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Is Corporacion America Airports SA (CAAP) A Good Stock To Buy?
The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We have processed the filings of the more than 700 world-class investment firms that we track and now have access to the collective wisdom contained in these filings, which are based on their March 31 holdings, data that is available nowhere else. Should you consider Corporacion America Airports SA (NYSE:CAAP) for your portfolio? We'll look to this invaluable collective wisdom for the answer.
Corporacion America Airports SA (NYSE:CAAP)was in 12 hedge funds' portfolios at the end of March. CAAP shareholders have witnessed a decrease in hedge fund interest lately. There were 13 hedge funds in our database with CAAP positions at the end of the previous quarter. Our calculations also showed that CAAP isn't among the30 most popular stocks among hedge funds.
Hedge funds' reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn't keep up with the unhedged returns of the market indices. Our research has shown that hedge funds' small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the market by 40 percentage points since May 2014 through May 30, 2019 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter.
We're going to check out the fresh hedge fund action regarding Corporacion America Airports SA (NYSE:CAAP).
At the end of the first quarter, a total of 12 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -8% from the previous quarter. The graph below displays the number of hedge funds with bullish position in CAAP over the last 15 quarters. With hedgies' positions undergoing their usual ebb and flow, there exists a select group of noteworthy hedge fund managers who were adding to their holdings considerably (or already accumulated large positions).
More specifically,Key Square Capital Managementwas the largest shareholder of Corporacion America Airports SA (NYSE:CAAP), with a stake worth $14.2 million reported as of the end of March. Trailing Key Square Capital Management was Makaira Partners, which amassed a stake valued at $12 million. Highland Capital Management, Newtyn Management, and Sloane Robinson Investment Management were also very fond of the stock, giving the stock large weights in their portfolios.
Because Corporacion America Airports SA (NYSE:CAAP) has faced bearish sentiment from the smart money, we can see that there is a sect of money managers who were dropping their positions entirely in the third quarter. It's worth mentioning that Bruce J. Richards and Louis Hanover'sMarathon Asset Managementdumped the biggest position of all the hedgies monitored by Insider Monkey, comprising an estimated $1.4 million in stock, and Jody LaNasa's Serengeti Asset Management was right behind this move, as the fund cut about $1.3 million worth. These transactions are intriguing to say the least, as total hedge fund interest fell by 1 funds in the third quarter.
Let's now take a look at hedge fund activity in other stocks - not necessarily in the same industry as Corporacion America Airports SA (NYSE:CAAP) but similarly valued. We will take a look at Veritex Holdings Inc (NASDAQ:VBTX), Employers Holdings, Inc. (NYSE:EIG), Waddell & Reed Financial, Inc. (NYSE:WDR), and CareDx, Inc. (NASDAQ:CDNA). All of these stocks' market caps resemble CAAP's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position VBTX,11,86806,3 EIG,17,72243,-1 WDR,18,110112,2 CDNA,25,139854,3 Average,17.75,102254,1.75 [/table]
View table hereif you experience formatting issues.
As you can see these stocks had an average of 17.75 hedge funds with bullish positions and the average amount invested in these stocks was $102 million. That figure was $58 million in CAAP's case. CareDx, Inc. (NASDAQ:CDNA) is the most popular stock in this table. On the other hand Veritex Holdings Inc (NASDAQ:VBTX) is the least popular one with only 11 bullish hedge fund positions. Corporacion America Airports SA (NYSE:CAAP) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and we'd rather spend our time researching stocks that hedge funds are piling on. Our calculations showed thattop 20 most popular stocksamong hedge funds returned 6.2% in Q2 through June 19th and outperformed the S&P 500 ETF (SPY) by nearly 3 percentage points. Unfortunately CAAP wasn't nearly as popular as these 20 stocks (hedge fund sentiment was quite bearish); CAAP investors were disappointed as the stock returned -3.1% during the same time period and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out thetop 20 most popular stocksamong hedge funds as 13 of these stocks already outperformed the market so far in Q2.
Disclosure: None. This article was originally published atInsider Monkey.
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Here’s What Hedge Funds Think About TPG Specialty Lending Inc (TSLX)
Russell 2000 ETF (IWM) lagged the larger S&P 500 ETF (SPY) by nearly 9 percentage points since the end of the third quarter of 2018 as investors worried over the possible ramifications of rising interest rates and escalation of the trade war with China. The hedge funds and institutional investors we track typically invest more in smaller-cap stocks than an average investor (i.e. only 298 S&P 500 constituents were among the 500 most popular stocks among hedge funds), and we have seen data that shows those funds paring back their overall exposure. Those funds cutting positions in small-caps is one reason why volatility has increased. In the following paragraphs, we take a closer look at what hedge funds and prominent investors think of TPG Specialty Lending Inc (NYSE:TSLX) and see how the stock is affected by the recent hedge fund activity.
TPG Specialty Lending Inc (NYSE:TSLX)was in 12 hedge funds' portfolios at the end of the first quarter of 2019. TSLX shareholders have witnessed an increase in hedge fund interest of late. There were 10 hedge funds in our database with TSLX holdings at the end of the previous quarter. Our calculations also showed that TSLX isn't among the30 most popular stocks among hedge funds.
Hedge funds' reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn't keep up with the unhedged returns of the market indices. Our research has shown that hedge funds' small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the market by 40 percentage points since May 2014 through May 30, 2019 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter.
Let's check out the recent hedge fund action regarding TPG Specialty Lending Inc (NYSE:TSLX).
At Q1's end, a total of 12 of the hedge funds tracked by Insider Monkey were long this stock, a change of 20% from the fourth quarter of 2018. By comparison, 15 hedge funds held shares or bullish call options in TSLX a year ago. With hedgies' positions undergoing their usual ebb and flow, there exists a select group of key hedge fund managers who were increasing their holdings significantly (or already accumulated large positions).
Among these funds,Millennium Managementheld the most valuable stake in TPG Specialty Lending Inc (NYSE:TSLX), which was worth $14.4 million at the end of the first quarter. On the second spot was Marshall Wace LLP which amassed $13.3 million worth of shares. Moreover, Clough Capital Partners, Arrowstreet Capital, and Element Capital Management were also bullish on TPG Specialty Lending Inc (NYSE:TSLX), allocating a large percentage of their portfolios to this stock.
As one would reasonably expect, key money managers were leading the bulls' herd.Arrowstreet Capital, managed by Peter Rathjens, Bruce Clarke and John Campbell, initiated the biggest position in TPG Specialty Lending Inc (NYSE:TSLX). Arrowstreet Capital had $8.3 million invested in the company at the end of the quarter. Jeffrey Talpins'sElement Capital Managementalso made a $7.2 million investment in the stock during the quarter. The only other fund with a brand new TSLX position is John Overdeck and David Siegel'sTwo Sigma Advisors.
Let's check out hedge fund activity in other stocks similar to TPG Specialty Lending Inc (NYSE:TSLX). These stocks are Industrial Logistics Properties Trust (NASDAQ:ILPT), Clovis Oncology Inc (NASDAQ:CLVS), Fresh Del Monte Produce Inc (NYSE:FDP), and Getty Realty Corp. (NYSE:GTY). All of these stocks' market caps resemble TSLX's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position ILPT,16,181029,-3 CLVS,29,567447,5 FDP,14,43087,-1 GTY,9,89875,1 Average,17,220360,0.5 [/table]
View table hereif you experience formatting issues.
As you can see these stocks had an average of 17 hedge funds with bullish positions and the average amount invested in these stocks was $220 million. That figure was $76 million in TSLX's case. Clovis Oncology Inc (NASDAQ:CLVS) is the most popular stock in this table. On the other hand Getty Realty Corp. (NYSE:GTY) is the least popular one with only 9 bullish hedge fund positions. TPG Specialty Lending Inc (NYSE:TSLX) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and we'd rather spend our time researching stocks that hedge funds are piling on. Our calculations showed thattop 20 most popular stocksamong hedge funds returned 6.2% in Q2 through June 19th and outperformed the S&P 500 ETF (SPY) by nearly 3 percentage points. Unfortunately TSLX wasn't nearly as popular as these 20 stocks (hedge fund sentiment was quite bearish); TSLX investors were disappointed as the stock returned 3% during the same time period and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out thetop 20 most popular stocksamong hedge funds as 13 of these stocks already outperformed the market so far in Q2.
Disclosure: None. This article was originally published atInsider Monkey.
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Hedge Funds Have Never Been This Bullish On Alector, Inc. (ALEC)
Hedge funds and other investment firms that we track manage billions of dollars of their wealthy clients' money, and needless to say, they are painstakingly thorough when analyzing where to invest this money, as their own wealth also depends on it. Regardless of the various methods used by elite investors like David Tepper and David Abrams, the resources they expend are second-to-none. This is especially valuable when it comes to small-cap stocks, which is where they generate their strongest outperformance, as their resources give them a huge edge when it comes to studying these stocks compared to the average investor, which is why we intently follow their activity in the small-cap space.
IsAlector, Inc. (NASDAQ:ALEC)a bargain? Hedge funds are becoming hopeful. The number of bullish hedge fund positions increased by 12 in recent months. Our calculations also showed that ALEC isn't among the30 most popular stocks among hedge funds.
Hedge funds' reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn't keep up with the unhedged returns of the market indices. Our research has shown that hedge funds' small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the market by 40 percentage points since May 2014 through May 30, 2019 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter.
Let's take a look at the recent hedge fund action encompassing Alector, Inc. (NASDAQ:ALEC).
At Q1's end, a total of 12 of the hedge funds tracked by Insider Monkey were long this stock, a change of 12 from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards ALEC over the last 15 quarters. So, let's review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds,OrbiMed Advisorsheld the most valuable stake in Alector, Inc. (NASDAQ:ALEC), which was worth $246.8 million at the end of the first quarter. On the second spot was Deerfield Management which amassed $36.6 million worth of shares. Moreover, RA Capital Management, Highline Capital Management, and Millennium Management were also bullish on Alector, Inc. (NASDAQ:ALEC), allocating a large percentage of their portfolios to this stock.
As one would reasonably expect, key hedge funds were leading the bulls' herd.OrbiMed Advisors, managed by Samuel Isaly, established the most valuable position in Alector, Inc. (NASDAQ:ALEC). OrbiMed Advisors had $246.8 million invested in the company at the end of the quarter. James E. Flynn'sDeerfield Managementalso made a $36.6 million investment in the stock during the quarter. The other funds with new positions in the stock are Peter Kolchinsky'sRA Capital Management, Jacob Doft'sHighline Capital Management, and Israel Englander'sMillennium Management.
Let's go over hedge fund activity in other stocks - not necessarily in the same industry as Alector, Inc. (NASDAQ:ALEC) but similarly valued. We will take a look at Stratasys, Ltd. (NASDAQ:SSYS), OneSmart International Education Group Limited (NYSE:ONE), Bright Scholar Education Holdings Limited (NYSE:BEDU), and Oxford Industries, Inc. (NYSE:OXM). This group of stocks' market values are closest to ALEC's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position SSYS,14,137475,0 ONE,6,42937,-1 BEDU,9,85774,1 OXM,11,67701,2 Average,10,83472,0.5 [/table]
View table hereif you experience formatting issues.
As you can see these stocks had an average of 10 hedge funds with bullish positions and the average amount invested in these stocks was $83 million. That figure was $358 million in ALEC's case. Stratasys, Ltd. (NASDAQ:SSYS) is the most popular stock in this table. On the other hand OneSmart International Education Group Limited (NYSE:ONE) is the least popular one with only 6 bullish hedge fund positions. Alector, Inc. (NASDAQ:ALEC) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we'd rather spend our time researching stocks that hedge funds are piling on. Our calculations showed thattop 20 most popular stocksamong hedge funds returned 6.2% in Q2 through June 19th and outperformed the S&P 500 ETF (SPY) by nearly 3 percentage points. Unfortunately ALEC wasn't nearly as popular as these 20 stocks and hedge funds that were betting on ALEC were disappointed as the stock returned 2.1% during the same period and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out thetop 20 most popular stocksamong hedge funds as 13 of these stocks already outperformed the market so far in Q2.
Disclosure: None. This article was originally published atInsider Monkey.
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Is Amerisafe, Inc. (AMSF) A Good Stock To Buy?
It is already common knowledge that individual investors do not usually have the necessary resources and abilities to properly research an investment opportunity. As a result, most investors pick their illusory “winners” by making a superficial analysis and research that leads to poor performance on aggregate. Since stock returns aren't usually symmetrically distributed and index returns are more affected by a few outlier stocks (i.e. the FAANG stocks dominating and driving S&P 500 Index's returns in recent years), more than 50% of the constituents of the Standard and Poor’s 500 Index underperform the benchmark. Hence, if you randomly pick a stock, there is more than 50% chance that you'd fail to beat the market. At the same time, the 20 most favored S&P 500 stocks by the hedge funds monitored by Insider Monkey generated an outperformance of 6 percentage points during the first 5 months of 2019. Of course, hedge funds do make wrong bets on some occasions and these get disproportionately publicized on financial media, but piggybacking their moves can beat the broader market on average. That's why we are going to go over recent hedge fund activity in Amerisafe, Inc. (NASDAQ:AMSF).
IsAmerisafe, Inc. (NASDAQ:AMSF)a bargain? The smart money is buying. The number of long hedge fund positions went up by 1 in recent months. Our calculations also showed that AMSF isn't among the30 most popular stocks among hedge funds.
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that hedge funds' large-cap stock picks indeed failed to beat the market between 1999 and 2016. However, we were able to identify in advance a select group of hedge fund holdings that outperformed the market by 40 percentage points since May 2014 through May 30, 2019 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that'll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 30.9% through May 30, 2019. That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
We're going to analyze the recent hedge fund action encompassing Amerisafe, Inc. (NASDAQ:AMSF).
At the end of the first quarter, a total of 12 of the hedge funds tracked by Insider Monkey were long this stock, a change of 9% from one quarter earlier. By comparison, 8 hedge funds held shares or bullish call options in AMSF a year ago. With the smart money's positions undergoing their usual ebb and flow, there exists a few noteworthy hedge fund managers who were upping their holdings meaningfully (or already accumulated large positions).
Among these funds,Citadel Investment Groupheld the most valuable stake in Amerisafe, Inc. (NASDAQ:AMSF), which was worth $5.8 million at the end of the first quarter. On the second spot was Renaissance Technologies which amassed $4.1 million worth of shares. Moreover, Two Sigma Advisors, Millennium Management, and Fisher Asset Management were also bullish on Amerisafe, Inc. (NASDAQ:AMSF), allocating a large percentage of their portfolios to this stock.
Now, some big names have been driving this bullishness.Millennium Management, managed by Israel Englander, assembled the largest position in Amerisafe, Inc. (NASDAQ:AMSF). Millennium Management had $2 million invested in the company at the end of the quarter. Hoon Kim'sQuantinno Capitalalso made a $0.5 million investment in the stock during the quarter. The only other fund with a new position in the stock is Andrew Feldstein and Stephen Siderow'sBlue Mountain Capital.
Let's check out hedge fund activity in other stocks similar to Amerisafe, Inc. (NASDAQ:AMSF). We will take a look at Fate Therapeutics Inc (NASDAQ:FATE), Carrizo Oil & Gas, Inc. (NASDAQ:CRZO), AAR Corp. (NYSE:AIR), and Keane Group, Inc. (NYSE:FRAC). This group of stocks' market values are closest to AMSF's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position FATE,18,413631,3 CRZO,15,114113,2 AIR,23,113938,9 FRAC,28,554730,2 Average,21,299103,4 [/table]
View table hereif you experience formatting issues.
As you can see these stocks had an average of 21 hedge funds with bullish positions and the average amount invested in these stocks was $299 million. That figure was $19 million in AMSF's case. Keane Group, Inc. (NYSE:FRAC) is the most popular stock in this table. On the other hand Carrizo Oil & Gas, Inc. (NASDAQ:CRZO) is the least popular one with only 15 bullish hedge fund positions. Compared to these stocks Amerisafe, Inc. (NASDAQ:AMSF) is even less popular than CRZO. Hedge funds dodged a bullet by taking a bearish stance towards AMSF. Our calculations showed that the top 20 most popular hedge fund stocks returned 6.2% in Q2 through June 19th and outperformed the S&P 500 ETF (SPY) by nearly 3 percentage points. Unfortunately AMSF wasn't nearly as popular as these 20 stocks (hedge fund sentiment was very bearish); AMSF investors were disappointed as the stock returned 3.2% during the same time frame and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out thetop 20 most popular stocksamong hedge funds as 13 of these stocks already outperformed the market so far in the second quarter.
Disclosure: None. This article was originally published atInsider Monkey.
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Should You Be Concerned About Australian Pharmaceutical Industries Limited's (ASX:API) Earnings Growth?
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When Australian Pharmaceutical Industries Limited (ASX:API) announced its most recent earnings (28 February 2019), I compared it against two factor: its historical earnings track record, and the performance of its industry peers on average. Being able to interpret how well Australian Pharmaceutical Industries has done so far requires weighing its performance against a benchmark, rather than looking at a standalone number at a point in time. In this article, I've summarized the key takeaways on how I see API has performed.
See our latest analysis for Australian Pharmaceutical Industries
API's trailing twelve-month earnings (from 28 February 2019) of AU$47m has declined by -1.7% compared to the previous year.
Furthermore, this one-year growth rate has been lower than its average earnings growth rate over the past 5 years of 44%, indicating the rate at which API is growing has slowed down. Why is this? Let's examine what's transpiring with margins and if the rest of the industry is feeling the heat.
In terms of returns from investment, Australian Pharmaceutical Industries has fallen short of achieving a 20% return on equity (ROE), recording 9.5% instead. Furthermore, its return on assets (ROA) of 3.1% is below the AU Healthcare industry of 4.2%, indicating Australian Pharmaceutical Industries's are utilized less efficiently. And finally, its return on capital (ROC), which also accounts for Australian Pharmaceutical Industries’s debt level, has declined over the past 3 years from 11% to 9.1%. This correlates with an increase in debt holding, with debt-to-equity ratio rising from 28% to 54% over the past 5 years.
Though Australian Pharmaceutical Industries's past data is helpful, it is only one aspect of my investment thesis. Companies that are profitable, but have capricious earnings, can have many factors affecting its business. I recommend you continue to research Australian Pharmaceutical Industries to get a better picture of the stock by looking at:
1. Future Outlook: What are well-informed industry analysts predicting for API’s future growth? Take a look at ourfree research report of analyst consensusfor API’s outlook.
2. Financial Health: Are API’s operations financially sustainable? Balance sheets can be hard to analyze, which is why we’ve done it for you. Check out ourfinancial health checks here.
3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore ourfree list of these great stocks here.
NB: Figures in this article are calculated using data from the trailing twelve months from 28 February 2019. This may not be consistent with full year annual report figures.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
What Kind Of Shareholders Own Asset Plus Limited (NZSE:APL)?
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A look at the shareholders of Asset Plus Limited (NZSE:APL) can tell us which group is most powerful. Institutions will often hold stock in bigger companies, and we expect to see insiders owning a noticeable percentage of the smaller ones. Companies that have been privatized tend to have low insider ownership.
Asset Plus is a smaller company with a market capitalization of NZ$103m, so it may still be flying under the radar of many institutional investors. Taking a look at our data on the ownership groups (below), it's seems that institutions are noticeable on the share registry. Let's delve deeper into each type of owner, to discover more about APL.
Check out our latest analysis for Asset Plus
Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it's included in a major index. We would expect most companies to have some institutions on the register, especially if they are growing.
As you can see, institutional investors own 54% of Asset Plus. 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 Asset Plus's historic earnings and revenue, below, but keep in mind there's always more to the story.
Institutional investors own over 50% of the company, so together than can probably strongly influence board decisions. Asset Plus is not owned by hedge funds. There is some analyst coverage of the stock, but it could still become more well known, with time.
The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO.
Most consider insider ownership a positive because it can indicate the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.
I can report that insiders do own shares in Asset Plus Limited. As individuals, the insiders collectively own NZ$1.8m worth of the NZ$103m company. Some would say this shows alignment of interests between shareholders and the board, though I generally prefer to see bigger insider holdings. But it might be worth checkingif those insiders have been selling.
The general public holds a 42% stake in APL. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.
While it is well worth considering the different groups that own a company, there are other factors that are even more important.
I like to dive deeperinto how a company has performed in the past. You can accessthisinteractive graphof past earnings, revenue and cash flow, for free.
But ultimatelyit is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look atthis free report showing whether analysts are predicting a brighter future.
NB: Figures in this article are calculated using data from the last twelve months, which refer to the 12-month period ending on the last date of the month the financial statement is dated. This may not be consistent with full year annual report figures.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
How To Look At APN Convenience Retail REIT (ASX:AQR)
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APN Convenience Retail REIT is a AU$255m small-cap, real estate investment trust (REIT) based in Melbourne, Australia. REITs own and operate income-generating property and adhere to a different set of regulations. This impacts how AQR’s business operates and also how we should analyse its stock. Below, I'll look at a few important metrics to keep in mind as part of your research on AQR.
Check out our latest analysis for APN Convenience Retail REIT
REIT investors should be familiar with the term Fund from Operations (FFO) – a REIT’s main source of cash flow from its day-to-day business activities. FFO is a higher quality measure of earnings because it takes out the impact of non-recurring sales and non-cash items such as depreciation. These items can distort the bottom line and not necessarily reflective of AQR’s daily operations. For AQR, its FFO of AU$16m makes up 64% of its gross profit, which means the majority of its earnings are high-quality and recurring.
AQR's financial stability can be gauged by seeing how much its FFO generated each year can cover its total amount of debt. The higher the coverage, the less risky AQR is, broadly speaking, to have debt on its books. The metric I'll be using, FFO-to-debt, also estimates the time it will take for the company to repay its debt with its FFO. With a ratio of 14%, the credit rating agency Standard & Poor would consider this as significantly high risk. This would take AQR 7 years to pay off using just operating income, which is a long time, and risk increases with time. But realistically, companies have many levers to pull in order to pay back their debt, beyond operating income alone.
I also look at AQR's interest coverage ratio, which demonstrates how many times its earnings can cover its yearly interest expense. This is similar to the concept above, but looks at the upcoming obligations. The ratio is typically calculated using EBIT, but for a REIT stock, it's better to use FFO divided by net interest. With an interest coverage ratio of 4.02x, it’s safe to say AQR is generating an appropriate amount of cash from its borrowings.
In terms of valuing AQR, FFO can also be used as a form of relative valuation. Instead of the P/E ratio, P/FFO is used instead, which is very common for REIT stocks. AQR's price-to-FFO is 16.26x, compared to the long-term industry average of 16.5x, meaning that it is fairly valued.
As a REIT, APN Convenience Retail REIT offers some unique characteristics which could help diversify your portfolio. However, before you decide on whether or not to invest in AQR, I highly recommend taking a look at other aspects of the stock to consider:
1. Future Outlook: What are well-informed industry analysts predicting for AQR’s future growth? Take a look at ourfree research report of analyst consensusfor AQR’s outlook.
2. Valuation: What is AQR 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 AQR 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. |
Does Alembic Limited's (NSE:ALEMBICLTD) P/E Ratio Signal A Buying Opportunity?
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This article is for investors who would like to improve their understanding of price to earnings ratios (P/E ratios). We'll apply a basic P/E ratio analysis to Alembic Limited's (NSE:ALEMBICLTD), to help you decide if the stock is worth further research.Alembic has a P/E ratio of 4.73, based on the last twelve months. That means that at current prices, buyers pay ₹4.73 for every ₹1 in trailing yearly profits.
Check out our latest analysis for Alembic
Theformula for P/Eis:
Price to Earnings Ratio = Share Price ÷ Earnings per Share (EPS)
Or for Alembic:
P/E of 4.73 = ₹42.2 ÷ ₹8.93 (Based on the trailing twelve months to March 2019.)
The higher the P/E ratio, the higher the price tag of a business, relative to its trailing earnings. That is not a good or a bad thingper se, but a high P/E does imply buyers are optimistic about the future.
Generally speaking the rate of earnings growth has a profound impact on a company's P/E multiple. When earnings grow, the 'E' increases, over time. Therefore, even if you pay a high multiple of earnings now, that multiple will become lower in the future. Then, a lower P/E should attract more buyers, pushing the share price up.
It's nice to see that Alembic grew EPS by a stonking 46% in the last year. And it has bolstered its earnings per share by 52% per year over the last five years. So we'd generally expect it to have a relatively high P/E ratio.
One good way to get a quick read on what market participants expect of a company is to look at its P/E ratio. If you look at the image below, you can see Alembic has a lower P/E than the average (17.7) in the pharmaceuticals industry classification.
Alembic's P/E tells us that market participants think it will not fare as well as its peers in the same industry. Many investors like to buy stocks when the market is pessimistic about their prospects. If you consider the stock interesting, further research is recommended. For example, I often monitordirector buying and selling.
Don't forget that the P/E ratio considers market capitalization. That means it doesn't take debt or cash into account. The exact same company would hypothetically deserve a higher P/E ratio if it had a strong balance sheet, than if it had a weak one with lots of debt, because a cashed up company can spend on growth.
Such spending might be good or bad, overall, but the key point here is that you need to look at debt to understand the P/E ratio in context.
Alembic has net cash of ₹455m. That should lead to a higher P/E than if it did have debt, because its strong balance sheets gives it more options.
Alembic's P/E is 4.7 which is below average (15.4) in the IN market. Not only should the net cash position reduce risk, but the recent growth has been impressive. The below average P/E ratio suggests that market participants don't believe the strong growth will continue.
Investors have an opportunity when market expectations about a stock are wrong. If it is underestimating a company, investors can make money by buying and holding the shares until the market corrects itself. We don't have analyst forecasts, but you might want to assessthis data-rich visualizationof earnings, revenue and cash flow.
But note:Alembic may not be the best stock to buy. So take a peek at thisfreelist of interesting companies with strong recent earnings growth (and a P/E ratio below 20).
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
Should You Be Concerned About Allahabad Bank's (NSE:ALBK) Historical Volatility?
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If you're interested in Allahabad Bank (NSE:ALBK), then you might want to consider its beta (a measure of share price volatility) in order to understand how the stock could impact your portfolio. Modern finance theory considers volatility to be a measure of risk, and there are two main types of price volatility. The first category is company specific volatility. This can be dealt with by limiting your exposure to any particular stock. The second sort is caused by the natural volatility of markets, overall. For example, certain macroeconomic events will impact (virtually) all stocks on the market.
Some stocks mimic the volatility of the market quite closely, while others demonstrate muted, exagerrated or uncorrelated price movements. Some investors use beta as a measure of how much a certain stock is impacted by market risk (volatility). While we should keep in mind that Warren Buffett has cautioned that 'Volatility is far from synonymous with risk', beta is still a useful factor to consider. To make good use of it you must first know that the beta of the overall market is one. A stock with a beta greater than one is more sensitive to broader market movements than a stock with a beta of less than one.
See our latest analysis for Allahabad Bank
Zooming in on Allahabad Bank, we see it has a five year beta of 0.85. This is below 1, so historically its share price has been rather independent from the market. This means that -- if history is a guide -- buying the stock would reduce the impact of overall market volatility in many portfolios (depending on the beta of the portfolio, of course). Share price volatility is well worth considering, but most long term investors consider the history of revenue and earnings growth to be more important. Take a look at how Allahabad Bank fares in that regard, below.
Allahabad Bank is a fairly large company. It has a market capitalisation of ₹158b, which means it is probably on the radar of most investors. When a large company like this trades with a low beta value, it is often because there is some other systemic factor influencing the share price. For example, commodity prices might influence a mining company strongly, while expectations around dividend payments (and capital expenditure requirements) might have a big impact on utilities.
One potential advantage of owning low beta stocks like Allahabad Bank is that your overall portfolio won't be too sensitive to overall market movements. However, this can be a blessing or a curse, depending on what's happening in the broader market. This article aims to educate investors about beta values, but it's well worth looking at important company-specific fundamentals such as Allahabad Bank’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 ALBK’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 ALBK 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 ALBK'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. |
PRESS DIGEST- Financial Times - June 27
June 27 (Reuters) - The following are the top stories in the Financial Times. Reuters has not verified these stories and does not vouch for their accuracy.
Headlines Tata to build UK's biggest carbon capture project https://on.ft.com/2KGEO1U JP Morgan Chase in talks to invest in UK fintech https://on.ft.com/2KEdelS
FCA pressed Woodford into being overseen by Link https://on.ft.com/2NfCAsq
Overview Tata Chemicals Europe plans to build Britain's biggest carbon-capture project in Cheshire, north-west England, after securing government funding. JPMorgan Chase & Co is in talks to purchase a stake in 10x Future Technologies, the banking technology start-up founded by former Barclays chief Antony Jenkins.
Britain's Financial Conduct Authority pressured Neil Woodford to use a management service that the watchdog is now investigating over its role in the collapse of the star stockpicker's flagship fund. (Compiled by Bengaluru newsroom; Editing by Sandra Maler) |
UPDATE 6-Democrats clash on healthcare, border in scrappy first U.S. presidential debate
(Adds Castro, Warren quotes, background)
By James Oliphant and Ginger Gibson
MIAMI, June 26 (Reuters) - Democratic presidential contenders battled over healthcare coverage and border policy on Wednesday during a surprisingly heated first debate that laid bare the party's divisions on whether to abolish private insurance and shift to a Medicare-for-All system.
In the first round of back-to-back debates, several of the lesser-known candidates vied for attention in the crowded race to take on President Donald Trump, shouting over one another to grab the spotlight and prove they are capable of standing up to the Republican in the November 2020 election.
The Democratic contenders repeatedly attacked Trump, saying his economic policies benefited the wealthy at the expense of working Americans, and calling his border policies heartless.
"On January 20, 2021, we'll say 'Adios' to Donald Trump," said former Housing Secretary Julian Castro.
But they also turned their fire on each other, most often targeting Beto O'Rourke. The former congressman tangled with Castro, a fellow Texan, on border policy, and New York Mayor Bill de Blasio on healthcare.
The intensity of the exchanges after six months of a relatively mild campaign reflected the high stakes in what could be a make-or-break moment for some of the contenders struggling to be noticed in the Democratic field of more than 20 candidates.
No one mentioned front-runner Joe Biden, who will take the stage with top rival Bernie Sanders and eight other candidates in the second debate on Thursday night.
The battle over healthcare began when the candidates were asked to raise their hands if they support eliminating private health insurance. Only U.S. Senator Elizabeth Warren and de Blasio did so, but they quickly challenged the other eight candidates on stage.
Warren, a leader of the party's progressive wing who has been surging in opinion polls, said private insurance was taking advantage of Americans. She backs a government-sponsored Medicare-for-All approach and criticized those who say it is not politically feasible.
"What they are really telling you is they just won't fight for it. Healthcare is a basic right, and I will fight for it," she said.
But former U.S. Representative John Delaney, an outspoken critic of Medicare for All who supports a universal healthcare approach that includes private insurance, said Democrats should not throw away a system that some Americans are happy with.
"I think we should be the party that keeps what’s working and fixes what’s broken," Delaney said.
After years of defending former Democratic President Barack Obama's landmark healthcare law known as Obamacare from Republican attempts to repeal it, Democrats have struggled during the campaign to agree on the best approach to fixing it.
The Medicare for All approach pushed by Warren and Sanders, which has gained support in Congress, would create a government-operated plan that eliminates private insurance. It is modeled on the Medicare government healthcare program for seniors.
O'Rourke said private insurance was "fundamental to our ability to get everybody cared for," but de Blasio cut him off.
"Congressman O'Rourke, private insurance is not working for tens of millions of Americans when you talk about the copays, the deductibles the premiums - it's not working. How can you defend a system that's not working?"
'BORING!'
O'Rourke also came under attack from Castro over the separation of families and detention of migrants at the southern border. Castro said he would decriminalize border crossings by migrants, which he said had led to the separation of families. He challenged O'Rourke and others to support him.
O'Rourke said that as a congressman he helped introduce a bill that would ensure that those who are seeking asylum and refuge in the United States are not criminalized.
Castro responded: "I'm not talking about the ones that are seeking asylum, I'm talking about everybody else." He accused O'Rourke of not doing his homework.
Trump hinted he would not tweet his reactions to the debate live. It was taking place as he flies aboard Air Force One to Osaka, Japan, for a G20 summit.
But shortly after it began, he could not help himself. "BORING!" he tweeted.
"This debate was the best argument for President Trump’s re-election and should really be counted as an in-kind contribution to the President’s campaign," Kayleigh McEnany, the Trump campaign's spokeswoman, said in a statement.
"The far-left, socialist policies Democrats embraced tonight were akin to a mutual political suicide pact," she said.
The debate was an opportunity for some of the less-noticed candidates to step out of the shadow cast by Biden, a former vice president, and Sanders, a senator from Vermont.
U.S. Senator Cory Booker had the most speaking time in the debate at about 11 minutes, according to the New York Times and other media trackers. He was followed by O'Rourke, Warren and Castro. Washington Governor Jay Inslee had the least.
Several of the contenders took aim at corporate America, saying it did not pay enough in taxes, repaid government bailouts by shifting jobs overseas and charged too much for its products.
"Who is this economy really working for? It's doing great for a thinner and thinner slice at the top. It's doing great for giant drug companies. It's just not doing great for people who are trying to get a prescription filled," Warren said.
Inslee said he was the only candidate on the stage who had passed a public healthcare option and a law protecting a woman's right to reproductive health and health insurance.
That drew a sharp response from Senator Amy Klobuchar.
"There are three women up here who have fought pretty hard for a woman's right to choose," she said, looking at Warren and congresswoman Tulsi Gabbard.
(Reporting by James Oliphant, Ginger Gibson and Letitia Stein in Miami; Writing by John Whitesides in Washington; Editing by Colleen Jenkins and Peter Cooney) |
One Thing To Remember About The Allahabad Bank (NSE:ALBK) Share Price
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Anyone researching Allahabad Bank (NSE:ALBK) might want to consider the historical volatility of the share price. Modern finance theory considers volatility to be a measure of risk, and there are two main types of price volatility. First, we have company specific volatility, which is the price gyrations of an individual stock. Holding at least 8 stocks can reduce this kind of risk across a portfolio. The second sort is caused by the natural volatility of markets, overall. For example, certain macroeconomic events will impact (virtually) all stocks on the market.
Some stocks are more sensitive to general market forces than others. Beta can be a useful tool to understand how much a stock is influenced by market risk (volatility). However, Warren Buffett said 'volatility is far from synonymous with risk' in his 2014 letter to investors. So, while useful, beta is not the only metric to consider. To use beta as an investor, you must first understand that the overall market has a beta of one. A stock with a beta below one is either less volatile than the market, or more volatile but not corellated with the overall market. In comparison a stock with a beta of over one tends to be move in a similar direction to the market in the long term, but with greater changes in price.
Check out our latest analysis for Allahabad Bank
Zooming in on Allahabad Bank, we see it has a five year beta of 0.85. This is below 1, so historically its share price has been rather independent from the market. This means that -- if history is a guide -- buying the stock would reduce the impact of overall market volatility in many portfolios (depending on the beta of the portfolio, of course). Beta is worth considering, but it's also important to consider whether Allahabad Bank is growing earnings and revenue. You can take a look for yourself, below.
Allahabad Bank is a reasonably big company, with a market capitalisation of ₹158b. Most companies this size are actively traded with decent volumes of shares changing hands each day. It is a little unusual to see big companies like this trade on low beta values. Oftentimes there is some other clear influence on the share price, overshadowing market volatility.
One potential advantage of owning low beta stocks like Allahabad Bank is that your overall portfolio won't be too sensitive to overall market movements. However, this can be a blessing or a curse, depending on what's happening in the broader market. In order to fully understand whether ALBK is a good investment for you, we also need to consider important company-specific fundamentals such as Allahabad Bank’s financial health and performance track record. I highly recommend you dive deeper by considering the following:
1. Financial Health: Are ALBK’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 ALBK 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 ALBK'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. |
Rite Aid Corp (RAD) Q1 2020 Earnings Call Transcript
Image source: The Motley Fool.
Rite Aid Corp(NYSE: RAD)Q1 2020 Earnings CallJun 26, 2019,5:00 p.m. ET
• Prepared Remarks
• Questions and Answers
• Call Participants
Operator
Good afternoon. My name is Kelly, and I will be your conference operator today. At this time, I'd like to welcome everyone to the Rite Aid First Quarter Fiscal 2020 Earnings Conference Call. (Operator Instructions) To download a copy of today's presentation, click the blue file button on the lower left corner of your screen and select the file.
Thank you. I would now like to turn the call over to Byron Purcell. Please go ahead.
Byron Purcell--Investor Relations
Thank you, and good evening, everyone. We welcome you to our first quarter earnings conference call. On the call today with me, are John Standley, Chief Executive Officer; Bryan Everett, Chief Operating Officer; Ben Bulkley, Chief Executive Officer of EnvisionRxOptions; and Matt Schroeder, Chief Financial Officer.
On today's call, John, Bryan and Ben will provide an update on the business. Matt will provide an update on our first quarter results and review guidance for fiscal 2020. And then, we will take questions. As we mentioned in our release, we are providing slides related to the material we will be discussing today. These slides are provided on our website www.riteaid.com under the Investor Relations Information tab. We will not be referring to them in our remarks, but I hope you'll find them helpful as they summarize some of the key points made on the call.
Before we start, I'd like to remind you that today's conference call includes certain forward-looking statements. These forward-looking statements are presented in the context of certain risks and uncertainties that can cause actual results to differ. These risks and uncertainties are described in our press release in Item 1A of our most recent annual report on Form 10-K and other documents that we file or furnish with the Securities and Exchange Commission. Also, we will be using certain non-GAAP measures in our release and then the accompanying slides. The definition of these non-GAAP measures, along with the reconciliation to the related GAAP measure are described in our press release and slides.
With these remarks, I'd now like to turn it over to John.
John T. Standley--Chief Executive Officer
Thanks, Byron, and thanks everyone, for joining us on today's call. While first quarter results did not meet our expectations due to prescription reimbursement rate pressure in the retail pharmacy segment and margin compression in the pharmacy services segment, we are pleased with improvements in our top line growth and operating efficiency in the retail pharmacy segment and Medicare Part D revenue growth in the pharmacy services segment. We believe that enhancements made to the McKesson supply agreement, generic purchasing improvements, revenue growth and the benefit of actions we have taken to reduce costs should drive improved results in both segments for the remainder of the year. In addition, we recently formed two strategic partnerships that will help us better meet the needs of our customers heading forward. The key element of our strategy is to drive a digital transformation that delivers personalized and seamlessly connected experiences to our customers across all in-store and online touch points.
Last week, we announced an exciting new partnership with Adobe to leverage the Adobe Experience Cloud and helping us bring this vision to life. Through this partnership, we'll gain access to real time personalization, deep customer journey analytics, content management and advertising capabilities to enhance our digital and marketing solutions, while forming deeper relationships with our customers. This partnership will allow us to the combined Rite Aid's health and wellness expertise with strategic guidance and operational support from Adobe Specialists, as we seamlessly connect our pharmacy, retail stores and online customer journey.
We also know that expanding our own brand offering presents a tremendous opportunity to grow our business, while delivering outstanding value to our customers. To help make the most of this opportunity, we've partnered with UNFI to introduce their Wild Harvest brand to Rite Aid stores in the second quarter. The Wild Harvest product line includes natural and organic items that will expand our current offering and further support our wellness transformation in the front end. Bryan will have more information on this partnership later in the call.
We're excited to be partnering with both Adobe and UNFI and we'll continue seeking our best-in- class partnerships with industry leaders to accelerate innovation and provide engaging new experiences for our customers across all channels. As we transform our business, we're also making significant operational progress as reflected in our first quarter results for key areas of our business. Our continued success with clinical pharmacy services and other script growth initiatives help drive a strong 3.7% increase in same-store prescription count, which exceeded our expectations and is our best script count performance in four years.
In the front end, we generated critical top line momentum in our focus front end categories and delivered positive year-over-year growth of 0.3%, when excluding cigarettes and tobacco products. And we continue to demonstrate good cost control as we also benefited from steps we've taken to reduce our cost structure, which allowed us to more than fully offset the anticipated reduction in TSA revenue. We achieved these results in the phase of continued reimbursement rate pressure. We expect our quarterly run rate of EBITDA to improve as we complete our generic bidding activity and those cost savings are fully recognized in our results.
Now, pharmacy services segment, results for our EnvisionRxOptions PBM were impacted by margin compression in the commercial business and key investments we're making to support current year and future growth. At the same time, we continue to see strong growth in Medicare Part D revenue and are excited about the progress we're making in the current 2020 commercial selling season. We're also improving operational efficiencies, as we look to further leverage the unique offerings of Envision in delivering a higher level of patient care.
Looking ahead, we're taking significant steps to transform our business and deliver enhanced customer experiences as we accelerate our path to the future initiative. These efforts are helping us identify significant opportunities to drive further growth and operating efficiency, and include building solutions to work with regional health plans to improve patient health outcomes, optimizing SKUs in our front end offering to free up working capital, improve front end profitability and improve the customer experience, assessing our pricing and promotional strategy and a continued review of our cost structure, which includes opportunities to use technology and vendor partners to help reduce costs. While still early in the process, we expect these initiatives to drive significant value in fiscal 2021 and beyond, while reducing our reliance on traditional pharmacy reimbursement rate models.
With that, I'll turn it over to our Chief Operating Officer, Bryan Everett for additional details about our go-forward strategy and an update on our key initiatives. Bryan?
Bryan Everett--Chief Operating Officer
Thank you, John. And thanks, again, to everyone for joining the call. I'd like to start by saying that I'm excited by the momentum we're building as a team and optimistic about the opportunities ahead of us as we begin to see our transformation come to life. A key highlight has been our success with clinical pharmacy initiatives that helped us deliver our fourth consecutive quarter of same-store prescription count growth, and as John mentioned, our best performance in four years. Additionally, we were able to follow up last year's record number of immunizations by nearly doubling our first quarter ancillary immunizations, which protect our customers against conditions like shingles, pneumonia, measles and whooping cough. To accelerate this growth, we're providing additional prompts for ancillary vaccines like Tdap. I'd like to thank our dedicated pharmacy teams for providing a high level of care and service to our customers resulting in this business growth. In addition to this organic growth, we also continued to invest in prescription file buys and have an increased plan of $60 million for fiscal year '20. We'll continue to closely monitor the marketplace for file buy opportunities.
Additionally, we continue to work with our payer partners to gain access to limited and preferred networks. As part of this effort, we recently regained access to Anthem's Managed Medicaid network. Our continued success in these areas will be critical as we implement our path to the future strategy and work to help payers provide a higher level of care. To achieve this, we will continue to focus on driving operational efficiencies that free up time for our pharmacists to deliver best-in-class clinical pharmacy services through our AIM strategy. We believe these pharmacy services represent our gateway into value-based care and our best opportunity to drive positive patient health outcomes.
We are also generating important momentum in the front end. Quarter one was the first quarter in 12 quarters that we delivered positive front end same-store sales, minus cigarettes and tobacco products. We have particularly strong sales in consumables, personal care and OTC items, while also benefiting from the Easter shift. As we reimagine our front end business, we continue to expand our health and wellness offering by introducing additional items, including more natural, organic and cleaner or free from products. As John mentioned, we recently entered into an agreement with UNFI to add over 180 new Wild Harvest food items to the majority of our stores. The Wild Harvest line is a brand of natural and organic items and starts to hit store shelves next month. Another area focus on the front end continues to be growing own brand penetration over the next few years. We believe this area presents enormous potential and our go-forward plan introduces new items, enhances our product mix and additional consideration to how we market and promote these items.
One example of our own brand focus is the successful recent expansion of our iconic Thrifty Ice Cream brand to Idaho, Oregon and Washington. We are currently planning to expand the Thrifty Ice Cream brand to additional markets in the east. We are also gearing up for the relaunch of our best selling Rite Aid Pharmacy OTC brand later in the second quarter. Also during the first quarter, we began piloting the sale of CBD creams, lotions and lip balms at Rite Aid stores in Oregon and Washington to better meet the needs and preferences of our customers in those communities, response from customers has been positive so far.
In April, we announced plans to remove e-cigarettes and vaping products from all stores, while also increasing the aides to purchase tobacco products to 21 throughout the chain. We stated that we would implement both of these changes within 90 days. We are ahead of schedule in meeting both of those commitments and plan to have these changes fully implemented by July 1.
As we focus on delivering a higher level of care in the pharmacy and transforming our front end business, we also know that today's consumers want to engage with brands in a number of different ways. Our digital business, although relatively small, grew 115% in the first quarter and continues to be an important priority for the company. We're excited to be creating an innovative retail offering that enhances our in-store experiences and creates a seamlessly connected journey for our customers across all touch points.
Our partnership with Amazon to launch Amazon lockers at Rite Aid stores will help us take these efforts to an even higher level. Through Amazon lockers, customers can visit select Rite Aid locations to pick up their Amazon packages from a secure locker. Today, we've installed Amazon lockers at over 300 store locations and our plan is to have this pickup option available in 900 stores by the end of quarter two. We've seen an increase in customer traffic in those stores and expect that to continue with the rollout of additional locker locations. A key aspect of our strategy is to grow our business by driving additional traffic into our existing network of stores to experience our retail offering and the high level service and care we provide. We believe that new initiatives like Amazon locker give us a tremendous opportunity to achieve this critical objective.
In addition to our same day, no charge prescription home delivery for wellness+ gold and silver members in the majority of our markets, we expanded our Instacart pilot to additional stores during the quarter. As we continue to test this online and mobile app-driven service to further enhance our home delivery capabilities. As we look to seamlessly connect our in-store and digital experiences, we're excited about our strategic partnership with Adobe and believe that will be a game changer in how we engage with our existing customers and attract new customers. By leveraging Adobe Experience Cloud and the expertise of the Adobe team, we'll be able to deliver highly personalized digital marketing offers and also make it easier to navigate and shop on our app and website in addition to the caring moments that our associates deliver to customers in-store.
To help lead our marketing and merchandising transformation, we're pleased to welcome Eric Keptner, who has been named to the newly created position of Chief Marketing and Merchandising Officer, and officially joined our team earlier this week. Eric is an experienced retail executive, who has proven that he can integrate and manage all aspects of an organization's marketing and merchandising assets to provide great customer experiences, operate efficiently and deliver growth. We're pleased to have Eric join our team and believe that combining the responsibilities of marketing and merchandising under one leader will help us further accelerate our efforts to create a seamlessly connected customer experience.
As I conclude my remarks, I want to take a moment to sincerely thank our Rite Aid store associates, field leaders, distribution center partners and corporate team members for all that they're doing. I'm truly inspired by the passion that our associates have, as I visit our stores and distribution centers and engage with our teams. Day in and day out, Rite Aid associates are working to bring our mission of improving the health and wellness of our communities to life and embracing this opportunity to test and learn from new initiatives. I look forward to working with our team as we excel our path to the future strategy and position our company for growth.
At this time, I like to turn it over to EnvisionRxOption CEO, Ben Bulkley for an update on the pharmacy services segment. Ben?
Ben Bulkley--Chief Executive Officer, EnvisionRxOptions
Thank you, Bryan. Despite the margin compression John mentioned in the EnvisionRx first quarter result, we feel good about the progress we're making to grow our business. We're substantially ahead of prior year period in lives won in our commercial lines as well as in our Part D plan. The margin compression in quarter one is attributable to a few large off-market contracts that did not renew last year. The bulk of the unfavorable year-over-year comparison will play out this year.
I'm pleased to say, we've renewed a number of very important client contracts in this last period as a result of a more disciplined account-management process. We are also in process of modifying several contractual relationships that we expect will contribute positively to EBITDA in quarter two and beyond in fiscal year 2020. Our progress in obtaining more lives in the commercial business is because of our position as an independent pharmacy services alternative offering a transparency model. Not only do we see it in the numbers, but the clients and prospects I continue to meet share their strong support for EnvisionRx as an essential option in the marketplace. There are also from these conversations very clear ways we can extend our relationship in enhancing our services and new product capabilities.
I've had the opportunity to spend more time with our technology and (inaudible) teams. Technology is, of course, a key enabler of all of our businesses. Our adjudication systems' capability remains a strong core on which we can build. Our strategy looking forward is to increase our technology investments to enhance our platform and add new revenue sources to the business. We're in a unique position to introduce capabilities to certain segments of the market because of our pass through model. To support our continued growth and our investments is a step up in operational excellence as a way of doing business. There are significant opportunities for us to simplify the business, to limit the rework and improve quality for our teams and clients. We're very excited by the progress we're making here. Ultimately, our growth will always be based on providing better and better levels of service, delivering innovative new products and of course, disciplined execution.
I'd like to provide some additional details for the results -- of the efforts toward continued growth in the Medicare Part D enrollment. All told, over the past calendar year, we've gained approximately 108,000 lives in the Part D sector and now have roughly 648,000 enrolled Part D members for plan year 2019. Additionally, since the close of the plan year 2017, we have now increased our Part D membership total by well over 250,000 lives. In other words, the strategic decisions over the last few years are continuing to pay off. Most notably, our number of chooser members in our Med D plans has increased from 77,000 in calendar 2016 to 364,000 today. As with Medicare Part D enrollment, specialty pharmacy continues to be an important opportunity in our go-forward strategy and Envision specialty first quarter revenue continued its growth in this key area of our business. Year-over-year, specialty revenues for the first quarter are favorable by approximately 23% compared to the first quarter of the previous year.
We're also excited about the progress in the current 2020 commercial selling season with several regional and health plan RFPs in-house, a number of finalist opportunities and new regional health plans already in place. We now project our commercial membership total to increase by approximately 320,000 lives year-over-year that have several exciting prospects in the pipeline. Envision is well positioned to take advantage of the consolidation that is occurring in the marketplace. On balance, we're very enthused by the progress we're making and the prospects for future growth.
Thank you for your time. Now I'll turn it over to Matt Schroeder, our Chief Financial Officer for more information on our financial results.
Matt Schroeder--Chief Financial Officer
Thanks, Ben. And thanks to everyone for joining us today. On this evening's call, I'll walk through our first quarter results and review our fiscal 2020 guidance.
Revenues for the quarter were $5.4 billion, which were essentially flat to the prior-year's first quarter results. Net loss from continuing operations was $99.3 million or $1.88 per diluted share versus a net loss from continuing operations of $41.7 million or $0.79 per diluted share in the prior-year's quarter. Current year net loss was impacted by severance and restructuring charges related to our strategic initiatives and a reduction in adjusted EBITDA. Adjusted net loss in the current quarter was $7.5 million or $0.14 per diluted share versus adjusted net income of $1 million or $0.02 per diluted share in the prior-year quarter.
Our decline in adjusted net loss was primarily due to a decline in adjusted EBITDA, which was $110.3 million in the current quarter compared to a $138 million in the prior-year quarter. This was partially offset by a reduction in lease termination and impairment charges due to store closures in the prior-year's quarter.
Retail pharmacy segment revenue for the quarter was $3.86 billion, which was $33 million lower than last-year's first quarter. Our increase in same-store sales was more than offset by the impact of store closures. Same-store sales increased 1.4% in the quarter. Front end same-store sales were down 30 basis points and pharmacy same-store sales increased by 2.3% with same-store script count of 3.7% on a 30-day adjusted basis.
Total retail pharmacy segment gross profit dollars in the quarter were $39 million lower than last-year's first quarter and gross margin was 78 basis points lower as a percent of revenues. Adjusted EBITDA gross profit was unfavorable to last-year's first quarter by $43.8 million and 90 basis points worse as a percent of revenues. We faced continued reimbursement rate pressures during the quarter that we were not able to fully offset with generic cost savings and same-store prescription count growth. As noted in our release, $12.5 million of the reimbursement rate decline was due to an adjustment to our estimated exposure for a retroactive billing from a state Medicaid agency.
Retail Pharmacy segment SG&A expense for the quarter was $6.9 million and 41 basis points higher than last-year's first quarter. The increase in SG&A expense was driven by an increase in restructuring related charges that were offset by an improvement of $23.7 million or 40 basis points as a percent of revenue in adjusted EBITDA SG&A. Our adjusted EBITDA SG&A improvement was driven by strong labor and expense control, including the effect of our previously announced restructuring, partially offset by lower TSA fee income from Walgreens.
Our pharmacy services segment had revenue of $1.57 billion, which was an increase of $23 million or 1.5%. The increase was due to an increase in our Medicare Part D revenues. Adjusted, EBITDA for the pharmacy services segment of $26.3 million with $7.5 million lower than last-year's first quarter adjusted EBITDA of $33.9 million. Gross profit and margin were negatively impacted by margin compression in our commercial business. The decline in adjusted EBITDA was also driven by increases in SG&A expense as we continue to invest for future growth.
Our cash flow statement for the quarter shows a use of cash from operating activities of $51 million. We funded the annual employer 401(k) contribution and bonus payments, which normally have a negative impact on cash flow in the first quarter. Timing of receivables and payables also had an impact. We expect our cash flow from operations to fluctuate from quarter-to-quarter due to seasonal inventory builds in our retail business and the timing of the build of the current year CMS receivable, which occurs primarily in Q2 versus receipt of the prior-year receivable from CMS, which occurs in Q3. We expect to generate positive free cash flow this year due to initiatives to reduce inventory and improve payable terms. Our debt balance net of cash was approximately $3.4 billion at the end of our quarter and our pro forma leverage ratio was 6 times adjusted EBITDA, which takes into account the pro forma impact of the sale proceeds from the remaining distribution centers to Walgreens. Our liquidity of approximately $1.7 billion at quarter-end was very strong and with no debt maturing until 2023, we had the flexibility and runway to execute our strategic initiatives.
Turning to fiscal 2020 guidance, which we are confirming at this time, our guidance assumes a continued decline in prescription reimbursement rates, partially offset by prescription count growth, improvements in drug costs and continued strong SG&A expense control. We expect our quarterly run rate of adjusted EBITDA for fiscal 2020 to improve, given expectations for same store prescription growth, the timing of drug purchasing improvements and actions we are taking to reduce costs. We expect total sales to be between $21.5 billion and $21.9 billion and same-store sales to be in a range of flat to an increase of 1%. We expect adjusted EBITDA to be between $500 million and $560 million. We expect adjusted net income to be in a range of a loss of $0.14 per share to income of $0.72 per share. Our net loss guidance includes an estimate of $55 million for restructuring expenses related to the rightsizing of our organization that we announced last quarter and our transformation initiatives. A large portion of the restructuring expense is for severance costs for headcount reductions, which were largely recognized in the first quarter. However, the restructuring expense estimate may be refined in future quarters, as we further develop these transformation initiatives. Keep in mind that this restructuring expense is not part of adjusted EBITDA or adjusted net income.
Our fiscal 2020 capital expenditure plan is to spend $250 million, which includes $60 million for script file buys and investments in technology design and to accelerate our digital and omni-channel offering. We are planning to open or relocate 8 stores and remodel 70 stores in fiscal 2020.
This completes my portion of the presentation. And I'll now turn it back to John.
John T. Standley--Chief Executive Officer
Thank you, Matt. Before we open the phone lines for questions, I'd just like to state that as a company, we have a tremendous opportunity to build on our momentum in key areas of our business and ultimately, redefine what it means to be a neighborhood destination for health and wellness. We have a strong foundation for growth, thanks to our trusted and well-known brand, award-winning customer loyalty program, innovative wellness store format and expanded offering of clinical pharmacy services.
We have a clear and customer-focused strategy that leverages our strongest capabilities and capitalizes on our biggest opportunities to deliver value in the retail healthcare marketplace. We have ample liquidity and a cost structure that's much better aligned with our current operations, which gives us the time and flexibility we need to execute this strategy. And we have an outstanding team of talented Rite Aid associates who are passionate about delivering a great experience to our customers. When combined with our new strategic partnerships and the investments we're making to transform our business, we believe we're on the right path in positioning Rite Aid for future growth.
That concludes our prepared remarks for the call. We will now open up the phone lines to your questions.
Operator
(Operator Instructions) Your first question comes from the line of Lisa Gill from JPMorgan. Please go ahead, your line is open.
Michael Minchak--Analyst -- JPMorgan
Thanks, it's actually Mike Minchak in for Lisa this afternoon. Just in terms of the discussion around new value-based pharmacy reimbursement models, we've heard yourself as well as some of the larger payers have been talking about that. Just wondering if you could talk about what those models might look like, I mean, should we be thinking about incremental payments for keeping patient to inherent or would you be going at risk for some component of your reimbursement? And as we think about those models, when do you expect them to be implemented more broadly, is this a counter 2020 impact or are we thinking more 2021 and beyond? And then as a follow up to that, how should we be thinking about the profitability of those new models versus the current model?
John T. Standley--Chief Executive Officer
Well, our goal is to drive profitability up over time. So the current sort of gross margin retail reimbursement models are pretty painful, obviously, based on our recent results. So our goal is to find additional ways to create value here and get paid for it. I think there's a few different things that we're working on. Today, we do participate through Medicare Part D and certain performance-type networks. Honestly, oftentimes they're designed in a way that makes it difficult for us to really achieve any gain sharing. So our goal is really to try and come up with some ways that drive value for both payer partners and Rite Aid. We can do that based on kind of specific type measurements, things that drive star ratings, closed gaps and care and do things like that, and find a way to get compensated for that, some of that could be at risk potentially, but we can also be focusing more broadly on outcomes as well. And we've had our model like that in the marketplace previously. So I think we're kind of running down some parallel paths to really find the right solutions that meet the needs of our regional partners and the payer space.
Bryan Everett--Chief Operating Officer
Mike, it's Bryan, I might just add that it is probably -- is an FY '21 calendar year '20 in terms of when we realize some of that additional income.
Michael Minchak--Analyst -- JPMorgan
Got it. And then just wondering if you could provide any more color on the PBM selling season. Where do you stand in terms of your retention rate, how much of your book is left to be renewed for 2020 at this point? And then obviously with all that's going on in the marketplace, your pass through pricing model is probably seeing a lot of interest there. Is that interest sort of broad based across all customer verticals or sort of limited to a certain customer category?
John T. Standley--Chief Executive Officer
It is across all segments we're seeing it, and we're nearly double the place we are now versus last year in our progress. So we're seeing really good momentum here. And we continue to see that pipeline grow, so we feel really good about that. Retention rates are above our goals, actually. So we feel good about overall where we are.
Michael Minchak--Analyst -- JPMorgan
Got it. Appreciate the color.
John T. Standley--Chief Executive Officer
Pieces of book of business, right, for this year?
Bryan Everett--Chief Operating Officer
That's right.
Michael Minchak--Analyst -- JPMorgan
Thanks for the color.
John T. Standley--Chief Executive Officer
Okay.
Operator
Your next question comes from the line of Robert Jones from Goldman Sachs. Please go ahead, your line is open.
Kevin Hartman--Goldman Sachs -- Analyst
Hey, this is actually Kevin Hartman on for Bob today. Thanks for taking the question. So just first, your adjusted EBITDA guidance would appear to require a pretty meaningful ramp in growth off 1Q levels, even though you'll have to manage through the TSA's potentially rolling off in the back half. So obviously the retroactive billing won't repeat, but outside of this, could you give more specifics on the biggest drivers of the ramp in growth? And what you think the biggest swing factors might be between you getting to the high end versus the low end of guidance?
John T. Standley--Chief Executive Officer
Sure, I'll start Matt and you can clean up on this one. The first thing is we have reimbursement rate changes go into effect in the first part of the year. We are now largely through our biggest generic bid of the year that's coming in line or maybe just a little bit better than our expectations. So we have the value of those generic savings for the remainder of the year. We continue to have script count growth, which is going to help us push this thing forward. We're making really good progress on cost savings and we believe we have things lined up here, which we'll continue to fully offset the TSA fees as they ramp down later in the year. So although the first quarter obviously isn't where we wanted it to be, I think a lot of the things are lining up the way we expected to hit our results down the stretch here.
Matt Schroeder--Chief Financial Officer
Yes, I -- the only thing I would add -- couple of things I would add to that, Kevin are -- we expect to see continued strong prescription count growth and we referenced getting back into some plans this year that are actually going to help further drive that prescription count growth, so I think that's going to be a positive. And then on the PBM side, there was some of the benefits on drug cost and that we talked about our off spin and flow through on the PBM as well in addition to some of the adjustments that Ben talked about in his commentary.
Kevin Hartman--Goldman Sachs -- Analyst
Thanks. And then quickly on, you guys have mentioned last quarter there was an open reimbursement contract, I think, for fiscal '20 which you were still working. So I was wondering, if you could just give us a quick update on how that's going, if it's completed and if it was within what you were expecting?
John T. Standley--Chief Executive Officer
Still working on it. Yes.
Kevin Hartman--Goldman Sachs -- Analyst
Awesome. Well, thanks guys.
Operator
Your next question comes from the line of Carla Casella from JPMorgan. Please go ahead, your line is open.
Carla Casella--JPMorgan -- Analyst
Hi. Can you give us what the amount of the TSA was in the quarter?
Matt Schroeder--Chief Financial Officer
The TSA fee was probably about $40 million, Carla, down about $9 million from last year.
Carla Casella--JPMorgan -- Analyst
And is that a good runway for the year?
Matt Schroeder--Chief Financial Officer
No, it's going to ramp down even more throughout the year as we have stores roll off the TSA.
Carla Casella--JPMorgan -- Analyst
Okay, and then --
Matt Schroeder--Chief Financial Officer
I think what we said publicly, Carla, is we expect the TSA income this year to be about $40 million by half of what it was last year, so.
Carla Casella--JPMorgan -- Analyst
Okay. That's great. And then on the -- you mentioned there are a few large off-market contracts that you didn't renew. That's all pharmacy services, right? Is that what you're referring to?
John T. Standley--Chief Executive Officer
That's correct.
Carla Casella--JPMorgan -- Analyst
And did that -- should that help gross margin going forward or I mean -- we didn't see it impact the gross margin this quarter. Is it something that's late in improvement or how should we think about it going forward? And are there others that you're considering not renewing going forward?
John T. Standley--Chief Executive Officer
This year -- so experience at this year is dilutive. Next year, we will not feel that effect.
Bryan Everett--Chief Operating Officer
So it's a contract. Just to back it's primarily one larger contract and there's a couple, I guess. But one larger one and it's a client that didn't renew last year.
John T. Standley--Chief Executive Officer
Correct.
Bryan Everett--Chief Operating Officer
That last year -- these are not competitive. They simply didn't renew.
Carla Casella--JPMorgan -- Analyst
Okay. And the amount of the FILO outstanding, is that still $450 million?
Matt Schroeder--Chief Financial Officer
That is correct.
Carla Casella--JPMorgan -- Analyst
The face value. Okay.
Matt Schroeder--Chief Financial Officer
Yes.
Carla Casella--JPMorgan -- Analyst
But your liquidity number, the $1.7 billion. Is that FILO included in your ABL availability?
Matt Schroeder--Chief Financial Officer
So the availability calculation is really based upon how much more we can draw on a revolver, Carla. There is a borrowing based component in the credit facility that also basically works into the FILO. But at the end of day, the $1.7 billion is additional draws we could do in a revolver.
Carla Casella--JPMorgan -- Analyst
Okay. Great, thank you.
Operator
Your next question comes from the line of William Reuter from Bank of America Merrill Lynch. Please go ahead, your line is open.
William Reuter--Bank of America Merrill Lynch -- Analyst
Good afternoon, it sounds like you've made some good progress on the commercial side on Envision. I think that you've accelerated the number for the 2020 season from last quarter. Is that number a net number or a gross number? And I guess do you expect to -- if it is a gross number, do you expect it to be offset by any losses?
John T. Standley--Chief Executive Officer
It's a net number, including our projected sales through the rest of the year. And it does include -- it does include expected and anticipated losses. The good news is, we've signed the most important contracts at this point for renewal.
William Reuter--Bank of America Merrill Lynch -- Analyst
Okay, that's helpful. And then would there be any changes in terms of your Medicare Part D preferred networks for 2020 plan year? Do you have an expectation there?
John T. Standley--Chief Executive Officer
I mean we're always adjusting. There is not a substantial change in our strategy there.
William Reuter--Bank of America Merrill Lynch -- Analyst
Okay. And then just lastly from me, I think that you will continue to get proceeds from the sale of the DCs to Walgreens. Do you have an expectation -- and I think it's a $160 million? Do you have an expectation for when you will be receiving those?
Matt Schroeder--Chief Financial Officer
So, William, this is Matt. We -- under the TSA agreement, we would not receive. We don't have -- Walgreens doesn't have to take possession of these DCs until the end of the TSA, which is October of 2020. So the receipt of those proceeds could be as late as then.
William Reuter--Bank of America Merrill Lynch -- Analyst
Okay, that's all from me. Thank you.
Operator
Your next question comes from the line of Karru Martinson from Jefferies. Please go ahead, your line is open.
Karru Martinson--Jefferies -- Analyst
Good afternoon. Just on the $12. million (sic) [$12.5 million] charge for the retroactive billing, could you provide a little more color? Is that cash going out the door here in the next quarter or two? Or -- and does that fully cover you or will there be additional adjustments there?
John T. Standley--Chief Executive Officer
So Karru, it's cash that's going to go out the door here probably over the next six to 12 months depending on the timing of all the retroactive billings. We've made our best estimate of what we think the amount of those retroactive billings is going to be. Until we kind of get the final billings, the number could maybe move a little bit off of that, but I'm pretty confident with the $12.5 million.
Karru Martinson--Jefferies -- Analyst
Okay. And then when you talk about on the PBM -- in investing for future growth. Is this kind of the SG&A run rate that we should be using going forward? Or are these kind of onetime investments that enhance the scalability and then you can kind of leverage the growth off of that?
John T. Standley--Chief Executive Officer
There's actually a little bit of both. It's elevating some to cover the volume increases. But there are some additional investments in our systems and our process capabilities. So we can scale with this increased volume.
Karru Martinson--Jefferies -- Analyst
Okay. And just lastly, can you provide an update on the CEO search?
John T. Standley--Chief Executive Officer
I can. So our Board has retained a nationally recognized search firm to assist with the search process. And with their assistance, the Board has identified several qualified candidates. The Board is currently working through the interview and selection process, recognizing that the search is the Board's highest priority. The board is making significant progress toward selecting a strong leader that will help Rite Aid to be successful.
Karru Martinson--Jefferies -- Analyst
Thank you very much, guys. Appreciate it.
Operator
And we have one last question remaining. Your last question comes from the line of David Cook from Wells Fargo. Please go ahead, your line is open.
David Cook--Wells Fargo -- Analyst
Hi, it's David Cook on for Bryan. One first touch on the retail side. I'm curious in the quarter, did you all see an impact to sales with regard to your tobacco 21 move as well as your move to a no longer sell vape and e-liquid products or is that just kind of organic consumption declines?
Ben Bulkley--Chief Executive Officer, EnvisionRxOptions
Yes, we answered this question. So that's why if you kind of take those things out, the comp actually flips to positive. So we've kind of given you the impact there we're minus 30 bps with it and we're positive 30 bps without it.
David Cook--Wells Fargo -- Analyst
Okay. And then the stores with the Amazon lockers, is there anyway you can provide kind of a relative lift in sales at the stores where you have those?
Ben Bulkley--Chief Executive Officer, EnvisionRxOptions
First of all, we can see they're getting utilization from data that we get back. We need a little bit of time here to quantify and measure the sales impact of this thing. So you've got to give us little time to work with it and we'll see how it goes.
David Cook--Wells Fargo -- Analyst
Okay. And then the pharmacy segment -- services side, I guess similar to Karru's question, the growth kind of related SG&A investments that's been a theme for a while now, I guess at what point do those kind of level off?
John T. Standley--Chief Executive Officer
I think that we'll continue to see additional investments because we want to accelerate our growth. I think we'll begin to see some of it level off toward the end of this year. But we'll also know a lot more coming into next year on our selling season. So we may make some adjustments if we have significantly higher uplift.
Bryan Everett--Chief Operating Officer
So you're going to continue to be a little elevated year-over-year. But in terms of run rate, you're in a pretty good place except for whatever you might do to bulk up for business season, right.
John T. Standley--Chief Executive Officer
That's right.
Bryan Everett--Chief Operating Officer
Yeah. So I think we're kind of -- I think we're getting close to a steady state. I think there's also some opportunity for efficiency that they're thinking about. And then it depends on how we do in Med D and whatnot and what enrollment looks like. But we may have to prolong some temporary help just to get through open enrollment and things like that.
John T. Standley--Chief Executive Officer
Which is typical.
Bryan Everett--Chief Operating Officer
Which is typical, yeah.
David Cook--Wells Fargo -- Analyst
Okay. And then lastly, the $43 million of add backs for restructuring charges, what percentage of that or what amount of that is a cash restructuring charge?
John T. Standley--Chief Executive Officer
It's predominantly cash restructuring charges. But one thing to keep in mind is a lot of severance costs were recognizing the expense upfront, but the actual payments are going to happen kind of come out over a period of time.
David Cook--Wells Fargo -- Analyst
Okay. That's all from us. Thanks.
John T. Standley--Chief Executive Officer
Okay. Well, I think that's all the questions that we have for this evening. So thanks everyone for joining us. We appreciate it.
Matt Schroeder--Chief Financial Officer
Thank you very much.
Bryan Everett--Chief Operating Officer
Thank you.
Operator
This concludes today's conference call. You may now disconnect.
Duration: 45 minutes
Byron Purcell--Investor Relations
John T. Standley--Chief Executive Officer
Bryan Everett--Chief Operating Officer
Ben Bulkley--Chief Executive Officer, EnvisionRxOptions
Matt Schroeder--Chief Financial Officer
Michael Minchak--Analyst -- JPMorgan
Kevin Hartman--Goldman Sachs -- Analyst
Carla Casella--JPMorgan -- Analyst
William Reuter--Bank of America Merrill Lynch -- Analyst
Karru Martinson--Jefferies -- Analyst
David Cook--Wells Fargo -- Analyst
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President Trump wants military athletes to go pro sooner
President Donald Trump wants military athletes to get to the pros sooner. (AP Photo/Evan Vucci) President Donald Trump believes athletes at military academies should be allowed to go pro sooner. Trump signed an order Wednesday, asking the Pentagon to come up with a new plan that would allow just that , according to the Associated Press. Under the current policy — which was passed by the Trump administration in 2017 — athletes at military academies have to serve two years of active duty before they can play professional sports. Trump wants to alter that proposal — allowing military academy athletes to play professional sports immediately after graduating — because he feels athletes only have a short time to “take advantage of their athletic talents during which playing professional sports is realistically possible.” The shift in ideology may have been spurred by Army football’s visit to the White House in May. At the event, Trump remarked he would “look at doing a waiver for service academy athletes who can get into the major leagues, like the NFL, hockey, baseball. They’ll serve their time after they’re finished with professional sports.” One player affected by the policy was Jalen Robinette, a wide receiver from Air Force who was considered a likely NFL draft choice in 2017 . Trump has given the defense secretary 120 days to come up with a new plan. ——— 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: ‘I’m 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’ Women’s World Cup is succeeding, no thanks to FIFA |
New software glitch found in Boeing's troubled 737 Max jet
A new software problem has been found in the troubled Boeing 737 Max that could push the plane's nose down automatically, and fixing the flaw is almost certain to further delay the plane's return to flying after two deadly crashes. Boeing said Wednesday that the FAA "identified an additional requirement" for software changes that the aircraft manufacturer has been working on for eight months, since shortly after the first crash. "Boeing agrees with the FAA's decision and request, and is working on the required software to address the FAA's request," Boeing said in a statement. Government test pilots trying out Boeing's updated Max software in a flight simulator last week found a flaw that could result in the plane's nose pitching down, according to two people familiar with the matter. In both Max crashes, the plane's flight-control software pushed the nose down based on faulty readings from one sensor. The people said fixing the issue might be accomplished through software changes or by replacing a microprocessor in the plane's flight-control system. One said the latest setback is likely to delay the plane's return to service by an extra one to three months. Both spoke on condition of anonymity to discuss aspects of the review process that are not public. In a statement, the Federal Aviation Administration said it will lift its grounding of the plane only when it deems the jet safe — there is no set timeline. "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 agency said. The Max began passenger flights in 2017 and is Boeing's best-selling plane, although fewer than 400 have been delivered to airlines. A Max flown by Indonesia's Lion Air crashed in October, and an Ethiopian Airlines Max crashed in March. In all, 346 people died. Days after the second crash, regulators around the world grounded the plane. Boeing is scaling back the power of flight-control software called MCAS to push the nose down. It is also linking the software's nose-down command to two sensors on each plane instead of relying on just one in the original design. Story continues It is still uncertain what kind of training pilots will get for flying the plane with the new software — either computer-based or in-flight simulators. Meanwhile, some airlines that own Max jets have had to cancel large numbers of flights while the planes remain grounded. On Wednesday, United Airlines pushed back the scheduled return of its 14 Max jets until September. Southwest Airlines and American Airlines had already made similar announcements — an acknowledgement that the plane won't return to flying as soon as the airlines had hoped. ___ David Koenig can be reached at http://twitter.com/airlinewriter |
If You Had Bought Akzo Nobel India (NSE:AKZOINDIA) Shares Five Years Ago You'd Have Made 59%
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When we invest, we're generally looking for stocks that outperform the market average. Buying under-rated businesses is one path to excess returns. To wit, the Akzo Nobel India share price has climbed 59% in five years, easily topping the market return of 35% (ignoring dividends).
View our latest analysis for Akzo Nobel India
While the efficient markets hypothesis continues to be taught by some, it has been proven that markets are over-reactive dynamic systems, and investors are not always rational. One way to examine how market sentiment has changed over time is to look at the interaction between a company's share price and its earnings per share (EPS).
During five years of share price growth, Akzo Nobel India achieved compound earnings per share (EPS) growth of 7.4% per year. This EPS growth is lower than the 9.8% average annual increase in the share price. This suggests that market participants hold the company in higher regard, these days. That's not necessarily surprising considering the five-year track record of earnings growth.
You can see how EPS has changed over time in the image below (click on the chart to see the exact values).
Before buying or selling a stock, we always recommend a close examination ofhistoric growth trends, available here..
When looking at investment returns, it is important to consider the difference betweentotal shareholder return(TSR) andshare price return. Whereas the share price return only reflects the change in the share price, the TSR includes the value of dividends (assuming they were reinvested) and the benefit of any discounted capital raising or spin-off. Arguably, the TSR gives a more comprehensive picture of the return generated by a stock. As it happens, Akzo Nobel India's TSR for the last 5 years was 85%, which exceeds the share price return mentioned earlier. The dividends paid by the company have thusly boosted thetotalshareholder return.
Akzo Nobel India shareholders are down 6.1% for the year (even including dividends), but the market itself is up 2.9%. Even the share prices of good stocks drop sometimes, but we want to see improvements in the fundamental metrics of a business, before getting too interested. On the bright side, long term shareholders have made money, with a gain of 13% per year over half a decade. It could be that the recent sell-off is an opportunity, so it may be worth checking the fundamental data for signs of a long term growth trend. Before deciding if you like the current share price, check how Akzo Nobel India scores on these3 valuation metrics.
Of courseAkzo Nobel India 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 IN exchanges.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
Is Grupo Financiero Galicia S.A. (GGAL) A Good Stock To Buy?
How do you pick the next stock to invest in? One way would be to spend hours of research browsing through thousands of publicly traded companies. However, an easier way is to look at the stocks that smart money investors are collectively bullish on. Hedge funds and other institutional investors usually invest large amounts of capital and have to conduct due diligence while choosing their next pick. They don't always get it right, but, on average, their stock picks historically generated strong returns after adjusting for known risk factors. With this in mind, let’s take a look at the recent hedge fund activity surrounding Grupo Financiero Galicia S.A. (NASDAQ:GGAL).
IsGrupo Financiero Galicia S.A. (NASDAQ:GGAL)ready to rally soon? Investors who are in the know are in a pessimistic mood. The number of long hedge fund positions went down by 2 in recent months. Our calculations also showed that GGAL isn't among the30 most popular stocks among hedge funds.GGALwas in 17 hedge funds' portfolios at the end of the first quarter of 2019. There were 19 hedge funds in our database with GGAL positions at the end of the previous quarter.
So, why do we pay attention to hedge fund sentiment before making any investment decisions? Our research has shown that hedge funds' small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the market by 40 percentage points since May 2014 through May 30, 2019 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter. Even if you aren't comfortable with shorting stocks, you should at least avoid initiating long positions in our short portfolio.
We're going to review the key hedge fund action encompassing Grupo Financiero Galicia S.A. (NASDAQ:GGAL).
Heading into the second quarter of 2019, a total of 17 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -11% from the fourth quarter of 2018. Below, you can check out the change in hedge fund sentiment towards GGAL over the last 15 quarters. So, let's check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Of the funds tracked by Insider Monkey,EMS Capital, managed by Edmond M. Safra, holds the largest position in Grupo Financiero Galicia S.A. (NASDAQ:GGAL). EMS Capital has a $26.7 million position in the stock, comprising 2% of its 13F portfolio. Sitting at the No. 2 spot isMillennium Management, led by Israel Englander, holding a $21.7 million position; less than 0.1%% of its 13F portfolio is allocated to the stock. Remaining professional money managers that hold long positions encompass Crispin Odey'sOdey Asset Management Group, Robert Charles Gibbins'sAutonomy Capitaland John Horseman'sHorseman Capital Management.
Because Grupo Financiero Galicia S.A. (NASDAQ:GGAL) has experienced bearish sentiment from hedge fund managers, it's safe to say that there was a specific group of funds who sold off their full holdings heading into Q3. At the top of the heap, David Halpert'sPrince Street Capital Managementsold off the largest stake of all the hedgies monitored by Insider Monkey, totaling close to $20.2 million in stock. Richard Driehaus's fund,Driehaus Capital, also said goodbye to its stock, about $15.7 million worth. These bearish behaviors are intriguing to say the least, as total hedge fund interest dropped by 2 funds heading into Q3.
Let's now take a look at hedge fund activity in other stocks similar to Grupo Financiero Galicia S.A. (NASDAQ:GGAL). We will take a look at American Eagle Outfitters Inc. (NYSE:AEO), Wyndham Destinations, Inc. (NYSE:WYND), ACI Worldwide Inc (NASDAQ:ACIW), and Air Lease Corp (NYSE:AL). All of these stocks' market caps are closest to GGAL's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position AEO,25,459761,-2 WYND,25,139648,5 ACIW,23,347597,2 AL,23,312641,-10 Average,24,314912,-1.25 [/table]
View table hereif you experience formatting issues.
As you can see these stocks had an average of 24 hedge funds with bullish positions and the average amount invested in these stocks was $315 million. That figure was $115 million in GGAL's case. American Eagle Outfitters Inc. (NYSE:AEO) is the most popular stock in this table. On the other hand ACI Worldwide Inc (NASDAQ:ACIW) is the least popular one with only 23 bullish hedge fund positions. Compared to these stocks Grupo Financiero Galicia S.A. (NASDAQ:GGAL) is even less popular than ACIW. Hedge funds clearly dropped the ball on GGAL as the stock delivered strong returns, though hedge funds' consensus picks still generated respectable returns. Our calculations showed thattop 20 most popular stocksamong hedge funds returned 6.2% in Q2 through June 19th and outperformed the S&P 500 ETF (SPY) by nearly 3 percentage points. A small number of hedge funds were also right about betting on GGAL as the stock returned 29.8% during the same period and outperformed the market by an even larger margin.
Disclosure: None. This article was originally published atInsider Monkey.
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Is Solaris Oilfield Infrastructure, Inc. (SOI) A Good Stock To Buy?
Based on the fact that hedge funds have collectively under-performed the market for several years, it would be easy to assume that their stock picks simply aren't very good. However, our research shows this not to be the case. In fact, when it comes to their very top picks collectively, they show a strong ability to pick winning stocks. This year hedge funds' top 20 stock picks easily bested the broader market, at 18.7% compared to 12.1%, despite there being a few duds in there like Berkshire Hathaway (even their collective wisdom isn't perfect). The results show that there is plenty of merit to imitating the collective wisdom of top investors.
Solaris Oilfield Infrastructure, Inc. (NYSE:SOI)has seen an increase in hedge fund sentiment of late.SOIwas in 16 hedge funds' portfolios at the end of the first quarter of 2019. There were 15 hedge funds in our database with SOI positions at the end of the previous quarter. Our calculations also showed that soi isn't among the30 most popular stocks among hedge funds.
Hedge funds' reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn't keep up with the unhedged returns of the market indices. Our research has shown that hedge funds' small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the market by 40 percentage points since May 2014 through May 30, 2019 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter.
Let's check out the key hedge fund action regarding Solaris Oilfield Infrastructure, Inc. (NYSE:SOI).
At the end of the first quarter, a total of 16 of the hedge funds tracked by Insider Monkey were long this stock, a change of 7% from one quarter earlier. On the other hand, there were a total of 18 hedge funds with a bullish position in SOI a year ago. So, let's find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Andrew Feldstein and Stephen Siderow'sBlue Mountain Capitalhas the largest position in Solaris Oilfield Infrastructure, Inc. (NYSE:SOI), worth close to $25.9 million, amounting to 0.3% of its total 13F portfolio. Sitting at the No. 2 spot isAdage Capital Management, managed by Phill Gross and Robert Atchinson, which holds a $23.6 million position; 0.1% of its 13F portfolio is allocated to the company. Some other hedge funds and institutional investors that are bullish include Todd J. Kantor'sEncompass Capital Advisors, Anand Parekh'sAlyeska Investment Groupand Peter Rathjens, Bruce Clarke and John Campbell'sArrowstreet Capital.
Consequently, key hedge funds have jumped into Solaris Oilfield Infrastructure, Inc. (NYSE:SOI) headfirst.Arrowstreet Capital, managed by Peter Rathjens, Bruce Clarke and John Campbell, established the most valuable position in Solaris Oilfield Infrastructure, Inc. (NYSE:SOI). Arrowstreet Capital had $7.1 million invested in the company at the end of the quarter. D. E. Shaw'sD E Shawalso initiated a $0.7 million position during the quarter. The only other fund with a brand new SOI position is David Harding'sWinton Capital Management.
Let's also examine hedge fund activity in other stocks - not necessarily in the same industry as Solaris Oilfield Infrastructure, Inc. (NYSE:SOI) but similarly valued. We will take a look at Cellectis SA (NASDAQ:CLLS), OneSpan Inc. (NASDAQ:OSPN), Intellia Therapeutics, Inc. (NASDAQ:NTLA), and Federal Agricultural Mortgage Corp. (NYSE:AGM). All of these stocks' market caps resemble SOI's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position CLLS,8,32826,0 OSPN,13,71319,1 NTLA,10,16843,0 AGM,9,26105,0 Average,10,36773,0.25 [/table]
View table hereif you experience formatting issues.
As you can see these stocks had an average of 10 hedge funds with bullish positions and the average amount invested in these stocks was $37 million. That figure was $102 million in SOI's case. OneSpan Inc. (NASDAQ:OSPN) is the most popular stock in this table. On the other hand Cellectis SA (NASDAQ:CLLS) is the least popular one with only 8 bullish hedge fund positions. Compared to these stocks Solaris Oilfield Infrastructure, Inc. (NYSE:SOI) is more popular among hedge funds. Our calculations showed thattop 20 most popular stocksamong hedge funds returned 6.2% in Q2 through June 19th and outperformed the S&P 500 ETF (SPY) by nearly 3 percentage points. Unfortunately SOI wasn't nearly as popular as these 20 stocks and hedge funds that were betting on SOI were disappointed as the stock returned -5.8% during the same period and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out thetop 20 most popular stocksamong hedge funds as 13 of these stocks already outperformed the market in Q2.
Disclosure: None. This article was originally published atInsider Monkey.
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Here is What Hedge Funds Think About Regal Beloit Corporation (RBC)
The first quarter was a breeze as Powell pivoted, and China seemed eager to reach a deal with Trump. Both the S&P 500 and Russell 2000 delivered very strong gains as a result, with the Russell 2000, which is composed of smaller companies, outperforming the large-cap stocks slightly during the first quarter. Unfortunately sentiment shifted in May as this time China pivoted and Trump put more pressure on China by increasing tariffs. Hedge funds' top 20 stock picks performed spectacularly in this volatile environment. These stocks delivered a total gain of 18.7% through May 30th, vs. a gain of 12.1% for the S&P 500 ETF. In this article we will look at how this market volatility affected the sentiment of hedge funds towards Regal Beloit Corporation (NYSE:RBC), and what that likely means for the prospects of the company and its stock.
Hedge fund interest inRegal Beloit Corporation (NYSE:RBC)shares was flat at the end of last quarter. This is usually a negative indicator. The level and the change in hedge fund popularity aren't the only variables you need to analyze to decipher hedge funds' perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That's why at the end of this article we will examine companies such as Chimera Investment Corporation (NYSE:CIM), Silicon Laboratories Inc. (NASDAQ:SLAB), and AU Optronics Corp. (NYSE:AUO) to gather more data points.
In today’s marketplace there are numerous metrics shareholders employ to assess their holdings. A pair of the most useful metrics are hedge fund and insider trading activity. Our experts have shown that, historically, those who follow the best picks of the top hedge fund managers can trounce the broader indices by a very impressive amount (see the details here).
We're going to take a peek at the latest hedge fund action encompassing Regal Beloit Corporation (NYSE:RBC).
At Q1's end, a total of 17 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 0% from one quarter earlier. On the other hand, there were a total of 16 hedge funds with a bullish position in RBC a year ago. So, let's check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds,Fisher Asset Managementheld the most valuable stake in Regal Beloit Corporation (NYSE:RBC), which was worth $48.1 million at the end of the first quarter. On the second spot was AQR Capital Management which amassed $28.5 million worth of shares. Moreover, Renaissance Technologies, Arrowstreet Capital, and GLG Partners were also bullish on Regal Beloit Corporation (NYSE:RBC), allocating a large percentage of their portfolios to this stock.
Due to the fact that Regal Beloit Corporation (NYSE:RBC) has faced bearish sentiment from hedge fund managers, it's easy to see that there were a few money managers that decided to sell off their entire stakes heading into Q3. Intriguingly, Lee Ainslie'sMaverick Capitaldumped the biggest position of the "upper crust" of funds monitored by Insider Monkey, totaling an estimated $2.2 million in stock. Minhua Zhang's fund,Weld Capital Management, also dumped its stock, about $0.7 million worth. These transactions are intriguing to say the least, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).
Let's now take a look at hedge fund activity in other stocks similar to Regal Beloit Corporation (NYSE:RBC). These stocks are Chimera Investment Corporation (NYSE:CIM), Silicon Laboratories Inc. (NASDAQ:SLAB), AU Optronics Corp. (NYSE:AUO), and Liberty Latin America Ltd. (NASDAQ:LILA). This group of stocks' market values match RBC's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position CIM,10,117502,-1 SLAB,12,40386,-5 AUO,8,63727,-1 LILA,14,163739,1 Average,11,96339,-1.5 [/table]
View table hereif you experience formatting issues.
As you can see these stocks had an average of 11 hedge funds with bullish positions and the average amount invested in these stocks was $96 million. That figure was $130 million in RBC's case. Liberty Latin America Ltd. (NASDAQ:LILA) is the most popular stock in this table. On the other hand AU Optronics Corp. (NYSE:AUO) is the least popular one with only 8 bullish hedge fund positions. Compared to these stocks Regal Beloit Corporation (NYSE:RBC) is more popular among hedge funds. Our calculations showed thattop 20 most popular stocksamong hedge funds returned 6.2% in Q2 through June 19th and outperformed the S&P 500 ETF (SPY) by nearly 3 percentage points. Unfortunately RBC wasn't nearly as popular as these 20 stocks and hedge funds that were betting on RBC were disappointed as the stock returned -2.3% during the same period and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out thetop 20 most popular stocksamong hedge funds as 13 of these stocks already outperformed the market in Q2.
Disclosure: None. This article was originally published atInsider Monkey.
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Here’s What Hedge Funds Think About Meridian Bioscience, Inc. (VIVO)
With the first-quarter round of 13F filings behind us it is time to take a look at the stocks in which some of the best money managers in the world preferred to invest or sell heading into the first quarter. One of these stocks was Meridian Bioscience, Inc. (NASDAQ:VIVO).
Meridian Bioscience, Inc. (NASDAQ:VIVO)was in 16 hedge funds' portfolios at the end of the first quarter of 2019. VIVO investors should be aware of a decrease in support from the world's most elite money managers of late. There were 18 hedge funds in our database with VIVO positions at the end of the previous quarter. Our calculations also showed that vivo isn't among the30 most popular stocks among hedge funds.
Hedge funds' reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn't keep up with the unhedged returns of the market indices. Our research has shown that hedge funds' small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the market by 40 percentage points since May 2014 through May 30, 2019 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter.
We're going to go over the key hedge fund action surrounding Meridian Bioscience, Inc. (NASDAQ:VIVO).
At Q1's end, a total of 16 of the hedge funds tracked by Insider Monkey were long this stock, a change of -11% from one quarter earlier. By comparison, 16 hedge funds held shares or bullish call options in VIVO a year ago. With hedge funds' capital changing hands, there exists a select group of key hedge fund managers who were boosting their holdings considerably (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, Jim Simons'sRenaissance Technologieshas the number one position in Meridian Bioscience, Inc. (NASDAQ:VIVO), worth close to $52.9 million, accounting for less than 0.1%% of its total 13F portfolio. The second largest stake is held by D. E. Shaw ofD E Shaw, with a $6.8 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Some other hedge funds and institutional investors that are bullish comprise Noam Gottesman'sGLG Partners, Peter Rathjens, Bruce Clarke and John Campbell'sArrowstreet Capitaland Ken Griffin'sCitadel Investment Group.
Judging by the fact that Meridian Bioscience, Inc. (NASDAQ:VIVO) has witnessed declining sentiment from the aggregate hedge fund industry, logic holds that there were a few hedgies who sold off their entire stakes heading into Q3. Intriguingly, David Harding'sWinton Capital Managementsold off the biggest investment of the 700 funds followed by Insider Monkey, worth about $3.7 million in stock, and Minhua Zhang's Weld Capital Management was right behind this move, as the fund sold off about $0.6 million worth. These moves are interesting, as total hedge fund interest was cut by 2 funds heading into Q3.
Let's also examine hedge fund activity in other stocks similar to Meridian Bioscience, Inc. (NASDAQ:VIVO). These stocks are Wabash National Corporation (NYSE:WNC), NV5 Global, Inc. (NASDAQ:NVEE), Mammoth Energy Services, Inc. (NASDAQ:TUSK), and NanoString Technologies Inc (NASDAQ:NSTG). All of these stocks' market caps are similar to VIVO's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position WNC,16,67949,-4 NVEE,10,25194,-3 TUSK,17,389043,0 NSTG,22,143670,7 Average,16.25,156464,0 [/table]
View table hereif you experience formatting issues.
As you can see these stocks had an average of 16.25 hedge funds with bullish positions and the average amount invested in these stocks was $156 million. That figure was $84 million in VIVO's case. NanoString Technologies Inc (NASDAQ:NSTG) is the most popular stock in this table. On the other hand NV5 Global, Inc. (NASDAQ:NVEE) is the least popular one with only 10 bullish hedge fund positions. Meridian Bioscience, Inc. (NASDAQ:VIVO) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and we'd rather spend our time researching stocks that hedge funds are piling on. Our calculations showed thattop 20 most popular stocksamong hedge funds returned 6.2% in Q2 through June 19th and outperformed the S&P 500 ETF (SPY) by nearly 3 percentage points. Unfortunately VIVO wasn't nearly as popular as these 20 stocks (hedge fund sentiment was quite bearish); VIVO investors were disappointed as the stock returned -33.3% during the same time period and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out thetop 20 most popular stocksamong hedge funds as 13 of these stocks already outperformed the market so far in Q2.
Disclosure: None. This article was originally published atInsider Monkey.
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Here’s What Hedge Funds Think About Conn’s, Inc. (CONN)
Hedge funds are known to underperform the bull markets but that's not because they are bad at investing. Truth be told, most hedge fund managers and other smaller players within this industry are very smart and skilled investors. Of course, they may also make wrong bets in some instances, but no one knows what the future holds and how market participants will react to the bountiful news that floods in each day. Hedge funds underperform because they are hedged. The Standard and Poor’s 500 Index returned approximately 12.1% in the first 5 months of this year through May 30th (including dividend payments). Conversely, hedge funds’ top 20 large-cap stock picks generated a return of 18.7% during the same 5-month period. An average long/short hedge fund returned only a fraction of this due to the hedges they implement and the large fees they charge. Our research covering the last 18 years indicates that investors can outperform the market by imitating hedge funds' stock picks rather than directly investing in hedge funds. That's why we believe it isn't a waste of time to check out hedge fund sentiment before you invest in a stock like Conn's, Inc. (NASDAQ:CONN).
Conn's, Inc. (NASDAQ:CONN)has experienced an increase in enthusiasm from smart money of late.CONNwas in 16 hedge funds' portfolios at the end of the first quarter of 2019. There were 14 hedge funds in our database with CONN holdings at the end of the previous quarter. Our calculations also showed that conn isn't among the30 most popular stocks among hedge funds.
In the financial world there are tons of signals stock traders use to analyze stocks. Two of the best signals are hedge fund and insider trading sentiment. We have shown that, historically, those who follow the best picks of the best hedge fund managers can outpace the market by a healthy margin (see the details here).
We're going to take a look at the fresh hedge fund action encompassing Conn's, Inc. (NASDAQ:CONN).
At Q1's end, a total of 16 of the hedge funds tracked by Insider Monkey were long this stock, a change of 14% from the fourth quarter of 2018. By comparison, 16 hedge funds held shares or bullish call options in CONN a year ago. With hedge funds' sentiment swirling, there exists an "upper tier" of noteworthy hedge fund managers who were adding to their stakes significantly (or already accumulated large positions).
Among these funds,Anchorage Advisorsheld the most valuable stake in Conn's, Inc. (NASDAQ:CONN), which was worth $66.3 million at the end of the first quarter. On the second spot was Marshall Wace LLP which amassed $17.7 million worth of shares. Moreover, Portolan Capital Management, Millennium Management, and Buckingham Capital Management were also bullish on Conn's, Inc. (NASDAQ:CONN), allocating a large percentage of their portfolios to this stock.
As one would reasonably expect, key hedge funds have been driving this bullishness.Interval Partners, managed by Gregg Moskowitz, created the biggest call position in Conn's, Inc. (NASDAQ:CONN). Interval Partners had $3.2 million invested in the company at the end of the quarter. Mark Broach'sManatuck Hill Partnersalso initiated a $2.7 million position during the quarter. The following funds were also among the new CONN investors: Jim Simons'sRenaissance Technologies, Benjamin A. Smith'sLaurion Capital Management, and Gregg Moskowitz'sInterval Partners.
Let's also examine hedge fund activity in other stocks similar to Conn's, Inc. (NASDAQ:CONN). These stocks are Superior Energy Services, Inc. (NYSE:SPN), Heidrick & Struggles International, Inc. (NASDAQ:HSII), Entercom Communications Corp. (NYSE:ETM), and Dermira Inc (NASDAQ:DERM). All of these stocks' market caps match CONN's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position SPN,25,112729,5 HSII,18,131951,-4 ETM,21,95501,5 DERM,24,202565,8 Average,22,135687,3.5 [/table]
View table hereif you experience formatting issues.
As you can see these stocks had an average of 22 hedge funds with bullish positions and the average amount invested in these stocks was $136 million. That figure was $126 million in CONN's case. Superior Energy Services, Inc. (NYSE:SPN) is the most popular stock in this table. On the other hand Heidrick & Struggles International, Inc. (NASDAQ:HSII) is the least popular one with only 18 bullish hedge fund positions. Compared to these stocks Conn's, Inc. (NASDAQ:CONN) is even less popular than HSII. Hedge funds dodged a bullet by taking a bearish stance towards CONN. Our calculations showed that the top 20 most popular hedge fund stocks returned 6.2% in Q2 through June 19th and outperformed the S&P 500 ETF (SPY) by nearly 3 percentage points. Unfortunately CONN wasn't nearly as popular as these 20 stocks (hedge fund sentiment was very bearish); CONN investors were disappointed as the stock returned -23.3% during the same time frame and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out thetop 20 most popular stocksamong hedge funds as 13 of these stocks already outperformed the market so far in the second quarter.
Disclosure: None. This article was originally published atInsider Monkey.
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Hedge Funds Have Never Been More Bullish On Sportsman’s Warehouse Holdings Inc (SPWH)
Before we spend days researching a stock idea we like to take a look at how hedge funds and billionaire investors recently traded that stock. The S&P 500 Index ETF (SPY) lost 2.6% in the first two months of the second quarter. Ten out of 11 industry groups in the S&P 500 Index lost value in May. The average return of a randomly picked stock in the index was even worse (-3.6%). This means you (or a monkey throwing a dart) have less than an even chance of beating the market by randomly picking a stock. On the other hand, the top 20 most popular S&P 500 stocks among hedge funds not only generated positive returns but also outperformed the index by about 3 percentage points through May 30th. In this article, we will take a look at what hedge funds think about Sportsman's Warehouse Holdings Inc (NASDAQ:SPWH).
IsSportsman's Warehouse Holdings Inc (NASDAQ:SPWH)going to take off soon? Money managers are becoming more confident. The number of long hedge fund bets increased by 2 lately. Our calculations also showed that SPWH isn't among the30 most popular stocks among hedge funds.SPWHwas in 17 hedge funds' portfolios at the end of March. There were 15 hedge funds in our database with SPWH positions at the end of the previous quarter.
In the eyes of most traders, hedge funds are perceived as slow, outdated financial tools of yesteryear. While there are over 8000 funds with their doors open at present, We look at the masters of this club, approximately 750 funds. It is estimated that this group of investors watch over most of the smart money's total asset base, and by following their inimitable equity investments, Insider Monkey has unsheathed numerous investment strategies that have historically outstripped the market. Insider Monkey's flagship hedge fund strategy outstripped the S&P 500 index by around 5 percentage points annually since its inception in May 2014 through June 18th. We were able to generate large returns even by identifying short candidates. Our portfolio of short stocks lost 28.2% since February 2017 (through June 18th) even though the market was up nearly 30% during the same period. We just shared a list of 5 short targets in ourlatest quarterly updateand they are already down an average of 8.2% in a month whereas our long picks outperformed the market by 2.5 percentage points in this volatile 5 week period (our long picks also beat the market by 15 percentage points so far this year).
Let's analyze the key hedge fund action regarding Sportsman's Warehouse Holdings Inc (NASDAQ:SPWH).
At the end of the first quarter, a total of 17 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 13% from the fourth quarter of 2018. On the other hand, there were a total of 15 hedge funds with a bullish position in SPWH a year ago. With hedgies' positions undergoing their usual ebb and flow, there exists a few key hedge fund managers who were upping their holdings substantially (or already accumulated large positions).
The largest stake in Sportsman's Warehouse Holdings Inc (NASDAQ:SPWH) was held byCannell Capital, which reported holding $10.6 million worth of stock at the end of March. It was followed by Arbiter Partners Capital Management with a $7.3 million position. Other investors bullish on the company included Scion Asset Management, D E Shaw, and Springbok Capital.
Now, key hedge funds were breaking ground themselves.Manatuck Hill Partners, managed by Mark Broach, established the largest position in Sportsman's Warehouse Holdings Inc (NASDAQ:SPWH). Manatuck Hill Partners had $1.2 million invested in the company at the end of the quarter. Peter Rathjens, Bruce Clarke and John Campbell'sArrowstreet Capitalalso made a $0.5 million investment in the stock during the quarter. The other funds with brand new SPWH positions are Philippe Laffont'sCoatue Managementand John Overdeck and David Siegel'sTwo Sigma Advisors.
Let's now review hedge fund activity in other stocks - not necessarily in the same industry as Sportsman's Warehouse Holdings Inc (NASDAQ:SPWH) but similarly valued. We will take a look at SB One Bancorp (NASDAQ:SBBX), DHX Media Ltd (NASDAQ:DHXM), Brasilagro Cia Brasileira De Propriedades Agricolas (NYSE:LND), and OncoCyte Corporation (NYSE:OCX). This group of stocks' market values resemble SPWH's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position SBBX,5,17646,1 DHXM,4,59802,-1 LND,1,43,0 OCX,7,34448,6 Average,4.25,27985,1.5 [/table]
View table hereif you experience formatting issues.
As you can see these stocks had an average of 4.25 hedge funds with bullish positions and the average amount invested in these stocks was $28 million. That figure was $35 million in SPWH's case. OncoCyte Corporation (NYSE:OCX) is the most popular stock in this table. On the other hand Brasilagro Cia Brasileira De Propriedades Agricolas (NYSE:LND) is the least popular one with only 1 bullish hedge fund positions. Compared to these stocks Sportsman's Warehouse Holdings Inc (NASDAQ:SPWH) is more popular among hedge funds. Our calculations showed thattop 20 most popular stocksamong hedge funds returned 6.2% in Q2 through June 19th and outperformed the S&P 500 ETF (SPY) by nearly 3 percentage points. Unfortunately SPWH wasn't nearly as popular as these 20 stocks and hedge funds that were betting on SPWH were disappointed as the stock returned -21.7% during the same period and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out thetop 20 most popular stocksamong hedge funds as 13 of these stocks already outperformed the market in Q2.
Disclosure: None. This article was originally published atInsider Monkey.
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Here’s What Hedge Funds Think About Whirlpool Corporation (WHR)
"The global economic environment is very favorable for investors. Economies are generally strong, but not too strong. Employment levels are among the strongest for many decades. Interest rates are paused at very low levels, and the risk of significant increases in the medium term seems low. Financing for transactions is freely available to good borrowers, but not in major excess. Covenants are lighter than they were five years ago, but the extreme excesses seen in the past do not seem prevalent yet today. Despite this apparent ‘goldilocks’ market environment, we continue to worry about a world where politics are polarized almost everywhere, interest rates are low globally, and equity valuations are at their peak," are the words ofBrookfield Asset Management. Brookfield was right about politics as stocks experienced their second worst May since the 1960s due to escalation of trade disputes. We pay attention to what hedge funds are doing in a particular stock before considering a potential investment because it works for us. So let’s take a glance at the smart money sentiment towards Whirlpool Corporation (NYSE:WHR) and see how it was affected.
Whirlpool Corporation (NYSE:WHR)was in 18 hedge funds' portfolios at the end of March. WHR investors should be aware of a decrease in activity from the world's largest hedge funds lately. There were 20 hedge funds in our database with WHR positions at the end of the previous quarter. Our calculations also showed that WHR isn't among the30 most popular stocks among hedge funds.
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey's flagship best performing hedge funds strategy returned 25.8% year to date (through May 30th) and outperformed the market even though it draws its stock picks among small-cap stocks. This strategy also outperformed the market by 40 percentage points since its inception (see the details here). That's why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
Let's take a look at the recent hedge fund action surrounding Whirlpool Corporation (NYSE:WHR).
At Q1's end, a total of 18 of the hedge funds tracked by Insider Monkey were long this stock, a change of -10% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in WHR over the last 15 quarters. So, let's check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
When looking at the institutional investors followed by Insider Monkey, Edgar Wachenheim'sGreenhaven Associateshas the largest position in Whirlpool Corporation (NYSE:WHR), worth close to $376.4 million, accounting for 6.7% of its total 13F portfolio. The second largest stake is held byMillennium Management, managed by Israel Englander, which holds a $43.6 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Some other hedge funds and institutional investors that are bullish include Tom Gayner'sMarkel Gayner Asset Management, John Overdeck and David Siegel'sTwo Sigma Advisorsand Ken Griffin'sCitadel Investment Group.
Due to the fact that Whirlpool Corporation (NYSE:WHR) has faced declining sentiment from the entirety of the hedge funds we track, it's safe to say that there is a sect of hedge funds that decided to sell off their full holdings heading into Q3. It's worth mentioning that Richard Barrera'sRoystone Capital Partnerssold off the largest investment of the 700 funds monitored by Insider Monkey, totaling close to $28.9 million in stock. Ray Dalio's fund,Bridgewater Associates, also sold off its stock, about $23.8 million worth. These transactions are intriguing to say the least, as aggregate hedge fund interest was cut by 2 funds heading into Q3.
Let's go over hedge fund activity in other stocks - not necessarily in the same industry as Whirlpool Corporation (NYSE:WHR) but similarly valued. We will take a look at Zions Bancorporation (NASDAQ:ZION), Woori Financial Group Inc. (NYSE:WF), ON Semiconductor Corporation (NASDAQ:ON), and HollyFrontier Corporation (NYSE:HFC). All of these stocks' market caps are closest to WHR's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position ZION,44,631442,2 WF,1,997,-1 ON,39,660556,10 HFC,25,827449,0 Average,27.25,530111,2.75 [/table]
View table hereif you experience formatting issues.
As you can see these stocks had an average of 27.25 hedge funds with bullish positions and the average amount invested in these stocks was $530 million. That figure was $548 million in WHR's case. Zions Bancorporation (NASDAQ:ZION) is the most popular stock in this table. On the other hand Woori Financial Group Inc. (NYSE:WF) is the least popular one with only 1 bullish hedge fund positions. Whirlpool Corporation (NYSE:WHR) is not the least popular stock in this group but hedge fund interest is still below average. Our calculations showed thattop 20 most popular stocksamong hedge funds returned 6.2% in Q2 through June 19th and outperformed the S&P 500 ETF (SPY) by nearly 3 percentage points. A small number of hedge funds were also right about betting on WHR as the stock returned 7.8% during the same time frame and outperformed the market by an even larger margin.
Disclosure: None. This article was originally published atInsider Monkey.
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Here’s What Hedge Funds Think About Penske Automotive Group, Inc. (PAG)
Hedge funds run by legendary names like George Soros and David Tepper make billions of dollars a year for themselves and their super-rich accredited investors (you’ve got to have a minimum of $1 million liquid to invest in a hedge fund) by spending enormous resources on analyzing and uncovering data about small-cap stocks that the big brokerage houses don’t follow. Small caps are where they can generate significant outperformance. That's why we pay special attention to hedge fund activity in these stocks.
Penske Automotive Group, Inc. (NYSE:PAG)was in 18 hedge funds' portfolios at the end of the first quarter of 2019. PAG has experienced a decrease in activity from the world's largest hedge funds lately. There were 23 hedge funds in our database with PAG positions at the end of the previous quarter. Our calculations also showed that PAG isn't among the30 most popular stocks among hedge funds.
According to most stock holders, hedge funds are seen as worthless, outdated investment tools of years past. While there are over 8000 funds with their doors open at the moment, We hone in on the aristocrats of this group, about 750 funds. These investment experts watch over bulk of the smart money's total capital, and by tracking their finest equity investments, Insider Monkey has identified numerous investment strategies that have historically beaten the market. Insider Monkey's flagship hedge fund strategy surpassed the S&P 500 index by around 5 percentage points per year since its inception in May 2014 through June 18th. We were able to generate large returns even by identifying short candidates. Our portfolio of short stocks lost 28.2% since February 2017 (through June 18th) even though the market was up nearly 30% during the same period. We just shared a list of 5 short targets in ourlatest quarterly updateand they are already down an average of 8.2% in a month whereas our long picks outperformed the market by 2.5 percentage points in this volatile 5 week period (our long picks also beat the market by 15 percentage points so far this year).
We're going to go over the new hedge fund action surrounding Penske Automotive Group, Inc. (NYSE:PAG).
At Q1's end, a total of 18 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -22% from one quarter earlier. On the other hand, there were a total of 18 hedge funds with a bullish position in PAG a year ago. With the smart money's positions undergoing their usual ebb and flow, there exists a select group of noteworthy hedge fund managers who were boosting their holdings meaningfully (or already accumulated large positions).
Among these funds,GAMCO Investorsheld the most valuable stake in Penske Automotive Group, Inc. (NYSE:PAG), which was worth $23.1 million at the end of the first quarter. On the second spot was AQR Capital Management which amassed $12.6 million worth of shares. Moreover, Arrowstreet Capital, Citadel Investment Group, and Royce & Associates were also bullish on Penske Automotive Group, Inc. (NYSE:PAG), allocating a large percentage of their portfolios to this stock.
Seeing as Penske Automotive Group, Inc. (NYSE:PAG) has experienced declining sentiment from the entirety of the hedge funds we track, we can see that there lies a certain "tier" of hedgies who sold off their positions entirely last quarter. It's worth mentioning that Jim Simons'sRenaissance Technologiessaid goodbye to the largest stake of all the hedgies watched by Insider Monkey, totaling close to $6.2 million in stock. Dmitry Balyasny's fund,Balyasny Asset Management, also cut its stock, about $2.5 million worth. These bearish behaviors are important to note, as total hedge fund interest fell by 5 funds last quarter.
Let's now take a look at hedge fund activity in other stocks - not necessarily in the same industry as Penske Automotive Group, Inc. (NYSE:PAG) but similarly valued. These stocks are Graphic Packaging Holding Company (NYSE:GPK), The Brink's Company (NYSE:BCO), Selective Insurance Group, Inc. (NASDAQ:SIGI), and LiveRamp Holdings, Inc. (NYSE:RAMP). This group of stocks' market values match PAG's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position GPK,24,639511,4 BCO,25,490686,3 SIGI,12,28810,-2 RAMP,23,323059,5 Average,21,370517,2.5 [/table]
View table hereif you experience formatting issues.
As you can see these stocks had an average of 21 hedge funds with bullish positions and the average amount invested in these stocks was $371 million. That figure was $71 million in PAG's case. The Brink's Company (NYSE:BCO) is the most popular stock in this table. On the other hand Selective Insurance Group, Inc. (NASDAQ:SIGI) is the least popular one with only 12 bullish hedge fund positions. Penske Automotive Group, Inc. (NYSE:PAG) is not the least popular stock in this group but hedge fund interest is still below average. Our calculations showed thattop 20 most popular stocksamong hedge funds returned 6.2% in Q2 through June 19th and outperformed the S&P 500 ETF (SPY) by nearly 3 percentage points. A small number of hedge funds were also right about betting on PAG, though not to the same extent, as the stock returned 3.8% during the same time frame and outperformed the market as well.
Disclosure: None. This article was originally published atInsider Monkey.
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Read This Before You Buy Alkane Resources Limited (ASX:ALK) Because Of Its P/E Ratio
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This article is for investors who would like to improve their understanding of price to earnings ratios (P/E ratios). We'll apply a basic P/E ratio analysis to Alkane Resources Limited's (ASX:ALK), to help you decide if the stock is worth further research. Based on the last twelve months,Alkane Resources's P/E ratio is 9.92. That is equivalent to an earnings yield of about 10%.
Check out our latest analysis for Alkane Resources
Theformula for price to earningsis:
Price to Earnings Ratio = Price per Share ÷ Earnings per Share (EPS)
Or for Alkane Resources:
P/E of 9.92 = A$0.46 ÷ A$0.046 (Based on the trailing twelve months to December 2018.)
The higher the P/E ratio, the higher the price tag of a business, relative to its trailing earnings. That isn't a good or a bad thing on its own, but a high P/E means that buyers have a higher opinion of the business's prospects, relative to stocks with a lower P/E.
Earnings growth rates have a big influence on P/E ratios. That's because companies that grow earnings per share quickly will rapidly increase the 'E' in the equation. That means unless the share price increases, the P/E will reduce in a few years. A lower P/E should indicate the stock is cheap relative to others -- and that may attract buyers.
Alkane Resources's earnings made like a rocket, taking off 89% last year.
We can get an indication of market expectations by looking at the P/E ratio. We can see in the image below that the average P/E (10.8) for companies in the metals and mining industry is higher than Alkane Resources's P/E.
Its relatively low P/E ratio indicates that Alkane Resources shareholders think it will struggle to do as well as other companies in its industry classification. Many investors like to buy stocks when the market is pessimistic about their prospects. If you consider the stock interesting, further research is recommended. For example, I often monitordirector buying and selling.
It's important to note that the P/E ratio considers the market capitalization, not the enterprise value. So it won't reflect the advantage of cash, or disadvantage of debt. Theoretically, a business can improve its earnings (and produce a lower P/E in the future) by investing in growth. That means taking on debt (or spending its cash).
While growth expenditure doesn't always pay off, the point is that it is a good option to have; but one that the P/E ratio ignores.
With net cash of AU$74m, Alkane Resources has a very strong balance sheet, which may be important for its business. Having said that, at 33% of its market capitalization the cash hoard would contribute towards a higher P/E ratio.
Alkane Resources trades on a P/E ratio of 9.9, which is below the AU market average of 15.8. The net cash position gives plenty of options to the business, and the recent improvement in EPS is good to see. One might conclude that the market is a bit pessimistic, given the low P/E ratio.
When the market is wrong about a stock, it gives savvy investors an opportunity. If it is underestimating a company, investors can make money by buying and holding the shares until the market corrects itself. So thisfreevisual report on analyst forecastscould hold the key to an excellent investment decision.
Of courseyou might be able to find a better stock than Alkane Resources. So you may wish to see thisfreecollection of other companies that have grown earnings strongly.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
Here is What Hedge Funds Think About Lions Gate Entertainment Corporation (LGF-A)
How do you pick the next stock to invest in? One way would be to spend hours of research browsing through thousands of publicly traded companies. However, an easier way is to look at the stocks that smart money investors are collectively bullish on. Hedge funds and other institutional investors usually invest large amounts of capital and have to conduct due diligence while choosing their next pick. They don't always get it right, but, on average, their stock picks historically generated strong returns after adjusting for known risk factors. With this in mind, let’s take a look at the recent hedge fund activity surrounding Lions Gate Entertainment Corporation (NYSE:LGF-A).
Lions Gate Entertainment Corporation (NYSE:LGF-A)investors should be aware of a decrease in activity from the world's largest hedge funds of late.LGF-Awas in 18 hedge funds' portfolios at the end of the first quarter of 2019. There were 21 hedge funds in our database with LGF-A positions at the end of the previous quarter. Our calculations also showed that LGF-A isn't among the30 most popular stocks among hedge funds.
Hedge funds' reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn't keep up with the unhedged returns of the market indices. Our research has shown that hedge funds' small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the market by 40 percentage points since May 2014 through May 30, 2019 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter.
Let's go over the latest hedge fund action surrounding Lions Gate Entertainment Corporation (NYSE:LGF-A).
At the end of the first quarter, a total of 18 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -14% from the previous quarter. By comparison, 19 hedge funds held shares or bullish call options in LGF-A a year ago. With hedge funds' capital changing hands, there exists a few notable hedge fund managers who were upping their holdings meaningfully (or already accumulated large positions).
More specifically,MHR Fund Managementwas the largest shareholder of Lions Gate Entertainment Corporation (NYSE:LGF-A), with a stake worth $248.4 million reported as of the end of March. Trailing MHR Fund Management was Soros Fund Management, which amassed a stake valued at $16.4 million. Kingdon Capital, Citadel Investment Group, and Renaissance Technologies were also very fond of the stock, giving the stock large weights in their portfolios.
Because Lions Gate Entertainment Corporation (NYSE:LGF-A) has witnessed declining sentiment from the aggregate hedge fund industry, it's easy to see that there were a few hedgies that decided to sell off their entire stakes heading into Q3. At the top of the heap, Matthew Knauer and Mina Faltas'sNokota Managementcut the largest position of all the hedgies followed by Insider Monkey, worth an estimated $4.7 million in stock. Paul Hondros's fund,AlphaOne Capital Partners, also said goodbye to its stock, about $4.5 million worth. These bearish behaviors are intriguing to say the least, as aggregate hedge fund interest was cut by 3 funds heading into Q3.
Let's check out hedge fund activity in other stocks - not necessarily in the same industry as Lions Gate Entertainment Corporation (NYSE:LGF-A) but similarly valued. These stocks are American National Insurance Company (NASDAQ:ANAT), NCR Corporation (NYSE:NCR), Cabot Microelectronics Corporation (NASDAQ:CCMP), and Cornerstone OnDemand, Inc. (NASDAQ:CSOD). This group of stocks' market values are closest to LGF-A's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position ANAT,9,37272,-6 NCR,22,250591,2 CCMP,17,273525,-3 CSOD,29,644787,-2 Average,19.25,301544,-2.25 [/table]
View table hereif you experience formatting issues.
As you can see these stocks had an average of 19.25 hedge funds with bullish positions and the average amount invested in these stocks was $302 million. That figure was $316 million in LGF-A's case. Cornerstone OnDemand, Inc. (NASDAQ:CSOD) is the most popular stock in this table. On the other hand American National Insurance Company (NASDAQ:ANAT) is the least popular one with only 9 bullish hedge fund positions. Lions Gate Entertainment Corporation (NYSE:LGF-A) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and we'd rather spend our time researching stocks that hedge funds are piling on. Our calculations showed thattop 20 most popular stocksamong hedge funds returned 6.2% in Q2 through June 19th and outperformed the S&P 500 ETF (SPY) by nearly 3 percentage points. Unfortunately LGF-A wasn't nearly as popular as these 20 stocks (hedge fund sentiment was quite bearish); LGF-A investors were disappointed as the stock returned -22.6% during the same time period and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out thetop 20 most popular stocksamong hedge funds as 13 of these stocks already outperformed the market so far in Q2.
Disclosure: None. This article was originally published atInsider Monkey.
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Oil edges higher ahead of G20, OPEC meeting
By Stephanie Kelly
NEW YORK (Reuters) - Oil prices edged higher on Thursday on expectations that OPEC will extend an output cut agreement, while investors awaited a meeting between the United States and China that could produce a breakthrough on trade talks.
Brent crude futures rose 6 cents to settle at $66.55 a barrel. U.S. West Texas Intermediate (WTI) crude futures rose 5 cents to settle at $59.43 a barrel.
The Organization of the Petroleum Exporting Countries is expected to roll over a deal on cutting supplies at a meeting next week and discuss deepening the curbs, Iraq's oil minister said.
Sources told Reuters this month that Algeria had floated an idea of deepening the cut by some 600,000 barrels per day.
A deal between OPEC and its allies, including Russia to curb output by 1.2 million bpd, runs out at the end of June. Meetings on July 1-2 in Vienna will discuss the next steps.
The OPEC meeting will follow the G20 summit this weekend.
"If we don't see OPEC extend its production agreement and the U.S. and China leave the G20 with more problems, this rally up to one-month highs could stop," said Gene McGillian, vice president of market research at Tradition Energy in Stamford, Connecticut.
U.S. President Donald Trump said on Wednesday a trade deal with Chinese President Xi Jinping was possible this weekend but he is prepared to impose U.S. tariffs on most remaining Chinese imports if the two countries don't agree.
"It's clear that investors are a little cautious when it comes to this meeting, given how talks collapsed previously and the fighting talk we've since seen from both sides," said Craig Erlam, analyst at OANDA.
Tensions between the United States and Iran have also kept the market on edge. Iran is on course to breach a threshold in its nuclear agreement within days by accumulating more enriched uranium than permitted, although it had not done so yet by a deadline it set for Thursday, diplomats said, citing U.N. inspectors' data.
When asked about Iran possibly breaching those restrictions, U.S. Special Representative on Iran Brian Hook said it was clear there would be consequences.
Elsewhere, the government of Canada's main crude-producing province, Alberta, eased crude oil production curtailments for August on Thursday, setting the limit at 3.74 million bpd, compared with 3.71 million bpd in July.
GRAPHIC-U.S. crude inventories, weekly changes since 2017, click https://tmsnrt.rs/2XlX17b
(Additional reporting by Alex Lawler in London and Aaron Sheldrick in Tokyo; Editing by David Gregorio and Marguerita Choy) |
Hedge Funds Have Never Been This Bullish On A10 Networks Inc (ATEN)
The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We have processed the filings of the more than 700 world-class investment firms that we track and now have access to the collective wisdom contained in these filings, which are based on their March 31 holdings, data that is available nowhere else. Should you consider A10 Networks Inc (NYSE:ATEN) for your portfolio? We'll look to this invaluable collective wisdom for the answer.
A10 Networks Inc (NYSE:ATEN)has experienced an increase in hedge fund interest in recent months. Our calculations also showed that ATEN isn't among the30 most popular stocks among hedge funds.
To most investors, hedge funds are assumed to be worthless, old investment tools of years past. While there are greater than 8000 funds trading at present, We hone in on the aristocrats of this group, approximately 750 funds. It is estimated that this group of investors orchestrate most of the smart money's total asset base, and by tracking their inimitable equity investments, Insider Monkey has determined a few investment strategies that have historically outpaced the broader indices. Insider Monkey's flagship hedge fund strategy outstripped the S&P 500 index by around 5 percentage points a year since its inception in May 2014 through June 18th. We were able to generate large returns even by identifying short candidates. Our portfolio of short stocks lost 28.2% since February 2017 (through June 18th) even though the market was up nearly 30% during the same period. We just shared a list of 5 short targets in ourlatest quarterly updateand they are already down an average of 8.2% in a month whereas our long picks outperformed the market by 2.5 percentage points in this volatile 5 week period (our long picks also beat the market by 15 percentage points so far this year).
Let's review the latest hedge fund action surrounding A10 Networks Inc (NYSE:ATEN).
At the end of the first quarter, a total of 18 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 6% from the fourth quarter of 2018. By comparison, 13 hedge funds held shares or bullish call options in ATEN a year ago. So, let's check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Of the funds tracked by Insider Monkey, Eric Singer'sVIEX Capital Advisorshas the number one position in A10 Networks Inc (NYSE:ATEN), worth close to $29.2 million, accounting for 25.9% of its total 13F portfolio. Coming in second is Steven Baughman ofDivisar Capital, with a $18.1 million position; 5.9% of its 13F portfolio is allocated to the company. Other professional money managers that hold long positions contain Jim Simons'sRenaissance Technologies, Chuck Royce'sRoyce & Associatesand Peter Rathjens, Bruce Clarke and John Campbell'sArrowstreet Capital.
Now, some big names were breaking ground themselves.Element Capital Management, managed by Jeffrey Talpins, assembled the biggest position in A10 Networks Inc (NYSE:ATEN). Element Capital Management had $0.2 million invested in the company at the end of the quarter.
Let's now review hedge fund activity in other stocks - not necessarily in the same industry as A10 Networks Inc (NYSE:ATEN) but similarly valued. We will take a look at AVROBIO, Inc. (NASDAQ:AVRO), Team, Inc. (NYSE:TISI), Quanex Building Products Corporation (NYSE:NX), and 111, Inc. (NASDAQ:YI). This group of stocks' market values match ATEN's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position AVRO,4,66404,-2 TISI,14,94607,2 NX,16,44813,0 YI,3,13149,0 Average,9.25,54743,0 [/table]
View table hereif you experience formatting issues.
As you can see these stocks had an average of 9.25 hedge funds with bullish positions and the average amount invested in these stocks was $55 million. That figure was $95 million in ATEN's case. Quanex Building Products Corporation (NYSE:NX) is the most popular stock in this table. On the other hand 111, Inc. (NASDAQ:YI) is the least popular one with only 3 bullish hedge fund positions. Compared to these stocks A10 Networks Inc (NYSE:ATEN) is more popular among hedge funds. Our calculations showed thattop 20 most popular stocksamong hedge funds returned 6.2% in Q2 through June 19th and outperformed the S&P 500 ETF (SPY) by nearly 3 percentage points. Unfortunately ATEN wasn't nearly as popular as these 20 stocks and hedge funds that were betting on ATEN were disappointed as the stock returned -7.5% during the same period and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out thetop 20 most popular stocksamong hedge funds as 13 of these stocks already outperformed the market in Q2.
Disclosure: None. This article was originally published atInsider Monkey.
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Did Hedge Funds Drop The Ball On DHT Holdings Inc (DHT) ?
Hedge funds run by legendary names like George Soros and David Tepper make billions of dollars a year for themselves and their super-rich accredited investors (you’ve got to have a minimum of $1 million liquid to invest in a hedge fund) by spending enormous resources on analyzing and uncovering data about small-cap stocks that the big brokerage houses don’t follow. Small caps are where they can generate significant outperformance. That's why we pay special attention to hedge fund activity in these stocks.
IsDHT Holdings Inc (NYSE:DHT)a healthy stock for your portfolio? Money managers are taking a bearish view. The number of bullish hedge fund bets went down by 1 lately. Our calculations also showed that dht isn't among the30 most popular stocks among hedge funds.
Hedge funds' reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn't keep up with the unhedged returns of the market indices. Our research has shown that hedge funds' large-cap stock picks indeed failed to beat the market between 1999 and 2016. However, we were able to identify in advance a select group of hedge fund holdings that outperformed the market by 40 percentage points since May 2014 through May 30, 2019 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that'll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 30.9% through May 30, 2019. That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
[caption id="attachment_324853" align="aligncenter" width="450"]
Joshua Friedman of Canyon Capital[/caption]
We're going to analyze the latest hedge fund action encompassing DHT Holdings Inc (NYSE:DHT).
At the end of the first quarter, a total of 16 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -6% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in DHT over the last 15 quarters. So, let's see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds,Renaissance Technologiesheld the most valuable stake in DHT Holdings Inc (NYSE:DHT), which was worth $23.2 million at the end of the first quarter. On the second spot was Lansdowne Partners which amassed $13.7 million worth of shares. Moreover, Canyon Capital Advisors, SAYA Management, and Firefly Value Partners were also bullish on DHT Holdings Inc (NYSE:DHT), allocating a large percentage of their portfolios to this stock.
Because DHT Holdings Inc (NYSE:DHT) has experienced declining sentiment from the aggregate hedge fund industry, it's safe to say that there were a few hedgies who sold off their full holdings heading into Q3. Interestingly, Clint Carlson'sCarlson Capitaldumped the biggest investment of the 700 funds tracked by Insider Monkey, valued at close to $3.3 million in stock, and Kevin Michael Ulrich and Anthony Davis's Anchorage Advisors was right behind this move, as the fund dumped about $2.2 million worth. These moves are important to note, as total hedge fund interest fell by 1 funds heading into Q3.
Let's now take a look at hedge fund activity in other stocks - not necessarily in the same industry as DHT Holdings Inc (NYSE:DHT) but similarly valued. These stocks are Preferred Apartment Communities Inc. (NYSE:APTS), Sonic Automotive Inc (NYSE:SAH), Care.com Inc (NYSE:CRCM), and Zumiez Inc. (NASDAQ:ZUMZ). All of these stocks' market caps match DHT's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position APTS,7,3491,5 SAH,11,14767,1 CRCM,18,152719,1 ZUMZ,13,33969,1 Average,12.25,51237,2 [/table]
View table hereif you experience formatting issues.
As you can see these stocks had an average of 12.25 hedge funds with bullish positions and the average amount invested in these stocks was $51 million. That figure was $68 million in DHT's case. Care.com Inc (NYSE:CRCM) is the most popular stock in this table. On the other hand Preferred Apartment Communities Inc. (NYSE:APTS) is the least popular one with only 7 bullish hedge fund positions. DHT Holdings Inc (NYSE:DHT) is not the most popular stock in this group but hedge fund interest is still above average. Our calculations showed thattop 20 most popular stocksamong hedge funds returned 6.2% in Q2 through June 19th and outperformed the S&P 500 ETF (SPY) by nearly 3 percentage points. Hedge funds were also right about betting on DHT as the stock returned 27% during the same period and outperformed the market by an even larger margin. Hedge funds were rewarded for their relative bullishness.
Disclosure: None. This article was originally published atInsider Monkey.
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Gold eases on U.S.-China trade optimism, holds above $1,400 per oz
By Karthika Suresh Namboothiri
(Reuters) - Gold steadied on Thursday as investors looked for further cues from trade talks between the United States and China, which bolstered risk appetite and lifted the dollar, but the metal held on to support around the key $1,400 per ounce pivot.
Spot gold edged 0.1% lower to $1,407.71 per ounce as of 1:37 p.m. EDT(1737 GMT), having briefly dipped below $1,400 earlier in the session.
Prices have fallen more than $37 since gold's six-year high of $1,438.63 on Tuesday.
"We are still in a bullish momentum for gold with a couple of days of consolidation ... (We are seeing) a little pull-back on profit taking," said Phillip Streible, senior commodities strategist at RJO Futures, adding a stronger dollar and equities were weighing on bullion.
"People are fearful of giving up their whole gains (in gold)."
U.S. gold futures settled 0.2% lower at $1,412 per ounce.
The South China Morning Post (SCMP), citing sources, said Washington and Beijing were laying out an agreement that would help avert the next round of tariffs on an additional $300 billion of Chinese imports.
Investors hopes of a trade deal, however, were slightly dented by White House economic adviser Larry Kudlow's comment that Washington may move ahead with more tariffs on Chinese goods after all.
Global equities rose for the first time in five sessions, while U.S. stocks pared gains slightly on the back of Kudlow's comments.[MKTS/GLOB]
Meanwhile, the dollar eked out gains following days of weakness as comments from Fed officials on Wednesday signalled aggressive interest rate cuts were unlikely in its July meeting.
Futures are 100% priced for a cut of 25 basis points next month, and imply a 22% chance of 50 basis points.
Higher interest rates boost the dollar, making dollar-denominated gold more expensive for buyers using other currencies, and they reduce investor interest in non-yielding bullion.
The spike in the U.S. dollar from the lows of yesterday along with factors such as sliding yields precipitated to a bit of a sell-off in gold, said Bart Melek, head of commodity strategies at TD Securities in Toronto.
"For much of the quarter we are going to be trending around $1400."
Amongst other metals, silver declined 0.1% to $15.22 per ounce, while platinum was down 0.1% at $812.89. Palladium prices rose 1.7% to $1,547.91.
(Reporting by Karthika Suresh Namboothiri in Bengaluru; Editing by Marguerita Choy and Matthew Lewis) |
Dollar holds gains vs yen, jitters prevail ahead of G20
By Shinichi Saoshiro
TOKYO (Reuters) - The dollar hovered near a one-week high against the yen on Thursday, propped up by hopes of Sino-U.S. trade talk progress though investors were nonetheless cautious ahead of a meeting between leaders of the two powers in Japan in days ahead.
The greenback was little changed at 107.730 yen, having risen about 0.6% overnight to 107.850 yen, its highest since June 20. The U.S. currency was supported by comments from U.S. Treasury Secretary Steven Mnuchin that 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 though the cautious optimism remained intact.
"As the yen's moves on the Mnuchin comments show, the market is likely to react nervously to headlines related to the G20 summit," said Masafumi Yamamoto, chief forex strategist at Mizuho Securities.
U.S. President Donald Trump and Chinese President Xi Jinping are due to meet at the June 28-29 G20 summit in Osaka. Investors are focusing on whether the two leaders can pave the way to resolve a trade dispute between the world's two biggest economies.
The potential implications of the Trump-Xi meeting for U.S. monetary policy are huge, Yamamoto at Mizuho Securities said.
"If the two sides agree not to impose more tariffs, the Fed would no longer need to cut rates," he said. "On the contrary, if the talks point to the imposition of more tariffs, that could nudge hesitant policymakers towards rate cuts."
The dollar has taken a hit over the past week - it reached a six-month low of 106.780 yen on Tuesday - after the Federal Reserve opened the door to possible monetary easing in the coming months.
The dollar index against a basket of six major currencies was a touch lower at 96.196 after rising modestly the previous day.
The index had retreated to a three-month low of 95.843 at the start of the week amid the Fed's easing prospects. But it has managed to regain some traction after comments this week from central bank officials such as Chair Jerome Powell that tapered aggressive rate cut expectations.
The euro was steady at $1.1369 after inching up 0.05% on Wednesday.
The Canadian dollar was on a bullish footing as crude oil's surge supported commodity-linked currencies.
The loonie traded at C$1.3124 per dollar after advancing overnight to C$1.3108, its strongest since early February.
Oil prices surged as U.S. stockpiles of crude and refined products decreased.
The New Zealand dollar traded near a two-month peak of $0.6693 scaled on Wednesday, when the currency bounced after the Reserve Bank of New Zealand refrained from lowering rates.
The Australian dollar was close to a 2-1/2-week high of $0.6995 brushed the previous day.
(Editing by Sam Holmes) |
Why Apollo Tourism & Leisure Ltd (ASX:ATL) Could Be Worth Watching
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Apollo Tourism & Leisure Ltd (ASX:ATL), which is in the auto business, and is based in Australia, saw significant share price movement during recent months on the ASX, rising to highs of A$1.01 and falling to the lows of A$0.35. Some share price movements can give investors a better opportunity to enter into the stock, and potentially buy at a lower price. A question to answer is whether Apollo Tourism & Leisure's current trading price of A$0.36 reflective of the actual value of the small-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Apollo Tourism & Leisure’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.
See our latest analysis for Apollo Tourism & Leisure
Good news, investors! Apollo Tourism & Leisure is still a bargain right now. I’ve used the price-to-earnings ratio in this instance because there’s not enough visibility to forecast its cash flows. The stock’s ratio of 3.65x is currently well-below the industry average of 10.68x, meaning that it is trading at a cheaper price relative to its peers. Although, there may be another chance to buy again in the future. This is because Apollo Tourism & Leisure’s beta (a measure of share price volatility) is high, meaning its price movements will be exaggerated relative to the rest of the market. If the market is bearish, the company’s shares will likely fall by more than the rest of the market, providing a prime buying opportunity.
Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio. Although value investors would argue that it’s the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. Though in the case of Apollo Tourism & Leisure, it is expected to deliver a negative earnings growth of -7.7%, which doesn’t help build up its investment thesis. It appears that risk of future uncertainty is high, at least in the near term.
Are you a shareholder?Although ATL is currently undervalued, the negative outlook does bring on some uncertainty, which equates to higher risk. I recommend you think about whether you want to increase your portfolio exposure to ATL, or whether diversifying into another stock may be a better move for your total risk and return.
Are you a potential investor?If you’ve been keeping an eye on ATL for a while, but hesitant on making the leap, I recommend you dig deeper into the stock. Given its current undervaluation, now is a great time to make a decision. But keep in mind the risks that come with negative growth prospects in the future.
Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on Apollo Tourism & Leisure. You can find everything you need to know about Apollo Tourism & Leisure inthe latest infographic research report. If you are no longer interested in Apollo Tourism & Leisure, you can use our free platform to see my list of over50 other stocks with a high growth potential.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
Is Now An Opportune Moment To Examine Apollo Tourism & Leisure Ltd (ASX:ATL)?
Want to participate in ashort research study? Help shape the future of investing tools and you could win a $250 gift card!
Apollo Tourism & Leisure Ltd (ASX:ATL), which is in the auto business, and is based in Australia, received a lot of attention from a substantial price movement on the ASX over the last few months, increasing to A$1.01 at one point, and dropping to the lows of A$0.35. Some share price movements can give investors a better opportunity to enter into the stock, and potentially buy at a lower price. A question to answer is whether Apollo Tourism & Leisure's current trading price of A$0.36 reflective of the actual value of the small-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Apollo Tourism & Leisure’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.
See our latest analysis for Apollo Tourism & Leisure
Great news for investors – Apollo Tourism & Leisure is still trading at a fairly cheap price. In this instance, I’ve used the price-to-earnings (PE) ratio given that there is not enough information to reliably forecast the stock’s cash flows. I find that Apollo Tourism & Leisure’s ratio of 3.65x is below its peer average of 10.68x, which suggests the stock is undervalued compared to the Auto industry. What’s more interesting is that, Apollo Tourism & Leisure’s share price is quite volatile, which gives us more chances to buy since the share price could sink lower (or rise higher) in the future. This is based on its high beta, which is a good indicator for how much the stock moves relative to the rest of the market.
Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Although value investors would argue that it’s the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. Though in the case of Apollo Tourism & Leisure, it is expected to deliver a negative earnings growth of -7.7%, which doesn’t help build up its investment thesis. It appears that risk of future uncertainty is high, at least in the near term.
Are you a shareholder?Although ATL is currently undervalued, the adverse prospect of negative growth brings about some degree of risk. Consider whether you want to increase your portfolio exposure to ATL, or whether diversifying into another stock may be a better move for your total risk and return.
Are you a potential investor?If you’ve been keeping tabs on ATL for some time, but hesitant on making the leap, I recommend you dig deeper into the stock. Given its current undervaluation, now is a great time to make a decision. But keep in mind the risks that come with negative growth prospects in the future.
Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on Apollo Tourism & Leisure. You can find everything you need to know about Apollo Tourism & Leisure inthe latest infographic research report. If you are no longer interested in Apollo Tourism & Leisure, 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. |
Did Hedge Funds Drop The Ball On Recro Pharma Inc (REPH)?
Before we spend days researching a stock idea we like to take a look at how hedge funds and billionaire investors recently traded that stock. The S&P 500 Index ETF (SPY) lost 2.6% in the first two months of the second quarter. Ten out of 11 industry groups in the S&P 500 Index lost value in May. The average return of a randomly picked stock in the index was even worse (-3.6%). This means you (or a monkey throwing a dart) have less than an even chance of beating the market by randomly picking a stock. On the other hand, the top 20 most popular S&P 500 stocks among hedge funds not only generated positive returns but also outperformed the index by about 3 percentage points through May 30th. In this article, we will take a look at what hedge funds think about Recro Pharma Inc (NASDAQ:REPH).
Recro Pharma Inc (NASDAQ:REPH)shares haven't seen a lot of action during the first quarter. Overall, hedge fund sentiment was unchanged. The stock was in 11 hedge funds' portfolios at the end of the first quarter of 2019. The level and the change in hedge fund popularity aren't the only variables you need to analyze to decipher hedge funds' perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That's why at the end of this article we will examine companies such as Pointer Telocation Limited (NASDAQ:PNTR), Sol-Gel Technologies Ltd. (NASDAQ:SLGL), and Capitala Finance Corp (NASDAQ:CPTA) to gather more data points.
Hedge funds' reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn't keep up with the unhedged returns of the market indices. Our research has shown that hedge funds' small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the market by 40 percentage points since May 2014 through May 30, 2019 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter.
We're going to take a look at the new hedge fund action encompassing Recro Pharma Inc (NASDAQ:REPH).
At the end of the first quarter, a total of 11 of the hedge funds tracked by Insider Monkey were long this stock, a change of 0% from the fourth quarter of 2018. By comparison, 14 hedge funds held shares or bullish call options in REPH a year ago. With hedgies' positions undergoing their usual ebb and flow, there exists a few notable hedge fund managers who were upping their stakes considerably (or already accumulated large positions).
More specifically,Broadfin Capitalwas the largest shareholder of Recro Pharma Inc (NASDAQ:REPH), with a stake worth $11.2 million reported as of the end of March. Trailing Broadfin Capital was Newtyn Management, which amassed a stake valued at $6.5 million. Engine Capital, Alyeska Investment Group, and Renaissance Technologies were also very fond of the stock, giving the stock large weights in their portfolios.
We view hedge fund activity in the stock unfavorable, but in this case there was only a single hedge fund selling its entire position:Millennium Management. One hedge fund selling its entire position doesn't always imply a bearish intent. Theoretically a hedge fund may decide to sell a promising position in order to invest the proceeds in a more promising idea. However, we don't think this is the case in this case because only one of the 800+ hedge funds tracked by Insider Monkey identified as a viable investment and initiated a position in the stock (that fund wasFondren Management).
Let's now review hedge fund activity in other stocks - not necessarily in the same industry as Recro Pharma Inc (NASDAQ:REPH) but similarly valued. We will take a look at Pointer Telocation Limited (NASDAQ:PNTR), Sol-Gel Technologies Ltd. (NASDAQ:SLGL), Capitala Finance Corp (NASDAQ:CPTA), and Alpine Immune Sciences, Inc. (NASDAQ:ALPN). This group of stocks' market values match REPH's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position PNTR,4,6939,2 SLGL,3,7600,0 CPTA,3,1504,0 ALPN,6,55932,0 Average,4,17994,0.5 [/table]
View table hereif you experience formatting issues.
As you can see these stocks had an average of 4 hedge funds with bullish positions and the average amount invested in these stocks was $18 million. That figure was $35 million in REPH's case. Alpine Immune Sciences, Inc. (NASDAQ:ALPN) is the most popular stock in this table. On the other hand Sol-Gel Technologies Ltd. (NASDAQ:SLGL) is the least popular one with only 3 bullish hedge fund positions. Compared to these stocks Recro Pharma Inc (NASDAQ:REPH) is more popular among hedge funds. Our calculations showed thattop 20 most popular stocksamong hedge funds returned 6.2% in Q2 through June 19th and outperformed the S&P 500 ETF (SPY) by nearly 3 percentage points. Hedge funds were also right about betting on REPH as the stock returned 66.9% during the same period and outperformed the market by an even larger margin. Hedge funds were clearly right about piling into this stock relative to other stocks with similar market capitalizations.
Disclosure: None. This article was originally published atInsider Monkey.
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Is 51job, Inc. (JOBS) A Good Stock To Buy?
Hedge funds are known to underperform the bull markets but that's not because they are bad at investing. Truth be told, most hedge fund managers and other smaller players within this industry are very smart and skilled investors. Of course, they may also make wrong bets in some instances, but no one knows what the future holds and how market participants will react to the bountiful news that floods in each day. Hedge funds underperform because they are hedged. The Standard and Poor’s 500 Index returned approximately 12.1% in the first 5 months of this year through May 30th (including dividend payments). Conversely, hedge funds’ top 20 large-cap stock picks generated a return of 18.7% during the same 5-month period. An average long/short hedge fund returned only a fraction of this due to the hedges they implement and the large fees they charge. Our research covering the last 18 years indicates that investors can outperform the market by imitating hedge funds' stock picks rather than directly investing in hedge funds. That's why we believe it isn't a waste of time to check out hedge fund sentiment before you invest in a stock like 51job, Inc. (NASDAQ:JOBS).
51job, Inc. (NASDAQ:JOBS)has seen a decrease in hedge fund interest of late.JOBSwas in 12 hedge funds' portfolios at the end of the first quarter of 2019. There were 13 hedge funds in our database with JOBS positions at the end of the previous quarter. Our calculations also showed that JOBS isn't among the30 most popular stocks among hedge funds.
In the 21st century investor’s toolkit there are many metrics stock traders can use to value their stock investments. A pair of the most under-the-radar metrics are hedge fund and insider trading signals. Our experts have shown that, historically, those who follow the best picks of the best hedge fund managers can outpace the broader indices by a healthy margin (see the details here).
We're going to take a look at the new hedge fund action regarding 51job, Inc. (NASDAQ:JOBS).
At the end of the first quarter, a total of 12 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -8% from the previous quarter. By comparison, 12 hedge funds held shares or bullish call options in JOBS a year ago. So, let's check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically,Sloane Robinson Investment Managementwas the largest shareholder of 51job, Inc. (NASDAQ:JOBS), with a stake worth $10.4 million reported as of the end of March. Trailing Sloane Robinson Investment Management was Sensato Capital Management, which amassed a stake valued at $9.9 million. Fisher Asset Management, Weld Capital Management, and Two Sigma Advisors were also very fond of the stock, giving the stock large weights in their portfolios.
Because 51job, Inc. (NASDAQ:JOBS) has faced a decline in interest from hedge fund managers, it's easy to see that there is a sect of hedgies who were dropping their full holdings heading into Q3. It's worth mentioning that David Kowitz and Sheldon Kasowitz'sIndus Capitalsaid goodbye to the biggest investment of all the hedgies tracked by Insider Monkey, totaling an estimated $1.6 million in stock. David Costen Haley's fund,HBK Investments, also sold off its stock, about $0.6 million worth. These bearish behaviors are important to note, as total hedge fund interest dropped by 1 funds heading into Q3.
Let's check out hedge fund activity in other stocks similar to 51job, Inc. (NASDAQ:JOBS). We will take a look at Empire State Realty Trust Inc (NYSE:ESRT), nVent Electric plc (NYSE:NVT), Acuity Brands, Inc. (NYSE:AYI), and The Stars Group Inc. (NASDAQ:TSG). This group of stocks' market caps match JOBS's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position ESRT,14,161856,1 NVT,25,920355,-3 AYI,29,795548,2 TSG,44,902595,4 Average,28,695089,1 [/table]
View table hereif you experience formatting issues.
As you can see these stocks had an average of 28 hedge funds with bullish positions and the average amount invested in these stocks was $695 million. That figure was $29 million in JOBS's case. The Stars Group Inc. (NASDAQ:TSG) is the most popular stock in this table. On the other hand Empire State Realty Trust Inc (NYSE:ESRT) is the least popular one with only 14 bullish hedge fund positions. Compared to these stocks 51job, Inc. (NASDAQ:JOBS) is even less popular than ESRT. Hedge funds dodged a bullet by taking a bearish stance towards JOBS. Our calculations showed that the top 20 most popular hedge fund stocks returned 6.2% in Q2 through June 19th and outperformed the S&P 500 ETF (SPY) by nearly 3 percentage points. Unfortunately JOBS wasn't nearly as popular as these 20 stocks (hedge fund sentiment was very bearish); JOBS investors were disappointed as the stock returned -4.9% during the same time frame and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out thetop 20 most popular stocksamong hedge funds as 13 of these stocks already outperformed the market so far in the second quarter.
Disclosure: None. This article was originally published atInsider Monkey.
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Here’s What Hedge Funds Think About Hawaiian Electric Industries, Inc. (HE)
While the market driven by short-term sentiment influenced by the accomodative interest rate environment in the US, increasing oil prices and optimism towards the resolution of the trade war with China, many smart money investors kept their cautious approach regarding the current bull run in the first quarter and hedging or reducing many of their long positions. However, as we know, big investors usually buy stocks with strong fundamentals, which is why we believe we can profit from imitating them. In this article, we are going to take a look at the smart money sentiment surrounding Hawaiian Electric Industries, Inc. (NYSE:HE).
Hawaiian Electric Industries, Inc. (NYSE:HE)has seen a decrease in activity from the world's largest hedge funds lately. Our calculations also showed that HE isn't among the30 most popular stocks among hedge funds.
According to most shareholders, hedge funds are perceived as slow, outdated financial tools of the past. While there are more than 8000 funds trading at the moment, We look at the elite of this club, about 750 funds. Most estimates calculate that this group of people direct most of the hedge fund industry's total capital, and by watching their unrivaled equity investments, Insider Monkey has discovered many investment strategies that have historically outstripped Mr. Market. Insider Monkey's flagship hedge fund strategy outperformed the S&P 500 index by around 5 percentage points annually since its inception in May 2014 through June 18th. We were able to generate large returns even by identifying short candidates. Our portfolio of short stocks lost 28.2% since February 2017 (through June 18th) even though the market was up nearly 30% during the same period. We just shared a list of 5 short targets in ourlatest quarterly updateand they are already down an average of 8.2% in a month whereas our long picks outperformed the market by 2.5 percentage points in this volatile 5 week period (our long picks also beat the market by 15 percentage points so far this year).
We're going to analyze the recent hedge fund action surrounding Hawaiian Electric Industries, Inc. (NYSE:HE).
At the end of the first quarter, a total of 12 of the hedge funds tracked by Insider Monkey were long this stock, a change of -8% from the previous quarter. On the other hand, there were a total of 10 hedge funds with a bullish position in HE a year ago. With hedgies' capital changing hands, there exists a select group of key hedge fund managers who were upping their holdings considerably (or already accumulated large positions).
The largest stake in Hawaiian Electric Industries, Inc. (NYSE:HE) was held byValueAct Capital, which reported holding $58.1 million worth of stock at the end of March. It was followed by Renaissance Technologies with a $31 million position. Other investors bullish on the company included Winton Capital Management, AQR Capital Management, and GLG Partners.
Because Hawaiian Electric Industries, Inc. (NYSE:HE) has witnessed falling interest from hedge fund managers, we can see that there exists a select few funds who sold off their full holdings by the end of the third quarter. Intriguingly, Brian Olson, Baehyun Sung, and Jamie Waters'sBlackstart Capitalsaid goodbye to the largest stake of the 700 funds tracked by Insider Monkey, worth an estimated $19.2 million in stock, and Dmitry Balyasny's Balyasny Asset Management was right behind this move, as the fund dropped about $0.4 million worth. These bearish behaviors are important to note, as aggregate hedge fund interest was cut by 1 funds by the end of the third quarter.
Let's go over hedge fund activity in other stocks - not necessarily in the same industry as Hawaiian Electric Industries, Inc. (NYSE:HE) but similarly valued. These stocks are First Horizon National Corporation (NYSE:FHN), Williams-Sonoma, Inc. (NYSE:WSM), Itaú CorpBanca (NYSE:ITCB), and Radian Group Inc (NYSE:RDN). All of these stocks' market caps resemble HE's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position FHN,16,126038,-3 WSM,29,371142,12 ITCB,1,4168,0 RDN,19,192857,-5 Average,16.25,173551,1 [/table]
View table hereif you experience formatting issues.
As you can see these stocks had an average of 16.25 hedge funds with bullish positions and the average amount invested in these stocks was $174 million. That figure was $144 million in HE's case. Williams-Sonoma, Inc. (NYSE:WSM) is the most popular stock in this table. On the other hand Itaú CorpBanca (NYSE:ITCB) is the least popular one with only 1 bullish hedge fund positions. Hawaiian Electric Industries, Inc. (NYSE:HE) is not the least popular stock in this group but hedge fund interest is still below average. Our calculations showed thattop 20 most popular stocksamong hedge funds returned 6.2% in Q2 through June 19th and outperformed the S&P 500 ETF (SPY) by nearly 3 percentage points. A small number of hedge funds were also right about betting on HE as the stock returned 7.7% during the same time frame and outperformed the market by an even larger margin.
Disclosure: None. This article was originally published atInsider Monkey.
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Ajanta Pharma Limited (NSE:AJANTPHARM) Is Yielding 0.9% - But Is It A Buy?
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Dividend paying stocks like Ajanta Pharma Limited (NSE:AJANTPHARM) tend to be popular with investors, and for good reason - some research suggests a significant amount of all stock market returns come from reinvested dividends. If you are hoping to live on your dividends, it's important to be more stringent with your investments than the average punter. Regular readers know we like to apply the same approach to each dividend stock, and we hope you'll find our analysis useful.
While Ajanta Pharma's 0.9% dividend yield is not the highest, we think its lengthy payment history is quite interesting. The company also bought back stock equivalent to around 1.2% of market capitalisation this year. There are a few simple ways to reduce the risks of buying Ajanta Pharma for its dividend, and we'll go through these below.
Explore this interactive chart for our latest analysis on Ajanta Pharma!
Dividends are typically paid from company earnings. If a company pays more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. Comparing dividend payments to a company's net profit after tax is a simple way of reality-checking whether a dividend is sustainable. Looking at the data, we can see that 20% of Ajanta Pharma's profits were paid out as dividends in the last 12 months. With a low payout ratio, it looks like the dividend is comprehensively covered by earnings.
Another important check we do is to see if the free cash flow generated is sufficient to pay the dividend. Ajanta Pharma paid out 249% of its free cash flow last year, suggesting the dividend is poorly covered by cash flow. Paying out such a high percentage of cash flow suggests that the dividend was funded from either cash at bank or by borrowing, neither of which is desirable over the long term. Ajanta Pharma paid out less in dividends than it reported in profits, but unfortunately it didn't generate enough free cash flow to cover the dividend. Cash is king, as they say, and were Ajanta Pharma to repeatedly pay dividends that aren't well covered by cashflow, we would consider this a warning sign.
Consider gettingour latest analysis on Ajanta Pharma's financial position here.
Before buying a stock for its income, we want to see if the dividends have been stable in the past, and if the company has a track record of maintaining its dividend. Ajanta Pharma has been paying dividends for a long time, but for the purpose of this analysis, we only examine the past 10 years of payments. Its dividend payments have fallen by 20% or more on at least one occasion over the past ten years. During the past ten-year period, the first annual payment was ₹0.33 in 2009, compared to ₹9.00 last year. Dividends per share have grown at approximately 39% per year over this time. The growth in dividends has not been linear, but the CAGR is a decent approximation of the rate of change over this time frame.
So, its dividends have grown at a rapid rate over this time, but payments have been cut in the past. The stock may still be worth considering as part of a diversified dividend portfolio.
With a relatively unstable dividend, it's even more important to see if earnings per share (EPS) are growing. Why take the risk of a dividend getting cut, unless there's a good chance of bigger dividends in future? It's good to see Ajanta Pharma has been growing its earnings per share at 11% a year over the past 5 years. Rapid earnings growth and a low payout ratio suggests this company has been effectively reinvesting in its business. Should that continue, this company could have a bright future.
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. Firstly, the company has a conservative payout ratio, although we'd note that its cashflow in the past year was substantially lower than its reported profit. We were also glad to see it growing earnings, but it was concerning to see the dividend has been cut at least once in the past. In sum, we find it hard to get excited about Ajanta Pharma from a dividend perspective. It's not that we think it's a bad business; just that there are other companies that perform better on these criteria.
Companies that are growing earnings tend to be the best dividend stocks over the long term. See what the 5 analysts we track are forecasting for Ajanta Pharmafor freewith publicanalyst estimates for the company.
If you are a dividend investor, you might also want to look at ourcurated list of dividend stocks yielding above 3%.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
Here’s What Hedge Funds Think About FirstCash, Inc. (FCFS)
Hedge funds and other investment firms that we track manage billions of dollars of their wealthy clients' money, and needless to say, they are painstakingly thorough when analyzing where to invest this money, as their own wealth also depends on it. Regardless of the various methods used by elite investors like David Tepper and David Abrams, the resources they expend are second-to-none. This is especially valuable when it comes to small-cap stocks, which is where they generate their strongest outperformance, as their resources give them a huge edge when it comes to studying these stocks compared to the average investor, which is why we intently follow their activity in the small-cap space.
FirstCash, Inc. (NASDAQ:FCFS)shares haven't seen a lot of action during the first quarter. Overall, hedge fund sentiment was unchanged. The stock was in 12 hedge funds' portfolios at the end of March. The level and the change in hedge fund popularity aren't the only variables you need to analyze to decipher hedge funds' perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That's why at the end of this article we will examine companies such as Univar Inc (NYSE:UNVR), Penske Automotive Group, Inc. (NYSE:PAG), and Graphic Packaging Holding Company (NYSE:GPK) to gather more data points.
Hedge funds' reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn't keep up with the unhedged returns of the market indices. Our research has shown that hedge funds' small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the market by 40 percentage points since May 2014 through May 30, 2019 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter.
[caption id="attachment_745225" align="aligncenter" width="473"]
Noam Gottesman, GLG Partners[/caption]
Let's take a peek at the recent hedge fund action regarding FirstCash, Inc. (NASDAQ:FCFS).
At Q1's end, a total of 12 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 0% from the previous quarter. By comparison, 13 hedge funds held shares or bullish call options in FCFS a year ago. So, let's check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
According to Insider Monkey's hedge fund database, Jim Simons'sRenaissance Technologieshas the largest position in FirstCash, Inc. (NASDAQ:FCFS), worth close to $132.3 million, accounting for 0.1% of its total 13F portfolio. Coming in second isGLG Partners, led by Noam Gottesman, holding a $10.3 million position; less than 0.1%% of its 13F portfolio is allocated to the stock. Remaining members of the smart money that hold long positions comprise Israel Englander'sMillennium Management, D. E. Shaw'sD E Shawand Cliff Asness'sAQR Capital Management.
Because FirstCash, Inc. (NASDAQ:FCFS) has faced a decline in interest from the entirety of the hedge funds we track, it's safe to say that there lies a certain "tier" of money managers that elected to cut their full holdings last quarter. At the top of the heap, Ken Griffin'sCitadel Investment Groupdropped the biggest position of all the hedgies watched by Insider Monkey, totaling about $0.6 million in stock. Phil Frohlich's fund,Prescott Group Capital Management, also cut its stock, about $0.3 million worth. These bearish behaviors are important to note, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).
Let's check out hedge fund activity in other stocks - not necessarily in the same industry as FirstCash, Inc. (NASDAQ:FCFS) but similarly valued. We will take a look at Univar Inc (NYSE:UNVR), Penske Automotive Group, Inc. (NYSE:PAG), Graphic Packaging Holding Company (NYSE:GPK), and The Brink's Company (NYSE:BCO). All of these stocks' market caps resemble FCFS's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position UNVR,42,1098378,19 PAG,18,70927,-5 GPK,24,639511,4 BCO,25,490686,3 Average,27.25,574876,5.25 [/table]
View table hereif you experience formatting issues.
As you can see these stocks had an average of 27.25 hedge funds with bullish positions and the average amount invested in these stocks was $575 million. That figure was $165 million in FCFS's case. Univar Inc (NYSE:UNVR) is the most popular stock in this table. On the other hand Penske Automotive Group, Inc. (NYSE:PAG) is the least popular one with only 18 bullish hedge fund positions. Compared to these stocks FirstCash, Inc. (NASDAQ:FCFS) is even less popular than PAG. Hedge funds clearly dropped the ball on FCFS as the stock delivered strong returns, though hedge funds' consensus picks still generated respectable returns. Our calculations showed thattop 20 most popular stocksamong hedge funds returned 6.2% in Q2 through June 19th and outperformed the S&P 500 ETF (SPY) by nearly 3 percentage points. A small number of hedge funds were also right about betting on FCFS as the stock returned 14.4% during the same period and outperformed the market by an even larger margin.
Disclosure: None. This article was originally published atInsider Monkey.
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Here’s What Hedge Funds Think About Selective Insurance Group, Inc. (SIGI)
"The global economic environment is very favorable for investors. Economies are generally strong, but not too strong. Employment levels are among the strongest for many decades. Interest rates are paused at very low levels, and the risk of significant increases in the medium term seems low. Financing for transactions is freely available to good borrowers, but not in major excess. Covenants are lighter than they were five years ago, but the extreme excesses seen in the past do not seem prevalent yet today. Despite this apparent ‘goldilocks’ market environment, we continue to worry about a world where politics are polarized almost everywhere, interest rates are low globally, and equity valuations are at their peak," are the words ofBrookfield Asset Management. Brookfield was right about politics as stocks experienced their second worst May since the 1960s due to escalation of trade disputes. We pay attention to what hedge funds are doing in a particular stock before considering a potential investment because it works for us. So let’s take a glance at the smart money sentiment towards Selective Insurance Group, Inc. (NASDAQ:SIGI) and see how it was affected.
IsSelective Insurance Group, Inc. (NASDAQ:SIGI)undervalued? Investors who are in the know are becoming less hopeful. The number of bullish hedge fund bets shrunk by 2 recently. Our calculations also showed that SIGI isn't among the30 most popular stocks among hedge funds.
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that hedge funds' large-cap stock picks indeed failed to beat the market between 1999 and 2016. However, we were able to identify in advance a select group of hedge fund holdings that outperformed the market by 40 percentage points since May 2014 through May 30, 2019 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that'll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 30.9% through May 30, 2019. That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
[caption id="attachment_758442" align="aligncenter" width="450"]
Michael Platt of Bluecrest Capital Management[/caption]
We're going to check out the key hedge fund action regarding Selective Insurance Group, Inc. (NASDAQ:SIGI).
At Q1's end, a total of 12 of the hedge funds tracked by Insider Monkey were long this stock, a change of -14% from one quarter earlier. On the other hand, there were a total of 11 hedge funds with a bullish position in SIGI a year ago. So, let's find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds,Prospector Partnersheld the most valuable stake in Selective Insurance Group, Inc. (NASDAQ:SIGI), which was worth $8.9 million at the end of the first quarter. On the second spot was AQR Capital Management which amassed $5.2 million worth of shares. Moreover, Renaissance Technologies, Millennium Management, and GLG Partners were also bullish on Selective Insurance Group, Inc. (NASDAQ:SIGI), allocating a large percentage of their portfolios to this stock.
Due to the fact that Selective Insurance Group, Inc. (NASDAQ:SIGI) has faced bearish sentiment from the smart money, it's safe to say that there was a specific group of fund managers that slashed their positions entirely in the third quarter. It's worth mentioning that Minhua Zhang'sWeld Capital Managementsold off the biggest position of all the hedgies tracked by Insider Monkey, comprising close to $0.9 million in stock, and D. E. Shaw's D E Shaw was right behind this move, as the fund cut about $0.5 million worth. These bearish behaviors are important to note, as total hedge fund interest fell by 2 funds in the third quarter.
Let's now take a look at hedge fund activity in other stocks - not necessarily in the same industry as Selective Insurance Group, Inc. (NASDAQ:SIGI) but similarly valued. We will take a look at LiveRamp Holdings, Inc. (NYSE:RAMP), Bank OZK (NASDAQ:OZK), Enstar Group Ltd. (NASDAQ:ESGR), and PBF Energy Inc (NYSE:PBF). This group of stocks' market caps resemble SIGI's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position RAMP,23,323059,5 OZK,20,256803,2 ESGR,11,348751,2 PBF,22,342765,4 Average,19,317845,3.25 [/table]
View table hereif you experience formatting issues.
As you can see these stocks had an average of 19 hedge funds with bullish positions and the average amount invested in these stocks was $318 million. That figure was $29 million in SIGI's case. LiveRamp Holdings, Inc. (NYSE:RAMP) is the most popular stock in this table. On the other hand Enstar Group Ltd. (NASDAQ:ESGR) is the least popular one with only 11 bullish hedge fund positions. Selective Insurance Group, Inc. (NASDAQ:SIGI) is not the least popular stock in this group but hedge fund interest is still below average. Our calculations showed thattop 20 most popular stocksamong hedge funds returned 6.2% in Q2 through June 19th and outperformed the S&P 500 ETF (SPY) by nearly 3 percentage points. A small number of hedge funds were also right about betting on SIGI as the stock returned 21.1% during the same time frame and outperformed the market by an even larger margin.
Disclosure: None. This article was originally published atInsider Monkey.
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Hedge Funds Have Never Been This Bullish On Transportadora de Gas del Sur SA (TGS)
It seems that the masses and most of the financial media hate hedge funds and what they do, but why is this hatred of hedge funds so prominent? At the end of the day, these asset management firms do not gamble the hard-earned money of the people who are on the edge of poverty. Truth be told, most hedge fund managers and other smaller players within this industry are very smart and skilled investors. Of course, they may also make wrong bets in some instances, but no one knows what the future holds and how market participants will react to the bountiful news that floods in each day. The Standard and Poor’s 500 Index returned approximately 12.1% in the first 5 months of this year (through May 30th). Conversely, hedge funds’ top 20 large-cap stock picks generated a return of 18.7% during the same 5-month period, with the majority of these stock picks outperforming the broader market benchmark. Coincidence? It might happen to be so, but it is unlikely. Our research covering the last 18 years indicates that hedge funds' stock picks generate superior risk-adjusted returns. That's why we believe it isn't a waste of time to check out hedge fund sentiment before you invest in a stock like Transportadora de Gas del Sur SA (NYSE:TGS).
Transportadora de Gas del Sur SA (NYSE:TGS)investors should pay attention to an increase in hedge fund interest lately.TGSwas in 12 hedge funds' portfolios at the end of the first quarter of 2019. There were 8 hedge funds in our database with TGS positions at the end of the previous quarter. Our calculations also showed that TGS isn't among the30 most popular stocks among hedge funds.
So, why do we pay attention to hedge fund sentiment before making any investment decisions? Our research has shown that hedge funds' small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the market by 40 percentage points since May 2014 through May 30, 2019 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter. Even if you aren't comfortable with shorting stocks, you should at least avoid initiating long positions in our short portfolio.
[caption id="attachment_758454" align="aligncenter" width="450"]
James Dondero of Highland Capital Management[/caption]
Let's take a look at the latest hedge fund action surrounding Transportadora de Gas del Sur SA (NYSE:TGS).
Heading into the second quarter of 2019, a total of 12 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 50% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards TGS over the last 15 quarters. With hedge funds' capital changing hands, there exists an "upper tier" of notable hedge fund managers who were upping their stakes considerably (or already accumulated large positions).
Among these funds,Oaktree Capital Managementheld the most valuable stake in Transportadora de Gas del Sur SA (NYSE:TGS), which was worth $9.1 million at the end of the first quarter. On the second spot was Millennium Management which amassed $8.8 million worth of shares. Moreover, Highland Capital Management, Point State Capital, and Athanor Capital were also bullish on Transportadora de Gas del Sur SA (NYSE:TGS), allocating a large percentage of their portfolios to this stock.
Now, some big names were breaking ground themselves.ExodusPoint Capital, managed by Michael Gelband, assembled the largest position in Transportadora de Gas del Sur SA (NYSE:TGS). ExodusPoint Capital had $1.6 million invested in the company at the end of the quarter. Michael Platt and William Reeves'sBlueCrest Capital Mgmt.also initiated a $0.5 million position during the quarter. The following funds were also among the new TGS investors: Peter Rathjens, Bruce Clarke and John Campbell'sArrowstreet Capitaland Jonathan Soros'sJS Capital.
Let's also examine hedge fund activity in other stocks similar to Transportadora de Gas del Sur SA (NYSE:TGS). We will take a look at Uniti Group Inc. (NASDAQ:UNIT), Amkor Technology, Inc. (NASDAQ:AMKR), Ladder Capital Corp (NYSE:LADR), and Cision Ltd. (NYSE:CISN). This group of stocks' market caps are closest to TGS's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position UNIT,21,249203,7 AMKR,25,88588,1 LADR,15,53995,1 CISN,17,51296,0 Average,19.5,110771,2.25 [/table]
View table hereif you experience formatting issues.
As you can see these stocks had an average of 19.5 hedge funds with bullish positions and the average amount invested in these stocks was $111 million. That figure was $33 million in TGS's case. Amkor Technology, Inc. (NASDAQ:AMKR) is the most popular stock in this table. On the other hand Ladder Capital Corp (NYSE:LADR) is the least popular one with only 15 bullish hedge fund positions. Compared to these stocks Transportadora de Gas del Sur SA (NYSE:TGS) is even less popular than LADR. Hedge funds clearly dropped the ball on TGS as the stock delivered strong returns, though hedge funds' consensus picks still generated respectable returns. Our calculations showed thattop 20 most popular stocksamong hedge funds returned 6.2% in Q2 through June 19th and outperformed the S&P 500 ETF (SPY) by nearly 3 percentage points. A small number of hedge funds were also right about betting on TGS as the stock returned 23.1% during the same period and outperformed the market by an even larger margin.
Disclosure: None. This article was originally published atInsider Monkey.
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Hedge Funds Have Never Been This Bullish On Glacier Bancorp, Inc. (GBCI)
Is Glacier Bancorp, Inc. (NASDAQ:GBCI) a good equity to bet on right now? We like to check what the smart money thinks first before doing extensive research. Although there have been several high profile failed hedge fund picks, the consensus picks among hedge fund investors have historically outperformed the market after adjusting for known risk attributes. It's not surprising given that hedge funds have access to better information and more resources to predict the winners in the stock market.
Glacier Bancorp, Inc. (NASDAQ:GBCI)was in 12 hedge funds' portfolios at the end of March. GBCI investors should pay attention to an increase in enthusiasm from smart money lately. There were 10 hedge funds in our database with GBCI positions at the end of the previous quarter. Our calculations also showed that GBCI isn't among the30 most popular stocks among hedge funds.
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey's flagship best performing hedge funds strategy returned 25.8% year to date (through May 30th) and outperformed the market even though it draws its stock picks among small-cap stocks. This strategy also outperformed the market by 40 percentage points since its inception (see the details here). That's why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
[caption id="attachment_745225" align="aligncenter" width="473"]
Noam Gottesman, GLG Partners[/caption]
Let's go over the fresh hedge fund action encompassing Glacier Bancorp, Inc. (NASDAQ:GBCI).
At Q1's end, a total of 12 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 20% from the fourth quarter of 2018. By comparison, 5 hedge funds held shares or bullish call options in GBCI a year ago. So, let's review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically,Fisher Asset Managementwas the largest shareholder of Glacier Bancorp, Inc. (NASDAQ:GBCI), with a stake worth $29.1 million reported as of the end of March. Trailing Fisher Asset Management was GLG Partners, which amassed a stake valued at $9.5 million. Millennium Management, Forest Hill Capital, and Balyasny Asset Management were also very fond of the stock, giving the stock large weights in their portfolios.
Now, some big names were breaking ground themselves.Tudor Investment Corp, managed by Paul Tudor Jones, initiated the most valuable position in Glacier Bancorp, Inc. (NASDAQ:GBCI). Tudor Investment Corp had $0.8 million invested in the company at the end of the quarter. D. E. Shaw'sD E Shawalso initiated a $0.7 million position during the quarter.
Let's go over hedge fund activity in other stocks - not necessarily in the same industry as Glacier Bancorp, Inc. (NASDAQ:GBCI) but similarly valued. We will take a look at Extended Stay America Inc (NASDAQ:STAY), United States Steel Corporation (NYSE:X), National Health Investors Inc (NYSE:NHI), and Laureate Education, Inc. (NASDAQ:LAUR). This group of stocks' market valuations match GBCI's market valuation.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position STAY,32,522804,0 X,24,214659,0 NHI,12,120110,-1 LAUR,21,277072,-3 Average,22.25,283661,-1 [/table]
View table hereif you experience formatting issues.
As you can see these stocks had an average of 22.25 hedge funds with bullish positions and the average amount invested in these stocks was $284 million. That figure was $58 million in GBCI's case. Extended Stay America Inc (NASDAQ:STAY) is the most popular stock in this table. On the other hand National Health Investors Inc (NYSE:NHI) is the least popular one with only 12 bullish hedge fund positions. Compared to these stocks Glacier Bancorp, Inc. (NASDAQ:GBCI) is even less popular than NHI. Hedge funds dodged a bullet by taking a bearish stance towards GBCI. Our calculations showed that the top 20 most popular hedge fund stocks returned 6.2% in Q2 through June 19th and outperformed the S&P 500 ETF (SPY) by nearly 3 percentage points. Unfortunately GBCI wasn't nearly as popular as these 20 stocks (hedge fund sentiment was very bearish); GBCI investors were disappointed as the stock returned 0% during the same time frame and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out thetop 20 most popular stocksamong hedge funds as 13 of these stocks already outperformed the market so far in the second quarter.
Disclosure: None. This article was originally published atInsider Monkey.
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Here’s What Hedge Funds Think About National Health Investors Inc (NHI)
We at Insider Monkey have gone over 738 13F filings that hedge funds and famous value investors are required to file by the SEC. The 13F filings show the funds' and investors' portfolio positions as of March 31st. In this article we look at what those investors think of National Health Investors Inc (NYSE:NHI).
IsNational Health Investors Inc (NYSE:NHI)an exceptional investment right now? The best stock pickers are becoming less hopeful. The number of long hedge fund bets shrunk by 1 in recent months. Our calculations also showed that NHI isn't among the30 most popular stocks among hedge funds.
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that hedge funds' large-cap stock picks indeed failed to beat the market between 1999 and 2016. However, we were able to identify in advance a select group of hedge fund holdings that outperformed the market by 40 percentage points since May 2014 through May 30, 2019 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that'll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 30.9% through May 30, 2019. That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Let's check out the latest hedge fund action surrounding National Health Investors Inc (NYSE:NHI).
At the end of the first quarter, a total of 12 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -8% from one quarter earlier. By comparison, 10 hedge funds held shares or bullish call options in NHI a year ago. So, let's find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds,Renaissance Technologiesheld the most valuable stake in National Health Investors Inc (NYSE:NHI), which was worth $79.4 million at the end of the first quarter. On the second spot was Millennium Management which amassed $23.7 million worth of shares. Moreover, Two Sigma Advisors, Citadel Investment Group, and Citadel Investment Group were also bullish on National Health Investors Inc (NYSE:NHI), allocating a large percentage of their portfolios to this stock.
Seeing as National Health Investors Inc (NYSE:NHI) has witnessed a decline in interest from the smart money, logic holds that there lies a certain "tier" of funds that decided to sell off their entire stakes last quarter. Interestingly, Peter Algert and Kevin Coldiron'sAlgert Coldiron Investorsdropped the biggest stake of the "upper crust" of funds monitored by Insider Monkey, comprising close to $1.1 million in stock. D. E. Shaw's fund,D E Shaw, also sold off its stock, about $0.7 million worth. These transactions are intriguing to say the least, as total hedge fund interest was cut by 1 funds last quarter.
Let's check out hedge fund activity in other stocks similar to National Health Investors Inc (NYSE:NHI). These stocks are Laureate Education, Inc. (NASDAQ:LAUR), Investors Bancorp, Inc. (NASDAQ:ISBC), ASGN Incorporated (NYSE:ASGN), and Turquoise Hill Resources Ltd (NYSE:TRQ). All of these stocks' market caps are closest to NHI's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position LAUR,21,277072,-3 ISBC,24,658094,-3 ASGN,23,171702,2 TRQ,17,928990,1 Average,21.25,508965,-0.75 [/table]
View table hereif you experience formatting issues.
As you can see these stocks had an average of 21.25 hedge funds with bullish positions and the average amount invested in these stocks was $509 million. That figure was $120 million in NHI's case. Investors Bancorp, Inc. (NASDAQ:ISBC) is the most popular stock in this table. On the other hand Turquoise Hill Resources Ltd (NYSE:TRQ) is the least popular one with only 17 bullish hedge fund positions. Compared to these stocks National Health Investors Inc (NYSE:NHI) is even less popular than TRQ. Hedge funds dodged a bullet by taking a bearish stance towards NHI. Our calculations showed that the top 20 most popular hedge fund stocks returned 6.2% in Q2 through June 19th and outperformed the S&P 500 ETF (SPY) by nearly 3 percentage points. Unfortunately NHI wasn't nearly as popular as these 20 stocks (hedge fund sentiment was very bearish); NHI investors were disappointed as the stock returned 2.6% during the same time frame and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out thetop 20 most popular stocksamong hedge funds as 13 of these stocks already outperformed the market so far in the second quarter.
Disclosure: None. This article was originally published atInsider Monkey.
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Here’s What Hedge Funds Think About LegacyTexas Financial Group Inc (LTXB)
The market has been volatile in the last 6 months as the Federal Reserve continued its rate hikes and then abruptly reversed its stance and uncertainty looms over trade negotiations with China. Small cap stocks have been hit hard as a result, as the Russell 2000 ETF (IWM) has underperformed the larger S&P 500 ETF (SPY) by nearly 9 percentage points. SEC filings and hedge fund investor letters indicate that the smart money seems to be paring back their overall long exposure since summer months, though some funds increased their exposure dramatically at the end of Q4 and the beginning of Q1. In this article, we analyze what the smart money thinks of LegacyTexas Financial Group Inc (NASDAQ:LTXB) and find out how it is affected by hedge funds' moves.
Hedge fund interest inLegacyTexas Financial Group Inc (NASDAQ:LTXB)shares was flat at the end of last quarter. This is usually a negative indicator. At the end of this article we will also compare LTXB to other stocks including Columbia Financial, Inc. (NASDAQ:CLBK), Mallinckrodt Public Limited Company (NYSE:MNK), and Abercrombie & Fitch Co. (NYSE:ANF) to get a better sense of its popularity.
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that hedge funds' large-cap stock picks indeed failed to beat the market between 1999 and 2016. However, we were able to identify in advance a select group of hedge fund holdings that outperformed the market by 40 percentage points since May 2014 through May 30, 2019 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that'll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 30.9% through May 30, 2019. That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
[caption id="attachment_745225" align="aligncenter" width="473"]
Noam Gottesman, GLG Partners[/caption]
Let's take a look at the fresh hedge fund action encompassing LegacyTexas Financial Group Inc (NASDAQ:LTXB).
Heading into the second quarter of 2019, a total of 12 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 0% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in LTXB over the last 15 quarters. So, let's see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds,Millennium Managementheld the most valuable stake in LegacyTexas Financial Group Inc (NASDAQ:LTXB), which was worth $58 million at the end of the first quarter. On the second spot was Elizabeth Park Capital Management which amassed $11.7 million worth of shares. Moreover, Renaissance Technologies, Balyasny Asset Management, and GLG Partners were also bullish on LegacyTexas Financial Group Inc (NASDAQ:LTXB), allocating a large percentage of their portfolios to this stock.
Seeing as LegacyTexas Financial Group Inc (NASDAQ:LTXB) has witnessed a decline in interest from the entirety of the hedge funds we track, it's easy to see that there is a sect of fund managers that decided to sell off their full holdings heading into Q3. Interestingly, Ian Simm'sImpax Asset Managementdropped the biggest position of the "upper crust" of funds watched by Insider Monkey, worth an estimated $10.4 million in stock. Cliff Asness's fund,AQR Capital Management, also cut its stock, about $0.3 million worth. These moves are interesting, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).
Let's check out hedge fund activity in other stocks similar to LegacyTexas Financial Group Inc (NASDAQ:LTXB). We will take a look at Columbia Financial, Inc. (NASDAQ:CLBK), Mallinckrodt Public Limited Company (NYSE:MNK), Abercrombie & Fitch Co. (NYSE:ANF), and ServisFirst Bancshares, Inc. (NASDAQ:SFBS). This group of stocks' market caps are similar to LTXB's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position CLBK,8,25859,2 MNK,20,280322,-2 ANF,25,236240,3 SFBS,10,10546,-1 Average,15.75,138242,0.5 [/table]
View table hereif you experience formatting issues.
As you can see these stocks had an average of 15.75 hedge funds with bullish positions and the average amount invested in these stocks was $138 million. That figure was $90 million in LTXB's case. Abercrombie & Fitch Co. (NYSE:ANF) is the most popular stock in this table. On the other hand Columbia Financial, Inc. (NASDAQ:CLBK) is the least popular one with only 8 bullish hedge fund positions. LegacyTexas Financial Group Inc (NASDAQ:LTXB) is not the least popular stock in this group but hedge fund interest is still below average. Our calculations showed thattop 20 most popular stocksamong hedge funds returned 6.2% in Q2 through June 19th and outperformed the S&P 500 ETF (SPY) by nearly 3 percentage points. A small number of hedge funds were also right about betting on LTXB as the stock returned 7.6% during the same time frame and outperformed the market by an even larger margin.
Disclosure: None. This article was originally published atInsider Monkey.
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Why Atul Auto Limited (NSE:ATULAUTO) Could Be Your Next Investment
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Attractive stocks have exceptional fundamentals. In the case of Atul Auto Limited (NSE:ATULAUTO), there's is a financially-healthy , dividend-paying company with a a strong track record of performance. Below, I've touched on some key aspects you should know on a high level. For those interested in understanding where the figures come from and want to see the analysis, read the fullreport on Atul Auto here.
Over the past year, ATULAUTO has grown its earnings by 15%, with its most recent figure exceeding its annual average over the past five years. The strong earnings growth is reflected in impressive double-digit 21% return to shareholders, which is an optimistic signal for the future. ATULAUTO's ability to maintain an adequate level of cash to meet upcoming liabilities is a good sign for its financial health. This implies that ATULAUTO manages its cash and cost levels well, which is a crucial insight into the health of the company. ATULAUTO currently has no debt on its balance sheet. This implies that the company is running its operations purely on off equity funding. which is typically normal for a small-cap company. Therefore the company has plenty of headroom to grow, and the ability to raise debt should it need to in the future.
Income investors would also be happy to know that ATULAUTO is a great dividend company, with a current yield standing at 1.5%. ATULAUTO has also been regularly increasing its dividend payments to shareholders over the past decade.
For Atul Auto, I've compiled three key factors you should further examine:
1. Future Outlook: What are well-informed industry analysts predicting for ATULAUTO’s future growth? Take a look at ourfree research report of analyst consensusfor ATULAUTO’s outlook.
2. Valuation: What is ATULAUTO 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 ATULAUTO is currently mispriced by the market.
3. Other Attractive Alternatives: Are there other well-rounded stocks you could be holding instead of ATULAUTO? Exploreour interactive list of stocks with large potentialto get an idea of what else is out there you may be missing!
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
Here’s What Hedge Funds Think About Azul S.A. (AZUL)
Based on the fact that hedge funds have collectively under-performed the market for several years, it would be easy to assume that their stock picks simply aren't very good. However, our research shows this not to be the case. In fact, when it comes to their very top picks collectively, they show a strong ability to pick winning stocks. This year hedge funds' top 20 stock picks easily bested the broader market, at 18.7% compared to 12.1%, despite there being a few duds in there like Berkshire Hathaway (even their collective wisdom isn't perfect). The results show that there is plenty of merit to imitating the collective wisdom of top investors.
Azul S.A. (NYSE:AZUL)investors should pay attention to an increase in hedge fund interest in recent months. Our calculations also showed that AZUL isn't among the30 most popular stocks among hedge funds.
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that hedge funds' large-cap stock picks indeed failed to beat the market between 1999 and 2016. However, we were able to identify in advance a select group of hedge fund holdings that outperformed the market by 40 percentage points since May 2014 through May 30, 2019 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that'll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 30.9% through May 30, 2019. That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Let's take a gander at the key hedge fund action regarding Azul S.A. (NYSE:AZUL).
Heading into the second quarter of 2019, a total of 12 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 9% from the fourth quarter of 2018. Below, you can check out the change in hedge fund sentiment towards AZUL over the last 15 quarters. With hedgies' capital changing hands, there exists a select group of notable hedge fund managers who were increasing their holdings meaningfully (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Howard Marks'sOaktree Capital Managementhas the most valuable position in Azul S.A. (NYSE:AZUL), worth close to $43.2 million, comprising 0.8% of its total 13F portfolio. The second largest stake is held byZWEIG DIMENNA PARTNERS, managed by Joe DiMenna, which holds a $42.5 million position; the fund has 4.7% of its 13F portfolio invested in the stock. Other peers with similar optimism encompass Mark Moore'sThornTree Capital Partners, Jon Bauer'sContrarian Capitaland Ken Griffin'sCitadel Investment Group.
As aggregate interest increased, key hedge funds were breaking ground themselves.PEAK6 Capital Management, managed by Matthew Hulsizer, assembled the largest position in Azul S.A. (NYSE:AZUL). PEAK6 Capital Management had $1.5 million invested in the company at the end of the quarter. Benjamin A. Smith'sLaurion Capital Managementalso initiated a $1.2 million position during the quarter. The other funds with brand new AZUL positions are Robert B. Gillam'sMcKinley Capital Management, Matthew Hulsizer'sPEAK6 Capital Management, and Richard Driehaus'sDriehaus Capital.
Let's now review hedge fund activity in other stocks similar to Azul S.A. (NYSE:AZUL). These stocks are Outfront Media Inc (NYSE:OUT), BankUnited, Inc. (NYSE:BKU), Sunstone Hotel Investors Inc (NYSE:SHO), and Tetra Tech, Inc. (NASDAQ:TTEK). All of these stocks' market caps resemble AZUL's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position OUT,25,334752,8 BKU,19,536410,-2 SHO,20,156169,4 TTEK,23,58316,-2 Average,21.75,271412,2 [/table]
View table hereif you experience formatting issues.
As you can see these stocks had an average of 21.75 hedge funds with bullish positions and the average amount invested in these stocks was $271 million. That figure was $151 million in AZUL's case. Outfront Media Inc (NYSE:OUT) is the most popular stock in this table. On the other hand BankUnited, Inc. (NYSE:BKU) is the least popular one with only 19 bullish hedge fund positions. Compared to these stocks Azul S.A. (NYSE:AZUL) is even less popular than BKU. Hedge funds clearly dropped the ball on AZUL as the stock delivered strong returns, though hedge funds' consensus picks still generated respectable returns. Our calculations showed thattop 20 most popular stocksamong hedge funds returned 6.2% in Q2 through June 19th and outperformed the S&P 500 ETF (SPY) by nearly 3 percentage points. A small number of hedge funds were also right about betting on AZUL as the stock returned 20.4% during the same period and outperformed the market by an even larger margin.
Disclosure: None. This article was originally published atInsider Monkey.
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Beto breaks into Spanish at Democratic debate
Beto O’Rourke on Wednesday answered his first question at the 2020 Democratic presidential debate in Miami — in both English and Spanish. The former Texas congressman was asked whether he would support taxing higher earners, as has been proposed by some of his Democratic rivals. “This economy has got to work for everyone and right now we know that it isn’t,” O’Rourke said. “And it’s going to take all of us coming together to make sure that it does.” Without pausing, the El Paso native switched to Spanish. “We need to include every person in the success of this economy,” O’Rourke said, according to a Yahoo News translation. “But if we want to do this we need to include every person in our democracy. Each vote, each voter needs the representation, and every voice needs to listen.” Former Texas Rep. Beto O'Rourke. (Photo: Jim Watson/AFP/Getty Images) O’Rourke then switched back to English. “Right now we have a system that favors those who can pay for access and outcomes,” he said. “That’s how you explain an economy that is rigged to corporations and the very wealthiest. A $2 trillion tax cut that favored corporations while they were sitting on piles of cash and the very wealthiest in this country at a time of historic wealth inequality.” Wednesday’s debate was broadcast live by NBC, MSNBC and the Spanish-language Telemundo. While the language switch may have caught some viewers by surprise, O’Rourke often delivers answers in both English and Spanish on the campaign trail. Later, O'Rourke fielded a question in Spanish from Telemundo's José Diaz-Balart, who was co-moderating the debate. The former congressman replied in both Spanish and English. O'Rourke wasn't the only candidate to deliver an answer in Spanish on Wednesday night. Former Housing and Urban Development Secretary Julian Castro and Sen. Cory Booker of New Jersey did so, too. Read more original 2020 coverage from Yahoo News: Democrats vow debate won't become 'crazytown' Warren has big lead among young progressives, NextGen poll finds Bernie Sanders to launch livestream TV channel after the debate Biden wants more 'civility.' His rivals want more power. In rambling interview, Trump pronounces Biden 'a lost soul' Trump says climate change goes ‘both ways’ Beto O’Rourke says he’s unfazed by sinking poll numbers in Iowa Bernie Sanders goes all in on democratic socialism — again Trump isn't afraid of Elizabeth Warren. But he should be. |
Tim Ryan slams GM for factory move to Mexico as Warren urges US take lead in green tech
Ohio Rep. Tim Ryan slammedGeneral Motorsfor leaving Ohio in favor of Mexico, while Massachusetts Sen. Elizabeth Warren urged the United States to take the lead in developing green technology during Wednesday's Democratic presidential debate.
"We lost 4,000 jobs at a General Motors facility that rippled throughout our community," he said. "General Motors got a tax cut. General Motors got a bailout and then they have the audacity to move a new car that they're going to produce to Mexico."He said the loss of General Motors hit him personally, but that the exodus of American companies from the US has been "going on for years in northeast Ohio."
"I've had family members that have had to unbolt a machine from the factory floor, put it in a box and ship it to China," Ryan said.
He then called for a new stance on industrials that would bring more jobs to the U.S., particularly when it comes to electric vehicle manufacturing.
"There's going to be 30 million [electric vehicles] made in the next 10 years -- I want half of them made in the United States. I want to dominate the solar industry and manufacture those in the United States," he said.
Warren echoed the call for change in America's industrial policy, saying the current stance of "let corporations do what they want to do" hasn't worked."Giant corporations have one priority and that's to turn a profit," she said. "If they can save a nickel by sending a job to Mexico, Asia or Canada, they're going to do it."
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Warren also agreed the future is in green technology and said she wants the U.S. to be the country that provides it for the future.She said she would be open to having corporations use research in green tech to make "all kinds of products" with one caveat -- they must manufacture it in the U.S. and then sell it around the world."There is a $23 trillion market coming" that includes potentially 1.2 million jobs, Warren said of green tech.
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Is ANI Integrated Services Limited's (NSE:AISL) 14% ROE Better Than Average?
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One of the best investments we can make is in our own knowledge and skill set. With that in mind, this article will work through how we can use Return On Equity (ROE) to better understand a business. By way of learning-by-doing, we'll look at ROE to gain a better understanding of ANI Integrated Services Limited (NSE:AISL).
Our data showsANI Integrated Services has a return on equity of 14%for the last year. Another way to think of that is that for every ₹1 worth of equity in the company, it was able to earn ₹0.14.
Check out our latest analysis for ANI Integrated Services
Theformula for return on equityis:
Return on Equity = Net Profit ÷ Shareholders' Equity
Or for ANI Integrated Services:
14% = ₹52m ÷ ₹386m (Based on the trailing twelve months to March 2019.)
Most readers would understand what net profit is, but it’s worth explaining the concept of shareholders’ equity. It is all the money paid into the company from shareholders, plus any earnings retained. You can calculate shareholders' equity by subtracting the company's total liabilities from its total assets.
ROE measures a company's profitability against the profit it retains, and any outside investments. The 'return' is the profit over the last twelve months. A higher profit will lead to a higher ROE. So, all else being equal,a high ROE is better than a low one. Clearly, then, one can use ROE to compare different companies.
By comparing a company's ROE with its industry average, we can get a quick measure of how good it is. The limitation of this approach is that some companies are quite different from others, even within the same industry classification. Pleasingly, ANI Integrated Services has a superior ROE than the average (9.4%) company in the Professional Services industry.
That is a good sign. I usually take a closer look when a company has a better ROE than industry peers. One data point to check is ifinsiders have bought shares recently.
Virtually all companies need money to invest in the business, to grow profits. That cash can come from retained earnings, issuing new shares (equity), or debt. In the first two cases, the ROE will capture this use of capital to grow. In the latter case, the debt required for growth will boost returns, but will not impact the shareholders' equity. Thus the use of debt can improve ROE, albeit along with extra risk in the case of stormy weather, metaphorically speaking.
Although ANI Integrated Services does use a little debt, its debt to equity ratio of just 0.042 is very low. I'm not impressed with its ROE, but the debt levels are not too high, indicating the business has decent prospects. Conservative use of debt to boost returns is usually a good move for shareholders, though it does leave the company more exposed to interest rate rises.
Return on equity is useful for comparing the quality of different businesses. In my book the highest quality companies have high return on equity, despite low debt. All else being equal, a higher ROE is better.
But when a business is high quality, the market often bids it up to a price that reflects this. The rate at which profits are likely to grow, relative to the expectations of profit growth reflected in the current price, must be considered, too. Check the past profit growth by ANI Integrated Services by looking at thisvisualization of past earnings, revenue and cash flow.
But note:ANI Integrated Services may not be the best stock to buy. So take a peek at thisfreelist of interesting companies with high ROE and low debt.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
Here’s What Hedge Funds Think About Tower Semiconductor Ltd. (TSEM)
The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We have processed the filings of the more than 700 world-class investment firms that we track and now have access to the collective wisdom contained in these filings, which are based on their March 31 holdings, data that is available nowhere else. Should you consider Tower Semiconductor Ltd. (NASDAQ:TSEM) for your portfolio? We'll look to this invaluable collective wisdom for the answer.
Tower Semiconductor Ltd. (NASDAQ:TSEM)was in 12 hedge funds' portfolios at the end of the first quarter of 2019. TSEM shareholders have witnessed a decrease in activity from the world's largest hedge funds lately. There were 16 hedge funds in our database with TSEM holdings at the end of the previous quarter. Our calculations also showed that TSEM isn't among the30 most popular stocks among hedge funds.
According to most market participants, hedge funds are assumed to be slow, old financial tools of years past. While there are more than 8000 funds trading at the moment, Our experts look at the aristocrats of this group, about 750 funds. It is estimated that this group of investors preside over most of the hedge fund industry's total asset base, and by following their top equity investments, Insider Monkey has determined a number of investment strategies that have historically outrun Mr. Market. Insider Monkey's flagship hedge fund strategy outperformed the S&P 500 index by around 5 percentage points annually since its inception in May 2014 through June 18th. We were able to generate large returns even by identifying short candidates. Our portfolio of short stocks lost 28.2% since February 2017 (through June 18th) even though the market was up nearly 30% during the same period. We just shared a list of 5 short targets in ourlatest quarterly updateand they are already down an average of 8.2% in a month whereas our long picks outperformed the market by 2.5 percentage points in this volatile 5 week period (our long picks also beat the market by 15 percentage points so far this year).
Let's take a look at the latest hedge fund action regarding Tower Semiconductor Ltd. (NASDAQ:TSEM).
At the end of the first quarter, a total of 12 of the hedge funds tracked by Insider Monkey were long this stock, a change of -25% from one quarter earlier. By comparison, 15 hedge funds held shares or bullish call options in TSEM a year ago. With hedge funds' sentiment swirling, there exists an "upper tier" of notable hedge fund managers who were boosting their stakes substantially (or already accumulated large positions).
More specifically,Rima Senvest Managementwas the largest shareholder of Tower Semiconductor Ltd. (NASDAQ:TSEM), with a stake worth $152.1 million reported as of the end of March. Trailing Rima Senvest Management was D E Shaw, which amassed a stake valued at $51.9 million. Renaissance Technologies, Two Sigma Advisors, and Moab Capital Partners were also very fond of the stock, giving the stock large weights in their portfolios.
Due to the fact that Tower Semiconductor Ltd. (NASDAQ:TSEM) has witnessed a decline in interest from the smart money, logic holds that there is a sect of hedgies that decided to sell off their positions entirely by the end of the third quarter. At the top of the heap, Richard Mashaal'sRima Senvest Managementsaid goodbye to the largest stake of all the hedgies followed by Insider Monkey, comprising about $1.5 million in stock. Minhua Zhang's fund,Weld Capital Management, also sold off its stock, about $0.6 million worth. These transactions are important to note, as aggregate hedge fund interest dropped by 4 funds by the end of the third quarter.
Let's now review hedge fund activity in other stocks - not necessarily in the same industry as Tower Semiconductor Ltd. (NASDAQ:TSEM) but similarly valued. We will take a look at Cannae Holdings, Inc. (NYSE:CNNE), Cubic Corporation (NYSE:CUB), Sotheby's (NYSE:BID), and Xencor Inc (NASDAQ:XNCR). All of these stocks' market caps match TSEM's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position CNNE,24,256097,1 CUB,15,72613,-7 BID,18,335777,2 XNCR,16,189739,3 Average,18.25,213557,-0.25 [/table]
View table hereif you experience formatting issues.
As you can see these stocks had an average of 18.25 hedge funds with bullish positions and the average amount invested in these stocks was $214 million. That figure was $258 million in TSEM's case. Cannae Holdings, Inc. (NYSE:CNNE) is the most popular stock in this table. On the other hand Cubic Corporation (NYSE:CUB) is the least popular one with only 15 bullish hedge fund positions. Compared to these stocks Tower Semiconductor Ltd. (NASDAQ:TSEM) is even less popular than CUB. Hedge funds dodged a bullet by taking a bearish stance towards TSEM. Our calculations showed that the top 20 most popular hedge fund stocks returned 6.2% in Q2 through June 19th and outperformed the S&P 500 ETF (SPY) by nearly 3 percentage points. Unfortunately TSEM wasn't nearly as popular as these 20 stocks (hedge fund sentiment was very bearish); TSEM investors were disappointed as the stock returned -6.3% during the same time frame and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out thetop 20 most popular stocksamong hedge funds as 13 of these stocks already outperformed the market so far in the second quarter.
Disclosure: None. This article was originally published atInsider Monkey.
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How Many Ausgold Limited (ASX:AUC) Shares Did Insiders Buy, In The Last Year?
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We often see insiders buying up shares in companies that perform well over the long term. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So before you buy or sellAusgold Limited(ASX:AUC), you may well want to know whether insiders have been buying or selling.
Most investors know that it is quite permissible for company leaders, such as directors of the board, to buy and sell stock on the market. However, most countries require that the company discloses such transactions to the market.
We don't think shareholders should simply follow insider transactions. But it is perfectly logical to keep tabs on what insiders are doing. As Peter Lynch said, 'insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise.'
View our latest analysis for Ausgold
Over the last year, we can see that the biggest insider purchase was by Non-Executive Chairman Richard Lockwood for AU$210k worth of shares, at about AU$0.02 per share. So it's clear an insider wanted to buy, even at a higher price than the current share price (being AU$0.015). While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company's future. We always take careful note of the price insiders pay when purchasing shares. It is generally more encouraging if they paid above the current price, as it suggests they saw value, even at higher levels.
Over the last year, we can see that insiders have bought 14.5m shares worth AU$299k. While Ausgold insiders bought shares last year, they didn't sell. You can see a visual depiction of insider transactions (by individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
There are always plenty of stocks that insiders are buying. So if that suits your style you could check each stock one by one or you could take a look at thisfreelist of companies. (Hint: insiders have been buying them).
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. A high insider ownership often makes company leadership more mindful of shareholder interests. Insiders own 18% of Ausgold shares, worth about AU$2.0m. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.
There haven't been any insider transactions in the last three months -- that doesn't mean much. On a brighter note, the transactions over the last year are encouraging. Insiders own shares in Ausgold and we see no evidence to suggest they are worried about the future. To put this in context, take a look at how a company has performed in the past. You can accessthisdetailed graphof past earnings, revenue and cash flow.
But note:Ausgold may not be the best stock to buy. So take a peek at thisfreelist of interesting companies with high ROE and low debt.
For the purposes of this article, insiders are those individuals who report their transactions to the relevant regulatory body.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
Fact-Checking Claims From the First Democratic Debate
This was no Trump rally. Ten Democrats kicked off the presidential debate season with a sober rendering of policy that featured a smattering of missteps on climate change, the economy and more but no whoppers.
The Democrats spoke largely in generalities Wednesday night and when they got into the nuts and bolts, their claims largely checked out. But not always.
A look at the rhetoric from the first debate, with 10 more Democrats taking the stage in Miami on Thursday:
JAY INSLEE, Washington’s governor: “We are the first generation to feel the sting of climate change and we are the last that can do something about it. … It is our last chance in an administration, next one, to do something about it.”
THE FACTS: Not quite. This answer implies that after 2025 or 2029, when whoever is elected in 2020 leaves office, it will be too late to fight or limit climate change.
That’s a common misconception that stemmed from a U.N. scientific report that came out last fall, which talked about 2030, mostly because that’s a key date in the Paris climate agreement. The report states that with every half a degree Celsius and with every year, global warming and its dangers get worse. However, it does not say at some point it is too late.
“The hotter it gets the worse it gets but there is no cliff edge,” James Skea, co-chairman of the report and professor of sustainable energy at Imperial College London, told The Associated Press.
The report co-author, Swiss climate scientist Sonia I. Seneviratne this month tweeted, “Many scientists point – rightfully – to the fact that we cannot state with certainty that climate would suddenly go berserk in 12 years if we weren’t doing any climate mitigation. But who can state with certainty that we would be safe beyond that stage or even before that?”
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BETO O’ROURKE, referring to the international climate goal: “If all of us does all that we can, then we’re going to be able to keep this planet from warming another 2 degrees Celsius and ensure that we match what this country can do and live up to our promise and our potential.”
THE FACTS:O’Rourke gets the climate goal wrong.
Since 2009, international summits and the Paris climate agreement list the overarching goal as limiting climate change to no more than 2 degrees Celsius (3.6 degrees Fahrenheit) from pre-industrial times. That’s somewhere between 1850 and 1880, depending on who is calculating.
There’s a big difference because since pre-industrial times, Earth has already warmed 1 degree Celsius (1.8 degrees Fahrenheit). So the world community is talking about 1 degree Celsius from now and O’Rourke is talking about twice that.
JULIAN CASTRO, former federal housing secretary: “I would do several things, starting with something we should have done a long time ago, which is to pass the Equal Rights Amendment, finally, in this country. And, also, pursue legislation so that women are paid equal pay for equal work in this country.”
THE FACTS:It would be past time if it hadn’t already happened. It has been illegal to pay men more than women for the same work, or vice versa, since the passage of the Equal Pay Act in 1963. Disparities, however, persist despite the law.
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TIM RYAN, U.S. representative from Ohio: “The bottom 60% haven’t seen a raise since 1980. The top 1% control 90% of the wealth.”
THE FACTS:Those figures exaggerate the state of income and wealth inequality. While few studies single out the bottom 60%, theCongressional Budget Office calculatesthat the bottom 80% of Americans have seen their incomes rise 32% since 1979. That is certainly lower than the doubling of income enjoyed by the top one-fifth of income earners. And the richest 1% possess 32% of the nation’s wealth, according todata from the Federal Reserve, not 90%.
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O’ROURKE:“That’s how you explain an economy that is rigged to corporations and the very wealthiest. A $2 trillion tax cut that favored corporations while they were sitting on record piles of cash and the very wealthiest in this country at a time of historic wealth inequality.”
THE FACTS:The tax cut wasn’t quite that big: The Joint Committee on Taxation estimates that it will reduce tax revenues by $1.5 trillion over the next decade. And individuals, not corporations, will actually receive the bulk of those cuts — they’re getting $1.1 trillion while businesses get $654 billion, offset by higher tax revenues from changes to international tax law.
The tax cuts did mostly favor richer Americans: The top one-fifth of income earners got 65% of the benefit from the tax cuts, with just 1% going to the poorest one-fifth, according to the nonpartisan Tax Policy Center.
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First Democratic Debate Begins With All Eyes on Sen. Elizabeth Warren
Jim Watson/AFP/Getty In the opening moments of Wednesday night’s first Democratic debate, it was clear where the spotlight was: on Sen. Elizabeth Warren (D-MA), the highest-polling candidate of the 10 presidential hopefuls on stage in Miami. The debate’s moderators directed four questions to Warren in the first 20 minutes, more than any other candidate, and those questions touched at the heart of her policy agenda — the economy, income inequality, and sweeping change to the nation’s health care system. That gave Warren an opportunity to get at the heart of her stump speech from the get-go. “We need to make structural change in our government and our economy and in our country,” she said to wrap up the debate’s first answer, to applause. The rest of the field found themselves chasing Warren’s agenda, too, illustrating just how much the liberal senator has set the policy framework of the crowded 2020 primary. The first question, for example, directed to Sen. Cory Booker (D-N.J.) was framed as a response to an idea championed by Warren: breaking up Facebook, Amazon, and Google, something Booker has criticized. “Why do you disagree?” he was asked. In recent weeks, Warren has surged to the top tier of the two dozen-strong field of Democrats after a shaky first stretch in the race. Several polls have shown her trailing only former Vice President Joe Biden and Sen. Bernie Sanders (I-VT) nationally and in key states, even surpassing Sanders in some surveys. 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. |
Should We Be Cautious About Airan Limited's (NSE:AIRAN) ROE Of 7.4%?
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While some investors are already well versed in financial metrics (hat tip), this article is for those who would like to learn about Return On Equity (ROE) and why it is important. We'll use ROE to examine Airan Limited (NSE:AIRAN), by way of a worked example.
Over the last twelve monthsAiran has recorded a ROE of 7.4%. That means that for every ₹1 worth of shareholders' equity, it generated ₹0.074 in profit.
View our latest analysis for Airan
Theformula for ROEis:
Return on Equity = Net Profit ÷ Shareholders' Equity
Or for Airan:
7.4% = ₹62m ÷ ₹835m (Based on the trailing twelve months to March 2019.)
It's easy to understand the 'net profit' part of that equation, but 'shareholders' equity' requires further explanation. It is the capital paid in by shareholders, plus any retained earnings. The easiest way to calculate shareholders' equity is to subtract the company's total liabilities from the total assets.
Return on Equity measures a company's profitability against the profit it has kept for the business (plus any capital injections). The 'return' is the amount earned after tax over the last twelve months. The higher the ROE, the more profit the company is making. So, as a general rule,a high ROE is a good thing. That means ROE can be used to compare two businesses.
Arguably the easiest way to assess company's ROE is to compare it with the average in its industry. Importantly, this is far from a perfect measure, because companies differ significantly within the same industry classification. As shown in the graphic below, Airan has a lower ROE than the average (12%) in the IT industry classification.
That certainly isn't ideal. We'd prefer see an ROE above the industry average, but it might not matter if the company is undervalued. Nonetheless, it could be useful todouble-check if insiders have sold shares recently.
Most companies need money -- from somewhere -- to grow their profits. That cash can come from issuing shares, retained earnings, or debt. In the first two cases, the ROE will capture this use of capital to grow. In the latter case, the debt required for growth will boost returns, but will not impact the shareholders' equity. Thus the use of debt can improve ROE, albeit along with extra risk in the case of stormy weather, metaphorically speaking.
Although Airan does use debt, its debt to equity ratio of 0.13 is still low. Its ROE is certainly on the low side, and since it already uses debt, we're not too excited about the company. Careful use of debt to boost returns is often very good for shareholders. However, it could reduce the company's ability to take advantage of future opportunities.
Return on equity is a useful indicator of the ability of a business to generate profits and return them to shareholders. In my book the highest quality companies have high return on equity, despite low debt. All else being equal, a higher ROE is better.
But ROE is just one piece of a bigger puzzle, since high quality businesses often trade on high multiples of earnings. The rate at which profits are likely to grow, relative to the expectations of profit growth reflected in the current price, must be considered, too. So I think it may be worth checking thisfreethisdetailed graphof past earnings, revenue and cash flow.
But note:Airan may not be the best stock to buy. So take a peek at thisfreelist of interesting companies with high ROE and low debt.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
Airan Limited (NSE:AIRAN) Delivered A Weaker ROE Than Its Industry
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One of the best investments we can make is in our own knowledge and skill set. With that in mind, this article will work through how we can use Return On Equity (ROE) to better understand a business. To keep the lesson grounded in practicality, we'll use ROE to better understand Airan Limited (NSE:AIRAN).
Our data showsAiran has a return on equity of 7.4%for the last year. One way to conceptualize this, is that for each ₹1 of shareholders' equity it has, the company made ₹0.074 in profit.
Check out our latest analysis for Airan
Theformula for ROEis:
Return on Equity = Net Profit ÷ Shareholders' Equity
Or for Airan:
7.4% = ₹62m ÷ ₹835m (Based on the trailing twelve months to March 2019.)
Most know that net profit is the total earnings after all expenses, but the concept of shareholders' equity is a little more complicated. It is all the money paid into the company from shareholders, plus any earnings retained. Shareholders' equity can be calculated by subtracting the total liabilities of the company from the total assets of the company.
ROE measures a company's profitability against the profit it retains, and any outside investments. The 'return' is the profit over the last twelve months. That means that the higher the ROE, the more profitable the company is. So, all else equal,investors should like a high ROE. That means ROE can be used to compare two businesses.
Arguably the easiest way to assess company's ROE is to compare it with the average in its industry. However, this method is only useful as a rough check, because companies do differ quite a bit within the same industry classification. As shown in the graphic below, Airan has a lower ROE than the average (12%) in the IT industry classification.
Unfortunately, that's sub-optimal. It is better when the ROE is above industry average, but a low one doesn't necessarily mean the business is overpriced. Still,shareholders might want to check if insiders have been selling.
Virtually all companies need money to invest in the business, to grow profits. That cash can come from retained earnings, issuing new shares (equity), or debt. In the case of the first and second options, the ROE will reflect this use of cash, for growth. In the latter case, the debt used for growth will improve returns, but won't affect the total equity. Thus the use of debt can improve ROE, albeit along with extra risk in the case of stormy weather, metaphorically speaking.
Airan has a debt to equity ratio of 0.13, which is far from excessive. Its ROE is quite low, and the company already has some debt, so surely shareholders are hoping for an improvement. Conservative use of debt to boost returns is usually a good move for shareholders, though it does leave the company more exposed to interest rate rises.
Return on equity is useful for comparing the quality of different businesses. In my book the highest quality companies have high return on equity, despite low debt. If two companies have the same ROE, then I would generally prefer the one with less debt.
Having said that, while ROE is a useful indicator of business quality, you'll have to look at a whole range of factors to determine the right price to buy a stock. The rate at which profits are likely to grow, relative to the expectations of profit growth reflected in the current price, must be considered, too. Check the past profit growth by Airan by looking at thisvisualization of past earnings, revenue and cash flow.
Of courseAiran may not be the best stock to buy. So you may wish to see thisfreecollection of other companies that have high ROE and low debt.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
Will Augusta Capital Limited's (NZSE:AUG) Earnings Grow Over The Next Few Years?
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Augusta Capital Limited's (NZSE:AUG) most recent earnings update in May 2019 revealed that the business benefited from a substantial tailwind, more than doubling its earnings from the prior year. Investors may find it useful to understand how market analysts view Augusta Capital's earnings growth outlook over the next few years and whether the future looks even brighter than the past. Note that I will be looking at net income excluding extraordinary items to get a better understanding of the underlying drivers of earnings.
View our latest analysis for Augusta Capital
Market analysts' consensus outlook for the upcoming year seems pessimistic, with earnings reducing by a double-digit -17%. In the following year, earnings begin to improve, but face another decrease in 2022 with earnings reaching NZ$6.2m.
Although it is useful to understand the rate of growth each year relative to today’s value, it may be more valuable to gauge the rate at which the company is rising or falling every year, on average. The advantage of this method is that we can get a bigger picture of the direction of Augusta Capital's earnings trajectory over the long run, irrespective of near term fluctuations, fluctuate up and down. To calculate this rate, I've appended a line of best fit through the forecasted earnings by market analysts. The slope of this line is the rate of earnings growth, which in this case is -2.6%. This means that, we can assume Augusta Capital will chip away at a rate of -2.6% every year for the next few years.
For Augusta Capital, I've compiled three pertinent factors you should further examine:
1. Financial Health: Does it have a healthy balance sheet? Take a look at ourfree balance sheet analysis with six simple checkson key factors like leverage and risk.
2. Valuation: What is AUG 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 AUG is currently mispriced by the market.
3. Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of AUG? 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. |
Does The Ashapura Intimates Fashion Limited (NSE:AIFL) Share Price Tend To Follow The Market?
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Anyone researching Ashapura Intimates Fashion Limited (NSE:AIFL) might want to consider the historical volatility of the share price. Volatility is considered to be a measure of risk in modern finance theory. Investors may think of volatility as falling into two main categories. The first category is company specific volatility. This can be dealt with by limiting your exposure to any particular stock. The second type is the broader market volatility, which you cannot diversify away, since it arises from macroeconomic factors which directly affects all the stocks on the market.
Some stocks are more sensitive to general market forces than others. Beta is a widely used metric to measure a stock's exposure to market risk (volatility). Before we go on, it's worth noting that Warren Buffett pointed out in his 2014 letter to shareholders that 'volatility is far from synonymous with risk.' Having said that, beta can still be rather useful. The first thing to understand about beta is that the beta of the overall market is one. Any stock with a beta of greater than one is considered more volatile than the market, while those with a beta below one are either less volatile or poorly correlated with the market.
View our latest analysis for Ashapura Intimates Fashion
With a beta of 1.02, (which is quite close to 1) the share price of Ashapura Intimates Fashion has historically been about as voltile as the broader market. If the future looks like the past, we could therefore consider it likely that the stock price will experience share price volatility that is roughly similar to the overall market. 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 Ashapura Intimates Fashion fares in that regard, below.
With a market capitalisation of ₹67m, Ashapura Intimates Fashion is a very small company by global standards. It is quite likely to be unknown to most investors. It doesn't take much money to really move the share price of a company as small as this one. That makes it somewhat unusual that it has a beta value so close to the overall market.
Since Ashapura Intimates Fashion has a beta close to one, it will probably show a positive return when the market is moving up, based on history. If you're trying to generate better returns than the market, it would be worth thinking about other metrics such as cashflows, dividends and revenue growth might be a more useful guide to the future. This article aims to educate investors about beta values, but it's well worth looking at important company-specific fundamentals such as Ashapura Intimates Fashion’s financial health and performance track record. I highly recommend you dive deeper by considering the following:
1. Future Outlook: What are well-informed industry analysts predicting for AIFL’s future growth? Take a look at ourfree research report of analyst consensusfor AIFL’s outlook.
2. Past Track Record: Has AIFL 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 AIFL's historicalsfor more clarity.
3. Other Interesting Stocks: It's worth checking to see how AIFL measures up against other companies on valuation. You could start with thisfree list of prospective options.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
Ashapura Intimates Fashion Limited (NSE:AIFL): What Does Its Beta Value Mean For Your Portfolio?
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If you own shares in Ashapura Intimates Fashion Limited (NSE:AIFL) then it's worth thinking about how it contributes to the volatility of your portfolio, overall. In finance, Beta is a measure of volatility. Modern finance theory considers volatility to be a measure of risk, and there are two main types of price volatility. First, we have company specific volatility, which is the price gyrations of an individual stock. Holding at least 8 stocks can reduce this kind of risk across a portfolio. The second type is the broader market volatility, which you cannot diversify away, since it arises from macroeconomic factors which directly affects all the stocks on the market.
Some stocks see their prices move in concert with the market. Others tend towards stronger, gentler or unrelated price movements. Beta can be a useful tool to understand how much a stock is influenced by market risk (volatility). However, Warren Buffett said 'volatility is far from synonymous with risk' in his 2014 letter to investors. So, while useful, beta is not the only metric to consider. To use beta as an investor, you must first understand that the overall market has a beta of one. Any stock with a beta of greater than one is considered more volatile than the market, while those with a beta below one are either less volatile or poorly correlated with the market.
Check out our latest analysis for Ashapura Intimates Fashion
With a beta of 1.02, (which is quite close to 1) the share price of Ashapura Intimates Fashion has historically been about as voltile as the broader market. If the future looks like the past, we could therefore consider it likely that the stock price will experience share price volatility that is roughly similar to the overall market. Many would argue that beta is useful in position sizing, but fundamental metrics such as revenue and earnings are more important overall. You can see Ashapura Intimates Fashion's revenue and earnings in the image below.
With a market capitalisation of ₹67m, Ashapura Intimates Fashion is a very small company by global standards. It is quite likely to be unknown to most investors. It doesn't take much money to really move the share price of a company as small as this one. That makes it somewhat unusual that it has a beta value so close to the overall market.
Ashapura Intimates Fashion has a beta value quite close to that of the overall market. That doesn't tell us much on its own, so it is probably worth considering whether the company is growing, if you're looking for stocks that will go up more than the overall market. This article aims to educate investors about beta values, but it's well worth looking at important company-specific fundamentals such as Ashapura Intimates Fashion’s financial health and performance track record. I highly recommend you dive deeper by considering the following:
1. Future Outlook: What are well-informed industry analysts predicting for AIFL’s future growth? Take a look at ourfree research report of analyst consensusfor AIFL’s outlook.
2. Past Track Record: Has AIFL 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 AIFL's historicalsfor more clarity.
3. Other Interesting Stocks: It's worth checking to see how AIFL measures up against other companies on valuation. You could start with thisfree list of prospective options.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
Here’s What Hedge Funds Think About Meridian Bancorp, Inc. (EBSB)
Hedge Funds and other institutional investors have just completed filing their 13Fs with the Securities and Exchange Commission, revealing their equity portfolios as of the end of March. At Insider Monkey, we follow nearly 750 active hedge funds and notable investors and by analyzing their 13F filings, we can determine the stocks that they are collectively bullish on. One of their picks is Meridian Bancorp, Inc. (NASDAQ:EBSB), so let’s take a closer look at the sentiment that surrounds it in the current quarter.
Meridian Bancorp, Inc. (NASDAQ:EBSB)has experienced an increase in hedge fund interest recently.EBSBwas in 15 hedge funds' portfolios at the end of the first quarter of 2019. There were 10 hedge funds in our database with EBSB positions at the end of the previous quarter. Our calculations also showed that EBSB isn't among the30 most popular stocks among hedge funds.
Hedge funds' reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn't keep up with the unhedged returns of the market indices. Our research has shown that hedge funds' small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the market by 40 percentage points since May 2014 through May 30, 2019 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter.
Let's take a look at the recent hedge fund action regarding Meridian Bancorp, Inc. (NASDAQ:EBSB).
At Q1's end, a total of 15 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 50% from the fourth quarter of 2018. The graph below displays the number of hedge funds with bullish position in EBSB over the last 15 quarters. So, let's examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically,Renaissance Technologieswas the largest shareholder of Meridian Bancorp, Inc. (NASDAQ:EBSB), with a stake worth $32.2 million reported as of the end of March. Trailing Renaissance Technologies was Impax Asset Management, which amassed a stake valued at $21.1 million. D E Shaw, Castine Capital Management, and Millennium Management were also very fond of the stock, giving the stock large weights in their portfolios.
Consequently, key hedge funds were leading the bulls' herd.Castine Capital Management, managed by Paul Magidson, Jonathan Cohen. And Ostrom Enders, established the largest position in Meridian Bancorp, Inc. (NASDAQ:EBSB). Castine Capital Management had $5.2 million invested in the company at the end of the quarter. Bain Capital'sBrookside Capitalalso made a $1.8 million investment in the stock during the quarter. The other funds with new positions in the stock are David Harding'sWinton Capital Management, Michael Platt and William Reeves'sBlueCrest Capital Mgmt., and Roger Ibbotson'sZebra Capital Management.
Let's now review hedge fund activity in other stocks - not necessarily in the same industry as Meridian Bancorp, Inc. (NASDAQ:EBSB) but similarly valued. We will take a look at Addus Homecare Corporation (NASDAQ:ADUS), ANI Pharmaceuticals Inc (NASDAQ:ANIP), Kornit Digital Ltd. (NASDAQ:KRNT), and Boot Barn Holdings Inc (NYSE:BOOT). All of these stocks' market caps are closest to EBSB's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position ADUS,14,73546,0 ANIP,17,82176,4 KRNT,10,42618,-4 BOOT,23,154459,4 Average,16,88200,1 [/table]
View table hereif you experience formatting issues.
As you can see these stocks had an average of 16 hedge funds with bullish positions and the average amount invested in these stocks was $88 million. That figure was $76 million in EBSB's case. Boot Barn Holdings Inc (NYSE:BOOT) is the most popular stock in this table. On the other hand Kornit Digital Ltd. (NASDAQ:KRNT) is the least popular one with only 10 bullish hedge fund positions. Meridian Bancorp, Inc. (NASDAQ:EBSB) is not the least popular stock in this group but hedge fund interest is still below average. Our calculations showed thattop 20 most popular stocksamong hedge funds returned 6.2% in Q2 through June 19th and outperformed the S&P 500 ETF (SPY) by nearly 3 percentage points. A small number of hedge funds were also right about betting on EBSB as the stock returned 13.6% during the same time frame and outperformed the market by an even larger margin.
Disclosure: None. This article was originally published atInsider Monkey.
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Is Cooper-Standard Holdings Inc (CPS) A Good Stock To Buy?
The Insider Monkey team has completed processing the quarterly 13F filings for the March quarter submitted by the hedge funds and other money managers included in our extensive database. Most hedge fund investors experienced strong gains on the back of a strong market performance, which certainly propelled them to adjust their equity holdings so as to maintain the desired risk profile. As a result, the relevancy of these public filings and their content is indisputable, as they may reveal numerous high-potential stocks. The following article will discuss the smart money sentiment towards Cooper-Standard Holdings Inc (NYSE:CPS).
Cooper-Standard Holdings Inc (NYSE:CPS)has experienced a decrease in support from the world's most elite money managers recently. Our calculations also showed that CPS isn't among the30 most popular stocks among hedge funds.
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that hedge funds' large-cap stock picks indeed failed to beat the market between 1999 and 2016. However, we were able to identify in advance a select group of hedge fund holdings that outperformed the market by 40 percentage points since May 2014 through May 30, 2019 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that'll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 30.9% through May 30, 2019. That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Let's take a glance at the key hedge fund action encompassing Cooper-Standard Holdings Inc (NYSE:CPS).
At the end of the first quarter, a total of 15 of the hedge funds tracked by Insider Monkey were long this stock, a change of -12% from the fourth quarter of 2018. Below, you can check out the change in hedge fund sentiment towards CPS over the last 15 quarters. So, let's check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Cooper-Standard Holdings Inc (NYSE:CPS) was held byRoyce & Associates, which reported holding $10.1 million worth of stock at the end of March. It was followed by Arrowstreet Capital with a $6.1 million position. Other investors bullish on the company included Levin Capital Strategies, Two Sigma Advisors, and D E Shaw.
Since Cooper-Standard Holdings Inc (NYSE:CPS) has witnessed falling interest from the aggregate hedge fund industry, logic holds that there was a specific group of funds that decided to sell off their full holdings by the end of the third quarter. At the top of the heap, Noam Gottesman'sGLG Partnerssold off the largest investment of the "upper crust" of funds monitored by Insider Monkey, worth about $1.5 million in stock, and Jim Simons's Renaissance Technologies was right behind this move, as the fund dropped about $0.6 million worth. These bearish behaviors are interesting, as aggregate hedge fund interest fell by 2 funds by the end of the third quarter.
Let's also examine hedge fund activity in other stocks - not necessarily in the same industry as Cooper-Standard Holdings Inc (NYSE:CPS) but similarly valued. These stocks are John B. Sanfilippo & Son, Inc. (NASDAQ:JBSS), Monotype Imaging Holdings Inc. (NASDAQ:TYPE), Principia Biopharma Inc. (NASDAQ:PRNB), and Weidai Ltd. (NYSE:WEI). All of these stocks' market caps resemble CPS's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position JBSS,11,106528,1 TYPE,21,228038,4 PRNB,11,245376,-1 WEI,1,521,0 Average,11,145116,1 [/table]
View table hereif you experience formatting issues.
As you can see these stocks had an average of 11 hedge funds with bullish positions and the average amount invested in these stocks was $145 million. That figure was $41 million in CPS's case. Monotype Imaging Holdings Inc. (NASDAQ:TYPE) is the most popular stock in this table. On the other hand Weidai Ltd. (NYSE:WEI) is the least popular one with only 1 bullish hedge fund positions. Cooper-Standard Holdings Inc (NYSE:CPS) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we'd rather spend our time researching stocks that hedge funds are piling on. Our calculations showed thattop 20 most popular stocksamong hedge funds returned 6.2% in Q2 through June 19th and outperformed the S&P 500 ETF (SPY) by nearly 3 percentage points. Unfortunately CPS wasn't nearly as popular as these 20 stocks and hedge funds that were betting on CPS were disappointed as the stock returned -11.5% during the same period and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out thetop 20 most popular stocksamong hedge funds as 13 of these stocks already outperformed the market so far in Q2.
Disclosure: None. This article was originally published atInsider Monkey.
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Here’s What Hedge Funds Think About Regis Corporation (RGS)
Is Regis Corporation (NYSE:RGS) a good investment right now? We check hedge fund and billionaire investor sentiment before delving into hours of research. Hedge funds spend millions of dollars on Ivy League graduates, expert networks, and get tips from investment bankers and industry insiders. Sure they sometimes fail miserably, but their consensus stock picks historically outperformed the market after adjusting for known risk factors.
Regis Corporation (NYSE:RGS)was in 15 hedge funds' portfolios at the end of the first quarter of 2019. RGS has experienced an increase in support from the world's most elite money managers in recent months. There were 12 hedge funds in our database with RGS holdings at the end of the previous quarter. Our calculations also showed that RGS isn't among the30 most popular stocks among hedge funds.
Hedge funds' reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn't keep up with the unhedged returns of the market indices. Our research has shown that hedge funds' large-cap stock picks indeed failed to beat the market between 1999 and 2016. However, we were able to identify in advance a select group of hedge fund holdings that outperformed the market by 40 percentage points since May 2014 through May 30, 2019 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that'll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 30.9% through May 30, 2019. That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
We're going to take a glance at the latest hedge fund action encompassing Regis Corporation (NYSE:RGS).
At Q1's end, a total of 15 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 25% from the previous quarter. By comparison, 13 hedge funds held shares or bullish call options in RGS a year ago. With hedgies' sentiment swirling, there exists a few key hedge fund managers who were increasing their holdings considerably (or already accumulated large positions).
According to Insider Monkey's hedge fund database, Daniel Beltzman and Gergory Smith'sBirch Run Capitalhas the most valuable position in Regis Corporation (NYSE:RGS), worth close to $209.6 million, corresponding to 66.6% of its total 13F portfolio. Sitting at the No. 2 spot isRenaissance Technologies, managed by Jim Simons, which holds a $40.8 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Remaining hedge funds and institutional investors that hold long positions contain Brian Gustavson and Andrew Haley's1060 Capital Management, Robert Rodriguez and Steven Romick'sFirst Pacific Advisors LLCand D. E. Shaw'sD E Shaw.
As aggregate interest increased, key money managers were breaking ground themselves.1060 Capital Management, managed by Brian Gustavson and Andrew Haley, assembled the largest position in Regis Corporation (NYSE:RGS). 1060 Capital Management had $12.5 million invested in the company at the end of the quarter. Matthew Hulsizer'sPEAK6 Capital Managementalso initiated a $0.7 million position during the quarter. The other funds with new positions in the stock are Gavin Saitowitz and Cisco J. del Valle'sSpringbok Capital, Paul Tudor Jones'sTudor Investment Corp, and David Harding'sWinton Capital Management.
Let's now take a look at hedge fund activity in other stocks - not necessarily in the same industry as Regis Corporation (NYSE:RGS) but similarly valued. These stocks are CymaBay Therapeutics Inc (NASDAQ:CBAY), Navigant Consulting, Inc. (NYSE:NCI), Monarch Casino & Resort, Inc. (NASDAQ:MCRI), and Banco Latinoamericano de Comercio Exterior, S.A. (NYSE:BLX). This group of stocks' market valuations resemble RGS's market valuation.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position CBAY,29,407226,2 NCI,15,27692,-2 MCRI,10,130391,0 BLX,1,6043,0 Average,13.75,142838,0 [/table]
View table hereif you experience formatting issues.
As you can see these stocks had an average of 13.75 hedge funds with bullish positions and the average amount invested in these stocks was $143 million. That figure was $293 million in RGS's case. CymaBay Therapeutics Inc (NASDAQ:CBAY) is the most popular stock in this table. On the other hand Banco Latinoamericano de Comercio Exterior, S.A. (NYSE:BLX) is the least popular one with only 1 bullish hedge fund positions. Regis Corporation (NYSE:RGS) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we'd rather spend our time researching stocks that hedge funds are piling on. Our calculations showed thattop 20 most popular stocksamong hedge funds returned 6.2% in Q2 through June 19th and outperformed the S&P 500 ETF (SPY) by nearly 3 percentage points. Unfortunately RGS wasn't nearly as popular as these 20 stocks and hedge funds that were betting on RGS were disappointed as the stock returned -7.3% during the same period and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out thetop 20 most popular stocksamong hedge funds as 13 of these stocks already outperformed the market so far in Q2.
Disclosure: None. This article was originally published atInsider Monkey.
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Here’s What Hedge Funds Think About Ruth’s Hospitality Group, Inc. (RUTH)
A market surge in the first quarter, spurred by easing global macroeconomic concerns and Powell's pivot ended up having a positive impact on the markets and many hedge funds as a result. The stocks of smaller companies which were especially hard hit during the fourth quarter slightly outperformed the market during the first quarter. Unfortunately, Trump is unpredictable and volatility returned in the second quarter and smaller-cap stocks went back to selling off. We finished compiling the latest 13F filings to get an idea about what hedge funds are thinking about the overall market as well as individual stocks. In this article we will study the hedge fund sentiment to see how those concerns affected their ownership of Ruth's Hospitality Group, Inc. (NASDAQ:RUTH) during the quarter.
Ruth's Hospitality Group, Inc. (NASDAQ:RUTH)was in 15 hedge funds' portfolios at the end of March. RUTH shareholders have witnessed a decrease in hedge fund interest recently. There were 17 hedge funds in our database with RUTH positions at the end of the previous quarter. Our calculations also showed that RUTH isn't among the30 most popular stocks among hedge funds.
In today’s marketplace there are a multitude of signals stock market investors put to use to evaluate stocks. Some of the most innovative signals are hedge fund and insider trading sentiment. Our researchers have shown that, historically, those who follow the best picks of the best fund managers can outpace the market by a superb amount (see the details here).
Let's take a glance at the fresh hedge fund action surrounding Ruth's Hospitality Group, Inc. (NASDAQ:RUTH).
Heading into the second quarter of 2019, a total of 15 of the hedge funds tracked by Insider Monkey were long this stock, a change of -12% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards RUTH over the last 15 quarters. With hedgies' positions undergoing their usual ebb and flow, there exists an "upper tier" of notable hedge fund managers who were increasing their holdings substantially (or already accumulated large positions).
According to Insider Monkey's hedge fund database, Peter Rathjens, Bruce Clarke and John Campbell'sArrowstreet Capitalhas the largest position in Ruth's Hospitality Group, Inc. (NASDAQ:RUTH), worth close to $15.7 million, corresponding to less than 0.1%% of its total 13F portfolio. Coming in second is Cliff Asness ofAQR Capital Management, with a $11.3 million position; less than 0.1%% of its 13F portfolio is allocated to the company. Other hedge funds and institutional investors that are bullish encompass Noam Gottesman'sGLG Partners, Israel Englander'sMillennium Managementand Lee Ainslie'sMaverick Capital.
Because Ruth's Hospitality Group, Inc. (NASDAQ:RUTH) has faced bearish sentiment from hedge fund managers, we can see that there exists a select few fund managers that decided to sell off their full holdings by the end of the third quarter. At the top of the heap, Paul Marshall and Ian Wace'sMarshall Wace LLPsold off the biggest stake of all the hedgies followed by Insider Monkey, totaling close to $0.6 million in stock. Minhua Zhang's fund,Weld Capital Management, also sold off its stock, about $0.5 million worth. These bearish behaviors are important to note, as aggregate hedge fund interest dropped by 2 funds by the end of the third quarter.
Let's now take a look at hedge fund activity in other stocks similar to Ruth's Hospitality Group, Inc. (NASDAQ:RUTH). We will take a look at Meta Financial Group Inc. (NASDAQ:CASH), Solaris Oilfield Infrastructure, Inc. (NYSE:SOI), Cellectis SA (NASDAQ:CLLS), and OneSpan Inc. (NASDAQ:OSPN). All of these stocks' market caps resemble RUTH's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position CASH,12,82203,-1 SOI,16,102118,1 CLLS,8,32826,0 OSPN,13,71319,1 Average,12.25,72117,0.25 [/table]
View table hereif you experience formatting issues.
As you can see these stocks had an average of 12.25 hedge funds with bullish positions and the average amount invested in these stocks was $72 million. That figure was $65 million in RUTH's case. Solaris Oilfield Infrastructure, Inc. (NYSE:SOI) is the most popular stock in this table. On the other hand Cellectis SA (NASDAQ:CLLS) is the least popular one with only 8 bullish hedge fund positions. Ruth's Hospitality Group, Inc. (NASDAQ:RUTH) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we'd rather spend our time researching stocks that hedge funds are piling on. Our calculations showed thattop 20 most popular stocksamong hedge funds returned 6.2% in Q2 through June 19th and outperformed the S&P 500 ETF (SPY) by nearly 3 percentage points. Unfortunately RUTH wasn't nearly as popular as these 20 stocks and hedge funds that were betting on RUTH were disappointed as the stock returned -10.6% during the same period and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out thetop 20 most popular stocksamong hedge funds as 13 of these stocks already outperformed the market so far in Q2.
Disclosure: None. This article was originally published atInsider Monkey.
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Here’s What Hedge Funds Think About Gannett Co., Inc. (GCI)
Hedge funds are not perfect. They have their bad picks just like everyone else. Facebook, a stock hedge funds have loved dearly, lost nearly 40% of its value at one point in 2018. Although hedge funds are not perfect, their consensus picks do deliver solid returns, however. Our data show the top 20 S&P 500 stocks among hedge funds beat the S&P 500 Index by more than 6 percentage points so far in 2019. Because hedge funds have a lot of resources and their consensus picks do well, we pay attention to what they think. In this article, we analyze what the elite funds think of Gannett Co., Inc. (NYSE:GCI).
Gannett Co., Inc. (NYSE:GCI)was in 16 hedge funds' portfolios at the end of the first quarter of 2019. GCI has experienced a decrease in support from the world's most elite money managers lately. There were 17 hedge funds in our database with GCI positions at the end of the previous quarter. Our calculations also showed that GCI isn't among the30 most popular stocks among hedge funds.
Hedge funds' reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn't keep up with the unhedged returns of the market indices. Our research has shown that hedge funds' small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the market by 40 percentage points since May 2014 through May 30, 2019 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter.
We're going to go over the latest hedge fund action regarding Gannett Co., Inc. (NYSE:GCI).
Heading into the second quarter of 2019, a total of 16 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -6% from the fourth quarter of 2018. On the other hand, there were a total of 16 hedge funds with a bullish position in GCI a year ago. So, let's find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Gannett Co., Inc. (NYSE:GCI) was held byAlden Global Capital, which reported holding $89.7 million worth of stock at the end of March. It was followed by Arrowstreet Capital with a $7.8 million position. Other investors bullish on the company included HG Vora Capital Management, Royce & Associates, and Two Sigma Advisors.
Seeing as Gannett Co., Inc. (NYSE:GCI) has witnessed falling interest from the entirety of the hedge funds we track, we can see that there exists a select few money managers who were dropping their entire stakes in the third quarter. Intriguingly, Noam Gottesman'sGLG Partnersdumped the biggest position of the "upper crust" of funds watched by Insider Monkey, totaling an estimated $2.7 million in stock. Joel Greenblatt's fund,Gotham Asset Management, also said goodbye to its stock, about $2.2 million worth. These bearish behaviors are interesting, as total hedge fund interest fell by 1 funds in the third quarter.
Let's now take a look at hedge fund activity in other stocks similar to Gannett Co., Inc. (NYSE:GCI). These stocks are ePlus Inc. (NASDAQ:PLUS), James River Group Holdings Ltd (NASDAQ:JRVR), COMSCORE, Inc. (NASDAQ:SCOR), and WillScot Corporation (NASDAQ:WSC). This group of stocks' market valuations resemble GCI's market valuation.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position PLUS,9,24581,-4 JRVR,12,37500,2 SCOR,14,270009,2 WSC,22,131621,-2 Average,14.25,115928,-0.5 [/table]
View table hereif you experience formatting issues.
As you can see these stocks had an average of 14.25 hedge funds with bullish positions and the average amount invested in these stocks was $116 million. That figure was $126 million in GCI's case. WillScot Corporation (NASDAQ:WSC) is the most popular stock in this table. On the other hand ePlus Inc. (NASDAQ:PLUS) is the least popular one with only 9 bullish hedge fund positions. Gannett Co., Inc. (NYSE:GCI) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we'd rather spend our time researching stocks that hedge funds are piling on. Our calculations showed thattop 20 most popular stocksamong hedge funds returned 6.2% in Q2 through June 19th and outperformed the S&P 500 ETF (SPY) by nearly 3 percentage points. Unfortunately GCI wasn't nearly as popular as these 20 stocks and hedge funds that were betting on GCI were disappointed as the stock returned -20% during the same period and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out thetop 20 most popular stocksamong hedge funds as 13 of these stocks already outperformed the market so far in Q2.
Disclosure: None. This article was originally published atInsider Monkey.
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Here’s What Hedge Funds Think About National Vision Holdings, Inc. (EYE)?
Billionaire hedge fund managers such as David Abrams, Steve Cohen and Stan Druckenmiller can generate millions or even billions of dollars every year by pinning down high-potential small-cap stocks and pouring cash into these candidates. Small-cap stocks are overlooked by most investors, brokerage houses, and financial services hubs, while the unlimited research abilities of the big players within the hedge fund industry can easily identify the undervalued and high-potential stocks that reside the ignored corners of equity markets. There are numerous small-cap stocks that have turned out to be great winners, which is one of the main reasons the Insider Monkey team pays close attention to the hedge fund activity in relation to these stocks.
IsNational Vision Holdings, Inc. (NASDAQ:EYE)a buy, sell, or hold? Hedge funds are getting more optimistic. The number of long hedge fund positions moved up by 1 lately. Our calculations also showed that eye isn't among the30 most popular stocks among hedge funds.EYEwas in 16 hedge funds' portfolios at the end of the first quarter of 2019. There were 15 hedge funds in our database with EYE positions at the end of the previous quarter.
Hedge funds' reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn't keep up with the unhedged returns of the market indices. Our research has shown that hedge funds' small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the market by 40 percentage points since May 2014 through May 30, 2019 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter.
We're going to view the fresh hedge fund action regarding National Vision Holdings, Inc. (NASDAQ:EYE).
Heading into the second quarter of 2019, a total of 16 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 7% from the previous quarter. The graph below displays the number of hedge funds with bullish position in EYE over the last 15 quarters. So, let's examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds,Adage Capital Managementheld the most valuable stake in National Vision Holdings, Inc. (NASDAQ:EYE), which was worth $197.7 million at the end of the first quarter. On the second spot was Select Equity Group which amassed $119.2 million worth of shares. Moreover, Element Capital Management, Citadel Investment Group, and D E Shaw were also bullish on National Vision Holdings, Inc. (NASDAQ:EYE), allocating a large percentage of their portfolios to this stock.
Now, key money managers have been driving this bullishness.Ellington, managed by Mike Vranos, established the most valuable position in National Vision Holdings, Inc. (NASDAQ:EYE). Ellington had $2.2 million invested in the company at the end of the quarter. Paul Marshall and Ian Wace'sMarshall Wace LLPalso initiated a $0.5 million position during the quarter. The following funds were also among the new EYE investors: Bruce Kovner'sCaxton Associates LP, Matthew Hulsizer'sPEAK6 Capital Management, and Brandon Haley'sHolocene Advisors.
Let's now take a look at hedge fund activity in other stocks - not necessarily in the same industry as National Vision Holdings, Inc. (NASDAQ:EYE) but similarly valued. We will take a look at RPC, Inc. (NYSE:RES), Liberty Expedia Holdings, Inc. (NASDAQ:LEXEA), Integer Holdings Corporation (NYSE:ITGR), and Triton International Limited (NYSE:TRTN). This group of stocks' market values are similar to EYE's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position RES,20,138878,8 LEXEA,29,390781,3 ITGR,29,241568,10 TRTN,18,59347,7 Average,24,207644,7 [/table]
View table hereif you experience formatting issues.
As you can see these stocks had an average of 24 hedge funds with bullish positions and the average amount invested in these stocks was $208 million. That figure was $395 million in EYE's case. Liberty Expedia Holdings, Inc. (NASDAQ:LEXEA) is the most popular stock in this table. On the other hand Triton International Limited (NYSE:TRTN) is the least popular one with only 18 bullish hedge fund positions. Compared to these stocks National Vision Holdings, Inc. (NASDAQ:EYE) is even less popular than TRTN. Hedge funds dodged a bullet by taking a bearish stance towards EYE. Our calculations showed that the top 20 most popular hedge fund stocks returned 6.2% in Q2 through June 19th and outperformed the S&P 500 ETF (SPY) by nearly 3 percentage points. Unfortunately EYE wasn't nearly as popular as these 20 stocks (hedge fund sentiment was very bearish); EYE investors were disappointed as the stock returned -1.5% during the same time frame and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out thetop 20 most popular stocksamong hedge funds as 13 of these stocks already outperformed the market so far in the second quarter.
Disclosure: None. This article was originally published atInsider Monkey.
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Is Par Pacific Holdings, Inc. (PARR) A Good Stock To Buy?
The 700+ hedge funds and famous money managers tracked by Insider Monkey have already compiled and submitted their 13F filings for the first quarter, which unveil their equity positions as of March 31. We went through these filings, fixed typos and other more significant errors and identified the changes in hedge fund portfolios. Our extensive review of these public filings is finally over, so this article is set to reveal the smart money sentiment towards Par Pacific Holdings, Inc. (NYSE:PARR).
Hedge fund interest inPar Pacific Holdings, Inc. (NYSE:PARR)shares was flat at the end of last quarter. This is usually a negative indicator. At the end of this article we will also compare PARR to other stocks including Mercer International Inc. (NASDAQ:MERC), Solar Capital Ltd. (NASDAQ:SLRC), and Social Capital Hedosophia Holdings Corp. (NYSE:IPOA) to get a better sense of its popularity.
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that hedge funds' large-cap stock picks indeed failed to beat the market between 1999 and 2016. However, we were able to identify in advance a select group of hedge fund holdings that outperformed the market by 40 percentage points since May 2014 through May 30, 2019 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that'll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 30.9% through May 30, 2019. That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
[caption id="attachment_758477" align="aligncenter" width="450"]
Andy Redleaf of Whitebox Advisors[/caption]
Let's take a peek at the new hedge fund action encompassing Par Pacific Holdings, Inc. (NYSE:PARR).
At Q1's end, a total of 16 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 0% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards PARR over the last 15 quarters. With hedge funds' sentiment swirling, there exists a few noteworthy hedge fund managers who were increasing their holdings meaningfully (or already accumulated large positions).
Among these funds,Whitebox Advisorsheld the most valuable stake in Par Pacific Holdings, Inc. (NYSE:PARR), which was worth $38.3 million at the end of the first quarter. On the second spot was Park West Asset Management which amassed $30.1 million worth of shares. Moreover, Birch Run Capital, Renaissance Technologies, and Omega Advisors were also bullish on Par Pacific Holdings, Inc. (NYSE:PARR), allocating a large percentage of their portfolios to this stock.
Due to the fact that Par Pacific Holdings, Inc. (NYSE:PARR) has faced a decline in interest from the smart money, it's easy to see that there lies a certain "tier" of hedge funds that decided to sell off their full holdings heading into Q3. It's worth mentioning that Peter Algert and Kevin Coldiron'sAlgert Coldiron Investorscut the largest stake of all the hedgies monitored by Insider Monkey, comprising an estimated $1.8 million in stock, and Marc Majzner's Clearline Capital was right behind this move, as the fund said goodbye to about $0.2 million worth. These moves are important to note, as total hedge fund interest stayed the same (this is a bearish signal in our experience).
Let's also examine hedge fund activity in other stocks - not necessarily in the same industry as Par Pacific Holdings, Inc. (NYSE:PARR) but similarly valued. These stocks are Mercer International Inc. (NASDAQ:MERC), Solar Capital Ltd. (NASDAQ:SLRC), Social Capital Hedosophia Holdings Corp. (NYSE:IPOA), and Qiwi PLC (NASDAQ:QIWI). This group of stocks' market valuations are closest to PARR's market valuation.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position MERC,14,141114,-2 SLRC,11,60312,-1 IPOA,22,283400,1 QIWI,12,77832,4 Average,14.75,140665,0.5 [/table]
View table hereif you experience formatting issues.
As you can see these stocks had an average of 14.75 hedge funds with bullish positions and the average amount invested in these stocks was $141 million. That figure was $110 million in PARR's case. Social Capital Hedosophia Holdings Corp. (NYSE:IPOA) is the most popular stock in this table. On the other hand Solar Capital Ltd. (NASDAQ:SLRC) is the least popular one with only 11 bullish hedge fund positions. Par Pacific Holdings, Inc. (NYSE:PARR) is not the most popular stock in this group but hedge fund interest is still above average. Our calculations showed thattop 20 most popular stocksamong hedge funds returned 6.2% in Q2 through June 19th and outperformed the S&P 500 ETF (SPY) by nearly 3 percentage points. Hedge funds were also right about betting on PARR as the stock returned 11.6% during the same period and outperformed the market by an even larger margin. Hedge funds were rewarded for their relative bullishness.
Disclosure: None. This article was originally published atInsider Monkey.
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Hedge Funds Have Never Been This Bullish On Berry Petroleum Corporation (BRY)
Does Berry Petroleum Corporation (NASDAQ:BRY) represent a good buying opportunity at the moment? Let’s quickly check the hedge fund interest towards the company. Hedge fund firms constantly search out bright intellectuals and highly-experienced employees and throw away millions of dollars on satellite photos and other research activities, so it is no wonder why they tend to generate millions in profits each year. It is also true that some hedge fund players fail inconceivably on some occasions, but net net their stock picks have been generating superior risk-adjusted returns on average over the years.
Berry Petroleum Corporation (NASDAQ:BRY)investors should pay attention to an increase in support from the world's most elite money managers of late.BRYwas in 16 hedge funds' portfolios at the end of March. There were 14 hedge funds in our database with BRY holdings at the end of the previous quarter. Our calculations also showed that BRY isn't among the30 most popular stocks among hedge funds.
So, why do we pay attention to hedge fund sentiment before making any investment decisions? Our research has shown that hedge funds' small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the market by 40 percentage points since May 2014 through May 30, 2019 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter. Even if you aren't comfortable with shorting stocks, you should at least avoid initiating long positions in our short portfolio.
Let's view the key hedge fund action encompassing Berry Petroleum Corporation (NASDAQ:BRY).
At the end of the first quarter, a total of 16 of the hedge funds tracked by Insider Monkey were long this stock, a change of 14% from the previous quarter. The graph below displays the number of hedge funds with bullish position in BRY over the last 15 quarters. With hedge funds' sentiment swirling, there exists a select group of noteworthy hedge fund managers who were upping their stakes significantly (or already accumulated large positions).
The largest stake in Berry Petroleum Corporation (NASDAQ:BRY) was held byOaktree Capital Management, which reported holding $90.1 million worth of stock at the end of March. It was followed by Venor Capital Management with a $24.5 million position. Other investors bullish on the company included Marathon Asset Management, Millennium Management, and Marshall Wace LLP.
As one would reasonably expect, specific money managers have jumped into Berry Petroleum Corporation (NASDAQ:BRY) headfirst.Oaktree Capital Management, managed by Howard Marks, established the most valuable position in Berry Petroleum Corporation (NASDAQ:BRY). Oaktree Capital Management had $90.1 million invested in the company at the end of the quarter. Israel Englander'sMillennium Managementalso initiated a $11.8 million position during the quarter. The following funds were also among the new BRY investors: Paul Marshall and Ian Wace'sMarshall Wace LLP, Ron Gutfleish'sElm Ridge Capital, and David Costen Haley'sHBK Investments.
Let's go over hedge fund activity in other stocks similar to Berry Petroleum Corporation (NASDAQ:BRY). We will take a look at Trueblue Inc (NYSE:TBI), Lantheus Holdings Inc (NASDAQ:LNTH), Ra Pharmaceuticals, Inc. (NASDAQ:RARX), and Coherus Biosciences Inc (NASDAQ:CHRS). This group of stocks' market valuations match BRY's market valuation.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position TBI,17,78413,2 LNTH,18,99743,1 RARX,20,267787,3 CHRS,27,199168,7 Average,20.5,161278,3.25 [/table]
View table hereif you experience formatting issues.
As you can see these stocks had an average of 20.5 hedge funds with bullish positions and the average amount invested in these stocks was $161 million. That figure was $167 million in BRY's case. Coherus Biosciences Inc (NASDAQ:CHRS) is the most popular stock in this table. On the other hand Trueblue Inc (NYSE:TBI) is the least popular one with only 17 bullish hedge fund positions. Compared to these stocks Berry Petroleum Corporation (NASDAQ:BRY) is even less popular than TBI. Hedge funds dodged a bullet by taking a bearish stance towards BRY. Our calculations showed that the top 20 most popular hedge fund stocks returned 6.2% in Q2 through June 19th and outperformed the S&P 500 ETF (SPY) by nearly 3 percentage points. Unfortunately BRY wasn't nearly as popular as these 20 stocks (hedge fund sentiment was very bearish); BRY investors were disappointed as the stock returned -4.2% during the same time frame and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out thetop 20 most popular stocksamong hedge funds as 13 of these stocks already outperformed the market so far in the second quarter.
Disclosure: None. This article was originally published atInsider Monkey.
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Here is What Hedge Funds Think About Quotient Technology Inc (QUOT)
As we already know from media reports and hedge fund investor letters, many hedge funds lost money in fourth quarter, blaming macroeconomic conditions and unpredictable events that hit several sectors, with technology among them. Nevertheless, most investors decided to stick to their bullish theses and recouped their losses by the end of the first quarter. We get to see hedge funds' thoughts towards the market and individual stocks by aggregating their quarterly portfolio movements and reading their investor letters. In this article, we will particularly take a look at what hedge funds think about Quotient Technology Inc (NYSE:QUOT).
IsQuotient Technology Inc (NYSE:QUOT)a worthy stock to buy now? Investors who are in the know are turning bullish. The number of long hedge fund bets improved by 4 recently. Our calculations also showed that QUOT isn't among the30 most popular stocks among hedge funds.
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey's flagship best performing hedge funds strategy returned 25.8% year to date (through May 30th) and outperformed the market even though it draws its stock picks among small-cap stocks. This strategy also outperformed the market by 40 percentage points since its inception (see the details here). That's why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
Let's view the key hedge fund action surrounding Quotient Technology Inc (NYSE:QUOT).
Heading into the second quarter of 2019, a total of 16 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 33% from one quarter earlier. By comparison, 19 hedge funds held shares or bullish call options in QUOT a year ago. With the smart money's positions undergoing their usual ebb and flow, there exists a few notable hedge fund managers who were upping their holdings significantly (or already accumulated large positions).
The largest stake in Quotient Technology Inc (NYSE:QUOT) was held byPerceptive Advisors, which reported holding $97.2 million worth of stock at the end of March. It was followed by Rima Senvest Management with a $66.5 million position. Other investors bullish on the company included P2 Capital Partners, D E Shaw, and Trigran Investments.
Now, specific money managers have jumped into Quotient Technology Inc (NYSE:QUOT) headfirst.Perceptive Advisors, managed by Joseph Edelman, initiated the largest position in Quotient Technology Inc (NYSE:QUOT). Perceptive Advisors had $97.2 million invested in the company at the end of the quarter. Douglas T. Granat'sTrigran Investmentsalso made a $4.4 million investment in the stock during the quarter. The other funds with new positions in the stock are Jim Simons'sRenaissance Technologies, Joe DiMenna'sZWEIG DIMENNA PARTNERS, and Joseph Mathias'sConcourse Capital Management.
Let's also examine hedge fund activity in other stocks similar to Quotient Technology Inc (NYSE:QUOT). These stocks are Sturm, Ruger & Company (NYSE:RGR), Genfit SA (NASDAQ:GNFT), InfraREIT Inc (NYSE:HIFR), and ScanSource, Inc. (NASDAQ:SCSC). This group of stocks' market caps match QUOT's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position RGR,17,110759,3 GNFT,10,90626,10 HIFR,14,190869,-1 SCSC,10,49992,-2 Average,12.75,110562,2.5 [/table]
View table hereif you experience formatting issues.
As you can see these stocks had an average of 12.75 hedge funds with bullish positions and the average amount invested in these stocks was $111 million. That figure was $228 million in QUOT's case. Sturm, Ruger & Company (NYSE:RGR) is the most popular stock in this table. On the other hand Genfit SA (NASDAQ:GNFT) is the least popular one with only 10 bullish hedge fund positions. Quotient Technology Inc (NYSE:QUOT) is not the most popular stock in this group but hedge fund interest is still above average. Our calculations showed thattop 20 most popular stocksamong hedge funds returned 6.2% in Q2 through June 19th and outperformed the S&P 500 ETF (SPY) by nearly 3 percentage points. Hedge funds were also right about betting on QUOT as the stock returned 12% during the same period and outperformed the market by an even larger margin. Hedge funds were rewarded for their relative bullishness.
Disclosure: None. This article was originally published atInsider Monkey.
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Here is What Hedge Funds Think About Gran Tierra Energy Inc. (GTE)
At Insider Monkey we follow nearly 750 of the best-performing investors and even though many of them lost money in the last couple of months of 2018 (some actually delivered very strong returns), the history teaches us that over the long-run they still manage to beat the market, which is why it can be profitable for us to imitate their activity. Of course, even the best money managers can sometimes get it wrong, but following some of their picks gives us a better chance to outperform the crowd than picking a random stock and this is where our research comes in.
Gran Tierra Energy Inc. (NYSE:GTE)shares haven't seen a lot of action during the first quarter. Overall, hedge fund sentiment was unchanged. The stock was in 16 hedge funds' portfolios at the end of March. At the end of this article we will also compare GTE to other stocks including ACCO Brands Corporation (NYSE:ACCO), Extreme Networks, Inc (NASDAQ:EXTR), and Continental Building Products Inc (NYSE:CBPX) to get a better sense of its popularity.
So, why do we pay attention to hedge fund sentiment before making any investment decisions? Our research has shown that hedge funds' small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the market by 40 percentage points since May 2014 through May 30, 2019 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter. Even if you aren't comfortable with shorting stocks, you should at least avoid initiating long positions in our short portfolio.
Let's go over the recent hedge fund action surrounding Gran Tierra Energy Inc. (NYSE:GTE).
At Q1's end, a total of 16 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 0% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in GTE over the last 15 quarters. With hedge funds' capital changing hands, there exists a select group of notable hedge fund managers who were increasing their stakes substantially (or already accumulated large positions).
The largest stake in Gran Tierra Energy Inc. (NYSE:GTE) was held byGMT Capital, which reported holding $167.5 million worth of stock at the end of March. It was followed by Luminus Management with a $53 million position. Other investors bullish on the company included Moerus Capital Management, Renaissance Technologies, and Arrowstreet Capital.
Since Gran Tierra Energy Inc. (NYSE:GTE) has faced a decline in interest from the aggregate hedge fund industry, it's easy to see that there was a specific group of funds that slashed their positions entirely by the end of the third quarter. Interestingly, David Halpert'sPrince Street Capital Managementsold off the largest stake of the 700 funds watched by Insider Monkey, comprising close to $6.6 million in stock. Richard Driehaus's fund,Driehaus Capital, also said goodbye to its stock, about $0.6 million worth. These moves are intriguing to say the least, as total hedge fund interest stayed the same (this is a bearish signal in our experience).
Let's now review hedge fund activity in other stocks similar to Gran Tierra Energy Inc. (NYSE:GTE). These stocks are ACCO Brands Corporation (NYSE:ACCO), Extreme Networks, Inc (NASDAQ:EXTR), Continental Building Products Inc (NYSE:CBPX), and Mr. Cooper Group Inc. (NASDAQ:COOP). This group of stocks' market valuations are closest to GTE's market valuation.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position ACCO,18,49974,-3 EXTR,20,97339,0 CBPX,20,87312,4 COOP,27,310225,-1 Average,21.25,136213,0 [/table]
View table hereif you experience formatting issues.
As you can see these stocks had an average of 21.25 hedge funds with bullish positions and the average amount invested in these stocks was $136 million. That figure was $269 million in GTE's case. Mr. Cooper Group Inc. (NASDAQ:COOP) is the most popular stock in this table. On the other hand ACCO Brands Corporation (NYSE:ACCO) is the least popular one with only 18 bullish hedge fund positions. Compared to these stocks Gran Tierra Energy Inc. (NYSE:GTE) is even less popular than ACCO. Hedge funds dodged a bullet by taking a bearish stance towards GTE. Our calculations showed that the top 20 most popular hedge fund stocks returned 6.2% in Q2 through June 19th and outperformed the S&P 500 ETF (SPY) by nearly 3 percentage points. Unfortunately GTE wasn't nearly as popular as these 20 stocks (hedge fund sentiment was very bearish); GTE investors were disappointed as the stock returned -25.1% during the same time frame and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out thetop 20 most popular stocksamong hedge funds as 13 of these stocks already outperformed the market so far in the second quarter.
Disclosure: None. This article was originally published atInsider Monkey.
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Here’s What Hedge Funds Think About QAD Inc. (QADA)
Reputable billionaire investors such as Jim Simons, Cliff Asness and David Tepper generate exorbitant profits for their wealthy accredited investors (a minimum of $1 million in investable assets would be required to invest in a hedge fund and most successful hedge funds won't accept your savings unless you commit at least $5 million) by pinpointing winning small-cap stocks. There is little or no publicly-available information at all on some of these small companies, which makes it hard for an individual investor to pin down a winner within the small-cap space. However, hedge funds and other big asset managers can do the due diligence and analysis for you instead, thanks to their highly-skilled research teams and vast resources to conduct an appropriate evaluation process. Looking for potential winners within the small-cap galaxy of stocks? We believe following the smart money is a good starting point.
QAD Inc. (NASDAQ:QADA)has seen a decrease in activity from the world's largest hedge funds of late.QADAwas in 16 hedge funds' portfolios at the end of March. There were 17 hedge funds in our database with QADA positions at the end of the previous quarter. Our calculations also showed that qada isn't among the30 most popular stocks among hedge funds.
So, why do we pay attention to hedge fund sentiment before making any investment decisions? Our research has shown that hedge funds' small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the market by 40 percentage points since May 2014 through May 30, 2019 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter. Even if you aren't comfortable with shorting stocks, you should at least avoid initiating long positions in our short portfolio.
We're going to view the fresh hedge fund action regarding QAD Inc. (NASDAQ:QADA).
At Q1's end, a total of 16 of the hedge funds tracked by Insider Monkey were long this stock, a change of -6% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in QADA over the last 15 quarters. With the smart money's sentiment swirling, there exists a few noteworthy hedge fund managers who were boosting their stakes significantly (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Wilmot B. Harkey and Daniel Mack'sNantahala Capital Managementhas the biggest position in QAD Inc. (NASDAQ:QADA), worth close to $45.7 million, amounting to 1.4% of its total 13F portfolio. Coming in second isRenaissance Technologies, managed by Jim Simons, which holds a $28.5 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Remaining professional money managers that hold long positions consist of George McCabe'sPortolan Capital Management, David Atterbury'sWhetstone Capital Advisorsand Chuck Royce'sRoyce & Associates.
We view hedge fund activity in the stock unfavorable, but in this case there was only a single hedge fund selling its entire position:Shannon River Fund Management. One hedge fund selling its entire position doesn't always imply a bearish intent. Theoretically a hedge fund may decide to sell a promising position in order to invest the proceeds in a more promising idea. However, we don't think this is the case in this case because none of the 700+ hedge funds tracked by Insider Monkey identified QADA as a viable investment and initiated a position in the stock.
Let's now take a look at hedge fund activity in other stocks similar to QAD Inc. (NASDAQ:QADA). These stocks are CBTX, Inc. (NASDAQ:CBTX), Intrexon Corp (NASDAQ:XON), Jianpu Technology Inc. (NYSE:JT), and Encore Capital Group, Inc. (NASDAQ:ECPG). This group of stocks' market valuations match QADA's market valuation.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position CBTX,8,22427,0 XON,8,11013,-2 JT,7,44007,2 ECPG,14,60635,6 Average,9.25,34521,1.5 [/table]
View table hereif you experience formatting issues.
As you can see these stocks had an average of 9.25 hedge funds with bullish positions and the average amount invested in these stocks was $35 million. That figure was $125 million in QADA's case. Encore Capital Group, Inc. (NASDAQ:ECPG) is the most popular stock in this table. On the other hand Jianpu Technology Inc. (NYSE:JT) is the least popular one with only 7 bullish hedge fund positions. Compared to these stocks QAD Inc. (NASDAQ:QADA) is more popular among hedge funds. Our calculations showed thattop 20 most popular stocksamong hedge funds returned 6.2% in Q2 through June 19th and outperformed the S&P 500 ETF (SPY) by nearly 3 percentage points. Unfortunately QADA wasn't nearly as popular as these 20 stocks and hedge funds that were betting on QADA were disappointed as the stock returned -3.6% during the same period and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out thetop 20 most popular stocksamong hedge funds as 13 of these stocks already outperformed the market in Q2.
Disclosure: None. This article was originally published atInsider Monkey.
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I Ran A Stock Scan For Earnings Growth And Auckland International Airport (NZSE:AIA) Passed With Ease
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For beginners, it can seem like a good idea (and an exciting prospect) to buy a company that tells a good story to investors, even if it completely lacks a track record of revenue and profit. But the reality is that when a company loses money each year, for long enough, its investors will usually take their share of those losses.
If, on the other hand, you like companies that have revenue, and even earn profits, then you may well be interested inAuckland International Airport(NZSE:AIA). While that doesn't make the shares worth buying at any price, you can't deny that successful capitalism requires profit, eventually. Conversely, a loss-making company is yet to prove itself with profit, and eventually the sweet milk of external capital may run sour.
Check out our latest analysis for Auckland International Airport
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. Therefore, there are plenty of investors who like to buy shares in companies that are growing EPS. Impressively, Auckland International Airport has grown EPS by 36% per year, compound, in the last three years. If the company can sustain that sort of growth, we'd expect shareholders to come away winners.
Careful consideration of revenue growth and earnings before interest and taxation (EBIT) margins can help inform a view on the sustainability of the recent profit growth. I note that Auckland International Airport's revenuefrom operationswas lower than its revenue in the last twelve months, so that could distort my analysis of its margins. While we note Auckland International Airport's EBIT margins were flat over the last year, revenue grew by a solid 11% to NZ$713m. 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.
You don't drive with your eyes on the rear-view mirror, so you might be more interested in thisfreereport showing analyst forecasts for Auckland International Airport'sfutureprofits.
Like the kids in the streets standing up for their beliefs, insider share purchases give me reason to believe in a brighter future. This view is based on the possibility that stock purchases signal bullishness on behalf of the buyer. However, insiders are sometimes wrong, and we don't know the exact thinking behind their acquisitions.
We note that Auckland International Airport insiders spent NZ$102k on stock, over the last year; in contrast, we didn't see any selling. That puts the company in a nice light, as it makes me think its leaders are feeling confident.
Along with the insider buying, another encouraging sign for Auckland International Airport is that insiders, as a group, have a considerable shareholding. To be specific, they have NZ$27m worth of shares. That's a lot of money, and no small incentive to work hard. Despite being just 0.2% of the company, the value of that investment is enough to show insiders have plenty riding on the venture.
While insiders already own a significant amount of shares, and they have been buying more, the good news for ordinary shareholders does not stop there. The cherry on top is that the CEO, Adrian Littlewood is paid comparatively modestly to CEOs at similar sized companies. I discovered that the median total compensation for the CEOs of companies like Auckland International Airport with market caps between NZ$6.0b and NZ$18b is about NZ$4.3m.
Auckland International Airport offered total compensation worth NZ$3.6m to its CEO in the year to June 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 a culture of integrity, in a broader sense.
For growth investors like me, Auckland International Airport's raw rate of earnings growth is a beacon in the night. On top of that, insiders own a significant stake in the company and have been buying more shares. So I do think this is one stock worth watching. Now, you could try to make up your mind on Auckland International Airport by focusing on just these factors,oryou couldalsoconsider how its price-to-earnings ratio compares to other companies in its industry.
As a growth investor I do like to see insider buying. But Auckland International Airport isn't the only one. You can see aa free list of them here.
Please note the insider transactions discussed in this article refer to reportable transactions in the relevant jurisdiction
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
Will Sprouts Farmers Market Ever Thrive?
The grocery business is tough. Full disclosure: Getting food distributed to the masses isnot my favorite investment. Nevertheless, there's a little money to be made in grocery retail, especially these days when consumers are all about fresh and organic choices.
And that's what makesSprouts Farmers Market(NASDAQ: SFM)such a head-scratcher. Since the chain went public in 2013, the stock has done nothing but decline -- all the while posting modest revenue and profit gains.
Granted,shares were way overpricedin the past, with investors overly optimistic about the fresh grocer's ability to move into new markets. But with a new CEO and national expansion chugging along at a decent pace, things aren't all that bad.
Sprouts is a small chain with the bulk of its stores in its home state of Arizona and in California. New openings have been occurring at about 30 a year, and the grand total was 322 at the end of the first quarter of 2019. Those new stores account for the bulk of Sprouts' growth of late.
[{"Metric": "Revenue", "Q1 2019": "$1.414 billion", "Q1 2018": "$1.287 billion", "Change": "10%"}, {"Metric": "Operating income", "Q1 2019": "$79.6 million", "Q1 2018": "$79.7 million", "Change": "N/A"}, {"Metric": "Earnings per share", "Q1 2019": "$0.46", "Q1 2018": "$0.50", "Change": "(8%)"}]
Data source: Sprouts Farmers Market.
Same-store sales (a combination of foot traffic and ticket size per visit) also grew 1.4% during the quarter. Over the last two years, the metric has increased a total of 4.1% -- a respectable number given that peers likeKrogercan't seem to gain any real traction and are only boosting sales via digital orders. Sprouts is losing some steam here, though, as comps were up 5.3% in the trailing two-year stretch that ended in 2017 and 5% in the trailing two years that ended in 2018.
In spite of top-line gains for the grocer, operating income was flat and earnings were down during the first quarter. The blame lies with higher general and administrative expenses, as well as some extra costs associated with a few store closures. Toss in a higher provision for taxes, and it all added up to an underwhelming bottom-line performance. As of this writing, shares are down 16% in the last 12 months.
Image source: Getty Images.
Shortly after the first-quarter release, Sprouts also announced some executive changes. Jack Sinclair -- former CEO of 99 Cents Only Stores and previously an executive atWalmart's U.S. grocery division -- was made CEO effective June 24. Former interim co-CEO and CFO Brad Lukow left the company, so the CFO position is in flux for the time being. The situation with the company's top brass could be another reason for investors' salty mood.
At the end of the day, though, it's all about the bottom line, and Sprouts hasn't delivered the kind of growth shareholders were looking for. Even though sales are expected to increase 9% to 10.5% for full-year 2019, management has forecast earnings to be flat to slightly down from 2018. Maybe Sinclair and whoever joins him can get things back into growth mode, but that remains to be seen.
Even with the uncertainty, Sprouts might be a decent buy right now. Trailing-12-month P/E puts the stock at 15.8. That's far cheaper than the recently gone-public West Coast peerGrocery Outlet, which trades for a whopping 165 times 12-month earnings as of this writing.
And though earnings growth has been nonexistent for Sprouts as of late, free cash flow (money left over after basic operating expenses and capital expenditures) has been trending up in the last couple of years. In short, things may not look great on the surface at Sprouts Farmers Market, but investors could do far worse in the grocery department.
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Nicholas Rossolilloand his clients have 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. |
3 Stocks to Hold for the Next 20 Years
Investing maven Warren Buffett famously quipped thathis favorite holding period is forever. There's a lot to be said for thinking in those terms, not just because it's the strategy the world's most successful living investor follows. For one thing, focusing on the ultra-long term forces you to focus on thequalityandstaying powerof the businesses you're buying when you purchase their shares. For another, holding onto the companies you own allows you to build wealth very tax-efficiently, as capital gains taxes are rarely due unless and until you sell. And of course, a long-term focus gives you patience when the market is moving against you.
Knowing the benefits a long-term focus can have for investors, we asked three contributors to each pick a company whose shares they believe would be worth holding onto for the next 20 years. They selectedTake-Two Interactive(NASDAQ: TTWO),Berkshire Hathaway(NYSE: BRK-A)(NYSE: BRK-B), andKinder Morgan(NYSE: KMI). Read on to find out what makes these three companies worth your consideration.
Image Source: Getty Images
Keith Noonan(Take-Two Interactive):The video game industry has seen many corporate players come and go over the last two decades, but Take-Two Interactive has been one of its biggest winners and looks primed for long-term success. The publisher has significantly expanded the strength of its franchise portfolio, with properties likeGrand Theft Auto,NBA 2K, andRed Dead Redemptionputting up great numbers and giving the companya strong base of propertiesto rely on as it launches new series and ramps up the mobile wing of its business.
Grand Theft Auto Vis still going strong, bringing in substantial retail and online sales despite having first released in 2013. The franchise has been an industry leader since 2001 and demonstrated incredible longevity to become one of the most successful entertainment properties ever.NBA 2K19was North America's best-selling sports game last year, its third-best-selling title overall, and put up record online engagement and in-game digital spending for the series. Meanwhile,Red Dead Redemption 2was 2018's best-selling game.
Take-Two has a stable of bankable properties and has shown that it can reliably deliver great content. That's a recipe for success in the video game industry, and a commendable track record on that front has allowed the company to build a healthy balance sheet. Take-Two doesn't plan to rest on its laurels and sit on its cash. Comments from management suggest that the company will continue to make acquisitions to bolster its position in the mobile gaming space and tap into the huge audience there. With high-quality gaming content becoming increasingly important in broader media and technology ecosystems and the likelihood that the global gaming audience will see a significant expansion over the next two decades, there's a good chance that Take-Two Interactive will be a strong performer over the stretch.
Rich Smith(Berkshire Hathaway):A lot can happen in 20 years. Today I'm going to place a bet on oneparticularthing happening:
At some point in the next 20 years, Warren Buffett is (probably) going to die.
I know that sounds morbid, but consider that according to the National Center for Health Statistics, a white male born in 1930, such as Warren Buffett, had a life expectancy of 60 years at time of birth. At age 88 today, Buffett should actually have already been dead for 28 years. Statistically speaking.
Now,factuallyspeaking, Warren Buffett isn't dead yet (although he is planning on it). But once the Oracle of Omahadoes, in fact, pass away, a lot of folks are going to be tempted to sell Berkshire Hathaway, certain that without the world's greatest investor at its helm, Berkshire's days of beating the market will be well and truly over.
I disagree.
Why? Because for the last 55 years, Warren Buffett -- this self-sameworld's greatest investor-- has devoted himself to buying upthe greatest businesses in America(and around the world) and gathering them together under the umbrella of one single stock symbol: "BRK." Even in a worst-case scenario, where no one ever replaces Mr. Buffett, no one equal to him at the task of adding to this portfolio of great businesses -- the companies he'salreadyboughtare still right therewithin Berkshire Hathaway.
Unless some new CEO makes a great, big goof and sells them, they'll remain there for the next 20 years, 30 years, and beyond.
My advice: So long as Berkshire Hathaway holds onto those businesses, you should hold onto Berkshire Hathaway stock.
Chuck Saletta(Kinder Morgan):Love it or hate it, the reality is that demand for oil and natural gas is expected to remain strong for decades to come. With that demand for those types of fuels comes a need to move them from where they get produced to where they ultimately get consumed. That's the foundation that makes Kinder Morgan worthy of your consideration as a stock to hold for the next 20 years.
As one of the largest energy infrastructure companies in North America, Kinder Morgan boasts around 84,000 miles of pipelines crisscrossing the continent. Those pipelines provide some of the safest and most economical ways to transport that energy around.
Still, as Kinder Morgan itself discovered whentrying to expand its Canadian Trans Mountain Pipeline, there is frequently a lot of political opposition to pipelines getting built or expanded. Somewhat ironically, however, that opposition actually provides something of a moat around the company's existing operations. The difficulty and cost involved in laying new pipelines mean that existing infrastructure -- such as the infrastructure Kinder Morgan owns -- faces that much less competition.
While it's true that Kinder Morgan was forced to cut its dividend in 2015, the company used the improved cash flow from that cut, along with some asset sales,to shore up its balance sheet. That means that today's Kinder Morgan is financially much stronger than it was just a few short years ago. That should give today's investors even more confidence that the company looks like a reasonable one to potentially hold onto for the next 20 years.
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Chuck Salettaowns shares of Kinder Morgan and has the following options: short January 2020 $15 puts on Kinder Morgan, short January 2020 $20 puts on Kinder Morgan, and long January 2020 $20 calls on Kinder Morgan.Keith Noonanowns shares of Take-Two Interactive.Rich Smithhas no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Berkshire Hathaway (B shares), Kinder Morgan, and Take-Two Interactive. The Motley Fool has adisclosure policy. |
The Latest: Las Vegas casino workers picket Palms casino
LAS VEGAS (AP) — The Latest on a casino workers picket outside the Palms casino-resort (all times local): 7:10 p.m. ___ More than 1,000 members of a Las Vegas casino workers' union and other hospitality union members picketed on a busy street Wednesday night in front of the Palms casino-resort west of the Strip to demand that casino managers bargain with the workers. The Culinary Union members wore their signature red shirts and chanted while carrying signs that said, "No contract. No peace." Culinary Union secretary-treasurer Geoconda Argüello-Kline, secretary-treasurer for the Culinary Union says the Palms-owner Station Casinos is disrespecting workers by refusing to come to the bargaining table and the union won't stop until they negotiate. Michael Britt, a senior vice president for Station Casinos' parent company, Red Rock Resorts, says the company has a "legal and appropriate" right to challenge a National Labor Relations Board ruling that determine determined the company failed and refused to bargain in good faith. ___ 9:30 a.m. Members of a powerful Las Vegas casino workers' union and other hospitality workers will picket Wednesday outside the Palms casino-resort, where owners have refused to bargain with the union. The workers will call for Palms-owner Station Casinos to negotiate with the workers, who voted in April 2018 to unionize. The company challenged the election's result but the National Labor Relations Board determined the company has been "failing and refusing to bargain collectively and in good faith" with the Culinary Union. The Palms west of the Las Vegas Strip is one of six Station Casinos-owned properties in Las Vegas where workers have voted to unionize in recent years. Station Casinos did not respond to a message seeking comment. The Culinary Union says it represents about 900 porters, food servers, bartenders and other workers at the Palms. |
Is Alliance Resource Partners a Buy?
The first, second, and third thing investors are likely to notice aboutAlliance Resource Partners(NASDAQ: ARLP)is that the stock pays a double-digit distribution yield. The next thing investors will notice is that the business makes all of its money from mining and transporting coal.
On the one hand, the company is profitable: It sold a record 40.4 million tons of coal in 2018. It has managed to comfortably cover its distribution in four of the last five years. And it even managed to stop a multiyear slide in sales last year with its highest level of revenue since 2015.
On the other hand, it's 2019. Can any serious investor with a long-term mindset really own a coal stock?
Image source: Getty Images.
Alliance Resource Partners mines steam coal (used for generating electricity) and metallurgical coal (used for industrial applications) from assets in the United States. It sells a range of low-sulfur, moderate-sulfur, and high-sulfur coal products. In addition to generating revenue from the direct and indirect sale of products, the business has wisely begun to wade into transportation services. That has allowed it to generate revenue from overseeing the safe passage of coal from its mines to customers via barge and rail.
That change to the business model has provided a noticeable increase in total revenue, especially after a record volume of product was sold in 2018. That said, Alliance Resource Partners has seen its business deteriorate over the years due to falling demand for coal and weakening selling prices. Investors don't have to go back that far to see the trend: The company reported $2.2 billion in coal sales and $544 million in operating income as recently as 2014. Consider how the business has fared more recently.
[{"Metric": "Coal revenue", "2018": "$1.84 billion", "2017": "$1.71 billion", "2016": "$1.86 billion"}, {"Metric": "Transportation revenue", "2018": "$112 million", "2017": "$42 million", "2016": "$30 million"}, {"Metric": "Operating expenses", "2018": "$1.63 billion*", "2017": "$1.46 billion", "2016": "$1.56 billion"}, {"Metric": "Operating income", "2018": "$372 million*", "2017": "$332 million", "2016": "$368 million"}, {"Metric": "Net income", "2018": "$367 million", "2017": "$304 million", "2016": "$339 million"}, {"Metric": "Earnings per share (EPS)", "2018": "$2.73", "2017": "$2.25", "2016": "$2.51"}, {"Metric": "Distribution per share", "2018": "$2.07", "2017": "$1.88", "2016": "$1.99"}, {"Metric": "Operating cash flow", "2018": "$694 million", "2017": "$556 million", "2016": "$703 million"}]
Data source: SEC filing. *Includes an $80 million benefit from a legal settlement.
Alliance Resource Partners has been able to cover its distribution with operating cash flow. It's distribution coverage ratio in 2018 was 1.51 times. While the company's financial performance has improved in the last five quarters, that had a lot to do with an $80 million settlement received in the first quarter of 2018. That reduced operating expenses and therefore boosted operating income and net income. Without it, operating income would have continued its multiyear slide. Investors also might want to entertain the idea that the recent production surge will be remembered as a tiny blip on the long-term radar. Simply put, coal is being phased out globally.
Consider that Alliance Resource Partners sold 68% of its coal to American electric utilities in 2018. However, the amount of electricity generated from coal-fired power plants in the United States declined 35% from 2009 to 2018. Accelerating retirements resulted in a further 8% decline in electricity generation in the first quarter of 2019 compared to the year-ago period. Worse yet, the U.S. Energy Information Administration counts 63 planned retirements of coal-fired power plants between now and 2027 -- and many more are likely to be announced.
While Alliance Resource Partners has increased the share of exports from 4.5% of total sales volume in 2016 to 27.8% last year, international markets are also reducing coal consumption for both industrial and power applications. China is on pace to reduce coal's share of its electricity generation from 64% in 2015 to 58% in 2020. Many countries in Europe are on pace to be coal-free by 2030. Meanwhile, therise of low-cost liquefied natural gas(LNG) exports might prove just as devastating as any climate change policies.
Another risk is that the company's largest customer, a subsidiary ofPPL Corporation, was responsible for 10.9% of total revenue in 2018. However, the parent company has committed to reducing carbon dioxide emissions 70% from 2010 levels by 2050. That requires the energy-generating company to shutter practically all 7,410 megawatts of coal-fired power plants it owns, which represent 72% of its total generating capacity and 3% of the country's coal-fired power plant fleet.
Image source: Getty Images.
Yes, a 12.6% distribution yield is enticing. Yes, Alliance Resource Partners turned in a surprisingly positive performance in 2018. Yes, the stock trades at less than 7 times future earnings estimates. But investors can probably see that the coal industry is headed to an early retirement --perhaps much earlier than current estimates suggest.
If that's not enough to peel your eyes away from the double-digit yield, then consider that this coal stock has lost 39% of its value in the last five years with dividends included. Parking your money in theS&P 500would have returned 67%, including dividends, in the same span. In other words, you would have collected a hefty income stream by owning this stock, but lost most of your principal. That's not the point of investing. Therefore, investors should definitely stay away from this coal stock.
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Maxx Chatskohas no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has adisclosure policy. |
U.S., Japan have not discussed revising security pact -Japan
TOKYO, June 27 (Reuters) - Japan's top government spokesman said on Thursday that Japan and the United States have not discussed revising the U.S.-Japan security treaty after U.S. President Donald Trump renewed his criticism of the defence pact in a television interview.
Trump told Fox television in Washington on Wednesday that if the United States is attacked, Japan "doesn't have to help us at all. They can watch it on a Sony television, the attack."
The Japanese and U.S. governments "have not discussed revising the U.S.-Japan Security Treaty at all," Yoshihide Suga told reporters in Tokyo.
"The obligations of the United States and Japan ... are balanced between both countries," he added. (Reporting by Daniel Leussink; editing by Darren Schuettler) |
SoftBank, Toyota's self-driving car venture to add five more automakers: sources
By Maki Shiraki TOKYO (Reuters) - The self-driving car joint venture of SoftBank Corp and Toyota Motor will receive investment from a further five Japanese automakers, two sources familiar with the matter said, broadening backing for the all-Japan effort. Mazda Motor Corp, Suzuki Motor Corp, Subaru Corp, Isuzu Motors and Toyota unit Daihatsu will each take a stake of a few percent in the venture, the sources said. With the move to autonomous driving and electric vehicles creating ructions across the industry and spawning once unlikely partnerships, the venture, Monet, which is developing an on-demand self-driving service platform, hopes to help Japan's auto industry ride the shift. Monet, announced in October, added investment from Honda Motor Co and Toyota's truck making subsidiary Hino Motors in March, leaving SoftBank Corp the largest shareholder with a 40.2% share and Toyota owning 39.8%. When Honda and Hino joined in March, the total investment in Monet was 2.5 billion yen ($23.20 million). It was not immediately clear how much the five new partners are investing in the venture. Monet declined to comment on the investment, which was first reported by Nikkei. Mazda, Suzuki, Subaru, Isuzu and Daihatsu also declined to comment. The venture's head told Reuters earlier this month it was planning to expand its investor base. Monet hopes to export a basic version of the service to Southeast Asia in 2020 and aims to roll out on-demand bus and car services in Japan in the next year. ($1 = 107.7500 yen) (Additional reporting by Naomi Tajitsu; Writing by Sam Nussey; Editing by Muralikumar Anantharaman) |
‘The Daily Show With Trevor Noah’ Zings Dems Debate Follies
Click here to read the full article. The Democratic presidential candidate debate was comedy gold for The Daily Show and Trevor Noah , as the long lineup of hopefuls provided enough memorable moments to fill a ballot. Or, in this case, a program, via Noah’s Votegasm 2020 , a live show that followed the Democratic scrum. The Daily Show kicked off the live laughs seconds after the debate with a show festooned with the graphic, “World War D: Let’s Get Ready to Ramble: Part 1.” Related stories Donald Trump Backpedals, Tweets About Democratic Debate And Technical Difficulties; Trevor Noah Responds Trevor Noah, Seth Meyers, Stephen Colbert Torch Trump's 'She's Not My Type' Assault Denial Seth Meyers, Trevor Noah, Stephen Colbert Take On Trump's "Cocked And Loaded" Claim Host Trevor Noah got off several quality shots at more than half the field, beginning with Beto O’Rourke, who answered a question about health care in fluent Spanish. “‘To hear my answer in English, press one,'” Noah riffed. “This guy was so fluent, people probably thought they had switched to Univision by mistake.” A reaction photo of a wide-eyed Corey Booker watching the conquistador to his left accentuated the bit. The logistics of the debate became a big theme in Noah’s broadsides. Amy Klobuchar, he noted, continually ran out of time just before she delivered what she hoped would be a killer line. Noah imagined time management being a problem even if Klobuchar were to be elected. “But I’m president!” he said, imitating her being told she was out of time during her inauguration. As footage showed Washington Gov. Jay inslee raising a finger trying to get a word in edgewise, Noah cracked that Inslee had “spent the whole night like he was trying to order a drink. How are you going to get the nomination when you can’t even get a vodka soda?” Story continues John Delaney, Noah marveled, got several applause lines despite next to zero name recognition heading into the debate. “He should say his name after each answer, like DJ Khalid,” Noah laughed. “John De-LAY-neee! Bew, bew bew!” New York Mayor Bill De Blasio came in for some ribbing from the hometown show. After a string of clips showing De Blasio horning in on the time of others onstage, Noah said, “That was a typical subway move right there!” With that kind of performance, Noah reasoned, “he went from a one [percent rating in the polls] to like at least a three.” Some of the choice bits posted via Twitter: When you remember we have to do this all over again tomorrow #DemDebate pic.twitter.com/SRvkN61qps — The Daily Show (@TheDailyShow) June 27, 2019 Trevor’s LIVE coverage of the first 2020 Democratic debate. #Votegasm2020 #DemDebate https://t.co/S3cakNo5pe — The Daily Show (@TheDailyShow) June 27, 2019 EXCLUSIVE: Behind-the-scenes footage of MSNBC's technical difficulties #DemDebate pic.twitter.com/45jmBKmNIK — The Daily Show (@TheDailyShow) June 27, 2019 BREAKING: Jay Inslee, John Delaney, and Tim Ryan have spontaneously fused into a jar of mayonnaise #DemDebate pic.twitter.com/zq2oSwFrdg — The Daily Show (@TheDailyShow) June 27, 2019 When your little sister steals your phone https://t.co/2vucJQxpOM — The Daily Show (@TheDailyShow) June 27, 2019 Ya'll got this man on Live TV trying to think of a couple of words in Spanish to sprinkle in on his next answer. #DemDebate pic.twitter.com/UwT2KnwRfk — Roy Wood Jr- Ex Jedi (@roywoodjr) June 27, 2019 Team de Blasio signing on! #DemDebate https://t.co/FZsZBVFEJx pic.twitter.com/Rdp1VG1I5I — The Daily Show (@TheDailyShow) June 27, 2019 Achievement Unlocked: ¡Tiempo de pander! #DemDebate pic.twitter.com/2D5u5aerPJ — The Daily Show (@TheDailyShow) June 27, 2019 Warren arrives at the #DemDebate with all her policies in tow pic.twitter.com/4rc5SNl8dE — The Daily Show (@TheDailyShow) June 27, 2019 When Dad says "Hola, como estas?" to the waiter at the Mexican restaurant #DemDebate pic.twitter.com/64FY2LV6kp — The Daily Show (@TheDailyShow) June 27, 2019 Sign up for Deadline's Newsletter . For the latest news, follow us on Facebook , Twitter , and Instagram . |
Why Semiconductor Shares Are Rallying After Micron's Latest Move
Micron Technologies(NASDAQ: MU)thinks it has cut through the Gordian knot that is the trade war -- sort of.
It's actually more of a workaround. According to CEO Sanjay Mehrota on the company'sfiscal 2019 third-quarterearnings call, Micron has begun selling some products to Huawei again. Mehrota explained:
As you know, effective May 16, the U.S. Commerce Department's Bureau of Industry and Security, or BIS, added Huawei and 68 of its non-U.S. affiliates to the BIS entity list. To ensure compliance, Micron immediately suspended shipments to Huawei and [began] a review of Micron products sold to Huawei to determine whether they are subject to the imposed restrictions. Through this review, we determined that we could lawfully resume shipping a subset of current products because they are not subject to export administration regulations and entity list restrictions. We have started shipping some orders of those products to Huawei in the last two weeks.
CFO David Zinsner added that Micron has mitigated 90% of the impact from tariffs enacted over the course of theU.S.-China trade warand that the extra tax has had a minimal impact on profit margins. The chipmaker admitted that uncertainty remains, that it can't resumeallshipments of product to Huawei, and that there's no guarantee there won't be more trade bans in the future. Nevertheless, the not-as-bad-as-expected bad news signaled relief for some of Micron's semiconductor peers.
Image source: Getty Images.
The semiconductor industry has been especially affected by the trade war. Not only is the world's most populous country a big consumer of technology, but a significant portion of the manufacturing process takes place there as well. The worry has been that higher taxes could dampen demand.
Then the crackdown on Huawei came. Huawei is a massive manufacturer of tech equipment, infrastructure, and consumer hardware, and it accounts for a significant portion of sales for many U.S. tech companies. Micron, for example, made 13% of its revenue from Huawei during its fiscal 2019 second quarter, before the ban went in place.
It's a similar story for other names in the sector. Connectivity chip makerSkyworks Solutions(NASDAQ: SWKS)has been beaten up latelybecause 12% of its sales were to Huawei. Worry also mounted that Skyworks' new 5G network products would struggle, as Huawei is a primary developer of the new mobile network technology and 5G infrastructure.The listofcollateral damagegoes on, includingBroadcom(NASDAQ: AVGO),Xilinx(NASDAQ: XLNX), andothers.
Micron's breakthrough, then, was good news for the sector. Optimism resurfaced that other names could soon find a reprieve. Chip stocks were up more than 3% the day after Micron's report, as measured by theiShares PHLX Semiconductor ETF(NASDAQ: SOXX). The index has rallied 25% year to date, but it remains about 10% off its high-water mark.
Data source:YCharts.
Trade wars, tariffs, and bans on Huawei aside, one fact remains: Semiconductors are the building blocks of all things technology. And with technology an increasingly important component of our lives around the globe, the trade war is really just a distraction from the long-term secular trend that is in place.
In answering an analyst question specifically about 5G networks, Mehrota had an obvious but nonetheless important point investors should remember:
Keep in mind that in certain countries 5G [has] already started to be deployed, such as [South] Korea, and there are of course leading suppliers other than Huawei as well for 5G. So it remains to be seen how this deployment occurs over the course of [the] next few quarters, in particular here.
Trade wars are disruptive, especially when they're between the world's two largest economies. But there are other places to do business, and there are other companies that aren't Huawei developing technology in need of chip solutions. Workarounds are possible. Whatever happens next, there's no need to panic if you have a horse in the semiconductor race.
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Nicholas Rossolilloand his clients own shares of Micron Technology and Skyworks Solutions. The Motley Fool owns shares of and recommends Skyworks Solutions. The Motley Fool recommends Broadcom Ltd and Xilinx. The Motley Fool has adisclosure policy. |
What Kind Of Shareholder Appears On The Athena Resources Limited's (ASX:AHN) Shareholder Register?
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Every investor in Athena Resources Limited (ASX:AHN) should be aware of the most powerful shareholder groups. Insiders often own a large chunk of younger, smaller, companies while huge companies tend to have institutions as shareholders. Warren Buffett said that he likes 'a business with enduring competitive advantages that is run by able and owner-oriented people'. So it's nice to see some insider ownership, because it may suggest that management is owner-oriented.
With a market capitalization of AU$6.8m, Athena Resources is a small cap stock, so it might not be well known by many institutional investors. Our analysis of the ownership of the company, below, shows that institutional investors have not yet purchased much of the company. Let's take a closer look to see what the different types of shareholder can tell us about AHN.
Check out our latest analysis for Athena Resources
Small companies that are not very actively traded often lack institutional investors, but it's less common to see large companies without them.
There could be various reasons why no institutions own shares in a company. Typically, small, newly listed companies don't attract much attention from fund managers, because it would not be possible for large fund managers to build a meaningful position in the company. Alternatively, there might be something about the company that has kept institutional investors away. Athena Resources's earnings and revenue track record (below) may not be compelling to institutional investors -- or they simply might not have looked at the business closely.
Hedge funds don't have many shares in Athena Resources. Our information suggests that there isn't any analyst coverage of the stock, so it is probably little known.
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. The company management answer to the board; and the latter should represent the interests of shareholders. Notably, sometimes top-level managers are on the board, themselves.
I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions.
It seems insiders own a significant proportion of Athena Resources Limited. It has a market capitalization of just AU$6.8m, and insiders have AU$2.1m worth of shares in their own names. I would say this shows alignment with shareholders, but it is worth noting that the company is still quite small; some insiders may have founded the business. You canclick here to see if those insiders have been buying or selling.
With a 38% ownership, the general public have some degree of sway over AHN. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.
We can see that Private Companies own 28%, of the shares on issue. Private companies may be related parties. Sometimes insiders have an interest in a public company through a holding in a private company, rather than in their own capacity as an individual. While it's hard to draw any broad stroke conclusions, it is worth noting as an area for further research.
Public companies currently own 3.1% of AHN stock. It's hard to say for sure, but this suggests they have entwined business interests. This might be a strategic stake, so it's worth watching this space for changes in ownership.
While it is well worth considering the different groups that own a company, there are other factors that are even more important.
I always like to check for ahistory of revenue growth. You can too, by accessing this free chart ofhistoric revenue and earnings in thisdetailed graph.
Of course,you might find a fantastic investment by looking elsewhere.So take a peek at thisfreelist of interesting companies.
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. |
Blood pressure drug recall: 32 lots of losartan recalled over small amounts of carcinogen
Macleods Pharmaceuticals Limited is recalling 32 lots of the popular blood pressure drug losartan after discovering trace amounts of a probable carcinogen.
The recalled losartan and potassium/hydrochlorothiazide combination tablets contained small amounts of N-nitrosodiethylamine, or NDEA, according to a company notice posted tothe Food and Drug Administration's websiteWednesday.
"Based on the available information, the risk of developing cancer in a few patients following long-term use of the product cannot be ruled out," the recall notice states.
The active drug ingredient was manufactured at Hetero Labs Limited in India, one of the overseas drug factories linked torepeated blood medication recallssince last July.
Macleods also recalledone lot of the losartan combination drug in Februaryfor the same reason. The company said in the statement that for this recall "it has not received any reports of adverse effects."
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Health care professionals advise patients to consult with their doctors or pharmacists before discontinuing one of the recalled blood pressure medicines or finding an alternative treatment.
Discontinuing a recalled drug could cause more immediate harm than staying on the medication.
Consumers with medical questions or to report an adverse event can contact Macleods at 855-926-3384 from 8 a.m. to 5 p.m. EST.
For questions about returning the product, contact Qualanex via email atrecall@qualanex.comor call 888-280-2046 from 7 a.m. to 4 p.m. CST weekdays.
Here are the doses, lot numbers and expiration dates of the recalled medicine:
Losartan Potassium Tablets 50 mg:
• BLl711A, BLl710A, November 2019
Losartan Potassium and Hydrochlorothiazide Tablets 50 mg/ 12.5 mg:
• BLK719A, BLK720A, BLK721A, BLK722A, BLK723A, BLK724A, September 2019
• BLK725A, BLK726A, October 2019
• BLK804A, BLK806A, January 2020
• BLK825A, BLK826A, October 2021
Losartan Potassium and Hydrochlorothiazide Tablets 100 mg/ 12.5 mg:
• BLM716A, BLM717A, July 2019
• BLM719A, BLM720A, August 2019
• BLM721A, BLM722A, September 2019
• BLM723A, BLM724A, BLM725A, October 2019
• BLM726A, November 2019
• BLM802A, BLM803A, December 2019
• BLM825A, BLM826A, BLM827A, September 2021
Contributing: Ken Alltucker
Follow Kelly Tyko on Twitter:@KellyTyko
This article originally appeared on USA TODAY:Blood pressure drug recall: 32 lots of losartan recalled over small amounts of carcinogen |
Bharat Dynamics Limited (NSE:BDL) Earns A Nice Return On Capital Employed
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Today we are going to look at Bharat Dynamics Limited (NSE:BDL) to see whether it might be an attractive investment prospect. To be precise, we'll consider its Return On Capital Employed (ROCE), as that will inform our view of the quality of the business.
Firstly, we'll go over how we calculate ROCE. Then we'll compare its ROCE to similar companies. Finally, we'll look at how its current liabilities affect its ROCE.
ROCE is a measure of a company's yearly pre-tax profit (its return), relative to the capital employed in the business. In general, businesses with a higher ROCE are usually better quality. In brief, it is a useful tool, but it is not without drawbacks. Renowned investment researcher Michael Mauboussinhas suggestedthat a high ROCE can indicate that 'one dollar invested in the company generates value of more than one dollar'.
The formula for calculating the return on capital employed is:
Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities)
Or for Bharat Dynamics:
0.21 = ₹5.4b ÷ (₹55b - ₹29b) (Based on the trailing twelve months to March 2019.)
So,Bharat Dynamics has an ROCE of 21%.
View our latest analysis for Bharat Dynamics
When making comparisons between similar businesses, investors may find ROCE useful. Using our data, we find that Bharat Dynamics's ROCE is meaningfully better than the 13% average in the Aerospace & Defense industry. We would consider this a positive, as it suggests it is using capital more effectively than other similar companies. Regardless of where Bharat Dynamics sits next to its industry, its ROCE in absolute terms appears satisfactory, and this company could be worth a closer look.
As we can see, Bharat Dynamics currently has an ROCE of 21% compared to its ROCE 3 years ago, which was 15%. This makes us wonder if the company is improving.
It is important to remember that ROCE shows past performance, and is not necessarily predictive. ROCE can be misleading for companies in cyclical industries, with returns looking impressive during the boom times, but very weak during the busts. ROCE is only a point-in-time measure. If Bharat Dynamics is cyclical, it could make sense to check out thisfreegraph of past earnings, revenue and cash flow.
Liabilities, such as supplier bills and bank overdrafts, are referred to as current liabilities if they need to be paid within 12 months. The ROCE equation subtracts current liabilities from capital employed, so a company with a lot of current liabilities appears to have less capital employed, and a higher ROCE than otherwise. To counteract this, we check if a company has high current liabilities, relative to its total assets.
Bharat Dynamics has total assets of ₹55b and current liabilities of ₹29b. Therefore its current liabilities are equivalent to approximately 53% of its total assets. This is admittedly a high level of current liabilities, improving ROCE substantially.
While its ROCE looks decent, it wouldn't look so good if it reduced current liabilities. Bharat Dynamics looks strong on this analysis,but there are plenty of other companies that could be a good opportunity. Here is afree listof companies growing earnings rapidly.
If you like to buy stocks alongside management, then you might just love thisfreelist of companies. (Hint: insiders have been buying them).
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 Gains for 8th Straight Session, Extending 2019’s Longest Streak
Bitcoin’s meteoric 2019 rally may have shown signs of cooling Wednesday, but that didn’t stop the cryptocurrency from ending the day in the green.
In fact, the price of bitcoin ended yesterday’s session with its eighth consecutive day in the green, closing up by more than $1,200 on the day’s open of $11,375 and ending just below $13,000.
The streak is a record for 2019, passing the six Green candles seen between June 12 to June 17 as the only other significant run of multi-day gains.
Related:Coinbase Hit With Outage As Bitcoin Price Drops $1.8K in 15 Minutes
Still, that’s not to say that streak isn’t in jeopardy heading into Thursday’s session.
At 20:00 UTC on June 26, the world’s largest cryptocurrency by market capitalization, dropped by more than $2,000 in just under 30 minutes amid a service outage at major U.S. exchange provider Coinbase.
However, with Coinbase’s fix implemented, bitcoin’s (BTC) price is also back up above $12,588 at press time, after dropping to a temporary low of $11,754.
BTC is currently changing hands for $12,827, as per CoinMarketCap data.
Related:Above $13K: Bitcoin’s Price Extends 2019 Gains to New 17-Month High
As can be seen above, the sharp sell-off from the 24-hour high at $13,785 brought prices to a local low of $11,710 before opportunistic traders picked up a cheaper bid and drove the prices higher, back toward $13,000 at around 23:31 UTC, 29 minutes before the daily close.
Total daily volume for BTC has also shown up in a big way with the world’s largest exchange, Binance, posting record-high trading volume in Tether (USDT) terms over a 24-hour period. Other exchanges such as Bitstamp and Coinbase are posting 500-day highs in total daily volume for June 26, with over 81.2 million BTC traded in a single day on those exchanges.
What’s more impressive, if data from CoinMarketCap is to be believed, over 45.9 billion BTC were traded during June 26’s trading period amounting to some of the highest levels ever recorded.
Its “Real 10” volume – a metric that takes into account trading volume from exchanges reporting honest volume figures as identified in a report by Bitwise Asset Management – currently stands at $46.17 billion, a small difference, according to Messari.io.
Meanwhile, other notable currencies such as Cardano (ADA), bitcoin cash (BCH) and Ether (ETH) are also back on the rise, up between 1.7 and 7.72 percent, respectively amid strong volume.
Also worth noting, the total market capitalization for the entire cryptocurrency market has recovered by more than $21.7 billion, up from $351.8 billion to stand at $373.5 billion.
Disclosure:The author holds no cryptocurrency at the time of writing.Bitcoin Imagevia Shutterstock; Charts viaTradingView
• CoinMarketCap Makes First Acquisition to Further Improve Crypto Data Offering
• Bitcoin’s Price Is Up 43% in 7 Days as Bull Frenzy Grips Market |
Boasting A 16% Return On Equity, Is Ahluwalia Contracts (India) Limited (NSE:AHLUCONT) A Top Quality Stock?
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While some investors are already well versed in financial metrics (hat tip), this article is for those who would like to learn about Return On Equity (ROE) and why it is important. We'll use ROE to examine Ahluwalia Contracts (India) Limited (NSE:AHLUCONT), by way of a worked example.
Our data showsAhluwalia Contracts (India) has a return on equity of 16%for the last year. That means that for every ₹1 worth of shareholders' equity, it generated ₹0.16 in profit.
Check out our latest analysis for Ahluwalia Contracts (India)
Theformula for ROEis:
Return on Equity = Net Profit ÷ Shareholders' Equity
Or for Ahluwalia Contracts (India):
16% = ₹1.2b ÷ ₹7.3b (Based on the trailing twelve months to March 2019.)
It's easy to understand the 'net profit' part of that equation, but 'shareholders' equity' requires further explanation. It is the capital paid in by shareholders, plus any retained earnings. You can calculate shareholders' equity by subtracting the company's total liabilities from its total assets.
ROE looks at the amount a company earns relative to the money it has kept within the business. The 'return' is the amount earned after tax over the last twelve months. The higher the ROE, the more profit the company is making. So, as a general rule,a high ROE is a good thing. Clearly, then, one can use ROE to compare different companies.
Arguably the easiest way to assess company's ROE is to compare it with the average in its industry. Importantly, this is far from a perfect measure, because companies differ significantly within the same industry classification. As you can see in the graphic below, Ahluwalia Contracts (India) has a higher ROE than the average (8.6%) in the Construction industry.
That's what I like to see. I usually take a closer look when a company has a better ROE than industry peers. For example,I often check if insiders have been buying shares.
Virtually all companies need money to invest in the business, to grow profits. That cash can come from issuing shares, retained earnings, or debt. In the first two cases, the ROE will capture this use of capital to grow. In the latter case, the debt required for growth will boost returns, but will not impact the shareholders' equity. In this manner the use of debt will boost ROE, even though the core economics of the business stay the same.
Although Ahluwalia Contracts (India) does use a little debt, its debt to equity ratio of just 0.083 is very low. The fact that it achieved a fairly good ROE with only modest debt suggests the business might be worth putting on your watchlist. Judicious use of debt to improve returns can certainly be a good thing, although it does elevate risk slightly and reduce future optionality.
Return on equity is useful for comparing the quality of different businesses. Companies that can achieve high returns on equity without too much debt are generally of good quality. If two companies have around the same level of debt to equity, and one has a higher ROE, I'd generally prefer the one with higher ROE.
But ROE is just one piece of a bigger puzzle, since high quality businesses often trade on high multiples of earnings. It is important to consider other factors, such as future profit growth -- and how much investment is required going forward. So you might want to check this FREEvisualization of analyst forecasts for the company.
But note:Ahluwalia Contracts (India) may not be the best stock to buy. So take a peek at thisfreelist of interesting companies with high ROE and low debt.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
Toni Braxton's 24-Year-Old Niece Lauren's Cause of Death Revealed
Toni Braxton ‘s niece Lauren Braxton’s cause of death has been revealed. An autopsy completed by the medical examiner’s office in Maryland shows Lauren died of a heroin overdose and fentanyl intoxication, E! News reported. Lauren, who was the daughter of Toni’s younger brother Michael Conrad Braxton Jr., died on April 29 in Maryland. She was 24. TMZ also reported that law enforcement responded to a 911 call around noon on that Monday and found Lauren unresponsive when they arrived. According to the outlet, Lauren was pronounced dead by paramedics. Following Lauren’s death, a rep for the Braxton family told Entertainment Tonight , “We ask that you please respect the Braxton family’s privacy in this time of sadness and loss.” Toni, 51, broke her silence on Lauren’s death a few days later, sharing a red carpet photo of the two on Instagram. “R.I.P to my amazing niece Lauren ‘Lo Lo’ Braxton…I’m still in disbelief and so very heartbroken 😥💔 Love you…always auntie ‘Te Te,’” Toni wrote in the caption. Michael, 50, a Maryland based singer-songwriter, is the only son among the Braxton siblings and has appeared on episodes of their show, Braxton Family Values . He and Toni are the elder siblings to sisters Traci, 48, Towanda, 45, Trina, 44, and Tamar, 42. View this post on Instagram R.I.P to my amazing niece Lauren “Lo Lo” Braxton... I’m still in disbelief and so very heartbroken 😥💔 Love you...always auntie “Te Te” A post shared by Toni Braxton (@tonibraxton) on May 1, 2019 at 3:50pm PDT RELATED:Toni Braxton’s Niece Lauren Dies of Heart Condition at 24: Report Trina also paid her respects to her Lauren with an Instagram photo she posted on Tuesday . Her caption read, “God sent me another angel! Rest in Heaven Lauren ‘LoLo’ Braxton.” Tamar also opened up about Lauren’s death, explaining in an Instagram Live video that the death was the first time she had lost a family member and came amid a busy time for her, as she tours with Kandi Burruss and continues filming Braxton Family Values . Story continues Due to her busy schedule and how hard she was taking the news, the star announced she would not be attending Lauren’s funeral because she was feeling too “drained” to be at the services. Traci Braxton, Towanda Braxton, Evelyn Braxton, Toni Braxton, Michael Braxton Sr., Michael Braxton Jr, and Trina Braxton | Paras Griffin/Getty Images “I’ve been M.I.A. because I just cannot bring myself to post about my niece. Like, I just can’t do it,” she told her followers in the four-minute clip, which was captured the blog YBF Chic . “But what I did want to say is I want to thank everyone for sending their condolences.” “I don’t want my sisters or my family to get upset with me, but the things that’s been going on — this is the first time that anybody in my family has passed,” she continued. “Nobody tell you about going to the damn funeral. I don’t have time going to the funeral.” “I’m still drained from that… It’s a lot,” Tamar added, noting that, “Everything happens in God’s divine order and you’ve got to respect it and praise him anyway.” View this post on Instagram God sent me another angel! Rest in Heaven Lauren “LoLo” Braxton. ❤️ A post shared by Trina Braxton (@trinabraxton1) on Apr 30, 2019 at 7:50am PDT Her comments didn’t sit well with some fans, who criticized the singer for not attending the services for her niece. “You wrong for not supporting your brother! Put the shoe on the other foot. So self-centered,” wrote one fan, while another follower added, “and yet ur the only one that didn’t write a tribute to your niece… smh it doesn’t look good” Another user firmly wrote, “Get..your a— up and go to the funeral for 2 hours then get back in your bed. I’m not hearing this excuse.” Tamar Braxton | Monty Brinton/CBS RELATED: Remembering the Stars We Lost in 2019 In response to the backlash, Tamar spoke out on Instagram again — this time in a post on Friday, with a reshared image that read “PSA: Don’t tell people how to heal from something you’ve never been through.” The reality star captioned the photo , which spoke to allowing others to grieve in different ways, “…. and now you know the rest of the story ✨.” If you or someone you know is in need of help, please contact the SAMHSA substance abuse helpline at 1-800-662-HELP. |
How Much Did Ahluwalia Contracts (India) Limited's (NSE:AHLUCONT) CEO Pocket Last Year?
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Bikramjit Ahluwalia is the CEO of Ahluwalia Contracts (India) Limited (NSE:AHLUCONT). This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Next, we'll consider growth that the business demonstrates. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. This method should give us information to assess how appropriately the company pays the CEO.
See our latest analysis for Ahluwalia Contracts (India)
According to our data, Ahluwalia Contracts (India) Limited has a market capitalization of ₹22b, and pays its CEO total annual compensation worth ₹13m. (This figure is for the year to March 2018). It is worth noting that the CEO compensation consists almost entirely of the salary, worth ₹13m. We examined companies with market caps from ₹14b to ₹55b, and discovered that the median CEO total compensation of that group was ₹23m.
Most shareholders would consider it a positive that Bikramjit Ahluwalia takes less total compensation than the CEOs of most similar size companies, leaving more for shareholders. Though positive, it's important we delve into the performance of the actual business.
You can see a visual representation of the CEO compensation at Ahluwalia Contracts (India), below.
Ahluwalia Contracts (India) Limited has increased its earnings per share (EPS) by an average of 13% a year, over the last three years (using a line of best fit). It achieved revenue growth of 6.4% over the last year.
This shows that the company has improved itself over the last few years. Good news for shareholders. It's good to see a bit of revenue growth, as this suggests the business is able to grow sustainably. It could be important to checkthis free visual depiction ofwhat analysts expectfor the future.
With a total shareholder return of 18% over three years, Ahluwalia Contracts (India) Limited shareholders would, in general, be reasonably content. But they would probably prefer not to see CEO compensation far in excess of the median.
It looks like Ahluwalia Contracts (India) Limited pays its CEO less than similar sized companies. Many would consider this to indicate that the pay is modest since the business is growing. While some might be keen on seeing higher returns, our short analysis has not produced any evidence to suggest Bikramjit Ahluwalia is overcompensated.
It's good to see reasonable payment of the CEO, even while the business improves. But it would be nice if insiders were also buying shares. If you think CEO compensation levels are interesting you will probably really likethis free visualization of insider trading at Ahluwalia Contracts (India).
Arguably, business quality is much more important than CEO compensation levels. So check out thisfreelist of interesting companies, that have HIGH return on equity and low debt.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
Does Ahluwalia Contracts (India) Limited's (NSE:AHLUCONT) CEO Pay Compare Well With Peers?
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Bikramjit Ahluwalia is the CEO of Ahluwalia Contracts (India) Limited (NSE:AHLUCONT). This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Next, we'll consider growth that the business demonstrates. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. The aim of all this is to consider the appropriateness of CEO pay levels.
See our latest analysis for Ahluwalia Contracts (India)
According to our data, Ahluwalia Contracts (India) Limited has a market capitalization of ₹22b, and pays its CEO total annual compensation worth ₹13m. (This number is for the twelve months until March 2018). It is worth noting that the CEO compensation consists almost entirely of the salary, worth ₹13m. We looked at a group of companies with market capitalizations from ₹14b to ₹55b, and the median CEO total compensation was ₹23m.
Most shareholders would consider it a positive that Bikramjit Ahluwalia takes less total compensation than the CEOs of most similar size companies, leaving more for shareholders. While this is a good thing, you'll need to understand the business better before you can form an opinion.
You can see a visual representation of the CEO compensation at Ahluwalia Contracts (India), below.
Ahluwalia Contracts (India) Limited has increased its earnings per share (EPS) by an average of 13% a year, over the last three years (using a line of best fit). It achieved revenue growth of 6.4% over the last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's nice to see a little revenue growth, as this is consistent with healthy business conditions. It could be important to checkthis free visual depiction ofwhat analysts expectfor the future.
With a total shareholder return of 18% over three years, Ahluwalia Contracts (India) Limited shareholders would, in general, be reasonably content. But they would probably prefer not to see CEO compensation far in excess of the median.
Ahluwalia Contracts (India) Limited is currently paying its CEO below what is normal for companies of its size. Many would consider this to indicate that the pay is modest since the business is growing. The total shareholder return might not be amazing, but that doesn't mean that Bikramjit Ahluwalia is paid too much.
It's good to see reasonable payment of the CEO, even while the business improves. But it would be nice if insiders were also buying shares. So you may want tocheck if insiders are buying Ahluwalia Contracts (India) shares with their own money (free access).
Arguably, business quality is much more important than CEO compensation levels. So check out thisfreelist of interesting companies, that have HIGH return on equity and low debt.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
Why You Should Like BF Utilities Limited’s (NSE:BFUTILITIE) ROCE
Want to participate in a short research study ? Help shape the future of investing tools and you could win a $250 gift card! Today we'll look at BF Utilities Limited ( NSE:BFUTILITIE ) and reflect on its potential as an investment. To be precise, we'll consider its Return On Capital Employed (ROCE), as that will inform our view of the quality of the business. First, we'll go over how we calculate ROCE. Next, we'll compare it to others in its industry. Last but not least, we'll look at what impact its current liabilities have on its ROCE. Return On Capital Employed (ROCE): What is it? ROCE is a measure of a company's yearly pre-tax profit (its return), relative to the capital employed in the business. In general, businesses with a higher ROCE are usually better quality. Ultimately, it is a useful but imperfect metric. Renowned investment researcher Michael Mauboussin has suggested that a high ROCE can indicate that 'one dollar invested in the company generates value of more than one dollar'. So, How Do We Calculate ROCE? Analysts use this formula to calculate return on capital employed: Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities) Or for BF Utilities: 0.15 = ₹2.4b ÷ (₹18b - ₹1.6b) (Based on the trailing twelve months to March 2018.) So, BF Utilities has an ROCE of 15%. View our latest analysis for BF Utilities Is BF Utilities's ROCE Good? ROCE is commonly used for comparing the performance of similar businesses. BF Utilities's ROCE appears to be substantially greater than the 11% average in the Construction industry. We consider this a positive sign, because it suggests it uses capital more efficiently than similar companies. Aside from the industry comparison, BF Utilities's ROCE is mediocre in absolute terms, considering the risk of investing in stocks versus the safety of a bank account. It is possible that there are more rewarding investments out there. Story continues You can click on the image below to see (in greater detail) how BF Utilities's past growth compares to other companies. NSEI:BFUTILITIE Past Revenue and Net Income, June 27th 2019 It is important to remember that ROCE shows past performance, and is not necessarily predictive. Companies in cyclical industries can be difficult to understand using ROCE, as returns typically look high during boom times, and low during busts. This is because ROCE only looks at one year, instead of considering returns across a whole cycle. If BF Utilities is cyclical, it could make sense to check out this free graph of past earnings, revenue and cash flow . How BF Utilities's Current Liabilities Impact Its ROCE Short term (or current) liabilities, are things like supplier invoices, overdrafts, or tax bills that need to be paid within 12 months. Due to the way ROCE is calculated, a high level of current liabilities makes a company look as though it has less capital employed, and thus can (sometimes unfairly) boost the ROCE. To check the impact of this, we calculate if a company has high current liabilities relative to its total assets. BF Utilities has total liabilities of ₹1.6b and total assets of ₹18b. Therefore its current liabilities are equivalent to approximately 8.7% of its total assets. With low levels of current liabilities, at least BF Utilities's mediocre ROCE is not unduly boosted. Our Take On BF Utilities's ROCE If performance improves, then BF Utilities may be an OK investment, especially at the right valuation. But note: make sure you look for a great company, not just the first idea you come across. So take a peek at this free list of interesting companies with strong recent earnings growth (and a P/E ratio below 20). If you are like me, then you will not want to miss this free list of growing companies that insiders are buying. We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com . This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
The Crypto Daily – The Movers and Shakers 27/06/19
It was another day for the Bitcoin bulls.
Bitcoin rallied by 9.7% on Wednesday. Following on from a 6.03% gain on Tuesday, Bitcoin ended the day at $12,876.
It was a 9thconsecutive day of gains for the Bitcoin bulls.
Bullish through most of the day, Bitcoin rallied from an early intraday low $11,684.5 to a late intraday high and new swing hi $13,764.
Steering well clear of the major support levels, Bitcoin broke through the major resistance levels before a late sell-off.
The late sell-off saw Bitcoin slide back to $11,780 levels before bouncing back.
A late recovery saw Bitcoin break back through to $12,000 levels to close out the day with solid gains.
Across the rest of the top 10 cryptos, it was another mixed bag for the rest of the pack.
Joining Bitcoin in the green on the day were Ethereum and Bitcoin Cash ABC, with gains of 5.77% and 1.90% respectively.
It was red for the rest of the top 10. Leading the way down were Bitcoin Cash SV and EOS. The pair fell by 7.93% and 6.04% respectively.
Litecoin and Stellar’s Lumen also saw relatively heavy losses, falling by 3.6% and by 2.35% respectively.
Ripple’s XRP and Binance Coin saw more modest losses of 1.27% and 0.95% respectively.
The moves through Tuesday sawBitcoin’s dominancehit 63% levels.
Bitcoin drove the total crypto market cap to $370bn levels on the day, up from $336.68bn on Tuesday.
The Bitcoin rally also drew in sidelined investors. 24-hour trading volumes jumped from $71bn levels to $130bn levels on the day.
At the time of writing, Bitcoin was down by 2.45% to $12,561.0. A choppy start to the day saw Bitcoin hit a morning high $13,242 before sliding to a morning low $12,371.
In spite of the choppy start, Bitcoin left the major support and resistance levels untested early on.
Elsewhere, it was a sea of red across the majors. Stellar’s Lumen was down by 3.54% at the time of writing. Bitcoin Cash ABC (-2.52%), Binance Coin (-2.77%), and Bitcoin Cash SV (-2.04%) were also deep in the red.
Through the early hours, Ethereum saw the most modest of losses, down by 1.25%.
Bitcoin would need to move back through to $12,780 levels to support another break through to $13,000 levels.
Following the recent string of gains, however, Bitcoin would need support from the broader market to break out from this morning’s high $13,242.
Barring a return to $13,000 levels by the early afternoon, Bitcoin would likely come up short of the first major resistance level at $13,865.17.
Failure to move back through to $12,780 levels could see Bitcoin fall deeper into the red. A fall through the morning low $12,371 would bring sub-$12,000 levels into play.
Barring a crypto meltdown, however, the first major support level at $11,785.67 should limit the downside on the day.
Get Into Cryptocurrency Trading Today
Thisarticlewas originally posted on FX Empire
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Those Who Purchased Bega Cheese (ASX:BGA) Shares A Year Ago Have A 36% Loss To Show For It
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Investors can approximate the average market return by buying an index fund. But if you buy individual stocks, you can do both better or worse than that. For example, theBega Cheese Limited(ASX:BGA) share price is down 36% in the last year. That falls noticeably short of the market return of around 12%. Longer term shareholders haven't suffered as badly, since the stock is down a comparatively less painful 14% in three years. And the share price decline continued over the last week, dropping some 5.3%.
Check out our latest analysis for Bega Cheese
To paraphrase Benjamin Graham: Over the short term the market is a voting machine, but over the long term it's a weighing machine. One imperfect but simple way to consider how the market perception of a company has shifted is to compare the change in the earnings per share (EPS) with the share price movement.
Unhappily, Bega Cheese had to report a 92% decline in EPS over the last year. This fall in the EPS is significantly worse than the 36% the share price fall. So the market may not be too worried about the EPS figure, at the moment -- or it may have expected earnings to drop faster. Indeed, with a P/E ratio of 70.02 there is obviously some real optimism that earnings will bounce back.
You can see below how EPS has changed over time (discover the exact values by clicking on the image).
Dive deeper into Bega Cheese's key metrics by checking this interactive graph of Bega Cheese'searnings, revenue and cash flow.
We'd be remiss not to mention the difference between Bega Cheese'stotal shareholder return(TSR) and itsshare price return. Arguably the TSR is a more complete return calculation because it accounts for the value of dividends (as if they were reinvested), along with the hypothetical value of any discounted capital that have been offered to shareholders. Bega Cheese's TSR of was a loss of 34% for the year. That wasn't as bad as its share price return, because it has paid dividends.
While the broader market gained around 12% in the last year, Bega Cheese shareholders lost 34% (even including dividends). However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. On the bright side, long term shareholders have made money, with a gain of 1.5% per year over half a decade. It could be that the recent sell-off is an opportunity, so it may be worth checking the fundamental data for signs of a long term growth trend. Most investors take the time to check the data on insider transactions. You canclick here to see if insiders have been buying or selling.
Of course,you might find a fantastic investment by looking elsewhere.So take a peek at thisfreelist of companies we expect will grow earnings.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on AU exchanges.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
Beto O'Rourke's First Debate Answer Is Already A 2020 Election Meme
It didn’t take long for Wednesday night’s Democratic presidential debate to produce its first meme-worthy moment. Former Texas Rep. Beto O’Rourke broke out his Spanish in the middle of his first answer. Candidate @BetoORourke answered his first question during the #DemDebate primarily in Spanish https://t.co/VEmbgi01mb pic.twitter.com/ZM3MaHZpbq — Hollywood Reporter (@THR) June 27, 2019 As several observers noted, O’Rourke didn’t directly answer the question about marginal tax rates in either language . “We need to include every person in this economy’s success,” he said in Spanish. “But if we want to do that, we need to include every person in our democracy. Every voter needs representation and we need to listen to every voice.” O’Rourke was likely trying to make a direct pitch to viewers watching on Telemundo, which was one of the networks broadcasting the debate. But the opening gambit struck some critics as pandering, and many observers couldn’t help but notice Sens. Elizabeth Warren (D-Mass.) and Cory Booker (D-N.J.) — who later broke out some Spanish himself — looking on, leading to the debate’s first meme: When your friend comes back from study abroad #DemDebate pic.twitter.com/pvw4sYWhHu — Full Frontal (@FullFrontalSamB) June 27, 2019 When Dad says "Hola, como estas?" to the waiter at the Mexican restaurant #DemDebate pic.twitter.com/64FY2LV6kp — The Daily Show (@TheDailyShow) June 27, 2019 [spanish] pic.twitter.com/oxy9zRUIm8 — David Mack (@davidmackau) June 27, 2019 Question: can all of you say basically the same thing but in 20 sort of different ways and make it stretch for two hours? Everyone: Yes Beto: Si, se puede — Caroline Moss (@CarolineMoss) June 27, 2019 omg Booker’s face when Beto busted out the Spanish pic.twitter.com/O4oY4HowWK — andi zeisler (@andizeisler) June 27, 2019 Booker as Beto speaks in Spanish pic.twitter.com/pVYL3p0cun — Tim Mak (@timkmak) June 27, 2019 LOL pic.twitter.com/6nFgF5U3E6 — Mark Gongloff (@markgongloff) June 27, 2019 here u go internet pic.twitter.com/qc3AAAwp3m — Versha Sharma (@versharma) June 27, 2019 Beto answering in Spanish. Everyone else, "Ah, nobody likes a show off buddy." #DemDebate pic.twitter.com/k9r8u4Fdr8 — Kathleen Madigan (@kathleenmadigan) June 27, 2019 When you’re trying to end a meeting but that one coworker is still talking. pic.twitter.com/uDdlGaozK6 — F1agg Σagl3t0n 🇺🇸🦅🍑🌱 (@NM_Che56) June 27, 2019 Is Beto really speaking in Spanish right now? This reminds me of this scene in Bridesmaids. pic.twitter.com/9PV9ro4BQt — Alexis Benveniste (@apbenven) June 27, 2019 pic.twitter.com/nqN6LDR2ey — David Mack (@davidmackau) June 27, 2019 This look is the single funniest thing Cory Booker has ever done. pic.twitter.com/7RbnFDyX9a — Saeed Jones (@theferocity) June 27, 2019 pic.twitter.com/P4DTpz4np4 — M (@Mtorbat) June 27, 2019 et moi, je parle francais! -probably someone on the end — Alexandra Petri (@petridishes) June 27, 2019 Also on HuffPost Love HuffPost? Become a founding member of HuffPost Plus today. This article originally appeared on HuffPost . |
Rover teams practice for spelunking on the moon and Mars in California lava tubes
NASA’s robotics team drives the test rover, CaveR, into Valentine Cave at Lava Beds National Monument in California. One of the CaveR engineers is perched on a lava ledge, a marker of one of the lava flows in the cave. (NASA Photo) BELLEVUE, Wash. — Underground lava tubes are great places to set up bases on the moon, or look for life on Mars — but they’ll be super-tricky to navigate. Which is why a NASA team is practicing with a cave rover in California. Scientists are sharing their experiences from the Biologic and Resource Analog Investigations in Low Light Environments project, or BRAILLE, here at this week’s Astrobiology Science Conference . The site of the experiment is California’s Lava Beds National Monument , which houses North America’s largest network of lava tubes. These are tunnel-like structures left behind by ancient volcanic flows of molten rock. They’re known to exist on the moon and Mars, and in some places there are even openings that make those lava tubes accessible from the surface. The underground passageways provide shelter from the harsh radiation hitting the surface of the moon and Mars, which would be a big plus for would-be settlers. There’s even a chance that microbes could find a foothold in lava tubes on Mars, as they do on Earth. One of BRAILLE’s big goals is to learn how to use remote-controlled robots to blaze a trail through off-Earth caves. The cave rover, nicknamed CaveR, is the star of the show. During last year’s initial three-week expedition, CaveR was outfitted with imagers and scientific instruments, and then guided through Valentine Cave, one of the more than 750 caves in the Lava Beds system. “We were following a mission plan, just like you would for a regular planetary mission,” said BRAILLE principal investigator Jennifer Blank, an astrobiologist at NASA Ames Research Center who’s also affiliated with Seattle’s Blue Marble Space Institute of Science . A surface team of planetary scientists drew up the driving instructions for each of CaveR’s forays through Valentine Cave and saved them to a memory card. Then a runner carried the card down to the cave, where a team of engineers would execute the instructions. The data gathered during each drive was stored up and brought back to mission control for analysis. Then the cycle began again. Story continues Blank said the team decided against trying to beam the commands down to the rover directly. “NASA has that capability, but to incorporate that in our mission simulation would have required another million dollars,” she told GeekWire. Ultraviolet light highlights different microbes in the caves, as seen by the green, yellow and orange colonies that drape below small mineralized finger-like structures that jut upward from a ledge in the cave. These structures, growing against gravity and formed by the interaction of rock, water and microbes, are biomineral markers that record signs of life in the rock record. (NASA Photo) While the planetary scientists pored over the rover data, a different team composed of expert microbiologists checked out the cave on foot. Both teams spotted telltale signs of microbial life, in the form of tiny outcroppings that look like coral. “The first group saw the microbial features as strange crystals, unusual features to examine … The second group, right away they saw that they were biomarkers,” Blank said. “It really shows that a diverse team is very valuable.” BRAILLE’s researchers scraped samples from several caves in the Lava Beds system, and they plan to return for another round of exploration later this year. They’re also working on artificial intelligence tools that could sift through rover imagery and identify potential hotspots for life. It’s not exactly a new idea: NASA is already using an autonomous sample targeting system known as AEGIS on its Mars Curiosity rover. CaveR’s exploits in California should help scientists figure out what to look for when next-generation robots go spelunking on the Red Planet. “If we’re so lucky to go to a cave on Mars, and so lucky to find signs of life protected from the harsh surface environment and had to pick a target, what would we interrogate?” Blank said. Lava-tube rovers would be used for different purposes on the moon. “We don’t think there’s life to find on the moon now, but someday the life on the moon might be us,” Blank explained in a NASA news release . “And if I were going to the moon, I’d want to go to a lava tube.” Rovers could create detailed maps of the underground passageways, looking for fractures, cave-ins or other structural issues that would pose problems for a potential moon base. They could also look for signs of water ice that could sustain a moon base, above or below ground. One of the instruments on CaveR is the Near-Infrared Volatiles Spectrometer System , or NIRVSS (pronounced like “nervous”). That instrument is designed to identify frozen water that’s present in rocks and soil — and a flight-ready version could be sent to the moon on a rover as early as next year . More from GeekWire: After media mix-up, China says Chang’e-4 makes first landing on moon’s far side Make-believe Mars: Get a 360-degree view of the testbed for NASA’s InSight lander In the 2020s, China aims to lay groundwork for a moon base — plus missions to Mars Opportunity on Mars, 2004-2019: NASA sings requiem to a rover — and looks ahead |
Does Top Global Limited's (SGX:BHO) Past Performance Indicate A Weaker Future?
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Investors with a long-term horizong may find it valuable to assess Top Global Limited's (SGX:BHO) earnings trend over time and against its industry benchmark as opposed to simply looking at a sincle earnings announcement at one point in time. Below is my commentary, albiet very simple and high-level, on how Top Global is currently performing.
View our latest analysis for Top Global
BHO is loss-making, with the most recent trailing twelve-month earnings of -S$3.5m (from 31 March 2019), which compared to last year has become more negative. Over the past five years, its average earnings level was positive at S$1.1m, which meant its expenses has only exceeded revenues recently, pulling BHO into the loss-making zone.
Each year, for the past five years BHO has seen an annual increase in operating expense growth, outpacing revenue growth of 9.8%, on average. This adverse movement is a driver of the company's inability to reach breakeven.
Looking at growth from a sector-level, the SG real estate industry has been growing its average earnings by double-digit 12% over the previous year,
Although Top Global is loss-making, its has a good cash runway to meet its upcoming operating expense (should SG&A and one-year R&D remain constant at the current level of S$32m) over the next year. This is a sign of good cash management.
While past data is useful, it doesn’t tell the whole story. With companies that are currently loss-making, it is always difficult to forecast what will happen in the future and when. The most valuable step is to assess company-specific issues Top Global may be facing and whether management guidance has dependably been met in the past. You should continue to research Top Global to get a better picture of the stock by looking at:
1. Financial Health: Are BHO’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. Valuation: What is BHO 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 BHO 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.
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. |
Huawei shrugs off Verizon patent talks as 'common' business
By Sijia Jiang
HONG KONG (Reuters) - Huawei pegged its patent talks with U.S. carrier Verizon <VZ.N> as "common" business activity and said such negotiations should not be politicized, days after a senator filed legislation to prevent the Chinese firm from seeking damages in U.S. courts.
The company has demanded that Verizon pay licensing fees for more than 230 of the telecoms equipment maker's patents and is seeking over $1 billion, a person has told Reuters, against a background of mounting U.S.-China trade tensions.
Republican Senator Marco Rubio has described Huawei's demand as "baseless" and filed the legislation as an amendment to the National Defense Authorization Act, or NDAA, which places a broad ban on the use of U.S. federal money to buy Huawei products citing national security concerns.
"We simply don't believe Marco Rubio's amendment could be passed as law," Huawei's chief legal officer, Song Liuping, said at the company's Shenzhen headquarters on Thursday.
Intellectual property (IP) rights "should not be politicized", Song said. "IP is a private property issue and should be free from the competition, trade talks and any other allegations that countries have between them."
Song added that Huawei has been discussing patent licensing with companies in the United States, Europe and other parts of the world on a regular basis.
While the measure proposed by Rubio is several steps from becoming law, lawmakers have successfully used the NDAA in the past to crack down on the Chinese firm.
Huawei, the world's biggest telecommunications equipment maker and No.2 smartphone maker, denies its products pose a security threat and has sought to fight back in U.S. courts since Washington put it on an export blacklist last month.
ROYALTIES
It recently sued the U.S. government over the NDAA.
The Chinese firm also sued CNEX Labs Inc, alleging misappropriation of trade secrets involving a memory control technology by the California semiconductor designer and poaching of employees.
A U.S. jury on Wednesday cleared CNEX, while awarding the U.S. firm no damages on its own trade theft claims.
Analysts have said Huawei may be more inclined to monetize its U.S. patents now that the market ban and supplier ban imposed by Washington is expected to cost the firm $30 billion in revenue.
However, Song said Huawei has no intention of weaponizing the company's IP rights, echoing founder and CEO Ren Zhengfei from earlier this month.
Huawei, which has received over $1.4 billion in licensing revenue since 2015, is against charging exorbitant royalties, Song said, adding the firm had never been asked by a court to pay damages for malicious IP theft.
In 2017, a jury found Huawei misappropriated trade secrets from T-Mobile <TMUS.O> and ordered it to pay $4.8 million to the U.S. telco for breaching a handset supply contract between the two companies. The jury, however, did not find Huawei's misappropriation "wilful and malicious".
"We are not going to be a company with a major source of revenue from royalties," Song said, adding that Huawei will remain focused on its core business for its top line.
Huawei paid more than $6 billion in royalties to legally implement IP of other companies and has been granted 87,805 patents, of which 11,152 are U.S. patents, Song said.
Huawei has the most 5G standard essential patents in the world, according to consultancy IPlytics.
(Reporting by Sijia Jiang in Hong Kong; Writing by Sayantani Ghosh, Editing by Himani Sarkar) |
Democratic Debate: Candidates Disagree When It Comes to Medicare for All, Private Health Insurance
Democratic presidential candidates tangled on health care in theirfirst debate Wednesday, agreeing on the need for universal coverage but disagreeing about whether private insurance should be maintained.
The 10 candidates on the stage in Miami Wednesday were asked who would abolish private insurance, and only Massachusetts SenatorElizabeth Warrenand New York MayorBill de Blasioraised their hands. Warren supports a “Medicare for all,” government-run system.
Warren said insurance companies try to raise as much as they can in premiums while not making payments and “Medicare for all solves that problem.”
Former Texas RepresentativeBeto O’Rourkesaid he doesn’t support abolishing private insurance, causing de Blasio to interject: “Hey, wait, wait, Congressman O’Rourke, Congressman O’Rourke, private insurance is not working for tens of millions of Americans. Why are you defending private insurance to begin with?”
It was the first time the candidates disagreed in a debate that started with general agreement on the need for the U.S. economy to do more to help those who aren’t wealthy and gave lower-polling candidates such as de Blasio and former RepresentativeJohn Delaneya change to emerge.
Delaney got big applause when he questioned why the candidates would take away private employer insurance, when it’s working. SenatorAmy Klobucharalso said she doesn’t support undermining the private insurance—and tried, without success, to join the debate while moderators regularly called on Warren.
Warren started the first debate among Democratic presidential candidates with a robust defense of her plans for “structural” change to the U.S. economy, saying the current system is tilted far too much to benefit the wealthy.
“When you’ve got a government, when you’ve got an economy, that does great for those with money and isn’t doing great for everyone else, that is corruption pure and simple,” Warren said. “We need to call it out, we need to attack it head on and we need to make structural change in our government, in our economy and in our country.”
The economy, taxes, income inequality and the question of breaking up big companies dominated the opening rounds of the first debate among the Democrats seeking to challenge President Donald Trump Wednesday night in Miami.
Twenty Democrats will give voters the first side-by-side comparison of their plans and styles in two nights of debates that will serve as the first stage of winnowing for a historically large field of candidates.
The nationally televised debates in Miami is splitting the candidates into groups of 10 on Wednesday and Thursday, with each face-off including a mix of top-tier and lower-polling contenders. Warren is the highest-polling candidate on Wednesday night, trailing front-runnerJoe Biden, the former vice president, and SenatorBernie Sanders, who appear on Thursday.
It will be the first time so many of the Democratic hopefuls will appear together on the same stages after months of individual town halls and events in early primary and caucus states. With so many of the candidates largely aligned on the big issues, the debates provide an opportunity to set themselves apart, especially for those at the back of the pack.
At least a dozen debates are scheduled. A slip by one of the front-runners or a breakout performance by one of the lower-polling contenders has the potential to shake up the race, which has been dominated by Biden, Sanders, Warren, SenatorKamala Harrisand South Bend, Indiana, MayorPete Buttigieg.
Howard Dean, a former Democratic National Committee chairman and candidate for the party nomination, said he expects the field of 24 candidates will eventually be cut to 10 candidates before the first nominating contest, the Iowa caucuses in February.
Donna Brazile, another former DNC chairwoman who appeared with Dean at a Washington Post forum on Wednesday, agreed that no more than half of the current candidates will remain in the race by early next year. She said the first rounds of debates will give lower-tier candidates enough exposure to determine in a matter of months whether they can raise enough money and gain a big enough following to sustain their campaigns.
“We’ll be down to a rational number by Easter,” Brazile said.
The candidates aren’t being given much time to make their cases in the first debates. There are no opening statements, and they’ll be allotted 60 seconds to answer questions and 30 seconds to respond to any follow-ups.
The debates come at a fraught time internationally and domestically. There are heightened tensions between the U.S. and Iran after an unmanned American drone was shot down, and Trump is engaged in a trade war with China while fighting with Democrats on immigration amid a humanitarian crisis on the southern border.
Warren, Harris and Minnesota Senator Amy Klobuchar are among the Democratic candidates who visited a detention center in Florida this week to highlight the wrenching conditions for migrants, including children, as Congress debates different versions of an aid bill that must be reconciled.
The party is also divided about whether to pursue impeachment proceedings against Trump, with Special Counsel Robert Mueller set to testify before Congress on July 17. While many in the field have called for it, House Speaker Nancy Pelosi has resisted without an “ironclad” case and out of concerns about bolstering Trump’s re-election.
Warren is sharing the Wednesday stage with former Texas Representative Beto O’Rourke and SenatorCory Bookerof New Jersey, who are polling behind the top five, as well as seven candidates who are generating less that 3% in most polls: Klobuchar, former Housing and Urban Development SecretaryJulian Castro, RepresentativesTulsi GabbardandTim Ryan, New York City Mayor Bill de Blasio, Washington GovernorJay Insleeand former RepresentativeJohn Delaney.
The Massachusetts senator hassteadily risen in polls over the last two monthsand distinguished herself in the crowded field so far with a breadth of policy positions. They include a proposed annual tax on households with a net worth of more than $50 million and a 7% tax on company profits of more than $100 million.
Warren has been focused on claiming the mantle of leader of the party’s progressive faction, and she contrasts her plans with the more incremental approach of Biden, who is focusing his campaign almost entirely on Trump.
Biden and Sanders will join rivals including Harris and Buttigieg in Thursday night’s debate.
Three candidates did not qualify for the debates: Montana Governor Steve Bullock, Mayor Wayne Messam of Miramar, Florida, and Massachusetts Representative Seth Moulton. Bullock’s campaign says he has already met the qualifications to be on stage for the second round of debates, set for Detroit on July 30 and 31 and hosted by CNN.
—Democratic debate watch parties—and drinking games—are a thing
—Meet the2020 Democratic presidential candidatesyou’ve (probably) never heard of
—Issues that divide 2020 candidates going into thefirst Democratic debate
—These are thetop-polling Democratic candidates
—The2019 Democratic debate clashesyou won’t get to see
—What to know About the2019 Democratic debate: start time, schedule, format |
Three Things You Should Check Before Buying CARE Ratings Limited (NSE:CARERATING) For Its Dividend
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Is CARE Ratings Limited (NSE:CARERATING) a good dividend stock? How can we tell? Dividend paying companies with growing earnings can be highly rewarding in the long term. Unfortunately, it's common for investors to be enticed in by the seemingly attractive yield, and lose money when the company has to cut its dividend payments.
With a goodly-sized dividend yield despite a relatively short payment history, investors might be wondering if CARE Ratings is a new dividend aristocrat in the making. We'd agree the yield does look enticing. Before you buy any stock for its dividend however, you should always remember Warren Buffett's two rules: 1) Don't lose money, and 2) Remember rule #1. We'll run through some checks below to help with this.
Click the interactive chart for our full dividend analysis
Companies (usually) pay dividends out of their earnings. If a company is paying more than it earns, the dividend might have to be cut. As a result, we should always investigate whether a company can afford its dividend, measured as a percentage of a company's net income after tax. In the last year, CARE Ratings paid out 64% of its profit as dividends. This is a healthy payout ratio, and while it does limit the amount of earnings that can be reinvested in the business, there is also some room to lift the payout ratio over time.
Remember, you can always get a snapshot of CARE Ratings's latest financial position,by checking our visualisation of its financial health.
Before buying a stock for its income, we want to see if the dividends have been stable in the past, and if the company has a track record of maintaining its dividend. Looking at the data, we can see that CARE Ratings has been paying a dividend for the past six years. It's good to see that CARE Ratings has been paying a dividend for a number of years. However, the dividend has been cut at least once in the past, and we're concerned that what has been cut once, could be cut again. During the past six-year period, the first annual payment was ₹24.00 in 2013, compared to ₹30.00 last year. This works out to be a compound annual growth rate (CAGR) of approximately 3.8% a year over that time. CARE Ratings's dividend payments have fluctuated, so it hasn't grown 3.8% every year, but the CAGR is a useful rule of thumb for approximating the historical growth.
It's good to see some dividend growth, but the dividend has been cut at least once, and the size of the cut would eliminate most of the growth, anyway. We're not that enthused by this.
Given that the dividend has been cut in the past, we need to check if earnings are growing and if that might lead to stronger dividends in the future. CARE Ratings's earnings per share have been essentially flat over the past five years. Over the long term, steady earnings per share is a risk as the value of the dividends can be reduced by inflation. Growth of 0.7% is relatively anaemic growth, which we wonder about. When a business is not growing, it often makes more sense to pay higher dividends to shareholders rather than retain the cash with no way to utilise it.
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 CARE Ratings has an acceptable payout ratio. Unfortunately, earnings growth has also been mediocre, and the company has cut its dividend at least once in the past. In summary, we're unenthused by CARE Ratings as a dividend stock. It's not that we think it is a bad company; it simply falls short of our criteria in some key areas.
You can also discover whether shareholders are aligned with insider interests bychecking our visualisation of insider shareholdings and trades in CARE Ratings stock.
Looking for more high-yielding dividend ideas? Try ourcurated list of dividend stocks with a yield above 3%.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
Christopher C. Lee Launches Photomochi Photography Studio in San Francisco
Celebrated photographer Christopher C. Lee has established a state of the art photography studio, Photomochi, in the San Francisco Bay Area. The studio features a professional team of qualified filmmakers, cinematographers, photographers, talents, and marketing gurus for creative media mastery.
SAN FRANCISCO, CA / ACCESSWIRE / June 26, 2019 /Christopher C. Lee, founder of Photomochi, is a talented photographer and cinematographer who doubles as a software engineer. He is known for accomplishing a plethora of photography and cinematography projects across different specializations and brands. He also serves as the creative director of one of America's leading streetwear labels,Troo Wear- a brand that focuses on the theme of "freedom of expression".
Although Lee has established himself as a successful photographer, his work and passion are not confined to the cameras. He is the author of the best-selling photography book, "The Japan Book", and has a TESOL certification as a foreign language educator. He also regularly teaches math and physics as a brilliant tutor for AP students.
His background stems from tech entrepreneurship, with a degree in computer science from UC Berkeley and a penchant for creative ideas. Truly a polymath, he excels in many areas, but photography and filmmaking remain as his major interests. The launch ofPhotomochistudio demonstrates his profound vision for the art of photography and his desire to redefine, as well as uplift, the standards of the profession. With the inception of this studio,Christopher C. Lee, along with his team, has birthed a revolution in photography and filmmaking industry in the San Francisco Bay Area. He currently continues to serve as a director of photography to his protégés.
For Lee and his team, the quest for visual mastery is a relentless one which must be tirelessly pursued. This top organization has collaborated with previous clients hailing from many reputable companies such as Google, Airbnb, Dropbox, and more. They are constantly filled to the brim with new opportunities for directing their creative vision and providing their clients with excellent work. Photomochi studio boasts of some of the most versatile and skilled creative professionals in the business. It also utilizes a cutting-edge hardware and software workflow that streamlines production processes from the ground up. From shooting a wedding party to helping launch a Kickstarter campaign, they will get the job done, with a solid track record through rave reviews on Google My Business.
Excellence is the standard with team Photomochi. The outstanding customer service stands out as a main focus - the staff consistently coordinate their best efforts in providing top media services to their clients. Their specializations cover almost all genres - fashion, fine art, portraiture, wedding, commercial, product, architecture, aerial photography, and the list goes on. Feature film projects and video blogs on YouTube are also on the menu.
Photomochi creates and organizes: client meetings for project proposals, creative treatments, location scouting, wardrobe, set design, operations and logistics, equipment rentals, and more, carrying out all the essential pre-production tasks. They also specialize in offering brand promotion and advertising services across digital platforms.
From filmmaking to social media marketing to fine art, Photomochi is the one-stop platform for every entrepreneur and artist seeking to rejuvenate their business, raising the bar a giant notch for branding and publicity.
CONTACT INFO:Name: Christopher C. LeeEmail:Send EmailOrganization: PhotoMochiWebsite:https://www.photomochi.com
SOURCE:Photomochi
View source version on accesswire.com:https://www.accesswire.com/550093/Christopher-C-Lee-Launches-Photomochi-Photography-Studio-in-San-Francisco |
Is Ahlada Engineers Limited's (NSE:AHLADA) P/E Ratio Really That Good?
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This article is written for those who want to get better at using price to earnings ratios (P/E ratios). We'll apply a basic P/E ratio analysis to Ahlada Engineers Limited's (NSE:AHLADA), to help you decide if the stock is worth further research.Ahlada Engineers has a P/E ratio of 8.07, based on the last twelve months. In other words, at today's prices, investors are paying ₹8.07 for every ₹1 in prior year profit.
See our latest analysis for Ahlada Engineers
Theformula for price to earningsis:
Price to Earnings Ratio = Share Price ÷ Earnings per Share (EPS)
Or for Ahlada Engineers:
P/E of 8.07 = ₹71.05 ÷ ₹8.8 (Based on the year to March 2019.)
A higher P/E ratio means that investors are payinga higher pricefor each ₹1 of company earnings. All else being equal, it's better to pay a low price -- but as Warren Buffett said, 'It's far better to buy a wonderful company at a fair price than a fair company at a wonderful price.'
P/E ratios primarily reflect market expectations around earnings growth rates. Earnings growth means that in the future the 'E' will be higher. That means even if the current P/E is high, it will reduce over time if the share price stays flat. So while a stock may look expensive based on past earnings, it could be cheap based on future earnings.
Ahlada Engineers shrunk earnings per share by 4.8% last year. But over the longer term (5 years) earnings per share have increased by 23%.
We can get an indication of market expectations by looking at the P/E ratio. If you look at the image below, you can see Ahlada Engineers has a lower P/E than the average (22) in the building industry classification.
This suggests that market participants think Ahlada Engineers will underperform other companies in its industry. While current expectations are low, the stock could be undervalued if the situation is better than the market assumes. You should delve deeper. I like to checkif company insiders have been buying or selling.
Don't forget that the P/E ratio considers market capitalization. Thus, the metric does not reflect cash or debt held by the company. The exact same company would hypothetically deserve a higher P/E ratio if it had a strong balance sheet, than if it had a weak one with lots of debt, because a cashed up company can spend on growth.
Such expenditure might be good or bad, in the long term, but the point here is that the balance sheet is not reflected by this ratio.
Ahlada Engineers's net debt equates to 47% of its market capitalization. While that's enough to warrant consideration, it doesn't really concern us.
Ahlada Engineers has a P/E of 8.1. That's below the average in the IN market, which is 15.4. Since it only carries a modest debt load, it's likely the low expectations implied by the P/E ratio arise from the lack of recent earnings growth.
Investors have an opportunity when market expectations about a stock are wrong. If the reality for a company is not as bad as the P/E ratio indicates, then the share price should increase as the market realizes this. We don't have analyst forecasts, but shareholders might want to examinethis detailed historical graphof earnings, revenue and cash flow.
Of courseyou might be able to find a better stock than Ahlada Engineers. So you may wish to see thisfreecollection of other companies that have grown earnings strongly.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
PunaMusta Media Oyj (HEL:PUMU): Time For A Financial Health Check
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While small-cap stocks, such as PunaMusta Media Oyj (HEL:PUMU) with its market cap of €76m, are popular for their explosive growth, investors should also be aware of their balance sheet to judge whether the company can survive a downturn. Evaluating financial health as part of your investment thesis is crucial, as mismanagement of capital can lead to bankruptcies, which occur at a higher rate for small-caps. We'll look at some basic checks that can form a snapshot the company’s financial strength. However, this is just a partial view of the stock, and I recommend youdig deeper yourself into PUMU here.
PUMU has built up its total debt levels in the last twelve months, from €12m to €30m , which accounts for long term debt. With this increase in debt, PUMU's cash and short-term investments stands at €22m to keep the business going. Moreover, PUMU has generated cash from operations of €1.4m in the last twelve months, leading to an operating cash to total debt ratio of 4.7%, signalling that PUMU’s current level of operating cash is not high enough to cover debt.
At the current liabilities level of €32m, it seems that the business has maintained a safe level of current assets to meet its obligations, with the current ratio last standing at 1.22x. The current ratio is the number you get when you divide current assets by current liabilities. For Media companies, this ratio is within a sensible range as there's enough of a cash buffer without holding too much capital in low return investments.
With a debt-to-equity ratio of 61%, PUMU can be considered as an above-average leveraged company. This is a bit unusual for a small-cap stock, since they generally have a harder time borrowing than large more established companies.
Although PUMU’s debt level is towards the higher end of the spectrum, its cash flow coverage seems adequate to meet obligations which means its debt is being efficiently utilised. Since there is also no concerns around PUMU's liquidity needs, this may be its optimal capital structure for the time being. This is only a rough assessment of financial health, and I'm sure PUMU has company-specific issues impacting its capital structure decisions. I recommend you continue to research PunaMusta Media Oyj to get a more holistic view of the small-cap by looking at:
1. Future Outlook: What are well-informed industry analysts predicting for PUMU’s future growth? Take a look at ourfree research report of analyst consensusfor PUMU’s outlook.
2. Valuation: What is PUMU 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 PUMU 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. |
Morning News Call - India, June 27
To access a PDF version of this newsletter, please click here http://share.thomsonreuters.com/assets/newsletters/Indiamorning/MNC_IN_06272019.pdf If you would like to receive this newsletter via email, please register at: http://solutions.refinitiv.com/MNCIndiaSubscriptionpage FACTORS TO WATCH No major events are scheduled for the day. LIVECHAT - FINANCIALS OUTLOOK Kokkie Kooyman, Director and Portfolio Manager, global financials, at Denker Capital discusses the outlook for financials in Europe, the emerging world and the U.S., against the backdrop of the prevailing monetary policy. To join the conversation at 3:30 pm IST, click on the link: https://refini.tv/2P8N0Wp INDIA TOP NEWS • Pompeo vows cooperation with India but trade, defence issues unresolved U.S. Secretary of State Mike Pompeo sought to reduce heightened trade tension with India on Wednesday, promising a renewed focus on negotiating better ties, but giving few specifics of how they would overcome disputes over trade and investment. • RBI says foreign firms can process abroad, but must store data in India Foreign payment firms such as Mastercard and Visa can process transactions made in India outside of the country but the related data should be brought back for local storage within 24 hours, the Reserve Bank of India (RBI) said on Wednesday. • ANALYSIS-Slow pace of reforms spurring higher coal imports by Indian utilities Coal imports by Indian utilities are surging after the government failed to open the industry to competition, despite passing a liberalization policy 16 months ago, because of bureaucratic indecision and resistance from unions, industry and government officials said. • India's gold demand could fall to 3-year low as prices hit record high India's gold demand could fall 10% in 2019 from a year ago to the lowest level in three years as record high local prices dent retail purchases during a key festive season, the head of an industry body told Reuters. • Start-up of H-Energy's Jaigarh LNG import terminal in India delayed Indian natural gas company H-Energy Pvt Ltd will delay the start of its liquefied natural gas (LNG) import terminal at Jaigarh to the fourth quarter of 2019, the company's Chief Executive Officer Darshan Hiranandani said on Wednesday. • Tata Chemicals plans first UK industrial carbon capture demo plant Tata Chemicals Europe plans to build Britain's first industrial-scale carbon capture and utilisation demonstration plant to trap emissions for use in sodium carbonate manufacturing, the firm said on Thursday. • Airtel Africa to price London listing at bottom of range - bookrunner Airtel Africa's planned initial public offering on the London Stock Exchange is expected to price at 80 pence, the bottom end of its indicated price range, one of the bookrunners handling the sale said. GLOBAL TOP NEWS • Trump says trade deal 'possible' with China's Xi, tariffs could be lower U.S. President Donald Trump said on Wednesday that a trade deal with Chinese President Xi Jinping was possible this weekend but he is prepared to impose U.S. tariffs on virtually all remaining Chinese imports if the two countries continue to disagree. • No 'boots on the ground' in Iran dispute, Trump says; cites 'unlimited time' for new deal U.S. President Donald Trump said on Wednesday that he was "not talking boots on the ground" should he take military action against Iran and that he had "unlimited time" to try to forge an agreement with Tehran. • China's industrial profits up 1.1% in May as sales quicken Bolstered by improving sales, profits for China's industrial companies rose in May after shrinking the previous month, bucking a months-long downtrend, official data showed. LOCAL MARKETS OUTLOOK (As reported by NewsRise) • SGX Nifty nearest-month futures were little changed at 11,874.50. • The Indian rupee is expected to open lower against the dollar after crude oil prices jumped following a larger-than-expected drop in U.S. inventories. • Indian government bonds are likely to fall in early trade tracking an overnight gain in crude oil prices and as concerns over fiscal expansion continue to weigh. The yield on the benchmark 7.26% bond maturing in 2029 is likely to trade in a range of 6.92% - 6.98% today. GLOBAL MARKETS • The S&P 500 ended lower on Wednesday as gains in technology stocks were offset by a drop in healthcare shares, and investors parsed mixed messages over prospects for a deal to end a trade war between the United States and China. • Asian markets were busy going nowhere as confusion shrouded the chances of any progress in the Sino-U.S. trade standoff, while bulls scaled back wagers for a drastic cut in U.S. interest rates. • The dollar hovered near a one-week high against the yen, propped up by hopes of Sino-U.S. trade talk progress though investors were nonetheless cautious ahead of a meeting between leaders of the two powers in Japan in days ahead. • U.S. Treasury yields rose on Wednesday on hopes that the United States and China will make progress in trade talks later this week and as traders reduced bets that the Federal Reserve will cuts rates twice when it meets next month. • Oil fell, erasing some of the previous session's strong gains, as traders eye the G20 summit in Japan and a meeting of OPEC and other oil producers to decide on an extension of output cuts. • Gold traded steady after the previous session's sharp fall, as investors looked forward to trade talks between Washington and Beijing later this week in Japan. CLOSE FII INVESTMENTS EQUITIES DEBT PNDF spot 69.17/69.20 June 26 $15.31 mln -$9.38 mln 10-yr bond yield 6.93% Month-to-date $195.97 mln $498.69 mln Year-to-date $11.39 bln -$1.63 bln For additional data: India govt bond market volumes Stock market reports Non-deliverable forwards data Corporate debt stories [IN CORPD] Local market closing/intraday levels [IN SNAPSHOT] Monthly inflows [INFLOWS RTRS TABLE IN] ($1 = 69.2150 Indian rupees) (Compiled by Samrhitha Arunasalam in Bengaluru) |
Democratic debate: Four key takeaways from the first 2020 showdown
It was Elizabeth Warren ’s night to lose — and everyone else’s opportunity to gain — during the first round of the 2020 Democratic debates . The Massachusetts senator was the leading presidential candidate in national polls among the first 10 Democrats to take to the debate stage on Wednesday night in Miami. Ms Warren was joined by other notable candidates like former Texas Congressman Beto O’Rourke, New Jersey Senator Cory Booker and Washington Governor Jay Inslee . It was the first real chance for the candidates to pitch to a nationwide audience. The aim being to differentiate themselves from the competition on a range of issues, from climate change, to immigration, to — of course — how the party can defeat Donald Trump in 2020. Here’s some of the major takeaways: Elizabeth Warren really does have a plan for that Ms Warren had one major goal: avoid slipping on a banana peel and disrupting her increasing momentum in the national polls. She had a strong showing, using a notable amount of time to discuss the various policy proposals that have become a staple of her candidacy. She is the candidate who has shown so far the largest number of policies. Ms Warren raised her hand as one of the only Democratic presidential contenders willing to abolish her own private health insurance in favour of a government-run plan, demanding “structural change” in the economy and the government. On economic fairness in general, Ms Warren declared, “Who is this economy really working for? It’s doing great for a thinner and thinner slice at the top. ... That is corruption pure and simple ... and we need to make structural change.” Policies were front and centre during this debate and Ms Warren made sure she shone. Not everyone agrees on how to deal with immigration On immigration, the Democratic presidential hopefuls were united in blaming Mr Trump for the deaths of a migrant father and his toddler daughter whose bodies were beamed around the world in photographs after they drowned in the Rio Grande on the US-Mexico border. Story continues Former Obama administration housing chief Julian Castro said, “Watching that image of Oscar and his daughter Valeria was heartbreaking. It should also p*** us all off.” But the candidates did not agree on everything. Mr Castro assailed fellow Texan Mr O’Rourke for not calling for fully decriminalising crossing the US-Mexico border illegally. Mr O’Rourke said he doesn’t support fully decriminalising such border crossings because of fears about smugglers of drugs and people. Meanwhile, Mr Booker also sided with Mr Castro, arguing for full decriminalisation. It is an emotive issue, and Mr Castro in particular was one candidate who was sure to look like he was speaking from the heart. The squabbles and interruptions between candidates also showed that it was an issue to try and stand out on. Democrats spar over Iran Nuclear Deal Mr Booker was the only candidate at the debates to call it a “mistake” to sign back onto the 2015 nuclear accord with Iran after Mr Trump pulled out of the deal earlier in his presidency. The New Jersey senator was the only one of the 10 candidates on stage in Miami on Wednesday not to raise his hand when asked if he supported the deal. Under the agreement, Iran agreed to limit its enrichment of uranium and submit to UN inspections in exchange for the lifting of economic sanctions. Pressed to explain his rationale, Mr Booker said as president he would “do the best I can to secure this country.” He suggested the possibility of signing onto a different, stronger deal. Asked what each candidate believed was the greatest threat facing the US, Ms Gabbard said nuclear war, while Minnesota Senator Amy Klobuchar said Iran. National security is a major issue for a party that has traditionally been seen as not as strong as the Republicans in this particular area. Iran is something that the candidates will have to repeatedly return to in the coming weeks and months. Foreign policy is an area that current frontrunner, and former vice president Joe Biden is strong on - and the candidates on stage on Wednesday acted like they new it. The aim was to be clear about where they stand. 2020 hopefuls each get their shot at Trump Ms Klobuchar was the first to utter Mr Trump’s name, saying a few minutes into the debate, that he “sits in the White House and gloats” while the economy isn’t working for everyone. She also briefly referenced him again as the debate headed into its second hour. Responding to a question about US tensions with Iran, Ms Klobuchar said, “I don’t think we should conduct foreign policy in our bathrobe at 5 in the morning.” Other candidates invoked the president’s name in making their arguments on immigration. For example, Mr Booker spoke briefly in Spanish to further chastise Mr Trump’s policies, while Mr O’Rourke took a question in Spanish and answered it, saying, “We are going to treat everyone with respect.” He also said the Trump administration has focused on helping the wealthy and large corporations over everyday Americans — echoing similar sentiments of the other Democrats on stage. Wednesday night featured a collection of 10 candidates, led by Ms Warren, on national television for two hours. The overall field is so large that a second group of 10 Democrats, led by early front-runner Joe Biden, are to debate 24 hours later. The groupings were chosen at random by debate host NBC. Additional reporting by AP |
Ethereum Tokens to Trade on Swiss Stock Exchange via R3 Tech
Public blockchain tokens will soon be trading on a major securities exchange.
Revealed exclusively to CoinDesk,Swiss security token firm BlockState plans to “passport” half a dozenERC-20 tokensfrom ethereum, the second-largest public blockchain, to Corda, the privatedistributed ledgertechnology (DLT) platform developed by R3.
Before the end of the year, the tokens will be locked up in asmart contracton ethereum and “mirrored” versions of them will run on Corda. This is akin toglobal depository receipts, where shares of a company are held in custody in one country and a certificate representing ownership of them is traded in another.
Related:SWIFT Gives Blockchain Platforms Access to ‘Instant’ GPI Payments Following R3 Trial
What’s more, the passporting will take place on the networkR3 is buildingfor the Swiss Digital Exchange (SDX) – part of SIX, Switzerland’s national stock exchange and the world’s13th largest.
“BlockState has seen that exchanges and market infrastructure providers are building new digital infrastructure on Corda so they are jumping in,” said David Nicol, R3’s head of digital assets. “The way they are going to do that is with SDX, by issuing tokens that were on ethereum onto Corda.”
The reason for doing this is to open a wider market for issuers of security tokens, including institutional investors who don’t want to bother managing an ethereum wallet and would rather leave custody to SDX.
“A retail investor probably wouldn’t go through a financial institution connected to a regulated secondary market if he is also able to just hold an ERC-20 token in custody,” said Blockstate CEO Paul Claudius. “So I think this is bringing together these two investor ecosystems.”
Related:Private Blockchain’s Biggest Startups Integrate in Unprecedented Tie-Up
SIX declined to comment but has previously said it plans to tokenize existing financial instruments as well as list new digital assets, including areas like real estate and fine art, beginning this year.
Such convergence of public and private blockchains shows how the industry has changed since a few years ago when ethereum and R3 stood at opposite ends of the decentralization spectrum.
The former was open to all comers while R3’s Corda was designed with banks and regulated entities in mind. The two communities were also highly critical of each other, with R3 calling public blockchains unfit for enterprise use and ethereum devs dismissing R3 as a glorified workflow database.
But there weresigns of changeafoot a year ago when open-source developers began working on an equivalent of ethereum’s ERC-20 standard to create tokens representing various assets on Corda.
Now,BlockState’s own security token offering (STO), which is underway, will be the first pilot integration into Corda. There are five more issuances planned, the next fromStreetlife, an “urban music and lifestyle” company. Other sectors where BlockState will tokenize assets include real estate and sustainable energy.
As well as issuing tokens onto Corda, BlockState is registering them as securities in Switzerland, known for its conducive regulations and vast network of private banking, family offices and high net worth investors ready to buy newfangled digital assets.
“It’s a regulatory-friendly way to register securities,” noted Nicol. “You can go straight on to a blockchain and you can regulate that system of record. And in a space where the ability to execute is almost everything, they [BlockState] are really flying.”
Claudius explained that Swiss capital markets laws have “uncertified shares” where the share can be connected directly to a token, a digital representation of the ownership rights of the share with the shareholder register basically kept on the blockchain.
“Swiss regulations are technology-agnostic,” said Claudius. “The issuing of uncertified shares doesn’t require a global paper-based ledger which is dematerialized by a central securities depository. Since this is not necessary, they don’t really care how you manage your shareholder register – you can do it on a piece of paper or on a DLT.”
Paul Claudius image via Blockstate.
• Switzerland’s SIX Stock Exchange Is Working on a Swiss Franc Stablecoin
• Russia’s Central Depository to Launch Security Token Blockchain Next Month |
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