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Aggrieved businesses are lining up against Google
Type “Abraham Lincoln birthday” into Google’s search bar, hit enter, and at the top of the page — above those blue links — is a box with the answer to your query:
Providing these quick, easy answers to users has been part of Google’s (GOOG,GOOGL) search strategy for quite a few years now. But critics say the company has habitually crossed lines in ways from lifting content to anticompetitive behavior.
Earlier this month lyrics site Genius accused Google of stealing content from its lyrics websites — and showed what appeared to beconvincing proof in the Wall Street Journal. On its website, the company used different types of apostrophes to form a pattern in its lyrics that spelled out the word “red handed” in Morse code.
Genius says it has been telling Google since 2017 that copied texts were appearing on its website. Google says it hasn’t lifted anything, that everything there must have come from other lyrics sites.
For years, companies like Genius, Yelp, and Celebrity Net Worth have complained that Google has been lifting their content, specifically to replace the very services these companies provide. But as the Justice Department explores anantitrust probe against Google, companies are being more vocal with their criticism of the tech giant, especially when it comes to snippets.
“It’s hard to argue against Google’s right to put a form on the screen when you put in ‘2+2’,” Luther Lowe, SVP of Public Policy at Yelp and one of Google’sbiggest critics over the years, told Yahoo Finance. “I would say 2+2 is a commodity piece of information, an immutable fact.”
In other words, Calculator.com may be a casualty of Google’s easy shortcut, but businesses like Genius and Yelp see the same thing happening, only this time it involves content unique to these websites.
“Google has long sent large amounts of traffic to third parties,” a company spokesperson told Yahoo Finance. “We strongly believe that by creating the best search experience for people around the world, we will overall be able to deliver more traffic to sites across the web.”
Companies like Genius must license song lyrics from music companies. Genius alleges, with its evidence, that Google is stealing its interpretations of songs (lyric transcription is slightly subjective with “oohs” and “aahs”) — and its business is suffering as a result, with fewer citations, links, and traffic back to the site.
Google’s response has been that it licenses the lyrics from a Canadian company called LyricFind, so it’s not the company’s fault. A companyblog postexplains how Google lyrics appear in search results — “we do not crawl or scrape websites to source these lyrics.”
Something similar happened with Celebrity Net Worth, but in a “more egregious way,” longtime Google observer and SEO expert Rand Fishkin observed ina recent tweetstorm.
Google once asked the site for the data, and Celebrity Net Worth declined. But Google appeared to use the data anyway, putting them in the snippet above the search results. Like the Genius case, hidden clues gave the game away. A few fabricated celebs that were mixed in with the 25,000 real ones on the website surfaced through Google, proving to the CEO that Google had pillaged data from Celebrity Net Worth. “Traffic immediately crumbled,” itsCEO told The Outline.
“Google refusing citations and rejecting copyright principles b/c they bought data from a third party [e.g. another lyrics site that scraped from Genius] vs. scraped it themselves [from Genius] has gotta make any web creator nervous,”tweetedFishkin.
In the past, Yelp has spoken up many times to accuse Google of scraping content off its platform, often photos submitted by its users. In 2013 Yelp complained to the FTC that Google was unfairly using its content to improve its own local review products and promoting its own stuff. Google said it would stop, butin 2017Yelp said Google was violating a settlement it made to end an FTC investigation.
Google says it allows companies to opt out of snippets that would prevent incidents like this. But the companies didn’t totally comply, according to Google.
“We give site owners tools to opt out of snippets or indexing altogether if they wish, and we respect those instructions when site owners implement them on their domains,” a spokesperson said. ”We’re always exploring new ways to engage with and ensure we’re supporting the ecosystem.”
These seemingly minor spats over snippets and linkbacks belong in a greater context.
In a controversial interview that violated the company’s pre-IPO quiet period in 2004, Google co-founder Larry Page told Playboy Magazine that Google had no interest in becoming a walled-garden like AOL (or today’s Facebook), but that it was happy to send you to other sites. “In fact, that’s the point,” said Page.
Fifteen years later, it’s clear that Google has long abandoned this strategy, preferring to keep visitors in its own ecosystem if possible, answering queries quickly with a box, with or without citations of the original content. Google says its goal is to help people find information as quickly as possible.
In a recent blog post, Fishkin demonstrated the level of change in traffic from Google from 2004, by highlighting how the company’s search engine result pages give significant exclusive real estate to its own properties like YouTube and Google Maps, keeping users on its platform.
Today, in an environment where the search engine game is even more dominated by Google, only around 41% of users make it to non-Google sites,accordingto Jumpshot data collected by Fishkin. About half end up as zero-click searches (“Abraham Lincoln birthday”) and the rest either go to Google’s own sites or they are paid clicks to non-Google sites (Google gets paid).
Yelp’s Lowe argues that much of the innovative stuff on the internet was specifically born during the time of Web 2.0 — a term pegged to the rise of user-generated content — precisely because Google fostered it by passing 100% of its traffic through to new, innovative businesses and services.
“All the cool stuff was born in these conditions,” said Lowe. “It’s hard to decouple that with the rise of Google.”
For the smaller tech players, looking at today’s internet can seem hopeless. Though Google has tried and failed to take share of other online markets — Google Plus, for example, could not dethrone Facebook, Twitter, or LinkedIn — it often does very well, and often to its own users’ benefits.
“It’s a threat to innovation,” Lowe said, who said that stories like Genius’s are making venture capitalists think twice before investing in a new business. “There’s no incentive to create if you have a giant company bulldozing into markets,” he added.
At the same time, Google notes that snippets often do result in clicks, which can drive meaningful traffic. In other words, just because the percentage of traffic has gone down because searches are answered immediately, overall numbers Google passes off may have gone up.
Whether this all will have any effect on the antitrust investigation and outcome that the DOJ is looking into is still unclear, however.
Furthermore, from an optics perspective, explaining how this is “bad” or problematic is not easy. People appreciate Google because the company makes our lives easier when it gives us a straight answer when we ask basic questions like “When does the Super Bowl start?”
For cases like that, everyone would love to be saved a click — except publishers who try to play the game of trying to have their “What time is the Super Bowl” post appear at the top and boost their traffic.
In many cases, Google can scrape information and throw a link back, making everyone happy, like for movie listings. The local theater will be happy to provide this info to the searchers. But if the content that powers much of this machine is from sites that actually depend on visitors — specifically the Web 2.0 sites that only function because a small percentage of their visitors became the content creators and contributors — the model may fall apart. And if those businesses are squeezed out or never appear, it will be up to Google to either pick up the slack, which it may not be completely up to without the kind of investment that its competitors have shown. In that world, Google may provide lyrics like Genius, but not its library of song meanings and annotations, for instance.
For example, in local reviews where it competes against Yelp and Foursquare, Google has seen some success. But as Yahoo Finance has reported, Google de-indexes this content, perhaps to hide the fact that its ownreviews are shoddyand would not score high enough on the company’s own search algorithm to make it into the first page of links.
But no matter. Google’s content has a new home: above the 10 blue links of the results page, in an easy-to-find box.
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Ethan Wolff-Mannis a writer at Yahoo Finance focusing on consumer issues, personal finance, retail, airlines, and more. Follow him on Twitter@ewolffmann.
Breaking up Google isn't the answer
Google might be hiding the fact that its own local reviews are shoddy |
LGBTQ Google Employees Ask San Francisco Pride to Drop Google From Parade
Elijah Nouvelage/Getty Image A group of LGBTQ Google employees is lobbying San Francisco's Pride organizers to remove their company from the citys Pride celebration. In a letter published on Medium addressed to San Francisco Pride leadership, the Googlers called for the organization to remove Google as a Pride sponsor and to rescind its invitation to appear in Sunday's Pride parade. The letter argues that Google-owned YouTube permits hate and discrimination and the companys participation in Pride amounts to a rainbow veneer of support. New York City Gets Ready for the Battle of the LGBT Pride Marches We have spent countless hours advocating for our company to improve policies and practices regarding the treatment of LGBTQ+ persons, the depiction of LGBTQ+ persons, and harassment and hate speech directed at LGBTQ+ persons, on YouTube and other Google products, the letters authors write. Google drew ire from the LGBTQ community this month for its policy decisions on YouTube, particularly for its determination that conservative pundit Stephen Crowder did not violate the platform's rules in his repeated attacks on Vox host Carlos Maza . Maza is a frequent target for Crowder, who has called him a lispy queer" among other insults targeting Maza's sexual orientation. Every single video has included repeated, overt attacks on my sexual orientation and ethnicity, Maza said of Crowder's actions. YouTube made the call in early June that Crowder did not violate its policy against hate speech. ... While we found language that was clearly hurtful, the videos as posted dont violate our policies, the company wrote in a tweet addressing the situation at the time. Following an outcry against its decision, YouTube opted to demonetize Crowder's channel, first saying Crowder would be punished until he removed links to t-shirts he sells that say Socialism Is For Fags and then stating that his channel faced demonetization for [harming] the broader community. Story continues The same day, YouTube announced changes to its hate speech rules to disallow videos alleging that a group is superior in order to justify discrimination against based sexual orientation, among other identifiers. Internally, some Google employees planned to protest Google's record on LGBTQ issues while marching within the company's parade contingent, through t-shirts or signage. But as The Verge reported earlier this week, Googlers were told that this behavior was forbidden. Employees are free to make whatever statement they want personally, apart from our corporate sponsored float/contingent, a Google inclusion leader told Google's internal Gayglers group. But they are not permitted to leverage our platform to express a message contradictory to the one Google is expressing. Inside Google, the Gaygler community is divided on the ongoing controversy. At the time of writing, the letter calling for Google's removal from Pride festivities had around 100 signatures. While 100 employees within a company of more than 85,000 is a very small contingent, the group calling for change is indicative of broader tensions within the LGBTQ community, many of which surface during Pride Season. As Pride events have become increasingly mainstream and commercial in recent years, a counter movement within the community has pushed for the celebrations to realign around Prides protest roots, center marginalized voices , and reject corporate overtures. Aligning with this view, the group of Googlers in their Medium letter called on San Francisco Pride to honor the spirit of this year's theme, Generations of Resistance. We ask you to join us in resisting LGBTQ+ oppression on the internet, and the subjugation of our right to equality in favor of calculated business concerns, the letter states. The first Pride was a protest, and so now must this Pride be one. We do not make this request without serious consideration of the alternatives, the letter, first reported by Bloomberg , stated. Whenever we press for change, we are told only that the company will take a hard look at these policies. But we are never given a commitment to improve, and when we ask when these improvements will be made, we are always told to be patient. A Google spokesperson told The Daily Beast, Google has marched in the San Francisco Pride Parade for more than a decade and we are excited to continue the tradition this weekend. We are grateful for SF Prides partnership and leadership. The Daily Beast reached out to San Francisco Pride and will update this story if we receive comment. Read more at The Daily Beast. Got a tip? Send it to The Daily Beast here Get our top stories in your inbox every day. Sign up now! Daily Beast Membership: Beast Inside goes deeper on the stories that matter to you. Learn more. |
The CVR Energy (NYSE:CVI) Share Price Has Gained 207%, So Why Not Pay It Some Attention?
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It might seem bad, but the worst that can happen when you buy a stock (without leverage) is that its share price goes to zero. But if you buy shares in a really great company, you canmorethan double your money. For instance theCVR Energy, Inc.(NYSE:CVI) share price is 207% higher than it was three years ago. Most would be happy with that. On top of that, the share price is up 16% in about a quarter.
See our latest analysis for CVR Energy
To quote Buffett, 'Ships will sail around the world but the Flat Earth Society will flourish. There will continue to be wide discrepancies between price and value in the marketplace...' 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.
CVR Energy was able to grow its EPS at 45% per year over three years, sending the share price higher. Notably, the 45% average annual share price gain matches up nicely with the EPS growth rate. This suggests that sentiment and expectations have not changed drastically. Quite to the contrary, the share price has arguably reflected the EPS growth.
The company's earnings per share (over time) is depicted in the image below (click to see the exact numbers).
We're pleased to report that the CEO is remunerated more modestly than most CEOs at similarly capitalized companies. But while CEO remuneration is always worth checking, the really important question is whether the company can grow earnings going forward. Before buying or selling a stock, we always recommend a close examination ofhistoric growth trends, available here..
As well as measuring the share price return, investors should also consider the total shareholder return (TSR). 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. It's fair to say that the TSR gives a more complete picture for stocks that pay a dividend. We note that for CVR Energy the TSR over the last 3 years was 300%, which is better than the share price return mentioned above. The dividends paid by the company have thusly boosted thetotalshareholder return.
It's nice to see that CVR Energy shareholders have received a total shareholder return of 46% over the last year. That's including the dividend. That gain is better than the annual TSR over five years, which is 8.5%. Therefore it seems like sentiment around the company has been positive lately. In the best case scenario, this may hint at some real business momentum, implying that now could be a great time to delve deeper. Keeping this in mind, a solid next step might be to take a look at CVR Energy's dividend track record. Thisfreeinteractive graphis a great place to start.
Of courseCVR Energy 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 US exchanges.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
Democratic debates 2019: Apple News enters presidential race with candidate guides
Apple hopes to lure political junkies to its Apple News service with new at-a-glance candidate profiles of the 2020 Democratic presidential hopefuls. These curated candidate guides will appear ahead of the first two Democratic debates, taking place Wednesday and Thursday in Miami and broadcast on NBC, MSNBC and Telemundo. Guides will include content from several of Apple’s news partners, including USA TODAY, ABC, Axios, CNN, Fox, NBC, The New York Times, The Wall Street Journal, The Washington Post, TIME and Vox. Profiles are being set up for the same 20 candidates who will take the Democratic debate stage, 10 on each night. Candidates left out of these first debates won’t have an Apple News profile either, at least for now. As contenders along the way drop out of the race, the guides will also be whittled down, giving more bandwidth to the candidate pages of those who remain. The guides can be found in the Top Stories section within the Apple News app on iPhones, iPads and Macs. They'll include an illustration of the candidates, plus bios, quotes and their key positions on select issues chosen on the basis of their specific platforms. iOS 13 beta: 10 reasons to get the software now if you're feeling brave Apple News itself is free, though the premium Apple News+ service costs about 10 bucks monthly, giving you access to some 300 magazines, plus The Wall Street Journal, Los Angeles Times and Toronto Star. Any paywalled articles related to a Democratic candidate will only be made available to those who subscribe or are trying out Apple News+ . Apple hopes voters will not only skim profiles before and during the debate but continue to follow favored candidates throughout the election cycle; stories about them will appear within Apple News feeds. Apple News profile guide for Pete Buttigieg Apple is also working with NBC to get real-time fact-checking and video clips of key moments during the debate. Each candidate guide will more or less get the same amount of space, with some variation for those who have been in the public eye longer. And yes, Apple plans something similar for any GOP candidates who might challenge President Donald Trump during the primary season. Email: ebaig@usatoday.com; Follow @edbaig on Twitter This article originally appeared on USA TODAY: Democratic debates 2019: Apple News enters presidential race with candidate guides View comments |
Is Now The Time To Put South State (NASDAQ:SSB) On Your Watchlist?
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Like a puppy chasing its tail, some new investors often chase 'the next big thing', even if that means buying 'story stocks' without revenue, let alone profit. 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.
So if you're like me, you might be more interested in profitable, growing companies, likeSouth State(NASDAQ:SSB). Now, I'm not saying that the stock is necessarily undervalued today; but I can't shake an appreciation for the profitability of the business itself. Loss-making companies are always racing against time to reach financial sustainability, but time is often a friend of the profitable company, especially if it is growing.
See our latest analysis for South State
The market is a voting machine in the short term, but a weighing machine in the long term, so share price follows earnings per share (EPS) eventually. That makes EPS growth an attractive quality for any company. We can see that in the last three years South State grew its EPS by 6.2% per year. That might not be particularly high growth, but it does show that per-share earnings are moving steadily in the right direction.
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 South State's revenuefrom operationswas lower than its revenue in the last twelve months, so that could distort my analysis of its margins. South State maintained stable EBIT margins over the last year, all while growing revenue 9.7% to US$632m. 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.
Of course the knack is to find stocks that have their best days in the future, not in the past. You could base your opinion on past performance, of course, but you may also want tocheck this interactive graph of professional analyst EPS forecasts for South State.
I like company leaders to have some skin in the game, so to speak, because it increases alignment of incentives between the people running the business, and its true owners. As a result, I'm encouraged by the fact that insiders own South State shares worth a considerable sum. To be specific, they have US$42m worth of shares. That's a lot of money, and no small incentive to work hard. Despite being just 1.7% of the company, the value of that investment is enough to show insiders have plenty riding on the venture.
It means a lot to see insiders invested in the business, but I find myself wondering if remuneration policies are shareholder friendly. A brief analysis of the CEO compensation suggests they are. For companies with market capitalizations between US$2.0b and US$6.4b, like South State, the median CEO pay is around US$5.2m.
The South State CEO received US$3.2m in compensation for the year ending December 2018. That comes in below the average for similar sized companies, and seems pretty reasonable to me. While the level of CEO compensation isn't a huge factor in my view of the company, modest remuneration is a positive, because it suggests that the board keeps shareholder interests in mind. I'd also argue reasonable pay levels attest to good decision making more generally.
As I already mentioned, South State is a growing business, which is what I like to see. The fact that EPS is growing is a genuine positive for South State, but the pretty picture gets better than that. With a meaningful level of insider ownership, and reasonable CEO pay, a reasonable mind might conclude that this is one stock worth watching. 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 South State. You might benefit from giving it a glance today.
Of course, you can do well (sometimes) buying stocks thatare notgrowing earnings anddo nothave insiders buying shares. But as a growth investor I always like to check out companies thatdohave those features. You can accessa free list of them here.
Please note the insider transactions discussed in this article refer to reportable transactions in the relevant jurisdiction
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
Correction: College Athlete Sponsorships story
SACRAMENTO, Calif. (AP) — In a story June 25 about endorsement deals for college athletes, The Associated Press reported erroneously that Nancy Skinner is a state assemblywoman. Skinner is a state senator. A corrected version of the story is below: California rethinks endorsement deals for college athletes California lawmakers are debating whether to let student athletes sign endorsement deals and hire agents in a move that could upend the multibillion-dollar business of college sports By ANDREW OXFORD Associated Press SACRAMENTO, Calif. (AP) — California lawmakers are debating whether to let student athletes sign endorsement deals and hire agents in a move that could upend the multibillion-dollar business of college sports. A proposed law wending through the state Assembly would scrap policies that strictly limit the ways in which college athletes can profit from their name, image and likeness, raising the prospect of private sponsorships long off-limits for students. The bill comes amid an ongoing national debate over the extent to which students can financially benefit from their athletic performance. The legislation's backers argue it is a matter of fairness. "This is a civil rights issue of today," said Sen. Steven Bradford, a Democrat from Gardena, California, and an author of the legislation. But universities across the state are opposing the law, arguing it would put them in direct conflict with National Collegiate Athletic Association policies. The NCAA's president suggested that California schools may be prohibited from participating in national championships. "When contrasted with current NCAA rules, as drafted the bill threatens to alter materially the principles of intercollegiate athletics and create local differences that would make it impossible to host fair national championships," NCAA President Mark Emmert wrote to lawmakers. "As a result, it likely would have a negative impact on the exact student-athletes it intends to assist." Story continues The opposition has left lawmakers questioning whether to force a showdown between California's universities and the NCAA or let the NCAA address the issue on its own at a national level. The organization announced last month that it will create a working group to review policies on allowing student athletes to earn money from their name, image and likeness. The working group will release its findings in October. Emmert asked lawmakers postpone consideration of the bill until next year. But other lawmakers backing the bill are blunt that the state is well-positioned to nudge the NCAA along on the issue, noting California is home to powerhouse NCAA programs, from the University of California, Los Angeles to Stanford University. "The NCAA could change these rules," said Sen. Nancy Skinner, a Democrat from Berkeley and co-author of the bill. She added: "This is what California does. We lead, and we lead with our values." Skinner noted the bill would not take effect until 2023, leaving time for the NCAA and schools to address the law. Senate Bill 206 seems to have momentum, with the Senate passing it by a vote of 31-5 last month. An Assembly committee approved the measure on Tuesday. It goes next to the Assembly Higher Education Committee with the backing of civil rights groups and sports agents. Some experts also dismiss the suggestion that the NCAA could stop the state with adopting such a law. "Any attempt by the NCAA to ban California schools for complying with California law would very likely be seen as illegal under antitrust law as well as perhaps under other parts of California law," said Marc Edelman, a professor of law at Baruch College at the City University of New York who consults on sports law. The proposed law is just the latest turn in an ongoing debate over college sports, which has included lengthy litigation and talk of everything from paying student athletes to letting student athletes form unions, much like professional athletes. Proponents of Senate Bill 206 in California argue it will give athletes with professional league prospects a reason to stay in school and bring a measure of fairness to the economics of college sports they argue is lacking. But backers also say it could also help students in sports that have lower profiles and come with fewer opportunities for making a living as a professional athlete by letting them earn money while competing at the college level. Federal lawmakers have taken up the issue, too, with Sen. Chris Murphy, a Democrat from Connecticut, publishing a report on college sports earlier this year calling on athletics programs to compensate students. Edelman argued that the political dynamics in Congress may leave states best positioned to act on the issue, however. Legislative aides said in an analysis of the bill that it represents uncharted territory. The NCAA might refuse to budge, the bill might end up in court or the NCAA might create some way for athletes to monetize their name, image and likeness, aides noted. For example, the NCAA already allows athletes to accept prize money for Olympic winnings. |
Read This Before Buying CubeSmart (NYSE:CUBE) For Its Dividend
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Dividend paying stocks like CubeSmart (NYSE:CUBE) 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. 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 CubeSmart. We'd guess that plenty of investors have purchased it for the income. There are a few simple ways to reduce the risks of buying CubeSmart 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. 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 73% of CubeSmart's profits were paid out as dividends in the last 12 months. This is a fairly normal payout ratio among most businesses. It allows a higher dividend to be paid to shareholders, but does limit the capital retained in the business - which could be good or bad.
In addition to comparing dividends against profits, we should inspect whether the company generated enough cash to pay its dividend. CubeSmart paid out 72% of its cash flow as dividends last year, which is within a reasonable range for the average corporation. It's positive to see that CubeSmart'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.
As CubeSmart has a meaningful amount of debt, we need to check its balance sheet to see if the company might have debt risks. A quick way to check a company's financial situation uses these two ratios: net debt divided by EBITDA (earnings before interest, tax, depreciation and amortisation), and net interest cover. Net debt to EBITDA measures a company's total debt load relative to its earnings (lower = less debt), while net interest cover measures the company's ability to pay the interest on its debt (higher = greater ability to pay interest costs). CubeSmart is carrying net debt of 4.84 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 3.34 times its interest expense, CubeSmart's interest cover is starting to look a bit thin.
Remember, you can always get a snapshot of CubeSmart's latest financial position,by checking our visualisation of its financial health.
From the perspective of an income investor who wants to earn dividends for many years, there is not much point buying a stock if its dividend is regularly cut or is not reliable. For the purpose of this article, we only scrutinise the last decade of CubeSmart's dividend payments. During this period the dividend has been stable, which could imply the business could have relatively consistent earnings power. During the past ten-year period, the first annual payment was US$0.10 in 2009, compared to US$1.28 last year. This works out to be a compound annual growth rate (CAGR) of approximately 29% a year over that time.
With rapid dividend growth and no notable cuts to the dividend over a lengthy period of time, we think this company has a lot going for it.
While dividend payments have been relatively reliable, it would also be nice if earnings per share (EPS) were growing, as this is essential to maintaining the dividend's purchasing power over the long term. Strong earnings per share (EPS) growth might encourage our interest in the company despite fluctuating dividends, which is why it's great to see CubeSmart has grown its earnings per share at 99% per annum over the past five years. With recent, rapid earnings per share growth and a payout ratio of 73%, this business looks like an interesting prospect if earnings are reinvested effectively.
We'd also point out that CubeSmart 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.
When we look at a dividend stock, we need to form a judgement on whether the dividend will grow, if the company is able to maintain it in a wide range of economic circumstances, and if the dividend payout is sustainable. First, we think CubeSmart is paying out an acceptable percentage of its cashflow and profit. We like that it has been delivering solid improvement in its earnings per share, and relatively consistent dividend payments. CubeSmart 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 5 CubeSmart 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. |
John Roberts Throws the Administrative State a Lifeline
W hile there are many cultural and political causes for the growth of the federal administrative leviathan, it could not have become so powerful without considerable assistance from the Supreme Court. The Court has created, often out of whole cloth, judicial doctrines that magnify the problem: Congress is allowed to pass laws delegating its legislative authority to the executive branch; the executive branch, in turn, is given great leeway to interpret those laws as it sees fit; similar leeway applies even when the executive branch interprets its own regulations. The result is an interlocking system that grants the executive the powers of all three branches of government. It writes the laws, it interprets the laws, and it executes the law. One of the great projects of Americas originalist, classical-liberal judicial revolution has been to overturn this monstrously unconstitutional construct, and today was supposed to represent the first clear victory in the project overturning the so-called Auer doctrine, the judge-made rule that requires courts to defer to agency interpretations of their own regulations. That victory did not happen. Justice Roberts intervened and (mostly) saved Auer . The administrative leviathan suffered only the slightest of flesh wounds. The case is Kisor v. Wilkie , and the opinion is one of those head-scratching Supreme Court monstrosities with overlapping opinions that will spawn dozens of law-review articles and countless law-professor debates. But the bottom line is clear: Chief Justice John Roberts joined with the Courts four more progressive justices to save a modified, slightly stripped-down version of Auer . Justice Elena Kagan wrote a plurality opinion, and Justice Roberts in his separate concurrence characterized the prerequisites for, and limitations on Auer deference like this: The underlying regulation must be genuinely ambiguous; the agencys interpretation must be reasonable and must reflect its authoritative, expertise-based, and fair and considered judgment; and the agency must take account of reliance interests and avoid unfair surprise. Story continues In his own opinion, Justice Neil Gorsuch called this Auer maimed and enfeebled in truth, zombified. But as Gorsuch no doubt knows (and intends to convey), zombies are still dangerous. On the silver screen, they eat brains. In courts of law, they eat constitutions. While Justice Roberts tried mightily to downplay the difference between the weakened version of Auer and Gorsuchs call to overturn it entirely, the differences are still important. They go to the heart of the constitutional separation of powers. Under the Kagan/Roberts formulation, when an agency meets the new Auer preconditions, deference is still mandatory. Indeed, as Justice Roberts notes, there is a difference between holding that a court ought to be persuaded by an agencys interpretation and holding that it should defer to that interpretation under certain conditions. Under the Gorsuch formulation, courts should consider agency arguments and agency evidence, but they do not have to defer to agency conclusions. Gorsuch would put litigants on equal legal footing with the agencies they challenge. The Kagan/Roberts majority does not. It grants the executive branch an enduring advantage in the most difficult cases while as a practical matter stripping deference only in cases where the outcome is most obvious. As Gorsuch notes, the bottom line is a systematic judicial bias in favor of the federal government, the most powerful of parties, and against everyone else. But while originalist lawyers arm themselves to confront zombie Auer , we should prepare for legal battle with sober-minded distress, not abject despair. In his concurrence, Chief Justice Roberts went out of his way to state that issues surrounding judicial deference to agency interpretations of their own regulations are distinct from those raised in connection with judicial deference to agency interpretations of statutes enacted by Congress. Roberts is broadcasting that his mind is still open about Chevron deference, and in the world of administrative law, Chevron is the Great Satan. Auer is the Little Satan. Yesterday I described how SCOTUS seems set to revisit and revitalize the nondelegation doctrine, which would curtail the kind of regulations that executive branch agencies could promulgate and would go a long way toward resurrecting Congresss rightful role as the nations true lawmaker. Auer totters and groans forward, looking for litigants to devour, but there is still reason for hope. For the first time in a generation, Chevron is in danger. For the first time in many generations, delegation is in danger. The administrative state retains its immense power, but its unchecked expansion is facing a serious legal challenge, and that challenge will not end anytime soon. More from National Review The Boring Supreme Court Case That Could Help Make America Great Again The Administrative State Is a Threat to the Constitutional Order No, Senator Feinstein, Roe v. Wade Is Not a Superprecedent |
CANADA FX DEBT-C$ rises to 5-month high as investors brace for U.S. rate cuts
(Adds strategist quotes and details throughout; updates prices) * Canadian dollar rises 0.4% against the greenback * Loonie notches its strongest since Feb. 5 at 1.3108 * Price of U.S. oil increases 2.7% * Canada's 10-year yield touches a 2-week high at 1.499% By Fergal Smith TORONTO, June 26 (Reuters) - The Canadian dollar strengthened to a near five-month high against its U.S. counterpart on Wednesday as oil prices climbed and investors adjusted to the prospect of interest rate cuts by the Federal Reserve. The U.S. central bank signaled last Wednesday that it could ease interest rates as early as July due to growing risks to the U.S. economy, especially related to the trade war between Washington and Beijing. "I think the market is still reeling from last week's big Fed move," said Erik Bregar, head of FX strategy at the Exchange Bank of Canada. The Bank of Canada has also worried about trade conflicts. Money markets see about a 50% chance of a rate cut this year by the central bank, but that is much less easing than expected from the Fed. Adding to support for the loonie, the price of oil, one of Canada's major exports, was buoyed by U.S. government data that showed a larger-than-expected drawdown in crude stocks. U.S. crude oil futures settled 2.7% higher at $59.38 a barrel. At 2:44 p.m. (1844 GMT), the Canadian dollar was trading 0.4% higher at 1.3118 to the greenback, or 76.23 U.S. cents. The currency touched its strongest intraday level since Feb. 5 at 1.3108. The loonie rose despite Beijing on Tuesday halting beef and pork imports from Canada, citing falsified paperwork. Unknown actors are using bogus certificates to smuggle Canadian meat into China, Trade Minister Jim Carr said on Wednesday. Canadian government bond prices were lower across the yield curve in sympathy with U.S. Treasuries. The two-year fell 9.5 Canadian cents to yield 1.454% and the 10-year declined 59 Canadian cents to yield 1.497%. The 10-year yield touched its highest intraday since June 12 at 1.499%. Canadian gross domestic product data for April is due for release on Friday. (Reporting by Fergal Smith Editing by Nick Zieminski and Susan Thomas) |
Pro-Bitcoin Lawmaker Bashes SEC for ‘Third-World Approach’ to Crypto
The SEC is taking a A pro-bitcoin lawmaker is furious that the United States is taking a “third-world, developing-economy approach” to cryptocurrency regulations, thanks to the lax SEC and the bumbling Congress. Republican Congressman Warren Davidson warns that the legislative foot-dragging is putting the United States at a competitive disadvantage in the burgeoning crypto market. So he says the SEC had better wake up — or else the US will be left behind. Davidson to SEC: What Are You Waiting For? Congressman Davidson sounded the alarm June 25 at the inaugural meeting of the newly-assembled House Task Force on Financial Technology. Specifically, Davidson asked why the SEC feels no sense of urgency to issue regulatory clarity vis-à-vis cryptocurrencies like bitcoin . Davidson explained that the frustrated industry has been waiting for the SEC to issue regulatory guidelines, so it knows how to proceed. Davidson says leaving the crypto-sphere in this kind of legislative limbo is regressive and unfair. “This is a third-world, developing-economy kind of approach, [where] if you want to launch a company, you go negotiate with the government. And maybe you can get your deal, and maybe your deal is different from this other person’s deal.” pro bitcoin token taxonomy act Read the full story on CCN.com . View comments |
Do Simpson Manufacturing's (NYSE:SSD) Earnings Warrant Your Attention?
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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 as Peter Lynch said inOne Up On Wall Street, 'Long shots almost never pay off.'
If, on the other hand, you like companies that have revenue, and even earn profits, then you may well be interested inSimpson Manufacturing(NYSE:SSD). Now, I'm not saying that the stock is necessarily undervalued today; but I can't shake an appreciation for the profitability of the business itself. Conversely, a loss-making company is yet to prove itself with profit, and eventually the sweet milk of external capital may run sour.
Check out our latest analysis for Simpson Manufacturing
If you believe that markets are even vaguely efficient, then over the long term you'd expect a company's share price to follow its earnings per share (EPS). It's no surprise, then, that I like to invest in companies with EPS growth. It certainly is nice to see that Simpson Manufacturing has managed to grow EPS by 21% per year over three years. As a general rule, we'd say that if a company can keep upthatsort of growth, shareholders will be smiling.
One way to double-check a company's growth is to look at how its revenue, and earnings before interest and tax (EBIT) margins are changing. Simpson Manufacturing maintained stable EBIT margins over the last year, all while growing revenue 9.1% to US$1.1b. That's progress.
The chart below shows how the company's bottom and top lines have progressed over time. For finer detail, click on the image.
Fortunately, we've got access to analyst forecasts of Simpson Manufacturing'sfutureprofits. You can do your own forecasts without looking, or you cantake a peek at what the professionals are predicting.
I like company leaders to have some skin in the game, so to speak, because it increases alignment of incentives between the people running the business, and its true owners. So it is good to see that Simpson Manufacturing insiders have a significant amount of capital invested in the stock. Indeed, they have a glittering mountain of wealth invested in it, currently valued at US$254m. This suggests to me that leadership will be very mindful of shareholders' interests when making decisions!
It means a lot to see insiders invested in the business, but I find myself wondering if remuneration policies are shareholder friendly. Well, based on the CEO pay, I'd say they are indeed. I discovered that the median total compensation for the CEOs of companies like Simpson Manufacturing with market caps between US$2.0b and US$6.4b is about US$5.2m.
Simpson Manufacturing offered total compensation worth US$3.0m to its CEO in the year to December 2018. That seems pretty reasonable, especially given its below the median for similar sized companies. CEO remuneration levels are not the most important metric for investors, but when the pay is modest, that does support enhanced alignment between the CEO and the ordinary shareholders. It can also be a sign of good governance, more generally.
For growth investors like me, Simpson Manufacturing's raw rate of earnings growth is a beacon in the night. If you need more convincing beyond that EPS growth rate, don't forget about the reasonable remuneration and the high insider ownership. Each to their own, but I think all this makes Simpson Manufacturing look rather interesting indeed. If you think Simpson Manufacturing might suit your style as an investor, you could go straight to its annual report, or you could first checkour discounted cash flow (DCF) valuation for the company.
Although Simpson Manufacturing certainly looks good to me, I would like it more if insiders were buying up shares. If you like to see insider buying, too, then thisfreelist of growing companies that insiders are buying, could be exactly what you're looking for.
Please note the insider transactions discussed in this article refer to reportable transactions in the relevant jurisdiction
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
Paychex Inc (PAYX) Q4 2019 Earnings Call Transcript
Image source: The Motley Fool.
Paychex Inc(NASDAQ: PAYX)Q4 2019 Earnings CallJun 26, 2019,9:30 a.m. ET
• Prepared Remarks
• Questions and Answers
• Call Participants
Operator
Ladies and gentlemen, thank you for standing by and welcome to the Paychex Fourth Quarter and Fiscal year 2019 Earnings Conference Call. At this time, all participants have been placed in a listen-only mode, and the floor will be open for your questions following the presentation. (Operator Instructions)
It is now my pleasure to turn the floor over to Martin Mucci, President and Chief Executive Officer to begin.
Martin Mucci--President and Chief Executive Officer
Great, thank you. And thank you for joining us for our discussion of the Paychex fourth quarter fiscal 2019 earnings release. Joining me today is Efrain Rivera, our Chief Financial Officer. This morning, before the market opened, we released our financial results for the fourth quarter and fiscal year ended May 31, 2019. You can access our earnings release on the Investor Relations web page, our form 10-K will be filed with the SEC before the end of July, and this teleconference is being broadcast over the Internet and will be archived and available on our website for approximately one month. On today's call, I will review business highlights for the fourth quarter, Efrain we'll review our financial results for both the fourth quarter and full year and discuss our guidance for the upcoming fiscal 2020, and then we'll open it up for your questions.
We closed fiscal 2019 with growth across our major product lines and solid progress toward our objectives. Our total revenue growth was 16% for the fourth quarter, which includes, of course, the incremental results from a Oasis Outsourcing Group. Management Solutions revenue grew 4%, while PEO and Insurance Services revenues grew 67% or 10% excluding the impact of Oasis.
As we look back on fiscal '19, we had a solid service and retention performance, a number of innovative enhancements to our product offerings and mobile app, and we completed the largest acquisition in our history, the acquisition of Oasis added scale to our PEO business. And we ended the fiscal year serving 1.5 million work site employees across all of our outsourcing services. In addition, we are beginning to realize the strategic benefits of the acquisition through the expansion of relationships with insurance partners and opportunities to upsell within the existing Oasis base. Our newly combined PEO leadership team continues to expand our leadership position in the HR outsourcing industry.
Fiscal 2019 reflected excellent execution in client service and operations as seen in our client retention, in our client satisfaction scores. Our client retention has continued to increase from the prior year and we ended the fiscal year with payroll client retention on par with our historic best. We have made significant investments in our sales force this year, particularly in our inside sales and mid-market sales forces and in demand generation. These incremental investments are having an impact as we have experienced increased sales momentum with these efforts.
In addition, we have continued to produce solid new sales growth from our share payroll, HR Solutions, retirement and PEO sales teams. The momentum in new sales coupled with improved client retention has resulted in overall growth in our payroll client base. As of May 31, 2019, we served approximately 670,000 payroll clients. In addition, excluding worksite employees acquired as part of Oasis -- the Oasis acquisition, the number of worksite employees served by our HR outsourcing services reflected double-digit growth.
America's businesses are operating in challenging times. The unemployment rate is at its lowest in nearly 50 years, while employers try to ramp up their hiring. As a result, there is a lack of talent to fill open jobs, and the regulatory environment is complicated and continuously changing. State jurisdictions are continuing to advance employment-related laws and regulations that impact the hiring and employment of workers. Also, the way people work is changing, requiring employers to understand employees' workplace expectations, challenges and requirements.
In this evolving landscape, businesses are looking for simple solutions that help them build their business, stay compliant, improve productivity and recruit, hire and retain talent. Paychex is uniquely positioned to meet these needs through our breadth of service offerings, but more importantly, through the combination of our innovative technology and personalized service model. This sets us apart and allows us to be true partners and advocates for our clients.
We renewed our commitment to reducing the complexity for our customers related to payroll benefits and HR administration when we launched our new branding earlier this year. Our tag line, "The Power of Simplicity" reinforces this commitment. We continually invest in our solutions to make payroll and HR administration simpler for our clients and their employees and provide solutions the way they are working today. 70% of the usage of our 5 star mobile app is done by our clients' employees. We are making it easier for the employees and more productive for our clients through an increased number of self-service options.
The enhancements we have made throughout this past year include the HR center with Performance and Learning Management and enhanced HR data analytics, benefits management enhancements with a refreshed enrollment experience for health and benefits in retirement, and increased options through the use of chatbots in artificial intelligence. All of these enhancements are designed to provide simple solutions for our clients and their employees. This focus is on steadily investing in the innovation of our Paychex Flex Human Capital Management Technology played a significant part in our recognition by NelsonHall as a leader in payroll outsourcing for the North American small business market. This was our third year in a row receiving this designation.
Shifting to other solutions, we currently face a retirement crisis in the US. A recent report from the US Federal Reserve found that a quarter of Americans have no retirement savings. We recently launched enhancements through our 401(k) product design to help address this crisis by simplifying retirement plan enrollment and management. These enhancements included a new participant dashboard and added functionality in the advisor portal. The new participant dashboard makes the process of enrolling in 401(k) simpler than ever and also provides a unique combination of tools and resources to empower participants in preparing for the retirement. Our mobile app allows a new participant to enroll in as few as four clicks, which has already resulted in increased participation rates.
We also continue to return value to our shareholders. In May, we announced an increase in our quarterly dividend of $0.06 or 11% to $0.62 per share. During fiscal '19, we returned almost $900 million to our shareholders through a combination of dividends and share repurchases.
In summary, our fourth quarter caps another successful year for Paychex. Our state-of-the-art technology, full suite of HCM product offerings and world-class personalized service is a powerful combination that positions us for sustainable growth within our market ecosystem. Our organic business, combined with our new acquisitions have positioned us well for fiscal 2020 and beyond. The sustained efforts of our employees and their commitment to our clients continue to drive the Company forward.
I will now turn the call over to Efrain Rivera to review our financial results for the fourth quarter and fiscal year. Efrain?
Efrain Rivera--Senior Vice President, Chief Financial Officer, and Treasurer
Thanks, Martin, and good morning. I'd like to remind everyone that today's conference call will contain forward-looking statements that refer to future events and in such involve some risks. Please refer to our earnings release for the customary disclosures. In addition, I will periodically refer to some non-GAAP measures, such as adjusted operating income, adjusted net income and adjusted diluted earnings per share. These measurements exclude certain discrete tax items and one-time charges. Please refer to our press release and investor presentation for a discussion of these measures and a reconciliation for the fourth quarter and full-year fiscal 2019 to their related gap measures.
I'll start by providing some of the key highlights for the quarter and then follow up with some greater detail in certain areas. I'll touch briefly on full-year results and wrap with a review of the fiscal 2020 outlook. Total revenue and service revenue both grew 16% for the fourth quarter to $980 million, compared to $958 million -- I'm sorry, and $958 million respectively. Excluding Oasis, service revenue and total revenue both grew by 5%.
Expenses increased 22% for the fourth quarter to $666 million. But if you exclude the Oasis acquisition, expense growth was 6%. The increase in total expenses excluding Oasis is primarily driven by increased headcount due to incremental investments in the sales force, technology resources and operations to support the growth in business. In addition, an increase in PEO insurance costs contributed approximately 1% to the growth in total expenses in the fourth quarter.
Operating income increased 4% to $314 million. Operating margin was 32.1% for the fourth quarter, compared to 35.7% for the same period last year. Margins were were impacted by business mix due to the growth in PEO business, accelerated investments and sales, technology and operations, as well as some one-time acquisition, integration and amortization costs associated with the Oasis acquisition.
Our effective income tax was 25.8% for the fourth quarter, compared to 28.5% for the same period last year. Net income increased 6% to $230 million, and adjusted net income increased 10% to $228 million for the fourth quarter. Diluted earnings per share increased 7% to $0.64 for the fourth quarter, and adjusted diluted earnings per share increased 9% to $0.63.
I'll not provide some additional color in selected areas. Management Solutions revenue, as you know, this includes our payroll service revenue together with other HCM products included in many of our product bundles. It increased 4% to $695 million for the fourth quarter. The increase was primarily driven by growth in our client base across many of our services, along with growth in payroll revenue and payroll revenue per check, which increased or improved as a result of increases net of discounts. Within Management Solutions revenue, retirement services revenue also benefited from an increase in the number of plans served as well as an increase in revenue earned on the asset value of participants' 401(k) funds.
PEO and insurances revenue, it increased 67%, as Martin mentioned, $263 million for the fourth quarter. Excluding the acquisition of Oasis, PEO and Insurance Services revenue increased approximately 10% for the quarter. The increase was driven by growth in clients and client worksite employees across our combined PBS and HROI PEO businesses. Demand for our existing PEO services along with growth within our client base resulted in double-digit growth in the number of client worksite employees serve. Insurance service revenue benefited from an increase in the number of health and benefit clients and applicants, partially offset by the impact of softness in the workers' comp market as we discussed last quarter.
Interest on funds held for clients increased 25% for the fourth quarter to -- from 25% -- I'm sorry, 25% to $22 million, primarily as a result of higher average interest rates earned. Average balances for interest on funds held for clients remain flat for the fourth quarter as the impact of lower client withholdings resulting from the tax reform legislation and changes in client mix were partially offset by the impact of wage inflation.
Interest expense. I'll note that we had a net non-operating interest expense compared to net investment income in the prior year. This is a result of interest expense of the $800 million of debt financing that we utilized to fund a portion of the Oasis purchase price. The $800 million is made up of private placement debt securities with terms of seven years or 10 years with coupon rates of 4.07% to 4.25% respectively.
Now, let me touch on year-to-date results quickly. Management Solutions revenue again up 4% to $2.9 billion, PEO and Insurance Services revenue increased 48% to $822 million, up (ph) 19% excluding Oasis. Interest on funds held for clients up 27% to $81 million, driven by interest rate increases and partially offset by impact of decline in average invested balances. Total revenues increased 12% to $3.8 billion, 7% growth excluding Oasis. Operating margins were 36.3%, tempered by investments in the business, the acquisition of Oasis and growth in the existing PEO direct insurance costs. Net income increased 4% and adjusted net income increased 11%. Diluted EPS increased 4% and adjusted diluted EPS also increased 11%.
Turning to our investment portfolio. As you know our goal is to protect principle and optimize liquidity, we continue to invest in high credit quality securities. Our long-term portfolio has an average yield of 2.1% and an average duration of 2.9 years. Our combined portfolios have earned an average rate of return of 2.1% and 1.9% for the fourth quarter and fiscal year respectively. These are up from 1.7% and 1.5% for the respective periods last year.
Let's talk about our financial position. It remained strong with cash, restricted cash and total corporate investments of almost $800 million as of May 31, 2019. Funds held for clients, as of May 31, 2019 were $3.8 billion compared to $4.7 billion as of May 31, 2018. As you know, funds held for clients vary widely on a day-to-day basis and averaged $4.1 billion for the fourth quarter and $4 billion for the fiscal year. Our total available for sale investments, including corporate investments and funds held for clients reflected net unrealized gains of $20 million as of May 31, 2019, compared with net unrealized losses of $38 million as of May 31, 2018. The move to a net gain position was due to declines in longer term yields. Total stockholders equity was $2.6 billion as of the end of the year, reflecting $827 million in dividends paid and $57 million worth of shares repurchased during 2019. Our return on equity for the past 12 months is a very robust 42%.
Cash flows from operations were $1.3 billion for the fiscal year, an increase of 1% from the same period last year. The increase was driven by higher net income and non-cash adjustments, partially offset by fluctuations in working capital. Working capital fluctuations related to timing around collections and related tax payments for a combined PEO business along with higher accounts receivables related to growth in our payroll funding business for temporary staffing clients.
Now, let's turn to the guidance. I remind you that our outlook is based upon current view of -- our current view of economic conditions continuing with no significant changes. Our Management Solutions revenue anticipated to grow 4%. PEO and insurance revenue is anticipated to grow in the range of 30% to 35%, reflecting a full year of Oasis. Interest on funds held for clients is anticipated to grow in a range of 4% to 8%. At this stage, we do not contemplate either any increases obviously less likely and no rate declines. We will watch and see what happens.
Total revenue is anticipated to grow in the range of 10% to 11%. Operating income as a percent of total revenues anticipated to be approximately 36%, comparable with this year, reflecting the expected impact of higher PEO direct insurance costs. EBITDA margin for the fiscal year 2020 is expected to be approximately 41%, again comparable to where we are -- where we end this year. Net interest expense is anticipated to be in the range of $15 million to $18 million, reflecting a full year of interest on outstanding long term debt, which I discussed previously. The effective income tax rate for fiscal 2020 is expected to be in the range of 24% to 24.5%. Net income and diluted earnings per share are both anticipated to grow approximately 8%, and adjusted net income and adjusted diluted earnings per share are both expected to increase in the range of 8% to 9%. And remember that we don't plan on a tax benefit when we get a stock comp exercise, which is why we adjusted it out.
I will provide further color on the gating. Management Solutions revenue quarterly gating is anticipated to be consistent with the full year guidance with the exception of the first quarter, which is anticipated to be in the range of 3% to 4%, largely due to a mix of days in the quarter. However, please note that growth rates for the PEO and insurance revenues are anticipated to be significantly higher in the first half of the fiscal year until we reach the anniversary of the Oasis acquisition. So we anticipate growth in the range of 60% to 65% in the first half of fiscal 2020, and then growth of 11% to 14% in the second half. So let me just repeat that. We anticipate growth in the range of 60% to 65% in the first half of fiscal 2020 for PEO and Insurance Services and then growth moderates to 11% to 14% in the second half after the anniversary of the Oasis acquisition.
Our net income gating is also impacted by the timing of the Oasis acquisition, together with related amortization expense and integration costs. This causes lowered net income growth in the first half of the fiscal year. In addition, incremental investments in sales, technology and operations are ramped over the year during fiscal 2019. We expect net income growth to be below the full year guidance range provided at approximately 3% for the first half of the fiscal year, and then we expect it to increase to a range of 11% to 13% in the second half of the year. So let me repeat that. We expect net income growth to be below the full year guidance range for the first half of the year, and we expect it to be approximately 3% for the first half of the fiscal year, and then we expect it to increase to a range of 11% to 13% for the second half of the year due to the factors described above.
And then one final point on specific to Q1. For the first quarter of fiscal 2020, net income growth is anticipated to be in the range of 1% to 2%, with the most significant driver being that of investment spending funded by tax reform that was just starting to ramp up during the first quarter of fiscal 2019 and incremental expenses from Oasis.
So with that -- and with that color on the guidance, I will, one, refer you to our investor slides for more detail that have been posted on the web. And I will now turn the call back to Martin.
Martin Mucci--President and Chief Executive Officer
Thank you, Efrain. Operator, we'll now open up the call for any questions, please.
Operator
Thank you. (Operator Instructions) Our first question comes from the line of Ramsey El-Assal of Barclays.
Ramsey El-Assal--Barclays -- Analyst
Hi, guys. Thanks for taking my question. I wanted to ask again about just your operating margin guidance. You took it down a little bit and of course, you called out higher PEO direct insurance costs. Can you again just sort of remind us what are the drivers of those higher costs? And also, are there any other secondary factors or headwinds, I know there was quite a bit of content in your remarks, can you just kind of parse out for us exactly what's happening in terms of your expectations for guidance -- for margins in this coming year?
Martin Mucci--President and Chief Executive Officer
Hey, Ramsey. The first thing I'd say is that it wasn't a change from what we said before. We said that that operating, when you go back to Q3, we said it would be consistent with this year, which is 36%. That's what we called out this year. So I would say that with respect to your question on the margins, what we're seeing is that we by having more PEO revenue in the mix, it has a moderating impact on margins and it's offset by other efficiencies in the business, which is why even though our PEO revenues are up as a percentage of total revenues for the year, you see that the impact actually year-over-year is not significant.
The other thing I would point you to is that in Q3, we said that our EBITDA margin would be comparable to our operating margin, and that's exactly what we just stated. So I think it's consistent with what we've said before.
Ramsey El-Assal--Barclays -- Analyst
Fair enough. I wanted to ask you a broader kind of industry question about the PEO market in terms of further consolidation. Just in terms of the industry, do you expect that this market to kind of continue to consolidate? You've got another couple of good sized players out there, or probably a lot of smaller regional players as well, how do you see the market landscape changing? And then just a quick final bolt-on is, what interest rate assumptions are you using for your float (ph) income growth guidance? And with that, I can hop back in the queue.
Martin Mucci--President and Chief Executive Officer
Okay. Ramsey, I think the PEO, I think you will see some further consolidation I think, as it becomes more competitive, you need to have the breadth of services and the relationships with the carriers to offer the best, both combination of product and service, the best technology from a mobile standpoint as well for the enrollment of the benefits. And you've got to have the experience to handle some of the pretty rapidly changing requirements from the state side and from the carriers, and what the new insurance plans are, what the new rules are, and the HR piece of it is becoming even more important many times than the benefits themselves. So I think smaller players will find it continue -- will continue to find it difficult to provide and compete in this environment. And certainly with our acquisition of Oasis, there's been a lot, even more interest, I think, in the consolidation and the growth in that market, which continues to grow very strong across the board. As I noted and Efrain mentioned, I think as well, our growth in worksite employees was double digits even without the Oasis acquisition. So we're very proud of the sales and the service that we're providing in the PEO market. And I'll turn it back to Efrain on the interest rate assumptions.
Efrain Rivera--Senior Vice President, Chief Financial Officer, and Treasurer
Yes. So Ramsey, in my comments, I mentioned in the fourth quarter our combined portfolios were 2.1%. You can see for the year, we were 1.9% for the full year. So I would expect that when you look at the full year impact, we're going to tick up slightly from where we are in fourth quarter. We'll have a little bit of benefit from balances that should be a bit higher than what we had this year. But it's modest, you can see in the guidance of 4% to 8% increase on interest on funds held for clients. We're being somewhat cautious on what we expect in terms of the portfolio.
Ramsey El-Assal--Barclays -- Analyst
That's perfect. Thanks so much.
Operator
Your next question comes from the line of James Schneider of Goldman Sachs.
James Schneider--Goldman Sachs -- Analyst
Good morning. Thanks for taking my question. I may have missed the exact client count growth that you just called out in your prepared remarks. Can you maybe talk about within segments small -- micro, small and mid-market, kind of where do you see growth (inaudible) for payroll?
Martin Mucci--President and Chief Executive Officer
I think it's either on -- I think it's on -- in the press release and it's on our investor slide. So we ended the year at about 670,000 clients. Last year, we disclosed 650,000. We saw growth -- we saw a lot of growth in the SMB segment of the market.
Operator
Your next question comes from Jason Kupferberg of Bank of America.
Jason Kupferberg--Bank of America -- Analyst
Hey, good morning, guys.
Efrain Rivera--Senior Vice President, Chief Financial Officer, and Treasurer
Hi, Jason.
Martin Mucci--President and Chief Executive Officer
Good morning, Jason.
Jason Kupferberg--Bank of America -- Analyst
I just want to start with the question on core payroll revenue growth and thank you for the final quarter disclosure on that metric. I think it did slow a tick, a point down to 2% in Q4 and came in, I guess, 2% rounded for the full year. Was that effectively all pricing? And then would you expect to get a similar amount of pricing in fiscal '20?
Efrain Rivera--Senior Vice President, Chief Financial Officer, and Treasurer
Jason, I don't think it's slowed. I think what you're -- what you -- what you're seeing is that we anniversaried the acquisition of Lessor last year. So Q3 was a tick higher and it is very difficult, I would caution, to compare Q3 to Q4 now, because Q3 has certain kinds of revenue that only recur -- only occur in that quarter. So I think we ended up, we were pleased with where we ended up. We had client growth. We certainly saw some really robust results in parts of the market. Our internal sales were very good. Shared payroll was incredible, really strong year. And we are positioned really well from a digital marketing standpoint and from an internal sales standpoint. So we feel really good about where we're exiting the year and obviously, we had client growth, which is the ultimate indicator of that.
Jason Kupferberg--Bank of America -- Analyst
And just anything on the pricing?
Efrain Rivera--Senior Vice President, Chief Financial Officer, and Treasurer
Look, pricing is a part of -- it's a part of the equation. So we would expect certainly that we can continue to get price and have never have an issue.
Martin Mucci--President and Chief Executive Officer
Yeah, we've had -- especially, when you think about the client retention that is historic highs, we think the pricing has stopped very well. And we've been able to sell the value of not only the technology and that we've been introducing in the mobile app and so forth, but the service as well. So I think, still having the pricing in the same range we've been in the past, it should absolutely be doable and we should be able to retain and hold that pricing as well.
Jason Kupferberg--Bank of America -- Analyst
Okay. Understood. And just want to make sure I heard the comments properly around the float income forecast. I think you indicated you're not assuming any changes in Fed funds. I mean, obviously the market is pricing in a high probability of that next month. So I just wanted to make sure that you still got the rule of thumb right on that if I recall, a 25 basis point change in Fed funds is roughly a 1% or so of net income. Does that still hold?
Martin Mucci--President and Chief Executive Officer
25 bps, no, it's not correct. So it's about a 25 bps drop would result between in a impact of about $3 million to $4 million. So I haven't done the -- maybe that creates the 1%, but I would caution a little bit about that, because one of the things that we looked at when we looked at the guidance was, we have ways to adjust the duration of the portfolio to deal with changes -- modest changes or declines during the year. So I wouldn't necessarily take that to the bank because we do have some things we can do if we see some modest decreases during the year.
Jason Kupferberg--Bank of America -- Analyst
Okay.
Martin Mucci--President and Chief Executive Officer
That's why we are conservative on the range we provided.
Jason Kupferberg--Bank of America -- Analyst
Okay. And then just last one kind of on the macro front, I know you guys obviously have no client concentration, but just wanted to see if we can get an update on which parts of the economy these days you're most exposed to, construction, manufacturing, service industries, restaurants, whatever it may be just as people contemplate where the US economy may be heading in the next 12 to 18 months, how we should be thinking about Paychex's exposures?
Martin Mucci--President and Chief Executive Officer
Yes, I think we're pretty well spread across all of the different sectors. And I think we're seeing any big change in any of those on our small business index that we put out for our clients under 50. We're seeing kind of all sectors kind of hanging in there at the same manufacturing has been down, but it's about the same. And I would say there's still the strongest from an index perspective is those other services, discretionary services and those type of things that we're pretty heavy and so I would think that they're still doing pretty well. And they're still -- they're not necessarily growing, but they're growing at a slower rate than they have in the past. But they're still growing.
And I think the thing would be to watch some of the minimum wage increases and has that done anything? We haven't seen a big impact from those at this point. And instead, we're seeing sometimes more hours worked in general for those jobs. So I would say, we're pretty spread out and we don't see any major concern at this point. We're not seeing any signs of necessarily a slowdown. Still growth, a little slower growth than in the past. But that was some of the recovery as well.
Jason Kupferberg--Bank of America -- Analyst
All right. Okay, great color. Thanks, guys.
Martin Mucci--President and Chief Executive Officer
Sure.
Operator
Your next question comes from the line of James Berkley of Wolfe Research.
James Berkley--Wolfe Research -- Analyst
Thanks for the time. Appreciate it. I'm just wondering what you guys are seeing for bookings on the PEO side, is still trending low double digits, low teens like you were last quarter. Any change in cadence there? And could you walk us through the workers' comp-related impacts going forward and just how you're thinking about that in the quarters ahead?
Martin Mucci--President and Chief Executive Officer
I would say on the PEO side, both existing client growth and worksite employees and the new sales have been very strong. As I mentioned, we're double-digit without the Oasis acquisition. And of course, with that even stronger in the double-digit side. So we're showing very good strength in worksite employees. We now, across PEO, ASO, all of our products, we serve more worksite employees than anyone else. And we're showing great solid growth there. As I mentioned, the need for HR and the benefits is so much -- so significant these days with the unemployment rate so low, particularly for small- and mid-sized businesses. If they're going to attract and retain people, they really need the benefit of good benefit plans and good HR, which includes training and developing their people, data analytics, all the things that we're providing now, learning management systems that give them free training, modules that they can use or develop their own. So I think we're going to see continued good strong growth in the PEO side in particular, and of course, our ASO side as well, if they don't necessarily want the PEO or don't qualify under underwriting, we take them through the insurance agency of which we're the 20th largest in the country. And that gives us a great out that even many other PEO competitors do not have in their favor. Do you want to talk about workers?
Efrain Rivera--Senior Vice President, Chief Financial Officer, and Treasurer
Yeah. So just to add some color on that, James, the two of the strongest quarters from a bookings perspective in the entire company were PEO, which was very strong and then mid-market, which was very strong too. So we had two parts of the business that had very, very strong growth from a bookings perspective. On the workers comp side, it was as we quoted, a soft quarter. We think that's going to persist for at least two or three quarters that's built into our guidance. Rates have softened pretty significantly.
It tempers the growth of PEO. You can't see it as much because our PEO growth in the fourth quarter organically was in the upper teens. And so it's tempered a bit by the cyclical nature of the workers' comp market, which currently is soft. But we will see where we end up at the beginning of next year. So there's a couple things that mask what is very, very strong performance on the PEO side, and we were very heartened also by strong performance in mid-market HCM.
James Berkley--Wolfe Research -- Analyst
That's good to hear. Just two more quick things I wanted to touch on something that you guys mentioned, you talked about SurePayroll. Briefly, you're saying, you had a great year there and you expect it to do well going forward. I think, could you just expand on that a little bit?
And then secondly, the duration comment you made, I think your portfolio is around like 3.1 years or so. What can you bring that to and how would that impact $3 million to $4 million you referenced? How should -- just a little more color on how we should think about that?
Martin Mucci--President and Chief Executive Officer
Yeah, I'll lead with the SurePayroll. Yeah, they -- I think we have really mastered the handle on demand generation. We've put a lot of investment in that from both shared payroll and Flex -- and Paychex Flex, and I think we've really done a great job as far as the investments in improving demand generation and nurturing meaning, including nurturing leads that were weaker leads in the past that we may have lost because we did -- they didn't. We're ready to buy it, but we've got a quite complex nurturing process now where we can reach out and continue to build the leads and get them when they're ready.
Shared payroll, I think has been not only priced effectively, but also through the demand generation getting a lot more leads and being able to close them and also allowing some self-service options. So allowing clients to kind of on board themselves if they wish, which was a lot more self-service options that prospects want now, they can go in, they can start if they need help or jump in and help them. But that whole self-service part of it is also another way of capturing a lead that was looking to get started right away. It may have been difficult to reach if we call them back. So the whole change, the number of changes we've made in demand generation and handling a telephonic sales both here at Paychex and through shared payroll have been very strong and we expect that growth to continue. I think the product, the service and the positioning of how we sell online and telephonically has become much stronger this year. Efrain, you want to take the...
Efrain Rivera--Senior Vice President, Chief Financial Officer, and Treasurer
Yes, you're right, Jim. So the duration portfolio is in the low 3s. We could stretch that up to about 3.75 years of duration if we wanted to. We're obviously playing a number of those different variables across different scenarios. So that's why I think in response to Jason's question, actually maybe Ramsey and Jason's question, what we feel comfortable with is by setting the range where we are, we will just see where the Fed ends up from a rate perspective and then we can adjust the portfolio accordingly. So not have a major impact.
James Berkley--Wolfe Research -- Analyst
Okay. Great. Thank you very much.
Operator
Your next question comes from the line of Bryan Keane of Deutsche Bank.
Bryan Keane--Deutsche Bank -- Analyst
Hi, guys, good morning. Just a couple of clarifications. On that payroll client growth of 3%, was that in line with expectations and how how is that tracking historically and should we just kind of model that same amount of growth going forward?
Martin Mucci--President and Chief Executive Officer
Every year is a little bit different, Bryan. So I would say that -- what we say is that we expect payroll client growth to be in the 1% to 3% range. Last year, we didn't hit that target. This year, we were solidly within that. I would say that going forward, we expect to be within that range.
Bryan Keane--Deutsche Bank -- Analyst
Okay. Helpful. And then thinking about the PEO insurance revenue growth, I know in the back half we're talking about 11% to 14% growth. I'm guessing the fourth quarter will be the strongest quarter, though as some of the worker comp issues lap. And then what kind of growth rate should be a more normalized growth rate there once we get through the worker comp issue?
Martin Mucci--President and Chief Executive Officer
I'm going to hold off -- I'm going to hold off talking about it specifically, because there's -- by the time we get to Q4, there'll be lots of specific issues that are going to affect -- could affect that growth number. So I'll hold off. I think what we're comfortable with is saying where we are at the second half, we'll update as we go through the year.
Bryan Keane--Deutsche Bank -- Analyst
But there -- but the drag -- the primary -- primarily the drag out there in kind of the second half is that worker's comp growth rate or just any other puts and takes. I know the business obviously outperformed, grown 18%. I think it was 18% to 20% was the guide for fiscal year '19 originally. And then now that's a little bit of a lower growth rate ex that. So just trying to make that delta change.
Martin Mucci--President and Chief Executive Officer
So I get where you're going. I guess, Brian, what I'd say is that we should have anniversaried a lot of the impacts by fourth quarter, but I have no idea what the growth rate than the existing growth rate will be in at that point -- in market growth rate, I should say not ours. I know exactly what ours is. So I can't call that. I can't call that specifically. I think the fourth quarter will depend in large measure on how strong we exit the year -- next year with PEO with Oasis in the fall. So I think it's going to depend on that and also where we are with the workers' comp market. So there's still miles and miles to go before we get to Q4 of next year. But those will be the factors that will drive Q4 growth.
Bryan Keane--Deutsche Bank -- Analyst
Okay. I got it. Just last question (technical difficulty) seems like that continues to move and improve. How much room is there still to go that you can improve client retention?
Martin Mucci--President and Chief Executive Officer
Hey Brian, you cut out just at the very beginning of that. Could you just say that again? I didn't hear it all.
Bryan Keane--Deutsche Bank -- Analyst
Yeah, I just was asking about client retention. That seems like it's continued to improve and move in the right direction. Just trying to figure out how much more room is there for that to improve as you guys go forward here?
Martin Mucci--President and Chief Executive Officer
Okay. Yeah, I think we're very pleased with what we've done. We're at historic highs, so we'll always try to make that a little bit stronger. I think we're finding ways to service clients as they -- differently now as they want to be serviced a little bit differently. It's not all, it's probably half of them that want that necessarily telephonic payroll, dedicated payroll specialist. So many more are calling in, so many more are using the app, the chatbots and the -- that we're doing for self service. So it's putting us in a place that we haven't been before that could drive a little bit of more improvement. But given the number of losses in small business, which is still a large majority of the clients, I'd have to say -- I'd like to -- I do see some improvement, but it probably has some top level it can get to when you just have a large number, half of them or more, a little bit more than that or just out of business. So it'll depend a little bit on, obviously, the economy as well. But those leaving for a service, price and those things, I think can still get a little bit more of an improvement out of it.
Bryan Keane--Deutsche Bank -- Analyst
Okay. Helpful. Thanks for taking the questions.
Operator
Your next question comes from the line of Jeff Silber of BMO Capital Markets.
Jeff Silber--BMO Capital Markets. -- Analyst
Thanks so much. Just had a couple of modeling related questions. I know you typically don't guide to free cash flow. Is there anything going on differently next year or should we just kind of assume this typical conversion rate from EBITDA?
Efrain Rivera--Senior Vice President, Chief Financial Officer, and Treasurer
I think it's probably typical. Jeff, we also gave, I think in the investor slides, we give you an update on the D&A for next year versus this year, so you can calculate the incremental amount. I know you're big on those two numbers. So as -- and they're important. So they're in the slides there. But there should be no significant changes in terms of conversion.
Jeff Silber--BMO Capital Markets. -- Analyst
All right. Great. You caught me on that, Efrain. Thanks.
Efrain Rivera--Senior Vice President, Chief Financial Officer, and Treasurer
All right. You caught me, so.
Jeff Silber--BMO Capital Markets. -- Analyst
No worries. And then also just a minor one. You gave us some color on the cadence quarterly. I do appreciate that. Is there any specific impact from a margin perspective quarterly and also from a tax perspective quarterly?
Efrain Rivera--Senior Vice President, Chief Financial Officer, and Treasurer
Well, I mean, from a net perspective there's some impact. You can -- when you walk through the model of what I said, where the first half is 3% and I call that Q1 1% to 2%, and then in the back half. So from a net perspective, obviously in the back half, what you're seeing is higher margins. But part of it is too that partly due to ASC 606, we have more -- we're more heavily back-half weighted than we used to be before. And so if you look at our expenses and and you assume that there's not big changes quarter-over-quarter in our expenses, what you see is that the flow through of the incremental revenue drives higher income in the back half of the year. That's what you're seeing.
Jeff Silber--BMO Capital Markets. -- Analyst
Okay, that's actually helpful. Thank you so much.
Operator
Your next question comes from the line of Kartik Mehta of Northcoast Research.
Kartik Mehta--Northcoast Research -- Analyst
Hey, good morning, Marty and Efrain. How are you?
Efrain Rivera--Senior Vice President, Chief Financial Officer, and Treasurer
Good. How are you doing?
Kartik Mehta--Northcoast Research -- Analyst
Good. Hey, Marty, I wanted to ask a little bit about the PEO business and Oasis. You talked about investment both in sales and technology. And I'm wondering what kind of growth you are anticipating next year for the Oasis sales force? And just from a technology standpoint, is that just that you are going to have a more robust mobile offering? Or are there other investments that you're making in the business?
Martin Mucci--President and Chief Executive Officer
Yes, I think, kartik, what you'll see and we've already been doing some of this is linking them to our products. So Oasis already now is linked to our time and attendance product are linked better to our interfacing with our 401(k) and our retirement services product. These are things that sales force has not had before. They also have the opportunity to use our insurance agency, which they didn't have before. So if they didn't -- as a PEO, the underwriting didn't fit primarily. They couldn't necessarily take them for insurance -- for the insurance products and now they can run those through our insurance agency. We're just kind of working through all of the sales teams, but we have all of the leadership team now in place for a number of months for probably a quarter, and they're working through combining all of the sales processes and compensation plans and directions. And so they'll have more products to offer. They'll have insurance -- the insurance agencies to support them. And they'll certainly have all of the tools with sales force and the level of technology that we use for our sales teams to track the leads and referrals, et cetera. So we're feeling that we're pretty solid coming into this fiscal year as we start this month with Oasis and our PEO teams really combine -- and underwriting as well, all kind of combined and streamlined. So that they're going to have a lot more to offer.
Kartik Mehta--Northcoast Research -- Analyst
And then Martin, I think you talked about maybe changing of how you're obtaining clients in the sense that I don't know if you use this word or not, but inside sales and has that figures how has over the last six to 12 months changed as to how you're obtaining clients versus just the sales force that knocks on doors versus somebody that's inside?
Martin Mucci--President and Chief Executive Officer
Yes, the inside sales are telephonic sales. Here from Paychex standpoint, has continued to increase their production, their double-digit growth over last year. We're also introducing and trialing some self-service and really through shared payroll who has had that now for most of this year now. You're seeing that when the leads come in and they can either be addressed immediately by either the field or telephonically depending kind of on the size and what they're looking for. If they're directly referred to by a CPA, who is tied to our field sales rep -- we'll get them right to the field sales rep immediately and we'll address it.
If they'd rather just deal with something on the phone do a demo over online and then close on the sale right there and have it implemented, we'll do that. And now, we're moving -- you're going to see us moving toward a self-service option as well that your payroll has and has been working very effectively. One of the biggest issues with telephonic sales and leads, frankly, coming in, is that once you have the lead where someone's been interested, they fill out a form. You can't get back a hold of the prospect, because nobody answers their phone anymore. So what we're doing is we're -- by allowing self service where the client can actually get started and set themselves up if they have an issue, then we can talk to them. But they've already started by almost completing the sale, by starting to setup themselves, which they'd like to do immediately.
So that has also really turned out very well for us. And we're seeing a lot of good leads there for sure. The field is still very important to us, particularly from a channel development, we still continue to be a leader, I think, in the CPA referral market in current client referrals, and that's done very strongly by the field and they'll continue to concentrate on that. But as more of the small -- the brand new businesses start up and they come in through the web, the deal is how fast can you handle them. And they're certainly fine with handling it over the phone or setting it up themselves.
Kartik Mehta--Northcoast Research -- Analyst
And then just one last question, Efrain. Obviously, your balance sheet, you know, if other acquisition opportunity happen to come up, how -- what's the comfort level in terms of leverage for the Company today?
Efrain Rivera--Senior Vice President, Chief Financial Officer, and Treasurer
Well, Kartik, right now, we end the year, we're at zero net debt. So we certainly have the ability to get more leverage or be more leveraged if we want to. Yes, I don't think there's a specific number. We're going to be conservative about it. Obviously, a turn and a half of EBITDA that starts to get little bit higher than -- a little bit higher in the range. Would we go higher? It would really depend on whether we thought an acquisition was strategic or not. So I think it depends on the opportunity. Oasis, we used cash on hand, we borrowed $800 million. Oasis is going to be cash accretive. We have the capability doing the right kind of targeted acquisitions to be more acquisitive, and it will depend on whether what's the size of the acquisition and how strategic the opportunity is.
Kartik Mehta--Northcoast Research -- Analyst
Thank you, gentlemen. I appreciate it.
Martin Mucci--President and Chief Executive Officer
Okay. Thanks Kartik.
Operator
Your next question comes from the line of David Grossman of Stifel.
David Grossman--Stifel -- Analyst
Good morning. Thank you. Sort of go back to the growth of the PEO, but I guess I'm just having a little trouble following the math. So perhaps you can go back and reconcile your organic growth of PEO in the fourth quarter, which I think you said was about 10%, with the high-teens growth for the year and then the guide to 11% to 14% in the back half of the year, next year, which presumably is an organic number, when you lap the comparison. I know workers' comp is a little bit of that. So if you could just maybe deconstruct that for us?
Efrain Rivera--Senior Vice President, Chief Financial Officer, and Treasurer
So now you started with a faulty premise. You said that that PEO was 10%. PEO is not 10%, PEO and insurance was 10% in the quarter. PEO as I mentioned it before, if we isolated was upper teens, number one. Worksite growth -- worksite employee growth was again double digit. We didn't disclose an exact number, but you can see from the growth in worksite employees that Marty cited, we're up to 1.5 million of worksite employees serviced across our ASO and our PEO that we had a nice growth.
So we had really good bookings growth organically on the PEO. The PEO at the end of the year organically was growing in the upper teens. And then in the back half of next year, we're calling up 11% to 14%. Once we anniversary Oasis and what's going on there is that there's a drag from workers' comp that's impacting that number. So if there were no workers' comp, the number would be higher based on where we anticipate things will be as we get to the third and fourth quarter of next year. So hopefully that...
David Grossman--Stifel -- Analyst
So you are -- right, so I'm sorry. So you are high-teens PEO growth in the fourth quarter and you are high-teens for the year. Is that it?
Efrain Rivera--Senior Vice President, Chief Financial Officer, and Treasurer
Yes, I think it's called out, either in one of the slides or in -- I quoted out in my comments, but our PEO growth for the year was 19%.
David Grossman--Stifel -- Analyst
Got it. Got it. Sorry about that. Thank you for that clarification.
Efrain Rivera--Senior Vice President, Chief Financial Officer, and Treasurer
I have to say, it's always important to remember that PEO and insurance has the Paychex Insurance Agency and we're battling a bit of a drag on the workers' comp side that we will battle into next year. But we're obviously showing some pretty good underlying growth.
David Grossman--Stifel -- Analyst
Right. Right. And then just there was a comment, I think, Marty, you made about the integration with the carriers as it relates to Oasis. So perhaps you could just give us a little bit more color on kind of where you are in that process and how much incremental geographic reach you're getting as a result of that as you try to convert the payroll install base?
Martin Mucci--President and Chief Executive Officer
Sure, David. There's really two pieces of that. Well, first of all, say, we're in -- I think we're in good shape. We're in the middle of that now. But we've been already working through it and particularly the last few months. So one, there is geographic growth because they were in some states and areas that we weren't. So they had relationships there and already had some clients that we could gain referrals from.
From the carriers, they were stronger with one particular carrier that we have not been quite as strong with that gave us a little bit more leverage. When you put all those together, now we have more strength and more clout with all the carriers that we're involved with. So we think we've got very good plans between the two of us going forward into fiscal '20, and those were allowed kind of through the year. And so that gives us a better -- also, when you have more clout I guess, or more clients, obviously, we will have better integration with those carriers as well. So I think we're set up well with the number of carriers, the plans and the integration with them. So it's going to give us an expansion into a little more -- a few more states that we're not in, but better than that, a little bit stronger carrier relations for the best benefit plans, which is one of the most important things to have as you go out and compete.
David Grossman--Stifel -- Analyst
Right. So, as you look at kind of the geographic template with Oasis, do you think you've got pretty much solid coverage across the overlap with your installed base of payroll customers?
Martin Mucci--President and Chief Executive Officer
Yes, we certainly do. Particularly, I wouldn't say it covers the whole map by any means, but it covers those states that particularly have an interest in PEO, I mean, just the Georgia, Florida, Texas, California kind of thing. It's going into more states as we expanded, but it definitely picked up. I think they were in 14 different states. So we definitely picked up more states and where there is more interest in PEO sort of expanded where we were from that standpoint. And again, as I mentioned earlier, we're already integrating them with some of our products that they didn't have to offer as well. So not only do you get clout with the carriers and the benefit plans that they can offer, but also now they can more easily sell time and attendance that's integrated -- 401(k) that's integrated and they have our insurance agency to back them up if there is a client we don't want to underwrite.
Efrain Rivera--Senior Vice President, Chief Financial Officer, and Treasurer
Hey, David, one other thing I would say, I want to make sure that it's not implicit in the assumption in your question. PEO is probably is unique among the products that we sell and that a significant amount of the sales come from outside the Paychex client base. So if you take HROI and Oasis, you now have access to clients that are outside of the Paychex's, traditional base -- client base. So our expectations about growth in PEO are not solely based on the upsell of existing Paychex clients. They're based on going out and getting new -- brand new to Paychex's clients in PEO. So it's a mixture of both. So when we talk about geographic coverage, not just the base, it's also being In those geographies in a more concentrated way.
David Grossman--Stifel -- Analyst
Okay. Got it. Very helpful. Thank you.
Efrain Rivera--Senior Vice President, Chief Financial Officer, and Treasurer
Okay, Dave.
Operator
Your next question comes from the line of Lisa Ellis from MoffettNathanson.
Lisa Ellis--MoffettNathanson -- Analyst
Hi, good morning, guys. Can you talk a little bit about the investment-focused areas for 2020? I mean, you've had terrific success now with the digital marketing initiatives -- sales initiatives, et cetera, you got client base retention up. As you're looking out to 2020, what's the next wave of investment areas?
Martin Mucci--President and Chief Executive Officer
Yes, I think it continues to be in the innovation of the products and adding every -- about every six weeks, we're adding additional feature and functionality to the payroll products and particularly the HR side of the business, whether it's learning management, whether it's a partnership with -- let me stick with the products first. Second, I want to go to partnership. But with the products like learning management, data analytics, I think you'll see also we're continuing to invest in the chatbot and artificial intelligence that we're using. We're seeing that to be a big help from the service perspective and also on the mobile app.
So we're continuing to make things simple for clients and their employees. 70% of our mobile app usage is employees of our clients. And what we're finding is things like when we make it easy to enroll in 401(k), with they can do it in four clicks now versus the paperwork and the passing of the paperwork for the client and to watch and back and forth, that participant rate is already going up and those who are signing up for the 401(k) that leads to better client retention, because they now pass all the compliance tests and they have --their employees that are happy with their retirement plans and gives them better retention.
So the investment will be to continue to make things simple from the mobile app side, from the client employee side. Self service is going to be -- it just continues to be very important, right from initially signing up, right through to setting up everything for yourself. There's a whole wave these days of clients and their employees wanting to do things themselves when they want to do it. So you've got to make everything simple.
Luckily, our investments very long ago started to be our development was mobile first, meaning everything is made, designed simple for the mobile app and then can expand for your desktop as you need it. So a big thing there. Partnerships will be, again, for we have the only large partnership that's been announced with Indeed, we are out there providing a connection directly to flex with basically the push of a tile or a button that will get you to Indeed and help you post a job critically important right now in this low unemployment area. These are partnerships that we haven't necessarily done before, and we're being much more aggressive in trying to partner with what the needs of the client have been. So we're very pleased with the investments in artificial intelligence in chatbots, what that also I did't mentioned has done for service. Now we're taking -- I mean, 60% of these service requests coming in on a chatbot are handled by that -- or coming in online are being handled by that chatbot, that's freeing up our personnel for much more complicated questions and for more clients that they can handle. So it's really helping us from a service perspective as well.
Lisa Ellis--MoffettNathanson -- Analyst
Terrific, thank you. Efrain, I have a just a follow-up, sort of back to basics question on the PEO and ASO business, because you've mentioned a few times now your insurance agency. Can you just remind us when and what types of clients you will take on the underlying actuarial risk? And then I guess I always felt that you would reinsure that. So can you just clarify sort of in what situations does a client end up entering the PEO versus end up using your insurance agency potentially? And like what differentiates those two and sort of how does that impact you or your economics?
Efrain Rivera--Senior Vice President, Chief Financial Officer, and Treasurer
Yes. So just the the 120 second fly over on worker's comp, I'm going to say between 60% and 65% of all clients of PEO end up being underwritten by Paychex. And then we set reserves and have reinsurance above certain levels have been doing that for more than two decades without any issues when we look at that very, very closely. So then you say, what happens with the other third? Well, there are certain funds that you don't want to underwrite workers' comp or we have the unique advantage of having a insurance agency right next door. So we will have -- we will place those clients with Paychex Insurance Agency, and one of the things that we've found this year that was really a help was that by creating more of a tight linkage between the PEO and the insurance agency, it's now much more seamless to say to a client that otherwise we would not do workers' comp for to simply refer them to the agency to see if they can get a policy place, that's been a big plus and a big hit with our sales force too.
On the healthcare side, it's primarily a state of Florida issue, there's a little bit of other risk we take. And that's just a function of the concentration of clients that we have in Florida. We have an MPP plan. We do insurance with the Blues of Florida that gives access to a much broader network -- to a broader network of healthcare providers. And again, we look at the projected MLRs or medical loss ratios for the pool. We just reserve it appropriately and above a certain amount we reinsure that risk. So that's basically what we're doing. More limited risk taking on the healthcare side, we take some risk on workers' comp, reinsure it and then are very strict about who we let into the pool in either case. And where for other clients -- by the way, I said workers' comp in terms of insurance referrals. We also refer for healthcare to our agencies. So we've got flexibility and this helps us kind of protect the quality of the pool and workers' comp and in healthcare.
Lisa Ellis--MoffettNathanson -- Analyst
Terrific. Thank you. Super helpful.
Operator
Your next question comes from the line of Kevin McVeigh of Credit Suisse.
Kevin McVeigh--Credit Suisse -- Analyst
Great, thanks. Hey, so I know you mentioned a couple of times on the retention that you're bumping up against historical levels. But if you think about the investments you've made, the kind of diversification into PEO, is it -- what's the probability we enter a new range on that? And I guess, Marty, can you remind us kind of where we are, where that number is today and if it is in fact the case, so we can kind of reset that range? What's a better way to think about that? And then just what's the sensitivity to 100 basis points in terms of revenue?
Martin Mucci--President and Chief Executive Officer
Yeah. I'll start with it. It's a little stronger than 82% on the client retention, the way we look at it. I think it's a little bit better than that from a revenue perspective where we don't typically give that, but it's better than that. So our historic high has been right around that 82%. Now when you think about, as I said, Kevin, earlier, when you think about losses for the small business side, it's pretty tough to get a lot better than that, because small businesses just start up and go out of business. And obviously we've been able to handle that very effectively and profitably. But, I think, we'll look through the investments that I just talked about and Lisa's question, when you think about the investments in chatbots and artificial intelligence and responding to clients even quicker is there something there, not to mention we've done a lot of investment in data analytics and knowing models of which clients are most likely to leave us. And then we approach them kind of proactively through a retention team. I think all of those have that in the great service, which we are at historic highs for our net promoter score as well. I think we're all benefiting that getting us to the best.
So do I think we can do a little bit better than that? I think so, but I just think it does have a top limit because of just the number of auto businesses that happen in the small business market.
Kevin McVeigh--Credit Suisse -- Analyst
Understood. And then just real quick, I know obviously we've taken about 200 basis points of investment, put it back into the business, but you've shifted a lot of that capacity to cloud. So just trying to get a sense where are we in that cloud evolution, number one? And then just obviously there's certain amount of margin benefit from that as well, I guess twofold. When did some of those investments run off? And then what's the uplift on the margin as the capacity is done through the cloud as opposed to the traditional service?
Martin Mucci--President and Chief Executive Officer
Yeah, I think, pretty much you can say everything is pretty much in the cloud now that the way the clients approach us and where our services are. I mean, everything is software-as-a-service and everything is built as I said, mobile-first, everything is available that way. I think some of the additional investments that we've made and talked about will start to run off at the end of this year. We made an investment and a very deliberate investment to speed up some of the product development that we could see ourselves doing in the future and set to take advantage of the tax savings to instead of just run it all to the bottom line in a one-time kind of fashion. Hey, let's put some of this to accelerate the product development, we've been very happy with that.
Obviously, it's driven the best client satisfaction and retention scores, its improved our sales. Overall our par growth is the best it's been in three years from a sales perspective. So we're feeling like the right investments were put in place for sales, for telephonic sales, for demand generation through marketing and through IT. But some of that, through the IT, will start to come off toward the back of the year. I don't think we've given, hey, what that will do necessarily to margins or probably will, but -- at this point. But it will roll off, some of that will go back down to a little bit less investment -- normalized investment toward the end of this fiscal year.
Efrain Rivera--Senior Vice President, Chief Financial Officer, and Treasurer
Yeah. Hey, Kevin, one other thing I'd say to answer that question qualitatively, as Marty said, the investments start to roll off as we exit this year, which is what we had said before. At that point, in the absence of any change in the mix of the business, you would expect operating margins now to start to float back up. The only caveat that I've said when I get asked on that question is what is the growth of the PEO? Because the PEO has a moderating impact on margins. Now the offset to that would be faster revenue growth potentially. But I would say as we go through the year, we'll have better sense of kind of what the overall margin uplift. Underlying margin uplift, excluding PEO, is going to go up. PEO will have an impact though overall depending on mix.
Kevin McVeigh--Credit Suisse -- Analyst
Got it. And then, Efrain, if I could real quick, are you kind of where you are from a headcount perspective? Or would there be some more optimization based on kind of how the capacity sits?
Efrain Rivera--Senior Vice President, Chief Financial Officer, and Treasurer
You mean just in in general, or are you specific to anything?
Kevin McVeigh--Credit Suisse -- Analyst
I would say just the -- either, either. However, you want to answer that.
Martin Mucci--President and Chief Executive Officer
I mean, I think look, we're always, we've got a history of being very profitable and making sure that we keep our cost below. I think we continue to always look for leverage. As Efrain said, the change in the margins have been mostly because of the PEO business and the way that that hit your financials drives a lot of revenue, but also has higher expenses and brings the kind of margin percent down. But I think we're always looking for ways to continue to leverage and I think the investments we've made. But again, back to when you think about artificial intelligence and chatbots and so forth, answering 60%, 70% of the questions, we certainly are looking to continue to drive some headcount down where it's not needed.
But we've also been very good at then reinvesting that headcount where it is needed. So for years, we've taken headcount out of operations where we've got more efficient and put it into technology where we knew the market was going. So I'm not sure headcount itself, it'll all depend on where the growth is. And of course, we've grown the headcount really because of the growth in the business, not necessarily. We haven't -- we've never really deleveraged from a headcount perspective. In my, at least 15 years, we've always drove -- driven headcount down, but may have invested that somewhere else.
Kevin McVeigh--Credit Suisse -- Analyst
Awesome. Thank you all.
Operator
Your next question comes line of Tien-Tsin Huang from JP Morgan.
Tien-Tsin Huang--JP Morgan Chase & Co. -- Analyst
Hey, good morning. Just a quick question on retention. You had a lot of good questions there already, but just on Oasis specifically, are you -- do you have pretty good line of sight now on the retention there in the initial period? I can't remember if you said that there's an opportunity to maybe improve retention there once you apply the -- maybe the Paychex way there or not?
Martin Mucci--President and Chief Executive Officer
No, we really haven't broken that out. I think we have a pretty good line of sight that it's been pretty solid. We had no surprises what so ever, which is always good, on an acquisition. I think they've done a good job on the service side and selling to the right clients. We have not seen any fallout from insurance plan, changes or anything else at this point. So I think the retention has been solid. And there's always -- we're always looking for ways to improve it, but we certainly did not have any surprises and we're very satisfied with where they are and retention.
Tien-Tsin Huang--JP Morgan Chase & Co. -- Analyst
Fair enough. Thank you.
Martin Mucci--President and Chief Executive Officer
Okay, thanks.
Operator
Your next question comes from the line of Samad Samana of Jefferies.
Samad Samana--Jefferies. -- Analyst
Hi. Thanks for taking my question. So, Marty, based on your commentary, it looks like retention is up 100 basis points, it was 81% in last year's 10-K, and you mentioned it's over 82% this fiscal year that just ended. So I'm curious, what did gross new customer adds grow in fiscal '19 versus fiscal '18? I'm just trying to parse how much of that 3.1% total customer growth was driven by the improvement in gross retention versus new customer adds?
Martin Mucci--President and Chief Executive Officer
Yes, it's a mix of both, we don't break it out and we don't give that level of detail. But the -- certainly, the overall growth of clients was a benefit of both good sales results and a little bit better retention. Just that improvement in retention alone, on the payroll side, would not have made that total difference there.
Kevin McVeigh--Credit Suisse -- Analyst
Great. Thanks for taking my question.
Martin Mucci--President and Chief Executive Officer
Okay.
Operator
Your next question comes from the line of Mark Marcon of Baird.
Mark Marcon--Baird -- Analyst
Good morning, Marty and Efrain. Hey, I was wondering, you mentioned that in the mid-market, you ended up seeing good growth. And I'm wondering specifically, were there some new additions to the overall bundle that's driving that? Where -- what's the primary driver do you think of the improvement there? And I'll leave it there for now.
Martin Mucci--President and Chief Executive Officer
I think a couple of things. One, I think, certainly, the product adjustments that were the product enhancements that we've made, so adding data analytics, adding a new HR center, what we call HR center, gives you performance management support, also the -- I didn't mention, the learning management. So everything that is needed this year from a recruiting, training, and the personnel development that clients have been looking for, prospects are looking for, we have added and made it much stronger. And so I think from a product set that's very good. From a sales perspective, I think the approach of going totally with HR and the HR need is been very strong as well.
So I think that the approach of selling HR and approaching the client from their total HR needs has been strong and sales are up, probably the best growth we've seen again in three years in the mid-market. And we seem to be on a good path to start the new fiscal year as well.
Mark Marcon--Baird -- Analyst
That's great. And then any change in terms of the profile of those mid-market clients in terms of who you're winning them from or what sort of systems they had in place previously?
Martin Mucci--President and Chief Executive Officer
No, I don't think so. I think from any of the competitors, I think we're doing pretty well, it's been pretty consistent. I think we're obviously winning a few more, I think, than we were and I think that's again the sales execution is stronger, the sales training is stronger and the product itself is stronger. So we're pretty pleased with the momentum we're seeing in the mid-market. And I wouldn't say it's from any one competitor, I think we're doing pretty well against all of them when you compare it historically.
Mark Marcon--Baird -- Analyst
Great. And then with regards to the improvements that you've made, it's been a very short period of time that you've already ramped up in terms of the chatbots and the ability to answer questions, and you're getting the 60% to 70% of them now. Where do you think that goes in a couple of years?
Martin Mucci--President and Chief Executive Officer
See as I think -- I mean based on the improvements so far, what I read when you research this kind of -- around the country, I would think you could get up to 75%, maybe even 80%. And it's so easy, well, I think it's easy, but our development team might not. It's so -- you can be so responsive to the feedback of seeing if the question was answered or not that you get so much better about refining the questions that they're out -- being able to read the questions they are asking and respond to that. But I definitely think it could get up into those 75% range any way, maybe even 80%.
Mark Marcon--Baird -- Analyst
And you're directly tying the improvement in terms of a client retention, and the client satisfaction scores to people who utilize the chatbot or being serviced by it?
Martin Mucci--President and Chief Executive Officer
I wouldn't say that directly yet. I don't have it that specific, but I think it certainly is part of it. And we really ramped that up this year. And obviously we've seen good satisfaction and we get good results. We always ask the client after they've received their answers, did this satisfy? What you were looking for? And we're getting very good feedback on that and very good results. So it certainly, I think, has helped in the client satisfaction. But I think primarily that satisfaction has been on the product, the ability of the product to serve the client, the ease of use of the product and the great service, a personalized service that we're providing.
Mark Marcon--Baird -- Analyst
Great. And then with regards to the self implementation on the small end, I know it's really early days, but are you seeing any sort of -- maybe too early to tell. But is there any difference in terms of the client retention level that you see from clients that are willing to self implement?
Martin Mucci--President and Chief Executive Officer
I think it's a little early to really have an update there. But, what you do see is typically clients who set themselves up historically, even in a small sample are more likely to be retained because they feel like it was their fault that there was a problem, because they set themselves up. And therefore they own it a little bit more and they're a little more tolerant of giving us a chance to help fix the issue that they may have created.
Mark Marcon--Baird -- Analyst
Got it. Great. And then lastly, just workers' comp for next year and how we should think about Insurance Services? I'm not talking about the next fiscal year beyond the one that you've already guided for, but for the second half, when we go into the new calendar year, are you assuming that workers' comp rates are going to be down 15% to 25% in terms of your overall assumption? And then within PEO and insurance, what are you expecting the insurance part to be down?
Efrain Rivera--Senior Vice President, Chief Financial Officer, and Treasurer
Okay, so that's a compound question, got two pieces to it. So let me just (inaudible). So with respect to workers' comp, the workers' comp I'm talking about is not workers' comp that has anything to do with the PEO. So before that, pick that out of your mind. This is...
Mark Marcon--Baird -- Analyst
Got that out of my mind.
Efrain Rivera--Senior Vice President, Chief Financial Officer, and Treasurer
Yes, it's purely the workers' comp -- yes, Paychex workers' comp. So I would say, Mark, I don't know in the back half specifically how much we have it down. But certainly in the first half where we declined pretty significantly versus first half of last year and then it starts to moderate -- that decline starts to moderate in the back half of the year because we started to experience the declines in workers' comp heavily in third and fourth quarter. So I think it moderates as we go through the year. I would not expect to be 15% to 20% down in the fourth quarter, again, that's way too much.
Mark Marcon--Baird -- Analyst
Okay.
Efrain Rivera--Senior Vice President, Chief Financial Officer, and Treasurer
I would think we're getting closer to kind of flat or maybe slightly above by the time we get to Q4, just because we're anniversarying some sharp declines in the back half of the year.
Mark Marcon--Baird -- Analyst
And then this for the Insurance Services revenue?
Efrain Rivera--Senior Vice President, Chief Financial Officer, and Treasurer
Insurance in total, no, because health and benefits is growing nicely, actually had a good quarter revenue wise for health and benefits. This is again, health insurance and support to Paychex clients that's growing nicely at upper single digits. And we'd expect that to continue to grow nicely through the balance of the year.
Mark Marcon--Baird -- Analyst
Okay, great. Thank you.
Martin Mucci--President and Chief Executive Officer
Thanks, Mark.
Operator
Your final question comes from the line of James Faucette of Morgan Stanley.
Steven Wald--Morgan Stanley -- Analyst
Yea, hi. Good morning. It's Steven Wald on for James. Just maybe one quick one following up on the margin discussion, I think you said, all as equal past sort of 2020 results of the Oasis expect the margin to sort of float up. I think on the last call, you have talked about expecting year-over-year EBITDA margin improvement in 2021. If you could speak to whether that's still your expectation? And also, give me sort of -- if the OK times or good times whatever you want to call it continue, what the sort of upper limit is on the EBITDA or operating margin?
Efrain Rivera--Senior Vice President, Chief Financial Officer, and Treasurer
Yes, I'll answer the first and can't answer yet the second. I think we need to have a full year of Oasis under our belt, understand what the behavior of costs is in the business. We understand what it will be in '21. We would expect EBITDA margin to float up in '21. There's many reasons for that. But I think that we should see some improvement on EBITDA margin. What is the feeling of that a little bit early to say at this point. We'll have a better sense if we go through the year.
Steven Wald--Morgan Stanley -- Analyst
Okay. Thanks.
Martin Mucci--President and Chief Executive Officer
Okay.
Operator
Thank you, and I'll now turn the call to Mr. Mucci for any additional or closing remarks.
Martin Mucci--President and Chief Executive Officer
Thank you. And at this point, we'll close the call. If you're interested in replaying the webcast of this conference call, it will be archived for approximately 30 days. Thank you for taking the time to participate in our fourth quarter press release conference call and for your interest in Paychex. Have a great day.
Operator
Thank you. That does conclude the Paychex fourth quarter and fiscal year 2019 earnings conference call. You may now disconnect.
Duration: 81 minutes
Martin Mucci--President and Chief Executive Officer
Efrain Rivera--Senior Vice President, Chief Financial Officer, and Treasurer
Ramsey El-Assal--Barclays -- Analyst
James Schneider--Goldman Sachs -- Analyst
Jason Kupferberg--Bank of America -- Analyst
James Berkley--Wolfe Research -- Analyst
Bryan Keane--Deutsche Bank -- Analyst
Jeff Silber--BMO Capital Markets. -- Analyst
Kartik Mehta--Northcoast Research -- Analyst
David Grossman--Stifel -- Analyst
Lisa Ellis--MoffettNathanson -- Analyst
Kevin McVeigh--Credit Suisse -- Analyst
Tien-Tsin Huang--JP Morgan Chase & Co. -- Analyst
Samad Samana--Jefferies. -- Analyst
Mark Marcon--Baird -- Analyst
Steven Wald--Morgan Stanley -- Analyst
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Actuant Corp (ATU) Q3 2019 Earnings Call Transcript
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Actuant Corp(NYSE: ATU)Q3 2019 Earnings CallJun 26, 2019,11:00 a.m. ET
• Prepared Remarks
• Questions and Answers
• Call Participants
Operator
Ladies and gentlemen, thank you for standing by. Welcome to the Actuant Corporation's Third Quarter Earnings Conference Call. During the presentation, all participants will be in a listen-only mode. Afterwards, we will conduct a question-and-answer session. (Operator Instructions) As a reminder, this conference is being recorded, Wednesday, June 26th, 2019.
It is now my pleasure to turn the conference over to Barb Bolens, Vice President, Corporate Strategy, Investor Relations and Communications. Please go ahead, Ms. Bolens.
Barb Bolens--Vice President of Corporate Strategy, Investor Relations and Communications
Thank you very much, operator. Good morning, everyone, and thank you for joining us for Actuant's third quarter 2019 conference call. On the call today to present the Company results, are Randy Baker, Actuant's President and Chief Executive Officer; and Rick Dillon, Actuant's Chief Financial Officer. Also with us, are Fab Rasetti, General Counsel; and Bryan Johnson, Chief Accounting Officer. Our earnings release and slide presentation for today's call are available on our website at actuant.com in the investor section.
We are also recording this call and will archive it on our website. Please go to slide 2. During today's call, we will reference non-GAAP measures such as adjusted margins and adjusted earnings. You can find a reconciliation of GAAP, non-GAAP measures to GAAP in the schedules to this morning's press release. We would also like to remind you that we will be making statements in today's call and presentation that are not historical facts and are considered forward-looking statements. We are making those statements pursuant to the safe harbor provisions of Federal Securities law. Please see our SEC filings for the risks and other factors that may cause actual results to differ materially from forecasts, anticipated results or other forward-looking statements.
Consistent with how we have conducted prior calls we ask that you follow our one question, one follow up practice in order to keep today's call to an hour and also allow us to address questions from as many participants as possible. Thank you in advance for your cooperation.
As a reminder, during the call, and as in previous quarters, we may refer to our Industrial Tools & Service segment as ITS Tools or Enerpac and our Engineered Components & Systems segment as ECS for components.
Now I will turn the call over to Randy.
Randy Baker--President and Chief Executive Officer
Thanks, Bolens. Good morning, everybody. Today, we're going to start on slide 3. Our third quarter was one of the best results in many years, and I'm very pleased with the performance of the businesses. But before I review the results, I'd like to provide an update on our strategy progress. Our initiatives to improve organic growth are paying off. The Industrial Tools & Services segment grew by 8% in the quarter. This was a direct result of the efforts to improve our sales effectiveness and bring new products to the market. Our service sales grew at an impressive rate in the quarter which was benefiting from extended projects in the Middle East and North Sea.
As we recall, we announced a restructuring program in our second quarter earnings call to improve efficiency, reduce our cost base and prepare for the next phase of our strategy. The combination of Enerpac-Hydratight and the corporate structure are the area of focus which are well under way. We expect to see the benefits of our efforts as we enter our new fiscal year.
From a capital deployment perspective, we are maintaining strict discipline relative to our strategy. Our top priority remains investing in organic growth efforts while maintaining a clear perspective on strategic acquisitions. We have built a good pipeline of perspective tool companies which will extend our existing product lines and provide new technology to Enerpac. From a portfolio perspective, the Enerpac -- I'm sorry, the sale of the Engineered Components & Systems segment is continuing and we will provide more updates as become available.
Secondly, we have made decisions to retain the Cortland, industrial rope and medical component business. We believe we can further improve and grow the Company to maximize shareholder value. The industrial rope segment has the potential to serve a wider variety of customers through the utilization of the Enerpac channel, and the medical component business is growing fast with a very attractive profit margin.
Now, turning over to slide 4. As I mentioned earlier, we had a -- we are very pleased with results in the third quarter. Core sales grew by 3%, comprised of an outstanding result from Enerpac of 8%, while moderate decline from ECS segment of 2%. Adjusted operating profit grew by 18%, driven by 280 basis points of margin expansion.
As I stated in the past, our target Industrial Tools & Services operating leverage is between 35% and 45%, which was exceeded in the quarter. While ECS sales declined in the quarter, the team was able to expand margins through cost reduction and price realization. As a real result, EPS grew by 15% in the quarter to $0.45 a share, which was the top of our guidance range and the best earnings since 2015. From a financial leverage standpoint, we improved to 1.8, which is a substantial progress over prior year and places Actuant in a very healthy position. Overall, the third quarter was a great result and I'm proud of our global team for the effort to deliver on the commitments conditions and improve the Company.
Now turning over to slide 5. The third quarter was very active for new product launches and new platform wins. Enerpac tool launched nine new product families in the quarter and is now making great progress toward the 10% product development sales goal. The new E-Pulse hydraulic pump is a revolutionary design for all applications from lifting to bolting with a completely new drive system. The new E-Pulse pump provides a true competitive advantage and sets a new standard in the marketplace.
Secondly, our lifting group has released a highly creative cube jack system capable of 50 tons in a very compact design. This new system provides greater flexibility in a highly transportable package. On the Engineered Components & Systems side, our team won 10 new product platforms in the quarter and has reached a new level of product vitality of greater than 15%.
The new platform includes display systems, hydraulic tools and new drive line applications. Our push to have a higher degree of product vitality has lessened the impact of market cyclicality. Overall, we're very pleased with the progress of becoming a truly innovative company.
So moving on to slide 6, our capital allocations priorities have not changed. We believe investment in ourselves to maximize organic growth is the highest priority. Secondly, as you noted from our improved financial leverage, we will continue to maintain a strong balance sheet and reduce debt. As I mentioned, strategic acquisitions which support our tool company strategy are our priority. However, our ability to acquire and operate to improve the value of the Company must be maintained. We have built an active list of potential acquisitions which must meet our financial and operational hurdles, including comparison with share repurchase. Additionally, all acquisitions must support the extension of our tool product line and provide technology which gives Enerpac a competitive advantage.
I'm going to turn the call over to Rick, now to go through the details on the quarter and I'll come back with a market update and guidance.
Rick Dillon--Executive Vice President and Chief Financial Officer
Thanks, Randy, and good morning, everyone. So before we get into our third quarter report, let's quickly look at the one time items on slide 7. We recorded a net $9 million benefit from the impairment, divestiture and other charges. $11 million of the benefit is related to the decision to retain the quarterly US business, including an accounting adjustment for certain translation losses and depreciation and amortization.
This benefit is partially offset by divestiture costs related to the ECS process. Tax reform and other charges relates to the acceleration of debt issuance costs and $3 million of additional tax expense related to the reevaluation of certain tax credits as a result of law changes, given tax reform. So let's get into our third quarter results.
We turn to slide 8. Core sales increased 3%. This was offset by the 6% impact of divestitures in the quarter and a 4% headwind from the stronger dollar. Adjusted operating profit showed continued year-over-year improvement of 280 basis points with incremental profitability in both ITS and ECS. Our adjusted effective income tax rate was approximately 15% for the quarter in line with our expectations. Our full year effective tax rate is still expected to be approximately 20% and our fourth quarter rate is expected to be in the mid to upper 20%s similar to our second quarter. Adjusted EPS for the second quarter was $0.45 compared to $0.39 last year and at the top end of our guidance range.
We turn into slide 9. Total core sales at 3% was in line with our guidance in the mid-single digits range as continued strong growth of ITS was partially offset by a sales decline of ECS. ITS segment sales continue to be strong, with core sales up 8%, product sales continue to be solid, and service growth in the Middle East and North Sea was much stronger than our expectations.
In ECS, the modest decline in core sales resulted from reduced demand in off-highway truck, North America frac and China, while European truck is stable. I'll provide more color on core sales in a minute when we discuss the individual segment results.
Turning to slide 10 for a summary of our top line performance, our 3% consolidated core sales growth was driven by a $9 million improvement from volume and price. ITS volume grew by $9 million and it was partially offset by reduced ECS volume. Currency headwinds reduced sales by approximately $11 million or 4%, as did the net impact of acquisitions and divestitures, which was $20 million or 6%. Now let's look at both adjusted operating profit and adjusted EBITDA on slide 11.
Our trend of improving year-over-year operating profit margin has continued this quarter. Improvement from pricing actions and ITS core volume increases provided the greatest positive impact in the quarter. An unfavorable product mix and under absorption in both segments was partially offset by the benefit of the elimination of the losses from the heavy lifts products in the prior year.
As with the case last quarter, tariffs in the quarter were approximately $2 million and in line with our expectations. We continue to believe that our pricing actions were sufficient to cover commodity and other inflationary increases, including tariffs. But we are watching closely how the current trade and tariff discussions advance, any further tariff impacts would likely need to be covered in the form of surcharges. Our objective remains to prevent margin erosion due to inflationary cost pressures. And as expected, SAE expenses also improved year-over-year, primarily driven by reduced incentive compensation expense.
Now move on to the segment details starting with the ITS segment on slide 12. Core ITS sales increased by 8% year-over-year, which is the fifth consecutive quarter of consolidated core growth and the seventh consecutive quarter of core product sales growth in the segment. Core product sales were up mid-single digits with substantially all regions experiencing growth and led by North America. This reflects the continued benefits of our investments in NPD and commercial effectiveness.
The biggest driver of our growth in the quarter was the 23% core sales improvement in our service business, specifically in the Middle East and North Sea. Third quarter is our seasonally strongest service quarter due to planned maintenance shutdowns. However the upside we experienced in the quarter was attributable to scope additions to a number of large plant shutdowns. Emergency repairs and higher work level has been normal during Ramadan. Incremental profit flow through on the solid product growth in North America and the significant service growth drove the 24% EBITDA margin and is a testament to the strength of our ITS business and our opportunities to drive growth and profitability as we execute our strategy of becoming a pure play premier industrial tool company.
If we look at slide 13, before we move on to ECS, I want to spend a few minutes on the ITS restructuring program as well as the drivers of the ITS fourth quarter projections which Randy will cover shortly. As you mentioned earlier, ITS has begun to implement the restructuring program we announced earlier this quarter. The key areas of focus include repositioning our North American service business to align with our future growth strategy. Specifically, our service structure and resources will be focused on high value and added services -- high value-added services such as joint integrity, specialty machining and high margin bolting.
We had built a service organization that's not only focused on specialty service, but also commodity type service, which comprised historical profit margins. While we expect to see reduced service sales in North America in the near term, we spent to see an immediate improvement in profitability. Our new operating structure will also allow us to put more focus on growing our products and rental products to both our service and distribution networks. As we invest in and grow our rental and specialty service business, we will see incremental core sales and even greater profitability in the region.
In addition, as we finalize the integration -- Enerpac -- of Enerpac and Hydratight, our general ITS structure will be a focus, and may include de-emphasis of certain product offerings that while small, have negative impacts to our overall profitability. We continue to expect to achieve $12 million to $15 million annual savings with one-time restructuring costs of $15 million to $20 million. We already discussed the $1 million of cost that came during the Q3 and the rest of the costs coming in Q4 and early 2020.
With that, as we look ahead to expectations for ITS as we finish the year, I thought it would be helpful to frame the impact on the quarter from normal seasonality as well as restructuring.
In the fourth quarter from a product perspective, our core tool sales growth is expected to continue to be steady in the mid-single digits, supported by new product introductions that will offset -- will be offset by roughly $3 million of heavy lift product sales that came during Q4 2018, which will not repeat this year due to our focus on standard product offerings. Additionally, as just discussed, our restructuring activities focused on de-emphasizing lower profit and unprofitable service product line -- service and product lines will result in some incremental near-term top line reductions.
Q4 is our seasonally slowest service period due to our customers' maintenance schedules. This combined with the completion of the large projects we saw scope expansions on earlier in the year will result in the decline in sales from the quarterly sequential trend this year. What this means for ITS, in the fourth quarter is the top line growth projection of 1% to 4%, again, while down from our run rate this year, our expectation for quality growth in our core products and service business have not changed. However, we will see some puts and takes as we execute our strategy on service and product going forward.
Turning now to ECS on slide 14. Core sales declined by 2% in the quarter. The divestiture of Cortland Fibron and Precision-Hayes reduced year-over-year sales by $21 million or 14%, and the stronger dollar reduced sales by 3%, resulting in an overall reduction of 19%. The core sales decline of 2% was the result of the challenges in the ag market due to exceptionally cool and wet spring and its impact on the planting season as well as reductions in North American -- North America frac and China truck, and as stated earlier, European truck is stabilizing.
Cortland US sales were flat to prior year as ropes and cable sales were down year-over-year, but that was offset by very solid growth in our medical business. Profit margins in the segment increased year-over-year, primarily as a result of pricing, spin control and a reduction in incentive compensation expense. Given the expected market softness, we'll be taking actions in Q4 within the ECS business to reduce costs and drive efficiencies. We expect these restructuring actions to generate approximately $3 million in annual savings with a cost of approximately $2 million.
If we turn now to liquidity on slide 15, we generated $44 million of cash during the quarter in line with our seasonal patterns and our projected growth in cash in the third quarter. Working capital was a positive year-over-year as the accounts receivable built at the end of Q2 was collected as expected, and reduced inventory as well. In Q3 of 2018, we received a large tax refund of $17 million that did not repeat this year and resulted in one -- of the larger year-over-year impacts to cash flow. We now have -- or expect full year cash flow to be in the range of $62 million to $70 million down from the previous guidance of $80 million to $85 million.
The decrease is attributable to the anticipated cash restructuring costs in the fourth quarter, an effort to normalize inventories in our ECS segment ahead of new platform launches aggravated by the anticipated decline in sales in the fourth quarter and a delay of one platform launch until fiscal 2020. We're also seeing incremental CapEx, including the acceleration of certain ECS projects in anticipation of a divestiture.
We ended the quarter with $200 million of cash on hand. During the quarter, we renegotiated our term loan and revolving credit facilities to provide greater flexibility in anticipation of an ECS transaction and to support the execution of our strategic plan going forward. As we close the credit facility, our term loan balance was $200 million and we have since paid down an incremental $10 million with excess cash. Leverage measured by net debt to pro forma EBITDA took another step down and now sits at 1.8 times versus 2.6 times in Q3 of 2018. The combination of the reduction in leverage and the new credit facilities provides us with significant flexibility to execute on our strategic plan.
With that, I will turn the call back over to you, Randy.
Randy Baker--President and Chief Executive Officer
Thanks, Rick. Let's move over to slide 16. The general economic drivers remain largely unchanged from our second quarter. US economic growth is flattening while Euro Area has experienced sequential decline. Our recent dealer visits have revealed a consistent message of continued growth in industrial tools segment driven by good retail activity.
Our Enerpac deals are reporting stable inventory conditions, but are feeling the impact of pricing resulting from the ongoing tariff. Almost all of our 14 vertical markets are experiencing moderate growth, which is projected to continue through the fourth quarter. Service activity continues to be strong in the Middle East and other energy markets. In the off-highway mobile equipment marketable, both ag and construction equipment producers are balancing their wholesale to retail activity. As a result, the new equipment production orders will decline through the fourth quarter, but is expected to rebound quickly. On-highway sales in China have declined while the European truck market is more stable.
Now turning over to slide 17, our core sales growth expectations for the full year have changed. We are increasing our outlook for Industrial Tools & Service segment. The fourth quarter sales is projected to be in the 1% to 4% range and the full year projection is to be in the 6% to 7% range. This is a direct result of the stronger than expected service and the continued growth in the tools. Engineered Components & Systems is projected to decline in the fourth quarter by 7% to 11%. And the full year is -- we'll see a decline of between 2% and 3%. The combination of increasing tools and service sales with the declining Engineered Components & System resulted in a full year core sales outlook of between 2% and 3%.
And moving on to slide 18 in the guidance. Full year guidance will be adjusted to $1.125 billion to $1.135 billion, which reflects divestitures, currency impact in the lower ECS sales. Conversely, we are increasing our full year EPS range of between $1.15 and $1.21 with an effective tax rate of approximately 20%. Free cash flow will decrease to $62 million to $70 million, and for the fourth quarter we expect a range of $265 million to $275 million with an EPS of $0.25 to $0.31 per share.
And before I turn it over to the operator, I just want to reiterate that we are in the cusp (ph) of building one of the finest tool companies in the world. The Company has proven it can grow its sales coverage, it can increase its product development, and the result is creating a truly innovative and growing Company and we are very, very proud to be part of that.
So with that operator, I'm going to turn it over to you for questions.
Operator
Thank you. (Operator Instructions) Our first question comes from the line of Mig Dobre with R. W. Baird. Please proceed.
Joe Grabowski--Robert W. Baird -- Analyst
Good morning, guys. It's Joe Grabowski on for Mig this morning.
Rick Dillon--Executive Vice President and Chief Financial Officer
Good Morning.
Randy Baker--President and Chief Executive Officer
Good Morning.
Joe Grabowski--Robert W. Baird -- Analyst
Good morning. Could maybe expand a little bit more on the decision to retain the remaining Cortland businesses and kind of what changed from maybe last quarter when those businesses were part of the businesses could be divested?
Randy Baker--President and Chief Executive Officer
So as you know, we have been preparing for the divestment process for a long time where we've created a component business comprised of the ECS company. And separated from that, we sold PHI and the Cortland Fibron, which was the offshore oil and gas division, which was focused heavily on upstream, which we know was -- has been stressed and then that was placed last year. So the question is, what about Cortland, which is comprised of a industrial rope manufacturer and a very, very high quality medical component manufacturers. As we look through that and its ability to grow margins to an accretion level greater than or equal to Enerpac, we found that value and that creation possibility was there. So what we wanted to do is to really bring that business back into the full and then really proactively market the lifting assembling equipment back to Enerpac which we've already branded a significant number of our ropes and assemblies as an Enerpac product. And many of our distributors specialize in heavy lifting apparatus, whether it's cranes, spreading equipment or shackles or other components. So it fits quite well with that. So we believe we can create more shareholder value by growing that, and then secondly, by focusing on our med business, which has an extraordinary margin profile. The combination of those two things, we think we can build a very, very nice business.
Joe Grabowski--Robert W. Baird -- Analyst
Got it. Okay, makes sense. Thanks for the color. My follow up, I guess, the EC&S core sales guidance around 7% to 11% in the fourth quarter, can you maybe break it down, give a little more thought on which end markets are driving that and maybe specifically within that, wondering if you're seeing, any strength in ag related businesses or maybe improvement in ag related businesses with the elevated corn prices we've seen recently. Thank you.
Randy Baker--President and Chief Executive Officer
Okay. So, covering the components of ECS fourth quarter, one of the primary drivers is one of our new platform wins, which is a truck manufacturer in Europe has a one quarter delay on the launch of a sizable piece of business. So it's not a structural change to the business. It's the delay of the start of a major project which has a multi-year impact to the Company. So that's painful, but it's part of being component manufacturers. You could see differences in when the production changeovers for either model years or new product will launch. And that's a big chunk of that.
Secondly, we've seen softness in China. And so as we push harder to get more customers in China to offset that, we're going to see it in the short term. On the ag industry, as you know, I spent a lot of time in the ag industry and have a fairly good understanding of the dynamics, when you see major manufacturers constraining their wholesale plan and taking down their dealer stock, it creates a very, very nice environment in a very short period of time, because the availability of product is -- won't be there as we enter into the new fiscal year.
So on the corn price, if you look at the stock to use ratio and then you also think about what the lower planted acres and the lower yields do to the late start, it's going to drive the corn price up. So certain farmers and certain parts of the United States are going to see a very high windfall on their corn price, which should create some nice sales activity. So that's why we believe in the off-highway ag market. The reset should be short lived, because I can see great discipline from the three primary producers on constraining their inventory.
Joe Grabowski--Robert W. Baird -- Analyst
Got it. Okay. Thanks for taking my questions.
Operator
Thank you. Our next question comes from the line of Jeff Hammond with KeyBanc. Please proceed.
Patricia Gorman--KeyBanc Capital Markets -- Analyst
Hey, this is Trish on for Jeff. So looking at your fourth quarter guidance for IT&S, up against tough tools comp and with the early completion of service projects last quarter, can you talk more about where you're seeing strength in kind of what's driving the upgraded outlook for the segment?
Randy Baker--President and Chief Executive Officer
For tools specifically?
Patricia Gorman--KeyBanc Capital Markets -- Analyst
Yeah. For IT&S.
Randy Baker--President and Chief Executive Officer
Yeah. So, as Rick mentioned, he walked through that in a lot of detail on one of the slides. But where the real strength continues is in our tool platforms, new product launches, very healthy 14 vertical markets that are still seeing nice growth dynamics. So on the standard tool products, we still see really good things going forward. As you know, a year ago we made a conscious decision to stop doing highly specialized and in many cases highly risky and low margin construction projects. Many of them were large and many of them from a margin standpoint, either lost money or had very low margin. We've consciously stopped that.
So in our fourth quarter, we anniversary some of those projects. And so, as Rick said, that's about a $3 million takeout on a year-over-year basis, which mutes the overall product component of our ITS outlook. But you still see nice growth rates from the composite number. And then on the service side, as Rick also mentioned, our service, it has lumpy aspects to it. As we do larger projects, the customer may time to time ask us to extend those projects and keep people on job sites. And that creates a nice windfall force, which we saw in Q3, and in Q2 and which bump that growth rate up significantly.
So what we're guiding for our fourth quarter, we think is a very, very stable number. It reflects the benefit of a great tool company. And as we raise the full year guidance for the tool business, it reflects the full run rates from the full year. So we're extraordinarily pleased with the 6% to 7% to 8% growth rate for the business. It's -- it far exceeded our expectations. And when you see the EBITDA margin in the quarter of more than 24%, there are very few companies in the world that have that kind of -- type of margin profile, which again is why we are so thankful to have this quality of the business and why we're focusing on that for the future.
Patricia Gorman--KeyBanc Capital Markets -- Analyst
Okay, great. And then just on EC&S, given what you're seeing out of your end markets, does that change the way you're thinking about that -- about the sale process at all?
Randy Baker--President and Chief Executive Officer
Could you repeat the question? I'm not sure. I don't want to answer the wrong thing for you.
Patricia Gorman--KeyBanc Capital Markets -- Analyst
Yeah, so just looking at EC&S, given some of the softening end markets, is that impacting how you're thinking about the sale at all?
Randy Baker--President and Chief Executive Officer
Well, no. We always have looked at this as a strategic move for the Company. And as we said, we haven't given a lot of information about the process. And that's by design. But we're very, very committed to it. We know what's the right thing for our long-term improvement in the value of the Company. From the ECS standpoint, the key elements of that business is we've done a great job of developing a new platform win rate that is far exceeding the past. And I think that's a tremendous element of the business, because when you -- we've got a product vitality north of 15%, you're bringing in brand new customers every single quarter. It will lessen the impact of cyclicality. And that's an important piece if you're going to be in the component industry. So we're still very committed to the process and we think it's the best long-term decision for the Company.
Patricia Gorman--KeyBanc Capital Markets -- Analyst
Okay, great. Thanks, guys.
Operator
Thank you. Our next question comes from the line of Ann Duignan with JP Morgan. Please proceed.
Ann Duignan--JP Morgan -- Analyst
Hi, good morning. Ann Duignan here.
Randy Baker--President and Chief Executive Officer
Good morning, Ann.
Ann Duignan--JP Morgan -- Analyst
Good morning. Lot of my questions have been answered, but maybe you can talk a little bit about, I think you mentioned that mix was a negative in both the segments. Could you just expand on that?
Rick Dillon--Executive Vice President and Chief Financial Officer
I think from a ITS perspective, it's just the overweighted service in the quarter and really for the year versus our original guy. From the ECS perspective, it's just specific products, including some of the new products until we get to the appropriate run rate. So both of them experience a little bit of a mixed drag versus the original guy.
Ann Duignan--JP Morgan -- Analyst
Okay. And then you talked about how services had surprised due to the upside, is there any risk that we've now just created more of a deep hole going into fiscal '20 that these services -- some of the work was pulled forward and that you have tougher comps and no visibility. If you just -- like, talk about the -- say outlook for services in IT&S.
Randy Baker--President and Chief Executive Officer
Yeah, I think that you're always going to have lumpy spots within any fiscal year and service, particularly when you have large project build that you're on. They always do sort of reoccur. I mean, in 2016, we saw some very big ones that were in the $20 million plus. Those are tough to reoccur. But the ones that are of the medium size, they can create a nice windfall in a quarter. But it's something that our teams are constantly pushing as part of, once you get on a job site, you want to try to sell your services going forward, because the mobilization fees the customers paid are have already been paid. So there's a -- there are benefit to any petro chem site or transfer terminal wherever we're doing the work.
So I don't see it as a big problem going into next year. You may have some tough comps from quarter-to-quarter, but we still see the focus on high quality and high margin service, the primary objective. And as you know, our -- the element of service in the tool group, in the Enerpac tool company is actually a relatively small piece of the overall picture. If you think about our product sales, that is a very, very high percentage, which is also includes the rental business that we have. That's more than 80% of all the sales we do. And that's why the margins are so spectacular, is when you have that type of a business. So I don't see it as a major problem for us, Ann.
Rick Dillon--Executive Vice President and Chief Financial Officer
So you will see, as we talked about -- as we start to be de-emphasize some of this commodity type services, the restructuring is around North America, but the de-emphasis is global. You will see some top line pressure. But to Randy's point, these weren't the kinds of projects we saw in 2016, these were larger, longer tenured products that gave us some opportunities for upside. Then we will have projects like that and we normally do have projects like that, just unplanned maintenance and we expect that going forward. But our product and rental product growth will certainly outpace service and result in higher profitability going forward.
Ann Duignan--JP Morgan -- Analyst
And just as a point of clarification, could you just -- services at some point do you expect them to be margin neutral to the segment? I mean, is there -- can you ever get the service margins to the famous product in -- I'll leave it there. Thank you.
Randy Baker--President and Chief Executive Officer
Yeah. The service margins are always going to be a lower component of the things we do. But one of the elements of having a great service team in the field is, they're your eyes and ears on job sites that help you market your tools. These are rental or new equipment. And so when we go to a job site, we go with Enerpac tool. And that is a great way to market the products that we intend to sell. There are certain types of service, especially in joint integrity, is highly technical and it's a differentiator as a business. So we like that sort of thing. It will have higher margins, because we provide more than just labor. But when it's pure labor for hire, it'll never be equal to the product sales.
Ann Duignan--JP Morgan -- Analyst
Okay. Perfect. Thank you. I appreciate the color.
Randy Baker--President and Chief Executive Officer
Thanks, Ann.
Operator
Thank you. Our next question comes from the line of Justin Bergner with G. Research. Please proceed.
Justin Bergner--G. Research -- Analyst
Good morning, Randy.
Randy Baker--President and Chief Executive Officer
Good morning.
Justin Bergner--G. Research -- Analyst
Good morning, Rick.
Rick Dillon--Executive Vice President and Chief Financial Officer
Good morning.
Justin Bergner--G. Research -- Analyst
My first -- my first question relates to free cash flow. Would you be able to bridge the old free cash flow guidance to the new free cash flow guidance across some of the major buckets you highlighted earlier in the call?
Rick Dillon--Executive Vice President and Chief Financial Officer
I wouldn't be able to quantify those major buckets, because we generally don't. But, in terms of what's driving it, as I said, it's restructuring costs, which we've actually given what we anticipate in the fourth quarter by way of cash restructuring. There's a little bit of overall guidance, there's a little bit of CapEx that, is in anticipation of a divestiture and maybe that weren't planned to be complete entirely in '20. And then we had the inventory levels. And so ECS inventory levels particularly are up and with the delayed project, they are up. And the CapEx is primarily flat.
Justin Bergner--G. Research -- Analyst
Thank you. That's helpful. My second question relates to the restructuring detail you provided today. I'm just trying to clarify, is that restructuring associated with the restructuring, with IT&S becoming its own sort of independent business after the sale of EC&S, sort of what you referred to on the last call? Or is that actually not so much corporate restructuring, but IT&S specific restructuring operations with a further plan to follow on removing overhead, if and when you sell EC&S?
Rick Dillon--Executive Vice President and Chief Financial Officer
So, as we said on the last call, it's a combination. First of all, ITS as a stand-alone Company, you got to see the lines between what's corporate and what ITS business are. And so we talked about earlier, some of the North America service things that we're doing, including infrastructure, which would be in that corporate vein. And then we talked about some of these Enerpac-Hydratight merger, structural changes that we are doing. And again, those in a stand-alone, which fall in that corporate cost bucket.
In addition to that, like we talked about last quarter, we're going -- we're in the process of continuing to evaluate our corporate organization, in order to make sure we are efficient post transaction and that we have an overall cost that will allow us to sustain a 20% EBITDA margin or consolidate business. Of course, that will require -- some of those costs will transform or reduce naturally with a transaction, others will require actions. And as we get closer to a transaction and better clarity, we will be announced and potentially future actions to achieve that goal.
Justin Bergner--G. Research -- Analyst
Thank you. I'll hop back in the queue.
Operator
Thank you. Our next question comes from the line of Deane Dray with RBC Capital Markets. Please proceed.
Jeff--RBC Capital Markets -- Analyst
Good morning, this is Jeff (ph) on for Deane. My question is, given the recent volatility in oil prices, could you comment on the tool segment's sensitivity to oil? And additionally, could you just remind us the breakdown of upstream versus midstream and downstream exposure of the tool segments, specifically?
Randy Baker--President and Chief Executive Officer
Sure, the main thing with oil is it seeing multiple years of structural change. And so for the North American onshore, you can tell by the rig counts have come down. And so the North American sales into onshore has definitely tempered a bit. And you can see that in our torque tension sales in North America, and I think a lot of our distributors would speak to that fact that they've seen slower sales activity or slowing sales activity. It's been quite good, but it's just not as booming as it was a year and a half ago.
Offshore is primarily focused on maintenance of existing assets either in the Gulf or in the North Sea and has continued to be strong, because they have to maintain those assets. Now, if you're doing offshore drilling, that's a totally different thing and we don't participate a lot in offshore drilling anymore by design. And then as I mentioned, and Mid East has been quite active. We've seen double digit growth in service as well as some of our product sales categories in the Mid East have done quite well. So the volatility in the pricing does create some short term change in how people think about investment and CapEx. But the beauty of where we play is mid to down. And so we stay away from upstream, particularly as I mentioned a couple of years ago we consciously exited the upstream oil gas, which includes, well development, exploration, because that's where that volatility in pricing becomes very dramatic to a company.
So today we feel that the price where it's been setting is conducive to good maintenance activity and it's good to investment in new tools. Many of those tool activities come as a general maintenance manager purchase decisions. So it doesn't go in front of a CapEx committee. So things have been quite good and I think that's going to stay that way for a while.
Jeff--RBC Capital Markets -- Analyst
Okay, great, that's very helpful. And then just to follow up, is there any intention to kind of focus your M&A activities outside of energy? Or is it kind of just, it's next in the group kind of at the same percentage as your end markets?
Randy Baker--President and Chief Executive Officer
Yeah. So just to clarify, we won't focus any attention in the energy area for M&A, are a 100% of our activity for M&A is directed toward tool companies. As I've mentioned before to a lot of our investors, we look at several distinct categories of tools and ones that bring either a technology that we need for Enerpac or opens up a brand new market or a region that helps us grow as a tool company.
So you can rest assured that our capital investment relative to M&A will be focused of developing a world-class tool company and we will not deviate out of that. And as I mentioned in my commentary, it will follow very strict guidelines on the quality of the Company, the returns, how well can we own and operate it. And we will always compare it with the value of a share buyback rather than an investment in M&A. All of those hurdles meeting the criteria, then we proceed.
Jeff--RBC Capital Markets -- Analyst
Fantastic, thank you.
Operator
Thank you. (Operator Instructions) Our next question comes from line of Stanley Elliott with Stifel. Please proceed.
Brian Brophy--Stifel -- Analyst
Hi, good morning. This is Brian Brophy on for Stanley. I had a question on ITS. Can you give us some more color on what's driving the strength in the Middle East?
Randy Baker--President and Chief Executive Officer
Well, there's a lot of assets in the Middle East. There's -- there are so many large refineries there that need to be maintained. And the Mid East for us is broken into a couple of large markets, obviously, it's our traditional markets in Saudi, UAE and areas where there's a lot of assets that are being maintained. But also we're in the Caspian and North Africa and other places that typically, as we characterize, Middle East, people don't think about.
Caspian has been quite good for us. And as you remember, we made an acquisition that extended what we do in service from not just joint integrity and pipeline services, but also pipe -- perhaps in cleaning systems and services which added quite a bit of revenue to the region and also added what we do. So it's been quite good, double digit growth. I think some of that may slow down because some of those things were project extensions from sites we were already on, but we're still projecting some pretty good activity going forward out there.
Brian Brophy--Stifel -- Analyst
Excellent, thanks. And then on the incremental margins in that segment, still pretty strong this quarter in spite of that service mix headwind. So if you could give us little more color on what's driving that? And given that you guys see service moderating a bit in the fourth quarter, should we expect some improvement in incrementals in the fourth quarter? And then help us remind us what a long-term normalized incremental margin for that business is? Thank you.
Randy Baker--President and Chief Executive Officer
I'll do the reminder on the incremental margins and I'll turn it over to Rick to give you some detail on the composition. But 35% to 45% is always been our target for incremental margins or operating leverage for our tool company, which we have been able to operate in their effect of them. In fact, this quarter we blew through that number. It had to do with mix. It had to do with performance of the business. But, Rick, maybe you can give some more detail on composition.
Rick Dillon--Executive Vice President and Chief Financial Officer
Sure. So for the quarter, it's primarily a result of -- even though the mix is heavy weighted to service, the regions for which that service occurred are definitely some of the more profitable service margins that we have overall. So that works for us. Not having some of the project losses from last year, also work for us. And we also have a good mix of products versus you remember last year we had strong product sales, but a heavier weighting to bolting and some of our other products which were quite the same incremental margins.
Brian Brophy--Stifel -- Analyst
Excellent. Thank you. I will pass it on.
Operator
Thank you. Our next question is a follow up from the line of Justin Bergner with G. Research. Please proceed.
Justin Bergner--G. Research -- Analyst
Thank you for the follow up. Are you currently seeing more proposals for tools deals that could reach fruition that are low enough in sort of an expensive market to be superior to buying back your stock? Or are you sort of in a wait and see mode as it relates to valuations you would want to pay for the deals that you're contemplating?
Randy Baker--President and Chief Executive Officer
Multiples is never something we really want to talk about in a public environment, because it's deal by deal specific, quality companies are going to drive a little higher multiple. And it's important to remember that as we evaluate our stock based on the based intrinsic value of the Company, we always evaluate that accretion rate of that stock versus what we're paying for it, and high quality companies are always going to have a nice accretion rate.
So I always think that, if you're in the market and looking at a company, try to stay away from the proverbial fixer upper, that there's either some sort of crazy hockey stick of sales growth that somehow is going to improve it or that the margin profile just doesn't match what we're trying to do. So those hurdles are pretty strict for us, but we will always come back to how it performed versus just investing in ourselves.
Justin Bergner--G. Research -- Analyst
Thank you.
Randy Baker--President and Chief Executive Officer
You're welcome.
Operator
Thank you. I am showing no further questions at this time. I will now turn the call back to yourself for any closing remarks.
Barb Bolens--Vice President of Corporate Strategy, Investor Relations and Communications
Thank you, everybody. We appreciate your participation today and your support of Actuant. If you have follow up clause, please give us -- please reach out and we will set one up for you. Thank you very much.
Operator
Thank you. That does conclude the conference call for today. We thank you for your participation and ask that you please disconnect your line.
Duration: 49 minutes
Barb Bolens--Vice President of Corporate Strategy, Investor Relations and Communications
Randy Baker--President and Chief Executive Officer
Rick Dillon--Executive Vice President and Chief Financial Officer
Joe Grabowski--Robert W. Baird -- Analyst
Patricia Gorman--KeyBanc Capital Markets -- Analyst
Ann Duignan--JP Morgan -- Analyst
Justin Bergner--G. Research -- Analyst
Jeff--RBC Capital Markets -- Analyst
Brian Brophy--Stifel -- Analyst
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UPDATE 2-U.S., N.Korea in behind-the-scenes talks over 3rd summit, Moon says
(Adds White House official)
By Hyonhee Shin and Alexandra Alper
SEOUL/WASHINGTON, June 26 (Reuters) - The United States is in behind-the-scenes talks with North Korea over a possible third summit and has proposed reviving working-level negotiations stalled since a second meeting between U.S. President Donald Trump and Kim Jong Un in February, South Korean President Moon Jae-in said on Wednesday.
Trump said on Wednesday he would not meet with the North Korean leader during his trip to Asia for the G20 summit, which will include a visit to South Korea at the weekend.
"But I may be speaking with him in a different form," he told reporters before heading to Asia. He did not elaborate, but a White House official said he may have been talking about exchanging more letters with Kim.
U.S. Secretary of State Mike Pompeo said on Sunday that a recent exchange of letters between Trump and Kim boosted hopes for a restart of talks, calling it a "very real possibility."
North Korea's official KCNA news agency said on Sunday that Trump's letter had "excellent content" and Kim would "seriously contemplate" it, without elaborating.
Trump told reporters on June 11 he had received a very warm "beautiful letter" from Kim. He has not divulged its contents, but the White House offical, who did not want to be identified, described the letter as "very flowery".
Earlier on Wednesday, Moon, in written answers to questions from news agencies, including Reuters, said there was no reason to talk of a "stalemate" with North Korea just because the pace of progress had been slow.
A second summit between Trump and Kim held in February in Hanoi collapsed over differences between U.S. calls for North Korea to give up its nuclear weapons and Kim's demands for relief from punishing sanctions.
"Both sides have been engaged in dialogue in regard to a third summit," Moon said. "It's noteworthy that the behind-the-scenes talks have been preceded by the mutual understanding of each other's position gained through the Hanoi summit."
Moon said the United States had made a proposal for working-level talks and he urged Pyongyang to return to negotiations "at the earliest date possible in order to convince the international community of its willingness for complete nuclear dismantlement".
North Korea has pursued nuclear and missile programmes for years in defiance of U.N. Security Council resolutions and sanctions.
Moon has been an ardent champion of efforts to end the confrontation, vowing to play a mediator role in nudging North Korea into giving up its nuclear weapons in exchange for an end to sanctions and security guarantees.
Trump said on Tuesday he would hold another meeting with Kim at "at some point."
The Hanoi breakdown was a blow for Moon, who days before the summit offered to "ease the burden" of the United States by providing concessions to North Korea through inter-Korean economic initiatives which he seeks to revive.
NORTH KOREAN ANGER OVER SANCTIONS
Despite Kim's positive comments about Trump's letter, on Wednesday North Korea's foreign ministry called a recent U.S. extension of sanctions "a manifestation of the most extreme hostile acts by the United States" and an outright challenge to the joint statement issued at the first Trump-Kim summit in Singapore in June last year, in which the two sides agreed to foster a new era of relations.
Stephen Biegun, the U.S. special envoy for North Korea who led working-level talks ahead of the Hanoi summit, is visiting Seoul from Thursday for meetings with South Korean officials ahead of Trump, who is due in South Korea at the weekend.
Trump has been considering visiting the demilitarized zone separating the two Koreas, where Kim and Moon held a historic first summit last year, a South Korean official said.
U.S. officials have declined to comment on whether Trump will go to the DMZ. He had wanted to travel there on a 2017 visit to South Korea, but heavy fog prevented it.
Moon said the resumption of negotiations between North Korea and the United States would take things "to the next level," and added: "I believe everything has now fallen into place for that to happen."
The Hanoi summit cast doubt on Kim's willingness to denuclearise and Pyongyang increased worries about the future of dialogue when it tested short-range missiles last month and appeared to ignore repeated offers of dialogue from Washington and Seoul.
Moon said Kim had told him he wanted to "finalise a denuclearisation process as soon as possible and to concentrate on economic development".
However, Biegun has admitted that the two sides have yet to agree on what is meant by denuclearisation, which North Korea has taken to include the U.S. nuclear umbrella protecting Japan and South Korea. (Reporting by Hyonhee Shin in Seoul and Alexandra Alper, Steve Holland and David Brunnstrom in Washington; editing by James Dalgleish and Alistair Bell) |
FOREX-Dollar holds steady on reduced bets on steep U.S. rate cut
* Uncertainty lingers over U.S.-China trade deal before G20 summit * U.S. durable goods orders fall, goods balance gap widens * Bitcoin soars 16% towards $14,000, extends sizzling rally * Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh (Updates market action, adds quote) By Richard Leong NEW YORK, June 26 (Reuters) - The dollar held steady against a basket of currencies on Wednesday as traders rolled back bets of an aggressive interest rate decrease next month after comments from Federal Reserve officials that such a move may not be warranted at this time. Bitcoin rang up a stellar day, jumping over 16.26% to its highest level since January 2018. The greenback and the euro strengthened against the yen after U.S. Treasury Secretary Steven Mnuchin was quoted by CNBC as saying the trade deal between the United States and China is "about 90%" complete. Mnuchin’s comments were later restated to show he was using the past tense to describe progress in the U.S.-China talks. The pullback in the yen and Swiss franc was limited as traders remain jittery over prospects at the G20 summit this weekend in Osaka, Japan, where U.S. President Donald Trump and Chinese President Xi Jinping are due to have a meeting. Some bids for both perceived safe-haven currencies persisted amid tensions between Iran and the United States. Traders have been speculating whether Trump and Xi could at least reach an agreement to restart talks at the summit in a bid to avert more tariffs between the two nations. "No breakthroughs are expected. There is hope they will continue negotiating," said Eric Viloria, currency strategist at Credit Agricole in New York. "That could be neutral for the dollar." Earlier Wednesday, Trump told Fox Business Network he would impose additional duties on Chinese imports if he does not clinch a deal with Xi. In late U.S. trading, the dollar was up 0.57% at 107.790 yen , while the euro was 0.58% higher at 122.585 yen . The greenback was little changed against the euro at $1.1372. The dollar index edged up 0.09%, holding above a three-month low, in the wake of comments from two Federal Reserve officials, which cooled expectations the central bank would lower key lending rates by an aggressive half a percentage point at its next policy meeting on July 30-31. On Tuesday, Fed Chairman Jerome Powell stressed the central bank's independence from Trump, who is pushing for rate cuts. St. Louis Fed President James Bullard, considered one of the most dovish U.S. central bankers, surprised some investors by saying a 50 basis point cut in rates "would be overdone". The dollar fell last week after policy-makers opened the door to rate cuts in coming months. Interest rates futures implied traders fully expect a rate cut from the Fed next month, but they now see a 24% chance of a 50 basis-point decrease, down from 30% late on Tuesday, according to CME Group's FedWatch tool. Bitcoin continued its red-hot streak, approaching $14,000 on the Luxembourg-based Bitstamp exchange late Wednesday. The world's biggest and best-known virtual currency has been on a tear since Facebook rolled out its plan for its own digital currency, stoking bets for their usage to grow. Currency bid prices at 3:09PM (1909 GMT) Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid Previous Change Session Euro/Dollar EUR= $1.1370 $1.1365 +0.04% -0.86% +1.1390 +1.1349 Dollar/Yen JPY= 107.8100 107.1700 +0.60% -2.22% +107.8400 +107.1100 Euro/Yen EURJPY= 122.60 121.82 +0.64% -2.87% +122.6300 +121.7800 Dollar/Swiss CHF= 0.9776 0.9752 +0.25% -0.39% +0.9784 +0.9744 Sterling/Dollar GBP= 1.2689 1.2697 -0.06% -0.54% +1.2707 +1.2664 Dollar/Canadian CAD= 1.3117 1.3167 -0.38% -3.81% +1.3193 +1.3107 Australian/Doll AUD= 0.6985 0.6957 +0.40% -0.91% +0.6994 +0.6952 ar Euro/Swiss EURCHF= 1.1116 1.1085 +0.28% -1.23% +1.1124 +1.1077 Euro/Sterling EURGBP= 0.8960 0.8954 +0.07% -0.27% +0.8976 +0.8942 NZ NZD= 0.6677 0.6638 +0.59% -0.60% +0.6692 +0.6610 Dollar/Dollar Dollar/Norway NOK= 8.4928 8.5320 -0.46% -1.69% +8.5513 +8.4773 Euro/Norway EURNOK= 9.6558 9.6994 -0.45% -2.53% +9.7124 +9.6530 Dollar/Sweden SEK= 9.2604 9.2768 -0.18% +3.31% +9.2987 +9.2483 Euro/Sweden EURSEK= 10.5280 10.5470 -0.18% +2.57% +10.5626 +10.5220 (Additional reporting by Saikat Chatterjee in LONDON Editing by Susan Thomas and Chizu Nomiyama) |
Dutch railway company to pay reparations for WWII transports
THE HAGUE, Netherlands (AP) — The Dutch national railway company said Wednesday it will pay reparations to Jews, Roma and Sinti whom it transported to camps in the Netherlands during World War II — from where they were sent to Nazi concentration camps. NS said in a statement that its role in transporting Jews and other minorities to camps on orders of Nazi occupiers during WWII is a "black page in the history of the company." Job Cohen, a respected former mayor of Amsterdam who led a commission that proposed the reparations, called the payments a moral gesture. "It is not possible to name a reasonable and fitting amount of money that can compensate even a bit of the suffering of those involved," Cohen said in a statement. NS chief executive Roger van Boxtel said the decision will affect thousands of Holocaust survivors and direct relatives of victims, costing the company tens of millions of euros (dollars). Some 70% of the Dutch Jewish community — or more than 100,000 Jews — did not survive the war. Most were rounded up in cities like Amsterdam and taken by train to camps in the Netherlands before being sent to the border and put on German trains to concentration camps. The train company apologized in 2005 for its role in the transportations. It set up Cohen's commission last year to investigate how best to pay reparations. NS said an estimated 500 living survivors of the Holocaust who were transported by the company will receive 15,000 euros ($17,000) each. Widows and widowers of victims are eligible to receive 7,500 euros ($8,500) and, if they are no longer alive, the surviving children of victims should receive 5,000 euros ($5,685). French railway company SNCF also has expressed regret for its role in transporting Jews during WWII, acknowledging that its equipment and staff were used to transport 76,000 Jews to Germany. SNCF has argued that it had no effective control over operations when France was under Nazi occupation from 1940 to 1944. France's government has paid more than $6 billion in reparations to French citizens and certain deportees. The German government has paid around 70 billion euros in compensation for Nazi crimes, mainly to Jewish survivors. ___ This version corrects the first name of NS chief executive Van Boxtel to Roger, not Rogier. View comments |
Do Insiders Own Shares In Cytosorbents Corporation (NASDAQ:CTSO)?
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If you want to know who really controls Cytosorbents Corporation (NASDAQ:CTSO), then you'll have to look at the makeup of its share registry. 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.'
Cytosorbents is not a large company by global standards. It has a market capitalization of US$209m, which means it wouldn't have the attention of many institutional investors. Our analysis of the ownership of the company, below, shows that institutions own shares in the company. Let's delve deeper into each type of owner, to discover more about CTSO.
See our latest analysis for Cytosorbents
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.
Cytosorbents already has institutions on the share registry. Indeed, they own 27% of the company. This can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. When multiple institutions own a stock, there's always a risk that they are in a 'crowded trade'. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see Cytosorbents's historic earnings and revenue, below, but keep in mind there's always more to the story.
Hedge funds don't have many shares in Cytosorbents. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.
The definition of company insiders can be subjective, and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO.
Insider ownership is positive when it signals leadership are thinking like the true owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative in some circumstances.
It seems insiders own a significant proportion of Cytosorbents Corporation. It has a market capitalization of just US$209m, and insiders have US$21m worth of shares in their own names. It is great to see insiders so invested in the business. It might be worth checkingif those insiders have been buying recently.
The general public -- mostly retail investors -- own 55% of Cytosorbents . This size of ownership gives retail investors collective power. They can and probably do influence decisions on executive compensation, dividend policies and proposed business acquisitions.
Private equity firms hold a 7.4% stake in CTSO. This suggests they can be influential in key policy decisions. Some might like this, because private equity are sometimes activists who hold management accountable. But other times, private equity is selling out, having taking the company public.
I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too.
I like to dive deeperinto how a company has performed in the past. You can accessthisinteractive graphof past earnings, revenue and cash flow, for free.
Ultimatelythe future is most important. You can access thisfreereport on analyst forecasts for the company.
NB: Figures in this article are calculated using data from the last twelve months, which refer to the 12-month period ending on the last date of the month the financial statement is dated. This may not be consistent with full year annual report figures.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
NASA is opening up Apollo moon rock samples untouched for nearly 50 years
Some samples have never been analysed (Getty) When NASA brought rock samples back from the moon, scientists kept some back, in the knowledge that future techniques would allow new analysis. So some of the samples brought back were preserved and never brought into contact with Earth’s atmosphere (or frozen in helium) for 50 years. NASA’s Apollo sample curator Ryan Zeigler said, ‘It’s sort of a coincidence that we’re opening them in the year of the anniversary ‘But certainly the anniversary increased the awareness and the fact that we’re going back to the moon.’ Now NASA is to open the rock samples, and analyse them using technologies far beyond those available to scientists in 1972. Astronaut Footprint on the Moon Apollo 11 Mission July 20, 1969 One unopened sample was collected by the Apollo 17 mission, the last to put human boots on the lunar surface and the only to have a geologist onboard. ‘Returned samples are an investment in the future,’ says Lori Glaze, acting director of NASA's Planetary Science Division in Washington, DC. ‘These samples were deliberately saved so we can take advantage of today's more advanced and sophisticated technology to answer questions we didn't know we needed to ask.’ Read more from Yahoo News UK: Boris Johnson's team forced to deny he only owns one pair of socks Boy, 12, arrested on suspicion of homophobic assault in Liverpool Ian Brady ‘had access to vulnerable teenagers in Wormwood Scrubs’ It could offer insight into the Moon’s past - much like the samples of ice we use to see changes in Earth’s climate over long periods of time, this core sample from the Moon contains material spanning millions to billions of years. One of these samples has never been in contact with Earth’s atmosphere, and some have been frozen or stored in helium since collection. NASA has picked nine science teams to analyse the rocks. ‘These Moon rocks are a treasure, and the science we can do with them is a genuinely unique opportunity,’ said Alexander Sehlke, a principal investigator for one of the selected research teams.’ ‘My group is using just a little vial with a bit of dust in it, but it’s really exciting.’ Story continues These preserved samples are a time capsule to the Moon’s past, containing information that NASA will need as we begin to prepare for permanently inhabiting the Moon in the coming years. ---Watch the latest videos from Yahoo UK--- |
What Investors Should Know About Seaspan Corporation's (NYSE:SSW) Financial Strength
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Seaspan Corporation (NYSE:SSW) is a small-cap stock with a market capitalization of US$2.0b. While investors primarily focus on the growth potential and competitive landscape of the small-cap companies, they end up ignoring a key aspect, which could be the biggest threat to its existence: its financial health. Why is it important? Assessing first and foremost the financial health 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 not a comprehensive overview, so I recommend youdig deeper yourself into SSW here.
SSW has built up its total debt levels in the last twelve months, from US$4.4b to US$5.0b – this includes long-term debt. With this increase in debt, the current cash and short-term investment levels stands at US$626m to keep the business going. Moreover, SSW has produced US$537m in operating cash flow in the last twelve months, leading to an operating cash to total debt ratio of 11%, signalling that SSW’s operating cash is less than its debt.
With current liabilities at US$1b, the company arguably has a rather low level of current assets relative its obligations, with the current ratio last standing at 0.95x. The current ratio is calculated by dividing current assets by current liabilities.
SSW 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. We can check to see whether SSW is able to meet its debt obligations by looking at the net interest coverage ratio. A company generating earnings before interest and tax (EBIT) at least three times its net interest payments is considered financially sound. In SSW's, case, the ratio of 2.22x suggests that interest is not strongly covered, which means that debtors may be less inclined to loan the company more money, reducing its headroom for growth through debt.
Although SSW’s debt level is towards the higher end of the spectrum, its cash flow coverage seems adequate to meet debt obligations which means its debt is being efficiently utilised. Though its low liquidity raises concerns over whether current asset management practices are properly implemented for the small-cap. Keep in mind I haven't considered other factors such as how SSW has been performing in the past. I recommend you continue to research Seaspan to get a more holistic view of the stock by looking at:
1. Future Outlook: What are well-informed industry analysts predicting for SSW’s future growth? Take a look at ourfree research report of analyst consensusfor SSW’s outlook.
2. Valuation: What is SSW 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 SSW 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. |
Bitcoin price surge is not just about Facebook's crypto push
Bitcoin is up an eye-popping 245% in 2019 so far.
And based on many business news headlines of the past week, you’d think bitcoin’s surge is all thanks to Facebook (FB).
But bitcoin was already up nearly 200% before June 18, whenFacebook announced its plans to launch a cryptocurrency called Libranext year and a digital wallet called Calibra. And the Facebook news initially sent bitcoin lower for the first few days, before it recovered.
The initial thinking in some circles after Facebook’s announcement was that Libra, which has big-name backers like Visa, MasterCard, PayPal, Stripe, Spotify, Uber, and Lyft on board as “founding members,” will be bad for bitcoin, especially since the Libra Association says it aims for Libra to “put the term ‘currency’ back in cryptocurrency”by being a coin for everyday use.
Libra Association’s head of policy Dante Disparte even took a clear shot at bitcoin, telling Yahoo Finance that Libra coin, “is designed to be a unit of purchase and a unit of daily transactions, as opposed to a speculative asset—which is, candidly, where many cryptocurrencies have stood.” One of the biggest mainstream criticisms of bitcoin has been that it’s merely become a speculative investment, not for regular use as an actual currency.
But as the dust has settled from Facebook’s and Libra’s simultaneous June 18 announcements, more people in the cryptocurrency space are reasoning that the embrace of blockchain technology by Facebook and its other mainstream partners is an inherent endorsement of bitcoin. It is the “rising tide lifts all boats” argument. (Of course, the bitcoin community was quick to question whether Libra is truly decentralized, since Facebook executives are behind it, and whether Libra’s planned blockchain is a true “permissionless” ledger.)
In other words: Facebook’s crypto push is likely at least partially helping push other cryptocurrencies higher. But it’s far from the main driver.
So what’s the real reason bitcoin is moving higher in 2019?
CME Group, whichlaunched bitcoin futures trading back in December 2017, tweeted on June 18 about the “growing signs of institutional interest.” CME says it saw a new all-time high of bitcoin futures contracts on June 17.
Grayscale Investments has also seen big gains for its publicly traded bitcoin fund Grayscale Bitcoin Trust (GBTC), up 330% this year. In May, the firmlaunched a “Drop Gold” television ad campaignto push bitcoin as an investment class.
There is a lot of positive institutional crypto news in the water recently. JPMorganlaunched its own internal cryptocurrency, JPM Coin. TheCFTC this week approved LedgerXto offer bitcoin derivatives contracts, and to settle them in actual bitcoin.
And areport this month from Bitwise, highlighted by JPMorgan analysts, determined that institutional interest in the bitcoin futures market “has been significantly understated.” This has prompted the thinking that unlike the price hike at the end of 2017, which was driven by retail buying, “This time is different.”
That’s how Genesis Trading CEO Michael Moro frames it too. “This is a very different market today than it was in 2017,” he says. “2019 has less distractions. It's also a different space because the CME bitcoin futures product wasn’t available until December 2017.” Genesis says its trading volumes are two to three times higher than they were 12 months ago.
Lightning Labs, which offers a scaling alternative to the bitcoin blockchain and has been gaining momentum recentlythanks to support from Square and Twitter CEO Jack Dorsey, released its first mobile app on Wednesday andsaw an immediate flood of downloads.
And then there are the geopolitical factors. Many believe that President Trump’s endless trade war and tariff tit-for-tat with China (and threats of tariffs on other countries) has buoyed bitcoin, which is seen as a safe haven asset like gold. And earlier this month, European Central Bank chief Mario Draghi suggested the need for more ECB monetary stimulus,prompting criticism from Trump—that also was seen as a boon to bitcoin.
All of these factors have likely had a far bigger impact on the bitcoin price over the past few months than Facebook.
—
Daniel Roberts covers bitcoin and blockchain at Yahoo Finance. Follow him on Twitter at @readDanwrite.
Read more:
Facebook's Libra coin aims to 'put the currency back in cryptocurrency'
Cryptocurrency CEO who paid $4.6M for lunch with Buffett: 'It might be unrealistic'
SEC lawsuit against Kik has major implications for crypto industry
Exclusive: SEC quietly widens its crackdown on ICOs
There are now two 2020 candidates accepting crypto donations
JPMorgan blockchain chief: Why we launched our own cryptocurrency
Read the latest financial and business news from Yahoo Finance
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Huawei Technologies loses trade secrets case against U.S. chip designer
By Gary McWilliams
(Reuters) - A U.S. jury on Wednesday cleared California semiconductor designer CNEX Labs Inc of stealing trade secrets from Chinese electronics giant Huawei Technologies Co Ltd while awarding CNEX no damages on its own trade theft claims.
Huawei had sued CNEX in U.S. District Court in Sherman, Texas, for misappropriation of trade secrets involving a memory control technology and for poaching its employees. The jury rejected those claims, while finding a CNEX founder failed to notify the company of his patent filings.
CNEX filed a counter suit, alleging Huawei sought to steal its technology by posing as a customer and calling the original claims part of a pattern by Huawei to obtain others' secrets. The jury found Huawei had misappropriated CNEX's secrets but awarded no damages.
"This is a victory for the rule of law and for global standards of ethical corporate behavior," said CNEX General Counsel Matthew Gloss. "This case was never about money."
The United States has effectively banned its agencies from buying Huawei telecommunications equipment and barred U.S. companies from doing business with Huawei, claiming the firm represents a threat to national security.
Huawei has filed a suit to overturn the U.S. sales ban before the same Texas judge who heard the trade secrets suit. Two Huawei units separately face charges in a federal court in Seattle of conspiring to steal T-Mobile US Inc trade secrets between 2012 and 2014.
Huawei is reviewing the decision and considering its next moves, said Tim Danks, a Huawei vice president for risk management.
CNEX co-founder Yiren "Ronnie" Huang, who quit Huawei and co-founded CNEX days later, breached his employment contract requiring him to notify the company of any patents he obtained within a year of leaving the firm. However, it did not award Huawei damages.
Danks called the result a "mixed verdict," noting the company "is disappointed that the jury awarded no damages after finding Mr. Huang breached his employment agreement."
Huawei had sued CNEX and co-founder Huang in 2017 and was seeking at least $85.7 million in damages and rights to the San Jose, California, company's memory-control technology.
"The things that Huawei claims are trade secrets are not," CNEX attorney Deron Dacus said in court at the beginning of the trial earlier this month. He further described the lawsuit as "bullying and intimidation."
The eight-person jury did not award CNEX any damages in its trade theft claims because it did not have any revenue, a CNEX spokesman said. Huawei's suit was an effort to acquire "CNEX's advanced semiconductor technology" through a court action, said CNEX spokesman Paul Sherer.
U.S. District Court Judge Amos Mazzant, who heard the trade secrets case, separately is overseeing Huawei's bid to overturn the Trump administration's ban on its sales to government agencies and contractors.
(Reporting by Gary McWilliams; editing by Tom Brown and Cynthia Osterman) |
BlackBerry Falls Most in Year as Earnings Report Disappoints
(Bloomberg) -- BlackBerry Ltd. shares fell the most in a year after reporting sales from its software and services unit slowed and a recent acquisition contributed less of a boost than some analysts expected.
Revenue in the fiscal first quarter was $247 million, the Waterloo, Ontario-based company said Wednesday, up 16% from a year earlier. BlackBerry reorganized its reporting units, combining the business technology solutions group with the enterprise software and services unit. Now grouped under the Internet-of-Things division, it reported revenue of $136 million, which was down from $147 million in the fourth quarter.
Steven Li, an analyst at Raymond James, said any shortfall would have likely come from enterprise software, since the business technology solutions revenue stream is “typically stable and growing.” Part of the weakness also could have come from a reorganization of the sales division, according to Todd Coupland, an analyst at CIBC.
After BlackBerry’s $1.4 billion acquisition of cybersecurity firm Cylance, which closed in February, some analysts were expecting to see stronger revenue contributions in the first full quarter in which the purchase is on the books. Revenue from Cylance was $32 million in the three months ended May 31. “People were hoping Cylance would beat expectations more than it did,” Coupland said in an interview. There are also concerns about Crowdstrike Holdings Inc., a competitor in cybersecurity, which is growing at a higher rate than Cylance, he said.
Key Insights
Adjusted earnings per share of 1 cent beat analysts’ average estimate of breakeven in the quarter, as BlackBerry absorbed the Cylance acquisition.Shares fell as much as 10% to $7.47. It was the biggest decline for BlackBerry since last June. The stock had gained 17 percent through the close on Tuesday.Under Chief Executive Officer John Chen, the company has been positioning itself as a leader in cybersecurity. Cylance will enable BlackBerry to add artificial intelligence capabilities to its existing software products. The purchase was BlackBerry’s largest acquisition in seven years.BlackBerry is now focused on its connected and autonomous vehicle technology business, QNX, to drive growth. “The next thing that we have is to put the Cylance AI on to QNX,” Chen said on an earnings call.
Know More
Earlier this week, the Waterloo, Ontario-based company said its security and connectivity software was now installed in 150 million vehicles, up 25% from a year earlier. BlackBerry’s QNX technology is used by carmakers such as Honda Motor Co., Ford Motor Co., and BMW AG in driver assistance and hands-free systems, among other things.BlackBerry reaffirmed it expects annual adjusted revenue growth of 23%-27% in fiscal 2020.Read the statement here.
(Updates with share trading this year. A previous version of this story corrected the day that company reported in second paragraph.)
To contact the reporter on this story: Simran Jagdev in Toronto at sjagdev1@bloomberg.net
To contact the editors responsible for this story: Molly Schuetz at mschuetz9@bloomberg.net;David Scanlan at dscanlan@bloomberg.net
For more articles like this, please visit us atbloomberg.com
©2019 Bloomberg L.P. |
California to require background checks for ammo purchases
SACRAMENTO, Calif. (AP) — California has among the most stringent gun laws in the country and on Monday a far-reaching new initiative to curb violence will require background checks for every ammunition purchase. Gov. Gavin Newsom and other proponents said it will save lives but opponents are suing in hopes of eventually undoing a law they said will mostly harm millions of law-abiding gun owners. Voters approved the checks in 2016 and set an effective date of July 1. Ammunition dealers are seeing a surge in sales as customers stock up before the requirement takes effect. "In the last two weeks I've been up about 300%" with people "bulking up because of these stupid new laws," said Chris Puehse, who owns Foothill Ammo east of Sacramento. Brady Campaign to Prevent Gun Violence spokeswoman Amanda Wilcox appeared with Newsom at a news conference Tuesday and said the checks are "the kind of thing that could have prevented" last week's fatal shooting of rookie Sacramento police Officer Tara O'Sullivan. Prosecutors charge that Adel Sambrano Ramos fatally shot the 26-year-old officer using one of two rifles assembled from parts to create assault weapons that are illegal in California. Wilcox and other supporters said ammunition background checks can help authorities discover so-called ghost guns that aren't registered with the state. The state Department of Justice, which will administer the background check program, estimates there will be 13.2 million ammunition purchases each year. But 13 million will be by people who already cleared background checks when they bought guns in California, so they are already registered in the state's gun owners' database. They will pay a $1 processing fee each time they pick up bullets or shotgun shells. Store clerks will run buyers' identification through that database and a second database of those who bought guns legally but are no longer allowed to own them because of certain criminal convictions or mental health commitments. Those who pass get their ammo on the spot. Story continues But the Democratic governor and Robyn Thomas, executive director of the Giffords Law Center to Prevent Gun Violence, said there are still some issues that must be addressed. People who bought rifles or shotguns before 2014 and anyone who bought a handgun before 1996 are likely not in the state's Armed and Prohibited Persons System. "Sometimes in the drafting process little bits and pieces don't always fit perfectly together," Thomas said. Wilcox and Matthew Cubeiro, an attorney representing opponents, said owners who aren't in the system will have to pay $19 for a one-time background check that can take days to complete and is good for a single purchase within 30 days. Wilcox said that should encourage owners to register their firearms. Buyers will also have to get their ammunition through registered dealers, ending a practice that Thomas said allowed bullets ordered online to be delivered to their doors "like a pizza." But she said the law allows owners to give each other ammunition. The state is also seeking to require owners to prove that they are in the country legally if their drivers' licenses contain the notation that "federal limits apply." Republicans in the state Assembly criticized a move that they said will harm the millions of drivers who don't yet have new federally approved REAL ID driver's licenses in part because of a months-long Department of Motor Vehicles backlog. But state officials said older drivers' licenses will also still be accepted. California has 4.5 million registered gun owners. States officials estimate about 3 million are regular shooters and that they will buy ammunition four or five times each year. "For retailers and the average recreational shooter, these new requirements are going to, at a minimum, create practical and financial problems and friction when trying to make a simple ammunition purchase, and they will do nothing to stop access by criminals who have so many other ways to get ammunition," said Chuck Michel, an attorney for the National Rifle Association and its state affiliate, the California Rifle & Pistol Association. California's requirement follows similar laws in Connecticut, Illinois, Massachusetts and New Jersey. Gun violence declined in those states after they required licenses to buy ammunition, though they also tightened other gun laws, said Ari Freilich, California legislative affairs director for the San Francisco-based Giffords Law Center. He said requiring vendors to report the brand, type and amount of ammunition will enable the justice department to spot who is buying massive volumes of ammunition, who is buying ammunition when they are barred from owning weapons, and perhaps link purchases of a specific type of ammunition to a nearby crime. Terry McGuire, owner of Get Loaded Guns and Ammo east of Los Angeles, said many owners are buying bulk ammunition now because "they're more concerned about the government wanting to keep track of what they're buying." Opponents sued last year contending the background checks violate the Second Amendment right to bear arms, impede interstate commerce and are pre-empted by federal law. The lawsuit's star plaintiff is California resident Kim Rhode, who said in a statement that she shoots thousands of shotgun shells each week while trying to become the only person to win seven medals in seven consecutive Olympics. "Many people will be temporarily inconvenienced, just as they are in an airport security line, just to keep everyone safer," Freilich said. |
This is The Only Product You’ll Need to Expertly Trap Fruit Flies
Photo credit: Amazon From Woman's Day Fruit flies might just be one of the most annoying bugs in existence. They often seem like they appear out of nowhere — but when they make their presence known in your home, it can drive you absolutely crazy . Of course, most fruit fly traps are either unappealing to look at or are messy DIY creations , and that's something you definitely don't want displayed out in your kitchen for the world to see. That's where this chic white fruit fly trap from RSVP International comes in — it gives you all the function of a well-made DIY trap without sacrificing your kitchen's carefully crafted aesthetic. I mean, come on — who wants a dingy and gross looking trap made from plastic wrap? All you need to do to get this trap working is to fill the cup with a quarter cup of apple cider vinegar (which you can purchase on Amazon ) and a drop of dish soap, and voilà. The fruit flies will enter through the perforated stainless steel top and be stuck in the mixture, eventually clearing out your kitchen of the pesky pests. Photo credit: House Beautiful For best results, you'll want to place your white ceramic trap right by exposed fruit on your counter to keep the exposed produce healthy and free of fruit flies. The best part? The trap is dishwasher safe, so you'll have no trouble washing it clean after you're finished using it, and it can easily be used again and again. Hopefully, not too often! Follow House Beautiful on Instagram . You Might Also Like 60+ Easy and Satisfying Avocado Recipes You Need to Try ASAP "I Used To Love Getting Naked — And Then I Got Pregnant" 45 Inspirational Books All Women Should Read in Their Lifetime |
Interested In SunLink Health Systems, Inc. (NYSEMKT:SSY)? Here's How It Performed Recently
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Assessing SunLink Health Systems, Inc.'s (NYSEMKT:SSY) past track record of performance is an insightful exercise for investors. It allows us to reflect on whether or not the company has met or exceed expectations, which is a great indicator for future performance. Today I will assess SSY's recent performance announced on 31 March 2019 and evaluate these figures to its long-term trend and industry movements.
View our latest analysis for SunLink Health Systems
SSY is loss-making, with the most recent trailing twelve-month earnings of -US$2.4m (from 31 March 2019), which compared to last year has become less negative. Furthermore, the company's loss seem to be growing over time, with the five-year earnings average of -US$2.3m. Each year, for the past five years SSY has seen an annual decline in revenue of -14%, on average. This adverse movement is a driver of the company's inability to reach breakeven.
Inspecting growth from a sector-level, the US healthcare industry has been growing, albeit, at a unexciting single-digit rate of 2.7% in the prior twelve months,
Although SunLink Health Systems is loss-making, it has an ample cash cushion (US$9.2m) to pay for its upcoming operating expenses over the next couple of years. This is a strong indication of good cash management.
SunLink Health Systems's track record can be a valuable insight into its earnings performance, but it certainly doesn't tell the whole story. With companies that are currently loss-making, it is always hard to envisage what will happen in the future and when. The most useful step is to examine company-specific issues SunLink Health Systems may be facing and whether management guidance has consistently been met in the past. You should continue to research SunLink Health Systems to get a more holistic view of the stock by looking at:
1. Financial Health: Are SSY’s operations financially sustainable? Balance sheets can be hard to analyze, which is why we’ve done it for you. Check out ourfinancial health checks here.
2. 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. |
Alanis Morissette talks ‘challenges and miscarriages’ ahead of baby no 3
Alanis Morissette, who is expecting her third child at 45, talks about "some challenges and some miscarriages" she went through along the way. "I just didn't think it was possible, she told Self magazine. (Screenshot: Self magazine via Instagram) Jagged Little Pill the musical isn’t the only baby Alanis Morissette is readying for. The iconic songstress, 45, is preparing to welcome her third child with her performer husband, Mario “Souleye” Treadway. She talked about the pregnancy — and showed off her nearly cooked bare baby belly — in a Self magazine interview. And, well, "You Oughta Know," it hasn't been an easy journey. “Between Ever and Onyx” — her son, 8, and daughter, nearly 3 — “there were some false starts,” Morissette told the magazine. “I always wanted to have three kids, and then I've had some challenges and some miscarriages so I just didn't think it was possible.” Amid the miscarriages, she “felt so much grief and fear,” she admitted. “I chased and prayed for pregnancy and learned so much about my body and biochemistry and immunity and gynecology through the process. It was a torturous learning and loss-filled and persevering process.” View this post on Instagram A post shared by SELF (@selfmagazine) on Jun 26, 2019 at 5:16am PDT Morissette talked about all the medical research she did — “on everything, from hormones to physicality, every rabbit hole one could go down to chase answers.” And admitted that she tried everything — “from heavily self-medicating, to formal allopathic medications, to now.” She said her doctors laughed at “the thickness of my files.” Ultimately, she had success — as you can see. “When I ... chased my health in a different way, from multiple angles — [including] extensive consistent blood work monitoring to trauma recovery work to multiple doctor and midwife appointments to many tests and surgeries and investigations, things shifted,” she said. Though it was an emotional ride. “It's this whole chemistry of emotions,” she said. “Hormones and chemicals that are just coursing through your body. It [can] be triggering, or flashbacking, or re-traumatizing.” In the interview, Morissette opened up about her birth stories: 36 hours with her son and just one with her daughter — after drinking a bottle of castor oil. The latter was mostly without her midwife — just her husband by her side — due to the time frame. Story continues She’s talked before about having postpartum depression both times — the first time waiting 14 months before getting help and the second time four months. This time, she’ll be ready. “I'm going to wait four minutes,” she said. “I have said to my friends [as well as a physician], I want you to not necessarily go by the words I'm saying and as best as I can, I'll try to be honest, but I can't personally rely on the degree of honesty if I reference the last two experiences. I snowed a lot of them as I was snowing myself.” View this post on Instagram A post shared by SELF (@selfmagazine) on Jun 26, 2019 at 6:43am PDT She added, “Not singularly relying on myself to diagnose myself is key.” Describing what it felt like, she said, “For me I would just wake up and feel like I was covered in tar — and it wasn't the first time I'd experienced depression so I just thought Oh, well, this feels familiar, I'm depressed, I think . And then simultaneously, my personal history of depression where it was so normalized for me to be in the quicksand, as I call it, or in the tar. It does feel like tar, like everything feels heavy.” Morissette also spoke of marriage with Treadway, nine years strong. “He's an incredibly modern man, so he has never had an issue with being married to an alpha woman, God bless him,” she said. “His mom held down two full-time jobs, his dad stayed home. So there's nothing unfamiliar about [our situation for him].” In November, after the baby arrives, Morissette will see her songs come alive on Broadway when Jagged Little Pill the musical debuts. Read more on Yahoo Entertainment: NRA cancels NRATV — and the internet sends 'thoughts and prayers' 'Bourdain Day' tributes pour in from the late chef’s family, friends and fans: 'We miss your wit and spark' Pamela Anderson dumps 'monster' Adil Rami over cheating claims: 'This is my worst nightmare' Want daily pop culture news delivered to your inbox? Sign up here for Yahoo Entertainment & Lifestyle’s newsletter. |
Why Ensco Rowan Stock Is Soaring Today
Shares ofEnsco Rowan(NYSE: ESV)rose more than 11% by 2:45 p.m. EDT on Wednesday. Two factors propelled theoffshore drilling stock: rising oil prices and dayrates.
Crude oil prices rallied about 2.5% on Wednesday, closing at their highest levels in nearly a month. The main driver was the U.S. Energy Information Administration's weekly oil inventory report. According to the latest government data, oil storage levels plunged by 12.8 million barrels compared to the prior week. That was a much deeper decline than the 2.4-million-barrel drop analysts expected.
The bigger-than-expected inventory drawdown suggests that demand for oil might not be as weak as the market feared. That more optimistic view could give oil companies the confidence to sanction new offshore drilling projects.
Image source: Getty Images.
Oil companies have already approved several new offshore drilling projects in the last year, which isfinally fueling a rebound in investment levels. That increase in spending has helped drive up the rates for offshore drilling rigs, according to a report thatNoble(NYSE: NE)put out today. Noble said that the dayrates for jack-up rigs increased 80% to 90% in the North Sea, 50% to 70% in the Middle East, and 15% to 25% in Australia compared to where they were at the end of 2017.
Noble further noted that utilization for the company's floating rigs was 89% during the second quarter and 98% for jack-ups. Those numbers imply that the offshore drilling market has become much more competitive in recent months, which should help drive up sector profitability in the coming quarters.
The beleaguered offshore drilling sector got a double dose of good news today: Not only are industry fundamentals seemingly stronger than expected, but dayrates have also improved. Those two factors bode well for Ensco Rowan, and suggest that better days lie ahead for both the company and its offshore drilling peers.
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Matthew DiLallohas 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. |
Cresco Labs takes us inside its cannabis production operation: 'The full Willy Wonka tour'
Update 6/26/19: Cresco Labs Inc., a Chicago-based cannabis company, announced expanded operations and anticipated sales growth on Wednesday. It's projections come on the heels of Illinois Governor JB Pritzkerofficially signingadult-use legalization into law beginning January 1.
If you have doubts that cannabis is on its way from illegal to industrial, take a look inside Cresco Labs’(CRLBF)custom-built, 43,000-square-foot production facility in Joliet, Illinois.
It’s the company’s flagship production house where it grows, processes, packages, and distributes medical marijuana, and is now ramping up to meet the imminent demand of the recreational market in Illinois.
“It’s the full Willy Wonka tour,” Jason Nelson, Cresco’s vice president of production, told Yahoo Finance. “You go from weed, to cooking weed, to cooking edibles.”
The Illinois State Legislaturevoted late last month to legalize recreational marijuana. Until then, Cresco’s vertically integrated operation — consisting of three growing and processing facilities — was 100% dedicated to producing packaged goods for the state’s medical marijuana market. Now Cresco is getting ready to expand.
“There’s a significant increase that’s going to come from the size of the market and the demand,” Cresco’s CEO and co-founder, Charlie Bachtell, told Yahoo Finance about the state’s embrace of adult-use cannabis, scheduled to go into effect January 1, 2020.
“From an operational perspective we have a very big presence in Illinois. We have three cultivation licenses, five dispensary licenses, so a pretty dynamic increase going from medical to an adult-use program,” Bachtell said.
In addition to ushering in recreational use, the state also voted to expand its medical program. The revised program will permit marijuana to be prescribed to treat a wider group of medical conditions — including chronic pain, migraines, and irritable bowel syndrome — and allow nurse practitioners and physician assistants to certify patients to use the drug.
“Illinois has historically had a very restricted medical program compared to the rest of the states around the country,” Bachtell said, explaining that the restrictions have depressed Illinois medical patient numbers.
To meet growing demand, Cresco anticipates ramping up production in its three Illinois facilities. Currently, the company maintains multiple “bloom rooms” at each of its locations that can each hold as many as 630 plants. In Illinois, current average wholesale price for one pound of marijuana flower is approximately $3,000, making each plant, typically yielding a half of a pound, worth about $1,500, and capacity bloom rooms worth nearly $1 million.
Bachtell said Illinois has the benefit of designing “generation two” cannabis regulation by drawing on years of legalization wins and challenges realized in early adopter states, such as Colorado, Washington, and Oregon.
“It was one of the very unique components of the Illinois bill — we’re going to have one of the first limited license adult-use programs in the country. It was built on the back of the medical program. The medical program really did change the way that medical cannabis is done in the U.S.,” Bachtell said.
The upcoming law will pave the way for newcomers, as it provides for staged increases in the number and diversity of license-holders. Still, those who do enter the expanding market will be subject to the comparatively strict standards in the state of Illinois.
From the moment a new marijuana plant or “tip cutting” is placed into a cultivation dome, it’s tagged with its own barcode and entered into the state’s tracking system, Nelson said. Tip cuttings, organized by cultivars, or strains, are grown from a portion of a female plant, rather than from seed, to ensure each plant is a genetic clone of its mother.
“They know that there are clone domes, they know when they were cut, they know the amounts that are in one of these domes,” Nelson said.
State regulators also limit the type, frequency, and amount of synthetic and biochemicals that can be used to treat cannabis plants.
“We know in Illinois when we launched this space we had a lot of pesticide restrictions,” Nelson said. “It’s the most restrictive program in the country from that respect.” The pre-flower stage is the last time approved pesticides may be applied.
Extraction chemicals used to separate THC and CBD and other phytocannabinoids from mature plants are no exception.
“In Illinois, we’re forced to remove all of the butane out of the final product,” Nelson said. “Each state has a different threshold level that they allow...In Denver, where you can have 5,000 parts per million of butane left, I don’t like that per se.”
Every ounce of plant, whether utilized or discarded, must be physically and visually accounted for, capable of withstanding audit. More than 200 cameras monitor Cresco’s Joliet facility, with all footage backed up and accessible to state regulators, and unused plant material weighed, ground, and mixed with non-plant material before it leaves as refuse.
Cresco is unfazed by the restrictions in Illinois.
“Prior to this, we were in the banking space, particularly the mortgage banking space,” Bachtell said. He credits experience in the industry, during and after the financial collapse, for helping him handle markets that transition from unregulated to hyper-regulated in a short period of time. “For us, the transition should be pretty seamless,” he said. “Whether it’s a medical program or regulated adult-use, we’re familiar with the fundamentals.”
Bachtell said Cresco will offer its current brands to recreational users, once the market opens at the beginning of next year. The company also plans to develop new brands to appeal to its new market.
Read more:
GOP Senator has ‘pretty good confidence’ Congress will pass weed legislation
These are the biggest threats to the cannabis industry, according to top CEOs in the space
Why the world’s largest marijuana company is doubling its plans for US hemp
Alexis Keenan is a New York-based reporter for Yahoo Finance. She previously produced and reported for CNN and is a former litigation attorney. Follow on Twitter@alexiskweed.
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What Do Analysts Think About Cognizant Technology Solutions Corporation's (NASDAQ:CTSH) Future?
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Since Cognizant Technology Solutions Corporation (NASDAQ:CTSH) released its earnings in March 2019, analysts seem cautiously optimistic, with earnings expected to grow by 8.7% in the upcoming year relative to the past 5-year average growth rate of 5.4%. By 2020, we can expect Cognizant Technology Solutions’s bottom line to reach US$2.3b, a jump from the current trailing-twelve-month of US$2.1b. I will provide a brief commentary around the figures and analyst expectations in the near term. Readers that are interested in understanding the company beyond these figures shouldresearch its fundamentals here.
See our latest analysis for Cognizant Technology Solutions
The view from 27 analysts over the next three years is one of positive sentiment. Given that it becomes hard to forecast far into the future, broker analysts tend to project ahead roughly three years. To understand the overall trajectory of CTSH'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.
From the current net income level of US$2.1b and the final forecast of US$2.8b by 2022, the annual rate of growth for CTSH’s earnings is 10.0%. This leads to an EPS of $4.86 in the final year of projections relative to the current EPS of $3.61. Margins are currently sitting at 13%, which is expected to expand to 15% by 2022.
Future outlook is only one aspect when you're building an investment case for a stock. For Cognizant Technology Solutions, I've compiled three relevant 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 Cognizant Technology Solutions 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 Cognizant Technology Solutions is currently mispriced by the market.
3. Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of Cognizant Technology Solutions? 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. |
50 Great Places for Early Retirement in the U.S.
Getty Images Early retirement can be more than just a daydream for those long Tuesday afternoons at work. With some smart planning, you can make leaving the workforce early a reality. You just have to keep in mind the unique challenges facing early retirees. First of all, entering retirement at a relatively younger age means needing to stretch your nest egg further (hopefully). One way to do that is to find the right retirement destination for you. That's because where you live makes a big impact on your budget, as it helps determine your living costs, tax bills and employment and income opportunities. Yes, you'll be retired, but still being young, you may actually want to keep working a bit, whether to help pad your budget, pursue some passion project or just to stay busy with some kind of structure. With this in mind, we crunched the numbers in search of 50 great places--one per state--for early retirees to settle in, focusing on areas with lower living costs and favorable tax situations, both specifically for retirees. We also looked for places where the economy, typical household income and physical population are all in relatively good health. And we favored locations with high concentrations of residents ages 45 to 64, so you can enjoy early retirement with your peers. Take a look at the list of early-retirement cities. See Also: All 50 States Ranked for Retirement Huntsville, Ala. Courtesy Huntsville/Madison County Convention & Visitors Bureau Total population: 444,908 Share of population, age 45 to 64: 27.8% (U.S.: 26.1%) Retired cost of living: 5.4% below the national average Median income, age 45 to 64: $77,266 (U.S.: $69,909) State's retiree tax picture: Tax Friendly As one of the 10 Cheapest States Where You'll Want to Retire , the Heart of Dixie boasts many great spots for affordable living. And Huntsville, in northern Alabama, is one of the best. It offers all the low-cost, low-tax advantages as the rest of the state, but adds more generous household incomes. Story continues Home to NASA's Marshall Space Flight Center, the Redstone Arsenal and the Huntsville campus of the University of Alabama, the city offers a robust economy and a highly educated population. You can also find plenty of cultural attractions, from a sculpture trail to a symphony orchestra, as well as opportunities for outdoor recreation (think bass fishing). In fact, Alabama at-large offers many of Florida's popular retirement attractions--warm weather, nice beaches and plenty of golf--all at a typically lower price. See Also: 11 Reasons You Don't Want to Retire in Florida Juneau, Alaska Getty Images Total population: 32,434 Share of population, age 45 to 64: 29.3% Retired cost of living: 33.2% above national average Median income, age 45 to 64: $102,396 State's retiree tax picture: Most Tax Friendly If you crave adventure--and don't mind long winters and vast swaths of wilderness--it pays to live in Alaska. Literally. The state's oil wealth savings account gives all permanent residents an annual dividend: $1,600 per person in 2018. That's on top of the state's generous tax situation: Alaska has no state income tax or sales tax (although municipalities may levy a local sales tax), and it doesn't tax Social Security or other retirement benefits. No wonder Alaska ranks as the most tax-friendly state for retirees . Still, seniors don't seem too interested in facing the Last Frontier. Only 10.1% of the entire state's population is age 65 and older, compared with 14.9% of the U.S. That leaves more room for younger residents--with 25.8% of the state being 45 to 64 years old and an even higher share of the capital city belonging to that age group--to take advantage of the state's financial benefits. Younger retirees might also enjoy all the local, natural benefits: Juneau offers endless outdoor activities, from kayaking to whale watching, as well as a charming downtown. See Also: 8 Places That Will Pay You to Live There Lake Havasu City, Ariz. Getty Images Total population: 204,691 Share of population, age 45 to 64: 28.0% Retired cost of living: 0.2% below national average Median income, age 45 to 64: $44,328 State's retiree tax picture: Mixed Lake Havasu City, situated on the eastern shore of its namesake lake, is a popular destination for co-eds on spring break and snowbirds in the winter--a testament to its attractiveness for a wide age range, making it a great choice for early retirees. Indeed, for the whole year, the local median age is 50.4, compared with 37.8 for the U.S. Being lake-adjacent, the area along the California border offers plenty of water-related recreation, including boating, fishing and swimming, as well as scuba diving and water skiing. But it's more than just fun and games: Kiplinger named Lake Havasu City one of 15 Satellite Cities Poised to Thrive . That's based on expanding regional business growth and a hot job market, so it offers a strong economic base should you decide to unretire in some form. SEE ALSO: 9 Things You Must Know About Retiring to Arizona Hot Springs, Ark. Getty Images Total population: 97,994 Share of population, age 45 to 64: 27.1% Retired cost of living: 8.0% below national average Median income, age 45 to 64: $49,692 State's retiree tax picture: Not Tax Friendly You won't need to travel far for rest and relaxation if you settle in this retirement hotspot. Surrounding the north end of the city of Hot Springs is Hot Springs National Park, which has 47 hot springs that come out of the mountain of the same name and bathhouses, where you can drink from fountains and soak in the water. The relaxing experience extends into the city proper, where you can find many spa and massage services to choose from. You can also unwind by golfing at one of the area's 11 championship courses or by fishing or boating on one of the three local lakes. Even your wallet can de-stress. Housing, transportation and health care costs for retirees are particularly low, at 23.3%, 20.3% and 8.2% below the national average, respectively. The median home value in Hot Springs, about 60 miles southwest of Little Rock, is $114,700--far below the national median of $193,500, according to the U.S. Census Bureau. See Also: How All 50 States Tax Retirees San Francisco Getty Images Total population: 4.6 million Share of population, age 45 to 64: 26.8% Retired cost of living: 83.3% above national average Median income, age 45 to 64: $105,396 State's retiree tax picture: Mixed Yes, it's one of the most expensive cities in the U.S. , second only to Manhattan and with living costs about double the national average for both retirees and the general population. But a slim silver lining: While the infamously high housing prices push up the overall measure of local living costs, other expenses are not nearly as bad. Indeed, Bay Area housing costs alone are a whopping 253.3% above the national average for retirees, but health care costs for the demographic are a more manageable 19.4% above the national average. Plus, the main reason for the metro area's high costs--the burgeoning tech sector--is also a major attraction. It has driven rapid economic growth for years, helping to boost paychecks, create a hot job market and attract workers and businesses alike. So you should find plenty of opportunities to work in retirement if need be. See Also: 16 Expensive Places to Retire That Are Worth It Denver Getty Images Total population: 2.8 million Share of population, age 45 to 64: 25.7% Retired cost of living: 9.9% above national average Median income, age 45 to 64: $84,653 State's retiree tax picture: Mixed Colorado places eighth in the United Health Foundation's overall health rankings and fourth in its senior health rankings, and Denver plays a healthy role in that rating. Indeed, the Milken Institute, a think tank, ranked the metro area the 12th best big city for successful aging in large part due to the population's healthy and active lifestyle. Other strengths of the area include high employment and economic stability, which can be particularly desirable for early retirees who'd like to have the option to work again. For later on in your retirement, you may also appreciate Denver's quality infrastructure, with well-funded transit for older adults, highly rated nursing homes and ample continuing care. See Also: How 11 Types of Retirement Income Get Taxed New Milford, Conn. Photo by LFLamb via Flickr Total population: 27,380* Share of population, age 45 to 64: 33.4% Cost of living: 16.6% above the national average** Median income, age 45 to 64: n/a State's retiree tax picture: Least Tax Friendly Young retirees seeking peace and quiet without getting bored ought to consider settling in New Milford. About 82 miles north of New York City and 150 miles south of Boston, the New England village is a short train ride away from big-city amenities but bursting with small-town charm. It offers a quaint downtown area with shops, restaurants and an expansive town green. And Candlewood Lake and the Housatonic River provide a great setting for a host of outdoor activities, including swimming, boating, kayaking and rowing, and a chance to connect with nature. The local financial situation is not quite as picturesque. Connecticut at large tends to be quite pricey and aggressive with taxes. But living costs in New Milford are a bit more affordable than the rest of the state at 18.4% above the national average. And local household incomes are typically also high. Across all ages, the median household income in New Milford is $83,676, according to the U.S. Census Bureau, compared with $57,652 for the U.S. *Town population, according to the U.S. Census Bureau. **Overall cost of living for all residents, according to Sperling's BestPlaces. See Also: Put Your Retirement IQ to the Test Newark, Del. Courtesy VisitDelaware.com Total population: 33,673* Share of population, age 45 to 64: 16% Cost of living: 11.5%** Median income, age 45 to 64: n/a State's retiree tax picture: Tax Friendly College towns typically offer strong economic bases and brilliant amenities--and Newark, home to the University of Delaware, is no exception. Young retirees, in particular, may appreciate the vibrant campus lifestyle, including games, concerts and other events open to the whole community, as well as numerous restaurants and businesses drawn by co-ed consumers. As you age, you might also appreciate the continuing education offerings, as well as the quality health care facilities, of the University. Beyond college-related offerings, the area is also home to more than 17 miles of trails and 650 acres of parkland to enjoy and explore. Plus, the First State is tax-friendly to residents of all ages, so young retirees don't have to wait to take advantage of low taxes. Indeed, with no sales tax and low property tax, Delaware ranks among our top 10 Most Tax-Friendly States . *City population, according to the U.S. Census Bureau. **Overall cost of living for all residents, according to Sperling's BestPlaces. See Also: FIRE Savers Race to Retirement Tampa, Fla. Getty Images Total population: 3.0 million Share of population, age 45 to 64: 27.3% Retired cost of living: 9.3% below national average Median income, age 45 to 64: $68,759 State's retiree tax picture: Most Tax Friendly You can find plenty of great places to retire in Florida, as the scores of resident retirees can tell you. But this area ranked best with us for young retirees, driven mainly by its particularly affordable living costs and younger-skewing population. Tampa is actually one of three major cities that make up the Tampa Bay area, which also includes St. Petersburg and Clearwater. The latter tends to be the most popular among seniors, with seniors making up 21.4% of the population, compared with just 17.7% in St. Petersburg and 12.2% in Tampa. And of course, the entire area offers all the things you'd look for in a Florida retirement: white sand beaches, warm blue waters, plenty of golf and generous tax breaks. See Also: 37 States That Don't Tax Social Security Benefits Savannah, Ga. Getty Images Total population: 377,476 Share of population, age 45 to 64: 24.0% Retired cost of living: 9.8% below national average Median income, age 45 to 64: $68,759 State's retiree tax picture: Most Tax Friendly With its warm weather and low living costs, Georgia ranks third among our Best States for Retirement . And Savannah (city population: 145,862) is particularly peachy, especially for early retirees. Living costs among retired people are among the lowest in an already low-cost state. Yet incomes for 45- to 64-year-olds are among the most generous, albeit still below the national median. That should make it easier to stretch your savings through an extra-long retirement. Amenity-wise, the historic Georgia city offers beautiful sights, just right for strolling through retirement, including classic American architecture, town squares and riverfront views. Tybee Island, with its wide beaches and still-operating lighthouse, is just a 20-minute drive east of the city. You can also enjoy an array of restaurants, museums and theaters, particularly in downtown Savannah. See Also: 13 States That Tax Social Security Benefits Kapaa, Hawaii Getty Images Total population: 71,093 Share of population, age 45 to 64: 28.3% Cost of living: 67.5% above the national average** Median income, age 45 to 64: $82,891 State's retiree tax picture: Tax Friendly With its tropical climate and pristine beaches, Hawaii can be a retirement paradise for sun- and fun-loving folk. But the state's high costs is a big deterrent, especially for early retirees who need to make their money last even longer. With that in mind, we suggest considering the micropolitan area of Kapaa (which means "solid"), where living costs are not quite as intimidating. While still very high compared with the U.S., in general, they're notably lower than the rest of the state (86.9% above the national average) and capital Honolulu (89.7% above the national average for all residents and 92.2% above the national average for retirees). Kapaa proper is a small town with a population of just 10,505. It sits on the eastern shore of Kauai. Like many spots in Hawaii, it has plenty to offer in terms of natural beauty and outdoor recreation with beaches, parks and hiking trails lush with wildlife and ocean views. It also has the Samuel Mahelona Memorial Hospital, along with an outpatient clinic, within city limits and is just eight miles from Lihue International Airport. So it's not as remote as you might expect an island paradise to be. Indeed, it's a popular local shopping village with farmers markets, street vendors and several restaurants. Just don't mind all the tourists. **Overall cost of living for all residents, according to Sperling's BestPlaces. See Also: Great Places to Retire Near the Beach Twin Falls, Idaho Getty Images Total population: 105,287 Share of population, age 45 to 64: 22.6% Retired cost of living: 9.3% below national average Median income, age 45 to 64: $58,063 State's retiree tax picture: Mixed The Gem State is a brilliant blend of affordability and economic stability that can make a great home for early retirees. In fact, Idaho is the number one state for fastest job growth rate with high-tech firms, including Boise-based Micron, being attracted to its low operating costs and drawing investors and workers alike. Twin Falls is particularly cheap for retired residents, compared with all of Idaho's already low living costs 5% below the national average for the general population. But you can still find plenty to do, especially if you're an outdoor enthusiast. The area, on the edge of Snake River Canyon in Southern Idaho, offers beautiful vistas and a good setting for hiking, camping, bird watching and kayaking. See Also: What's Your Retirement Housing Strategy? Champaign-Urbana, Ill. Getty Images Total population: 237,849 Share of population, age 45 to 64: 21.6% Retired cost of living: 9.7% below national average Median income, age 45 to 64: $73,227 State's retiree tax picture: Mixed This part of central Illinois, home to the University of Illinois and Parkland College, offers affordability with no shortage of things to do, including college sporting events, film and music festivals and educational opportunities. The metro area is also home to a number of tech startups, fostered by the University Research Park's 43,000-square-foot business incubator called EnterpriseWorks. So young retirees can enjoy small-town charms and costs while exploring and developing big ideas and innovations. See Also: Retire in the Midwest? 12 Surprisingly Great Places Evansville, Ind. Getty Images Total population: 315,263 Share of population, age 45 to 64: 27.2% Retired cost of living: 6.4% below national average Median income, age 45 to 64: $61,349 State's retiree tax picture: Least Tax Friendly In the southwest corner of Indiana, near the borders of Illinois and Kentucky, the Evansville metro area is a cultural hub with five distinct arts districts, as well as the University of Southern Indiana, the University of Evansville and Ivy Tech Community College. So you can find plenty of attractions and activities to entertain you throughout your long retirement, all with below-average living costs. And as you age through retirement, you may appreciate the abundance of health care facilities, including six major hospitals nearby with approximately 2,000 beds. See Also: 33 States with No Estate Taxes or Inheritance Taxes Des Moines, Iowa Getty Images Total population: 623,113 Share of population, age 45 to 64: 24.9% Retired cost of living: 9.2% below national average Median income, age 45 to 64: $80,898 State's retiree tax picture: Not Tax Friendly For retirees looking to live in a big city on a small budget, Des Moines is a good choice. Affordability is just one reason the Milken Institute ranked the state capital fifth out of 100 large U.S. metro areas for successful aging. Des Moines also boasts a strong economy and plenty of health care facilities specializing in aging-related services. Retirees won't lack for things to do, either. There are numerous museums and arts venues, including an outdoor sculpture park, a zoo and botanical gardens. There's even a casino and racetrack in nearby Altoona that hosts annual camel, ostrich and zebra races (sorry, no wagering allowed). See Also: 10 Cheapest States Where You'll Want to Retire Topeka, Kan. Getty Images Total population: 233,382 Share of population, age 45 to 64: 27.2% Retired cost of living: 8.2% below national average Median income, age 45 to 64: $65,788 State's retiree tax picture: Least Tax Friendly If you're looking for affordability--as early retirees should be--there's no place like Kansas. The whole state has living costs 14% below the national average. And in capital city Topeka, retirees enjoy particularly affordable housing costs, 21.6% below the national average. Indeed, the median home value in Topeka is $100,400, compared with $139,200 in all of Kansas and $193,500 across the country. And now is a great time to take advantage of those low costs. Downtown Topeka is enjoying something of a renaissance, with a multi-million revitalization project that began in December 2012 now bearing the fruits of their labor. Improvements to infrastructure, including widening sidewalks, and the addition of new pocket parks, pavilions and public art works helped draw new businesses and restaurants. And that's just the beginning: Construction of a new plaza began just this year and is scheduled to go public in March 2020. Evergy Plaza will offer a large performance stage, a digital screen and several fountains and will convert into an ice rink for winters. Louisville, Ky. Getty Images Total population: 1.3 million Share of population, age 45 to 64: 27.4% Retired cost of living: 6.8% below national average Median income, age 45 to 64: $65,005 State's retiree tax picture: Most Tax Friendly The biggest city in Kentucky, Louisville is a solid blend of metropolitan attractions, southern and midwestern charm and affordability. Housing is particularly cheap at 20.3% below the national average for retirees. The median home value in Louisville is $146,900, according to the U.S. Census Bureau, a bit pricier than the rest of the state (median: $130,000) but less than the national median of $193,500. And home options are varied, from downtown apartments and historic homes in walkable neighborhoods to million-dollar houses and acres of land within and surrounding city limits. Along with the affordability, you can also enjoy plenty of cultural attractions in Louisville, including the Kentucky Center for the Arts, which hosts traveling Broadway shows, operas, and performances by the city's professional ballet company and orchestra. Bonus: Louisville is home to the Kentucky Derby, giving fans of horses, fancy hats and mint juleps an extra reason to love it here. Also, bourbon. See Also: 8 Tax Tips for Gambling Income and Losses Lafayette, La. Getty Images Total population: 487,633 Share of population, age 45 to 64: 25.4% Retired cost of living: 8.5% below national average Median income, age 45 to 64: $55,140 State's retiree tax picture: Tax Friendly If you're craving Cajun and Creole culture, Lafayette is the place to retire. Known as the "Cajun Capital City," the area is rich in history, distinctive foods and two-stepping tunes. Nature lovers can appreciate the area, too, located on the Mississippi Flyway and the Atchafalaya Loop of America's Wetland Birding Trail. Bird watchers have gotten a glimpse of 240 species, so far. And all that comes with smaller costs than you'd find in the Big Easy. The cost of living for retirees in New Orleans is 1.1% above the national average. See Also: 14 Retirement Mistakes You'll Regret Forever Portland, Maine Getty Images Total population: 525,776 Share of population, age 45 to 64: 30.2% Retired cost of living: 17.1% above national average Median income, age 45 to 64: $77,152 State's retiree tax picture: Mixed The largest city in Maine, Portland offers a lively downtown and plenty of urban-esque amenities amidst the great outdoors of the Pine Tree State. You can enjoy museums, theaters and an array of eclectic dining. The flagship L.L. Bean store in nearby Freeport is a must-see for many visitors, but resident shoppers also flock to Portland's unique boutiques and outlets. All the while, you're never too far from the area's many beaches. That means ample opportunity to lounge on the shore or dive into water-based activities including fishing, kayaking, sailing and even surfing. And of course, hiking and biking trails abound--perfect in the (much) colder months, too, for cross-country skiing and snowshoeing. See Also: 13 Retirement Tips for Snowbirds Lexington Park, Md. Photo by technodad via Flickr Total population: 110,979 Share of population, age 45 to 64: 27.5% Cost of living: 12.0% above the national average** Median income, age 45 to 64: $105,417 State's retiree tax picture: Least Tax Friendly About an hour and a half from Washington, D.C., the California-Lexington Park metro area of Maryland offers a quick escape from politics to the Chesapeake Bay. And despite the local population's high incomes (and the area's abundance of millionaires ), living costs are lower than much of the rest of the state--Maryland's cost of living is 24.6% above the national average. And it's far more affordable than the District, where living costs are 73.9% above the national average. In town, you can visit the Patuxent River Naval Air Museum to peruse the collection of naval artifacts, expanding beyond just operational aircrafts and focusing on the research and testing stages of development. (While it was once an official U.S. Navy museum, due to federal budget restructuring, it is now a private non-profit organization.) And in the rest of St. Mary's County, early retirees can explore and enjoy more than 500 miles of shoreline on the Patuxent and Potomac Rivers and the Chesapeake Bay. **Overall cost of living for all residents, according to Sperling's BestPlaces. Pittsfield, Mass. Getty Images Total population: 127,751 Share of population, age 45 to 64: 30.3% Retired cost of living: 7.4% above national average Median income, age 45 to 64: $65,943 State's retiree tax picture: Not Tax Friendly New England is notoriously expensive, but Pittsfield offers a small pocket of relative affordability--at least more reasonably priced than the Boston metro area, where living costs for retirees are 55.6% above the U.S. average. Housing is particularly affordable: The median home value in the city, located in the western part of the state, is $173,100, compared with $193,500 for the U.S. and a whopping $455,100 for Boston proper. Leaf peeping in the fall may be enough to draw you to the Berkshires. But you can find plenty to enjoy year round, including camping, fishing, hiking and skiing. Nearby, enjoy musical performances at the Tanglewood Music Center, the summer home of the Boston Symphony Orchestra. Art lovers may want to make short drive to the Clark Art Institute in Williamstown and the Massachusetts Museum of Contemporary Art (MASS MoCa, for short) in North Adams. See Also: Are You Really Ready to Retire? 8 Steps to a Happy Retirement Grand Rapids, Mich. Getty Images Total population: 1.0 million Share of population, age 45 to 64: 25.5% Retired cost of living: 2.2% below national average Median income, age 45 to 64: $71,042 State's retiree tax picture: Not Tax Friendly Michigan was hit hard by the Great Recession, when the automotive industry took a particularly sharp dive. A decade later, the business of cars has somewhat recovered, and the state's overall economic picture is generally improving. But poverty remains a big problem, especially in certain areas, including Detroit, Flint and Kalamazoo, where the overall poverty rate ranges from 31% to 42%, compared with 12.3% for the U.S., according to the U.S. Census Bureau. Grand Rapids is in a relatively better economic state. The overall poverty rate is lower at 22.5% and is actually below average among 45- to 64-year-olds at 8.2%, versus 10.6% across the country. And while living costs are a bit higher than than they are in other parts of the state (Kalamazoo's retirees have living costs 21.1% below the national average), they're still lower than the rest of the country, and higher median incomes help cover the spread. Plus, the local art, food and music scenes, along with an abundance of outdoor recreation options, will keep you entertained. Lake Michigan beaches are just 30 minutes away. And nicknamed Beer City, Grand Rapids has an "Ale Trail" with more than 80 breweries. Minneapolis Getty Images Total population: 3.5 million Share of population, age 45 to 64: 26.7% Retired cost of living: 5.8% above national average Median income, age 45 to 64: $89,630 State's retiree tax picture: Least Tax Friendly If the cold winters and equally harsh tax situation don't put you off of the North Star State, the Minneapolis metro area--including state capital, St. Paul--can be a great place to retire. In fact, the Milken Institute rates it as the 14th-best large metro area for successful aging, citing its livability including low crime rate and low senior poverty rate; high engagement of its older population; long life expectancy; and many outdoor recreation options (it's the Land of 10,000 Lakes, after all). Young retirees might prefer the bigger of the Twin Cities. Minneapolis (city population: 425,403) offers more of an urban lifestyle--while maintaining its midwestern charm--with an active night life and vibrant music scene (it was home to the late legend Prince). St. Paul (city population: 307,695), across the Mississippi River, may be the better choice for those looking for smaller crowds, more quiet and added affordability. The median home value in St. Paul is $187,400, compared with $222,600 in Minneapolis and $199,700 in all of Minnesota. Whichever twin you choose, you'll get access to all the arts, sports and college town amenities that make the area a great place to live and retire. See Also: 20 Worst States for Retirement Gulfport-Biloxi, Miss. Getty Images Total population: 388,082 Share of population, age 45 to 64: 26.3% Retired cost of living: 13.0% below national average Median income, age 45 to 64: $53,386 State's retiree tax picture: Most Tax Friendly First, the bad news: Mississippi is the most impoverished of all 50 states in the nation with a poverty rate of 19.8% among all residents, compared with 12.3% for the U.S. The 45- to 64-year-old cohort of the Gulfport-Biloxi metro area suffers less with a 14.1% poverty rate, but that's still greater than the 10.6% rate for the age group across the country. Plus, the state faces "extremely significant damage" due to tariffs, according to the U.S. Chamber of Commerce, making its current economic outlook unclear. The good news: If you can head down to the Magnolia State with a healthy nest egg, the low living costs and generous tax breaks should allow you to comfortably make it last throughout your long retirement. In fact, the Gulfport-Biloxi metro area is among the cheapest in the U.S. Gulfport offers more affordable housing with a median home value of $118,300 versus $154,800 in Biloxi (and $193,500 for the U.S.). And either city affords you access to white sand beaches on the Gulf of Mexico, casinos, oodles of outdoor recreation--including kayaking, birding, fishing and shrimping, camping and golfing. St. Louis Getty Images Total population: 2.8 million Share of population, age 45 to 64: 27.5% Retired cost of living: 9.9% below national average Median income, age 45 to 64: $72,205 State's retiree tax picture: Mixed The Gateway to the West can be a nice place to enter retirement, especially when you retire early and need to stretch your savings extra long. Housing is particularly affordable with costs for retirees 28.6% below the national average. Indeed, the city's median home value is $123,800, compared with $145,400 for the state and $193,500 for the nation, according to the U.S. Census Bureau. But low costs don't limit opportunities for living it up. Foodies can enjoy an eclectic collection of dining options, many influenced by the various ethnic groups that call the city home. (Italian-influenced toasted ravioli is a local favorite.) What to wash it all down with? Beer, naturally. Home to Anheuser-Busch, as well as a growing crop of craft breweries and brew pubs, St. Louis takes suds seriously. You can balance out all that good food and spirits by exploring the area's hundreds of parks and miles of trails and waterways. And as you age, you might appreciate that St. Louis also has an abundance of health care facilities, more than 40 establishments per 1,000 seniors in the metro area, double the U.S. average. See Also: 6 Ways Retirement Has Changed Over the Past 25 Years Bozeman, Mont. Getty Images Total population: 100,733 Share of population, age 45 to 64: 23.0% Retired cost of living: 2.6% above national average Median income, age 45 to 64: $75,219 State's retiree tax picture: Not Tax Friendly If you've ever dreamed of retiring to the mountains, here's your chance. Bozeman is in southern Montana, nestled in the Gallatin Valley and surrounded by majestic ranges and national forests. Yellowstone and Grand Teton national parks sit due south of Bozeman. The geography means you have to be comfortable hiking, mountain biking, skiing and backcountry exploring your way through retirement. Hunting and fishing are also popular local activities. But don't expect total isolation. Montana State University's Bozeman campus is home to about 15,000 students. Exuberant co-eds might not be the neighbors you pictured in your mountain-view retirement destination, but you may enjoy the dining, culture and entertainment options that come with a college town. See Also: Great Places to Retire Near the Mountains Omaha, Neb. Getty Images Total population: 914,190 Share of population, age 45 to 64: 24.9% Retired cost of living: 3.8% below national average Median income, age 45 to 64: $76,471 State's retiree tax picture: Least Tax Friendly Home to investing guru Warren Buffett, Omaha has been and continues to invest in itself, making it an increasingly attractive--and still affordable--place to live at any age. Just this year, the city has broken ground on a $300 million Riverfront Revitalization project that aims revamp an old industrial area to add housing, office space and entertainment areas. And already, you can enjoy an array of restaurants, shops, art galleries, concert halls and sporting events in town. (Some areas and activities may be disrupted by the revitalization project during the construction period, scheduled to complete in 2024.) Walking and biking trails throughout the city, along with five area lakes and two rivers, also provide plenty of outdoor activity. All that comes at a low cost, with housing being particularly affordable. Indeed, Buffett bought his own modest home there in 1958 for just $31,500--his most famously frugal money move and what he's called the third best investment of his life (after his two wedding rings). Home prices aren't quite that cheap anymore, but the median home value of $146,500 is still relatively affordable, compared with the national median of $193,500. See Also: The Berkshire Hathaway Portfolio: All 48 Buffett Stocks Gardnerville Ranchos, Nev. Getty Images Total population: 47,632 Share of population, age 45 to 64: 31.1% Cost of living: 34.1% above the national average** Median income, age 45 to 64: $69,183 State's retiree tax picture: Most Tax Friendly If you retire a millionaire, you'll be in good company in Gardnerville Ranchos. The small Nevada town near Lake Tahoe is home to a surprising number of millionaires . With its prime location, the draw is understandable--across all income levels. The nearby Sierra Nevada mountain range and Lake Tahoe provide ample opportunities for hiking, biking and boating in warm weather, and world-class skiing in winter. And just about an hour away, you can enjoy big-city amenities in Reno with its downtown full of restaurants, nightclubs, art galleries, music venues and, of course, casinos. Downside: You'll pretty much have to be a millionaire to afford the local living costs. Housing is the biggest budget killer with the median home value in Gardnerville Ranchos being $254,000, according to the U.S. Census Bureau, compared with $216,400 in Nevada and $193,500 in the U.S. Upside: State taxes are light not just for retirees, but for residents of all ages. In fact, the Silver State is one of Kiplinger's Most Tax-Friendly States in the U.S. , with its low property tax and zero income tax. **Overall cost of living for all residents, according to Sperling's BestPlaces. See Also: 12 States That Won't Tax Your Retirement Income Manchester, N.H. Getty Images Total population: 406,371 Share of population, age 45 to 64: 30% Retired cost of living: 10.4% above national average Median income, age 45 to 64: $93,052 State's retiree tax picture: Most Tax Friendly The Manchester metro area, including Nashua, may come with relatively high living costs, but the above-average household incomes help make them manageable. The Granite State's rock-solid tax advantages help, too. It's a big reason why we recently ranked New Hampshire the ninth best for retirement . Plenty of amenities make the area appealing to retirees. You can find a nice selection of restaurants in town and plenty of outdoor recreation to enjoy, including nearby snowshoeing, hiking, skiing and just taking in the scenic mountain views. And when you need a big-city escape--the city population of Manchester is just 111,196, after all--Boston is only an hour away. See Also: 5 Ways to Avoid Taxes on Social Security Benefits Asbury Park, N.J. Getty Images Total population: 15,511* Share of population, age 45 to 64: 24.2% Cost of living: 25.5% above the national average** Median income, age 45 to 64: n/a State's retiree tax picture: Mixed If you're hoping for a beach-based retirement, New Jersey may not be the first place that comes to mind. But the Jersey Shore can be a lovely place to retire to, albeit generally pricey, just like the rest of the Garden State. Central and South Jersey offer a bit more affordability in retirement than the northern, New York City-adjacent region, at least. For example, in Middlesex and Monmouth counties, the cost of living for retirees is 16.1% above the national average--not quite as bad as in Bergen and Passaic counties, where it's 23.1% above the national average. One of the relatively more affordable oceanfront towns is Asbury Park, for bad reasons. Until recently, the 1.4-square-mile city was as famous for its crime and corruption as it was for its boardwalk and beaches. But revitalization efforts over the past several years are bringing the latter characteristics back into the spotlight and adding on ritzier housing options, restaurants and shops, mainly on the east side of town. And still, Asbury Park maintains a quirky vibe with an arts and music scene that persisted even through the town's darker days. *City population, according to the U.S. Census Bureau. **Overall cost of living for all residents, according to Sperling's BestPlaces. Albuquerque, N.M. Getty Images Total population: 905,049 Share of population, age 45 to 64: 26.1% Retired cost of living: 2.4% below national average Median income, age 45 to 64: $59,944 State's retiree tax picture: Least Tax Friendly You can find a lot to enjoy in Albuquerque throughout your long retirement. Local casinos--complete with concert venues, restaurants and more, along with table games, slots and bingo--help energize the local nightlife. In the light of day, you can explore the many hiking and biking trails in and around the city, go hot air ballooning, enjoy a variety of golf courses and just enjoy the 310 sunny days Albuquerque tends to get each year through all four seasons. All that comes with below-average costs, but also below-average incomes. And many people aren't able to strike a balance: The poverty rate in Albuquerque is 18.2%, compared with 12.3% for the U.S., but better than the 19.7% rate for New Mexico. See Also: 31 Kirkland Signature Products Retirees Should Buy at Costco Buffalo, N.Y. Getty Images Total population: 1.1 million Share of population, age 45 to 64: 28.3% Retired cost of living: 6.1% below national average Median income, age 45 to 64: $67,558 State's retiree tax picture: Not Tax Friendly This metro area, which includes Cheektowaga and Niagra Falls, offers a pocket of affordability in a largely expensive Empire State. Health care and housing costs for retirees are particularly low at 12.7% and 9.5% below the national average, respectively. While the median home value in New York is a whopping $293,000, compared with $193,500 for the U.S., it's just a fraction of that in Buffalo at just $77,800. For your outdoor recreation, how do you like shoveling? The average snowfall is 94.4 inches each winter, but in four of the past six years, the accumulation has topped 100 inches, including 101.1 inches in the 2018-19 season. Once you dig yourself out, you partake in a wonderland of skiing, skating, tubing, pond hockey and a blizzard of other winter activities. Raleigh, N.C. Getty Images Total population: 1.3 million Share of population, age 45 to 64: 25.9% Retired cost of living: 7.3% below national average Median income, age 45 to 64: $82,608 State's retiree tax picture: Not Tax Friendly A high median income plus low living costs adds up to a good setting to stretch your savings through an extra-long retirement. Housing for retirees is particularly affordable, at 12.4% below the national average. Part of North Carolina's Research Triangle, along with Durham and Chapel Hill, Raleigh also comes with powerhouse employers (and college sports teams) that provide the area with a solid economic base. Indeed, the state boasts one of the highest job growth rates in the U.S. , and the Triangle is the center of growth in tech jobs while Raleigh also posts strong growth in professional and business services. That should give early retirees ample opportunity to dip back into the workforce as desired. See Also: 10 Reasons You'll Regret Buying a House with a Pool Bismarck, N.D. Getty Images Total population: 128,673 Share of population, age 45 to 64: 25.8% Retired cost of living: 2.8% below national average Median income, age 45 to 64: $82,884 State's retiree tax picture: Tax Friendly The capital city's strong economy means plenty of employment opportunities for early retirees who want the option of popping back into the workforce, if only part time. It also means you can find an array of restaurants and shops around town, as well as attractions, including the Lewis and Clark Riverboat, the North Dakota Heritage Center, Fort Abraham Lincoln and the Dakota Zoo. On the banks of the Missouri River, you can enjoy more active leisure in the summertime. That's when it's warm enough to go cruising, boating, kayaking and canoeing, as well as hiking and biking on the trails around the city and golfing at Hawktree Golf Club. Otherwise, hope you love snow. Bismarck gets an average 46 inches of snow each year, compared with an average 28 inches for the U.S. And the average temperature in January, the coldest month, is 2 degrees. See Also: 10 Most Tax-Friendly States for Retirees Cincinnati Getty Images Total population: 2.2 million Share of population, age 45 to 64: 27% Retired cost of living: 4.2% below national average Median income, age 45 to 64: $72,675 State's retiree tax picture: Mixed With relatively high incomes and relatively low living costs, the numbers add up favorably for an early retirement to Cincinnati. Housing for retirees is the biggest driver of affordability, falling 17.5% below the national average. The median home value in the city is $124,200, lower than the median $193,500 in the U.S. and even the median $135,100 in all of Ohio. Despite the cheap costs, Cincinnati is rich with big-city amenities, including an active arts and entertainment scene, plenty of restaurants and breweries, major sports teams and a healthy job market. The diverse local economy is home to eight Fortune 500 companies, as well as the University of Cincinnati and nearby Northern Kentucky University. See Also: Biggest Mistakes That Will Haunt Your Retirement Oklahoma City Getty Images Total population: 1.4 million Share of population, age 45 to 64: 24.1% Retired cost of living: 13.9% below national average Median income, age 45 to 64: $65,355 State's retiree tax picture: Not Tax Friendly The biggest city in the Sooner State charges residents little in living costs. Housing-related expenses are particularly affordable, at 27.3% below average. The median home value is $148,500, well below the nation's median of $193,500. Cowboys may feel particularly at home in Oklahoma City (it has one of the largest livestock markets in the world). But given the area's downtown revitalization effort, everyone can find something to enjoy. The Bricktown Entertainment District has a variety of restaurants and nightlife options. And in neighboring Norman, the University of Oklahoma plays host to bigtime sporting and cultural events. Portland, Ore. Getty Images Total population: 2.4 million Share of population, age 45 to 64: 26.2% Retired cost of living: 28.7% above national average Median income, age 45 to 64: $79,111 State's retiree tax picture: Not Tax Friendly As the TV show "Portlandia" says, Portland is where young people go to retire, and we concur, but seriously. Young retirees can certainly appreciate the city's laid-back vibe blended with its entrepreneurial spirit. And anyone could enjoy the big-city amenities in pedestrian-friendly neighborhoods, such as the popular Pearl District, coupled with its natural diversions, including Forest Park and Mount Tabor in the city and Mount Hood and the ocean also nearby. Less enjoyable: the high costs and tax situation. See Also: 15 Reasons You'll Go Broke in Retirement Pittsburgh Getty Images Total population: 2.3 million Share of population, age 45 to 64: 28.9% Retired cost of living: 1.0% above national average Median income, age 45 to 64: $70,254 State's retiree tax picture: Most Tax Friendly The Steel City is a good deal for your retirement. While overall living costs for retirees are slightly above average, housing and healthcare costs--major financial concerns, particularly as you age--are decidedly below average by 1.7% and 6.4%, respectively. Indeed, the median home value is just $108,500, compared with $170,500 for the state and $193,500 for the nation. Plus, the Keystone State offers some nice tax breaks for retirees--Social Security benefits and most other retirement income are not subject to state taxes. Despite being light on costs, Pittsburgh is still heavy on attractions. You can enjoy the Andy Warhol Museum, the Pittsburgh Ballet Theatre, a plethora of jazz joints and all the offerings of local universities, which include Duquesne, Carnegie Mellon and the University of Pittsburgh. And if watching all the collegiate and professional sports isn't enough activity for you, you have plenty of opportunities nearby to golf, hunt, fish, bike, hike and boat. See Also: 10 Things Retirees Should Never Keep in Their Wallets Providence, R.I. Getty Images Total population: 1.6 million Share of population, age 45 to 64: 28.1% Retired cost of living: 22.5% above national average Median income, age 45 to 64: $77,721 State's retiree tax picture: Not Tax Friendly Home to Ivy League Brown University and the world-renowned Rhode Island School of Design, as well as a handful of other colleges, Providence can be a great fit for intellectuals and artists looking to retire early. They'll have no shortage of things to do, with the schools offering gallery nights, performing arts events, educational opportunities and more. And their presence has helped draw a variety of restaurants and businesses to the area, too. Unfortunately, living costs and an unfriendly tax environment can be prohibitive throughout the tiny state, and Providence is no exception. See Also: Ways to Make Your Home More Age-Friendly Greenville, S.C. Getty Images Total population: 872,463 Share of population, age 45 to 64: 26.3% Retired cost of living: 2.6% below national average Median income, age 45 to 64: $59,527 State's retiree tax picture: Tax Friendly The metro area, including Anderson and Mauldin, multiplies the local population to hundreds of thousands, but the city of Greenville remains relatively small with just about 68,500. That's despite a virtual flood of new residents arriving at a rate of 15.9% since 2010, compared with population growth of just 9.9% for the entire Palmetto State and 6.0% for the U.S. What's the big draw? Low costs and and low taxes are highly motivational for anyone looking to stretch their savings. The metro area's housing for retirees is particularly affordable at 19.8% below the national average. But note that Anderson holds all the affordability on that front: The median home value in Greenville proper is $255,600 while in Anderson, it's significantly lower at $123,200. You'll find more action in Greenville, though, with a revitalized downtown area filling with a variety of new restaurants, shops and businesses. See Also: Retirement Checklist: 8 Steps to Take Right Now Pierre, S.D. Getty Images Total population: 21,956 Share of population, age 45 to 64: 27.8% Retired cost of living: 2.5% below national average Median income, age 45 to 64: $71,807 State's retiree tax picture: Most Tax Friendly South Dakota consistently tops our rankings of best states for retirement , what with its low living costs, tax friendliness and strong fiscal health. And while its farm economy is currently hurting from the recent tariffs situation, the financial services and tourism industries continue to hum along and contribute to the state's jobs growth . Capital city Pierre, situated on the Missouri River, is a nice place to settle in the Mount Rushmore state, particularly for fisherman and hunters. Lake Oahe, Lake Sharpe and smaller surrounding lakes offer anglers year round action. And nearby Fort Pierre National Grassland consists of 116,000 acres of federal land, where hunters can bag pheasants, prairie chickens and sharp-tail grouse, as well as waterfowl, white-tail deer and wild turkeys. See Also: All 50 States Ranked for Retirement Knoxville, Tenn. Getty Images Total population: 862,490 Share of population, age 45 to 64: 27.2% Retired cost of living: 17.4% below national average Median income, age 45 to 64: $58,303 State's retiree tax picture: Tax Friendly The Volunteer State is another good choice for budget-conscious retirees, with below-average living costs throughout the state and a friendly tax situation for all residents . It ranks fifth on our list of best states for retirement , but the tax advantages kick in well before normal retirement age with no broad-based income tax. Knoxville is particularly affordable for retirees, compared with, say, Nashville, where living costs among retired people are a mere 1.6% below the national average. Housing costs for retirees in Knoxville are the biggest factor bringing down costs, at nearly 30% below the national average. The city's median home value is just $124,500 versus $191,400 in Nashville and $193,500 across the country. Indeed, Knoxville is one of the cheapest U.S. cities to live in . See Also: 9 States With No Income Tax Sherman, Texas Photo by VSmithUK via Flickr Total population: 126,146 Share of population, age 45 to 64: 26.8% Retired cost of living: 14.3% below national average Median income, age 45 to 64: $64,446 State's retiree tax picture: Tax Friendly This small Texas city offers big savings for retirees with below-average costs in every spending category. It's actually among the cheapest U.S. cities to live in . Housing costs are particularly cheap--27.3% below the national average for retirees. The median home value in Sherman is $106,100, compared with $151,500 in all of Texas and $193,500 in the U.S. In town, you'll find charming amenities, such as boutique shopping, a number of unique restaurants (and many more chains) and community gatherings throughout the year, including a free summer concert series. Nature lovers might also appreciate the local 12,000-acre Hagerman National Wildlife Refuge, with more than 500 species identified so far. See Also: 27 Cheapest Places Where You'll Really Want to Retire Ogden, Utah Getty Images Total population: 642,274 Share of population, age 45 to 64: 20.7% Retired cost of living: 0.7% below national average Median income, age 45 to 64: $84,527 State's retiree tax picture: Least Tax Friendly Low costs plus fat paychecks can add up to big savings in Ogden. Ski aficionados, in particular, will appreciate the local world-class ski resorts, including Snowbasin and Powder Mountain, without the high price tags of, say, Provo. And even when the snow melts away, the area still covered with opportunities for outdoor adventure, as well as downtown attractions including a plethora of restaurants, shops and nightlife venues. See Also: 5 Retirement Lessons From the Great Recession Burlington, Vt. Getty Images Total population: 216,751 Share of population, age 45 to 64: 27.6% Retired cost of living: 17.2% above national average Median income, age 45 to 64: $83,500 State's retiree tax picture: Least Tax Friendly This small mountain city on the shores of Lake Champlain is a picturesque setting for tree-hugging retirees of all ages. Outdoor recreation is plentiful with miles of hiking and biking paths, nearby beaches where you can swim, kayak or paddleboard in the warmer months, and numerous skiing options in the area. An eco-friendly vibe permeates the town, from the businesses bolstering the city's economy, such as household-products maker Seventh Generation, to the local food movement feeding the neighborhood. Unfortunately, being green isn't easy on your wallet. Taxes and living costs are high, with housing among retirees being notably expensive at 43.2% above the national average. Indeed, the median home value is $220,600 in the Green Mountain State and $267,500 in Burlington. But if you're willing to give the workforce an encore in a remote job, the state is offering to alleviate some of that financial burden by paying you $5,000 to live there , which you could use to cover costs for moving, setting up a home office or using a co-working space. See Also: 13 States That Will Tax Your Social Security Roanoke, Va. Getty Images Total population: 313,069 Share of population, age 45 to 64: 28.4% Retired cost of living: 10.3% below national average Median income, age 45 to 64: $62,803 State's retiree tax picture: Tax Friendly Nestled between the Blue Ridge and Allegheny mountains, Roanoke is a haven for those looking to hike through their retirements. You can find more than 600 miles of hiking trails in the Roanoke Valley--including the Appalachian Trail--ranging from easy strolls to challenging climbs. If you'd rather take in the views with less effort, try a scenic drive along the Blue Ridge Parkway. For an even more leisurely afternoon, grab a pint at one of the many local craft breweries. Whatever you do there, you're likely to enjoy low costs while doing it. Housing is particularly affordable for retirees at 21.6% below the national average. While the median home value in Virginia is $255,800, compared with $193,500 for the U.S., in Roanoke, it's just $133,700. See Also: 10 Scams That Will Ruin Your Retirement Seattle Getty Images Total population: 3.7 million Share of population, age 45 to 64: 26.4% Retired cost of living: 50.1% above national average Median income, age 45 to 64: $92,533 State's retiree tax picture: Tax Friendly Seattle has been a desirable destination for people in all stages of life for years. And its popularity is reflected in its living costs, among the most expensive in the U.S. Still, the strong local economy and its booming tech scene, which promises typically high-paying jobs, draws high-skilled workers willing to cope with high costs. (Plus, it's still cheaper than Silicon Valley.) And the more easygoing atmosphere, encouraged by an abundance of nature and outdoor recreation opportunities in the area's many parks, trails, waterways and Cascade and Olympic mountain ranges, are big attractions for those out of the workforce, too. See Also: 20 Most Expensive U.S. Cities to Live In Morgantown, W.V. Getty Images Total population: 137,475 Share of population, age 45 to 64: 23.2% Retired cost of living: 6.3% below national average Median income, age 45 to 64: $63,746 State's retiree tax picture: Not Tax Friendly West Virginia University offers a number of benefits to retirees in Morgantown, from sports games to cultural activities such as Broadway shows and art exhibitions to highly rated medical facilities. If you're 50 or older, you can join the local chapter of the Osher Lifelong Learning Institute. Membership, which costs $100 a year to be a full member, gets you access to interest groups, trips, social gatherings and program classes, including local and international history, music, computers and yoga. And once you're 65 and older, you can take WVU courses at a discount. Beyond the University, you can find a world of outdoor recreation with ample opportunities for hiking, biking, fishing, birding, whitewater rafting and more. See Also: 15 Things Retirees Should Buy at Costco Green Bay, Wis. Getty Images Total population: 315,847 Share of population, age 45 to 64: 27.6% Retired cost of living: 10.2% below national average Median income, age 45 to 64: $70,934 State's retiree tax picture: Least Tax Friendly The University of Wisconsin brings all the benefits of retiring in a college town to the industrial city of Green Bay. That includes a thriving cultural and arts scene, quality medical care, a walkable downtown with an array of dining and shopping options and of course sports. And while the state's tax situation leaves something to be desired, low living costs are attractive. Green Bay is particularly affordable, with below-average costs for retirees across all spending categories. Housing expenses are notably low, with costs for retirees falling 20% below the national average. Couple that with the above-average income, and your budget should have no problem extending throughout your retirement here. See Also: 50 Best Places to Retire in the U.S. Cheyenne, Wyo. Getty Images Total population: 97,031 Share of population, age 45 to 64: 25.9% Retired cost of living: 7.9% below national average Median income, age 45 to 64: $75,418 State's retiree tax picture: Most Tax Friendly Retiring early to escape the noise and crowds of the workforce? The Cowboy State offers an abundance of space and quiet--and a scarcity of people. It has a population of fewer than 580,000--that's about six people per square mile. (By comparison, the country's smallest state in size, Rhode Island, hosts more than a million people, with more than 1,000 people per square mile.) Even the capital is relatively small, with about 64,000 residents living in the city proper. The lack of crowds doesn't leave you a lack of activities. You have plenty of outdoor diversions, such as miles of trails for hiking, biking and horseback riding; fishing and boating; and birding and other wildlife viewing. Train aficionados can enjoy the area's railroad history and displays of locomotives, including the world's largest steam engine (also retired). Another big local attraction: Every summer since 1897, Cheyenne hosts the world's largest outdoor rodeo and Western celebration, Frontier Days, now a 10-day event. SEE ALSO: 10 Things You Must Know About Retiring to Florida How We Picked the Best Places for Early Retirement Getty Images To pinpoint one great retirement destination in each state, we weighed a number of factors: Cost of living for retirees in specified major metropolitan and micropolitan statistical areas is provided by the Council for Community and Economic Research (C2ER) through its cost of living index for retired households. The index includes costs of housing, food and groceries, transportation, utilities, health care and miscellaneous expenses. For select cities, where data specifically for retired households was not available, cost of living comes from Sperling's Best Places and includes all residents, as noted. Population data, including the percentage of the population that is age 45 to 64, is provided by the U.S. Census Bureau. The figures, unless otherwise noted, represent the populations of major metropolitan and micropolitan statistical areas that often include multiple cities despite being named after just the principal city. Household incomes, poverty rates and unemployment rates for 45- to 64-year-olds are also from the U.S. Census Bureau. Taxes on retirees, based on Kiplinger's Retiree Tax Map , divides states into five categories: Most Tax Friendly, Tax Friendly, Mixed, Not Tax Friendly and Least Tax Friendly. Average health care costs in retirement are from HealthView Services and include Medicare, supplemental insurance, dental insurance and out-of-pocket costs for a 55-year-old couple who are both retired and are expected to live to 87 (husband) and 89 (wife). Rankings of each state's economic health are provided by the Mercatus Center at George Mason University and are based on various factors including state governments' revenue sources, debts, budgets and abilities to fund pensions, health-care benefits and other services. Rankings of the health of each state's population are from the United Health Foundation and are based on more than 30 factors ranging from residents' bad habits (smoking and excessive drinking) to the quality of hospital and nursing home care available in the state. See Also: Best States to Retire: All 50 States Ranked EDITOR'S PICKS 50 Best Places to Retire in the U.S. Best States to Retire 2018: All 50 States Ranked Taxes in Retirement: How All 50 States Tax Retirees Copyright 2019 The Kiplinger Washington Editors |
StockX is now valued at over $1 billion
In 2015, entrepreneur Josh Luber brought his idea of a 'stock market of things' to life. Now in 2019, after its latest $110 million round of Series C funding, StockX is valued at over $1 billion.
The Detroit-based company is primarily known for being a go-to platform for the nearly $6 billion sneaker resale market, but it’s also a place to buy and sell streetwear, handbags, luxury watches, another popular collectibles as if they’re shares of a company.
Luber and newly-named CEO Scott Cutler, formerly a senior VP at eBay and president of StubHub, joined Yahoo Finance's “On the Move” to discuss the site and the burgeoning resale market. "We are a marketplace; we are an evolution of eBay … but, the way that we connect buyers and sellers is the exact same way the world's stock market connects buyers and sellers," said Luber. Buyers place bids, sellers place asks, and when a bid and ask meet, the transaction happens automatically — across a true market price.
"[StockX] literally looks like Yahoo Finance on a sneaker product page; we can see every sale in every size every time," says Luber.
"We've already been growing at almost an order of magnitude faster than the rest of e-commerce in the marketplaces and products in which we are currently competing — and in many respects we are outcompeting all competitors that have the opportunity to buy on our platform as well because of our different model," said Cutler.
Read the latest financial and business news from Yahoo Finance
Reggie Wade is a writer for Yahoo Finance. Follow him on Twitter at@ReggieWade.
Read more:
• Foot Locker makes $100M bet on popular online sneaker marketplace GOAT
• The hottest resale sneakers by state
• How Nike took over the NBA sneaker game
• Read the latest financial and business news from Yahoo Finance
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Philadelphia hospital owner announces closure, citing losses
PHILADELPHIA (AP) — The owner of Hahnemann University Hospital in Philadelphia announced its closure in September because of what the company called "continuing, unsustainable financial losses." Philadelphia Academic Health System, a subsidiary of American Academic Health System, said Wednesday that Hahnemann will immediately begin an "orderly wind down of its inpatient and outpatient treatment services" at the 496-bed Level 1 trauma center that has about 2,500 employees. Joel Freedman, company founder and president said in a statement the healthy system "relentlessly pursued numerous strategic options to keep Hahnemann in operation" and they are "saddened our efforts have not been successful. The Pennsylvania Association of Staff Nurses and Allied Professionals, which represents 800 registered nurses at Hahnemann, called for intervention by state and city officials to save the hospital. "Hahnemann is a safety-net hospital that for decades has provided care to an under-served community," union president Maureen May said in a statement. "We cannot allow predatory, for-profit companies to plunder such a valuable public good." Philadelphia Academic Health System also owns St. Christopher's Hospital for Children, but Freedman said that hospital will remain open and the "difficult choice" of closing Hahnemann "will enable us to focus on the future of St. Christopher's." The company said the hospital was also working to find placement for all residents and fellows completing their training at Hahnemann. The hospital is an academic affiliate of Drexel University College of Medicine, which said it is working to ensure no disruption to the education of its medical students and organized relocation of its hospital-based clinical rotations. In April, 175 people were laid off at Hahnemann, which traces its roots to a homeopathic medical college opened in 1848. |
What You Must Know About Cognizant Technology Solutions Corporation's (NASDAQ:CTSH) Financial Health
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Investors looking for stocks with high market liquidity and little debt on the balance sheet should consider Cognizant Technology Solutions Corporation (NASDAQ:CTSH). With a market valuation of US$36b, CTSH is a safe haven in times of market uncertainty due to its strong balance sheet. These firms won’t be left high and dry if liquidity dries up, and they will be relatively unaffected by rises in interest rates. Assessing the most recent data for CTSH, I will take you through the key ratios to measure financial health, in particular, its solvency and liquidity.
View our latest analysis for Cognizant Technology Solutions
CTSH's debt levels surged from US$773m to US$1.6b over the last 12 months – this includes long-term debt. With this rise in debt, CTSH currently has US$3.7b remaining in cash and short-term investments to keep the business going. Additionally, CTSH has produced cash from operations of US$2.5b in the last twelve months, leading to an operating cash to total debt ratio of 154%, indicating that CTSH’s operating cash is sufficient to cover its debt.
At the current liabilities level of US$2.7b, it appears that the company has maintained a safe level of current assets to meet its obligations, with the current ratio last standing at 2.9x. The current ratio is the number you get when you divide current assets by current liabilities. Generally, for IT companies, this is a reasonable ratio since there is a bit of a cash buffer without leaving too much capital in a low-return environment.
A debt-to-equity ratio threshold varies depending on what industry the company operates, since some requires more debt financing than others. As a rule of thumb, a financially healthy large-cap should have a ratio less than 40%. CTSH’s level of debt is low relative to its total equity, at 7.0%. CTSH is not taking on too much debt commitment, which may be constraining for future growth.
CTSH has demonstrated its ability to generate sufficient levels of cash flow, while its debt hovers at a safe level. Furthermore, the company exhibits an ability to meet its near-term obligations, which isn't a big surprise for a large-cap. Keep in mind I haven't considered other factors such as how CTSH has been performing in the past. I suggest you continue to research Cognizant Technology Solutions to get a more holistic view of the stock by looking at:
1. Future Outlook: What are well-informed industry analysts predicting for CTSH’s future growth? Take a look at ourfree research report of analyst consensusfor CTSH’s outlook.
2. Valuation: What is CTSH 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 CTSH 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. |
Apple hires one of ARM's top chip designers
Apple appears to be making up for itsloss of chip designer talent. The company hasquietly hiredARM Lead CPU Architect Mike Filippo to serve as a chip architect. It's not certain just what he'll do at Apple, but hes work at ARM focused on high-end CPU designs including theCortex-A76and future models like Hercules and Zeus. He also worked on "infrastructure-focused" and "automotive-enhanced" processors, and was instrumental to designs for both AMD and Intel.
Filippo signed on in May. He's working in Austin, a known hub for Apple's semiconductor plans.
His experience bodes well for many Apple products, since Apple uses ARM-based chips not just as the heart of its mobile hardware, but as companions in Macs. You could see iPhones and iPads that continue topush boundaries. However, he may play a crucial role in expanding Apple's use of custom processing power. The company is rumored to be makingcustom ARM processors for Macs, not to mention anaugmented reality headset. Both of those will need both a lot of computing power and exceptional battery life, and Filippo could help Apple achieve those goals. |
'Silex' Malware Renders Internet-of-Things Devices Useless. Here's How to Prevent It
A new malware known as Silex is bringing smart devices to their knees.
The Silex malware, according toZDNet, ruins smart devices by gaining access to and destroying a device’s storage, eliminating its firewall and removing its network configuration. From here, the device stops working.
Silex was reportedly created by a 14-year-old hacker who goes by the pseudonym Light Leafon, according to ZDNet. The malware went unknown until it wasspottedby Larry Cashdollar, a security exploit researcher, on Tuesday. “It’s using known default credentials for IoT devices to log in and kill the system,” Cashdollar told ZDNet, which reports that Silex first affected 350 devices and then quickly spread to over 1,500 more.
The prevalence of Internet of Things devices that ship with default passwords is nothing new. Research byPositive Technologiesfrom 2017 showed that default passwords to 15 out of 100 IoT devices had never been changed. While not the majority, that’s certainly a large chunk of the26 billionsmart things devices out in the wild. The hacker is presumed to be inspired by the botnetBrickerBot, which plagued smart devices back in 2017. Both Silex and BrickerBot before it rely on default login credentials to gain control.
The danger associated with most of the devices around us having guessable passwords is obvious. So much so that,in 2018, California banned hardware from shipping with guessable logins like “password” and “123456.” The law also required that device makers force users to change a device’s built-in password upon setup.
The Silex malware relies on guessing your device’s user name and password. Since this malware is so new, it may be a while before your smart device issues a fix for the hack. So what can you do in the meantime?
“If users buy a device with standard, hard coded credentials, the best thing they can do is change the username and password for the device as quickly as possible,” says Tendermint’s director of security Jesse Irwin, a former staffer at the popular password management app 1Password.
The good news is that changing your device’s default admin password may help prevent an attack against the Silex malware. The bad news: all devices are not created equal. Changing the admin password ona DVRmay be more difficult than changing it ona router, for example.
Irwin notes that when trying to figure out the default username and password on an Internet-connected device, there are a few places people should look. Manufacturers often print usernames and passwords stickers to put on devices, or they include the information in user guide or setup instructions.
“If a device’s credentials cannot be changed, there are deeper technical measures that can be taken,” says Irwin. “But if you are not able to take care of those things on your own, return it.” The great thing about the booming market for connected devices, is that there are almost always other, safer options for available, she adds.
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Catch up withData Sheet,Fortune‘s daily digest on the business of tech. |
Is Cognizant Technology Solutions Corporation (NASDAQ:CTSH) Potentially Undervalued?
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Today we're going to take a look at the well-established Cognizant Technology Solutions Corporation (NASDAQ:CTSH). The company's stock saw a double-digit share price rise of over 10% in the past couple of months on the NASDAQGS. As a large-cap stock with high coverage by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock. However, what if the stock is still a bargain? Let’s take a look at Cognizant Technology Solutions’s outlook and value based on the most recent financial data to see if the opportunity still exists.
View our latest analysis for Cognizant Technology Solutions
The stock seems fairly valued at the moment according to my valuation model. It’s trading around 15% below my intrinsic value, which means if you buy Cognizant Technology Solutions today, you’d be paying a reasonable price for it. And if you believe the company’s true value is $74.04, then there isn’t much room for the share price grow beyond what it’s currently trading. So, is there another chance to buy low in the future? Given that Cognizant Technology Solutions’s share is fairly volatile (i.e. its price movements are magnified relative to the rest of the market) this could mean the price can sink lower, giving us an opportunity to buy later on. This is based on its high beta, which is a good indicator for share price volatility.
Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company's future expectations. With profit expected to grow by 34% over the next couple of years, the future seems bright for Cognizant Technology Solutions. It looks like higher cash flow is on the cards for the stock, which should feed into a higher share valuation.
Are you a shareholder?CTSH’s optimistic future growth appears to have been factored into the current share price, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the track record of its management team. Have these factors changed since the last time you looked at the stock? Will you have enough conviction to buy should the price fluctuates below the true value?
Are you a potential investor?If you’ve been keeping tabs on CTSH, now may not be the most optimal time to buy, given it is trading around its fair value. However, the optimistic prospect is encouraging for the company, which means it’s worth further examining other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.
Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on Cognizant Technology Solutions. You can find everything you need to know about Cognizant Technology Solutions inthe latest infographic research report. If you are no longer interested in Cognizant Technology Solutions, you can use our free platform to see my list of over50 other stocks with a high growth potential.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
How I wish people talked about living with a BRCA mutation
The word previvor is a blend of the words pre and survivor. It was created in 2000 by the nonprofit Facing Our Risk of Cancer Empowered (FORCE) in response to a user on a FORCE message board who wanted a label to describe what it was like to not have been diagnosed with cancer, but to have a genetic mutation that would increase her risk of developing cancer. From that discussion came previvor, defined as an individual who has survived a predisposition to cancer but hasnt yet had the disease. I technically became a previvor in June 2014. I underwent genetic counseling and testing, where I learned that I carried a BRCA2 gene mutation , a hereditary gene mutation that elevates an individuals lifetime risk of developing numerous types of cancer, particularly breast and ovarian cancer. Because of my family history, specifically the fact that my mother had breast cancer for the first time when she was 28 and a second diagnosis of triple negative breast cancer in her 40s, I made the decision to have a preventative double mastectomy in December 2014. That dropped my lifetime risk of developing breast cancer from 69% to less than 5%. In many ways, I thought that having my mastectomy would be the end of my BRCA journey. However, in the four and a half years since my diagnosis, I realized that Im at the beginning. Because having a BRCA mutation elevates my risk of developing ovarian cancer, every six months I undergo a transvaginal ultrasound and I have to submit bloodwork for a CA125 test , which is used to monitor for early signs of ovarian cancer. Once a year, I visit a dermatologist and an ophthalmologist to check for any signs of melanomas. I recently started seeing a specialist to monitor my risk of developing pancreatic cancer. And when I turn 35, I will start having annual colonoscopies to monitor for potential colon cancer. Given these numerous medical interventions and the fact that scientists are still learning about the full impact of carrying a BRCA mutation, Ive started to feel that its inappropriate to call myself a previvor. Having a BRCA mutation is something that will likely have to be monitored for my entire life. The question of whether I survive my predisposition for cancer feels like something that I have no way of knowing, so to say that Ive survived my predisposition for cancer almost feels like tempting fate. Story continues Ive also come to dislike the term previvor because I worry it limits the range of emotional responses that individuals with an elevated risk of developing cancer are allowed to express. It has been well documented how survivor culture in the breast cancer community can sometimes keep patients from expressing the fear and anxiety associated with their diagnoses, pressuring patients into needing to feel strong and positive. I worry that the term previvor can lead to a similar problem in the BRCA community. After learning about my BRCA mutation status, I experienced a wide range of emotions. Part of me felt relieved to know, and part of me was equally racked by depression and anxiety. I worried that my mutation status would limit my ability to find a romantic partner, and I was scared of undergoing surgery. I hid my feelings from my family and friends because so many people told me that I now had the knowledge to beat cancer before it beat me! It wasnt until I started seeing a therapist a few months after my surgery that I realized how depressed I was. Erika Stallings, HelloGIggles Finally, as Ive spent more time in previvor communities, both online and in-person, I cant help but notice the lack of diversity among participants. Numerous studies have found that women of color are underserved by genetic counseling and testing, which means that they dont have the same chance as white women to be a previvor. As a Black woman and an advocate for increased awareness of genetic counseling and testing in my community, it feels wrong to use a label that is not equally accessible to all women. For now, Ive decided not to use any term or description to characterize my BRCA status. Maybe that will change as I continue on my BRCA journey, but for now being label-less is good enough for me. |
Is Now An Opportune Moment To Examine Cognizant Technology Solutions Corporation (NASDAQ:CTSH)?
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Today we're going to take a look at the well-established Cognizant Technology Solutions Corporation (NASDAQ:CTSH). The company's stock saw a decent share price growth in the teens level on the NASDAQGS over the last few months. As a large-cap stock with high coverage by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock. However, could the stock still be trading at a relatively cheap price? Let’s examine Cognizant Technology Solutions’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.
View our latest analysis for Cognizant Technology Solutions
According to my valuation model, Cognizant Technology Solutions seems to be fairly priced at around 15% below my intrinsic value, which means if you buy Cognizant Technology Solutions today, you’d be paying a reasonable price for it. And if you believe the company’s true value is $74.04, then there isn’t much room for the share price grow beyond what it’s currently trading. So, is there another chance to buy low in the future? Given that Cognizant Technology Solutions’s share is fairly volatile (i.e. its price movements are magnified relative to the rest of the market) this could mean the price can sink lower, giving us an opportunity to buy later on. This is based on its high beta, which is a good indicator for share price volatility.
Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company's future expectations. Cognizant Technology Solutions’s earnings over the next few years are expected to increase by 34%, indicating a highly optimistic future ahead. This should lead to more robust cash flows, feeding into a higher share value.
Are you a shareholder?It seems like the market has already priced in CTSH’s positive outlook, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the financial strength of the company. Have these factors changed since the last time you looked at the stock? Will you have enough conviction to buy should the price fluctuates below the true value?
Are you a potential investor?If you’ve been keeping tabs on CTSH, now may not be the most advantageous time to buy, given it is trading around its fair value. However, the optimistic prospect is encouraging for the company, which means it’s worth diving deeper into other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.
Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on Cognizant Technology Solutions. You can find everything you need to know about Cognizant Technology Solutions inthe latest infographic research report. If you are no longer interested in Cognizant Technology Solutions, you can use our free platform to see my list of over50 other stocks with a high growth potential.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
How Does Investing In Sanatana Resources Inc. (CVE:STA) Impact The Volatility Of Your Portfolio?
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If you own shares in Sanatana Resources Inc. (CVE:STA) then it's worth thinking about how it contributes to the volatility of your portfolio, overall. In finance, Beta is a measure of volatility. Volatility is considered to be a measure of risk in modern finance theory. Investors may think of volatility as falling into two main categories. The first type is company specific volatility. Investors use diversification across uncorrelated stocks to reduce this kind of price volatility across the portfolio. The second sort is caused by the natural volatility of markets, overall. For example, certain macroeconomic events will impact (virtually) all stocks on the market.
Some stocks mimic the volatility of the market quite closely, while others demonstrate muted, exagerrated or uncorrelated price movements. Beta is a widely used metric to measure a stock's exposure to market risk (volatility). Before we go on, it's worth noting that Warren Buffett pointed out in his 2014 letter to shareholders that 'volatility is far from synonymous with risk.' Having said that, beta can still be rather useful. The first thing to understand about beta is that the beta of the overall market is one. Any stock with a beta of greater than one is considered more volatile than the market, while those with a beta below one are either less volatile or poorly correlated with the market.
View our latest analysis for Sanatana Resources
Given that it has a beta of 1.26, we can surmise that the Sanatana Resources share price has been fairly sensitive to market volatility (over the last 5 years). Based on this history, investors should be aware that Sanatana Resources are likely to rise strongly in times of greed, but sell off in times of fear. Share price volatility is well worth considering, but most long term investors consider the history of revenue and earnings growth to be more important. Take a look at how Sanatana Resources fares in that regard, below.
Sanatana Resources is a rather small company. It has a market capitalisation of CA$8.4m, which means it is probably under the radar of most investors. It takes less money to influence the share price of a very small company. This may explain the excess volatility implied by this beta value.
Since Sanatana Resources has a reasonably high beta, it's worth considering why it is so heavily influenced by broader market sentiment. For example, it might be a high growth stock or have a lot of operating leverage in its business model. This article aims to educate investors about beta values, but it's well worth looking at important company-specific fundamentals such as Sanatana Resources’s financial health and performance track record. I urge you to continue your research by taking a look at the following:
1. Financial Health: Are STA’s operations financially sustainable? Balance sheets can be hard to analyze, which is why we’ve done it for you. Check out ourfinancial health checks here.
2. Past Track Record: Has STA 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 STA's historicalsfor more clarity.
3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore ourfree list of these great stocks here.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
UBS: Fed interest rate cut 'risk management', but it may not happen at all
The Federal Reserve’s widely-expected interest rate cut next month is an exercise in “risk management” — but a new easing cycle is not entirely assured, banking giant UBS said on Wednesday.
The central bank has kept rates on hold since ending its tightening campaign late last year, even in the face of a weakening economy and a growingpolitical pressure from President Donald Trump.
Fed policymakers “see the US economy as fundamentally strong. Instead, a cut is about risk management,” UBS analysts wrote. The bank expects the Fed to cut its benchmark rates by half a percentage point.
Last week, almost half of theFOMCmoved towards an interest rate cut by the end of 2019. A vast majority expect a December rate 50bp lower than its current level. Although the median dot was unchanged, the general downward shift signifies the concerns that the Committee holds.
“If the Fed cuts and the economy remains buoyant, they can live with the consequences. In contrast, if they do not cut rates and the economy slumps, they will see themselves as having made a grave error,” the bank said — adding that if it doesn’t take place in July, it may not happen at all.
“Our expectation is that over the remainder of the year business sentiment and capital investment improve from their recent low levels in the absence of an escalation on the trade front and that monthly inflation strengthens,” analysts wrote.
“As a result we think the case for a rate cut becomes harder to make after the July meeting,” the analysts added.
To be certain, there are several reasons that Fed Chairman JeromePowelland the other members of the Fed’s Open Market Committee took a dovish tilt in last week’s meeting.
Among them is the U.S-China trade war and weaker global growth that’s weighing on business sentiment and job creation. In order for the Fed to stay its hand again, there would need to be measurable progress in those areas, UBS said.
“We believe the bar is high and that data have to generally outperform expectations by a meaningful degree to stop the cut,” the bank said. “The usual measures could stall a cut, but it would take a lot of strength.”
Weighing on the Fed’s considerations is that a cautious central may be fearful of making a policy mistake that sends the U.S. economy into a tailspin. That fear is being amplified by the U.S. trade dispute with China, which may not be resolved at this weekend’s G20 meeting.
U.S. stocks rose on Wednesday, as investors sent mixed signals over the path forward in U.S.-China trade talks.
The S&P 500 (^GSPC) rose 0.02%, or 0.49 points, as of 3:02 p.m. ET. The energy sector outperformed as oil prices spiked, while the real estate sector lagged. The Dow (^DJI) increased 0.18%, or 47.27 points, while the Nasdaq (^IXIC) rose 0.41%, or 32.21 points.
Donovan Russo is a writer for Yahoo Finance. Follow him@Donovanxrusso.
Read more:
• UBS: World economy ‘one step away from global recession'
• Why Trump-Xi meeting won't produce a trade war 'breakthrough' at G20: Goldman Sachs
• Trump blasts Federal Reserve as 'stubborn child' on rate policy
• GrubHub stock soars as Citi cites delivery tests as a reason to buy
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Why Corning Just Replaced Its Strategic Growth Framework
It's hard to believe it's already been nearly four years sinceCorning(NYSE: GLW)unveiled its ambitious 2016-2019 "Strategy and Capital Allocation Framework." At the time, the glass technologist initiallypledged to deploy over $20 billionin capital -- to be largely funded by its operating cash flow -- including returningat least$10 billion to shareholders through repurchases and increasing dividends, as well as investing roughly $10 billion back in the business toward future growth opportunities through a combination of research and development, capital spending, and strategic acquisitions.
In fact, Corning upped the ante along the way, ultimately returning over $12.5 billion to investors through dividends and share repurchases and investing $11 billion toward capturing future growth and solidifying its industry leadership.
Corning Chairman and CEO Wendell Weeks put it simply: "We did what we said we would do, and our shareholders have benefited."
But that naturally raises the question: What's next?
Image source: Getty Images.
With its original promises effectively fulfilled -- and with its stock price up nearly 80% as a result even excluding its dividend payments, which have increased 50% -- it's time to reap the benefits of those investments. To that end, Corning recently announced its new 2020-2023 "Strategy and Growth Framework."
Over the course of its new four-year plan, Corning is targeting compound annual sales growth of 6% to 8%, primarily stemming from organic growth in its five market-access platforms.
More specifically within those platforms, the company believes its core optical communications business will grow twice as fast as the broader passive optical market (helped by demand from 5G and hyperscale data centers). Its automotive market sales will double thanks to both its new gasoline particulate filter products and automotive glass. Mobile consumer electronics sales should "continue on a path to doubling" with help from Corning Gorilla Glass. Life sciences product growth should "at least" double that of the broader life-sciences industry through cell- and gene-therapy demand. Finally, the legacy display business should remain stable, as the impact of moderating price declines should be offset by new manufacturing capacity and larger television screen sizes.
Meanwhile, this top-line growth should translate to even greater 12% to 15% compound annual growth in earnings per share, aided by a combination of operating leverage and continued share repurchases. On that note, Corning renewed its pledge to return $8 billion to $10 billion to shareholders over the next four years through buybacks and dividends, the latter of which should continue to increase on a per-share basis by at least 10% each year.
"We believe that Corning is more resilient than at any point in its history," stated CFO Tony Tripeny -- a bold pronouncement considering the company has successfully weathered (and fostered, really) every technological and macroeconomic disruption imaginable since its founding in 1851.
"Our strategic investments are paying off and our relationships with industry-leading customers are creating new opportunities for collaboration and growth," Tripeny added. "Based on these factors and our record of execution, we are confident in our ability to meet the long-term goals we are setting today."
"Long-term" seems like a generous description for this four-year plan given Corning's storied history. But if Corning is able to once again deliver on its promises for new growth, I suspect the next several years could be its best yet.
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Steve Symingtonhas no position in any of the stocks mentioned. The Motley Fool recommends Corning. The Motley Fool has adisclosure policy. |
Some Stamper Oil & Gas (CVE:STMP) Shareholders Have Copped A 99% Share Price Wipe Out
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Some stocks are best avoided. We don't wish catastrophic capital loss on anyone. Imagine if you heldStamper Oil & Gas Corp.(CVE:STMP) for half a decade as the share price tanked 99%. And some of the more recent buyers are probably worried, too, with the stock falling 82% in the last year. The falls have accelerated recently, with the share price down 20% in the last three months. We note that the company has reported results fairly recently; and the market is hardly delighted. You can check out the latest numbers inour company report.
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 Stamper Oil & Gas
With zero revenue generated over twelve months, we don't think that Stamper Oil & Gas has proved its business plan yet. You have to wonder why venture capitalists aren't funding it. As a result, we think it's unlikely shareholders are paying much attention to current revenue, but rather speculating on growth in the years to come. For example, they may be hoping that Stamper Oil & Gas finds fossil fuels with an exploration program, before it runs out of money.
As a general rule, if a company doesn't have much revenue, and it loses money, then it is a high risk investment. There is 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). Some Stamper Oil & Gas investors have already had a taste of the bitterness stocks like this can leave in the mouth.
Our data indicates that Stamper Oil & Gas had CA$996,928 more in total liabilities than it had cash, when it last reported in March 2019. That makes it extremely high risk, in our view. But since the share price has dived -57% per year, over 5 years, it looks like some investors think it's time to abandon ship, so to speak. The image below shows how Stamper Oil & Gas's balance sheet has changed over time; if you want to see the precise values, simply click on the image.
In reality it's hard to have much certainty when valuing a business that has neither revenue or profit. Would it bother you if insiders were selling the stock? I would feel more nervous about the company if that were so. It costs nothing but a moment of your time tosee if we are picking up on any insider selling.
While the broader market gained around 1.2% in the last year, Stamper Oil & Gas shareholders lost 82%. Even the share prices of good stocks drop sometimes, but we want to see improvements in the fundamental metrics of a business, before getting too interested. Unfortunately, last year's performance may indicate unresolved challenges, given that it was worse than the annualised loss of 57% over the last half decade. We realise that Buffett has said investors should 'buy when there is blood on the streets', but we caution that investors should first be sure they are buying a high quality businesses. Shareholders might want to examinethis detailed historical graphof past earnings, revenue and cash flow.
If you like to buy stocks alongside management, then you might just love thisfreelist of companies. (Hint: insiders have been buying them).
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on CA exchanges.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
Inside Beth and Duane 'Dog' Chapman's Complex Love Story and 13-Year Marriage
Duane "Dog" Chapman is mourning the loss of his beloved wife, Beth Chapman. Beth died on Wednesday morning, Dog confirmed on Twitter, after a battle with cancer. She was 51 years old. Dog and Beth had been married since 2006, but had been dating on-and-off since meeting in 1986. Beth was 66-year-old Dog's fifth wife, after his previous marriages to La Fonda Sue Honeycutt, Anne Tengell, Lyssa Rae Brittain and Tawny Marie. But Beth and Dog's relationship was far from perfect when they started out, he acknowledged in his 2008 book, You Can Run But You Can’t Hide. Both came from rocky pasts before they met -- Dog was convicted of first-degree murder in 1976 after he had been waiting in a car when his friend shot and killed an alleged drug dealer during a deal to buy cannabis, and served 18 months in prison. Meanwhile, Beth's son, Dominic, whom she gave birth to when she was 17 years old, had been taken into state custody. Even after meeting, the two didn't fall into a committed relationship right away. In 1991, Beth actually married Dog's childhood best friend, Keith Barmore, and they had a daughter together, Cecily. Dog admitted in his book that he was devastated when Beth married Keith. "When I heard they got married, I got physically sick," he wrote , before claiming, "Friends told me he was abusing her something awful." However, Beth and Dog continued to see each other despite being married to other people, and after they both got divorced, they finally got serious with one another in 1995. Dog ended up adopting Cecily, and he also had eight children from his previous relationships. But what was supposed to be Dog and Beth's fairy-tale 2006 marriage in Hawaii was preceded by tragedy. His eldest daughter with his third wife, Lyssa -- Barbara Katie -- died in a car accident in Alaska the day before the wedding. Barbara was just 23 years old. According to Hawaii News Now , Dog and Beth consulted with a minister and decided to continue on with their ceremony, and informed their guests of the tragic news at their reception. Heartbreaking family drama struck again in 2011 when Dog and Beth were awarded temporary custody of Barbara's then 9-year-old son from his biological father after a neighbor took an audio recording of their grandson allegedly being physically abused. Story continues But despite their personal struggles, Dog and Beth continued to film their super successful A&E reality series, Dog the Bounty Hunter , which chronicled their experiences as bounty hunters. The show lasted for eight seasons before getting canceled in 2012, and the couple had a spinoff series, Dog and Beth: On the Hunt on CMT, before that series eventually ended in 2015. Throughout their time on TV, cameras chronicled their love for one another, including Dog's love advice for keeping his wife happy. "You cannot win the heart of a girl by being mean to her," he once told a man he apprehended who was accused of abusing his significant other, during a memorable episode of Dog the Bounty Hunter . "That is not how you win the heart of a lady. You got to be kind, flowers, nice, loving, put your coat down in the rain ... You think Romeo and Juliet, he beat her a** all the time? Romeo knocked the sh** out of Juliet so she loved him? No. That's not what you do." The show also didn't shy away from showing Beth and Dog's arguments, particularly, how Beth had no issue standing up to her husband. "My husband is a sweet personality," Beth told cameras at one point. "The problem is when that Dog guy comes around. He's nasty, he's aggressive. He doesn't have a wife." Meanwhile, Dog quipped, "How do you fight with a woman? We always lose. ... This is just a high-energy job, and once in a while, there'll be disagreements. But we're family, and that's what counts." Dog was always fiercely loyal to Beth, particularly after she was diagnosed with stage two throat cancer in September 2017. In an interview with Inside Edition one month later, the usually tough-as-nails Dog broke down in tears while discussing her diagnosis. "I told the doctor, 'She dies, you die,'" he said, choking back tears. "I said, 'I don't mean to be like that, and I don't mean to threaten you because I'm a good person, but Doc, if she dies, you die.'" As for her scar on her throat from where doctors removed a plum-sized tumor, he noted, "Listen, she's beautiful. I told her today, I can't even see it." In one of the more heartbreaking moments of the emotional interview, when Beth was asked if she thought Dog would fall apart without her, she bluntly replied, "Yes." Sadly, last November, Beth's lawyer confirmed to ET that her cancer had returned after she was previously declared cancer-free. Dog continued to keep his wife's spirits up , and she shared a picture of the two lying on a hospital bed together on Instagram later that month. "Another bend in the road, yet not the end of the road,#faith, #love #stayhumblepray," Beth wrote. View this post on Instagram Another bend in the Road yet not the End of the Road . #faith #love #stayhumblepray A post shared by Beth Chapman (@mrsdog4real) on Nov 29, 2018 at 3:54pm PST In March, Dog vowed to help his wife fight. "My baby has cancer and she is fighting like hell," he told DailyMailTV . "I have cried a lot over this because Beth is my everything." "Despite all of the obstacles I have overcome, this is by far the biggest test of my life and mark my words, I will not let her die," he continued. "She is my rock and my bodyguard. I will do everything I can to keep her here." He also said he was amazed by her strength and positive attitude. "She has told me repeatedly that if these are her last days on Earth she wants to spend every moment with me on the hunt, living life to the fullest and enjoying the time we have left together," he said. "The best part of my job is having her by my side on every journey. I can't imagine a day without her and think deep down inside she is always concerned for my safety because she wants the security of knowing I come home to her every night." But Beth's condition continued to deteriorate. When Beth was placed in a medically induced coma at Queen's Medical Center in Honolulu earlier this month, Dog asked for prayers. Please say your prayers for Beth right now thank you love you — Duane Dog Chapman (@DogBountyHunter) June 23, 2019 Beth and Dog's daughter, Bonnie, later shared a loving photo of the couple together. Dog and Beth adopted two children together, including their son, Garry. ❤️❤️ pic.twitter.com/YOkmzfYmYC — Bonnie Chapman (@Bonniejoc) June 23, 2019 Up until her last days, as a source told ET that Beth was "in very grave condition" and that she was being "heavily sedated" in the hospital, Dog remained by Beth's side with a positive attitude. "You all know how she is about HER NAILS!!" he tweeted, showing off his wife's sparkly manicure. You all know how she is about HER NAILS !! pic.twitter.com/w8iWMYrWZd — Duane Dog Chapman (@DogBountyHunter) June 25, 2019 Sadly, Beth died on June 26. ET learned that she died at Hawaii's Queen's Medical Center around 5:30 a.m. local time on Wednesday and that her entire family was by her side. "It’s 5:32 in Hawaii, this is the time she would wake up to go hike Koko Head mountain," Dog tweeted. "Only today, she hiked the stairway to heaven. We all love you, Beth. See you on the other side." It’s 5:32 in Hawaii, this is the time she would wake up to go hike Koko Head mountain. Only today, she hiked the stairway to heaven. We all love you, Beth. See you on the other side. — Duane Dog Chapman (@DogBountyHunter) June 26, 2019 For more on Beth's courageous cancer battle, watch the video below: RELATED CONTENT: Beth Chapman's Family and Friends Pay Tribute to Reality Star Following Her Death Beth Chapman, 'Dog the Bounty Hunter' Star, Dead at 51 Beth Chapman in 'Very Grave Condition' as Family Prays for a Miracle, Source Says Related Articles: Hollywood Bikini Bods Over 40 Biggest Celebrity Breakups of 2019 -- So Far! Celebrities in Their Underwear |
'Bachelorette' Hannah B. Is Defending Herself and Her "No-No Square"
Photo credit: ABC From Cosmopolitan Monday night's episode of The Bachelorette was truly iconic. There was naked bungee jumping, dry humping in a sauna, and something with branches that I don't know the purpose of but am down for: Photo credit: Giphy However, some people don't think women should have fun. If having to defend herself to the human version of slimy lettuce, Luke P., wasn't enough, Hannah is now also having to explain herself to a mass of online haters. Firstly, her IG story... On Monday night, Hannah’s said in her IG story, “during this episode, I always had my underwear on. My no-no square touched nobody else's no-no square." So, a few things. Firstly, it is concerning that an adult woman uses the childish phrase “no-no square” (I would personally consider mine a yes-yes square if I was being strapped to Garrett). Photo credit: Giphy Secondly, why is Hannah feeling the need to clarify? I mean, the producers took SO much time to show that the pair were “naked” - there were the black boxes, plus that long shot of Hannah’s bra in the river. Is Hannah trying to stop herself from getting more Luke P. style backlash by saying that she wasn’t actually naked? Scrolling through her IG comments, I can certainly see why this might be a fair concern: Photo credit: Instagram Photo credit: Instagram Awful. It’s worth noting that Garrett hasn’t felt the need to explain himself on any of his social media. Repeat after me, people: Stop! Telling! Women! What! To! Do! With! Their! Bodies! Photo credit: Giphy Then a whole post... Then, Hannah followed up with a lengthy IG post where she really stands up to the haters. “I refuse to feel shame. I refuse to believe the lies and evil that flood my comments,” she begins, underneath an adorable pic of Hannah in a field of tulips (in case the Netherlands tag just wasn’t Dutch enough for you). View this post on Instagram I refuse to not stand in the sun. I refuse to feel shame. I refuse to believe the lies and evil that flood my comments. I am standing firm in believing that maybe God wants to use a mess like me to point to His goodness and grace. But dang, it’s hard. The amount of hate I and the men on this journey with me receive...it’s chilling to know so many people want to spread hurt so recklessly. We all fall short of the glory of God...we just happen to do it on national television. ⠀⠀⠀⠀⠀⠀⠀⠀ I’ve realized that a lot of the things that Satan uses to hurt me, come in the form of many of your comments- he uses a grain of truth to steer to evil lies. “You’re not enough, you’re dirty, you’re dumb, you’re immature, you’re not worthy...”. It’s upsetting to get messages from Christians telling me I give Christians a bad name. I’ve lived my life for the world to see and judge and absolutely, I’m hot mess on a stick, I blew it a few times...but I refuse to believe I give Christians a bad name. I’m an imperfect human. Who is yes, also a Christian. And God has a master plan for all the failures I continue to learn and grow from to work out for good, and for his glory. ⠀⠀⠀⠀⠀⠀⠀⠀⠀ Thank you to those who continue to support me and my guys as we open our hearts to each other, and in turn...you! We appreciate you and your kindness! ♥️ A post shared by Hannah Brown (@alabamahannah) on Jun 25, 2019 at 10:59pm PDT She then continues “it’s upsetting to get messages from Christians telling me I give Christians a bad name. I’ve lived my life for the world to see and judge and absolutely, I’m hot mess on a stick, I blew it a few times...but I refuse to believe I give Christians a bad name.” Story continues Tyler C. also came to Hannah’s support via Twitter: The things some people do to stay relevant... let our Queen live and let’s embrace her on this journey. Very few have a clue what it’s like to be in the leads shoes. Our Queen is imperfectly perfect like us all. Dont Christians claim that only god should do the judging-James 4:12 https://t.co/3hZFTGswk7 - Tyler Cameron (@TylerJCameron3) June 26, 2019 Hannah absolutely shouldn’t feel any shame, which is why the very fact that this post had to be made is maddening. In the words of Hannah herself: Photo credit: Giphy ('You Might Also Like',) 16 Unexpected Fashion Rules That the Royal Family Follows The 8 Best Clarifying Shampoos for Getting Rid of Product Buildup Here's How to Flawlessly Conceal Your Acne View comments |
Before He Became Captain America, Chris Evans Was the Face of This Dating Board Game
Chris Evans has quite the resume before his days as Captain America, and Twitter is blowing up about it. While fans know that the Avengers: Endgame star, 38, has been around the acting block for a while, in films such as The Perfect Score and Not Another Teen Movie , an observant fan noticed that Evans was even involved in board games back in the day. Author Dana Schwartz shared a piece of Evans’ past work on Twitter, revealing that he was on the cover for Mystery Date , a board game conceived in the 1960’s. “Wow @ChrisEvans I think you have some explaining to do ‘Tyler,’ Schwartz wrote on Twitter, with a picture of Evans on the 1999 version of the board game, where he was known as being one of the three mystery men, named Tyler, the “beach date.” At the time, Evans would have been only 18-years-old, and had yet to appear in a single film. wow @ChrisEvans I think you have some explaining to do "tyler" pic.twitter.com/q0MSeC0B6o — Dana Schwartz (@DanaSchwartzzz) June 25, 2019 RELATED : Chris Evans, Internet Boyfriend: 14 Reasons Everyone Loves the Birthday Boy “I can’t believe my twelve year old self was dating chris evans this whole time,” Schwartz joked in a second tweet. Mystery Date was released in 1965 and primarily marketed towards young girls. The objective of the game is for the player to assemble an outfit by acquiring three matching color-coded cards, which then must match the outfit of the date at the mystery door. Twitter immediately jumped onboard the hilarious discovery, joking about the A-list actor’s prior gig. “I don’t know. Family, stability… the guy who wanted all that went in the ice 75 years ago. I think someone else came out. No YOU hang up. No, YOU!” one Twitter user joked , using a shot of Evans on the phone from the board game to reference his famed role as Steve Rogers, a.k.a. Captain America. Story continues "I don't know. Family, stability... the guy who wanted all that went in the ice 75 years ago. I think someone else came out. No YOU hang up. No, YOU!" pic.twitter.com/0s0oq5qM7g — Matt Fernandez (@FattMernandez) June 25, 2019 RELATED : Chris Evans Surprises His Former Classmates at Their 20-Year High School Reunion “THIS IS LIKE FINDING OUT MY WHOLE LIFE HAS BEEN A LIE,” wrote another surprised Twitter user. While he has become one of the biggest stars in Hollywood over the years, Evans has remained humble and true to his roots throughout his success, as evident last month, when he attended his 20-year high school reunion. Chris Evans | Matt Baron/Shutterstock Evans returned to his hometown of Sudbury, Massachusetts and mingled with his former Lincoln-Sudbury Regional High School classmates at Conrad’s Restaurant, which excited many of his childhood pals. “Many people wanted to take pictures with him,” manager Donna Scott told Boston.com “Everyone was pretty excited that he was there.” A Twitter user shared a photo of Evans wearing a white T-shirt and a black cardigan, writing, “Chris Evans attending his 20 year high school reunion and writing ‘Chris’ on his little name tag the same weekend Endgame becomes the 2nd highest grossing movie of all time feels like the Chris Evansiest thing to ever Chris Evans.” |
Royally Thirsty? Meet Queen Elizabeth’s Distant Cousin Alexander
Just when you were lamenting the fact that the two most eligible royal bachelors were off the market, there’s hope: Princess Alexandra’s grandson is a total heartthrob—and he just so happens to be a computer science and econ major at Brown University . (Yes, this means he’s stateside.) His name? It’s Alexander Ogilvy. And while he’s a long way off from the throne, he is an heir, which means he can be found on the Buckingham Palace balcony hobnobbing with Prince Harry, Meghan Markle and Kate Middleton from time to time. (Case in point: Trooping the Colour—he’s third from the right in the pic above—this year.) Ogilvy’s relation to the queen can be explained like this: He’s the son of James and Julia Ogilvy and the grandson of Queen Elizabeth’s cousin, Princess Alexandra of Kent, making him a first cousin twice-removed from HRH. Unlike other members of the royal clan, you can’t stalk him on Insta (his account @brogilvy is private, le sigh ), but you can take a gander at his sister Flora’s IG, who posts shots with her adorable brother from time to time. LYMI, Harry and William, but now that you’re both spoken for, the time has come to fantasize about the next royal wedding. (If we’re a part of it, that’s even more fun.) RELATED: This Is How Many Bodyguards Harry and Meghan Have at Their Frogmore Cottage Home |
Gender Gap Plagues 401(k) Savings Rates
It’s no secret that women, on average, are paid less than men. However, gender inequality not only affects women’s paychecks, but it also impacts their standard of living in retirement,a new surveyshows.
Women trail men substantially when it comes to saving for retirement, according to findings from a survey of more than 4,000 adults by investment firm T. Rowe Price. The survey, conducted by data analytics firm NMG Consulting, focused on two groups: adults 21 and older who currently contribute to a 401(k) plan or are eligible to contribute to one and have a balance of $1,000 or more, and current retirees with a Rollover IRA or left-in-plan 401(k) balance.
Baby boomer women — all of whom are nearing or have entered retirement — trail their male counterparts in savings for life after work. In fact, on average, they have less than half of what baby boomer men have saved, with a median 401(k) account balance of nearly $59,000, compared to more than $138,000 for men.
But this trend isn’t confined to boomers. For example, millennial women also tend to save less for retirement than millennial men, with the women having a median 401(k) balance of $12,300 in 2018, while millennial men had a median 401(k) balance of $42,300 — a difference of $30,000.
Of course you can’t save what you don’t have — as arecent survey by Salary Financefound, women tend to struggle with daily living expenses, and that they typically have more student loan and medical debt than men.
To get to the heart of women’s struggles, the T. Rowe Price survey also checked into the amount of money men and women earn each year, and they found that women, on average, make more than $21,000 less than their male cohorts.
A smaller paycheck, of course, means there’s less left over after monthly expenses are paid. Indeed, the survey found that women contribute a smaller percentage of their income to their 401(k) plans than do men. For instance, baby boomer men kick in an average of 10% of their salary to their 401(k), while baby boomer women contribute 7%.
Likewise, millennial men on average contribute 8% of their salaries, but millennial women typically put in 5%. Tellingly, 66% of women respondents who contribute less than the recommended rate reported that they are saving as much as they can afford to save.
Not only are men saving a higher percentage of their salaries, but they are also more likely to save for retirement outside of their 401(k) account. In fact, 32% of men said they saved some money in accounts other than their 401(k), compared to only 10% of women.
Other findings shed light on how retirement expectations vary between men and women. Approximately 46% of women believe they will have to lower their standard of living when they retire, compared to only 37% of men. Also, among those men and women who continue to work after they reach retirement age, women were most likely to do so because of financial needs, while men were most likely to continue working for the mental benefits.
While earning less can put you at a disadvantage when it comes to having money to set aside for retirement, there are still ways you can leverage retirement accounts to work to your advantage. For one thing, make sure youunderstand how 401(k) plans workso you can enjoy all of their benefits, such as 401(k) employer matching. In addition, make sure you understand all of your rollover options if you change jobs.
And if you currently don’t make enough to save for retirement, consider trying a side gig in order to have money for later in life. |
Have Insiders Been Selling Streamline Health Solutions, Inc. (NASDAQ:STRM) Shares This Year?
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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. The flip side of that is that there are more than a few examples of insiders dumping stock prior to a period of weak performance. So before you buy or sellStreamline Health Solutions, Inc.(NASDAQ:STRM), you may well want to know whether insiders have been buying or selling.
It's quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, most countries require that the company discloses such transactions to the market.
We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But equally, we would consider it foolish to ignore insider transactions altogether. For example, a Harvard Universitystudyfound that 'insider purchases earn abnormal returns of more than 6% per year.'
Check out our latest analysis for Streamline Health Solutions
In the last twelve months, the biggest single sale by an insider was when the CEO, President & Director, David Sides, sold US$139k worth of shares at a price of US$1.77 per share. That means that an insider was selling shares at slightly below the current price (US$1.86). 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. This single sale was just 9.1% of David Sides's stake. David Sides was the only individual insider to sell over the last year.
In the last twelve months insiders purchased 90000 shares for US$87k. On the other hand they divested 79522 shares, for US$139k. 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!
For those who like to findwinning investmentsthisfreelist of growing companies with recent insider purchasing, could be just the ticket.
For a common shareholder, it is worth checking how many shares are held by company insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Insiders own 29% of Streamline Health Solutions shares, worth about US$11m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.
An insider hasn't bought Streamline Health Solutions stock in the last three months, but there was some selling. And our longer term analysis of insider transactions didn't bring confidence, either. While insiders do own shares, they don't own a heap, and they have been selling. So we'd only buy after careful consideration. Therefore, you should should definitely take a look at thisFREEreport showing analyst forecasts for Streamline Health Solutions.
Of courseStreamline Health Solutions 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. |
Report: Series of failures led to deadly leak at Texas plant
HOUSTON (AP) — A series of failures, including flawed equipment and inadequate safeguards, helped cause a 2014 poisonous gas leak that killed four workers at a Houston-area chemical plant, according to a federal agency's final report on the deadly accident. Four employees at the now-closed DuPont chemical plant in LaPorte, Texas, died in the release of methyl mercaptan — a chemical used in the manufacture of insecticide and fungicide. The chemical began leaking from a valve around 4 a.m. on Nov. 15, 2014, in a unit at the plant in La Porte, about 20 miles (32.19 kilometers) east of Houston. Killed in the accident were Crystle Wise, Wade Baker and brothers Robert and Gilbert Tisnado. A fifth worker was injured. Various safety management system deficiencies, including problems with troubleshooting operations, safe work practices, toxic gas detection and emergency response, contributed to the severity of the incident, the U.S. Chemical Safety Board said in its report, issued Tuesday. "Our investigation revealed a long chain of failures which resulted in this fatal event, including deferring much needed process improvements; improvements that could have prevented the toxic release," said Kristen Kulinowski, the safety board's interim executive authority. In a statement, Corteva, a spinoff of DuPont's agriculture division, said while it disagrees with some of the safety board's findings, it values the agency's perspective and will carefully consider the recommendations. "Our deepest sympathies remain with the families and friends of our four colleagues who lost their lives on November 15, 2014. We are committed to maintaining a safe working environment at our facilities and will work to continuously improve our safety systems," Corteva said. In its final report, comprised of recommendations that are not mandatory, the safety board said the chemical leak resulted from a long "chain of implementation failures," including the flawed design of piping at the plant and ineffective building ventilation that had been identified five years before the leak but was never fixed. Story continues "The building where the workers died was not equipped with an adequate toxic gas detection system to alert personnel to the presence of dangerous chemicals," according to the report. The safety board said that once the chemical leak began, "an ineffective emergency response program at La Porte contributed to the extent and duration of the chemical release, placed other workers in harm's way, and did not effectively evaluate whether the chemical release posed a safety threat to the public." In 2016, DuPont permanently shut down the plant, a move the company characterized as a business decision. But the safety board said the deadly leak offers important lessons for the chemical industry. The agency said in its report that chemical plants need "a robust emergency response program to mitigate emergencies and to protect the health of workers, emergency responders, and the public." It also said a company must have a process safety management system that identifies, prevents or mitigates safety issues at a facility, and workers must be able to report injuries or incidents without fear of discrimination or retaliation or other consequence. In 2018, DuPont agreed to pay $3.1 million to settle a complaint by the Department of Justice and the Environmental Protection Agency that cited 22 violations of the Clean Air Act's Risk Management Program at the La Porte plant. Lawsuits filed by the families of Wise and the Tisnado brothers following the deadly accident have since been settled. ___ Follow Juan A. Lozano on Twitter: https://twitter.com/juanlozano70 |
Lawyer would be 'amazed' if FedEx gets what it wants in Huawei case
FedEx Corporation (FDX) is testing the weight of U.S. export laws that prohibit delivery of certain U.S. items to entities identified as a risk to national security. Legal experts say FedEx is unlikely to get all of its demands met, though.
In a suit against the U.S. Commerce Department and it subagency the Bureau of Industry and Security (BIS), FedEx argued for an injunction freeing it from BIS enforcement, claiming it cannot comply with the Export Control Reform Act of 2018 (ECRA), and the Export Administration Regulation Act (EAR), that, together, ban U.S. individuals and entities from delivering unlicensed commodities, software, and technology to entities included on the BIS “Entity List” — including, notably, the controversial Chinese telecommunications giant, Huawei.
The list singles out entities in more than 60 countries believed to pose a risk to U.S. national security interests. FedEx also requests a declaration that the EAR is unlawful as applied to the company.
Farhad Alavi, a trade compliance lawyer who represents clients designated on the Entity List, said he would be “amazed” if FedEx gets everything it’s requesting in its complaint. The government, he said, will likely view FedEx as an important link in the chain of protecting national security.
“There is substantial deference to agencies whose job it is to basically monitor national security,” Alavi told Yahoo Finance. “I was actually very surprised to see this complaint brought.”
The dispute comes as FedEx faces accusations from Huawei, which was added to the Entity List in May andthreatenedto blacklist FedEx for allegedly diverting multiple packages addressed to Huawei destinations in Asia. In a conference call with investors Tuesday, FedEx CEO Fred SmithsaidHuawei was not the impetus for the suit and played only a peripheral role in FedEx’s decision to file its action.
The laws require “considerably more screening than possible” for FedEx, the company said in its complaint. According to FedEx, the laws “deputize” the company, requiring it to police the contents of millions of packages it ships each day.
Joseph Gustavus, senior principal and leader of the Miller Canfield Export Control Practice, said that under the current laws FedEx needs to be concerned with package contents only when a parcel originates from a location outside the U.S.
“U.S. legal jurisdiction attaches if the package exits the U.S. and is sent to an entity on the Entity List,” he said. “You could send a teddy bear to an entity on the list and it would be a problem.”
In other words, Gustavus said, FedEx has no obligation to look inside a U.S.-originated package because its inquiry ends once it identifies a package addressed to an entity on the list. Without a license, such a package may not be delivered, regardless of its contents. Gustavus explained that although certain items may be technically exempt from the prohibited items list, in theory, the word “commodities,” as included in the government’s list of prohibited items is construed by export authorities as “tangibles.”
FedEx said it ships approximately 15 million packages per day, though it did not specify how many packages originate from foreign versus U.S. locations, or how many foreign-originated packages tend to be addressed to Entity List recipients. Yahoo Finance requested a response from FedEx concerning the estimates and did not receive a reply.
“Although the plight described by FedEx as a common carrier, is understandable, the BIS expects that companies as sophisticated as FedEx would have screening systems implemented that would capture the identities of the shipper or the ultimate recipient,” Gustavus said. The larger problem arises when FedEx is asked to deliver a package that originated overseas and is addressed an entity list designee.
Without inspecting the package contents, “FedEx has no way of understanding whether foreign items originating in a foreign country and destined for Huawei, or another listed entity, incorporates U.S. items,” Gustavus said. To make matters more complicated, under the EAR’sde minimisrule items that contain less than 25% of U.S. “total foreign product value” are exempt from U.S. export control laws.
“Determining foreign product value and overall qualification for thede minimisrule can be a complex process and must be documented in a written reasoned analysis,” Gustavus said, something his firm has successfully navigated for multiple foreign clients with respect to Huawei.
“It becomes hard for an American company that is competing on an international level, like FedEx, dealing often times between third countries. Not everything is from or to America,” Alavi said. Liabilities imposed by export laws create a cascading effect that ultimately precludes some legitimate activities from being logistically possible, he explained.
Whether the rules ultimately put American companies at a disadvantage is debatable. Alavi said similar national security-based laws are often adopted in other countries after the U.S. takes a position. “Europe has its own export controls — Australia has its own export controls,” he said.
Alavi reasoned that the court could offer FedEx and common carriers some leeway. “I think it does highlight the issue whether there is an imbalance between the commercial viability of these things versus the need for enforcing our exports. Obviously, any kind of common carrier does have an important duty, I would argue, on that front.”
FedEx also raised the possibility that inspecting package contents could infringe upon a sender’s privacy. Gustavus said the court is unlikely to give the theory much weight. “That’s the privacy right tail wagging the export control dog,” he said.
Because FedEx’s is requesting immediate relief Gustavus said the court is likely to grant a hearing within two weeks.
“I would imagine it will be looked at very soon,” Alavi said. “These courts move very quickly.”
According to a Bloombergreport, U.S. memory chipmaker Micron Technology Inc. (MU) and microprocessor manufacturer Intel Corp. (INTC)have implemented a workaround to legally circumvent the export ban.
On Tuesday, FedEx reportedadjusted fourth quarter earningsof $5.01 per share, beating consensus expectations for $4.81 a share, though it has lowered its 2019 earnings guidance citing continued weakness in global trade and industrial production.
Alexis Keenan is a New York-based reporter for Yahoo Finance. She previously produced and reported for CNN and is a former litigation attorney.
Follow Alexis Keenan on Twitter@alexiskweed. |
U.S. regulator cites new flaw on grounded Boeing 737 MAX
By David Shepardson and Eric M. Johnson
WASHINGTON/SEATTLE (Reuters) - The U.S. Federal Aviation Administration has identified a new risk that Boeing Co must address on its 737 MAX before the grounded jet can return to service, the agency said on Wednesday.
The risk was discovered during a simulator test last week and it is not yet clear if the issue can be addressed with a software upgrade or will require a more complex hardware fix, sources with knowledge of the matter told Reuters.
The FAA did not elaborate on the latest setback for Boeing, which has been working to get its best-selling airplane back in the air following a worldwide grounding in March in the wake of two deadly crashes within five months.
The new issue means Boeing will not conduct a certification test flight until July 8 in a best-case scenario, the sources said, but one source cautioned it could face further delays beyond that. The FAA will spend at least two to three weeks reviewing the results before deciding whether to return the plane to service, the people said.
Last month, FAA representatives told members of the aviation industry that approval of the 737 MAX jets could happen as early as late June.
The world's largest planemaker has been working on the upgrade for a stall-prevention system known as MCAS since a Lion Air crash in Indonesia in October, when pilots were believed to have lost a tug of war with software that repeatedly pushed the nose down.
A second deadly crash in March in Ethiopia also involved MCAS. The two accidents killed a total of 346 people.
"On the most recent issue, the FAA's process is designed to discover and highlight potential risks. The FAA recently found a potential risk that Boeing must mitigate," the FAA said in the statement emailed to Reuters. "The FAA will lift the aircraft’s prohibition order when we deem it is safe to do so."
Boeing said in a securities filing late on Wednesday that the FAA has asked it to address through software changes a specific flight condition not covered in the company's already-unveiled software changes.
The U.S. planemaker also said it agreed with the FAA's decision and request, and was working on a fix to address the problem.
"Boeing will not offer the 737 MAX for certification by the FAA until we have satisfied all requirements for certification of the MAX and its safe return to service," Boeing wrote in the filing.
INTENSE SCRUTINY
Boeing's aircraft are being subjected to intense scrutiny and testing designed to catch flaws even after a years-long certification process.
Two people briefed on the matter told Reuters that an FAA test pilot during a simulator test last week was running scenarios seeking to intentionally activate the MCAS stall-prevention system. During one activation it took an extended period to recover the stabilizer trim system that is used to control the aircraft, the people said.
It was not clear if the situation that resulted in an uncommanded dive can be addressed with a software update or if it is a microprocessor issue that will require a hardware replacement.
In a separate statement, Boeing said addressing the new problem would remove a potential source of uncommanded movement by the plane's stabilizer.
A hardware fix could add new delays to the plane's return to service.
The FAA also said on Wednesday that it continues "to evaluate Boeing's software modification to the MCAS and we are still developing necessary training requirements. We also are responding to recommendations received from the Technical Advisory Board. The TAB is an independent review panel we have asked to review our work regarding 737 Max return to service."
American Airlines Group Inc and Southwest Airlines Co earlier canceled flights through early September as a result of the grounding. On Wednesday, United Airlines said it also was removing MAX flights from its schedule through Sept. 3.
(Reporting by David Shepardson in Washington; Additional reporting by Eric M. Johnson in Seattle; Writing by Tracy Rucinski; Editing by Phil Berlowitz and Matthew Lewis) |
But, Which Spectrum? What You Need To Know About Hemp And Its Chemical Compounds
By Minchul An, Founder ofbuzzn.
There is a lot of confusion on the legality of CBD, and its counterparts.
With the most recent passing of The Farm Bill of 2018 signed by President Trump in December 2018, it states that Industrial Hemp is legal in all 50 states as long as it contains less than 0.3% THC. This legal limit allows CBD Hemp Extract to be sold as Dietary Supplements per Federal Law. However, CBD is just one compound from the hemp plant, and there are over 100 plus other cannabinoids that come with a whole plant extraction. The market today consists of 3 categories of hemp extract products. There is Full Spectrum Hemp, Broad Spectrum Hemp, and CBD Isolate.
1. Full Spectrum (or “whole plant”) products contain CBD as well as terpenes and other cannabinoids such as CBG, CBN, and trace amounts of THC. Those subject to drug testing should be cautious when it comes to full spectrum products. Although it contains less than 0.3% THC, it may still trigger a positive drug test.
2. Broad Spectrum (or “whole plant”) products contain CBD as well as terpenes and other cannabinoids such as CBG, CBN, but zero THC.
3. Isolates are typically the CBD oil products being highlighted as 99% “pure CBD.” The CBD has been isolated from the other cannabinoids such as CBG, CBN, and terpenes.
Although CBD is legal for the most part, there is still a lot of confusion around the hemp plant. To add even more confusion as to where CBD stands, the FDA approved a prescription drug called Epidiolex. Epidiolex is a class 5 prescription drug used to treat two types of seizures, and it’s made from the same compound CBD that’s available on the market as a dietary supplement. Epidiolex is, however, stronger in concentration. A dropperful of Epiodiolex (or 1 ml) contains 100mg of CBD. CBD brands over the counter typically have at most 20mg of CBD per dropperful. Currently, there hasn’t been much clarification if CBD will be seen as a Drug or Dietary Supplement. Technically, a drug is unsafe until it’s proven safe, meaning it has to go through clinical trials and phases in order to be submitted as an NDA (New Drug Approval) before it can become a prescription drug. A Dietary Supplement, on the otherhand, is GRAS (Generally Recognized As Safe) until proven otherwise.
Despite all this confusion as to where CBD and the other cannabinoids stand in terms of safety and efficacy, there are several studies proving this miracle plant has beneficial properties that can tackle an entire range of issues from mood to pain.
It was discovered in the early 90’s that the human body has an endocannabinoid system, and we have cannabis receptors located in that system called CB1 and CB2 receptors. These receptors can be found in our brain to our nervous system. When you take CBD or any form of cannabis extract, it works with these receptors to replenish the cannabidiol deficiency in our body. It’s believed that a lot of the issues many people deal with like inflammation, pain, and mood disorders are results of cannabinoid deficiencies in our body.
Due to Prohibition, the impact of the last centuries perception of cannabis still hangs heavy over the world, but drastic social shift is underway as attitudes are more supportive with legalization increasing fast. As of right now, the only clarification we have are the 3 different forms of Hemp Extracts that are available on the market.
When I first launched buzzn, we weren’t aware of the new term Broad Spectrum, so all of our labels and packaging originally said Full Spectrum Hemp Extract. As the industry progresses and new terms began to surface, we had to change our labels and packaging to reflect that. Ultimately, we use a whole plant extract and that’s essentially what full spectrum means. Because our products have zero THC, it’s technically no longer called a full spectrum product. As mentioned above, full spectrum has trace amounts of THC (less than 0.3%). Many can argue that low of a THC percentage is essentially non-detectable levels. Broad spectrum is similar to full spectrum in that it’s a whole plant extract but contains zero or non-detectable levels of THC.
Min An is the founder of buzzn, a line of organic CBD oil supplements for people and pets.
Photo by Javier Hasse.
The preceding article is from one of our external contributors. It does not represent the opinion of Benzinga and has not been edited.
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• Cannabis Sits At The Epicenter Of The Plant-Based Medicine Movement
• A European Landscape: The 21st Century's Women In Cannabis - And An Event For Us
• Opinion: Illinois' Bill To Legalize Cannabis Will Create A Failing Market
© 2019 Benzinga.com. Benzinga does not provide investment advice. All rights reserved. |
Lawsuit calls Arkansas "ag-gag" law unconstitutional
LITTLE ROCK, Ark. (AP) — A legal advocacy organization has filed a lawsuit in federal court challenging an Arkansas state law that farm organizations have used to shield themselves from undercover investigations by animal rights groups. Lawyers for the Animal Legal Defense Fund and other animal rights organizations filed the suit Tuesday against state Rep. DeAnn Vaught and her husband, who own a pig farm, and Peco Foods, an Alabama-based poultry farm with Arkansas facilities. The suit argues that the 2017 law, which was sponsored by Vaught and bars undercover investigations at private businesses like large farms, violates the First Amendment to the Constitution by banning a form of speech. The organizations are suing the Vaughts' farm and Peco because the legislation does not allow state agencies to enforce the law. David Muraskin, Senior Attorney at Public Justice, which is representing the organizations suing, said his clients asked the Vaughts' farm and Peco Foods to waive their rights under the law, which would have allowed investigations. By not doing so, the organizations have reasonable belief they'd be targeted by the law, Muraskin said, which gives them claim to sue. Muraskin said the two parties named in the suit are businesses the animal rights organizations "want to investigate and have specific plans to investigate and the law is the thing standing in the way of them doing so, because they are afraid of these penalties." The lawsuit also claims that the wording of the law is too broad. As written, it prohibits a person from gaining access to a "nonpublic area of a commercial property," and in any way capturing or recording damaging information, wording that lawyers say would prohibit a parent from documenting problems at a daycare or a customer from recording illegal conduct in the backroom of a store. A federal judge struck down a similar Iowa law in January, though Republican Gov. Kim Reynolds signed a different law in March that prosecutes people who conduct undercover investigations. Story continues In Indiana, an undercover investigation by an organization not involved in the Arkansas suit revealed farm workers abused calves and adult cows at a dairy. On June 10, three former employees were charged with animal cruelty. Federal courts have ruled against other "ag-gag" laws in Idaho, Utah and Wyoming, and litigation is ongoing in North Carolina. The Vaughts and Peco Foods could not be reached for comment. |
Two Food Stocks to Buy After General Mills (GIS) Posts Weak Q4 Sales
General Mills GIS reported their fourth quarter earnings today before the opening bell. The consumer staples giant was able to post a strong quarter earnings-wise, reporting earnings of $0.83 that beat the Zacks Consensus Estimate of $0.76, reaching an EPS surprise of +9.21%.
Despite surpassing earnings estimates, revenues fell short of what analysts were looking for. The company reported a 7% increase in net sales to $4.16 billion, which still fell short of the $4.24 billion expected by analysts according to Refinitiv. As a result, shares of GIS plunged by as much as 10% in intraday trading.
Net sales for the Company’s North American retail segment, which accounts for half of the food company’s total revenue, fell 2%. The company attributed this decline to the lower demand for its Nature Valley and Fiber One snack bars. Consumers have opted to steer away from snack bars because of their high sugar content. Additionally, more health conscious consumers are choosing to go in a different direction with their food choices. General Mills CEO Jeff Harmening noted that Fiber One bars used to be a part of the diet of half of the U.S. population and is now only part of 2% of people’s diet.
The company stated that it would soon begin working on new variations of snack bars, a strategy that worked for them in the past with yogurts. The company gave optimistic guidance for 2020; Harmening went on to say, “We’ll look to improve our performance again in fiscal 2020, and we have plans in place to accelerate our organic sales growth while maintaining our strong margins and cash discipline.” General Mills also acquired Blue Buffalo pet foods last year to diversify its company’s revenue streams and reduce its dependence on its snack, cereal, and yogurt products. The company expects Blue Buffalo’s net sales to increase between 8%-10% in fiscal 2020.
While General Mills missed its revenue target, the company seems determined to adjust to the new health conscious landscape and offer products that can appeal to the changing clientele.
There are additional food stocks that have the potential to make serious moves in terms of growth. Let’s take a further look into these stocks that can really bolster a portfolio.
Medifast
Medifast MED is a leading manufacturer and distributor of clinically proven healthy living products and programs. It is the brand recommended by more than 20,000 doctors. Medifast is a company that can really benefit from the switch to a health-conscious consumer market. Their health centered products can reach consumers in a way that appeals to their lifestyles. Medifast is currently listed as a Zacks Rank #2 (Buy) and shows tremendous upside in growth.
Our consensus estimates are currently calling for 42.11% earnings increase on the back of a 37.39% sales jump for the next quarter. The stock is also expected to continue to see double digit growth in both earnings and revenue through fiscal 2020. Medifast looks to continue its growth run as it has beat our estimates three out of the previous four quarters, for an average EPS surprise of 9.05%. The company has also been able to increase its earnings by 30.77% with a sales increase of 13.74% compared to the previous quarter.
The Chefs’ Warehouse
Chefs' Warehouse Holdings CHEF is a distributor of specialty food products in the United States. The Company is focused on serving the specific needs of chefs who own and/or operate restaurants, country clubs, hotels, culinary schools, etc. The Chefs’ Warehouse is currently sitting at a Zacks Rank #2 (Buy), and is another stock that shows a lot of promise in terms of growth.
Our Zacks Consensus Estimates are currently projecting earnings growth of 31.58% to go along with a revenue surge of 10.59% for the following fiscal quarter; our estimates continue to forecast double digit earnings growth through the next fiscal year. Not only is the stock expected to grow substantially, but it also boasts some strong valuation metrics. The food company’s Price/Sales ratio of 0.67 is well below the industry average, and has historically been trading at a discount in comparison to the industry in terms of this ratio.
Both MED and CHEF have been able to blow by the almost stagnant broader food market industry the past two years. Shares of both companies have ballooned over 100%.
More Stock News: This Is Bigger than the iPhone!It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.Click here for the 6 trades >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days.Click to get this free reportThe Chefs' Warehouse, Inc. (CHEF) : Free Stock Analysis ReportGeneral Mills, Inc. (GIS) : Free Stock Analysis ReportMEDIFAST INC (MED) : Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment Research |
Imagine Owning Stamper Oil & Gas (CVE:STMP) And Taking A 99% Loss Square On The Chin
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Long term investing is the way to go, but that doesn't mean you should hold every stock forever. It hits us in the gut when we see fellow investors suffer a loss. Spare a thought for those who heldStamper Oil & Gas Corp.(CVE:STMP) for five whole years - as the share price tanked 99%. And we doubt long term believers are the only worried holders, since the stock price has declined 82% over the last twelve months. Furthermore, it's down 20% in about a quarter. That's not much fun for holders. This could be related to the recent financial results - you can catch up on the most recent data by readingour company report.
We really feel for shareholders in this scenario. It's a good reminder of the importance of diversification, and it's worth keeping in mind there's more to life than money, anyway.
See our latest analysis for Stamper Oil & Gas
Stamper Oil & Gas 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 Stamper Oil & Gas will discover or develop fossil fuel before too long.
We think companies that have neither significant revenues nor profits are pretty high risk. You should be aware that there is always a chance that this sort of company will need to issue more shares to raise money to continue pursuing its business plan. While some such companies 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). Some Stamper Oil & Gas investors have already had a taste of the bitterness stocks like this can leave in the mouth.
Stamper Oil & Gas had liabilities exceeding cash by CA$996,928 when it last reported in March 2019, according to our data. That makes it extremely high risk, in our view. But since the share price has dived -57% per year, over 5 years, it looks like some investors think it's time to abandon ship, so to speak. The image below shows how Stamper Oil & Gas's balance sheet has changed over time; if you want to see the precise values, simply click on the image.
It can be extremely risky to invest in a company that doesn't even have revenue. There's no way to know its value easily. Would it bother you if insiders were selling the stock? I would feel more nervous about the company if that were so. It costs nothing but a moment of your time tosee if we are picking up on any insider selling.
While the broader market gained around 1.2% in the last year, Stamper Oil & Gas shareholders lost 82%. Even the share prices of good stocks drop sometimes, but we want to see improvements in the fundamental metrics of a business, before getting too interested. Regrettably, last year's performance caps off a bad run, with the shareholders facing a total loss of 57% per year over five years. Generally speaking long term share price weakness can be a bad sign, though contrarian investors might want to research the stock in hope of a turnaround. You might want to assessthis data-rich visualizationof its earnings, revenue and cash flow.
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 CA exchanges.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
Northern Trust transfers its PE blockchain-based platform to Broadridge
Wealth management provider Northern Trust hasannouncedit is transferring its blockchain-based platform to Broadridge, which will continue to develop it. The platform offers private equity asset servicing.
Northern Trust first launched its blockchain solution in 2017. The platform helps streamline capital call process, audit of PE lifecycle events, and deploy smart contracts. Broadridge is planning to add new capabilities to the platform, including data and analytics tools, enabling PE companies and investors to communicate and engage more easily.
“The alternatives/PE marketplace is expanding rapidly, and the technology needs of this evolving marketplace are underserved,” said Eric Bernstein, Broadridge’s head of asset management solutions. “Broadridge’s unique position as a network enabler, and successful record in utilizing blockchain technology, will allow us to help transform the private equity industry.”
The blockchain solutions will be first available to Guernsey and Delaware-based PE funds. This includes Northern Trust’s PE clients. |
Relay Medical Appoints Moshe Katzenelson as Senior Vice President, Global Business Development
Toronto, Ontario--(Newsfile Corp. - June 26, 2019) - Relay Medical Corp. (CSE: RELA) (OTCQB: RYMDF) FSE: EIY2) ("Relay" or the "Company"), an engine of MedTech innovation, is pleased to announce the appointment of Moshe Katzenelson as Senior Vice President, Global Business Development.
For over 25 years Mr. Katzenelson has played a pivotal role in the advancement of high-tech innovation in Israel's burgeoning technology industry and bringing that innovation to international markets through business development leadership. As Senior Vice President of Global Business Development, Moshe will lead Relay's business development team in the global expansion of Relay assets and the search for new technologies to be developed into innovative product offerings. Moshe will also be responsible for selling the rights to such products to global MedTech players.
"Moshe's track record of leadership, successful business development and international expansion, will be highly beneficial to the advancement of Relay's technologies and group of companies, as demonstrated by his leadership at the Incubator of the Technion Institute in Israel and in his most recent role, where he built the Trendlines accelerator in Singapore," said Lahav Gil, CEO, Relay Medical Corp. "Moshe brings to Relay unprecedented access to Tel Aviv's technology and innovation ecosystem, as well as access to the venture financing community in Israel and strategic MedTech companies in Europe. He is also connected to the Israeli networks for agriculture and cannabis related technology innovation and commercialization hubs which will be valuable to our Glow Lifetech venture with Agraflora Organics. We are very excited and pleased to welcome Moshe into the Relay Medical family."
"Relay's capabilities and business model are unique and exciting, and I look forward to working with Relay's excellent team on making a mark on the MedTech industry," said Moshe Katzenelson, SVP Global Business Development
Over the span of his career as an international medtech executive Mr. Katzenelson has led, invested in and actively nurtured start-up companies, much of that time as CEO of LabOne Ventures and Technion Seed - two early-stage investment firms in Israel. An engineer by background, and holding an MBA from the Tel-Aviv university, Moshe also gained much experience in project management and global business development, having successfully led such work for several leading companies, most recent of which were Netafim (a pioneer and global leader in irrigation solutions) and the Trendlines Group - one of Israel's most prestigious seed investment firms - where he was responsible for the firm's international expansion, and most notably the establishing of an "incubator" for investing in and nurturing medical device ventures in Singapore. Moshe operates from Israel, where he strengthens Relay's global reach to innovators and leading MedTech companies in Europe and Asia.
About Relay Medical Corp.
Relay Medical is an evolving "Integrated MedTech Accelerator" headquartered in Toronto, Canada, acquiring early-stage technologies and inventions, advancing and preparing them for pre-commercial acquisitions in the HealthTech marketplace. By integrating the funding, development and exit process into one organization led and managed by one expert team, Relay Medical is building the capacity to accelerate and transact technologies with high efficiency and grow into a leading engine for MedTech innovation in the global HealthTech marketplace.
Website:www.relaymedical.com
Contact:W. Clark KentPresidentRelay Medical Corp.Office. 647-872-9982 ext. 2TF. 1-844-247-6633 ext. 2investor.relations@relaymedical.com
Bernhard LangerEU Investor RelationsOffice. +49 (0) 177 774 2314Email:blanger@relaymedical.com
Forward-looking Information Cautionary Statement
Except for statements of historic fact, this news release contains certain "forward-looking information" within the meaning of applicable securities law. Forward-looking information is frequently characterized by words such as "plan", "expect", "project", "intend", "believe", "anticipate", "estimate" and other similar words, or statements that certain events or conditions "may" or "will" occur. Forward-looking statements are based on the opinions and estimates at the date the statements are made, and are subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those anticipated in the forward-looking statements including, but not limited to delays or uncertainties with regulatory approvals, including that of the CSE. There are uncertainties inherent in forward-looking information, including factors beyond the Company's control. There are no assurances that the commercialization plans for the HemoPalm product described in this news release will come into effect on the terms or time frame described herein. The Company undertakes no obligation to update forward-looking information if circumstances or management's estimates or opinions should change except as required by law. The reader is cautioned not to place undue reliance on forward-looking statements. Additional information identifying risks and uncertainties that could affect financial results is contained in the Company's filings with Canadian securities regulators, which filings are available atwww.sedar.com
To view the source version of this press release, please visithttps://www.newsfilecorp.com/release/45924 |
Imgur Receives $20M From Ex-Ripple CTO’s Payments Startup
Majorimagehosting platform and meme site Imgur received $20 million from micropayments startup Coil, according to a press releasepublishedon June 26
Per the release, as part of the partnership between the two companies, the founder and CEO of Coil and former CTO of Ripple Stefan Thomas will join Imgur’s board of directors. Imgur CEO Alan Schaaf commented:
“Coil's technology will open up new opportunities for users to give to one another and support the community in new ways.”
The press release explains that Coil’s platform lets users subscribe to other users’ content and use the company’s application programming interface to sendmicropaymentsto the content creator.
As part of the partnership, some of Imgur’s 300 million users who decide to subscribe to a premium membership and Coil subscription will be able to pay each other for original content.
The release also claims that the partnership creates new opportunities for Imgur to profit and improve user experience while also scaling up its advertisement business.
Imgur, which was founded in 2009, is a popular image-sharing site that is also used by theRedditcommunity to share visual content. As of press timedatafromAmazon’sweb statistics platform Alexa states that Imgur is the 16th most-visited website in theUnited Statesand the 56th most-visited worldwide.
In 2014, Imgurraised$40 million fromSilicon Valleyventure capital firmAndreessen Horowitzand Reddit.
As Cointelegraphreportedin October last year, the Bill and Melinda Gates Foundation partnered with Ripple Labs Inc. and Coil to implement the Interledger Protocol.
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Legal Sports Gambling
How did we get here and where are we going?
Gambling is widespread in the U.S. Only two states – Hawaii and Utah - completely prohibit gambling, and the rest allow some form of wagering, though the types of bets allowed, and the businesses that offer betting vary wildly from state to state.
The Indian Gaming Regulatory Act of 1988, allowing Native Americans to run casino operations on tribal land, led to a proliferation of small regional casinos and there are now more than 400 Indian gaming operations in 29 U.S. states.
Until recently however, gambling on sports was off-limits in the vast majority of the country.
In May of 2018, The United States Supreme Court issued a ruling that allows individual states to decide whether and how to allow gambling on sports. The decision overturned a 1992 federal law – the Professional and Amateur Sports Protection Act (PASPA) – which made it illegal to gamble on sports in most states.
PASPA had granted “grandfather” exemptions to limited sports gambling pools in Oregon, Delaware and Montana, and allowed basically all sports gambling in Nevada – where it had been legal for over 60 years. All other states were prohibited from allowing, regulating or taxing sports wagering. The Act also excluded Pari-mutuel horse and dog racing and – in a somewhat bizarre twist – the sport of Jai Alai.
The legislation had the strong support of several professional sports leagues as well as the NCAA. These established entities were already making money hand over fist on their respective offerings. Although they had to know that a significant portion of their fans were tuning in specifically because they were betting on the games, they could ignore it as long as the activity happened only in the illicit market.
They were making too much money on ticket sales, broadcast rights and merchandise to allow their images to be tarnished by the specter of an activity that many Americans consider immoral. Besides, they weren’t going to directly reap the benefits of legal wagering anyway, so it was in their best interests to keep gambling in the shadows.
For the next 20 years, even as a plethora of opportunities to gamble swept across the nation – bingo, poker, lotteries, riverboat casinos, Indian casinos – sports wagering remained illegal in most of the country.
That changed in 2012, when New Jersey – eager to find revenues to fill holes in the state budget – approved the Sports Wagering Act, which allowed existing casinos and racetracks to take wagers on other sports.
Continued . . .
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Legalized Sport Gambling Could Be Even Bigger than Marijuana
Americans wager $150 billion on sporting events every year – more than twice as much as they spend on marijuana.
Now that states are beginning to legalize sports betting, 5 stocks could soar as they accommodate the huge demand. One insider described the opportunity as “mind-blowing.” Early investors can still get in ahead of the surge.
See these 5 stocks now >>
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The Big Leagues were just as opposed to legal sports wagering in 2012 as they had been in 1992, and a coalition of the National Basketball league (NBA), The National Hockey League (NHL), Major League Baseball (MLB), the National Football League (NFL), and the National Collegiate Athletic Association (NCAA), filed a lawsuit in federal court against the state of New Jersey, seeking to enjoin them from allowing gambling.
The suit named the (then) Governor of New Jersey, Chris Christie, as well as the State’s Assistant Attorney General and the Director of the New Jersey Racing Commission. Christie took over the defense and argued that although New Jersey was potentially in violation of PASPA, the law itself was unconstitutional on tenth amendment (state’s rights) grounds. The District Court judge ruled in favor of the sports leagues; New Jersey appealed the decision, and it was upheld by a 3rd district appellate court as well.
Christie vowed to take it all the way to the top – the U.S. Supreme Court.
By the time Christie’s petition to the Supreme Court was accepted, The case had actually become “Murphy (rather than Christie) vs. National Collegiate Athletic Association,” as Phil Murphy had been elected Governor when Christie left the office to run for President.
In May of 2018, the court ruled 6-3 that PASPA was in fact a violation of the 10th amendment because it violated the principle that “any powers not expressly granted to the federal government by the constitution nor prohibited by it to the states would be reserved to each state respectively.”
It only took Gov. Murphy and the New Jersey state assembly one month to pass legislation allowing casinos and racetracks to take sports wagers. They also allow online wagers, though because the SCOTUS decision does not supersede the Federal Wire Act of 1961 – which outlaws wagers being placed over state lines – sports gaming operations must run all online operations from inside the state as well as verify that all wagers received are from bettors who are physically located in New Jersey.
What’s Next and Where is the Opportunity?
As of this writing, there are 11 states in which sports gambling has been legalized, 4 states (plus the District of Columbia) where legislation has been passed that will approve sports wagering in the near future, 26 states with some sort of legislation pending and only 9 states have yet to address the issue at all.
By now, you can probably see that there are going to be a lot of opportunities for profits in the industry.
The transition from illegal black markets to legal, regulated and taxed structures doesn’t happen overnight, and growing pains are common. (We’re also seeing the same sort of inconsistent progress in the marijuana industry.)
It’s estimated that $150 billion is wagered annually on sports in illegal markets. Because of the sometimes-glacial pace of regulatory change as well as the amount of time it takes for public opinion to change, that black market is definitely not going to disappear overnight.
As legal alternatives proliferate however, it’s hard not to see the black market for sports wagering slowly disappearing. Who wouldn’t prefer betting from the comfort of the couch with a credit card to meeting a bookie in a parking lot to exchange cash?
(In an analogous situation, during the prohibition of alcohol in the 1920s, black markets for homemade booze thrived, but dried up after prohibition was repealed. In 2019, can you imagine anyone drinking moonshine or bathtub gin when a wide variety of high quality and safe alcoholic beverages are available at the corner store?)
The winners are going to be the companies with the vision to plan their sports gambling operations for the next decades as the practice spreads across the country. They’ll probably include some forward-thinking casinos, as well as providers of gambling technology and – in an interesting turn of events – some of the professional sports teams and leagues that used to be staunchly opposed. Stay tuned.
How to Invest Today
The legalization of marijuana – and the investment opportunities that have arisen as a result – has been one of the biggest stories in in financial news, and for good reason.
But legalized sports gambling has the potential to be even bigger than marijuana. Americans are already betting more money than they’re spending on cannabis products (legally or illegally).
Zacks has released a brand-newBillion-Dollar Bets: Investing in Legal Sports Gambling,a Special Report designed to help you capitalize on this exciting new industry.
The report reveals 5 stocks that could experience major surges as more and more states legalize sports betting. The sooner you check out these stocks, the more profits you stand to make.
Don't wait to check it out. Your chance to download the report endsmidnight Sunday, June 30.
Click here to see the 5 stocks >>
Good Investing,
David BorunStock Strategist
David Borun is Zacks' Cannabis Stock Strategist. He applies 20 years of trading experience and several months of concentrated industry study to the direction of our unique portfolio serviceZacks Marijuana Innovators.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days.Click to get this free reportTo read this article on Zacks.com click here.Zacks Investment Research |
Trump's fatal flaw
Thelaw of unintended consequencesis a well-understood phenomenon: Public officials impose a law or rule intended to prompt one type of behavior, but fail to consider everybody who might be affected or ways people might react. In this manner, seemingly rational policies often backfire by creating an incentive to do the opposite of what policymakers intend.
President Trump is remarkably cavalier about consequences—and that could become the fatal flaw of his presidency. The latest example comes from Trump’s escalatingtrade disputes, which are rife with unintendedconsequences. When Trump put Chinese telecom firm Huawei on a blacklist in May, banning it from doing business with U.S. firms, he probably didn’t intend to harm American companies. But that’s exactly what’s happening.
Delivery giant FedEx hassued the government—the U.S. government, not the Chinese one—saying theHuaweipolicy shift imposes a burden no shipper can comply with. Under the new policy, FedEx (FDX) isn’t allowed to transportHuawei products—but it doesn’t know what’s inside every one of the 15 million packages it ships every day. It only knows the originating and shipping addresses. So FedEx could end up breaking the law if it doesn’t open every package to see what’s inside—which it plainly can’t do—and inadvertently ships a Huawei product. A Trump policy meant to shackle a foreign company has imposed an absurd burden on a domestic one.
[Check out oursuper-short guide to the 24 Democrats running for president.]
The Huawei ban is hurting other American companies that supply software or components to Huawei, including Google, Intel, Qualcomm and Micron, and are losing business. Banning Huawei from buying American components also creates an incentive for Huawei and other Chinese tech firms to begin a moonshot program to develop their own componentry, so they’re never again dependent on American suppliers. Trump’s policies could make Chinese tech firms more fearsome in the future, not less.
Trump didn’t campaign for president by promising to putAmerican farmers out of business, yet his tariffs are pounding farmers, too. The Trump tariffs on Chinese imports triggered highly predictable retaliatory tariffs from China on U.S. exports,especially agriculture. U.S. soybean exports have tanked andfarm income is down. Trump didn’t intend for these consequences to occur, but an army of economists and trade experts predicted they would. He didn’t care.
Other troubling consequences of Trump action:
Soaring budget deficits.Trump and many other Republicans predicted the 2017 tax cuts would produce so much economic growth that tax revenue from new workers and businesses would pour in and thetax cuts would pay for themselves. As most economists predicted, that hasn’t happened. Instead, the tax cuts have sent federal deficits soaring toward $1 trillion per year, levels only reached during the deep recession of 2007-2009.
Loss of faith in the Federal Reserve.Trump has beenbashing the Fedfor not cuttinginterest rates, even though that would be an unusual and possibly irresponsible thing to do during an expansion with a historically low unemployment rate. Yet the Fed may now have to cut rates,as Trump wishes, if Trump’s own protectionist trade policy damages the economy enough. Investors trust the Fed more than any political institution, and if they start to believe the Fed is politicized, there could be nothing that anchors faith in the U.S. economy in a downturn.
Faster global warming.Trump isn’t just inert onclimate change; he’s abetting it, by promoting policies that lead to more fossil fuel use, not less. Global warming is a huge problem beyond the ability of one world leader to fix, but Trump’s indifference to a plight his own grandchildren will contend with may reveal better than anything else his neglect of consequences likely to arise once his time in Washington is over.
A showdown with Iran.Trump must have thought the Iranians would play along when he withdrew from the 2015 deal that forced Iran to suspend its nuclear weapons program in exchange for the right to sell oil. The Iranians have lashed out instead, an outcome many experts predicted. Instead of improving upon an imperfect deal, as he promised, Trump has lit a match in the always volatile Middle East.
Recurring theme: Experts predicted many if not all of the unintended consequences Trump has brought to pass. Trump ignored those experts, probably because he doesn’t fear the consequences or he thinks they won’t affect him.
Trump famously postulated that he couldshoot somebody on Fifth Avenue in New York Cityand his supporters wouldn’t care. But they would care if he shot them, and that’s what Trump is risking with radical policies that could slow the economy, hurt workers and generate new hostility toward Americans around the world.
Trump’s trade wars may be one escalatory step away from causing economic damage that becomes measurable today. If there’s a recession, exploding deficits will make it harder for Washington to enact traditional stimulus spending. The United States will prevail if there’s a Middle East war, but it won’t be bloodless. Trump may feel he’s not bound by consequences, but it’s voters who will decide that, not him.
Confidential tip line:rickjnewman@yahoo.com.Encrypted communication available. Click here toget Rick’s stories by email.
Read more:
Markets are still getting the Trump trade war wrong
Trump should stop bragging about the stock market
How China could meddle in the 2020 election
Elizabeth Warren’s best and worst economic ideas
Medicare for all won’t work. This might
Rick Newman is the author of four books, including “Rebounders: How Winners Pivot from Setback to Success.” Follow him on Twitter:@rickjnewman
Read the latest financial and business news from Yahoo Finance |
Democrats hope Mueller testimony will have 'profound impact'
WASHINGTON (AP) — The chairman of the House Judiciary Committee says he expects special counsel Robert Mueller to have "a profound impact" when he testifies before Congress on July 17, even though Mueller has said he won't provide any new information. Mueller's unusual back-to-back testimony in front of the House Judiciary and Intelligence committees is likely to be the most highly anticipated congressional hearing in years, particularly given Mueller's resolute silence throughout his two-year investigation into Russian contacts with President Donald Trump's campaign . Democrats negotiated for more than two months to obtain the testimony, hoping to focus public attention on the special counsel's 448-page report that they believe most Americans have not read. "I think just if he says what was in the report and says it to the American people so they hear it, that will be very, very important," Judiciary Committee Chairman Jerrold Nadler told reporters Wednesday. "Whether he goes further than that, we'll see." Nadler said he thinks Mueller will be a compelling witness given the nature of the report, which detailed Russian interference in the 2016 presidential election and reviewed several episodes in which Trump tried to influence Mueller's probe. He said he believes the hearing will have a "profound impact" because many people haven't read the report and don't know what's in it. It will also be the first time Mueller has responded to questions since he was appointed special counsel in May 2017. Throughout his investigation, Mueller never responded to angry, public attacks from Trump, nor did he ever personally join his prosecutors in court or make announcements of criminal charges from the team. His sole public statement came from the Justice Department podium last month as he announced his departure, when he sought to explain his decision not to indict Trump or to accuse him of criminal conduct. Story continues He also put lawmakers on notice that he was not eager to testify and did not ever intend to say more than what he put in the report. "We chose those words carefully, and the work speaks for itself," Mueller said May 29. "I would not provide information beyond what is already public in any appearance before Congress." Those remarks did little to settle the demands for his testimony. The two committees continued negotiations that had already been going on for weeks, saying they still wanted to hear from Mueller no matter how reluctant he was. The two committees announced Tuesday that he'd finally agreed to come under subpoena, and that they had issued the subpoenas that day. The committee chairmen said there will be two hearings "back to back," one for each committee, and they will also separately meet with Mueller's staff in closed session. The Judiciary panel will go first, then Intelligence. Nadler would not give details on the negotiations or why the subpoenas were needed. He just said "we reached a point where we believed that if we issued a subpoena he would obey it." The Justice Department declined to comment. House Intelligence Committee Chairman Adam Schiff expressed concerns that either the White House or Justice Department would try and block some or all of Mueller's testimony, possibly at the last minute, as they have with other administration witnesses. "I think every indication is that the president will continue interfering in any way he can," Schiff said. On that point, though, Nadler said he doubts any such efforts would eventually succeed. "Mr. Mueller is an honest man and understands that congressional subpoenas are not optional," Nadler said. Trump himself simply tweeted, "Presidential Harassment!" He followed up on Wednesday morning in an interview with Fox Business Network, saying, "It never ends," then reiterating his grievances against the way the probe was conducted. In the report issued in April, Mueller concluded there was not enough evidence to establish a conspiracy between Trump's presidential campaign and Russia, which was the original question that started the investigation. But he also said he could not exonerate Trump on obstruction of justice. Democrats say it is now the job of Congress to assess the report's findings. Almost 80 Democrats have already announced that they believe an impeachment inquiry is needed, or around a third of the caucus. But House Speaker Nancy Pelosi has preferred a methodical approach that includes testimony from witnesses like Mueller. Supporters of opening the impeachment process hope his open testimony will help galvanize their effort. "I think having him testify will really illustrate the gravity of the allegations in the report and really have people understand why opening an inquiry is extraordinarily important for us to maintain the rule of law," said Rep. Alexandria Ocasio-Cortez, D-N.Y. Others were more cautious on what the testimony could achieve. "I think it will depend on what he says, and what people hear," said Rep. Mary Gay Scanlon, D-Pa., a member of the Judiciary panel. Democrats are likely to confront the special counsel on why he did not come to a firm conclusion on obstruction of justice, seek his reaction to Trump's criticism and ask for his personal opinion about whether Trump would have been charged were he not the commander in chief. Republicans are likely to ask him about how the probe was conducted, and whether there was bias against Trump at the Justice Department. House Minority Leader Kevin McCarthy, R-Calif., questioned why they would still want to hear from Mueller after the lengthy report was issued. "He said he didn't want to talk to us anymore, didn't he?" But Georgia Rep. Doug Collins, the top Republican on the Judiciary panel, has said he has no objections to Mueller's testimony. "May this testimony bring to House Democrats the closure that the rest of America has enjoyed for months, and may it enable them to return to the business of legislating," Collins said. ___ Associated Press writer Michael Balsamo contributed to this report. |
Laneway Resources's (ASX:LNY) Wonderful 350% Share Price Increase Shows How Capitalism Can Build Wealth
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Long term investing can be life changing when you buy and hold the truly great businesses. While not every stock performs well, when investors win, they can win big. Just think about the savvy investors who heldLaneway Resources Limited(ASX:LNY) shares for the last five years, while they gained 350%. This just goes to show the value creation that some businesses can achieve. Also pleasing for shareholders was the 13% gain in the last three months. But this could be related to the strong market, which is up 7.5% in the last three months.
View our latest analysis for Laneway Resources
Laneway Resources hasn't yet reported any revenue yet, so it's as much a business idea as an actual business. So it seems shareholders are too busy dreaming about the progress to come than dwelling on the current (lack of) revenue. For example, investors may be hoping that Laneway Resources finds some valuable resources, before it runs out of money.
Companies that lack both meaningful revenue and profits are usually considered high risk. There is almost always a chance they will need to raise more capital, and their progress - and share price - will dictate how dilutive that is to current holders. While some such companies go on to make revenue, profits, and generate value, others get hyped up by hopeful naifs before eventually going bankrupt. Of course, if you time it right, high risk investments like this can really pay off, as Laneway Resources investors might know.
Laneway Resources had liabilities exceeding cash by AU$3,536,333 when it last reported in December 2018, according to our data. That puts it in the highest risk category, according to our analysis. So we're surprised to see the stock up 35% per year, over 5 years, but we're happy for holders. It's clear more than a few people believe in the potential. You can see in the image below, how Laneway Resources's cash levels have changed over time (click to see the values).
Of course, the truth is that it is hard to value companies without much revenue or profit. Given that situation, many of the best investors like to check if insiders have been buying shares. It's usually a positive if they have, as it may indicate they see value in the stock. You canclick here to see if there are insiders buying.
It's good to see that Laneway Resources has rewarded shareholders with a total shareholder return of 200% in the last twelve months. Since the one-year TSR is better than the five-year TSR (the latter coming in at 35% per year), it would seem that the stock's performance has improved in recent times. Someone with an optimistic perspective could view the recent improvement in TSR as indicating that the business itself is getting better with time. Most investors take the time to check the data on insider transactions. You canclick here to see if insiders have been buying or selling.
If you are like me, then you willnotwant to miss thisfreelist of growing companies that insiders are buying.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on 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. |
Amazon unveils Prime Day date and it sounds like Alibaba's Singles Day: Tech
Tech header Wednesday, June 26, 2019 Get Yahoo Finance Tech, a weekly newsletter featuring our original content on the industry, sent directly to your inbox every Wednesday by 4 p.m. ET. Subscribe Amazon unveils the date of Prime Day, and it sounds like Alibaba’s Singles Day : Amazon (AMZN) just released the dates of Prime Day – and this year the sale event will be the longest ever, lasting a full two days. Prime Day, the annual shopping event for Prime members, will run July 15 to 16. Like previous years, the best deals usually feature Amazon’s own products, like the Amazon Fire TV and the Echo smart speaker. An early deal, Toshiba HD 43-inch Fire TV Edition Smart TV, is selling at $179.99, 40% off the regular price. Breaking up Google isn't the answer Alphabet pushes for a smart city that would run on data New bill would force big tech to reveal the value of your data China's drone giant DJI hits back at U.S. security concerns Microsoft debuts Personal Vault for OneDrive, offers more storage China wins when US focuses on short-term profits: telecom mogul Streaming boom becomes 'holy grail' for resurgent music industry Nextdoor’s push into real estate: ‘Where there’s money, there’s focus’ How much Best Buy could make from selling spin bikes and treadmills Meet the 11-year-old CEO trying to teach 1 billion kids to code The most embarrassing social media privacy mistakes to avoid Follow Yahoo Finance on Twitter , Facebook , Instagram , Flipboard , LinkedIn , YouTube , and reddit . View comments |
Watch: How to gain funding in esports
James Brightman,Wed, 26 Jun 2019 20:11:00
Esports is gaining some momentum, as it's expected to break $1 billion in revenue this year (according to Newzoo), but it's still far from a mainstream phenomenon. As with any nascent market, investors are going to be careful and highly selective about where they place their bets.BITKRAFT Esports Ventures is the only esports-exclusive VC fund and it has $140 million set aside to invest. But what does it take for your company to secure investment in the world of esports? What are VCs looking at? BITKRAFT Founding Partner, Malte Barth, spoke atCasual ConnectLondon about this very topic.
Barth noted that there are four key themes when it comes to investing in the esports landscape, and those are generally investments in horizontal tech (live streaming, graphics cards, design software, etc.), platforms (distribution, hosting, and more), all digital e-comm brands, and of course, games. You can watch his full presentation below.
Casual Connect is now GameDaily Connect-- stay tuned for more information on GameDaily Connect in Disneyland, August 27-29.
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Stocks dip into the red amid mixed trade signals
The three major U.S. stock indices ended Wednesday’s session mixed as investors reacted to conflicting signals about the path forward in U.S.-China trade talks.
The S&P 500 (^GSPC) fell 0.12%, or 3.6 points, as of market close Wednesday. The Dow (^DJI) slipped 0.04%, or 11.4 points, turning negative in the final minutes of trading. The Nasdaq (^IXIC) rose 0.32%, or 25.25 points.
Wednesday morning, U.S. Treasury Secretary Steven Mnuchintold CNBCthat the U.S. and China “were about 90% of the way” to a trade agreement. He added that he was hopeful a deal could be reached by the end of the year.
“I think there’s a path to complete this,” Mnuchin said in an interview with the news outlet.
Mnuchin’s comments initially sent risk assets higher, with Dow futures up more than 100 points in early trading before paring gains. Safe haven assets – including gold (GC=F) and U.S. government bonds – stemmed gains from earlier in the week. The U.S. dollar climbed against the Japanese yen (USDJPY=X) and Swiss franc (USDCHF=X).
The remarks come as President Donald Trump and China’s Xi Jinping are set to attend the G20 summit in Osaka, Japan at the end of the week.Trump said last weekthat he and Xi would convene at the event, and that talks between the U.S. and Chinese delegations would re-start prior to their meeting.
Meanwhile, U.S. officials are willing to hold off on imposing another round of tariffs on about $300 billion worth of Chinese imports as trade talks resume,Bloombergreported Tuesday, citing unnamed people familiar with the matter. This decision could reportedly be announced before Trump and Xi’s meeting at the G20 summit.
However, Trump toldFox Businesson Wednesday that he would still be willing to impose additional tariffs on imports from China if a trade deal could not be reached.
TheOffice of the U.S. Trade Representativewrapped up public hearings on the proposed tariffs on the additional $300 billion worth of Chinese products Tuesday afternoon. Currently, tariffs on about $250 billion in goods from China are in effect.
Separately, oil prices surged Wednesday after theEnergy Information Administration reportedthat U.S. crude supplies fell by a steeper-than-expected 12.8 million barrels during the week ending June 21. U.S. West Texas intermediate crude oil futures (CL=F) settled higher by 2.7% to $59.38 per barrel Wednesday after the report.
FedEx (FDX) said Tuesday that ongoing trade uncertaintywould impact its business in the current fiscal year, whilereportingbetter-than-expected earnings results for its fourth quarter. Alan B. Graf, Jr., CFO for the courier company, said in a statement that its fiscal 2020 performance “is being negatively affected by continued weakness in global trade and industrial production.” The company guided toward a mid-single-digit percentage point decline in diluted earnings per year for fiscal 2020, prior to its year-end MTM retirement plan accounting adjustment and excluding some integration expenses related to its acquisition of TNT Express.
Micron (MU) reported fiscal third-quarter results that toppedconsensus expectation as the semiconductor company suggested that demand for its products had rebounded. Third-quarter adjusted earnings of $1.05 per share beat expectations for 78 cents, while adjusted revenue of $4.79 billion was better than the $4.68 billion expected, according to Bloomberg data.
Like many U.S. chipmakers, the company has been hit by newly imposed restrictions on companies doing business with China’s Huawei. However, Micron CEO Sanjay Mehrotra said Tuesday that the company has “lawfully resumed shipping a subset of current products” to Huawei over the last two weeks “because they are not subject to export administration regulations and entity list restrictions.”
—
Emily McCormick is a reporter for Yahoo Finance.Follow her on Twitter: @emily_mcck
Read more from Emily:
• Don’t say ‘IPO’: What to know about Slack’s direct listing
• Buffett on the American economy, capitalism: ‘It works’
• Tech companies like Lyft want your money – not ‘your opinion’
• Levi Strauss shares jump more than 30% above IPO price at open
• Facebook sued by Trump administration for alleged ‘discriminatory’ ad practices
• Boeing 737 Max groundings ‘pressure’ U.S. economic data: Wells Fargo
Follow Yahoo Finance onTwitter,Facebook,Instagram,Flipboard,LinkedIn, andreddit. |
Cut-rate prices online: shoppers' win, businesses lose
NEW YORK (AP) — A bride-to-be looking for a gown online can find dresses with trains and lace for well under $300. Go into a local bridal shop, and the average price will stretch into four figures, taking some shoppers by surprise.
That kind of price disparity puts small businesses at a big disadvantage. Whether they sell to consumers or to other companies, owners struggle with customers' perceptions of what a product or service should cost, even if those expectations are unrealistic. Online competition — not just from Amazon, but from retailers and service providers of all sizes — can force owners to keep absorbing their rising costs rather than pass along the increases to customers. The problem is exacerbated by the Trump administration's 25% tariffs on thousands of imported items. Even wealthy customers balk at the higher prices.
Cut-rate prices on websites that sell wedding dresses direct from China put pressure on Ann Campeau, who owns four bridal shops. She has had customers come in expecting to get a dress at a price similar to what they saw for a low-end gown online.
"They think, if I go to a store with a $500 budget, I can get what I want. That's not even my wholesale cost," says Campeau, whose shops include Strut in Tempe, Arizona, and Long Beach, California, and Garnet & Grace in Whittier and Hayward, California.
Bridal shops sell dresses at the manufacturer's suggested retail price, similar to prices at auto dealerships. And since many gowns are made in China, they're being hit by 25% tariffs.
"I don't think our industry can afford to raise our prices without losing most of our customers to online sales," Campeau says.
A study published last year by Albert Cavallo, a Harvard Business School marketing professor, found that price changes across the U.S. retailing industry have become more frequent over the last decade because of online competition. According to the study, the amount of time merchandise was sold at regular prices, excluding sales and temporary discounts, fell to approximately 3.65 months during 2014-2017 from 6.7 months in 2008-2010. Over that time, online and mail order sales exploded, rising to a 14.5% share of retail sales from 5.5%, according the Commerce Department.
To survive, small businesses need a way to differentiate themselves from competitors who have dramatically low prices; for example, bridal shops can turn buying a wedding gown into a special occasion.
"We provide an experience that some women still value," says Campeau, who's been in business for nine years.
Prospective clients have told Akiva Goldstein that big companies can quote them better rates for information technology services like his, and within minutes. But clients may not be aware of what their IT needs and goals are, and whether they will get the service they want from a big player, says Goldstein, owner of New York-based OnsiteIn60. In such cases, he has to explain in detail why they're better off paying a higher price for his kind of service.
"You can't make a business decision if you haven't been educated properly," he says.
The internet, by making so much information available, has given consumers and business customers more power, says Charles Lindsey, a marketing professor at the University at Buffalo's School of Management, part of the State University of New York.
"It has changed not only the way we shop, but also the way we think about the marketplace and businesses and how consumers interact with businesses," he says. "B2B (business-to-business transactions) is being affected in many cases by the same dynamics."
The shift in power forces business owners to develop new strategies to preserve sales and profits.
"We will often spend weeks crunching numbers to decide if we should adjust our prices by just a few percentage points to keep up with online competition or stay where we are and ultimately lose business," says Will Munroe, director of e-commerce for Rug Studio, a retailer that operates online and at four stores in Texas. He's found that many online shoppers peruse the prices on Google's shopping site and sort the rugs they find by price.
"If we aren't the lowest price, then it is very likely we'll lose that customer," Munroe says.
The retailer has also changed its merchandise mix, offering more rugs that can be used indoors as well as outdoors — while they tend to be cheaper than strictly indoor rugs, their quality has improved in recent years and they attract buyers who want a lower price.
Pricing is an ongoing balancing act, says Nikki Corbett, owner of Precise, an editing and proofreading service based in Climax, North Carolina.
"I am constantly aware of the marketplace and how my pricing matches up to competitors as well as what the market will bear," Corbett says.
But Corbett has also learned that clients who balk at her rates and turn to one of her competitors were likely to be difficult or short-term customers. She finds that despite prospective clients' quest for lower prices, those who are the most loyal are often willing to pay more to get good service.
Customers at Gerald Olesker's lighting company include wealthy homeowners who can afford to pay high prices for lighting systems, but, he says, "they are just as careful with those dollars as any wise consumer." And Olesker, owner of ADG Lighting in Agora Hills, California, has seen those customers become more frugal during this quarter as they see tariffs driving up prices.
"There may be a bit more tolerance for price fluctuation among wealthy consumers but there is a limit and when we reach that limit, it impacts us," he says.
To preserve his profits, Olesker is doing more work for corporations. While he has had a good business with hotels, he's now branching out into lighting for retailers.
"I have to have another revenue stream," he says.
_____
Follow Joyce Rosenberg atwww.twitter.com/JoyceMRosenberg. Her work can be found here:https://apnews.com |
Blue States Millionaires Would Be Big Winners from SALT Cap Repeal
Some lawmakers from high-tax blue states want to repeal the $10,000 cap on state and local tax deductions imposed by the Tax Cuts and Jobs Act, but according to the Joint Committee on Taxation, doing so would provide a sizable benefit to wealthy taxpayers.
In areportreleased Monday, JCT said that eliminating the SALT cap would lower the tax burden on the roughly 600,000 households earning more than $1 million a year by a total of $40 billion. That’s 52% of the $77.4 billion in tax breaks that would be restored with a repeal of the SALT cap. Households earning more than $200,000 a year would claim 92% of the restored tax break, JCT said.
The House Ways and Means Committee will hold a hearing this week on how the SALT cap has affected middle-income taxpayers and local school districts. Some House Democrats are pushing for legislation to raise or even eliminate the cap, but no changes are expected anytime soon, since Senate Finance Committee Chairman Chuck Grassley has said he does not plan to address the issue.
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REFILE-UPDATE 1-Investors pile into U.S. money funds for nine straight weeks -iMoneyNet
(Fixes word in first paragraph to nervous from nervousness)
* Money assets have risen nearly $150 bln since April
* Fund yields stay firm despite bets on U.S. rate-cuts
By Richard Leong
NEW YORK, June 26 (Reuters) - Investors shifted more cash into money market funds for nine consecutive weeks, suggesting they are somewhat nervous even as Wall Street is hovering at all-time highs, according to a private report released on Wednesday.
Assets of money market funds, which are considered nearly as safe as bank accounts, increased by $19.13 billion to $3.156 trillion in the week ended June 25, the Money Fund Report said.
During this nine-week stretch, total fund assets have risen by $146 billion.
Taxable money market fund assets grew by $17.92 billion to $3.020 trillion, while tax-free assets climbed by $1.21 billion to $135.74 billion, according to the report, published by iMoneyNet.
Money managers' allocation to global equities dropped by 32 percentage points from May to a net 21% underweight, the lowest allocation to stocks since March 2009, a survey from Bank of America Merrill Lynch released last week showed.
On the other hand, their average allocation rose to 5.6% from 4.6% - the biggest jump since the 2011 debt ceiling crisis.
Even in light of those defensive moves by institutional investors, the S&P 500 hit a record high last Thursday on expectations the Federal Reserve would lower interest rates as early as next month to counter risk from global trade tension and sluggish domestic inflation.
Average yields on money funds were resilient even as U.S. bond yields have fallen on bets that Fed would lower key lending rates to preserve the current economic expansion.
The iMoneyNet average seven-day simple yield for taxable money funds held at 1.99%, its lowest level so far this year. The weighted average maturity among taxable funds shrank by one day to 29.
The iMoneyNet average seven-day yield for tax-free and municipal funds jumped to 1.41%, its highest since early May from 1.25%. The weighted average maturity of tax-free funds was unchanged at 27 days.
(Reporting by Richard Leong Editing by Alistair Bell) |
Conatus (CNAT) Stock Price Could Hit Zero
Did an iceberg just wallop into Conatus (CNAT) stock? This biotech company's shares plunged yesterday at breakneck speed of almost 70%. The reason? Conatus’ lead drug Emricasan failed a mid-stage trial in patients with nonalcoholic steatohepatitis-related decompensated cirrhosis.
Emricasan – an oral pan-caspase inhibitor that targets nonalcoholic steatohepatitis – has gone through several trials over the last three years. This recent phase 2b trial was conclusive enough for Conatus to forgo any further testing, after the trial clearly proved the drug is not an effective treatment.
Amidst uncertainty about Conatus’ strategic options, H.C. Wainwright analystEd Arcehas removed his price target on CNAT stock, while maintaining a Neutral rating. (To watch Arce's track record,click here)
Conatus projects its cash and equivalents at the end of 2019 to be in the range of $10M to $15M. The company also announced that 40% of their staff were laid off after the failure and suspension of the 2b trial.
Arce believes that it is incredibly challenging to value the company during this period of cash preservation and strategic re-evaluation. With the termination of the development program for Emricasan, Conatus is currently focused on finding a strategic purchaser who sees value in the CTS-2090 compound used in Emricasan and the expertise of the remaining employees. With a market cap of $9.64M, it appears that the market is pricing in the possibility of bankruptcy, as the company is being valued below Conatus’ projections of end-of-year 2019 cash and equivalents.
Arce believes the main concern is that if the company cannot find a strategic acquirer before their cash runs dry, they are at seriously risk of going into bankruptcy.
TipRanks suggests caution roars loud on Wall Street for sell-side analysts sizing up the challenged drug maker's prospects. Out of 4 analysts polled in the last 12 months, all 4 are sidelined on CNAT stock. (See CNAT's price targets and analyst ratings on TipRanks)
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Balancing Ethics With Returns
Nintai's purchase of Allergan provides us with a case study on deciding what's more important: ethics or profit |
EMERGING MARKETS-Most Latam currencies firm on trade optimism, stocks largely down
(Updates prices) By Susan Mathew June 26 (Reuters) - Latin American stocks mostly fell and Brazil's real traded flat on Wednesday, while most other regional currencies firmed on measured optimism around the Sino-U.S. trade dispute. Against a steady dollar, most Latam currencies recovered from losses logged last session after comments by U.S. Federal Reserve officials quashed hopes of a half-point cut in interest rates. Mexico's peso firmed 0.5% after three days of losses, while Colombia's currency rose 0.1% with support from rising oil prices. Chile's peso climbed 0.3%. Trade optimism centered around U.S. Treasury Secretary Steven Mnuchin's comment in a CNBC interview that Washington and Beijing were 90% through in making a trade deal, which U.S. President Donald Trump later reiterated. Trump said it was possible he would emerge with a deal from a meeting with Chinese leader Xi Jinping this weekend, after earlier threatening to impose "very substantial" tariffs on China if a deal couldn't be reached at the meeting. Some analysts still remained skeptical. "Given the differences between the two sides, we suspect that any truce will prove temporary. The conclusions of the summit itself are likely to be vague," wrote Jennifer McKeown, head of global economics service at Capital Economics. The trade dispute has dominated market moves for almost a year and contributed to a slowdown in global growth. Brazil's real was little changed on the day. The country's primary budget deficit widened more than expected in May, the Treasury said - further evidence of urgency in the need to pass the bill that overhauls the country's bloated pension system. The bill is expected to go to a vote in congressional committee as soon as Thursday. Presidential spokesman Otavio Rego Barros said on Tuesday the lower house of Congress would vote on the reform before lawmakers break for recess on July 18. Analysts broadly expect the real to remain pressured until the pension reform bill is passed. Stocks in Brazil rose 0.4% with miner Vale gaining despite a slip in iron ore prices. A Vale executive said it will spend 1.8 billion reais ($469 million) on safety and environmental recovery measures for the structures that remain standing near its Brumadinho dam that collapsed five months ago, killing nearly 250 people. Mexican shares slipped marginally. Energy infrastructure firm IEnova fell the most, down 3.6% after it said state power utility CFE had requested arbitration on a dispute over a natural gas pipeline. In Argentina, the peso slipped 0.9% after three days of gains when it added 2.6%, while stocks slipped for the first time in six days, down 0.9%. Key Latin American stock indexes and currencies at 1941 GMT: Stock indexes Latest Daily % change MSCI Emerging Markets 1048.67 0.32 MSCI LatAm 2840.62 0.02 Brazil Bovespa 100495.48 0.4 Mexico IPC 43766.64 -0.06 Chile IPSA 5086.71 -0.23 Argentina MerVal 39917.67 -0.93 Colombia IGBC 12616.23 -0.28 Currencies Latest Daily % change Brazil real 3.8473 0.10 Mexico peso 19.1240 0.50 Chile peso 679.4 0.21 Colombia peso 3181.28 0.14 Peru sol 3.293 0.33 Argentina peso 42.7000 -0.70 (interbank) (Reporting by Susan Mathew in Bengaluru; Editing by Cynthia Osterman) |
The Laneway Resources (ASX:LNY) Share Price Is Up 350% And Shareholders Are Delighted
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Buying shares in the best businesses can build meaningful wealth for you and your family. And highest quality companies can see their share prices grow by huge amounts. For example, theLaneway Resources Limited(ASX:LNY) share price is up a whopping 350% in the last half decade, a handsome return for long term holders. If that doesn't get you thinking about long term investing, we don't know what will. It's also good to see the share price up 13% over the last quarter. But this move may well have been assisted by the reasonably buoyant market (up 7.5% in 90 days).
See our latest analysis for Laneway Resources
With zero revenue generated over twelve months, we don't think that Laneway Resources has proved its business plan yet. So it seems that the investors focused more on what could be, than paying attention to the current revenues (or lack thereof). It seems likely some shareholders believe that Laneway Resources will find or develop a valuable new mine before too long.
Companies that lack both meaningful revenue and profits are usually considered high risk. There is usually a significant chance that they will need more money for business development, putting them at the mercy of capital markets. So the share price itself impacts the value of the shares (as it determines the cost of capital). While some such companies do very well over the long term, others become hyped up by promoters before eventually falling back down to earth, and going bankrupt (or being recapitalized). Laneway Resources has already given some investors a taste of the sweet gains that high risk investing can generate, if your timing is right.
Laneway Resources had liabilities exceeding cash by AU$3,536,333 when it last reported in December 2018, according to our data. That makes it extremely high risk, in our view. So we're surprised to see the stock up 35% per year, over 5 years, but we're happy for holders. It's clear more than a few people believe in the potential. You can click on the image below to see (in greater detail) how Laneway Resources's cash levels have changed over time.
In reality it's hard to have much certainty when valuing a business that has neither revenue or profit. One thing you can do is check if company insiders are buying shares. It's often positive if so, assuming the buying is sustained and meaningful. Luckily we are in a position to provide you with thisfreechart of insider buying (and selling).
It's nice to see that Laneway Resources shareholders have received a total shareholder return of 200% over the last year. That gain is better than the annual TSR over five years, which is 35%. Therefore it seems like sentiment around the company has been positive lately. In the best case scenario, this may hint at some real business momentum, implying that now could be a great time to delve deeper. Most investors take the time to check the data on insider transactions. You canclick here to see if insiders have been buying or selling.
We will like Laneway Resources 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 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. |
Why Investors Should Be Excited For Newmont Goldcorp's Joint Venture With Barrick
Early in 2019, gold mining giantNewmont Goldcorp(NYSE: NEM)formedas the result of a $10 billion merger. However, many Newmont investorsdisliked this deal, andBarrick(NYSE: GOLD), another gold mining giant, attempted to buy Newmont via an unsolicited bid with the intent of cancelling the Goldcorp acquisition and realizing synergies between Barrick and Newmont's operations in Nevada. Although Barrick's attempt to buy Newmont failed, the companies announced a joint venture called Nevada Gold Mines, allowing the two partners to share facilities and infrastructure in Nevada to cut costs. This joint venture allows Barrick and Newmont to attain most of the cost-savings of a merger while remaining separate, sturdy gold companies.
Source: Getty Images.
The Nevada Gold Mines joint venture will combine significant assets across Nevada, allowing both Barrick and Newmont to improve their operations via cost savings. Barrick will own 61.5% of the joint venture, called Nevada Gold Mines, while Newmont will hold the remaining 38.5%. The venture consists of eight mines in Nevada along with the associated infrastructure and processing facilities: four contributed by Barrick and four contributed by Newmont. Thanks to synergies between these operations, the deal is expected to generate around $5 billion in cost savings, which will be shared by the two companies.
The joint venture will form a massive mining complex generating an estimated 4 million ounces of gold annually . This makes it the single largest gold-producing operation in the world, pending regulatory approval.
Barrick had originally wanted to buy Newmont because of the synergies that could be unlocked in Nevada, but this joint venture allows Barrick and Newmont to capture those cost savings in Nevada while allowing each company to operate other mines independently. For investors, this is good news since they have more options to choose from. Newmont Goldcorp and Barrick are both massive gold producers with international portfolios. Both are currently profitable, likely to remain profitable, and large enough to withstand setbacks.
Barrick's management seems to be focusing more on efficiency and cost reduction while the managers at Newmont Goldcorp seems to be more focused on maintaining their position as the largest gold producer in the world well into the future. Barrick has thelowest costof gold production out of all the major producers and has focused aggressively on cutting its costs-per-ounce by selling off higher-cost assets and flattening its management structure. Newmont Goldcorp's management pushed through a merger over shareholder opposition in order to build the largest portfolio of properties with potential for development. Newmont Goldcorp has higher costs of production than Barrick but also has more properties that have potential for development into operational mines.
Investors generally invest in gold mining companies to get exposure to gold prices without having to buy and store physical gold. During a gold bull market, the increase in share price of gold miners often exceeds the increase in the price of physical gold itself. However mining is risky and owning shares in mining companies is much riskier than owning physical gold. Investors can choose between Barrick which is more focused on efficiency and Newmont Goldcorp which seems to be more focused on size. Or, they can buy some of each so they don't have to rely solely on one company to give their portfolio exposure to gold.
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General Mills Inc (GIS) Q4 2019 Earnings Call Transcript
Image source: The Motley Fool.
General Mills Inc(NYSE: GIS)Q4 2019 Earnings CallJun 26, 2019,8:30 a.m. ET
• Prepared Remarks
• Questions and Answers
• Call Participants
Operator
Greetings and welcome to the Fourth Quarter Fiscal 2019 Earnings Conference Call. During the presentation, all participants will be in a listen-only mode. Afterwards, we will conduct a question-and-answer session. (Operator Instructions) As a reminder, this conference is being recorded Wednesday, June 26, 2019. It is now my pleasure to turn the call over to Jeff Siemon, VP, Investor Relations. Please go ahead, sir.
Jeff Siemon--Vice President-Investor Relations
Thanks, Tanya, and on behalf of General Mills, thanks everyone for joining us this morning. I'm here with Jeff Harmening, our Chairman and CEO and Don Mulligan, our CFO. In addition, Jon Nudi, who leads our North America retail segment is joining us for the Q&A portion of the call. I'll hand the call over to them in a moment but before I do, let me cover a few different housekeeping items.
A press release on our Q4 and full year fiscal 2019 results was issued over the wire services earlier this morning. And you can find the release and a copy of the slides that supplement this morning's remarks on our Investor Relations website. I'll remind you that our remarks this morning will include forward-looking statements that are based on management's current views and assumptions.
The second slide in today's presentation was factors that could cause our future results to be different than our current estimates. And with that, I'll turn you over to my colleagues beginning with Jeff.
Jeffrey L. Harmening--Chairman of the Board and Chief Executive Officer
Thank you, Jeff, and good morning everyone. In fiscal 2019, we executed well, successfully transitioned Blue Buffalo into our portfolio and delivered on our financial commitments. We met our sales growth guidance and we exceeded our guidance for profit, for earnings per share and for cash flow. We also delivered double-digit top line and bottom line growth for Blue Buffalo, as we said we would at the beginning of the year. And while we're pleased with these results, we know that there is still room for improvement .
Turning to fiscal 2020, we'll continue to pursue our Consumer First Strategy and our compete, accelerate and reshape growth framework. We'll drive innovation and invest in our brands and capabilities to accelerate organic sales growth. We'll continue to execute our HMM and strategic revenue management or SRM programs and maintain our strong margins and we'll continue our cash discipline to reduce our leverage.
On Slide 5, you can see the key financial performance metrics for our fourth quarter and the full fiscal year. For the fourth quarter, net sales totaled $4.2 billion, up 9% in constant currency; organic net sales declined 1% driven by lower volume. Adjusted operating profit grew 5% in constant currency, driven by the addition of Blue Buffalo and strong HMM savings, partially offset by higher inflation and other supply chain costs. It should be noted that this profit performance compared against by far our strongest quarter of growth last year when adjusted operating profit was up double digits.
Adjusted diluted earnings per share totaled $0.83 and grew 6% in constant currency. For the full year, net sales totaled $16.9 billion, up 9% in constant currency; organic net sales were in line with year ago levels, with growth in our Asia and Latin America and Convenience Stores and Foodservice segments offsetting declines in North America retail and Europe and Australia.
Adjusted operating profit for the year totaled $2.9 billion, up 10% in constant currency, due to the addition of Blue Buffalo. Full year adjusted diluted EPS totaled $3.22, an increase of 4% in constant currency. A year ago, we laid out three key priorities for fiscal 2019, grow the core, transition Blue Buffalo and deliver our financial commitments.
Let me spend a few minutes summarizing our performance against each of these priorities over the past year. We outlined five keys to grow in the core in 2019, including improving our US Yogurt and emerging market businesses, strengthening our innovation, stabilizing distribution in the US and increasing benefits from price mix. I'm pleased to say that we made measurable progress against each of these areas. At the same time, we experienced challenges in a few other areas, most notably US Snacks, which held us back from fully realizing our top line ambitions.
We have plans in place to improve our organic sales growth in fiscal 2020 and you'll hear quite a bit more about those plans at our Investor Day in two weeks. We competed more effectively in fiscal 2019 as measured by our market share performance. We held or grew share in 7 of our Top 10 US categories, which represent roughly 85% of our Nielsen measured sales, thanks to solid innovation and brand building, proactive execution of our SRM initiatives and improved distribution trends. This included encouraging share gains in some of our largest categories including cereal, yogurt and refrigerated dough. Of the three categories where we lost share, soup was down just 10 basis points after a year where we delivered strong share gains.
On fruit snacks, we were capacity constrained in a growing category in fiscal 2019. We have capacity coming online in early fiscal '20 that will unlock growth for our brands in that segment. And our biggest opportunity is clearly in US Snack bars. At Investor Day, Jon Nudi will go into more depth on our plans to improve Nature Valley and Fiber One performance in fiscal 2020.
With that as a background, let me spend a bit of time summarizing our grow the core performance in fiscal '19 on our large global platform starting with cereal. We are encouraged by our continued positive momentum in cereal across US retail, convenience stores and foodservice and our Cereal Partners Worldwide joint venture. In US retail, the cereal category has sequentially improved for eight consecutive quarters. We grew our retail sales for the second year in a row and we extended our leading market share position through good brand building and very good innovation. On Lucky Charms, compelling consumer news and refreshed advertising helped drive a second consecutive year of retail sales growth, and we had a great year on innovation led by Cheerios Oat Crunch, Cinnamon Toast Crunch Churros and Fruity Lucky Charms. In fact, 5 of the 7 largest new products in the category in fiscal '19 were Big G cereals.
We're encouraged by early results of our April launch of Blueberry Cheerios and look forward to another strong year of innovation and brand building in fiscal 2020. Beyond US retail, we drove strong performance in our cereal platform in the convenience stores and foodservice segment in 2019, with net sales up low single-digits. We saw good results on Bowlpak cereals in K-12 schools and bulk cereal in colleges and universities.
In our CPW joint venture, constant currency net sales increased low single-digits for the year, with broad growth in Asia, the Middle East, Continental Europe, the UK and Australia. I'm also pleased with the improvements we made in our US Yogurt business in fiscal '19. As you can see on Slide 10, we've improved our trends significantly over the past two years. We also grew share for the full year, our first since fiscal 2015.
We improved our core yogurt business, which represents more than 50% of our retail sales and includes brands such as Go-GURT and Original Style Yoplait, all-family messaging on equity flavors such as Sour Patch Kids drove mid single-digit retail sales growth on Go-GURT and Original Style Yoplait stabilized behind more real fruit news. We continue to post impressive retail sales growth in the Simply Better yogurt segment, including a 48% increase on Oui and contributions from YQ.
In fiscal '20, we expect further improvements in US Yogurt as our strong consumer marketing plans and innovation continue to drive growth while the declines in our Greek and light product lines are less a drag on our results.
Shifting to our accelerate platforms, Haagen-Dazs, Old El Paso snack bars and Natural & Organic, we grew retail sales on three of the four platforms in 2019. Haagen-Dazs retail sales were up double digits as we broadened distribution of minicups and stickbars across Europe and Asia and launched compelling innovation including our new Barista line of coffee-inspired flavors, as well as peanut butter pints and stickbars. Old El Paso retail sales grew low single-digits, led by strong performance in North America,
Our US retail sales were up 6% behind our Anything Goes campaign as well as in-store taco stand displays, we showcase a variety of offerings to make taco night easy. Retail sales results continue to vary across geographies for snack bars, fiscal '19 results in the US underperformed our expectations with retail sales down mid-single digits. Fiber One declined significantly in fiscal '19 as we fell out of step with modern weight managers and on Nature Valley, our innovation and in-store execution did not meet our objectives.
On a positive note, EPIC and Larabar continued to increase availability and retail sales for our treat bar product line were up 50% as we expanded into more stores and offered incremental pack sizes. Importantly, we continue to drive strong performance on snack bars outside of North America with retail sales up 30%. In Europe and Australia, we posted 26% retail sales growth and even more impressive, we posted retail sales and share growth across all markets.
Retail sales for bars in our Asia and Latin America segment were up 47%. Asia drove outsized growth behind distribution gains and portfolio expansion on Nature Valley and Sweet Treat snack bars. On our Natural & Organic platform, retail sales were up low single-digits in F '19 as decline from our exit of some tail offerings and channel specific product lines were more than made up for by strong growth on our core products, including Annie's Mac & Cheese, Bunny Grahams, Muir Glen tomatoes and EPIC meat bars.
We continue to invest to accelerate growth across these four platforms in fiscal '20 and you'll hear more about from our segment leaders about those plans at our investment day in two weeks. Our second growth priority was to successfully transition Blue Buffalo while maintaining momentum on the business. I think we can confidently say that we delivered against this priority.
We delivered our F '19 pro forma growth guidance with an 11% increase in the top and bottom line versus the prior year adjusted for purchase accounting. We continue the momentum on BLUE with retail sales up high single-digits, led by the food, drug and mass or FDM channel and strong growth in e-commerce. And we significantly expanded distribution in FDM reaching 65% ACV for the final month of the fiscal year.
Aggregate year-to-date retail sales for BLUE were up high single-digits, and we've continued to gain market share in the category. Looking at results by channel, BLUE retail sales and FDM were up triple digits and we continue to grow and gain share across customers in this channel. Perhaps most importantly, for customers where BLUE has been in distribution for at least 12 months, retail sales grew nearly 30% in the fourth quarter versus last year. In the month of April, BLUE is the market share leader in a number of FDM accounts and held double-digit market share at three large customers.
In pet specialty, retail sales for BLUE declined double-digits in F '19 consistent with our expectations. This channel remains important for BLUE and we'll continue to partner with specialty customers to bring product variety, unique innovation and education to serve pet parents in the channel. For example, we're launching CARNIVORA, a new super premium product line under the BLUE banner in the pet specialty channel later this summer.
In e-commerce, which makes up roughly a quarter of Blue Buffalo net sales, we saw category retail trends slow in the back half of the year. Still BLUE's retail sales continue to outpace the category and we extended our market share leadership in this channel. E-commerce sales -- retail sales for BLUE were up 21% in fiscal '19 and we see more growth ahead as pet parents increasingly look for pet food online where BLUE is the number one brand.
Overall, we're happy with Blue Buffalo's performance in year one, and we see a long runway of growth ahead for this important business. For our third fiscal 2019 priority delivering on our financial commitments, I am proud to say that we did just that. We exceeded our guidance for operating profit, for earnings per share and free cash flow conversion in F '19. We generated 2 points of positive organic price mix by leveraging our enhanced SRM capability, including positive price mix in each of our segments. We've also delivered record levels of HMM and our strong cash flow focus allowed us to pay down $1.3 billion in debt, helping reduce our net debt to adjusted EBITDA ratio to 3.9x. This was ahead of our initial F '19 goal and bolsters our confidence that we can reach our target of 3.5x by the end of F '20.
With a clear understanding of what worked in fiscal '19 and where we can still improve, we've outlined three priorities for fiscal '20, which can be found on Slide 15. Our first priority is to accelerate our organic net sales growth. We'll improve growth in North America retail by maintaining momentum on cereal, continuing to improve US Yogurt and improving US Snacks through sharpened execution, strengthened innovation and increased capacity on platforms where we were constrained a year ago. We'll also see accelerated sales growth as we bring Blue Buffalo into our organic sales base, and we continue to drive strong growth for that business in F '20. Blue Buffalo will shift to a May year-end to align with our corporate calendar, which will add an extra month of results in F '20.
On a like-for-like basis, we expect Blue Buffalo net sales to increase 8% to 10% in F '20 and we're targeting double-digit growth on a reported basis. Our second priority is to maintain our strong margins, benefits from our long-running HMM cost savings program and contributions from our SRM actions will continue to provide fuel to invest in brand building on our highest priority and highest return categories, including cereal, pet, our accelerate platforms and US Yogurt. In addition, we'll invest to drive deeper data and analytics to support our e-commerce and SRM capabilities.
And our final priority for F '20 is to maintain a disciplined focus on cash to achieve our fiscal '20 leverage target. With these in priorities in mind, we expect to deliver on the fiscal 2020 guidance laid out on Slide 16, namely, we expect organic net sales to increase 1% to 2%. We're targeting adjusted operating profit growth of 2% to 4% in constant currency. We expect constant currency adjusted diluted earnings per share to increase 3% to 5% and we're targeting free cash flow conversion of at least 95% of adjusted after-tax earnings.
I am confident in our strategies and our plans for F '20. With that, I'll turn it over to Don to review our F '19 financial results and the 2020 financial outlook in more detail.
Donal L. Mulligan--Chief Financial Officer
Thanks, Jeff, and good morning everyone. Jeff provided a high level summary of our fiscal 2019 financial results. I'll share a few additional details, starting with the components of net sales growth on Slide 18. Organic net sales were down 1% in the fourth quarter, driven by lower contribution from pound volume. Organic net price realization and mix was flat in the fourth quarter compared to 3 points of positive price mix in the same period last year.
Foreign currency translation was a 2 point headwind to net sales and the net impact of acquisitions and divestitures added 10 points to net sales in the quarter, primarily driven by Blue Buffalo. As Jeff mentioned, full-year organic net sales were flat to last year with volume down 2%, offset by 2 points of positive price mix. And on a two-year basis, we saw both organic volume and price mix improve sequentially from the first half to the second half of fiscal '19.
Turning to our segment results on Slide 19, full year North America retail organic net sales were down 1% and lagged Nielsen-measured retail sales growth by about 1 point, which was in line with the expectations we outlined at the beginning of the year. Our SRM actions drove 1 point of positive organic price mix for the full year, which was 2 points ahead of last year's results.
Fourth quarter organic net sales rounded down to a 2% decline, driven primarily by declines in US Snacks in Canada. We saw unfavorable price mix in the quarter driven by higher promotional expense as we returned to normal merchandising levels this quarter after having relatively little in-store activity in last year's Q4.
Second half price mix was favorable by 1 point in line with the full-year result. And fourth quarter retail sales trends were slightly positive in US Nielsen-measured outlets with market share gains in a majority of our top US categories.
Full year segment operating profit increased 3% in constant currency, primarily due to benefits from cost savings initiatives and lower SG&A expenses, partially offset by lower net sales and higher product cost, primarily driven by input cost inflation. Fourth quarter segment operating profit decreased 2% in constant currency compared against high single-digit growth last year. In convenience stores and foodservice, organic net sales were up 2% for the full year, led by mid single-digit growth on our Focus 6 platforms. In fact, each of our Focus 6 platforms grew net sales in fiscal '19, including strong performance on frozen pouch breakfast and Bowlpak cereal in K-12 schools, Pillsbury Stuffed Waffle and Chex Mix snacks in convenience stores and Cinnamon rolls and other frozen baked goods in foodservice channels.
Organic net sales were also up 2% in the fourth quarter, driven by continued growth on all Focus 6 platforms. Segment operating profit increased 7% for the full year, primarily due to benefits from cost savings initiatives and positive net price realization and mix, partially offset by higher product cost, again primarily driven by input cost inflation. Fourth quarter segment operating profit was down 1% compared against double-digit growth last year.
In our Europe and Australia segment, organic net sales were down 1% for the full year. Declines on yogurt and the negative impact of a continued challenging retail environment in France were partially offset by growth on snack bars and ice cream. Nature Valley and Fiber One snacks delivered strong double-digit retail sales growth in fiscal '19 as we secured distribution gains and brought successful innovation to market. Haagen-Dazs retail sales also grew double-digits as we expanded distribution on minicup, stickbar and pint innovations.
Fourth quarter organic net sales were down 3%, for the prior year period that grew mid single-digits. Segment operating profit decreased $19 million for the full year, driven primarily by higher input cost including significant commodities inflation and currency driven inflation on products imported into the UK, partially offset by lower SG&A expenses. The bulk of that full year decline $15 million was in Q4, reflecting a difficult comparison against 55% profit growth a year ago.
Our Asia and Latin America segment delivered broad-based sales growth in fiscal '19, including increases in China, Brazil and India, the segment's three largest markets.
Full-year organic net sales increased 6% driven by growth on Nature Valley and Betty Crocker snacks in the Middle East, India and Latin America as well as strong performance on Haagen-Dazs across Asia and Wanchai Ferry in China. These results exclude the impact of the sale of La Saltena in Latin America and the sale of our yogurt business in China to a new Yoplait franchisee. Fourth quarter organic net sales increased 1% over the prior-year period that saw a double-digit like-for-like growth after adjusting for the calendar reporting change in Brazil.
Segment operating profit increased $33 million for the full year, driven by organic volume growth, positive net price realization and mix and lower SG&A expenses, partially offset by higher input costs. Fourth quarter segment operating profit increased $13 million. Slide 23 covers our Pet segment results. As Jeff mentioned, we achieved our full year targets of double-digit top and bottom line growth for Blue Buffalo, excluding purchase accounting charges. Fourth quarter net sales increased 38% on a pro forma basis, driven by significant distribution expansion in the FDM channel and the difference in shipping days from the month of acquisition.
Fourth quarter segment operating profit increased 82% on a pro forma basis and grew 88% excluding purchase accounting charges, driven primarily by robust volume growth and benefits from SRM actions that we implemented earlier in the year.
Slide 24 summarizes our fiscal 2019 margin results. As we anticipated, our fourth quarter margins were down compared to significant margin expansion a year ago. For the full-year, adjusted gross margin decreased 10 basis points and we delivered 30 basis points of adjusted operating profit margin expansion, driven primarily by record levels of COGS, HMM savings, strong cost control in SG&A and the addition of the higher margin Blue Buffalo business, partially offset by input cost inflation and higher product costs.
Slide 25 summarizes our joint venture results in fiscal 2019. CPW delivered its third consecutive quarter of top line growth and finished fiscal '19 with constant currency net sales growth of 1%. Full year Haagen-Dazs Japan net sales were down 7% in constant currency, driven primarily by seasonal innovation timing and declines in minicups and crispy sandwich varieties.
Combined after-tax earnings from joint ventures totaled $72 million in fiscal '19 compared to $85 million a year ago. The decline was driven primarily by our $11 million after-tax share of CPW restructuring charges as well as the lower sales in Haagen-Dazs Japan.
Slide 26 covers other noteworthy income statement items in the quarter. Corporate unallocated expenses, excluding certain items affecting comparability increased $62 million in the quarter, driven primarily by higher incentive expense and favorable one-time items in the same period last year. Net interest expense was $12 million below last year's fourth quarter that included a $34 million expense related to the bridge term loan financing for the Blue Buffalo acquisition. That expense is excluded from our adjusted earnings.
Full year net interest expense was modestly better than our expectations as strong cash flow allowed for accelerated debt reduction. The adjusted effective tax rate for the quarter was 20.6% compared to 26.7% a year ago, primarily driven by the net benefits related to US tax reform. Our full year adjusted effective tax rate came in just below the low end of our guidance range, primarily due to earnings mix and average diluted shares outstanding were up 3% in the quarter.
Slide 27 captures our balance sheet and cash flow highlights for fiscal '19. Our year-end core working capital balance totaled $385 million, down 34% versus last year, driven primarily by continued benefits from our terms extension program and a bit from lower inventory balances. Full year operating cash flow totaled $2.8 billion and capital investments were $538 million, resulting in free cash flow of $2.3 billion or 115% of our adjusted after-tax earnings. And our strong cash discipline enabled us to pay $1.2 billion in dividends, while reducing more than $1.3 billion in debt this year.
Shifting to fiscal '20, Slide 28 captures our key financial assumptions for the year. Our fiscal 2020 results will include a 53rd week in the fourth quarter. Contributions from the 53rd week, the impact of divestitures executed in fiscal '19 and currency translation are collectively expected to result in reported net sales growth finishing 1 to 2 percentage points above our organic sales growth guidance. Blue Buffalo will shift to a May year-end in fiscal '20 and therefore will include an extra month of results, which will impact our fourth quarter. As we've done with previous calendar alignments, we will include this adjustment in our fiscal '20 organic net sales results.
We're planning for growth investments in brand building and global capabilities like e-commerce and SRM to drive improvements in our organic growth profile in fiscal '20 and beyond. We expect holistic margin management savings and input cost inflation to each total roughly 4% of cost of goods sold. We're roughly 50% covered on our global commodity positions at this point in the year. Below the operating profit line, we estimate benefit plan income for the non-service components of our plans will total approximately $120 million, up roughly $30 million from fiscal '19 due to lower interest expense, and higher recent asset returns.
We expect net interest expense to total approximately $500 million and we're planning for the adjusted effective tax rate in fiscal '20 to be in line with fiscal '19 rate and we anticipate average diluted shares to increase approximately 1%.
Based on these assumptions, Slide 29 summarizes our fiscal '20 outlook for our key financial metrics. Organic net sales are expected to increase 1% to 2%, driven by improved growth in North America retail, 8% to 10% like-for-like growth for Blue Buffalo and double-digit growth including the extra reporting month and growth consistent with F '19 for our convenience stores and foodservice, Europe and Australia and Asia LatAm segments. We estimate constant currency adjusted operating profit will increase 2% to 4% from the base of $2.9 billion reported in fiscal 2019. Constant currency adjusted diluted EPS is expected to increase 3% to 5% from the base of $3.22 earned in fiscal '19. We're targeting free cash flow conversion of at least 95% of adjusted after-tax earnings and we do not expect currency translation to have a material impact on fiscal '20 adjusted operating profit or adjusted diluted EPS.
With that, let me turn it back over to Jeff for some closing remarks.
Jeffrey L. Harmening--Chairman of the Board and Chief Executive Officer
Thank you, Don. And as we look at next year, what I would like to say is that I'm pleased with the way we executed this year. I'm pleased that we transitioned Blue Buffalo effectively into the General Mills family and especially pleased that we delivered on our financial commitments. And we have strong plans in place for fiscal '20 to drive improved organic sales, while maintaining our strong margins, I remain confident in our strategies and look forward to taking another step forward in fiscal '20 on our path toward sustainable long-term growth.
With that, I think we'll open up the line for questions. Operator, can you get us started?
Operator
Thank you. (Operator Instructions) Our first question comes from the line of Ken Goldman with JPMorgan. Please proceed with your question.
Ken Goldman--JPMorgan -- Analyst
Hi. Good morning, everybody. I wanted to ask a quick question about the 13th month for Buff this coming year. Without going into the nitty-gritty, my math is that the extra month adds maybe 70 to 90 basis points to your expected organic top line growth rate. I just wanted to make sure that's correct or at least reasonably correct and is it also safe to assume that the extra month will entirely benefit 4Q '20?
Donal L. Mulligan--Chief Financial Officer
Yes, Ken, on your last question, yes. They will all -- the extra month will all come in Q4, as far as the contributions to the organic growth, there is really three components and we said that CNF, Europe, Australia and Asia LatAm will grow at the same rate -- grow but at the same rate as this year. So the increase for next year is really we're seeing it step up from a combination of BLUE's like-for-like growth, that 8% to 10% we talked about, the extra month and the base business. And frankly they are all about equally weighted. So you're probably a little high in what you're guessing for -- what you're estimating for the month and you should look for all three of those to have roughly equal weighting in that improvement from this year.
Ken Goldman--JPMorgan -- Analyst
Okay, that's helpful. And then a quick follow-up on, Jon, I know Jon is going to discuss snacks at the Investor Day. But it really seems to be worsening at least from what we're seeing in Nielsen right for a while. It was really Fiber One, then Nature Valley started getting worse, and now even Larabar in measured channels is trending negatively. I know we don't see everything in these -- in Nielsen and IRI, but is there a structural issue you think that's causing really most of your major brands to sort of decline at once here?
Jonathon J. Nudi--Group President, North America Retail
Yes, Ken. Thanks for the question. I think the short answer is, it's probably not, in fact, Larabar grew 11% for the year. I think there were some comps as we got into Q4 and Larabar, a big portion of that business is actually in non-measured channels, where we continue to do quite well. And we are very focused and frankly not satisfied with our performance on both Nature Valley and Fiber One and that's really what we need to turn around in the coming year. Nature Valley is really about getting back with meaningful innovation. We just launched the Krispy Kreme wafer bar that we're excited about and it's very early days, but the early returns are good. And frankly, we didn't execute very well. We missed some key windows from a merchandising standpoint, back to school on Nature Valley. We feel like we've got good plans in place to get after in this year.
Fiber One has been a structural issue over the last few years. Consumers, weight managers have really changed in terms of what they're looking for in terms of the macros of a product. So we just reformulated that product, it's flowing into market now, again, early days but encouraging signs there as well. So what I would tell you, we like Larabar, we don't believe there is a structural issue there. We love EPIC, that continues to grow, nearly 50% this past year. It's really Nature Valley and Fiber One that we're focused on as we move into fiscal '20.
Ken Goldman--JPMorgan -- Analyst
Thanks, Jon.
Jeffrey L. Harmening--Chairman of the Board and Chief Executive Officer
I agree with Jon's perspective that it's not structural, it's some of our innovation and execution. And in fact to that end, we're confident we'll sequentially improve in the first quarter in the first half of next year on snacks and that will accelerate even further in the back half of the year.
Ken Goldman--JPMorgan -- Analyst
Thanks very much.
Operator
Thank you. Our next question comes from the line of Rob Dickerson with Deutsche Bank. Please proceed with your question.
Rob Dickerson--Deutsche Bank -- Analyst
Great. Thank you very much. A sort of a question just around expectation on brand support in fiscal '20. It seems like what's implied, obviously, in the guidance is for essentially operating margin thought to be flat year-over-year, at the same time you do have your diluted (ph) margin mix benefit should be coming from at least from Blue Buffalo. I'm just curious to hear as you think about total company vis-a-vis kind of the Blue Buffalo benefit hopefully, it would imply that maybe there is still some margin contraction potential in other parts of the portfolio and I'm not sure if that given increased brand support levels or if there is maybe just flex in the overall P&L as we think about next fiscal year. Thanks.
Jeffrey L. Harmening--Chairman of the Board and Chief Executive Officer
Well, there are two questions in there, one is about brand building support and the other about margins. Let me take the first and I'll push it over to Don for the second. In terms of brand building support, what you will see is us increase our investment behind our brands, especially our priority brands and businesses as we look at next year. And so I made some remarks when you think about cereal, what we like, we like what we see in cereal, obviously, US Yogurt is improving and we want to keep that trend up. We need to get snacks back on track. You'll see us invest behind some really good ideas on bars and on snacks and then our accelerator platform. So the things that are the biggest priority for us, you'll see us improve our brand building, not only because they are priority but because we get good returns and we got some really good marketing on a lot of those businesses. So from a brand building perspective.
And then the same would be true for Blue Buffalo and Blue Buffalo, we're really encouraged by the trends we see in food, drug and mass. And we've got great marketing on Blue Buffalo, so you'll see us invest behind all of those businesses as well as capabilities to drive growth. We talk about SRM and we're pleased with what we've done. But there is more we can do and with e-commerce, whether it's on Blue Buffalo or whether it's on our core business, we think that there's more we can do to invest in those capabilities.
Donal L. Mulligan--Chief Financial Officer
Yeah, I don't have a lot to add, Jeff touched on where the investment is going to go to drive the top line and as you alluded to and as Jeff commented in his opening remarks, our focus is maintaining our strong margins, and that's what the plan is geared to do.
Rob Dickerson--Deutsche Bank -- Analyst
Okay, super. Thanks so much.
Operator
Thank you. Our next question comes from the line of Andrew Lazar with Barclays. Please proceed with your question.
Andrew Lazar--Barclays -- Analyst
Good morning, everybody. I guess with Blue Buffalo entering the base in fiscal '20 and including the calendar shift, it would seem that maybe that could drive about, call it, 1 point of organic growth in fiscal '20. And I guess that suggests the legacy can be anywhere from flat to up 1 to hit your targeted organic sales growth range next year. I think organic was flat in fiscal 2019, and you've, obviously, got another year of significant reinvestment on tap this coming year. So I guess my question is what would potentially hold back organic, if you will, on the legacy portfolio potentially to just flat again? Is it not knowing maybe how quickly snacks and yogurt responds or any additional sort of competitive concerns out there that are worth mentioning? Or is it really just again trying to be prudent and conservative in the way you're thinking about how organic growth sort of builds on the legacy? Thanks so much.
Jeffrey L. Harmening--Chairman of the Board and Chief Executive Officer
Yes, so I mean, two questions, two responses, Andrew. One is on how we guide in the second is about kind of what our expectations are on how we guide. I mean, there is a natural tension there because on the one hand, it occurs to us that doing what you said you're going to do is pretty important. And so we set our guidance accordingly. On the other hand, nobody really likes a sandbagger, either in business or in golf. And so we don't -- we're not trying to be too conservative either. We want to set targets we think are going to be realistic that are going to drive value for shareholders, but that we're going to hit. So just -- that's the way we think about it. In terms of our organic sales growth next year, really Blue Buffalo is going to make a big contribution. But we think that North -- we've got great plans for North America retail. That's where we can see improvement behind and maintaining momentum on cereal, which we feel good about, improving our yogurt business and improving US Snacks. And so with those three things improving to the extent that we can hold with growth on convenience and foodservice, hold our business in EU/AU where it is on growth and continued mid single-digit growth on Asia and Latin America, that would -- that tells me that growing Blue Buffalo and improving our top line sales are two areas we can look forward for growth.
Andrew Lazar--Barclays -- Analyst
Great. Okay, thanks for that. And then just a quick one. I realize portfolio mix in North America retail can swing the pricing number around from quarter to quarter quite a bit. If we're thinking about fiscal '20, maybe we could talk a bit about just how you see the contribution from volume and price playing out in North America retail?
Jeffrey L. Harmening--Chairman of the Board and Chief Executive Officer
Let me take it to a company standpoint and then I'll pass it to Jon for North America retail. From a company standpoint, first, I would take you back to fiscal 2019. At the very beginning of that year, we said we're going to see about 4% inflation and we -- but we needed some pricing and I think it's fair to say there was some skepticism as to whether we could do that or not broadly. And we're pleased that we were able to do that and we said, look, a little pricing goes a long way and it was about 2% versus 1% the year before.
I would say that, and we're not going to give how much pricing we're going to get next year, but what I will say is that we would expect to get a little bit of pricing next year starting in the first quarter and we see a little bit of inflation. So for the Company as a whole, we see a return -- we see some inflation in the coming year as Don indicated, and we think that we will get some pricing as well.
So with regard to North America, Jon, you might want to comment a little bit on this year and kind of what you expect.
Jonathon J. Nudi--Group President, North America Retail
Yes, sure. So Andrew, you're right in the fact that there are some fluctuations between quarters for the back half of fiscal '19, where we drove about a point of price mix and that was the same as for the year as well. So we feel really good about our ability to leverage our SRM toolkit and really drive some pricing in the market and we have good confidence as we move into fiscal '20 that we'll continue that through Q1 and really through fiscal '20 as well.
Andrew Lazar--Barclays -- Analyst
Great. Thanks, everyone.
Operator
Thank you. Our next question comes from the line of Bryan Spillane with Bank of America. Please proceed with your question.
Bryan Douglass Spillane--Bank of America Merrill Lynch -- Analyst
Hey, good morning, everyone. I guess just two quick ones from me. Maybe just following on Andrew's question, if we kind of take a little bit of pricing and what you're expecting in terms of HMM savings, whether it's safe to say that the expectation around gross margins are kind of flattish as we're looking at 2020?
And then the second question I had was just simply, I don't know if you gave it before, but just what you're expecting for CapEx for 2020?
Donal L. Mulligan--Chief Financial Officer
We didn't give guidance on the latter. But it's sitting at about 3.5%, so pretty much in line as a percent of sales of this from this year. As far as the construct of the P&L, you'll actually see some gross margin expansion. The key contributors, you mentioned about the price, the positive price mix that we expect to get that Jeff alluded to. We also, obviously, have the one-time benefit of rolling over the inventory step up charge that was in F '19. So we will see gross margin expansion. The investments that Jeff talked about in our brands and our capabilities will be SG&A investments. So you'll see SG&A go up as a percent of sales. Again, as I answered an earlier question, leading to stable operating margins.
Bryan Douglass Spillane--Bank of America Merrill Lynch -- Analyst
And just fair to say that for '20, there is less of a, I guess, a need for pricing to sort of drive the gross margin relative to the position that you were in a year ago?
Donal L. Mulligan--Chief Financial Officer
A little less. Our HMM and inflation projections for '19 are a little more in balance than when we came in -- for '20, excuse me, are a little more in balance than we came in for '19, yes.
Bryan Douglass Spillane--Bank of America Merrill Lynch -- Analyst
Okay, great. Thank you.
Operator
Thank you. Our next question comes from the line of Jason English with Goldman Sachs. Please proceed with your question.
Jason English--Goldman Sachs -- Analyst
Hey, good morning folks. Thank you for slotting me in. I have a couple of questions on Buff. First, real quick housekeeping, sorry, maybe I am just a little bit dense this morning, but I was having a hard time following the puts and takes on your growth expectations for Buff. Could you just give me a number of what you expect that business to grow at in 2020?
Jeffrey L. Harmening--Chairman of the Board and Chief Executive Officer
Well, on a like-for-like basis. 8% to 10%.
Jason English--Goldman Sachs -- Analyst
And what is it like-for-like, does that exclude just the extra month?
Jeffrey L. Harmening--Chairman of the Board and Chief Executive Officer
Correct.
Jason English--Goldman Sachs -- Analyst
Got it, OK. And on the online component, you guys showed the 21% growth this year, which is, obviously, quite strong, but it was a pretty big deceleration from the 30% growth in the first half, it kind of suggests that you're probably tracking sort of low double-digits. And I guess my question is what's driving that? Is that the whole channel has slowed or has your market share started to drift lower? And regardless of kind of what the driver is, if you could give us maybe your thoughts and the explanation of what's causing that?
Jeffrey L. Harmening--Chairman of the Board and Chief Executive Officer
Yeah. So in the fourth quarter, our sales in e-commerce were about 14% and the category itself grew less than that. So it really was a -- which is about 10% or 11%. So we gained share and gained share commensurate with what we've seen throughout the year. So it was really not a -- it's not a slowdown and our competitive positioning within the category, feel great about that. The channel itself slowed. And I think there are probably a couple components of that. The first is that there are players in that channel who were trying to take more profit in the category and then their sales slowed. I'll also say, if you look at Nielsen, you can see that not only did Blue Buffalo pick up in the last quarter of the year, but the FDM channel picked up significantly in the last quarter of the year behind I would say Blue Buffalo's launch.
And so that is certainly another component. What I expect going forward -- we'll talk about more on Investor Day, pet food is really something that's built for e-commerce and whether that e-commerce takes place with pure players or whether it takes place with our traditional retail customers. I would expect at some point what we're going to see is that the e-commerce channel itself will start to reaccelerate and that we'll accelerate with it. But it's not -- to answer your question, it's not Blue Buffalo getting less competitive, we feel great about our position related to the category itself.
Jason English--Goldman Sachs -- Analyst
That's really helpful. Thank you. And last quick question. I'll pass it on I promise. You delivered phenomenal margins on Buff in the fourth quarter. I know there was probably some leverage with a bit of the pipeline sale that may be not -- won't sustain, but at the same time you've got new capacity coming online next year, you've got a fall away of some of the start-up costs. How should we think about the sustainable profitability of that business in context to what we saw in the fourth quarter?
Jeffrey L. Harmening--Chairman of the Board and Chief Executive Officer
Well, you're right Jason. We had some secular (ph) benefits in the fourth quarter from building the inventory in the pipeline as we launched in FDM. That was simply beneficial from a profit standpoint and grew at 27% margins in the fourth quarter. We would expect margin expansion from full year F '19 going into full year F '20 and primarily driven by the fact that we are going to have the inventory step up in the numbers. So we expect BLUE to be driving very solid margins and certainly be as margin accretive as we expected when we purchased the business a year ago.
Jason English--Goldman Sachs -- Analyst
Okay. Thanks a lot, guys.
Jeffrey L. Harmening--Chairman of the Board and Chief Executive Officer
Thank you.
Operator
Thank you. Our next question comes from the line of Chris Growe with Stifel. Please proceed with your question.
Chris Growe--Stifel -- Analyst
Hi, good morning.
Jeffrey L. Harmening--Chairman of the Board and Chief Executive Officer
Good morning, Chris.
Chris Growe--Stifel -- Analyst
Good morning. I have a couple of follow-ups, if I could, please. Just to follow-on Jason's question, we talked about e-com there for pet. Where are you sourcing the market -- where is FDM, if you will, sourcing a lot of the market share gain for Blue Buffalo? Is that -- and we saw, of course, that your pet specialty sales were down as well. Is that the main area where it's coming from? I guess you also would associate with e-commerce as well given that slowed in the second half of the year.
Jeffrey L. Harmening--Chairman of the Board and Chief Executive Officer
Yes, we're seeing -- thanks for the question, Chris, what we are seeing is that the growth in our FDM channel is highly incremental and it looks to us about 70% incremental to everywhere else. And what I will also say is that our household penetration continues to rise and that is the highest predictor of future success is your growth in household penetration. And so as we look at the FDM channel, our volume is really being sourced from other brands within the FDM channel. And you can see that the FDM channel itself is growing in terms of dollars. And so as we've expanded into the FDM channel, one of the things we're most pleased with is that our business is not being sourced from the other members of the wholesome natural segment as much as it is brands in the middle. And so the whole segment is rising, the whole natural segment is rising. And that tells us, there is great demand for these kind of products and Blue Buffalo is the market leader and that's kind of what we expected with our launch in FDM and we're really pleased that it's working out that way.
Chris Growe--Stifel -- Analyst
Okay. Yes, thank you for that. And then just one other question, I think for Jon Nudi. Just so I have it straight, you have cost inflation broadly offset by HMM in the year, but you also do expect SRM to be a positive contributor. I think you said pricing to be up around 1%. So that's, obviously, one question or just one clarification. But related to that, I also want to better understand the shift in price mix from Q3 to Q4 just the implication for fiscal /20. There is a bit of a comp issue in there I think with the prior year, but it is a pretty big move from positive pricing in the mix to negative pricing in the mix in Q4. Sort of to understand the basis of why that changed so much?
Jonathon J. Nudi--Group President, North America Retail
Yes, absolutely Chris. You're absolutely right, we had some fluctuations between quarters. Again, importantly to remember, for the year we drove a point of price mix and for the back half we drove a point. There were certainly differences between Q3 and Q4 and the biggest driver of that was trade timing and really the comp to last year. Last April and May, we had very little merchandising in some of our major businesses. We got back to just normal levels of merchandising this year and that drove some trade expense. So, again, we are very confident in our ability to take pricing and really leverage our SRM toolkit and we expect that to continue as we move into fiscal '20 as well.
Chris Growe--Stifel -- Analyst
Those trade timing issues should be settled out now, is that right for fiscal '20?
Jonathon J. Nudi--Group President, North America Retail
Yes, that's right, again, and we were just getting back to normalized levels, our comps last year, again, we didn't have a lot of merchandising particularly in the months of April and May.
Chris Growe--Stifel -- Analyst
Okay. Thanks so much.
Jonathon J. Nudi--Group President, North America Retail
Thank you.
Operator
Thank you. Our next question comes from the line of David Driscoll with Citi. Please proceed with your question.
David Driscoll--Citigroup -- Analyst
Great. Thank you and good morning.
Jeffrey L. Harmening--Chairman of the Board and Chief Executive Officer
Good morning, David.
David Driscoll--Citigroup -- Analyst
Wanted to ask a few Blue Buffalo questions. Could you talk about the pacing of sales in 2020? Obviously, in '19, there was a lot of distribution gains, but I'd just like to hear your thoughts on how this lays out in '20 in even just a rough form, so we have a good way to track. And I assume that there are additional points of distribution that you still expect to gain like everything wasn't being just in the fourth quarter, so if we could start there?
Jeffrey L. Harmening--Chairman of the Board and Chief Executive Officer
Yes, David, thanks for the question and I'll take this one. As far as the phasing, we probably see the strongest growth in BLUE in the middle part of the year Q3 -- Q2 and Q3. Q1 will be hampered a little by the fact that we had an extra week in our fiscal '19 Q1. And, obviously, in Q4, we lapped the launch in Walmart and the expansion of Wilderness. The other factor in Q4 is that we're going to get the benefit of the extra month, which, as I mentioned in an earlier question, that all falls in Q4. So on the like-for-like basis, that 8% to 10% we talked about, strongest in Q3 -- Q2 and Q3, a little less in Q1 and Q4 for the reasons I mentioned and then the full benefit of the calendar changing in Q4. I hope that helps.
To your other point, we do expect to continue to see distribution gains clearly not at the rate we saw this year given the fact that we made the big launch in Walmart, but you'll continue to see us -- a matter of fact, if you look at the latest Nielsen, we're already up versus the 65 that we had at the end of April. So we're in the low 70s already. So we expect to continue to expand that as F '20 unfolds.
David Driscoll--Citigroup -- Analyst
Thank you. Then following on BLUE, can you talk about the growth in wet and treats? One of the benefits that we expected was to see wet and treats grow significantly as you enter into the food and mass channels because of the frequency of shopping. Are you seeing the traction there that you wanted to see and what are your expectations in F '20?
Donal L. Mulligan--Chief Financial Officer
Yes, we are seeing the traction we wanted to see as we launched into the FDM channel. In fact, our proportion of wet and treats is higher in FDM than it is in pet specialty and that's what we thought we would see as we entered the channel. Again, it gives us confidence that we understand the business and how it's going to evolve. What I would tell you is that we also think there's a big opportunity to innovate in the wet and treats area and you won't see that as much -- especially in the first half of F '20, it'd really be on continued distribution in the growth in wet and treats in the distribution. But we think there's a second act for that and that second act really is around innovation in both of those important segments.
I would also say -- it wasn't asked, but as we look at the expansion in food, drug, and mass, we expanded distribution in America, but we also launched in Wilderness and we're really pleased with both of those expansions. They are right on track and they're growing well and so we see continued growth from those.
David Driscoll--Citigroup -- Analyst
Last question from me on BLUE. We have this African swine fever that's expected to impact protein prices. Protein, I think, is the largest piece of the cost of goods for your Blue Buffalo business. Can you talk about how that would be expected to impact? Are you able to hedge? Do you think you have to take pricing? Just trying to gauge where the level of concern is on this or if there is almost any concern?
Jeffrey L. Harmening--Chairman of the Board and Chief Executive Officer
David, yes, we're not concerned about that when it comes to Blue Buffalo. While there is some pressure on protein, it's less on chicken, which is the major protein in BLUE's portfolio. Now, African swine fever is impacting our pork prices and we are seeing that in our Asian business and our China business, but less so with our BLUE business.
David Driscoll--Citigroup -- Analyst
Okay, guys. Thank you. I'll pass it along.
Operator
Thank you. Our next question comes from the line of Alexia Howard with Bernstein. Please proceed with your question.
Alexia Howard--Bernstein -- Analyst
Good morning, everyone.
Jeffrey L. Harmening--Chairman of the Board and Chief Executive Officer
Good morning, Alexia.
Alexia Howard--Bernstein -- Analyst
So can I stick with the pricing and inventory question on North American retail? I'm really just curious about why in measured channels on average across your US portfolio, the pricing was fairly flat. Obviously, you said that because of comparables your net price mix was down 2%. But I'm just kind of curious about why that pricing being down for you wasn't passed on to the consumer?
And then just on the inventory front, it looks as though the flat sales in cereals and yogurt was below the kind of trends of 3.5% sales growth, 1.5% sales growth that we saw in measured channels. Was that to do with pricing dynamics, non-measured channels or maybe retailer inventory reductions? Thank you and I'll pass it on.
Jeffrey L. Harmening--Chairman of the Board and Chief Executive Officer
Sure, Alexia. So as we look at the quarter, Q4 came in for North America retail very much as we expected. It was actually our strongest quarter of the year from a Nielsen standpoint. So we feel good about the momentum that we're driving in the market. We had about a point and a half gap between Nielsen movement and what we reported in net sales. And about a point of that was an inventory drag that we've seen all year as retailers are working on reducing their working capital and pulling inventories down. There was about a half point related to merchandising timing and, again, this is expense that was in Q4 as we got back to normalized levels of merchandising. So that was really the one thing in Q4 that really affected both price mix as well as our reported net sales. Again, as we look at our momentum in the market, we look at our share position, we feel really good about the momentum that we have as we move into the coming year and feel good about our plans as well.
Jeff Siemon--Vice President-Investor Relations
Alexia, this is Jeff Siemon. I'd just add that, if you look at the full year, North America retail, Nielsen's versus shipments was directly in line with what we said at the beginning of the year, which is we'd lag by about a point and that's what we saw for the full year.
Alexia Howard--Bernstein -- Analyst
Do you expect those retailer inventory reductions to continue if they've been fairly consistent through the course of fiscal '19?
Jeffrey L. Harmening--Chairman of the Board and Chief Executive Officer
We do. I mean, again, we definitely see our retail partners focus on working capital and we think they'll continue to make -- take, I mean, put initiatives in place to reduce inventories over time. Will be at the same -- to the same extent as this year? I don't know, but we expect it to continue.
Alexia Howard--Bernstein -- Analyst
Great. Thank you very much. I'll pass it on.
Operator
Thank you. Our next question comes from the line of Ken Zaslow with Bank of Montreal. Please proceed with your question.
Ken Zaslow--Bank of Montreal -- Analyst
Hey, good morning, everyone.
Jeffrey L. Harmening--Chairman of the Board and Chief Executive Officer
Good morning, Ken.
Ken Zaslow--Bank of Montreal -- Analyst
I just have a big overall question. Your long-term growth algorithm is mid single-digit operating profit. You had a year that you kind of consolidated and figured out a lot of the issues, you moved past so many things and then in 2020, you're still looking for 2% to 4% operating profit growth. What do you -- can you kind of compare and contrast why there is a difference between your long-term and when you'll return to that and why not in 2020?
Jeffrey L. Harmening--Chairman of the Board and Chief Executive Officer
Yes, I think the way I look, Ken -- this is Jeff. The way I look at it is that we keep making improvements toward our long-term algorithm and I think we took a step this year when we acquired Blue Buffalo and we'll take another step forward in fiscal '20. And I think the most important part of getting to mid single-digit operating profit really is to drive organic sales. And between Blue Buffalo and what we expect with NAR next year, we think we'll take another step forward with driving our organic sales to 1% to 2%, which is higher than what we've done in the past few years. And we're disciplined as we look at cost of doing it. And then we'll look to take another step the following year and so for me, the steady progression is the key and it really starts actually with organic sales.
Ken Zaslow--Bank of Montreal -- Analyst
So you -- I know this is way out there and you just gave 2020, but you would expect though outside any exogenous factors that 2021, would it be at least back into that range? I know that's a little far out, but I'm just trying to figure out like when the long-term growth rate we could start to assume that that is a viable place to start. Is that a fair way of looking at it? I'm not trying to box you in. I'm just trying to think about it.
Donal L. Mulligan--Chief Financial Officer
Hey, Ken, this is Don. We just gave two fiscal '20 guidance, so we're going to hold off on talking anything beyond fiscal 2020 at this --
Ken Zaslow--Bank of Montreal -- Analyst
Okay. Great. I appreciate it. Thank you.
Operator
Thank you. Our next question comes from the line of Robert Moskow with Credit Suisse. Please proceed with your question.
Robert Moskow--Credit Suisse -- Analyst
Hi, thanks. Most of my questions have been asked. But I guess I'll ask a follow-up to Ken Zaslow's question. I mean, you have now operating margins in the low 20% range for BLUE, North American Retail and Convenience Stores and Foodservice. It just feels like these margins don't have much room to go higher and you have reinvestment needs that seem to be kind of ongoing. Retailers have invested a lot in data analytics and it seems like there is a data war that you will need to keep putting money into. Maybe give me an update in the data war may be. Are you getting closer to investing in SRM at the appropriate level? And then just bigger picture, is it possible that if sales growth stays in the low single-digit range, maybe it just is going to be a lot harder from an algorithm standpoint to see mid single-digit operating profit growth. Thanks.
Donal L. Mulligan--Chief Financial Officer
Rob, I'll start with the larger picture and comment on data analytics, and I'll let Jeff go into a little bit more about how we are thinking about that. But in terms of the margins, just pulling up Jeff's answer to Ken's question is, it really is going to be triggered off, continue to accelerate our organic growth. Your comments on NAR, CNF and Blue Buffalo's strong margins is well taken. It's not those businesses don't have opportunity, but they are already very healthy and frankly driving growth in those businesses, top line growth is a very attractive proposition even at the current strong margins.
As we look longer though, we do know we have opportunity internationally and as we think about margin expansion beyond fiscal '20, we need the internationals where the percentage margin benefit can come from. As far as the data analytics, our investments, we will continue to invest in our brands and in our capabilities. We're targeting now, continue to build out what we are doing with e-commerce and SRM by getting deeper into the data analytics, it's something that has served us well and we will continue to invest and actually we think it's a key driver of our ability to drive that and accelerate that top line growth.
Jeffrey L. Harmening--Chairman of the Board and Chief Executive Officer
Yes, I'll build on what Don said. I mean, it's interesting you characterize the data as a war and I'm not really sure I view it that same way. I mean, I think that our ability to use data to drive our Consumer First strategy is actually a potential for high competitive advantage because it requires scale. And we have proprietary data through our three big websites. We think we'll have proprietary data through Box Tops for Education; we'll talk about -- a little bit about that in the coming weeks. And data analytics is something where scale matters and not only for a retailer, but for us. And we think that the fact that some of our retailers are getting more sophisticated with data actually helps us because we think that we'll be able to utilize that better than some of the other players especially some of the smaller players in the market. And so I understand that it makes people nervous when we start talking about data and when our retailer starts talking about that, but I don't view it as a war. Actually, I think it's a net opportunity for us.
Robert Moskow--Credit Suisse -- Analyst
Okay. Well, maybe you're winning the war, Jeff. Thanks a lot. Got it.
Jeffrey L. Harmening--Chairman of the Board and Chief Executive Officer
Okay. I think we've hit the bottom of the hour. So I know we didn't get quite to everyone, but we appreciate the time that you all spent this morning. We are around all day for follow-up questions for those of you that we didn't get to. Thanks again for the interest in General Mills and hope everyone has a wonderful day. Thanks, Tanya.
Operator
That does conclude the conference call for today. We thank you for your participation and ask that you please disconnect your lines.
Duration: 62 minutes
Jeff Siemon--Vice President-Investor Relations
Jeffrey L. Harmening--Chairman of the Board and Chief Executive Officer
Donal L. Mulligan--Chief Financial Officer
Jonathon J. Nudi--Group President, North America Retail
Ken Goldman--JPMorgan -- Analyst
Rob Dickerson--Deutsche Bank -- Analyst
Andrew Lazar--Barclays -- Analyst
Bryan Douglass Spillane--Bank of America Merrill Lynch -- Analyst
Jason English--Goldman Sachs -- Analyst
Chris Growe--Stifel -- Analyst
David Driscoll--Citigroup -- Analyst
Alexia Howard--Bernstein -- Analyst
Ken Zaslow--Bank of Montreal -- Analyst
Robert Moskow--Credit Suisse -- Analyst
More GIS analysis
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Schnitzer Steel Industries Inc (SCHN) Q3 2019 Earnings Call Transcript
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Schnitzer Steel Industries Inc(NASDAQ: SCHN)Q3 2019 Earnings CallJun 26, 2019,11:30 a.m. ET
• Prepared Remarks
• Questions and Answers
• Call Participants
Operator
Good day, ladies and gentlemen, and welcome to Schnitzer Steel Third Quarter 2019 Earnings Release Call and Webcast. At this time, all participants are in listen-only mode. Later, we'll conduct a question-and-answer session and instruction will be given at that time. (Operator Instructions). As a reminder, today's program is being recorded.
And now I'd like to introduce your host for today's program, Michael Bennett, Investor Relations. Please go ahead, sir.
Michael Bennett--Senior Director of Investor Relations
Thank you, Jonathan. Good morning. I'm Michael Bennett, the Company's Senior Director of Investor Relations. I'm happy to welcome you to Schnitzer Steel's earnings presentation for the third quarter of fiscal 2019.
In addition to today's audio comments, we have issued our press release and posted a set of slides, both of which you can access on our website at schnitzersteel.com or schn.com.
Before we start, let me call your attention to the detailed Safe Harbor statement on Slide 2, which is also included in our press release and then the Company's form 10-Q, which will be filed later today. As we note on Slide 2, we may make forward-looking statements on our call today, such as our statements about our outlook, targets, volume growth and future margin expansion. Our actual results may differ materially from those projected in our forward-looking statements.
Additional information concerning factors that could cause actual results to materially differ from those in the forward-looking statement is contained in Slide 2, as well as our press release of today and our Form 10-Q. Please note that we will be discussing some non-GAAP measures during our presentation today. We've included a reconciliation of those metrics to GAAP in the appendix to our slide presentation.
Now let me turn the call over to Tamara Lundgren, our Chief Executive Officer. She will host the call today with Richard Peach, our Chief Financial Officer and Chief of Corporate Operations.
Tamara L. Lundgren--President and Chief Executive Officer
Thank you, Michael. Good morning, everyone. Thank you all for joining us on our third quarter fiscal 2019 conference call. We appreciate your interest in our Company and we look forward to sharing our results with you this morning. On our call today, I'll review the highlights of our quarterly performance. The macroeconomic and market trends influencing our businesses. And the progress on our strategic initiatives. Richard will then provide details on our productivity initiatives, capital investment program, segment performance and capital structure. I'll wrap up and then we'll take your questions.
Before we get started, however, I'd like to make a few comments about safety. Safety underpins everything we do at Schnitzer. And we have continued to raise awareness, increase training and sharpen our focus. I am pleased that these results have yielded improved safety performance. For example, through the first three quarters of fiscal '19, our total recordable injury rate is lower by 26% versus last year. This reflects a multi-year trend of continuing improvement. We are proud of the men and women throughout the Company who have demonstrated the leadership necessary to achieve these results, and we are all committed to even further improvements. The health and safety of our employees and all who work and visit our sites remain paramount.
So let's turn now to Slide 4 to get started. Earlier this morning, we announced our fiscal '19 third quarter adjusted earnings per share of $0.63. This is our second best performance since fiscal '11. Both divisions delivered solid operating results. And I'd like to start this morning by mentioning a few of our key achievements in the quarter. First AMR. AMR delivered operating income per ferrous ton of $31, which was almost 25% higher than the second quarter. AMR's performance reflected the benefits from both higher ferrous and non-ferrous sales volumes, which were each up approximately 9%.
In addition, seasonally improved supply flows and retail sales and continuing benefits from the productivity initiatives we announced earlier this year all contributed to a AMR's stronger results. Second, CSS achieved operating income of $8 million, which was 41% higher than their Q2 results despite lower average net selling prices. Their performance reflected the benefits from seasonally higher finished steel sales volumes, which were up approximately 38% and also significantly increased utilization.
And third, our focus on profitability, inventory management and cost containment led to another strong quarter of strong operating cash flow. This enabled us to further reduce our debt and return capital to our shareholders through our 101st consecutive quarterly dividend.
Let's now turn to Slide 5 to review Q3 market trends and current conditions. During the quarter both export and domestic prices declined with domestic prices hitting an 18-month low. Domestic prices fell significantly more than export prices and by the end of the quarter export prices were trading at a premium to domestic prices, which we hadn't seen since 2018.
Looking at the chart on the top right of this slide, iron ore prices continued to strengthen throughout Q3 as supply concerns, strong steel demand and the Chinese domestic market and low iron ore inventory levels at Chinese ports contributed to higher pricing. The scrap-to-iron ore ratio is currently at or slightly below 3 times versus almost 4 times during Q2 and versus about 4.5 times over the last two years. This ratio makes scrap very attractive at current levels.
Looking at non-ferrous prices, prices and demand for zorba and copper scrap continued to weaken during the quarter with zorba hitting multi-year lows, primarily due to Chinese import restrictions including tariff and non-tariff barriers and also by softer end-product demand including weaker auto sales in China and the rest of Asia.
The uncertainty around China's quality and licensing regulations for the import of non-ferrous scrap continues to weigh on demand and prices. Before we move to the next slide to review finished steel market trends, it's worth focusing on the chart in the lower right.
China's finished steel exports have dropped by almost 50% since their peak in 2015. This downward trend is due to, among other things, the impact of the trade cases, which importantly were filed before the imposition of the section 232 tariffs and are effective irrespective of any changes to the 232 tariffs.
So let's turn now to Slide 6 to continue our conversation. Average domestic rebar pricing trended down during the quarter, primarily driven by customer destocking and lower scrap prices. West Coast demand continues to benefit from robust private construction spending and has the potential to benefit longer term, from increased state-level support for infrastructure projects.
As shown in the graph in the bottom left on this slide, domestic rebar-to-scrap metal spreads reached an eight-year high during the quarter driven by sustained low levels of imports, which continue to benefit domestic utilization rates and lower scrap prices.
Now let's turn to Slide 7, to discuss the long-term drivers of scrap demand. Long-term demand for scrap is underpinned by several trends, and these include the increased focus on the environmental impact from steelmaking, the wide-ranging objective to lower greenhouse gas emissions and the economic and environmental benefits of reducing energy consumption. We can see how these trends have been translated into higher scrap usage by looking at the chart in the upper left-hand corner of the slide as the chart shows, steel scrap usage has significantly outpaced the growth in crude steel production in some of the largest steel manufacturing countries.
Equally as important, the share of global steel production from electric arc furnaces continues to grow, not only in the US but also in China. By 2025, Chinese steel production from EAF is expected to double compared to 2017. And China is aiming to increase its ratio of scrap consumption in steelmaking by 50% from average scrap input estimates of 20% in 2018.
So now let's turn to Slide 8, for a review of our ferrous sales. Profitable growth in our ferrous sales volumes has been a successful multi-year strategic focus for a AMR. AMR's financial performance has benefited from increased flexibility provided by our investments to expand our ability to access the domestic market, as well as by our focus on expanding our sales to additional export markets and customers in Asia, South and Central America, the Middle East and Europe. The results are evident throughout our year-to-date performance. And as the relationship between domestic and export prices shifted, we were able to pivot our sales to the export market as we focused on capturing the benefits of the export premium versus domestic prices.
Now let's turn to Slide 9, for an update on our non-ferrous sales. Sequentially, our third quarter non-ferrous sales volumes increased approximately 9% and were up more than 5% year-over-year. Through the first three quarters of fiscal '19, we shipped more than two-thirds of our non-ferrous products to countries other than China. We have replaced the drop in China's imports in zorba and related products with the sales to countries such as India, Japan, South Korea, Malaysia, Taiwan and Thailand. Similar to the ferrous market, this demonstrates strong results from our sales diversification strategy and our ability to adapt to changing market dynamics. Assessing the timing of China's future import demand is still a bit of a challenge. Recent reports have indicated that the Chinese government is beginning to establish quotas for Chinese scrap importers ahead of issuing import licenses and may also be examining an industry proposal to discard the use of the term scrap by officially renaming certain copper scrap products as recyclable copper raw materials to reflect the high purity of furnace ready feedstock.
These are both good indications that the Chinese government is trying to balance the need for clean grades of scrap with its desire to eliminate the import of solid waste. While the situation remains fluid, our team has accessed alternative markets for our non-ferrous products and has continued to increase our sales to customers around the world. Looking forward, we have a well-developed and focused strategy that includes enhancing and continuing to grow our non-ferrous platform.
Let's turn to Slide 10, to discuss this in more detail. Productivity improvements, ferrous volume growth and technology investments underpin our strategy to more than offset the compression in margins we've experienced in fiscal '19 from the extended weakness in zorba prices. This drop in zorba prices and demand has adversely impacted our operating income by approximately $15 per ton.
So let's review each initiative in order. First, our productivity initiatives. The $35 million of productivity initiatives we announced at the beginning of the fiscal year should enable us to offset approximately one-half of this margin compression. Our financial results have already benefited from approximately two-thirds of this amount, with the remainder to be achieved in fiscal '20.
Second, our ferrous volume growth initiative. We have under way a multi-year volume initiative to continue to grow our ferrous volumes. As many of you know, we completed a year early, our three-year plan to increase our organic ferrous volumes by 25% to 30%, reaching 4.3 million tons at the end of fiscal '18. Our current volume initiative targets additional growth of 700,000 tons to reach 5 million tons based on our retained capacity by the end of fiscal '21. We expect this growth to create operating leverage equal to approximately $1 in operating income per ton on all tons for each incremental 100,000 tons.
Third; Our technology investment initiative. We are rolling out a capital investment program to implement advanced metal recovery technologies at our major operating facilities. We believe that the benefits from these investments will deliver at least $8 per ton once they are fully operational. The benefits come from three sources.
First; Improving the efficiency of our processes to enable us to meet global metal content and quality requirements on a cost-effective basis.
Second; Increasing our throughput and extracting more materials from our shredding process.
And third; Creating product optionality and furnace ready materials that can be marketed globally and both broaden and deepen our customer relationships. Importantly, these investments will also support the multi-year sustainability goals, which we plan to include in our next sustainability report in the fall. As Richard will explain in more detail, we expect the aggregate investment to be in the range of $65 million to $75 million over the next 18 months. Once implemented, we expect a short payback period and returns well in excess of our cost-of-capital, assuming average price and demand levels similar to Q3.
Together, our productivity, volume growth and technology investment initiatives should enable us to significantly expand our margins and to continue generating strong operating cash flow, providing us with additional opportunities to grow and to return more capital to our shareholders. We expect these initiatives to expand our margins in the range of $15 to $20 per ton, with approximately half of the benefits in fiscal '20 and the full-year run rate achieved by the end of fiscal '21.
Now I'll turn the presentation over to Richard, who will provide more details on our segment performance including our cash flow generation and our technology CapEx investments and productivity initiatives. Richard?
Richard D. Peach--Senior Vice President, Chief Financial Officer & Chief of Corporate Operations
Thank you and good morning. As Tamara mentioned earlier, productivity initiatives represent a critical element of our strategic priorities. Our plan is to deliver annual benefits of $55 million with at least 80% of the total in fiscal 2019 and the full run rate in fiscal 2020. Of the targeted annual benefits, AMR's share $27 million, there's $5 million dollars in CSS and $3 million in corporate. We have made significant progress already in the execution of our productivity measures and continue to track ahead of the rollout schedule that we originally set. In the third quarter, we achieved consolidated benefits of $9 million and year-to-date, have achieved total benefits of $20 million, including approximately $15 million in the AMR, $4 million in CSS and $1 million in corporate.
In AMR, we are achieving production cost efficiencies, benefits from enhanced asset management, reducing outside services, optimizing use of logistics and improving our retail yields. Of the AMR total, 80% is in cost-of-goods-sold, and 20% in SG&A and increased retail sales. In CSS, all the benefits are to cost-of-goods-sold through use of analytics and maintenance practices, improving yields and enhancing product quality. And in corporate the SG&A savings are coming primarily from lower professional fees and reducing outside services.
Now, let's move to Slide 12, for an update on our non-ferrous technology strategy. Over the past several years, we've had a strong focus on use of advanced non-ferrous processing technologies within our Recycling business. This already includes downstream sorting equipment in our major export facilities, which we have developed over time to meet changes in quality standards in different markets. Most recently, these existing processing capabilities have enabled us to grow our non-ferrous sales volumes by over 20% between fiscal year 2016 and 2018.
We produce high-quality products which meet our customers needs and which have supported the diversification of our sales to almost 20 countries, including to the United States.
As Tamara outlined, we have commenced a major capital investment program to replace, upgrade and add to our existing metal recovery technologies. These improvements will be taking place in at least five of our major facilities on both the east and west coasts of the United States and it's expected to create additional operating leverage as we target further growth in volumes over the next few years. In recent months, we have continued to develop our plan, which now includes new wets and dry processing technologies, enhanced zorba separation capabilities, more advanced sorting equipment and an expansion of our cable chopper rollout, which we had started in the last fiscal year.
Once implemented, these new technologies are expected to increase our throughput and mental recovery, broaden our product set and enable us to produce more furnace-ready materials. From a sustainability perspective, we expect the environmental benefits of the new technology will include greater diversion of waste from landfills, reductions and our air emissions, use of recycled water and improvements to our energy efficiency.
Engineering, permitting and equipment procurement is already well in process, and we anticipate commencing construction in the fourth quarter of fiscal '19 with the rollout continuing throughout the whole of calendar year 2020. We now expect the aggregate investment to be in the range of $65 million to $75 million with up to $10 million of that amount in fiscal '19. Once the new technology is fully implemented and assuming average prices and demand similar to Q3, we expect the benefit to operating income to be at least $8 per ferrous ton based on current volumes.
We also expect to achieve up to a third of that benefit in fiscal 2020. We expect the return on investment to be significantly in excess our cost-of-capital with an average payback of less than three years once we commence operations with the new equipment. We will continue to provide regular progress updates on these investments on a quarterly basis.
Now, let's turn to slide 13 and discuss performance and also metals recycling. In the third quarter, the AMR's operating income with $29 million, this represented operating income per ferrous ton of $31, which was a sequential improvement of $6, primarily driven by operating leverage from increased volumes and seasonally higher sales of retail parts. Average inventory accounting had an adverse impact in the third quarter of $1 million, which was similar sequentially, and which compared to a benefit of $2 million in the prior year third quarter.
AMR's ferrous sales volumes increased by 9% sequentially and benefited from seasonally improved supply flows, higher car purchase volumes which were up by 15% and benefits from our commercial initiatives. Average ferrous net selling prices in the third quarter were down by 13% year-over-year and up by 2% sequentially.
In the first part of the third quarter, the domestic market was higher than export but domestic prices then declined significantly and currently export prices are at a price premium to domestic of $15 to $20 per ton. As the export market was relatively stronger for most of the quarter, AMR increased its exports to 67% of ferrous sales, which was up from 60% in the second quarter. Our flexible platform gives us the ability to pivot our sales activity to achieve best available margins dependent on relative conditions between export and domestic markets.
Non-ferrous sales volumes were also up by 9% sequentially, on the higher supply flows and from our ability to diversify sales. In the third quarter, we shipped our non-ferrous products to 16 different countries as we continue to sell to a broad range of customers in Asia, Europe and in North America. Average non-ferrous net selling prices increased by 7% sequentially but decreased by 16% year-over-year, was zorba prices reducing by considerably more than the average change.
Over the past year, the primary driver of non-ferrous price weakness has been the continued impact of Chinese retaliatory tariffs and import restrictions. However, prices for recycled non-ferrous products did increase sequentially in the third quarter, as customers in Asia were buying ahead of China's latest round of new import regulations and quality standards, which are due to be implemented this summer.
Looking ahead to the fourth quarter, we anticipate AMR's ferrous sales volumes to increase sequentially in the range of 5% to 10%. Key influences on volumes over the remainder of the quarter includes the impact on supply flows, of the lower prices in the domestic market. Non-ferrous sales volumes are expected to approximate the third quarter.
We expect AMR's operating income per ton to be lower sequentially by approximately 10%, reflecting the impact on metal spreads from the lower price environment.
Now, let's move to Slide 14 and discuss operating trends in CSS. CSS third quarter operating income was $8 million, which was a sequential improvement of $2 million compared to the second quarter. Operating results benefited sequentially from a significant increase in sales volumes and higher utilization, partially offset by the impact of lower average net selling prices and high beginning inventory costs. Our finished steel sales volumes were 38% higher sequentially. Demand in West Coast markets remain strong and we benefited from a seasonal improvement following weather related construction delays, which has impacted the second quarter.
Rolling mill utilization was also much improved and reached 98% in the third quarter, up from 76% in the second quarter, which had included planned downtime. Average selling prices for finished steel were consistent year-over-year, but down sequentially by 5%, including from sales mix.
Looking ahead to the fourth quarter, we expect CSS finished steel sales volumes to be consistent with the higher levels achieved in the third quarter, due to product mix, extended customer destocking and the relative strength of the export scrap market versus domestic, all of which are providing [oh] visibility at this time. We expect CSS operating income in the fourth quarter will be sequentially lower than the third quarter performance.
Moving on, let's proceed to Slide 15 to review our capital structure. Operating cash flow in the third quarter was $40 million, driven mainly by profitability and a small decrease in working capital despite our higher volumes. Our operating cash flow for the year-to-date is now $63 million and looking ahead, we expect positive operating cash flow again during the fourth quarter.
Capital expenditures in the third quarter totaled $20 million and included a combination of spend on maintaining the business, environmental capital projects and investments in growth. For the year-to-date, our capital expenditures have totaled $61 million. In fiscal '19 as a whole, we expect to invest up to $90 million in capital expenditures. This reflects higher CapEx sequentially, including on major environmental projects and owner investments in growth. However, our full-year estimate is lower than we communicated last quarter, primarily due to the timing of expected cash outflows in respect of our major non-ferrous technology projects.
Our strong operating cash flow enabled us to reduce net debt by $16 million in the third quarter, while also returning capital to shareholders through the issuance of our 101st consecutive quarterly dividend. Net debt of $134 million at the end of the third quarter is almost $29 million lower than one year ago and our balance sheet remains strong with net leverage of 16% and a net debt-to-adjusted EBITDA ratio of 0.8X.
Turning to corporate items; Corporate costs in the fourth quarter were $13 million, a $4 million increase compared to the second quarter of fiscal '19 and a decrease of $2 million year-over-year. The sequential increase is primarily driven by a $2 million charge related to the settlement of a wage and hour class action lawsuit and higher incentive compensation accruals.
Looking ahead to the fourth quarter, we expect corporate costs to be $2 million lower than our expense in the third quarter. Our effective tax rate in the third quarter was an expense of 26%. Our tax rate for the fourth quarter is expected to be approximately 24%, although our actual tax rate will be subject to our level of financial performance on other relevant factors.
I'll now turn the presentation back over to Tamara.
Tamara L. Lundgren--President and Chief Executive Officer
Thank you, Richard.
As you've heard this morning in the third quarter we delivered a strong set of financial results. Despite challenges in both the non-ferrous and ferrous markets. Our performance can be attributed to the steps we have taken over the past several years and steps which are currently under way to continually improve our business performance.
With global scrap consumption growth outpacing crude steel production increases, the long-term outlook for scrap is strong. We remain focused on our strategic priorities which include productivity improvements, volume growth and major investments in advanced metals recovery technology. These initiatives should enable us to significantly expand our margins and to continue generating strong operating cash flow, providing us with additional opportunities to grow and to return more capital to our shareholders.
In closing, I'd like to thank our employees, many of whom I know are listening to our call this morning. Our performance is the direct reflection of your ability to drive best-in-class results without wavering from our core values. My thanks go to each of you as you've truly demonstrated why we continue to be a leader in our communities and the recycling industry.
Now operator, let's open up the call for questions.
Operator
Certainly, ladies and gentlemen, (Operator Instructions) Our first question comes from the line of Matthew Korn from Goldman Sachs. Your question, please.
Unidentified Participant
Hi, this is (inaudible) for Matthew Korn. US tariffs on some Turkey rebar under section 232 were recently lowered from 50% to 25%. What impact are you seeing from that change on the rebar side and on the scrap side as well?
Tamara L. Lundgren--President and Chief Executive Officer
Thank you and good morning. We clearly saw an uptick in scrap prices for Turkey right after the announcement of the elimination of the excess tariff. But we haven't seen any noticeable imports of finished goods of rebar into the US from Turkey. Turkey remains in the market in terms of buying scrap, but on a year-over-year basis is still lower than what has been historically traditional in terms of their scrap demand.
Unidentified Participant
Got it. That's great. Thank you. And then just switching gears a bit in regards to capital allocation, you know what -- how are you all thinking about share buybacks and debt repurchases going forward? And then regarding leverage, is there a particular leverage target that you have in mind?
Tamara L. Lundgren--President and Chief Executive Officer
We don't have a leverage target articulated. You've seen that we have over the course of the last five years really significantly reduced our debt and continue to generate strong operating cash flow. In terms of share buybacks and dividends and overall capital allocation, our priorities remain growth in the business, maintaining a strong balance sheet and then returning capital to shareholders. And as our strategic initiatives that we described are rolled out and implemented, they should clearly drive increased earnings and drive even higher cash flow, enabling us to consider increasing contributions to each of those buckets.
Unidentified Participant
Got it. Thank you. That's all for me. Congratulations on the quarter and thank you for the time.
Tamara L. Lundgren--President and Chief Executive Officer
Thank you.
Operator
Thank you once again, ladies and gentlemen, (Operator Instructions). Our next question comes from the line of Phil Gibbs from KeyBanc Capital. Your question, please.
Phil Gibbs--KeyBanc -- Analyst
Hey, good morning.
Tamara L. Lundgren--President and Chief Executive Officer
Good morning.
Phil Gibbs--KeyBanc -- Analyst
Tamara and Richard just maybe go through some of the assumptions in CSS slash steel in terms of why you've just provided commentary of being, I guess, directionally down, I wasn't sure why you kind of withheld providing more detail behind that If, you know, effectively right now you've got rebar, steel shipments flattish and the spread environment continues to be pretty good. Your energy cost hits should be should be winding down. So that was a little bit, I guess, head scratching to me in terms of the reasoning behind the lack of visibility. I think as you said it, so anything there would be would be helpful?
Tamara L. Lundgren--President and Chief Executive Officer
So, Phil, let me start and then Richard can add some detail. Clearly we're seeing steady demand, but the tone of the market represents extended destocking and fundamentally product mix, this extended destocking and the export strength versus domestic for scrap are all factors that we're watching very closely and are our influencers on the outlook. I think you've mentioned this in your reports as well, scrap low prices and finished good low prices, you know, we believe are really a near-term timing issue, not structural, but we've got a unique combination of extended destocking combined with delayed spring supply flows. And I think that we're at an inflection time. And so we're watching those factors very carefully. Richard?
Richard D. Peach--Senior Vice President, Chief Financial Officer & Chief of Corporate Operations
Yes. And I would add here, Phil. We've got a -- we've still got a couple of months to go in this quarter. And there is, due to factors Tamara has mentioned, you know, a fair bit of uncertainty, some things that I would mention to add a relative to the product mix, one of the factors that has an impact there is in railroad where the prices are down and more relatively to and rebar and then the destocking will come to an end. But currently there's some uncertainty when that would be. And then relative to export versus domestic in the Pacific Northwest scrap markets can be driven very much by the export market. And at this time, that balance is still playing itself out. So as we said, there's some challenges with visibility at this time. And where we see a downward -- outlook versus what was a very strong Q3. It's difficult to put a number on it at this time.
Phil Gibbs--KeyBanc -- Analyst
Yeah, I was just trying to balance your commentary in terms of your expectation that your own steel shipments are going to be pretty good. And I know you ran a very high level of utilization at the rolling mill in the May quarter and presumably, you would see the same thing in the fourth quarter. And so I just don't understand, I guess, the comments around destocking and you being you heavily rebar oriented. And then also saying that you expect your own shipments to be flat at a high level of utilization. And so I guess that's where I'm confused. So.
Richard Peach--Senior Vice President, Chief Financial Officer and Chief of Corporate Operations
Yeah, this is -- it's Richard again, Phil. Demand remains steady in the West Coast markets, which is underpinning our view that we expect another quarter of strong volumes. This is more of a question on a tightening spread in terms of margins relative to the three factors that we have mentioned.
Phil Gibbs--KeyBanc -- Analyst
Okay. And then just to follow up on your guidance comments and I might have a couple more, so I'll jump back. Your view that I think corporate costs will be down, was that relative to, your unadjusted $13 million. So I should expect $13 million to $11 million. So how to think about it?
Richard D. Peach--Senior Vice President, Chief Financial Officer & Chief of Corporate Operations
Yes.
Phil Gibbs--KeyBanc -- Analyst
Okay. Thanks very much.
Operator
Thank you. And this does conclude the question and answer session of today's program. I'd like to hand the program back to Tamara Lundgren, CEO for any further remarks.
Tamara L. Lundgren--President and Chief Executive Officer
Thank you. And thank you all for joining us on our call today and for your interest in our Company. We look forward to speaking with you again during our investor conferences that we'll be attending this summer and in October when we report our fourth quarter fiscal '19 results. Thank you.
Operator
Thank you, ladies and gentlemen, for your participation in today's conference. This does conclude the program. You may now disconnect. Good day.
Duration: 41 minutes
Michael Bennett--Senior Director of Investor Relations
Tamara L. Lundgren--President and Chief Executive Officer
Richard D. Peach--Senior Vice President, Chief Financial Officer & Chief of Corporate Operations
Richard Peach--Senior Vice President, Chief Financial Officer and Chief of Corporate Operations
Unidentified Participant
Phil Gibbs--KeyBanc -- Analyst
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'Little People, Big World' Star Tori Roloff Faces Controversy On Instagram
Roloff ended up deleting a post about parenting. A Reality TV Star Tory Roloff and her husband Zach are the stars of the TLC show Little People, Big World . Life As Parents The couple has one son, Jackson, and are expecting a daughter due in November. Understandably, a lot of the content that Tori posts on Instagram is about being a parent. Controversy On Instagram However, Tori faced some controversy when you wrote a post about spoiling children. "If you raise your kids, you get to spoil your grandkids. If you spoil your kids, you’ll end up raising your grandkids." She continued with additional remarks in the comment section. "Just a thought. I really think my generation has made it more important to be their kids’ best friend and not help guide and support their kids with boundaries and structure. I know we’re all doing the best we can but disciplining kiddos is essential to becoming a good citizen, not a taboo. Spoil with love." She Deleted The Post People on Instagram were quick to point out that there are many reasons for grandparents to raise their grandkids and that her comments were insensitive. Roloff didn't comment on the backlash, but she did delete the post. |
A Quest for Scale: Why Newmont Bought Goldcorp
On January 14, 2019,Newmont Goldcorp(NYSE: NEM)formed via a stock-for-stock transaction that joined together major gold miners Newmont and Goldcorp.Newmont paid a 17% premiumabove Goldcorp's trading price at the time of the merger. In 2018, the pre-merger Newmont produced 5.1 million ounces of gold with a cost of $909 per ounce. Goldcorp produced 2.3 million ounces of gold in 2018 with the costs at around $800 an ounce and expects to maintain these levels of production and costs in 2019. In addition to great production volume, Newmont Goldcorp has a large portfolio of reserves and resources for future development, making it less likely that its production will taper off as its current mines are exhausted. The combined production of these two companies exceeded the 2018 production of Barrick , which was the largest gold producer of 2018 though the average costs were higher. However, many investors objected to the premium that Newmont paid for Goldcorp and it takes lots of time and money to turn reserves and resources into mines. The acquisition sets Newmont Goldcorp up to be the largest gold producer in the world and also allows it to sustain its production into the future as reserves and resources are turned into mines.
Image source: Getty Images.
Investors did not react positively to news of the acquisition. Newmont shares fell when the merger was announced in January, and it suffered a 13.2% decline in April. In response, Newmont offered an $0.88 dividend to shareholders contingent upon the merger being approved to bolster support for the merger.
Hedge fund billionaire John Paulson was among the shareholders objecting to the deal, stating that the 17% premium Newmont was paying for Goldcorpwas too high. The stock-for-stock merger left former Goldcorp shareholders owning 35% of Newmont Goldcorp. Paulson expressed the concerns of many investors, observing that 35% of the cost savings of Newmont's partnership with Barrick would accrue to former Goldcorp shareholders. This, combined with the 17% premium made the price that Newmont paid for Goldcorp unattractive. However, Paulson would not have objected to the merger if the 17% premium had not been paid.
Basically, John Paulson and many Newmont investors felt that Newmont's management was giving Goldcorp shareholders too sweet of a deal. Goldcorp did not contribute any of the properties that are part of a massive cost-saving joint venture between Newmont and Barrick. However, former Goldcorp shareholders will benefit from this joint venture through their shares in Newmont Goldcorp, thereby diluting the benefit of this joint venture for those who had originally held Newmont shares.
While John Paulson's concerns are valid for those who held Newmont shares prior since before the merger, they shouldn't affect how new shareholders view the company. New investors are buying the entire portfolio of assets of the new combined Newmont Goldcorp, receiving shares in a company producing much more gold each year and possessing a much larger portfolio of active mines and properties that have potential for development.
However, that portfolio could be a mixed blessing. The company now claims to have the largest collection of reserves and resources . These two terms refer to very specific types of properties. Reserves are economically, legally, and technically feasible to extract, while resources are potentially valuable and are reasonably likely to be extracted. This is a good thing because it indicates that Newmont Goldcorp has properties that can replace its current mines when they are exhausted .
However, developing these properties is both expensive and risky. If gold prices increase, these reserves and resources could greatly appreciate in value, even if Newmont Goldcorp does not develop them. Furthermore, successful development of these mines can help Newmont Goldcorp maintain or increase the amount of gold it produces each year, likely improving its profits whether or not gold prices increase.
An unsuccessful development project, however, can quickly turn into a cash drain. Newmont Goldcorp's peerBarrickspent $5 billion to develop a gold mine in South America and never got a single ounce of gold out of it. Nothing is foolproof in the mining industry.
Newmont Goldcorp shares are not "undervalued" or an obvious buy. Investors are right to be somewhat wary about the costs of developing reserves and resources into mines and if the 17% premium was worth paying or not. The merger was also approved despite stiff shareholder opposition, which raises questions about how responsive management is to shareholders. Investors may be concerned that Newmont is more focused on growing its size even at the expense of shareholder value.
However, Newmont Goldcorp has scale in gold mining that few other companies can match. It has both the largest (projected) production and the largest collection of properties that can be developed into mines. Its costs are well below the current price of gold, so it can stay profitable even if the gold price decline . Should the price of gold rise, Newmont Goldcorp's profitability will also rise. Many investors like to have exposure to gold since it tends to do well when the rest of the market is doing badly. Newmont Goldcorp is a good way to get that
The 17% premium that Newmont paid for Goldcorp probably won't matter much if gold enters a bull market. Those who originally held Newmont shares now find themselves owning a much larger gold production business. This should allow them to experience larger gains than they would have previously. Goldcorp shareholders did get a very good deal but there should be plenty of gains for everyone if gold appreciates. That is probably why Newmont management was so eager to get the deal approved that they offered shareholders a special dividend contingent upon approval of the deal. However, there is plenty of opportunity for Newmont Goldcorp to get into trouble in development projects and there is no certainty that a strong gold bull market will materialize anytime soon. Shareholders should be vigilant for signs of trouble. However, given Newmont's size and profitability, development issues most likely won't be fatal to the company or its share price.
The issues surrounding the merger are largely irrelevant to new investors and are not significant enough to make it necessary for shareholders in the pre-merger Newmont to sell their shares. Goldcorp did get a very good deal in this merger but Newmont's management clearly saw value in the increasing annual gold production and increasing its portfolio of properties for future development. Shareholders of both Newmont and Goldcorp can continue to hold shares of a profitable gold business that has the potential for tremendous appreciation in a gold bull market. New investors also get a robust business that is likely to stay profitable even if some issues do arise.
Newmont Goldcorp's status as the largest producer of gold and the owner of the largest portfolio of reserves and resources makes it a good bet for investors seeking exposure to gold. If gold enters a bull market, the value of its annual gold production and the value of its undeveloped reserve properties will rise driving the stock price up as well. However, Newmont Goldcorp is still not a sure thing for investors.
It's worth noting that development is a risky undertaking, no matter the company. Success can never be guaranteed. However, large miners such as Newmont Goldcorp are much more likely to survive setbacks in development than smaller mining companies. Investors seeking to own a profitable business and gain exposure to gold will do well to look at large gold producers like Newmont Goldcorp.
Evan D'Silvahas 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. |
Rite Aid: Fiscal 1Q Earnings Snapshot
CAMP HILL, Pa. (AP) _ Rite Aid Corp. (RAD) on Wednesday reported a fiscal first-quarter loss of $99.7 million, after reporting a profit in the same period a year earlier. On a per-share basis, the Camp Hill, Pennsylvania-based company said it had a loss of $1.88. Losses, adjusted for non-recurring costs and to account for discontinued operations, came to 14 cents per share. The drugstore chain posted revenue of $5.37 billion in the period. Rite Aid expects full-year results to range from a loss of 14 cents per share to earnings of 72 cents per share, with revenue in the range of $21.5 billion to $21.9 billion. Rite Aid shares have decreased 50% since the beginning of the year. In the final minutes of trading on Wednesday, shares hit $7.11, a fall of 82% in the last 12 months. _____ This story was generated by Automated Insights (http://automatedinsights.com/ap) using data from Zacks Investment Research. Access a Zacks stock report on RAD at https://www.zacks.com/ap/RAD |
Supreme Court ACA Reimbursement Case Will Have Minimal Effect On Big Insurers
A Supreme Court case tackling whether the federal government must reimburse health insurers that lost money participating in the Affordable Care Act is worth billions collectively and will be closely watched — but the outcome is unlikely to have a big impact on the insurers’ bottom lines.
What's At Stake
The companies say the government owes them about $12 billion after Congress declined to fund a program meant to entice them to participate in theACA, also known as Obamacare.
The companies were agreeing to take customers with unknown risk, so the original law envisioned reimbursements for companies that lost significant money. But Republicans quickly began calling reimbursements a “bailout” and canceled them.
While the overall dollar amounts the companies were denied is significant — and some companies dropped out of ACA after being shorted — it’s a small part of most remaining companies’ overall finances. Some have already moved on.
At least one of the largest health insurers,Humana Inc(NYSE:HUM), has already written off about $583 million that it had expected, according toModern Healthcare.
Other large, publicly traded health insurers have also written off the uncollected money, Leerink Partners LLC analyst Ana Guptetold The Wall Street Journal.
Now, whatever the justices decide, the case is “not impacting the balance sheet” at those companies, Gupte said. If they do win, the payout would be “found money," she said.
Profits Are Back
There’s also been a turn in the ACA marketplace: insurers are starting to again see profits.
The companies increased rates significantly in the early years to deal with high costs and are now starting to make money on ACA customers, and rate hikes are slowing.
In states where insurers have made rate filings for 2020,several are averaging single-digit percentage increases. In Maryland, the average is negative, a 2.9% premium decrease.
Case Background
The risk corridor program was meant to coax insurers to provide ACA coverage by having the federal government cover some losses of companies that had the highest payouts.
Some of the money came from other insurers — those that profited heavily in the program had to fork over some profits to those that lost.
But the amount coming in from profitable insurers was never enough to meet the claims by companies losing money.
When the government decided not to make up the difference, the shortfall was a big reason for the large premium hikes in the early years of Obamacare.
Insurers who were expecting the risk corridor subsidy payments, including Moda Health Plan Inc., of Portland, Oregon, Maine Community Health Options and Land of Lincoln Mutual Health Insurance, filed suit.
Initially aclaims judge agreed with them, but a federal appeals court ruled last year that Congress was within its right to change its mind on the payments.
The health insurance industry argues ACA premiums were intentionally kept low by states because the companies could expect reimbursement for losses through the risk corridor program.
While large publicly traded insurers aren’t necessarily relying on reimbursements now, smaller ones could see their ability to participate in the ACA compromised, and some have dropped out of the ACA because of the decision not to make the payments.
And some of the not-for-profit ACA co-op insurers collapsed because the payments didn’t come.
The end of the payments “compromises those companies’ ability to continue providing health insurance coverage, transfers costs to consumers ... and undermines Congress’s stated goal in adopting the ACA — providing health insurance coverage for millions of Americans who previously were uninsured,” an industry group said in a brief supporting the plaintiffs.
Even for some smaller insurers, the money they claim is owed to them would be small.
For example, another company that originally sued, Sioux Falls, South Dakota-based Sanford Health, said it was owed million — in a year in which its operating revenue was over $4 billion.
The case, which combined individual lawsuits from the three plaintiffs, will be heard during the court’s next term, which starts in October.
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Amazon's New Store for Beauty Professionals: How Much of a Threat?
News ofAmazonentering the professional beauty product industry did startle Wall Street, with competitors’ stock taking a hit. But with a longer look at the business of stylists, barbers, estheticians, manicurists, and others, it’s questionable whether the online Seattle juggernaut will disrupt the industry as its main source of supplies, amounting to several billion dollars in annual sales.
When freelance hair stylistFelicia Rialsneeds to restock shampoo, conditioner, or styling products, she now buys them at the Los Angeles salon where she works part-time, or drives to an out-of-the-way beauty emporium called Naimie’s—”a huge inconvenience,” she says.
Rials may soon be saving the trip, since she can now order the same products on Amazon without having to worry about their authenticity.
However, convenience isn’t the only thing driving the beauty business.
“Usually all the beauty supply stores or professional stores give us a discount or wholesale prices,” saidMatilde Campos, a freelance stylist based in L.A. It’s unclear if Amazon is able to do that, but Rials notes the website’s prices aren’t much different from those at salons. Not to mention, some high-level stylists receive free products directly from brands, in exchange for social media posts.
Many small businesses use Amazon Prime memberships and its two-day free shipping option to order things like office supplies, snacks, and coffee. However, facing a tight deadline, stylists won’t be able use the service. Think: getting ready for a wedding or awards show like the Oscars, where Campos styledRomastar Yalitza Aparicio this year. “If I need anything last minute, it’s usuallyextremelylast minute and I would run to the store to purchase it,” Campos said.
Amazon’slatest addition to its online marketplaceallows state-certified career beauticians to order professional-grade products directly from Amazon, through brand partnerships with salon-grade companies like Wella Color Charm, RUSK, OPI Professional, Pureology, and others. Until now, many of these products were only available on Amazon through third-party retailers, which deterred some beauty professionals, concerned about inadvertently buying knockoffs. (While these third-parties will still be able to sell on Amazon, they’ll be excluded from the professional beauty store.)
News that Amazon is entering the professional beauty product businesstook a bite out of the stock of industry leaders.Ulta Beauty shares initially dropped 2.6%, and Sally Beauty Holdings stock fell 17%. By Wednesday, shares of both companies had regained some ground. At stake is an industry where In 2017, total U.S. salon services and salon retail sales alone totaled $63 billion,according toSalon Today.
While there are smaller beauty supply companies, Ulta and Sally have dominated as the go-to beauty suppliers for independent stylists, offering a large inventory and popular customer loyalty programs at their brick-and-mortar locations and online.
Sally Beauty was founded in 1964 with a single store in New Orleans. Since then, the company has grown to 3,761 locations in 12 countries and annual sales of $2.3 billion, according to the company’s 2018 annual report. The store offers a Pro Beauty Club program where licensed stylists can receive discounts and price matching, so it’s the closest retail equivalent to the Amazon store.
Aside from beauty stores like Ulta, Sally Beauty, and small entrepreneurs, salons are often the only place to get niche pro-grade products.
“For independent people or small business owners that don’t necessarily have the buying power to attract business from brands saying, ‘you can distribute our products,’ [the Amazon store] opens up a much bigger opportunity for them to get products,” said Sarah Jindal, senior global analyst for beauty and personal care at Mintel.
There’s also a downside from ordering online: It prevents stylists from sampling new products in the store and speaking with sales associates. Beauty is an industry where the texture, scent, and wear of a product matter a lot, and ordering new products from a website eliminates the sensory part of the retail experience. That’s one of the reasonsGlossier, the online retailerknown for millennial pink branding and empowerment-first messaging,opened brick-and-mortar storesin New York, Los Angeles, and Seattle.
As an answer to Glossier—and example of the competitive beauty business— Amazon launched its own mermaid green in-house “no-nonsense” skincare line, Belei, in April. The line,reportedlydeveloped by “listening to the Amazon customer,” remindedGlamourwriter Halie LaSavage of “the Glossiers and Summer Fridays of the online beauty world” when she visited the online retailer’s pop-up showroom.
In order to use the Amazon store, stylists will need to create an Amazon Business account and upload their license. Without being a registered stylist, it’s difficult to get a clear sense of the prices for the certified buyers. “There has to be an impetus or some sort of attractive aspect for the buyer. If they’re not getting better pricing or shipping or the ability to bundle things together, then what’s attractive about it?” Jindal asks. “I’m sure there’s other information that becomes available to the buyer that has a certified account.”
Jindal speculates that Amazon might introduce the option to subscribe, so stylists won’t need to restock every month, but right now, it seems like the biggest benefit is shipping with Amazon Prime.
But should the Amazon professional beauty store scare beauty meccas like Sally Beauty Supply, that cater to professionals and consumers? Sally in its 2018 annual report detailed plans to stay current. They include: expanding its “endless aisle” database of out-of-stock products, where customers can have any of the retailer’s 8,000 items shipped to their house, and updating its e-commerce and mobile capabilities for both Sally Beauty and its sister store, Beauty Systems. According to the same report, Sally Beauty Supply already ships 95% of its e-commerce orders in two days or less, just like Amazon Prime.
Plus, there’s not much overlap across Ulta and the Amazon beauty store. “Amazon’s Professional Beauty Store currently carries 51 brands. From this selection, Ulta only stocks around 30% of them. “We think this highlights different merchandising strategies and the lower quality brands on Amazon,” UBS analyst Michael Goldsmith toldInvestor’s Business Daily. “We continue to see Ulta having one of the best earnings algorithms in hardlines. We think it can generate [mid-single digit and high-single digit] comp growth, see modest operating margin expansion, and repurchase shares.”
“To be perfectly honest, I’m not worried about it,” Jindal said of the Amazon beauty store. “If I were Ulta or any of these other retailers, there’s that initial knee-jerk reaction you see whenever something like this gets announced, but when you think about who else is shopping at those retailers, the majority of business is probably [coming from] your average consumer. Is this going to be a massive hit? I would say probably not.”
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US Stock Market Overview – Stocks Trade Mixed, Energy Shares Rally
US stocks were mixed on Wednesday, as both the Dow and the S&P 500 closed in the red while the Nasdaq bucked the trend. Strong earnings from Micron boosted the semi-conductor space which helped buoy the tech heavy Nasdaq. Sectors were also mixed. Energy shares led the way higher rising 2.25%, fueled by a surge in crude oil prices following a larger than expected draw in crude oil inventories. Utilities were the worst performing sector.
Energy shares were buoyed by a larger than expected draw in crude oil stockpiles. The Energy Information Administration reported that crude oil inventories decreased by 12.8 million barrels from the previous week. Expectations were for a 2-million barrel draw. At 469.6 million barrels, crude oil inventories are about 5% above the five year average for this time of year. Gasoline inventories decreased by 1.0 million barrels last week and are at the five year average for this time of year. Distillate fuel inventories decreased by 2.4 million barrels last week and are about 7% below the five year average for this time of year. Total commercial petroleum inventories decreased last week by 11.9 million barrels last week.
Demand remains solid. According to the EIA total demand over the last four-week period averaged 20.6 million barrels per day, up by 1.8% from the same period last year. Over the past four weeks, gasoline demand averaged 9.7 million barrels per day, up by 2.1% from the same period last year. Distillate fuel demand averaged 3.9 million barrels per day over the past four weeks, up by 2.9% from the same period last year.
The drop in inventories came from lower imports. The EIA reported that crude oil imports averaged 6.7 million barrels per day last week, down by 812,000 barrels per day from the previous week. Over the past four weeks, crude oil imports averaged about 7.4 million barrels per day, 10.2% less than the same four-week period last year.
President Trump will meet with President Xi Jinping at the G-20 summit of world leaders. The two world leaders are scheduled to meet Saturday, the second day of the two-day summit in Osaka, Japan. Officials from both countries have been careful to manage expectations ahead of the summit, playing down the possibility of completing a trade deal.
US made capital goods rose more than expected in May. The Commerce Department said on Wednesday orders for non-defense capital goods excluding aircraft, a closely watched proxy for business spending plans, increased 0.4% last month amid increases in demand for machinery, and computers. Expectations were for core capital goods orders edging up 0.1% in May. Core capital goods orders rose 2.3% on a year-on-year basis. Shipments of core capital goods increased 0.7% last month after an upwardly revised 0.4% gain in the prior month. Core capital goods shipments are used to calculate equipment spending in the government’s gross domestic product measurement.
Thisarticlewas originally posted on FX Empire
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NBA free-agency primer: Sorting the frenzy ahead
NBA free agency opens at 6 p.m. ET on Sunday. With more than half the league hitting the market and a wealth of teams holding salary cap space including both franchises in Los Angeles and New York it should be a wild first week of July. Teams cannot actually sign players until July 6 at 11 a.m. ET, when the league lifts its moratorium, but they can make handshake agreements in the meantime. Then, its just a matter of holding that handshake until pen hits paper. ( Hi, DeAndre Jordan .) We already know recently traded All-Stars Anthony Davis and Mike Conley are on the move, but who will join them? We tried to simplify the frenzy with a free-agency primer, sorting players most likely to swap teams into four Top 5 categories: the top players, the best mid-tier values, the most overvalued and the cheapest bargains. Kawhi Leonard captured his second Finals MVP honor in leading Toronto to a title. (Getty Images) Top 5 free agents 1. Kawhi Leonard Incumbent team: Toronto Raptors Chief competitor: Los Angeles Clippers Rumored suitors: Brooklyn Nets, Los Angeles Lakers, New York Knicks He is the NBAs kingslayer . Leonard is the Finals MVP for the NBAs last two unconventional champions, toppling super-teams led by LeBron James and Kevin Durant. This past season with the Raptors was proof that he can single-handedly swing a good team to a title. And he is still just 27 years old. Despite lingering concerns about the health of his right leg and how much load management it might take to get him through his next contract, pay him whatever he wants. 2. Kevin Durant Incumbent team: Golden State Warriors Chief competitor: New York Knicks Rumored suitors: Brooklyn Nets, Los Angeles Clippers In the aftermath of Durants torn Achilles tendon, multiple league sources told Yahoo Sports that the Warriors and Knicks are still expected to offer him max contracts despite his expected absence for all or most of next season. That means five years, $221 million from the Warriors or four years, $164 million from the Knicks. Other teams, namely the Nets and Celtics, may also be willing to pay $164 million for three years of an unknown percentage of pre-injury production from a 32-year-old Durant, which may still be worth the investment. Thats how good he is. Story continues 3. Kyrie Irving Incumbent team: Boston Celtics Chief competitor: Brooklyn Nets Rumored suitors: Los Angeles Lakers, New York Knicks Irving just enjoyed his best statistical season, but there is considerable risk in committing long-term to him as the best player on a team with title aspirations. The 27-year-old undoubtedly played a role in fracturing the Celtics locker room and all but quit on them in the playoffs, which is likely why the Nets are reportedly hesitant about signing Irving if he does not bring a superstar with him. Cleveland can attest to the benefits and drawbacks of employing him as a secondary star. Someone will meet Irvings max contract demands, because he is an otherworldly talent. 4. Jimmy Butler Incumbent team: Philadelphia 76ers Chief competitor: Houston Rockets Rumored suitors: Los Angeles Lakers, Miami Heat As Philadelphias lone capable shot creator late in playoff games, Butler is worth more to the Sixers than anyone else, pushing them within four unfriendly bounces of the conference finals. He too carries baggage. Just ask Chicago and Minnesota. Butlers brief Philadelphia stay has seen its share of challenges , too. The Rockets reportedly offered four first-round picks for Butler in October, and while they have no cap space, GM Daryl Morey is creative in his quest for star talent . Every other team one piece away from contention should also be scheming for his services. 5. Kemba Walker Incumbent team: Charlotte Hornets Chief competitor: Boston Celtics Rumored suitors: Dallas Mavericks, Los Angeles Lakers, New York Knicks Wakers best season resulted in a third-team All-NBA selection, which puts him in line for a super-max extension from the Hornets worth $221 million over the next five years. The Hornets may not be willing to commit that much to a player who has led them into the lottery each of the last three years, and Walker may be willing to accept less than that to stay with a team built for middling. Where they are willing to compromise could determine whether the New York native tests the free-agency waters in Boston or anywhere else with loftier organizational goals than Charlotte. Next 5: Klay Thompson ( likely staying put ), Kristaps Porzingis ( restricted free agent ), DAngelo Russell, Al Horford, Khris Middleton ( Bucks need him ) Clippers guard Patrick Beverley never relents, no matter the opponent. (Getty Images) Top 5 value free agents Trevor Ariza Were a year removed from Ariza being a key to Houstons spread offense and switching defense, and what a year its been for the 33-year-old journeyman wing. He took a big payday to go to Phoenix, who dealt him to Washington, another team in a nosedive. With that experience behind him, a return to his role as a 3-and-D wing on a playoff team seems likely. Whoever signs him can hope the spacing provided by more talented teammates causes a spike in his 3-point shooting again. Patrick Beverley The 30-year-old All-Defensive guard pesters everyone from Damian Lillard to Kevin Durant. He has also shot 39.4 percent on nearly 1,000 3-point attempts over the last four seasons. That has the Mavs trying to pry him from a Clippers team angling for bigger fish. His experience is attractive to playoff teams, but their ability to sign him for something close to the midlevel exception may depend on whether a lottery team is willing to spend otherwise unused cap space on him setting their culture. Dewayne Dedmon The 7-footer emerged as a rim protector starting half a season alongside LaMarcus Aldridge on the 61-win San Antonio Spurs in 2016-17. He cashed that into a two-year, $14 million deal from the Atlanta Hawks, where he honed his jump shot in his late 20s. After attempting only one 3-pointer in his first four seasons, Dedmon made 83 of his 217 attempts (38.2 percent) in 2018-19. Thats all well worth another short-term pay raise from a team in need of a floor-spacing big. And who isnt? Austin Rivers Overlooked in Houstons six-game conference semifinals loss to Golden State: The flu that kept Rivers from playing in a Game 1 that came down to the final minute. The Rockets were 7.5 points per 100 possessions better with Rivers on the floor for the remainder of that series, a reflection of his in-case-of-emergency playmaking and defensive effort. He has survived seven seasons of unwarranted criticism for benefiting from nepotism to emerge as a reliable third guard on a contender. Ricky Rubio Once a teen sensation, the Spaniard is now a 28-year-old in search of his third NBA team in four years. When Utah dealt for Mike Conley last week, Rubio publicly thanked the fans, signaling the end to a two-year stint that looked much like his time in Minnesota defensive intensity, dazzling playmaking and subpar shooting. He is still a solid point guard, and now that the four-year, $55 million contract he signed as a promising prospect has expired, his salary should reflect his ability. Next 5: Seth Curry, Ed Davis, Danny Green, Wesley Matthews, Terrence Ross Did Kevon Looney's playoff performance go from underrated to overvalued? (Getty Images) Top 5 free agents about to be overpaid Harrison Barnes He fit well with the Warriors and was headed that way alongside the young Kings building blocks, but at what cost? Barnes opted out of the final season of the four-year, $94.4 million deal he signed in the spend-happy summer of 2016, which likely means he sees someone offering similar compensation beyond next season. Thats a lot, even for a guy who is good at the skills you want from a modern NBA player chief among them the ability to space the floor and defend multiple positions. Tobias Harris Nearly half the league could have max cap space, and a few teams can create two max slots. With only a handful of true franchise-altering talents available and a few second-tier stars likely staying put, there will be a team that offers serious cash to Harris, who was a borderline All-Star last season. But the midseason trade that sent him from the Clippers to the Sixers should give suitors pause, because he disappeared at times in the playoffs for Philadelphia and wasnt missed all that much in L.A. Kevon Looney In his fourth season with the Warriors, Looney emerged as their most dependable center a rim runner and protector who holds his own when switched onto guards in pick-and-roll defense. The league got a long look at his talent, and then saw how much his broken collarbone hindered Golden State in the Finals. He is 23 years old and will have his share of suitors who believe they can elevate him to an elite level. It seems just as likely, though, that Looneys next team discovers he isnt so great when hes not surrounded by all-time shooters and a Defensive Player of the Year. Julius Randle The former top-10 pick left a lot of Lakers fans regretting his exit last season, when he averaged 21.4 points (60 true shooting percentage), 8.7 rebounds and 3.1 assists as a 24-year-old on a Pelicans team in turmoil. Randle chased stats for $8.6 million in hopes of more than doubling that this summer, when more teams have cap space to burn. Bidders should be warned that the Pelicans operated at league-low defensive levels whenever Randle was on the court without Anthony Davis. Nikola Vucevic The 7-footer just enjoyed a contract season for the averages, averaging career highs of 20.8 points, 12 rebounds and 3.8 assists for a team that made the playoffs for the first time in his seven seasons in Orlando. Thats what might scare teams off a max contract. Still, Vucevic shot 36.4 percent on almost three attempts per game from distance (after entering the season as a career 30.8 percent 3-point shooter), and Magic coach Steve Clifford showed you can build a top-10 defense with him as your starting center. Those are things a team with cap space can talk itself into. Next 5: Rodney Hood, Nikola Mirotic, Marcus Morris, Terry Rozier, Jonas Valanciunas It was good to see Joakim Noah on an NBA court again, even if in a limited role. (Getty Images) Top 5 minimum-salaried free agents Vince Carter The 42-year-old is returning for a 22nd and final NBA season, so long as the league will have him. He has spent the past two seasons mentoring youth movements in Sacramento and Atlanta, but its high time his steady hand chases a ring before calling it quits. Carter shot nearly 40 percent on an average of four 3-point attempts over 76 games with the Hawks, and he showed enough athleticism to still throw down dunks on occasion and stay in front of opposing wings on the defensive end. Darren Collison Its hard to gauge what the market will be for players like Collison, who played his last two seasons in Indiana for $10 million. With so many available players, will teams spend like crazy on top- and mid-tier talents, leaving only minimum deals and exception scraps for a 31-year-old with playoff aspirations? Or will teams save room in an effort to add depth, like a point guard who has shot 40 percent from distance for four straight seasons? If history is any indication, it may be the former. Danuel House He was somewhat of a savior for a reeling Rockets team, effectively filling the wing void left by Ariza and Luc Mbah a Moute this past season. In 39 games split between a two-way contract and a standard NBA deal, the 6-foot-7 House shot better than 40 percent on nearly five 3-point attempts per game, and he can defend three positions. Thats all you can ask from a 26-year-old G League convert. Joakim Noah At 34 years old with a litany of leg ailments, he is no longer the Defensive Player of the Year that anchored Tom Thibodeaus Bulls, but as he proved in Memphis this past season, hes also not cooked in the way it seemed he might be before he was run out of New York . In limited minutes, he produced the sort of stats you would like to see from a backup big, and more importantly the Grizzlies defense operated at league-best levels when he was on the floor. He is nothing if not uber intense. Isaiah Thomas The two-time All-Star is still slowly grinding his way back from the hip injury that made him expendable by the Celtics, Cavaliers, Lakers and now Nuggets. Thomas returned from hip surgery to play 12 games in Denver before coach Mike Malone removed him from the playoff rotation. He was nowhere as explosive as he was when he submitted a legendary offensive season in 2016-17 the kind of year that more than masks any defensive deficiencies for a 5-foot-9 dude but he is still well worth a flier in hopes he can be a Sixth Man of the Year candidate again. Next 5: Wilson Chandler, JaMychal Green, Robin Lopez, Elfrid Payton, Nik Stauskas Ben Rohrbach is a staff writer for Yahoo Sports. Have a tip? Email him at rohrbach_ben@yahoo.com or follow him on Twitter! Follow @brohrbach More from Yahoo Sports: Rapinoe: Im not going to the f---ing White House Machado feels the love in his return to Baltimore Iggy says Warriors called fractured leg a bruise Womens World Cup is succeeding, no thanks to FIFA |
Why EnscoRowan, Grocery Outlet Holding, and Overstock.com Jumped Today
Wednesday was mixed on Wall Street as major stock indexes initially climbed but gave up much of their gains by the end of the session. With the G-20 summit coming up this weekend in Japan, many market participants are watching closely to see if the U.S. and China will be able to reach a constructive deal to avoid further escalation in the trade war that's developed between the world's two largest economic powers. Yet even though uncertainty has investors somewhat on edge, many stocks managed to overcome that nervousness to post significant gains.EnscoRowan(NYSE: ESV),Grocery Outlet Holding(NASDAQ: GO), andOverstock.com(NASDAQ: OSTK)were among the top performers. Here's why they did so well.
Shares of EnscoRowan gained 11% as the oil services giant responded positively to news from the commodity markets. Crude oil prices have mounted a major comeback recently, rising from just over $50 per barrel a couple weeks ago to hit $59 per barrel today. Oil markets are important drivers of activity for energy services companies in general, and EnscoRowan is particularly sensitive to movements in crude because of its specialty in hard-to-reach areas that require undersea operations to drill. Investors hope that therecent merger of Ensco and Rowanwill pay off for the combined company, and higher crude prices are a step in the right direction.
Image source: Getty Images.
Grocery Outlet Holdings saw its stock rise 7.5%, adding to recent gains immediately following its initial public offering last week. Thediscount grocery chain got a nice jumpout of the gate after its IPO, as investors are optimistic that the company is in the right niche in a highly competitive sector. Even as many retailers have seen threats from e-commerce competition, Grocery Outlet's focus on deep discount closeout and overstock merchandise gives it lower costs, allowing it to pass on deals to customers without sacrificing profit margin entirely. Yet until the company gets a bigger following, Grocery Outlet might have difficulty continuing to grow its business while ensuring that aggressive promotions don't leave it without any earnings at all.
Finally, shares of Overstock.com soared 25.5%. Given the gains in Grocery Outlet, it would be reasonable to think that Overstock's rise might have to do with something similar. Yet even though Overstock.com has played on the discount side of internet retail, it sees itsfuture in blockchain technology, and the soaring price of bitcoin tokens recently has sent shares through the roof. There's a lot of uncertainty about the crypto side of Overstock, but the stock has become a proxy for the bitcoin market, and if it can develop a meaningful business in blockchain, then today's gains might well prove to have been justified in the long run.
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Here's Why Bitcoin and Grayscale Bitcoin Trust Are Soaring Today
Leading cryptocurrency bitcoin (BTC-USD) has doneextremelywell in 2019, a sharp contrast to its performance in 2018. So far this year, bitcoin has more than tripled, and the price has jumped by 17% over the past 24 hours alone.
As would be expected, theGrayscale Bitcoin Trust(NASDAQOTH: GBTC)is also higher as a result. The trust, which primarily owns bitcoins and allows investors to indirectly own the virtual currency, was up by nearly 16% as of 3 p.m. EDT on Wednesday.
Image source: Getty Images.
Interestingly, there's no big news item today (or yesterday for that matter) that's fueling this rally. This seems to be a continuation of renewed investor interest in bitcoin, followingFacebook's(NASDAQ: FB)announcement of its own virtual currency.
The social media giant's cryptocurrency project, which has several notable partners includingUber,Mastercard,Visa, andPayPal, adds legitimacy to the idea of virtual currencies. But it isn't a direct threat to bitcoin since it will be a so-called "stable coin," pegged to the U.S. dollar.
One interesting observation is that while most cryptocurrencies are rising as well, their gains are not nearly as impressive as bitcoin's. Ethereum is up by 12% today, but other leading cryptocurrencies, such as Ripple, Bitcoin Cash, and Litecoin, are all up by single-digit percentages. So, though it's certainly fair to say that bitcoin is skyrocketing higher, this is not a broad-based cryptocurrency rally like the one we saw in late 2017.
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Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to its CEO, Mark Zuckerberg, is a member of The Motley Fool's board of directors.Matthew Frankel, CFPhas no position in any of the stocks or cryptocurrencies mentioned. The Motley Fool owns shares of and recommends Facebook, MA, PYPL, and V. The Motley Fool recommends UBER. The Motley Fool has no position in any cryptocurrencies mentioned. The Motley Fool has adisclosure policy. |
Trump says he 'made' Fed Chairman Powell
WASHINGTON (AP) — The stock market has taken in stride the almost daily drumbeat of President Donald Trump's attacks on Federal Reserve Chair Jay Powell, caring more about how the two men tackle their respective jobs than how they handle each other.
Trump is unhappy with Powell and the Fed for raising interest rates too high last year while central bankers in other countries keep rates low to support their economies. Whether Trump would fire Powell — or can legally — has been the subject of debates on the financial news networks, sometimes involving Trump himself.
Doing so would be unprecedented, and experts say that's why the markets need to take a wait and see approach, even though they have a large stake in who runs the Fed, and how.
"Events have taught us that your ability to anticipate something that's never happened before is very low, you're not going to be right," said Steve Chiavarone, equity strategist at Federated Investors.
In his latest criticism, Trump said in an interview on the Fox Business Network Wednesday that he "made" Powell but now would like to trade him in for Mario Draghi, the head of the European Central Bank. Draghi said last week that he was prepared to provide more stimulus if necessary to support the lagging European economy.
After raising rates four times last year, which Trump and some on Wall Street have blamed for a big drop in stocks in last year's fourth quarter, most investors believe Powell and the Fed are on track to do what Trump wants anyway — cut interest rates — to help protect the U.S. economic expansion. Ironically, Powell says the biggest threat the Fed sees to the economy is the trade war Trump is fighting with China.
In May, Trump's decision to raise existing tariffs on Chinese goods and threaten additional import taxes contributed to a 6.6% decline in the S&P 500 index. But Powell's recent intimations of a coming rate cut helped send the S&P 500 back to a record last week.
In his interview Wednesday, Trump did not acknowledge the Fed's change in policy. And Trump again insisted he had the right to demote Powell or to fire him, something that legal experts dispute. They contend that Powell can only be removed for malfeasance in office, not for a policy dispute. Powell's term as chairman runs until February 2022.
If Trump did try to remove Powell, it would likely hurt the market in the long term because it would damage the Federal Reserve's independence, said Chiavarone. But he's hesitant to predict what it would mean in the short term, particularly because Trump would likely replace Powell with someone who would be quick to cut interest rates.
Investors see lower rates as jet fuel for stock prices, so the initial market reaction may be to send stocks even higher.
Mark Zandi, chief economist at Moody's Analytics, said the market would likely become worried if Trump succeeds in getting close political allies on the seven-member Fed board.
After announcing he planned to nominate conservative commentator Stephen Moore and former GOP presidential candidate Herman Cain to the two Fed vacancies, those two candidates withdrew from consideration after the possibility that they would join the Fed generated heavy opposition.
"At the moment, markets see this as much ado about nothing but this could change quickly if the president succeeds in packing the Fed with his partisans," Zandi said.
Zandi also said that foreign investors might become worried about the attacks on Powell before U.S. investors do.
"We rely on global investors to buy our stocks and bonds and I think they are growing more wary. They may be the first to react," Zandi said.
Trump said Wednesday that one reason he's unhappy with the Fed's rate hikes was that it raises the cost of borrowing for the federal government.
"I want to pay it off," Trump said of the debt, a pledge he had made during the 2016 presidential campaign. The growth of the $22 trillion national debt has accelerated under Trump whose last budget projected annual deficits would top $1 trillion beginning this year.
Trump's latest Fed attack came a day after Powell made his most extensive comments on the Fed's need for political independence to do its job.
Asked about the repeated criticism by Trump, Powell said, "We are human. We make mistakes. I hope not frequently but we will make mistakes. But we won't make mistakes of integrity or character."
Powell said that the Fed's independence from direct political control had served the country well and when central banks do not have that protection "you see bad things happening."
___
AP Business Writer Stan Choe contributed from New York. |
A Look At The Fair Value Of Synertec Corporation Limited (ASX:SOP)
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Today we'll do a simple run through of a valuation method used to estimate the attractiveness of Synertec Corporation Limited (ASX:SOP) as an investment opportunity by projecting its future cash flows and then discounting them to today's value. I will be using the Discounted Cash Flow (DCF) model. Don't get put off by the jargon, the math behind it is actually quite straightforward.
Companies can be valued in a lot of ways, so we would point out that a DCF is not perfect for every situation. Anyone interested in learning a bit more about intrinsic value should have a read of theSimply Wall St analysis model.
See our latest analysis for Synertec
We are going to use a two-stage DCF model, which, as the name states, takes into account two stages of growth. The first stage is generally a higher growth period which levels off heading towards the terminal value, captured in the second 'steady growth' period. To 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, so we need to discount the sum of these future cash flows to arrive at a present value estimate:
[{"": "Levered FCF (A$, Millions)", "2019": "A$0.90", "2020": "A$0.63", "2021": "A$0.50", "2022": "A$0.43", "2023": "A$0.39", "2024": "A$0.37", "2025": "A$0.36", "2026": "A$0.35", "2027": "A$0.35", "2028": "A$0.35"}, {"": "Growth Rate Estimate Source", "2019": "Est @ -44.73%", "2020": "Est @ -30.62%", "2021": "Est @ -20.74%", "2022": "Est @ -13.82%", "2023": "Est @ -8.98%", "2024": "Est @ -5.59%", "2025": "Est @ -3.22%", "2026": "Est @ -1.56%", "2027": "Est @ -0.4%", "2028": "Est @ 0.41%"}, {"": "Present Value (A$, Millions) Discounted @ 7.68%", "2019": "A$0.84", "2020": "A$0.54", "2021": "A$0.40", "2022": "A$0.32", "2023": "A$0.27", "2024": "A$0.24", "2025": "A$0.21", "2026": "A$0.19", "2027": "A$0.18", "2028": "A$0.17"}]
Present Value of 10-year Cash Flow (PVCF)= A$3.35m
"Est" = FCF growth rate estimated by Simply Wall St
After calculating the present value of future cash flows in the intial 10-year period, we need to calculate the Terminal Value, which accounts for all future cash flows beyond the first stage. For a number of reasons a very conservative growth rate is used that cannot exceed that of a country's GDP growth. In this case we have used the 10-year government bond rate (2.3%) to estimate future growth. In the same way as with the 10-year 'growth' period, we discount future cash flows to today's value, using a cost of equity of 7.7%.
Terminal Value (TV)= FCF2029× (1 + g) ÷ (r – g) = AU$350k × (1 + 2.3%) ÷ (7.7% – 2.3%) = AU$6.7m
Present Value of Terminal Value (PVTV)= TV / (1 + r)10= A$AU$6.7m ÷ ( 1 + 7.7%)10= A$3.19m
The total value, or equity value, is then the sum of the present value of the future cash flows, which in this case is A$6.54m. In the final step we divide the equity value by the number of shares outstanding.This results in an intrinsic value estimate of A$0.030. Compared to the current share price of A$0.028, the company appears about fair value at a 5.5% discount to where the stock price trades currently. Valuations are imprecise instruments though, rather like a telescope - move a few degrees and end up in a different galaxy. Do keep this in mind.
We would point out that the most important inputs to a discounted cash flow are the discount rate and of course the actual cash flows. Part of investing is coming up with your own evaluation of a company's future performance, so try the calculation yourself and check your own assumptions. The DCF also does not consider the possible cyclicality of an industry, or a company's future capital requirements, so it does not give a full picture of a company's potential performance. Given that we are looking at Synertec as potential shareholders, the cost of equity is used as the discount rate, rather than the cost of capital (or weighted average cost of capital, WACC) which accounts for debt. In this calculation we've used 7.7%, which is based on a levered beta of 0.900. Beta is a measure of a stock's volatility, compared to the market as a whole. We get our beta from the industry average beta of globally comparable companies, with an imposed limit between 0.8 and 2.0, which is a reasonable range for a stable business.
Although the valuation of a company is important, it shouldn’t be the only metric you look at when researching a company. The DCF model is not a perfect stock valuation tool. Rather it should be seen as a guide to "what assumptions need to be true for this stock to be under/overvalued?" If a company grows at a different rate, or if its cost of equity or risk free rate changes sharply, the output can look very different. For Synertec, There are three essential aspects you should look at:
1. Financial Health: Does SOP 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 SOP? 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 ASX 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. |
Serena Williams Is Getting Her Own Wheaties Box & It's About Time
Click here to read the full article. Serena Williams slays on the tennis court — and in real life. The all-star athlete is a UNICEF ambassador, a Purple Purse ambassador, a women’s health and equality advocate, a wife and mom. But Williams can add a new accolade to her resume because finally, Serena Williams is going to appear on a Wheaties box. Given her long list of personal and professional accomplishments, it’s about time. General Mills announced the new box on their blog yesterday. “The image chosen of Serena Williams for her Wheaties box… is fitting for a champion,” the release reads. “It’s a moment of sheer jubilation and celebration, which she has had so many times in her tennis career.” Related stories Serena Williams & Ciara's Daughters Had a Playdate & the Video Is Beyond Cute Meghan & Harry Are Apparently Eyeing the Obamas as Baby Archie's Godparents Serena Williams Claps Back at Every Tennis Attire Critique With a Perfect French Open Outfit Williams also shared the cover, and — in her Instagram post — recognized Althea Gibson: the first African-American female tennis player to be featured on the bright orange box. “In 2001, Wheaties paid homage to a true champion and an icon by putting her on the cover of a Wheaties Box,” Williams wrote on Instagram. “Althea Gibson was the FIRST Black Woman tennis player to be on the box. Today, I am honored to be the second.” View this post on Instagram In 2001, Wheaties paid homage to a true champion and an icon by putting her on the cover of a Wheaties Box. Althea Gibson was the FIRST Black Woman tennis player to be on the box. Today, I am honored to be the second. A post shared by Serena Williams (@serenawilliams) on Jun 25, 2019 at 6:00am PDT In the aforementioned press release, Williams noted being featured on the Wheaties box fulfilled a lifelong dream. “ I have dreamt of this since I was a young woman and it’s an honor to join the ranks of some of America’s most decorated athletes .” Story continues The inclusion of Williams is a no-brainer . She has won 23 major singles titles, 14 major doubles titles and two major mixed titles. She has also taken home the Olympic gold four times, and now you can take Williams’ Wheaties box home. The limited-edition box will be on grocery stores shelves sometime next month. Sign up for SheKnows' Newsletter . For the latest news, follow us on Facebook , Twitter , and Instagram . |
Why BlackBerry, AeroVironment, and Global Blood Therapeutics Slumped on Wednesday
The stock market enjoyed a relatively quiet Wednesday, with most major benchmarks ending the session very close to where they started it. Investors are struggling with all the potential problems that the markets face, including possible turbulence related to trade negotiation news that's likely to come out at this weekend's G-20 summit, as well as efforts by central banks to manage economic growth and interest rates. Yet for some companies, bad news sent their share prices lower.BlackBerry(NYSE: BB),AeroVironment(NASDAQ: AVAV), andGlobal Blood Therapeutics(NASDAQ: GBT)were among the worst performers. Here's why they did so poorly.
Shares ofBlackBerry dropped 9%after the mobile device pioneer released its fiscal first-quarter financial results. BlackBerry managed to post a modest adjusted profit of $5 million for the period, but year-over-year revenue growth of 16% using regular accounting rules fell well short of what growth investors had wanted to see. More alarming was the fact that one of the most promising growth centers of the business, its Internet of Things division, produced sales gains of just 5%. Given how important the enterprise software and IT solutions niche has become in the tech world, BlackBerry's slowdown there suggests competitive pressures that could plague the company well into the future.
Image source: Getty Images.
AeroVironment's stock fell 9%following the release of its fiscal fourth-quarter report. The drone maker continued to see its top line deteriorate, with a 23% drop in sales and net income that was down even more sharply from year-ago levels. AeroVironment tried to focus on the more encouraging aspects of its business, which included favorable comments about its tactical missile systems, applications for farmers and researchers, and tools to enable global connectivity. Yet with a fiscal 2020 forecast that pointed to further weakness ahead, AeroVironment shareholders are losing patience after having hoped for years that the drone specialist would eventually blossom into a leadership role in the industry.
Finally, shares of Global Blood Therapeutics finished lower by 13%. The clinical-stage biopharmaceutical company said late Tuesday that it intends to sell $200 million in stock through a secondary public offering. Global Blood hopes to use the cash to help it invest in its voxelotor candidate treatment for sickle cell disease, as well as other candidate drugs that it identifies in the future. As often happens, Global Blood chose to announce its offering when its stock was near all-time highs, and investors hope that despite the near-term drop and somerecent concerns about voxelotor, they'll still be able to benefit from their holdings in the long run.
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Dan Caplingerhas no position in any of the stocks mentioned. The Motley Fool recommends AeroVironment and BlackBerry. The Motley Fool has adisclosure policy. |
California’s Transgender Prison Policy Is a Disaster for Women
L et’s suppose you care about the safety of women and girls. Where is the last place on earth you would lock up a predator? Might it be a women’s prison: a place where vulnerable women have no escape? This is the bleak reality of a bill approved in the California senate by 29–7 last month ( Senate Bill 132 ) that has been heard by the assembly’s public-safety committee and will soon appear before the appropriations committee: It would require the California Department of Corrections and Rehabilitation to house, search, and refer to inmates according to their preferred gender identity. No doctor’s certificate or chemical or surgical changes are needed. And what if the individual is a convicted sex offender, wife beater, or stalker? No matter, the person must still be treated according to his or her gender-identity preference. At first glance, the rationale is understandable. The bill outlines how transgender women in prisons are “particularly vulnerable to sexual abuse and sexual harassment.” It cites a study noting that they are 13 times more likely than non-transgender inmates in the same prisons to be victims of sexual abuse. And it references official data collected by the federal Bureau of Justice Statistics confirming that in a 2011–12 nationwide survey, nearly 40 percent of incarcerated transgender individuals reported experiencing sexual victimization while incarcerated. To be sure, life must be tough for sexual minorities in prison. But what the bill and its supporters completely neglect to address is the vulnerability of women. The bill does not include any data, information, or even a single reference to the vulnerability of incarcerated females to violent assault from males. This is striking given that more than 90 percent of rape and sexual-assault victims are women and the overwhelming majority of rapes are committed by males. No one has yet demonstrated how transgender women pose less of a risk to women than the rest of the male population does. But, at any rate, the bill as drafted fails to set forth any way to stop a male — any male, including sex offenders — who identifies as female from getting access to vulnerable women. Speaking at the California assembly hearing yesterday, Abigail Lunetta (a self-described “Democrat, feminist, and an advocate for women’s rights”) opposed the bill: “Right now, Richard Masbruch, a trans-identified male, is currently housed with female inmates in Corona, even though he is serving time for targeting, raping, and torturing women . Under no circumstances is this morally justifiable.” Story continues Feminists in Struggle, a nationwide feminist organization, were also “strenuously opposed” to the bill. The door would be open for “sexual predators of various types, from voyeurs to rapists, to reinvent themselves as female by taking on female names and identities,” they explained. “Add to this reality that the majority of female prisoners have been molested, raped, sexually assaulted, trafficked, coerced or forced into pornography and/or prostitution, and the potential harm to incarcerated women and girls is greatly increased.” The radical feminist group Women’s Liberation Front also expressed “adamant opposition,” saying the bill would “put women prisoners and women prison guards and staff, at serious increased risk of male violence.” They labeled the bill a “stunning attack on incarcerated women and one of the most extreme examples of elevating men’s feelings over women’s physical and psychological safety.” Note: These objections are largely coming from the left. So why won’t Democrats listen? Other groups, such as the Transgender Law Center, are single-minded in their pursuit of “transgender equity.” They emphasize that the bill “will help ensure the safety and dignity of incarcerated transgender people within the criminal-justice system.” Similarly, the American Civil Liberties Union (ACLU) of California ignores women’s concerns, stating that it is “proud to sponsor” the bill. In their pledge of support, the ACLU notes that efforts are already under way in other states, including Connecticut, which “became the first state in the nation to establish a legal right to be housed in a prison that matches the gender with which people identify.” Indeed, since 2016, under the Obama administration, the U.S. Bureau of Prisons required that federal inmates’ gender identity be “given serious consideration” in housing decisions. This was challenged the same year when three female prisoners at the Carswell Federal Medical Center in Fort Worth filed a federal complaint saying that being housed with males who identify as females would put them at risk. The Trump administration has since rolled back the federal guidelines and suggested a case-by-case approach. But this is not enough to protect vulnerable girls and women. Perhaps the Trump administration could learn a thing or two from the United Kingdom. Earlier this year, Britain became the first country in Europe to create a transgender prison wing. This is a compromise that could protect vulnerable transgender prisoners without sacrificing women’s safety. The change came after the U.K.’s Ministry of Justice confirmed the findings of a women’s-rights group, Fair Play for Women, that almost half of trans prisoners are sex offenders , compared with 19 percent of the prison population as a whole. “Prison governors and doctors say some sex criminals transition to get access to women,” the Times of London reported in May. Unfortunately, in the U.K., the issue rose to national attention only after a child sex abuser by the name of Stephen Wood, who identified as female and called himself Karen White, was sent to a women’s prison with his male genitalia fully intact. While there, he sexually assaulted multiple female inmates. With California heading in this direction, we have to ask: How many more women will have to be harmed by these policies before U.S. legislators will care? More from National Review The ‘Trans’ Child as Experimental Guinea Pig A Franker Gender Debate ‘Desmond Is Amazing’ Needs Saving View comments |
The Latest: Refinery confirms it will close, lay off workers
PHILADELPHIA (AP) — The Latest on the announcement that an East Coast oil refinery that caught fire will close (all times local): ___ 4:30 p.m. The owner of the largest oil refinery on the East Coast is giving first public confirmation of its plans to close the facility after a fire last week set off explosions and damaged the complex. Philadelphia Energy Solutions told the state labor department Wednesday that it will discontinue operations Monday and complete the layoff of about 1,020 workers within two weeks after that. The company says it is pursuing opportunities to restart the complex but cannot guarantee that will come to pass. The markets research company FactSet reported that gasoline futures prices spiked Tuesday night after the first news of the refinery's possible closure. Prices remained high Wednesday. The refinery says the 150-year-old complex processes 335,000 barrels of crude oil daily. The company has recently struggled financially. ___ 1:30 p.m. AAA says gasoline prices may increase after the announcement that a Philadelphia oil refinery will close after a devastating fire. Spokeswoman Jana Tidwell says motorists in the Mid-Atlantic region will likely see modest price increases at the pump leading into the high-demand summer travel season. The markets research company FactSet reported that gasoline futures prices spiked Tuesday night after the first news of the refinery's possible closure. Prices remained high Wednesday. Kevin Book is managing director at Clearview Energy Partners. He says the refinery has been an important source fueling transportation in the region. Analysts say the amount of gasoline that will be lost from the refinery is sizable but can easily be made up by imports from other regions and countries. ___ 10:30 a.m. The owner of the largest oil refinery on the East Coast is telling officials that it will close the facility after a fire last week set off explosions and damaged the complex. Philadelphia Mayor Jim Kenney said in a statement Wednesday that Philadelphia Energy Solutions had informed him of its decision. Story continues Kenney says the more than 1,000 workers there will be impacted. A company spokeswoman isn't responding to a request for comment. PES says the 150-year-old oil refining complex processes 335,000 barrels of crude oil daily. The refinery turns the crude into gasoline, jet fuel, propane, home heating oil and other products. It started as a bulk petroleum storage facility in 1866, and began refinery operations in 1870. The company emerged from bankruptcy last year after restructuring its debt. |
Flint Hills explores sale of Texas crude export terminal
HOUSTON, June 26 (Reuters) - U.S. oil refiner Flint Hills Resources is exploring the sale of its crude export terminal near Corpus Christi, Texas, and has hired JP Morgan Chase to market the assets, the company said on Wednesday.
Flint Hills, a unit of closely held Koch Industries Inc, may sell all the operation or seek a partner for the Ingleside, Texas, terminal. A spokesman declined to provide the sales price for the operation.
"We want to understand how the market values the asset and whether there is an opportunity to utilize the terminal better than we are today," spokesman Andy Saenz said.
The Ingleside terminal connects to its own pipeline from the Eagle Ford in South Texas and to other lines owned by Phillips 66, Plains All American Pipeline LP and others.
It is increasing storage capacity at the site by 1 million barrels to 3.5 million, and is raising the terminal's vessel loading capacity from 200,000 barrels per day (bpd) to 380,000 bpd, the company said.
U.S. pipeline operator Enterprise Products Partners LP is looking to sell its 50% stake in a recently-completed Corpus Christi, Texas, crude export terminal, according to a marketing document viewed by Reuters. (Reporting by Collin Eaton in Houston Editing by Marguerita Choy) |
CoinMarketCap Makes First-Ever Acquisition
CoinMarketCap, a major source of prices and volumetric data oncryptomarkets, has revealed plans for its first-ever acquisition in a press release shared with Cointelegaph on June 26
TheUnited States-based company is acquiring electronic crypto trading fundHashtag Capitalin order to expand its efforts within its Data Accountability & Transparency Alliance (DATA), an initiativelaunchedin May 2019 to provide greatertransparencyin crypto space.
Following the acquisition, the Hashtag Capital team will be joining CoinMarketCap to work on pricing algorithms for over 2,000 digital coinslistedon its platform, as well as to develop new data offerings on the platform, the press release notes.
Brandon Chez, CEO and founder of CoinMarketCap, said that the company’s first acquisition will allow it to go beyond its “traditional volume-weighted average prices to even more sophisticated price algorithms and analyses.”
Originally established as a cryptocurrency trading fund, Hashtag Capital was reportedly working on its own solution to provide the “true price” of markets, CoinMarketCap wrote in the announcement. The company has not disclosed financial details regarding the acquisition.
According to the press release, Hashtag Capital’s team includes former engineering executive at customer service platform Zendesk, Yangbin “Wybe” Kwok, who is also a co-founder of Zopim, which was acquired by Zendesk back in 2014.
CoinMarketCap’s DATA initiative has followed controversy around the reliability of statistics on the platform, following areportby Bitwise Asset Management, which claimed that 95% of trading volumes on unregulated exchanges is likely to be fake. Since then, Bitwiseclarifiedthat those volumes do not impact thepriceof bitcoin (BTC).
Recently, Eos developer Block.onepaid$30 million in cash to purchase a domain name for its new blockchain-based social media platform called Voice.
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A Look At The Intrinsic Value Of Synertec Corporation Limited (ASX:SOP)
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How far off is Synertec Corporation Limited (ASX:SOP) from its intrinsic value? Using the most recent financial data, we'll take a look at whether the stock is fairly priced by estimating the company's future cash flows and discounting them to their present value. This is done using the Discounted Cash Flow (DCF) model. It may sound complicated, but actually it is quite simple!
Remember though, that there are many ways to estimate a company's value, and a DCF is just one method. Anyone interested in learning a bit more about intrinsic value should have a read of theSimply Wall St analysis model.
See our latest analysis for Synertec
We are going to use a two-stage DCF model, which, as the name states, takes into account two stages of growth. The first stage is generally a higher growth period which levels off heading towards the terminal value, captured in the second 'steady growth' period. To begin with, we have to get estimates of the next ten years of cash flows. Seeing as no analyst estimates of free cash flow are available to us, we have extrapolate the previous free cash flow (FCF) from the company's last reported value. We assume companies with shrinking free cash flow will slow their rate of shrinkage, and that companies with growing free cash flow will see their growth rate slow, over this period. We do this to reflect that growth tends to slow more in the early years than it does in later years.
Generally we assume that a dollar today is more valuable than a dollar in the future, and so the sum of these future cash flows is then discounted to today's value:
[{"": "Levered FCF (A$, Millions)", "2019": "A$0.90", "2020": "A$0.63", "2021": "A$0.50", "2022": "A$0.43", "2023": "A$0.39", "2024": "A$0.37", "2025": "A$0.36", "2026": "A$0.35", "2027": "A$0.35", "2028": "A$0.35"}, {"": "Growth Rate Estimate Source", "2019": "Est @ -44.73%", "2020": "Est @ -30.62%", "2021": "Est @ -20.74%", "2022": "Est @ -13.82%", "2023": "Est @ -8.98%", "2024": "Est @ -5.59%", "2025": "Est @ -3.22%", "2026": "Est @ -1.56%", "2027": "Est @ -0.4%", "2028": "Est @ 0.41%"}, {"": "Present Value (A$, Millions) Discounted @ 7.68%", "2019": "A$0.84", "2020": "A$0.54", "2021": "A$0.40", "2022": "A$0.32", "2023": "A$0.27", "2024": "A$0.24", "2025": "A$0.21", "2026": "A$0.19", "2027": "A$0.18", "2028": "A$0.17"}]
Present Value of 10-year Cash Flow (PVCF)= A$3.35m
"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 2.3%. We discount the terminal cash flows to today's value at a cost of equity of 7.7%.
Terminal Value (TV)= FCF2029× (1 + g) ÷ (r – g) = AU$350k × (1 + 2.3%) ÷ (7.7% – 2.3%) = AU$6.7m
Present Value of Terminal Value (PVTV)= TV / (1 + r)10= A$AU$6.7m ÷ ( 1 + 7.7%)10= A$3.19m
The total value is the sum of cash flows for the next ten years plus the discounted terminal value, which results in the Total Equity Value, which in this case is A$6.54m. The last step is to then divide the equity value by the number of shares outstanding.This results in an intrinsic value estimate of A$0.030. Compared to the current share price of A$0.028, the company appears about fair value at a 5.5% discount to where the stock price trades currently. Valuations are imprecise instruments though, rather like a telescope - move a few degrees and end up in a different galaxy. Do keep this in mind.
The calculation above is very dependent on two assumptions. The first is the discount rate and the other is the cash flows. You don't have to agree with these inputs, I recommend redoing the calculations yourself and playing with them. The DCF also does not consider the possible cyclicality of an industry, or a company's future capital requirements, so it does not give a full picture of a company's potential performance. Given that we are looking at Synertec as potential shareholders, the cost of equity is used as the discount rate, rather than the cost of capital (or weighted average cost of capital, WACC) which accounts for debt. In this calculation we've used 7.7%, which is based on a levered beta of 0.900. 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 Synertec, I've put together three relevant factors you should further examine:
1. Financial Health: Does SOP 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 SOP? Exploreour interactive list of high quality stocksto get an idea of what else is out there you may be missing!
PS. Simply Wall St updates its DCF calculation for every AU stock every day, so if you want to find the intrinsic value of any other stock justsearch here.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
Justin Turner says fans rushing field is 'ridiculous'
The Los Angeles Dodgers are getting sick of dealing with the same issue night after night. Following yet another fan running onto the field during Tuesdays game, Justin Turner called for an end to this trend , according to the Los Angeles Times. The 34-year-old Turner said the issue was getting ridiculous, and suggested baseball step in enforce more severe punishments for fans who rush the field. Its getting ridiculous, Dodgers third baseman Justin Turner said. Its just not safe and it seems like theyre getting younger and younger and its going around now that nothings happening to these young kids. They just kind of get a slap on the wrist. So baseballs going to have to do something to make it hurt enough to keep fans in the stands and not running out on the field. Following the final out during the Dodgers 3-2 win Tuesday, a young fan ran onto the field. He was tackled before he could reach the Dodgers outfielders. That marked the third straight Dodgers game in which a fan has run onto the field. Cody Bellinger was rushed by fans both Sunday and Monday. The incidents Monday and Tuesday took place at Chase Field in Arizona. While the first fan was not punished for their actions, the fan at Chase Field was arrested and charged. She was also banned indefinitely from Chase Field, according to the Los Angeles Times. Turner is not the only Dodgers players to come out against fans running on the field. Bellinger was not happy about the situation either, saying its innocent right now, but it could get dangerous . 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: Rapinoe: Im not going to the f---ing White House Machado feels the love in his return to Baltimore Iggy says Warriors called fractured leg a bruise Womens World Cup is succeeding, no thanks to FIFA |
Wayfair Employees Protest Contract To Supply Beds To U.S. Detention Facilities
Online furniture retailerWayfairInc(NYSE:W) is getting heat from its employees who don't like the company's agreement with a government contractor to supply beds for migrants held at detention facilities near the U.S.-Mexico border.
Employees under the Twitter handle@wayfairwalkouthave askedfellow employees to join them at a June 26 afternoon walkout near the company's headquarters in Boston, Massachusetts.
FreightWaves has been unable to verify whether @wayfairwalkout is owned by a Wayfair employee, but a crowd gathered in Boston's Back Bay near Wayfair's corporate offices at the appointed walkout time.
Wayfair didn't immediately return a request for comment.
The employees are protesting Wayfair's agreement to supply $200,000 in bedroom furniture to a federally-operated detention facility in Carrizo Springs, Texas, per a contract with non-profitBCFS Health and Human Services. Several employees sent a letter to company leadership last week, asking the company to immediately cease supplying the beds and to establish a code of ethics for business-to-business sales that aligns with the values of Wayfair's employees.
"At Wayfair, we believe that ‘everyone should live in a home that they love.' Let's stay true to that message by taking a stand against the reprehensible practice of separating families, which denies them any home at all," the letter said. TheBoston Globesaid it obtained a copy of the letter from a company employee.
Wayfair responded to the letter saying, "As a retailer, it is standard practice to fulfill orders for all customers and we believe it is our business to sell to any customer who is acting within the laws of the countries within which we operate. We believe all of our stakeholders, employees, customers, investors and suppliers included, are best served by our commitment to fulfill all orders. This does not indicate support for the opinions or actions of the groups or individuals who purchase from us."
BCFS spokeswoman Krista Piferrer countered, "We believe youths should sleep in beds with mattresses." The company also directed questions about the contract to the Administration of Children and Families office of the U.S. Department of Health and Human Services (HHS). HHS didn't return an immediate request for comment.
According to @wayfairwalkout, Wayfair has said it will donate $100,000 to the Red Cross.
Massachusetts' Democratic U.S. senators Elizabeth Warren and Ed Markey tweeted their support to the protesting Wayfair employees.
"I stand with the hundreds of @Wayfair employees who are planning to stage a walkout at their Boston headquarters tomorrow. The safety and well-being of immigrant children is always worth fighting for," Warren tweeted.
"I'm with the Wayfair workers 100 percent as they prepare to take a stand for the migrant children trapped in the humanitarian crisis on our southern border," Markey said.
Image Sourced by Pixabay
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© 2019 Benzinga.com. Benzinga does not provide investment advice. All rights reserved. |
Nutritionist says premature death is preventable with this diet
Americans have yet to decrease their consumption of processed meat as they did nearly two decades ago, according new a study published in the Journal of the Academy of Nutrition and Dietetics.
Dr. Michael Greger, a plant based physician and author of “How Not To Die,” has identified certain foods that that will help you avoid the biggest killers like heart disease and cancer. He said people have tremendous power in over their health destiny and longevity.
“The vast majority of premature death and disability is preventable with a plant based diet and other lifestyle behaviors,” Dr. Greger told FOX Business’Maria Bartiromoon Wednesday.
Processed meat includes red meat or poultry “transformed through salting, curing, fermentation, smoking, or with the addition of chemical preservatives,” the study said. It analyzed data from 43,995 adults aged 20 and up who participated in the National Health and Nutrition Examination Survey (NHANES) between 1999 and 2016. The study found that the top processed meats consumed were luncheon meat, sausage, hot dogs, ham and bacon.
Dr. Greger encourages everyone to implement a plant based diet with greens as the healthiest vegetables, berries, the healthiest fruits, whole grains, legumes, and a tablespoon of flax seeds a day to help shed weight and be healthier.
There is a wide variety of diets for losing weight and living healthy. Mediterranean, Paleo, Keto diet, South Beach, Adkins are amongst the more popular diet options. Most diets have been shown to result in short-term weight loss.
However, a plant-based, unprocessed food diet with no salt, sugar or added oil is the only diet that has been proven to result in short- and long-term weight loss, to improve longevity, and to prevent and in many cases reverse most of the chronic diseases that sicken and eventually kill people. The chronic diseases include obesity, high blood pressure, heart attacks and strokes, diabetes, inflammatory and auto-immune diseases, dementia, osteoporosis, and many types of cancer.
“We have tremendous power over our health destiny and our longevity,” Dr. Greger said.
“How Not to Die” focuses on the U.S.’ 15 leading causes of death, while its upcoming companion will include healthy recipes that will help prevent and reverse disease.
Dr. Greger agreed that doctors excel at treating acute conditions like mending broken bones and curing infections. However, for chronic diseases which are the main causes of death, Dr. Greger said that diet surpasses the drugs offered by modern medicine. Even the salicylic acid found in baby aspirin, which is widely prescribed by doctors as a heart-disease preventative, is widely found in fruits and vegetables.
Dr. Greger made a powerful argument that a plant-based diet, along with regular exercise, is the gateway to a longer and healthier life and can reverse chronic diseases even after they have progressed.
His “daily dozen” list includes: berries, beans, other fruits, cruciferous vegetables, greens, other vegetables, whole grains, nuts and seeds, flax seeds, herbs, beverages, exercise.
“The sustaining motivation is how good you feel when you start eating healthier. That’s why I encourage to try a healthy diet. Like a free sample. Give me two weeks, give me three weeks, try eating healthy, and then there’s the internal motivation. All of the sudden, you’re feeling better, you’re sleeping better, your digestion is better. Then you have that internal motivation to continue to eat healthier because you feel so much better, but you don’t know how good you feel until you give it a try.”
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“What this new study shows about processed meats is the abject failure of the public health community to warn consumers of the dangers of processed meats. Bacon, ham, hotdogs, lunchmeat, sausage. These are known human careenage since we know they cause cancer in people,” he added.
Dr. Greger pointed out that medical education is lacking in courses on nutrition. But, medical education also provides minimal information on autoimmune disorders and for the most part, they remain a mystery to doctors.
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Why Pareteum Stock Plunged Today
Shares ofPareteum(NASDAQ: TEUM)plunged 20.3% on Wednesday, after the cloud-communications platform specialist found itself in the crosshairs of yet another short-selling firm.
In a scathing piece this morning that effectively amplifiedconcerns brought by short-sellerAurelius Value earlier this month, Viceroy Research suggested Pareteum "appears to be in breach of U.S. sanctions against Iran," with its services to Iran-based mobile virtual network operator Amin SMC. Viceroy elaborated that Amin SMC's chairman, Hamid Reza Amirinia, is "suspected of breaching sanctions with an Iranian government mandate to launder money for the regime."
IMAGE SOURCE: GETTY IMAGES.
Viceroy Research acknowledged the previous short-seller's report -- which Pareteum CEO Hal Turnerpromptly rebukedtwo weeks ago -- but said "given the discourse" it was "prudent that we also share our findings."
The firm went on to liken Pareteum to "the Wild West of telecoms," criticized its history of "promotional press releases" highlighting insignificant customer wins, and accused the company of inflating its its backlog metrics to "hype up the share price and reassure investors."
Viceroy says its valuation indicates potential downside of 44% to 76% from Tuesday's close, "with a more severe scenario more probable."
We should probably take this note with a grain of salt, particularly given its sensationalist tone, and -- with Pareteum's plunge and subsequent rebound on the similar short-seller's attack earlier this month -- its seemingly opportunist timing.
It remains to be seen, of course, whether Pareteum management will step out again to rebuke Viceroy Research's allegations. But it's no surprise to see the stock pulling back hard today.
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Coinbase Pro to Enable Chainlink Trading
Coinbase Pro will begin accepting inbound transfers of chainlink today in preparation for the rollout of full trading services for the cryptocurrency, according to acompany statement.
Once a sufficient supply of LINK is established on the platform, the company will phase in trading options for USD and ETH. The company said they will stage four transitions for each order book before LINK is fully integrated:
Transfer-only. Starting at 10am PT on June 26, customers will be able to transfer LINK into their Coinbase Pro account. Customers will not yet be able to place orders and no orders will be filled on these order books. Order books will be in transfer-only mode for at least 12 hours.
Trading will be available wherever Coinbase Pro has jurisdiction, with the exception of New York State. LINK will not be offered on Coinbase.com or via the company’s mobile apps.
Related:Crypterium Introduces Global Crypto Payments Card
Chainlink is an ethereum token that powers a decentralized oracle network. This network allows smart contracts on ethereum to securely connect to external data sources, APIs, and payment systems.
“One of the most common requests we receive from customers is to be able to trade more assets on our platform. Per the terms of our listing process, we anticipate supporting more assets that meet our standards over time,” the company said.
Chainlink logo via CoinDesk archives
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A McDonalds Customer Tried To Shame This Homeless Employee On Facebook And People Werent Having It
Photo credit: WJCL From Delish Internet trolls are real, and they are pretty much coming for everyone . According to a local Atlanta news station, WSB 2 , last week a McDonald's customer posted a picture of a young man sleeping inside the restaurant to a private Facebook group. Her caption read,"Just another reason for me to leave Fayetteville. I was in the McDonalds in the middle of town, and I saw this guy sleeping in the booth. I go and tell an employee that someone is asleep in their booth and her response was 'oh yeah, we know hee hee, its ok' and I said, 'not really but whatever.'" Now, while we totally feel that watching someone sleep inside any restaurant is a bit unsettling, this is a perfect example of why you don't have to post everything to social media right away. The chances of taking a situation like this out of context are pretty high, and unfortunately that's exactly what this woman did. In reality, the "guy" that she was referring to was 21-year-old Simon Childs, a young father who had just lost his mom and had pretty much no place to go. He later told reporters that "It kind of hurt to see my picture up there, you know? I thought it was something negative and nobody would care about it." Luckily, people took her bad juju and turned it into something beautiful and positive. Members from the community who saw or heard about the post began to stop by the McDonald's and donate "diapers for his son, supplies, and clothes." Local chefs Xavier and Theo Thomas even offered Childs a car to drive around in for interviews, while a local barber offered to give him a haircut so that he feel empowered and looked his best. Talk about teaching a man to fish! As for the woman that originally posted the picture of Childs, he has no ill will towards her. He told WSB 2, "I'm not homeless, not now, thanks to her." Wow. This guy is too nice. The woman herself later told reporters off camera that "she never intended to shame any one person in particular and she posted it in a private group." That doesn't really sound like an apology. Try again, please. ('You Might Also Like',) Crave Carbs? We Created This 21-Day Keto Plan Just for You Insanely Easy Weeknight Dinners To Try This Week 29 Insanely Delicious Vodka Cocktails View comments |
Did Changing Sentiment Drive PAS Group's (ASX:PGR) Share Price Down A Painful 88%?
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Some stocks are best avoided. We really hate to see fellow investors lose their hard-earned money. Spare a thought for those who heldThe PAS Group Limited(ASX:PGR) for five whole years - as the share price tanked 88%. And some of the more recent buyers are probably worried, too, with the stock falling 62% in the last year. Shareholders have had an even rougher run lately, with the share price down 50% in the last 90 days.
While a drop like that is definitely a body blow, money isn't as important as health and happiness.
View our latest analysis for PAS Group
In his essayThe Superinvestors of Graham-and-DoddsvilleWarren Buffett described how share prices do not always rationally reflect the value of a business. One way to examine how market sentiment has changed over time is to look at the interaction between a company's share price and its earnings per share (EPS).
Over five years PAS Group's earnings per share dropped significantly, falling to a loss, with the share price also lower. At present it's hard to make valid comparisons between EPS and the share price. However, we can say we'd expect to see a falling share price in this scenario.
The company's earnings per share (over time) is depicted in the image below (click to see the exact numbers).
Dive deeper into PAS Group's key metrics by checking this interactive graph of PAS Group'searnings, revenue and cash flow.
It's important to keep in mind that we've been talking about the share price returns, which don't include dividends, while the total shareholder return does. By accounting for the value of dividends paid, the TSR can be seen as a more complete measure of the value a company brings to its shareholders. PAS Group's TSR over the last 5 years is -84%; better than its share price return. Even though the company isn't paying dividends at the moment, it has done in the past.
PAS Group shareholders are down 62% for the year, but the market itself is up 12%. Even the share prices of good stocks drop sometimes, but we want to see improvements in the fundamental metrics of a business, before getting too interested. Unfortunately, last year's performance may indicate unresolved challenges, given that it was worse than the annualised loss of 31% over the last half decade. Generally speaking long term share price weakness can be a bad sign, though contrarian investors might want to research the stock in hope of a turnaround. Shareholders might want to examinethis detailed historical graphof past earnings, revenue and cash flow.
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 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. |
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