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Perseus SA (ATH:PERS) Has A ROE Of 12%
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Many investors are still learning about the various metrics that can be useful when analysing a stock. This article is for those who would like to learn about Return On Equity (ROE). By way of learning-by-doing, we'll look at ROE to gain a better understanding of Perseus SA (ATH:PERS).
Over the last twelve monthsPerseus has recorded a ROE of 12%. Another way to think of that is that for every €1 worth of equity in the company, it was able to earn €0.12.
See our latest analysis for Perseus
Theformula for return on equityis:
Return on Equity = Net Profit ÷ Shareholders' Equity
Or for Perseus:
12% = €2.9m ÷ €24m (Based on the trailing twelve months to December 2018.)
Most readers would understand what net profit is, but it’s worth explaining the concept of shareholders’ equity. 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.
ROE looks at the amount a company earns relative to the money it has kept within the business. The 'return' is the amount earned after tax over the last twelve months. That means that the higher the ROE, the more profitable the company is. So, as a general rule,a high ROE is a good thing. That means it can be interesting to compare the ROE of 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. If you look at the image below, you can see Perseus has a similar ROE to the average in the Food industry classification (10%).
That's not overly surprising. ROE doesn't tell us if the share price is low, but it can inform us to the nature of the business. For those looking for a bargain, other factors may be more important. If you like to buy stocks alongside management, then you might just love thisfreelist of companies. (Hint: insiders have been buying them).
Virtually all companies need money to invest in the business, to grow profits. The cash for investment can come from prior year profits (retained earnings), issuing new shares, or borrowing. In the first and second cases, the ROE will reflect this use of cash for investment in the business. In the latter case, the use of debt will improve the returns, but will not change the equity. That will make the ROE look better than if no debt was used.
Although Perseus does use debt, its debt to equity ratio of 0.83 is still low. Its ROE isn't particularly impressive, but the debt levels are quite modest, so the business probably has some real potential. Judicious use of debt to improve returns can certainly be a good thing, although it does elevate risk slightly and reduce future optionality.
Return on equity is 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.
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 Perseus by looking at thisvisualization of past earnings, revenue and cash flow.
If you would prefer check out another company -- one with potentially superior financials -- then do not miss thisfreelist of interesting companies, that have HIGH return on equity and low debt.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
A Note On Perseus SA's (ATH:PERS) ROE and Debt To Equity
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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. We'll use ROE to examine Perseus SA (ATH:PERS), by way of a worked example.
Our data showsPerseus has a return on equity of 12%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 €0.12.
View our latest analysis for Perseus
Theformula for ROEis:
Return on Equity = Net Profit ÷ Shareholders' Equity
Or for Perseus:
12% = €2.9m ÷ €24m (Based on the trailing twelve months to December 2018.)
It's easy to understand the 'net profit' part of that equation, but 'shareholders' equity' requires further explanation. It is all the money paid into the company from shareholders, plus any earnings retained. 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 yearly profit. The higher the ROE, the more profit the company is making. So, all else being equal,a high ROE is better than a low one. That means it can be interesting to compare the ROE of different companies.
By comparing a company's ROE with its industry average, we can get a quick measure of how good it is. Importantly, this is far from a perfect measure, because companies differ significantly within the same industry classification. The image below shows that Perseus has an ROE that is roughly in line with the Food industry average (10%).
That's neither particularly good, nor bad. ROE can give us a view about company quality, but many investors also look to other factors, such as whether there are insiders buying shares. If you are like me, then you willnotwant to miss thisfreelist of growing companies that insiders are buying.
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 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 Perseus does use debt, its debt to equity ratio of 0.83 is still low. Its ROE isn't particularly impressive, but the debt levels are quite modest, so the business probably has some real potential. Judicious use of debt to improve returns can certainly be a good thing, although it does elevate risk slightly and reduce future optionality.
Return on equity is useful for comparing the quality of different businesses. A company that can achieve a high return on equity without debt could be considered a high quality business. If two companies have around the same level of debt to equity, and one has a higher ROE, I'd generally prefer the one with higher ROE.
But ROE is just one piece of a bigger puzzle, since high quality businesses often trade on high multiples of earnings. The rate at which profits are likely to grow, relative to the expectations of profit growth reflected in the current price, must be considered, too. You can see how the company has grow in the past by looking at this FREEdetailed graphof past earnings, revenue and cash flow.
If you would prefer check out another company -- one with potentially superior financials -- then do not miss thisfreelist of interesting companies, that have HIGH return on equity and low debt.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
Moody's, Israel's Team8 to create cyber risk standard for businesses
By Tova Cohen and Ari Rabinovitch
TEL AVIV (Reuters) - Ratings agency Moody's Corp <MCO.N> and Israeli cyber group Team8 launched on Thursday a joint venture to assess how vulnerable businesses are to cyber attacks and create what they hope will become a global benchmark.
Cyber attacks are in focus after a virus from Ukraine spread around the globe in 2017, crippling thousands of computers, disrupting ports from Los Angeles to Mumbai and even halting production at a chocolate factory in Australia.
Similar to the way that banks can check their stability with a stress-test, Moody's and Team8 are developing a framework to measure companies' defenses and preparedness for such attacks in comparison to other businesses and over time.
The service will be a tool for companies engaging in mergers and acquisitions or when purchasing cyber insurance policies, said Derek Vadala, chief executive of the joint venture who most recently served as head of Moody's cyber risk group.
The venture did not disclose financial details.
"Companies doing business with each other are spending more and more resources on understanding what is the risk associated with doing business with third parties and fourth parties," Team8 CEO Nadav Zafrir told Reuters on the sidelines of a Tel Aviv University cyber conference.
"We believe that not only is that already slowing down the economy, but that we are going to see this slant continuing to deteriorate," Zafrir, an ex-commander of Israel's elite 8200 military intelligence unit, added.
The cyber health of companies has in the past had an impact on credit ratings as well. In March, Standard & Poor's downgraded Atlanta-based credit bureau Equifax <EFX.N> reflecting the possible fallout from a 2017 data breach. Moody's in May revised its outlook of Equifax citing the breach.
Moody's said the new cyber rating product was not related to its credit ratings service.
The new company will be based in New York and in Israel and will initially have a dozen employees, but is expected to grow to hundreds in coming years.
A creator of cyber defense startups, Team8 is backed financially by Moody's and other major companies like Microsoft <MSFT.O>, Airbus <AIR.PA> and Qualcomm <QCOM.O>.
Companies are well aware of growing cyber threats, and total spending on information security products and services is expected to reach $124 billion in 2019, according to a report from advisory company Gartner which estimated spending surpassing $114 billion in 2018.
A coordinated global cyber attack, spread through malicious email, could cause economic damages of between $85 billion and $193 billion, one hypothetical scenario developed as a stress test for risk management showed.
In this scenario, claims paid by the insurance sector are estimated at $10 billion-$27 billion, the report produced by insurance market Lloyd’s of London and Aon said.
Vadala said the company was building its model and expected to have beta customers in a year. The idea is to engage thousands of companies so the index becomes the global standard, he said.
(Reporting by Tova Cohen; Editing by Emelia Sithole-Matarise and Mark Potter) |
How Many Hazer Group Limited (ASX:HZR) Shares Have Insiders Sold, 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 we'll take a look at whether insiders have been buying or selling shares inHazer Group Limited(ASX:HZR).
It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, such insiders must disclose their trading activities, and not trade on inside information.
We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But logic dictates you should pay some attention to whether insiders are buying or selling shares. As Peter Lynch said, 'insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise.'
See our latest analysis for Hazer Group
In the last twelve months, the biggest single sale by an insider was when the , Geoffrey Pocock, sold AU$319k worth of shares at a price of AU$0.68 per share. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. The good news is that this large sale was at well above current price of AU$0.26. So it is hard to draw any strong conclusion from it. The only individual insider seller over the last year was Geoffrey Pocock.
Geoffrey Pocock divested 1.5m shares over the last 12 months at an average price of AU$0.41. The chart below shows insider transactions (by individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
For those who like to findwinning investmentsthisfreelist of growing companies with recent insider purchasing, could be just the ticket.
For a common shareholder, it is worth checking how many shares are held by company insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. Insiders own 21% of Hazer Group shares, worth about AU$5.4m. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.
The fact that there have been no Hazer Group insider transactions recently certainly doesn't bother us. We don't take much encouragement from the transactions by Hazer Group insiders. But we do like the fact that insiders own a fair chunk of the company. Along with insider transactions, I recommend checking if Hazer Group is growing revenue. This free chart ofhistoric revenue and earnings should make that easy.
But note:Hazer Group 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. |
GLOBAL MARKETS-Asian shares creep higher on hopes of Sino-U.S. trade truce
* Asian stock markets : https://tmsnrt.rs/2zpUAr4
* MSCI ex-Japan rises, gains led by China
* China-U.S. tentative agree to trade truce - SCMP
* Market pares bets for half-point Fed rate cut in July
By Swati Pandey and Wayne Cole
SYDNEY, June 27 (Reuters) - Asian share markets turned higher on Thursday following a media report the United States and China have tentatively agreed to a truce in their trade war, ahead of a closely-watched meeting between the two nations this weekend.
The South China Morning Post (SCMP), citing sources, said in 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.
On Wednesday, U.S. President Donald Trump said a trade deal with his Chinese counterpart Xi Jinping was possible this weekend though he was prepared to impose tariffs on virtually all remaining Chinese imports if talks fail.
"But the truce cake seems to have been baked," the SCMP cited one of its sources as saying.
Hopes the world's two biggest economies would finally reach an agreement were enough to cheer investors, sending MSCI's broadest index of Asia-Pacific shares outside Japan up 0.6%.
China led the gains with its blue-chip index up 1.4%. South Korea's KOSPI index was up 0.6% while Hong Kong's Hang Seng and Japan's Nikkei jumped 0.8%.
Relations between Washington and Beijing have spiralled downward since talks collapsed in May, when the United States accused China of reneging on pledges to reform its economy.
The ongoing trade war has already rattled investors who have ditched shares for the safety of bonds and gold this year. It has also prompted the U.S. Federal Reserve to pause its rate tightenings and, in fact, signal a cut as soon as next month.
Many traders said they expected the market to remain in a narrow range until after the weekend meeting of G20 leaders in Osaka, Japan where Trump is also holding bilateral talks with other nations.
"The bottom line is the market has been hit by a barrage of noise that gives us less clarity than before," said Chris Weston, market strategist at Pepperstone.
"While the most likely situation is we simply hear a lot of bravadoes that the two sides plan to work closely together and agree to find a solution that is amicable, we still need to consider if the event poses a gaping risk for markets," he added.
"It certainly feels as though the probability is we will see traders manage exposures, refraining from adding too much additional risk just in case."
Wall Street had been circumspect, with the Dow ending Wednesday down 0.04%, while the S&P 500 lost 0.12% and the Nasdaq rose 0.32%.
LESS THAN 50
Trump weighed into U.S. monetary policy on Wednesday, accusing Federal Reserve Chairman Jerome Powell of doing a "bad job" and "out to prove how tough he is" by not cutting interest rates.
Markets are convinced the Fed will indeed ease at its next meeting in July, but had to scale back bets on a half-point cut following cautious comments from various policy makers.
Futures are 100% priced for a cut of 25 basis points, and imply a 22% chance of 50 basis points.
The probability of a less aggressive Fed and expectations of a Sino-China trade truce helped ease the selling pressure on the U.S. dollar, which inched up to 96.276 on a basket of currencies from a three-month trough of 95.843.
The dollar bounced modestly against the yen to 107.97 and away from a low of 106.77. The euro likewise eased back to $1.13615 from a top of $1.1412.
The dollar's gains took a little of the shine off gold, which broke a six-session winning stretch and eased to $1,407.22 per ounce.
Oil prices ran into profit-taking in early Asia, having gained overnight on a larger-than-expected drawdown in crude stocks as exports hit a record high and surprise falls in refined product stockpiles.
Brent crude futures eased 20 cents to $66.29, while U.S. crude lost 22 cents to $59.16 a barrel.
(Editing by Sam Holmes) |
Julián Castro Breaks Out in Debate Defined by Border Policy and Immigration
Beto O’Rourke opened the debate speaking in Spanish, and Cory Booker went bilingual about 30 minutes later while talking about the border. But it was Julián Castro, a mostly forgotten candidate the last several months, who broke out in the first half of the Democratic debate by leading the field on Latin America issues and immigration.
Castro expressed plans to immediately cancel some of President Donald Trump’s immigration policies and started a conversation about making border crossings a civil penalty rather than a criminal penalty—a stance that drew O’Rourke into an uncomfortable position.
The debate turned to immigration when moderator Jose Diaz-Balart asked Castro what he would do his first day in office concerning the border. Castro said he would sign an executive order to eliminate Trump’s“zero tolerance” policythat called for prosecuting anyone illegally entering the United States and his “metering” policy that limits the number of daily asylum seekers, forcing many to wait in northern Mexico. Castro referenced El Salvadoran asylum seekers Óscar Alberto Martínez Ramírez and his 2-year-old daughter Valeria,who died this week while crossing the Rio Grande. They had been waiting at a migrant camp.
“This metering policy is what prompted Óscar and Valeria to make that risky swim across the river,” Castro said. “They have been playing games with people who are coming to try and seek asylum at our ports of entry. Óscar and Valeria went to seek asylum and they were denied the ability to make an asylum claim. So they got frustrated and they tried to cross the river and they died because of that.”
Moments later, Castro brought up his plan to repeal section 1325 of the Immigration and Nationality Act. The section as currently constructed makes border crossing a criminal offense. He said he would make it a civil offense and praised Booker, Elizabeth Warren, and Jay Inslee for proposing the same.
Then, after O’Rourke started sharing his plan to rewrite immigration laws, Castro interrupted him. He brought up section 1325 again. O’Rourke has not supported its repeal, expressing concern about drug traffickers.
“Some of us on this stage have called to end that section,” Castro said. “Some like Congressman O’Rourke have not. And I want to challenge all of the candidates to do that…If you truly want to change the system then we’ve got to repeal that section.”
O’Rourke countered by emphasizing his intention to rewrite a comprehensive plan. Castro fired back by saying other parts of the U.S. criminal code outlaw drug trafficking.
The performance could be a boon for Castro, who has been polling under 1 percent, and harmful to fellow Texan O’Rourke, who has been criticized for an inability to put forth clear policy stances as his campaign languishes.
The end of their confrontation about immigration featured mostly incomprehensible back and forth. About the only clear expression came from Castro. He said to O’Rourke, “If you did your homework on this issue you would know.”
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Las Vegas casino workers picket Palms, call for negotiation
LAS VEGAS (AP) More than 1,000 members of a powerful Las Vegas casino workers union and other hospitality workers picketed Wednesday evening outside the Palms casino-resort, where owners have refused to bargain with the union. The workers, chanting and carrying signs that said, "No contract. No peace," called for Palms owner Station Casinos to negotiate with employees, 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, located 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. The Culinary Union represents about 900 porters, food servers, bartenders and other workers at the Palms, which is undergoing a $690 million renovation. Culinary Union secretary-treasurer Geoconda Argüello-Kline, secretary-treasurer for the Culinary Union, said Station Casinos is disrespecting workers by refusing to come to the bargaining table and the union won't stop until they negotiate. Jose Luis Cuevas, a porter at the Palms, said he's worked at the casino for 11 years and wants to get better benefits. "The most important, we need job security for our families, our kids," he said. "Right now, they can kick you out any time." As part of the dispute, the union in March picketed outside the restaurants of celebrity chefs and business partners of Station Casinos in eight cities across the U.S. The company, which operates more than 10 casino-hotels in and around Las Vegas, also has clashed with the Culinary Union at its Green Valley Ranch casino-resort in the Las Vegas suburb of Henderson. Workers there voted to unionize in November 2017. A year later, federal labor regulators found that the company "engaged in unfair labor practices" by refusing to bargain with the Green Valley Ranch employees. "With respect to both Palms and Green Valley Ranch, although the union would clearly prefer that we not exercise our legal right to challenge the NLRB's decisions regarding those properties in the United States federal courts, we have every right to do so and our challenges are both legal and appropriate," Michael Britt, a senior vice president for Station Casinos' parent company, Red Rock Resorts, said in a statement. |
What Is Indiabulls Ventures Limited's (NSE:IBVENTURES) Share Price Doing?
Want to participate in a short research study ? Help shape the future of investing tools and you could win a $250 gift card! Indiabulls Ventures Limited ( NSE:IBVENTURES ), which is in the capital markets business, and is based in India, saw significant share price movement during recent months on the NSEI, rising to highs of ₹349.5 and falling to the lows of ₹245.2. 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 Indiabulls Ventures's current trading price of ₹267.1 reflective of the actual value of the mid-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Indiabulls Ventures’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 Indiabulls Ventures Is Indiabulls Ventures still cheap? Indiabulls Ventures is currently overpriced based on my relative valuation model. I’ve used the price-to-earnings ratio in this instance because there’s not enough visibility to forecast its cash flows. The stock’s ratio of 31.66x is currently well-above the industry average of 15.58x, meaning that it is trading at a more expensive price relative to its peers. In addition to this, it seems like Indiabulls Ventures’s share price is quite stable, which could mean two things: firstly, it may take the share price a while to fall back down to an attractive buying range, and secondly, there may be less chances to buy low in the future once it reaches that value. This is because the stock is less volatile than the wider market given its low beta. What kind of growth will Indiabulls Ventures generate? NSEI:IBVENTURES Past and Future Earnings, June 27th 2019 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. In Indiabulls Ventures’s case, its revenues over the next few years are expected to grow by 42%, indicating a highly optimistic future ahead. If expense does not increase by the same rate, or higher, this top line growth should lead to stronger cash flows, feeding into a higher share value. Story continues What this means for you: Are you a shareholder? It seems like the market has well and truly priced in IBVENTURES’s positive outlook, with shares trading above its fair value. However, this brings up another question – is now the right time to sell? If you believe IBVENTURES should trade below its current price, selling high and buying it back up again when its price falls towards its real value can be profitable. But before you make this decision, take a look at whether its fundamentals have changed. Are you a potential investor? If you’ve been keeping an eye on IBVENTURES for a while, now may not be the best time to enter into the stock. The price has surpassed its industry peers, which means it is likely that there is no more upside from mispricing. However, the optimistic prospect is encouraging for IBVENTURES, which means it’s worth diving deeper into other factors in order to take advantage of the next price drop. Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on Indiabulls Ventures. You can find everything you need to know about Indiabulls Ventures in the latest infographic research report . If you are no longer interested in Indiabulls Ventures, you can use our free platform to see my list of over 50 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 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. |
How Financially Strong Is The Indian Hotels Company Limited (NSE:INDHOTEL)?
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Small-caps and large-caps are wildly popular among investors; however, mid-cap stocks, such as The Indian Hotels Company Limited (NSE:INDHOTEL) with a market-capitalization of ₹189b, rarely draw their attention. Despite this, the two other categories have lagged behind the risk-adjusted returns of commonly ignored mid-cap stocks. Today we will look at INDHOTEL’s financial liquidity and debt levels, which are strong indicators for whether the company can weather economic downturns or fund strategic acquisitions for future growth. Remember this is a very top-level look that focuses exclusively on financial health, so I recommend a deeper analysisinto INDHOTEL here.
See our latest analysis for Indian Hotels
INDHOTEL's debt level has been constant at around ₹23b over the previous year – this includes long-term debt. At this stable level of debt, the current cash and short-term investment levels stands at ₹4.5b , ready to be used for running the business. On top of this, INDHOTEL has generated cash from operations of ₹7.1b during the same period of time, resulting in an operating cash to total debt ratio of 31%, meaning that INDHOTEL’s operating cash is sufficient to cover its debt.
Looking at INDHOTEL’s ₹21b in current liabilities, it appears that the company may not be able to easily meet these obligations given the level of current assets of ₹12b, with a current ratio of 0.55x. The current ratio is the number you get when you divide current assets by current liabilities.
INDHOTEL is a relatively highly levered company with a debt-to-equity of 45%. This is not uncommon for a mid-cap company given that debt tends to be lower-cost and at times, more accessible. No matter how high the company’s debt, if it can easily cover the interest payments, it’s considered to be efficient with its use of excess leverage. A company generating earnings after interest and tax at least three times its net interest payments is considered financially sound. In INDHOTEL's case, the ratio of 3.03x suggests that interest is appropriately covered, which means that lenders may be less hesitant to lend out more funding as INDHOTEL’s high interest coverage is seen as responsible and safe practice.
INDHOTEL’s high cash coverage means that, although its debt levels are high, the company is able to utilise its borrowings efficiently in order to generate cash flow. Though its lack of liquidity raises questions over current asset management practices for the mid-cap. This is only a rough assessment of financial health, and I'm sure INDHOTEL has company-specific issues impacting its capital structure decisions. You should continue to research Indian Hotels to get a better picture of the stock by looking at:
1. Future Outlook: What are well-informed industry analysts predicting for INDHOTEL’s future growth? Take a look at ourfree research report of analyst consensusfor INDHOTEL’s outlook.
2. Valuation: What is INDHOTEL 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 INDHOTEL 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. |
Are The Indian Hotels Company Limited's (NSE:INDHOTEL) Interest Costs Too High?
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Small and large cap stocks are widely popular for a variety of reasons, however, mid-cap companies such as The Indian Hotels Company Limited (NSE:INDHOTEL), with a market cap of ₹189b, often get neglected by retail investors. However, generally ignored mid-caps have historically delivered better risk adjusted returns than both of those groups. INDHOTEL’s financial liquidity and debt position will be analysed in this article, to get an idea of whether the company can fund opportunities for strategic growth and maintain strength through economic downturns. Note that this information is centred entirely on financial health and is a top-level understanding, so I encourage you to look furtherinto INDHOTEL here.
See our latest analysis for Indian Hotels
Over the past year, INDHOTEL has maintained its debt levels at around ₹23b including long-term debt. At this stable level of debt, the current cash and short-term investment levels stands at ₹4.5b to keep the business going. On top of this, INDHOTEL has produced cash from operations of ₹7.1b during the same period of time, resulting in an operating cash to total debt ratio of 31%, indicating that INDHOTEL’s debt is appropriately covered by operating cash.
With current liabilities at ₹21b, it seems that the business may not be able to easily meet these obligations given the level of current assets of ₹12b, with a current ratio of 0.55x. The current ratio is the number you get when you divide current assets by current liabilities.
With a debt-to-equity ratio of 45%, INDHOTEL can be considered as an above-average leveraged company. This is not uncommon for a mid-cap company given that debt tends to be lower-cost and at times, more accessible. No matter how high the company’s debt, if it can easily cover the interest payments, it’s considered to be efficient with its use of excess leverage. A company generating earnings after interest and tax at least three times its net interest payments is considered financially sound. In INDHOTEL's case, the ratio of 3.03x suggests that interest is appropriately covered, which means that debtors may be willing to loan the company more money, giving INDHOTEL ample headroom to grow its debt facilities.
Although INDHOTEL’s debt level is towards the higher end of the spectrum, its cash flow coverage seems adequate to meet debt obligations which means its debt is being efficiently utilised. However, its low liquidity raises concerns over whether current asset management practices are properly implemented for the mid-cap. Keep in mind I haven't considered other factors such as how INDHOTEL has been performing in the past. I recommend you continue to research Indian Hotels to get a better picture of the stock by looking at:
1. Future Outlook: What are well-informed industry analysts predicting for INDHOTEL’s future growth? Take a look at ourfree research report of analyst consensusfor INDHOTEL’s outlook.
2. Valuation: What is INDHOTEL 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 INDHOTEL 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. |
France's Macron says no need to lower government's stake in Renault
By Chris Gallagher
TOKYO (Reuters) - French President Emmanuel Macron said on Thursday there was no need for the government to lower its stake in Renault and that he wanted the Renault-Nissan alliance to work on strengthening its synergies.
Relations have been strained between the alliance members since the shock arrest in November of former boss Carlos Ghosn, but Macron referred to that as an individual situation that should not have a bearing on their partnership.
"Nothing in this situation justifies changing the cross shareholdings, the rules of governance, and the state's shareholding in Renault, which has nothing to do with Nissan," Macron told reporters.
Macron's comment contradicts recent remarks by Finance Minister Bruno Le Maire that the government was ready to reduce its 15% stake in Renault in the interest of bolstering the automaker's alliance with Japan's Nissan Motor.
"I wish for the group to maintain its stability concentrating on the essential and that synergies between Renault and Nissan continue to be strengthened," said Macron, who was in Japan on an official state visit ahead of the G20 in Osaka.
"The future of the group is how it can become leader in electric vehicles and one of the leaders in autonomous vehicles … I think the future is more of a growing integration."
Despite the French government's frequent calls for Renault and Nissan to strengthen their partnership, Nissan has been unhappy with what it sees as an unequal relationship and has rebuffed previous suggestions of an outright merger.
Renault owns 43% of Nissan which has surpassed its French partner in size since being rescued by it two decades ago. Nissan holds a 15%, non-voting stake in its partner.
Nissan Chief Executive Hiroto Saikawa said at a shareholders' meeting this week the Japanese automaker would "postpone discussions" on the future direction of the alliance as it prioritized recovery of its financial performance.
(Reporting by Chris Gallagher; Editing by Himani Sarkar and Gopakumar Warrier) |
Cargotec Corporation (HEL:CGCBV): What Does Its Beta Value Mean For Your Portfolio?
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Anyone researching Cargotec Corporation (HEL:CGCBV) might want to consider the historical volatility of the share price. Modern finance theory considers volatility to be a measure of risk, and there are two main types of price volatility. The first 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 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 Cargotec
Looking at the last five years, Cargotec has a beta of 1.69. The fact that this is well above 1 indicates that its share price movements have shown sensitivity to overall market volatility. Based on this history, investors should be aware that Cargotec are likely to rise strongly in times of greed, but sell off in times of fear. Share price volatility is well worth considering, but most long term investors consider the history of revenue and earnings growth to be more important. Take a look at how Cargotec fares in that regard, below.
Cargotec is a fairly large company. It has a market capitalisation of €2.1b, which means it is probably on the radar of most investors. It takes deep pocketed investors to influence the share price of a large company, so it's a little unusual to see companies this size with high beta values. It may be that that this company is more heavily impacted by broader economic factors than most.
Since Cargotec tends to moves up when the market is going up, and down when it's going down, potential investors may wish to reflect on the overall market, when considering the stock. This article aims to educate investors about beta values, but it's well worth looking at important company-specific fundamentals such as Cargotec’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 CGCBV’s future growth? Take a look at ourfree research report of analyst consensusfor CGCBV’s outlook.
2. Past Track Record: Has CGCBV 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 CGCBV's historicalsfor more clarity.
3. Other Interesting Stocks: It's worth checking to see how CGCBV 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. |
Does Alpha Bank A.E. (ATH:ALPHA) Have A Volatile Share Price?
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If you're interested in Alpha Bank A.E. (ATH:ALPHA), 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. 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 see their prices move in concert with the market. Others tend towards stronger, gentler or unrelated price movements. Beta is a widely used metric to measure a stock's exposure to market risk (volatility). Before we go on, it's worth noting that Warren Buffett pointed out in his 2014 letter to shareholders that 'volatility is far from synonymous with risk.' Having said that, beta can still be rather useful. The first thing to understand about beta is that the beta of the overall market is one. A stock with a beta 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 Alpha Bank A.E
Given that it has a beta of 1.79, we can surmise that the Alpha Bank A.E share price has been fairly sensitive to market volatility (over the last 5 years). If this beta value holds true in the future, Alpha Bank A.E shares are likely to rise more than the market when the market is going up, but fall faster when the market is going down. Beta is worth considering, but it's also important to consider whether Alpha Bank A.E is growing earnings and revenue. You can take a look for yourself, below.
With a market capitalisation of €2.6b, Alpha Bank A.E is a pretty big company, even by global standards. It is quite likely well known to very many investors. It has a relatively high beta, suggesting it may be somehow leveraged to macroeconomic conditions. For example, it might be a high growth stock with lots of investors trading the shares. It's notable when large companies to have high beta values, because it usually takes substantial capital flows to move their share prices.
Since Alpha Bank A.E tends to moves up when the market is going up, and down when it's going down, potential investors may wish to reflect on the overall market, when considering the stock. This article aims to educate investors about beta values, but it's well worth looking at important company-specific fundamentals such as Alpha Bank A.E’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 ALPHA’s future growth? Take a look at ourfree research report of analyst consensusfor ALPHA’s outlook.
2. Past Track Record: Has ALPHA 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 ALPHA's historicalsfor more clarity.
3. Other Interesting Stocks: It's worth checking to see how ALPHA 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. |
Twitter calls out 'Big Brother' racism
Night two of the Big Brother season 21 premiere aired Wednesday night and caused a lot of negative social media buzz when contestant David Alexander was banished from the house before the first Head of Household competition even took place. The first-ever Big Brother camp director, named Jackson Michie, had to choose four contestants to banish from the house and, while Michie seemed to have his own competition-related reasons for picking Cliff Hogg III, Kemi Fakunle, Jessica Milagros and Alexander, Twitter had another opinion. One person tweeted: Jackson taking the two black houseguests, the plus sized Latina woman and the old guy? LMAO who is shocked #bb21 — emily (@roussohoh) June 27, 2019 While others posted: jackson picking who to banish #bb21 pic.twitter.com/Nwu8U3pT5q — shadon (@wokeyonce) June 27, 2019 The old man and the minorities #bb21 pic.twitter.com/uP3Mx4IzGp — Dori (@JustHereForFood) June 27, 2019 Banishing the only 2 black houseguests, the eldest houseguest, and the only plus size houseguest during the first night.... makes you look so bad. I really hope Jackson is a prejury boot. Casting needs more open minded Southern men. Robyn needs to do better. This aint it. #BB21 — V E L E N A #BB21 (@VelenaWWE) June 27, 2019 This episode HIGHLIGHTS what I've been saying for years. BB casting needs to be even across the board. 4 Black hgs. 4 White hgs. 4 Latino hgs. 4 Asian hgs. Make this shit even for EVERYONE. #BB21 pic.twitter.com/d9Cx96wvQr — Brandon Fluellen (@BMFluellen1) June 27, 2019 This dude banished the blacks in the house. Please you absolutely cannot make it up, I— #BB21 pic.twitter.com/5fD5y1exXw — they think that i’m tom cruise (@TVHEAUXX) June 27, 2019 So Jackson picked the old guy, the black guy, the black girl and the plus size girl... #BB21 pic.twitter.com/XrTsUbLV8w — Danielle kelley 🐘 (@DanielleRkelley) June 27, 2019 So Jackson puts up: The eldest houseguest (Cliff) The ONLY Black male houseguest The ONLY Black female houseguest The ONLY Latina female houseguest Didn't I tell y'all. It's gonna be one of those summers. Get ready. #BB21 pic.twitter.com/piGZ6vXp9x — Brandon Fluellen (@BMFluellen1) June 27, 2019 In the diary room, Alexander told the audience, "The reason I wanted to win, the reason I wanted to compete and be on this show, I want to be the first, like, black person to win B ig Brother . I wanted to represent African-American culture in a different light. I wanted to show that. I wanted to show it." Story continues Alexander's confession had Twitter even more upset about his too-soon eviction. David’s eviction shows the importance of REAL diversity and variety. One black male houseguest is not enough. Especially when I can count a few repeat types of white houseguests. #BB21 — 🦋++ (@lyricglow) June 27, 2019 “I wanted to be the first black person to win big brother, I wanted to represent African Americans” #BB21 pic.twitter.com/2oZtkjftJf — ً (@celestialpjm_) June 27, 2019 #BB21 David: I came on Big Brother because I wanted to represent African-American culture in a different light Me: pic.twitter.com/xdf1NLa3tF — Norris Johnson (@norrisj23) June 27, 2019 David DESERVED BETTER!! Let’s hope he gets back in the game🤞🏾 #BB21 pic.twitter.com/TZ1xBNACmc — JayIntuitive (@JKIRKLANDD) June 27, 2019 Fortunately, this may not be the last time we see Alexander, as host Julie Chen Moonves told him that he's only out of the house "for now." Check out Big Brother on cbs.com for air dates and times. Check out the dramatic episode of ‘KUWTK’ revealing how the Tristan and Jordyn cheating scandal unfolded: Read more from Yahoo! Entertainment: Country music star jokes about not being straight on ‘Songland’ Rosie O’Donnell wishes Meghan McCain ‘wouldn’t be mean to Joy Behar’ Rihanna and Seth Meyers get into hilarious day drinking shenanigans Tell us what you think! Hit us up on Twitter , Facebook or Instagram , or leave your comments below. And check out our host, Kylie Mar, on Twitter , Facebook or Instagram . Want daily pop culture news delivered to your inbox? Sign up here for Yahoo Entertainment & Lifestyle's newsletter. View comments |
It’s Now Harder to Mine Bitcoin Than Ever
Bitcoin mining has become more competitive than ever.
Bitcoin mining difficulty – the measure of how hard it is to earn mining rewards in the world’s largest cryptocurrency by market cap – has reached a new record high above 7.93 trillion. That’s a seven percent jump from the 7.45 trillion record set during the recent two-week adjustment cycle, which was the highest since October 2018.
Bitcoin is designed to adjust its mining difficulty every 2,016 blocks (approximately 14 days), based on the amount of computing power deployed to the network. This is done to ensure the block production interval at the next period will remain constant at around every 10 minutes. When there are fewer machines racing to solve math problems to earn the next payout of newly created bitcoin, difficulty falls; when there are more computers in the game, it rises.
Data from BTC.com
Related:Wait for October: New Bitcoin Miner Demand Is Again Outstripping Supply
Right now the machines are humming furiously.Bitcoin miners across the world have been performing calculations at an average 56.77 quintillion hashes per second (EH/s) over the last 14 days to compete for mining rewards on the world’s first blockchain, according to data from mining poolBTC.com.
BTC.com data further indicates the average bitcoin mining hash rate in the last 24-hour and three-day periods were 59.58 EH/s and 59.70 EH/s, respectively, even higher than the average 56.77 EH/s from May 15 to June 27, or any 14-day data in the network’s history.
Similarly, data fromblockchain.infoalso shows the aggregate of bitcoin computing power was around 66 EH/s as of June 22, surpassing last year’s record high of 61.86 EH/s tracked by the site, and has more than doubled since December 2018 when the hash rate dropped to as low as 31 EH/s amid bitcoin’s price fall.
Assuming all such additional computing power has come from more widely used equipment such as the AntMiner S9, which performs calculations at an average rate of 14 tera hashes per second (TH/s), that suggests more than 2 million units of mining equipment may have been switched on over the past several months. (1 EH/s equals to 1 million TH/s)
Related:China Authorities Probe Alleged Illegal Bitcoin Mining Sites at Hydro Plants
The increase in capacity is also in line with bitcoin’s price jump over the first half of 2019, whichcausedthe price of second-hand mining equipment to double in China, and also juiced demand for new machines.
BTC.com further estimates the bitcoin mining difficulty will jumpby another seven percent at the beginning of the next adjustment cycle, which would be the first time for bitcoin mining difficulty to cross the eight trillion threshold.
Such computing interest comes at a time when mining farms in China, especially in the country’s mountainous southwest, have been gradually plugging in equipment as the rainy summer approaches.
According to a reportpublishedby blockchain research firm Coinshare, as of earlier this month, 50 percent of the global bitcoin computing power was located in China’s Sichuan province.
However, it’s important to note that this year, the arrival of the rainy season in China’s southwest has been delayed by nearly a month compared to previous years. As a result, some local mining farms were only running less than half of their total capacity in the past month.
Xun Zheng, CEO of mining farm operator Hashage based in Chengdu that owns several facilities across China’s southwestern provinces, said there had been no rain in the area for over 20 days since early May, which was “unusual.”
“In the past years, it usually starts raining continuously throughout May so [hydropower plants] normally will have enough water resources by early June,” he said.
As a result, in early June his firm was only operating at 40 percent of capacity; it can host more than 200,000 ASIC miners. But as the rain has arrived gradually over the past two weeks, the proportion has climbed to over 60 percent.
Mining farms in China previouslyestimatedthat the total hash rate this year during the peak of the rainy season around August could break the threshold of 70EH/s. That means another 300,000 units of mining machines could be further activated, assuming all are AntMiner S9s or similar models.
Those waiting to be switched on will also include new capital in the sector such as Shanghai-based Fundamental Labs, a blockchain fund that hasinvested$44 million on top-of-the-line mining equipment, which will be activated in June.
Bitcoin miningimage via CoinDesk archives
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Does Ahlada Engineers Limited's (NSE:AHLADA) Recent Track Record Look Strong?
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Measuring Ahlada Engineers Limited's (NSE:AHLADA) track record of past performance is an insightful exercise for investors. It enables us to reflect on whether the company has met or exceed expectations, which is a powerful signal for future performance. Below, I will assess AHLADA's recent performance announced on 31 March 2019 and compare these figures to its historical trend and industry movements.
See our latest analysis for Ahlada Engineers
AHLADA's trailing twelve-month earnings (from 31 March 2019) of ₹114m has jumped 41% compared to the previous year.
Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of 33%, indicating the rate at which AHLADA is growing has accelerated. What's enabled this growth? Well, let’s take a look at whether it is merely due to an industry uplift, or if Ahlada Engineers has experienced some company-specific growth.
In terms of returns from investment, Ahlada Engineers has fallen short of achieving a 20% return on equity (ROE), recording 10% instead. However, its return on assets (ROA) of 9.7% exceeds the IN Building industry of 6.5%, indicating Ahlada Engineers has used its assets more efficiently. Though, its return on capital (ROC), which also accounts for Ahlada Engineers’s debt level, has declined over the past 3 years from 26% to 21%.
While past data is useful, it doesn’t tell the whole story. While Ahlada Engineers has a good historical track record with positive growth and profitability, there's no certainty that this will extrapolate into the future. I suggest you continue to research Ahlada Engineers to get a more holistic view of the stock by looking at:
1. Future Outlook: What are well-informed industry analysts predicting for AHLADA’s future growth? Take a look at ourfree research report of analyst consensusfor AHLADA’s outlook.
2. Financial Health: Are AHLADA’s operations financially sustainable? Balance sheets can be hard to analyze, which is why we’ve done it for you. Check out ourfinancial health checks here.
3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore ourfree list of these great stocks here.
NB: Figures in this article are calculated using data from the trailing twelve months from 31 March 2019. This may not be consistent with full year annual report figures.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
It’s Risk on with the Markets Hoping for a Resolution to the Trade War
Economic data was on the lighter side through the Asian session this morning. Japan retail sales and New Zealand business confidence figures provided direction early on.
Outside of the stats, optimistic chatter from the U.S administration ahead of the G20 provided support for riskier assets to pin back the Yen.
Retail salesincreased by 1.2% in May, month-on-month, which was in line with forecast. Retail sales increase by 0.4% in April.
The Japanese Yen moved from ¥107.726 to ¥107.759 upon release of the figures. At the time of writing, theJapanese Yenwas down by 0.20% to ¥108.01 against the U.S Dollar.
The ANZ Business Confidence Index slid from -32 to -38.1 in June. Economists had forecast a rise to -22.
According to the latestANZ Business survey,
• The firms’ views of their own activity fell by 1 point to +8, with the other activity indicators holding relatively steady.
• Employment intentions, investment intentions, and capacity utilization were all unchanged at 0, +3 and +5 respectively.
• A net 40% of firms expect it to be tough to get credit, down 4 points.
• Export intentions rose by 5 points.
• Profit expectations fell by 3 points to a net 13% expecting profit to decline.
The Kiwi Dollar moved from $0.66837 to $0.66833 upon release of the figures. At the time of writing, theKiwi Dollarwas up by 0.01% to $0.6682.
TheAussie Dollarwas up by 0.11% to $0.6993.
It’s a busier day ahead on the economic data front.
Key stats include June prelim inflation figures for Spain and Germany and Eurozone business confidence numbers.
With the ECB willing to step in should inflationary pressures ease, we can expect the EUR to be responsive to the inflation numbers.
Business confidence will also impact the EUR on the day.
Outside of the numbers, we can expect the markets to particularly sensitive to any chatter from the U.S and Beijing ahead of the G20 Summit that kicks off tomorrow.
At the time of writing, theEURwas down by 0.07% to $1.1361.
There are no material stats due out of the UK today to provide direction for the Pound.
The lack of stats will leave chatter from Conservative Party leadership candidates Johnson and Hunt in focus.
At the time of writing, thePoundwas down by 0.03% to $1.2686.
It’s another relatively busy day on the economic calendar.
Finalized 1stquarter GDP figures are due out of the U.S along with the weekly jobless claims figures.
Later in the U.S session, May pending home sales numbers are also due out.
Barring any deviation from 2ndestimates, the weekly jobless claims and pending home sales numbers will likely have the greatest influence.
Outside of the numbers, it’s the eve of the heavily anticipated G20 Summit. Any chatter on trade and/or Iran will have an impact on risk sentiment on the day.
At the time of writing, theDollar Spot Indexwas up by 0.07% to 96.281.
There are no material stats due out of Canada to provide direction.
We can expect crude oil prices to provide direction on the day. Market sentiment towards the economic outlook, rising tensions in the Middle East and the extended trade war remain the key drivers.
TheLooniewas down by 0.02% to C$1.3130, against the U.S Dollar, at the time of writing.
Thisarticlewas originally posted on FX Empire
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FCC opens probe into Sinclair disclosures on failed Tribune deal
By David Shepardson
WASHINGTON (Reuters) - The Federal Communications Commission has opened a new investigation into whether Sinclair Broadcast Group Inc engaged in misrepresentations or a lack of candor in its failed effort to win approval for a $3.9 billion bid to purchase Tribune Media Co.
In a June 25 letter to Sinclair posted Wednesday on the FCC's website, the government agency directed Sinclair to answer a series of questions and provide documents by July 9, warning that "failing to respond accurately and completely to this (letter) constitutes a violation of the act and our rules."
Sinclair did not immediately respond to a Reuters request for comment.
An administrative judge in March dropped a hearing into allegations that Sinclair, the largest U.S. broadcast station owner, may have misled regulators. Judge Jane Halprin added however that the allegations "are extremely serious charges that reasonably warrant a thorough examination."
Tribune terminated the sale of 42 TV stations in 33 markets to Sinclair, which has 192 stations, in August. A month earlier the FCC referred the deal for a hearing, questioning Sinclair’s candor over the planned sale of some stations and suggesting Sinclair would effectively retain control over them.
The collapse of the deal, which was backed by U.S. President Donald Trump, potentially ended Sinclair’s hopes of building a national conservative-leaning TV powerhouse that might have rivaled Twenty-First Century Fox Inc’s Fox News.
Sinclair in March said it continues "to maintain that we were completely candid, transparent and honest with the FCC during its review of our proposed acquisition of Tribune Media."
Andrew Schwartzman, a law professor at Georgetown University, said the FCC could have waited to address the issues when Sinclair's licenses were up for renewal, but said the inquiry was "inevitable" given the FCC's prior findings.
After the deal collapsed, the FCC’s Enforcement Bureau said it did not oppose dismissal of the hearing proceeding.
Nexstar Media Group Inc said in December it will buy Tribune in a $4.1 billion deal that would make it the largest regional U.S. TV station operator. The deal is still under review by the Justice Department and the FCC.
Democrats accused Sinclair of slanting news coverage in favor of Republicans. Trump last year criticized the Republican-led FCC for not approving the Tribune deal, saying on Twitter it "would have been a great and much needed Conservative voice for and of the People."
In 2017, the FCC said it was fining Sinclair $13.38 million after it failed to properly disclose that paid programming that aired on local TV stations was sponsored by a cancer institute.
In the latest inquiry, Sinclair could face new fines.
In May, Walt Disney Co said it would sell its interests in 21 regional sports networks and Fox College Sports to Sinclair for $9.6 billion.
(Reporting by David Shepardson; Editing by Stephen Coates) |
Are Cargotec Corporation (HEL:CGCBV) Investors Paying Above The Intrinsic Value?
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Today we will run through one way of estimating the intrinsic value of Cargotec Corporation (HEL:CGCBV) by taking the expected future cash flows and discounting them to their present value. I will use the Discounted Cash Flow (DCF) model. It may sound complicated, but actually it is quite simple!
We generally believe that a company's value is the present value of all of the cash it will generate in the future. However, a DCF is just one valuation metric among many, and it is not without flaws. Anyone interested in learning a bit more about intrinsic value should have a read of theSimply Wall St analysis model.
See our latest analysis for Cargotec
We're using the 2-stage growth model, which simply means we take in account two stages of company's growth. In the initial period the company may have a higher growth rate and the second stage is usually assumed to have a stable growth rate. To begin with, we have to get estimates of the next ten years of cash flows. Where possible we use analyst estimates, but when these aren't available we extrapolate the previous free cash flow (FCF) from the last estimate or reported value. We assume companies with shrinking free cash flow will slow their rate of shrinkage, and that companies with growing free cash flow will see their growth rate slow, over this period. We do this to reflect that growth tends to slow more in the early years than it does in later years.
A DCF is all about the idea that a dollar in the future is less valuable than a dollar today, so we discount the value of these future cash flows to their estimated value in today's dollars:
[{"": "Levered FCF (\u20ac, Millions)", "2019": "\u20ac223.50", "2020": "\u20ac216.25", "2021": "\u20ac215.50", "2022": "\u20ac137.00", "2023": "\u20ac134.00", "2024": "\u20ac132.14", "2025": "\u20ac131.07", "2026": "\u20ac130.54", "2027": "\u20ac130.38", "2028": "\u20ac130.48"}, {"": "Growth Rate Estimate Source", "2019": "Analyst x2", "2020": "Analyst x4", "2021": "Analyst x4", "2022": "Analyst x1", "2023": "Analyst x1", "2024": "Est @ -1.39%", "2025": "Est @ -0.81%", "2026": "Est @ -0.41%", "2027": "Est @ -0.12%", "2028": "Est @ 0.08%"}, {"": "Present Value (\u20ac, Millions) Discounted @ 9.21%", "2019": "\u20ac204.66", "2020": "\u20ac181.32", "2021": "\u20ac165.46", "2022": "\u20ac96.32", "2023": "\u20ac86.27", "2024": "\u20ac77.90", "2025": "\u20ac70.75", "2026": "\u20ac64.52", "2027": "\u20ac59.01", "2028": "\u20ac54.08"}]
Present Value of 10-year Cash Flow (PVCF)= €1.06b
"Est" = FCF growth rate estimated by Simply Wall St
After calculating the present value of future cash flows in the intial 10-year period, we need to calculate the Terminal Value, which accounts for all future cash flows beyond the first stage. The Gordon Growth formula is used to calculate Terminal Value at a future annual growth rate equal to the 10-year government bond rate of 0.5%. We discount the terminal cash flows to today's value at a cost of equity of 9.2%.
Terminal Value (TV)= FCF2029× (1 + g) ÷ (r – g) = €130m × (1 + 0.5%) ÷ (9.2% – 0.5%) = €1.5b
Present Value of Terminal Value (PVTV)= TV / (1 + r)10= €€1.5b ÷ ( 1 + 9.2%)10= €627.30m
The total value is the sum of cash flows for the next ten years plus the discounted terminal value, which results in the Total Equity Value, which in this case is €1.69b. In the final step we divide the equity value by the number of shares outstanding.This results in an intrinsic value estimate of €26.2. Relative to the current share price of €32.96, the company appears slightly overvalued at the time of writing. The assumptions in any calculation have a big impact on the valuation, so it is better to view this as a rough estimate, not precise down to the last cent.
We would point out that the most important inputs to a discounted cash flow are the discount rate and of course the actual cash flows. If you don't agree with these result, have a go at the calculation yourself and play with the assumptions. The DCF also does not consider the possible cyclicality of an industry, or a company's future capital requirements, so it does not give a full picture of a company's potential performance. Given that we are looking at Cargotec as potential shareholders, the cost of equity is used as the discount rate, rather than the cost of capital (or weighted average cost of capital, WACC) which accounts for debt. In this calculation we've used 9.2%, which is based on a levered beta of 1.331. Beta is a measure of a stock's volatility, compared to the market as a whole. We get our beta from the industry average beta of globally comparable companies, with an imposed limit between 0.8 and 2.0, which is a reasonable range for a stable business.
Valuation is only one side of the coin in terms of building your investment thesis, and it shouldn’t be the only metric you look at when researching a company. The DCF model is not a perfect stock valuation tool. Rather it should be seen as a guide to "what assumptions need to be true for this stock to be under/overvalued?" If a company grows at a different rate, or if its cost of equity or risk free rate changes sharply, the output can look very different. What is the reason for the share price to differ from the intrinsic value? For Cargotec, I've compiled three important factors you should further examine:
1. Financial Health: Does CGCBV have a healthy balance sheet? Take a look at ourfree balance sheet analysis with six simple checkson key factors like leverage and risk.
2. Future Earnings: How does CGCBV's growth rate compare to its peers and the wider market? Dig deeper into the analyst consensus number for the upcoming years by interacting with ourfree analyst growth expectation chart.
3. Other High Quality Alternatives: Are there other high quality stocks you could be holding instead of CGCBV? Exploreour interactive list of high quality stocksto get an idea of what else is out there you may be missing!
PS. The Simply Wall St app conducts a discounted cash flow valuation for every stock on the HEL every day. If you want to find the calculation for other stocks justsearch here.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
Are Cargotec Corporation (HEL:CGCBV) Investors Paying Above The Intrinsic Value?
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Today we'll do a simple run through of a valuation method used to estimate the attractiveness of Cargotec Corporation (HEL:CGCBV) as an investment opportunity by projecting its future cash flows and then discounting them to today's value. This is done using the Discounted Cash Flow (DCF) model. Don't get put off by the jargon, the math behind it is actually quite straightforward.
Remember though, that there are many ways to estimate a company's value, and a DCF is just one method. If you want to learn more about discounted cash flow, the rationale behind this calculation can be read in detail in theSimply Wall St analysis model.
View our latest analysis for Cargotec
We are going to use a two-stage DCF model, which, as the name states, takes into account two stages of growth. The first stage is generally a higher growth period which levels off heading towards the terminal value, captured in the second 'steady growth' period. To start off with, we need to estimate the next ten years of cash flows. Where possible we use analyst estimates, but when these aren't available we extrapolate the previous free cash flow (FCF) from the last estimate or reported value. We assume companies with shrinking free cash flow will slow their rate of shrinkage, and that companies with growing free cash flow will see their growth rate slow, over this period. We do this to reflect that growth tends to slow more in the early years than it does in later years.
Generally we assume that a dollar today is more valuable than a dollar in the future, so we need to discount the sum of these future cash flows to arrive at a present value estimate:
[{"": "Levered FCF (\u20ac, Millions)", "2019": "\u20ac223.50", "2020": "\u20ac216.25", "2021": "\u20ac215.50", "2022": "\u20ac137.00", "2023": "\u20ac134.00", "2024": "\u20ac132.14", "2025": "\u20ac131.07", "2026": "\u20ac130.54", "2027": "\u20ac130.38", "2028": "\u20ac130.48"}, {"": "Growth Rate Estimate Source", "2019": "Analyst x2", "2020": "Analyst x4", "2021": "Analyst x4", "2022": "Analyst x1", "2023": "Analyst x1", "2024": "Est @ -1.39%", "2025": "Est @ -0.81%", "2026": "Est @ -0.41%", "2027": "Est @ -0.12%", "2028": "Est @ 0.08%"}, {"": "Present Value (\u20ac, Millions) Discounted @ 9.21%", "2019": "\u20ac204.66", "2020": "\u20ac181.32", "2021": "\u20ac165.46", "2022": "\u20ac96.32", "2023": "\u20ac86.27", "2024": "\u20ac77.90", "2025": "\u20ac70.75", "2026": "\u20ac64.52", "2027": "\u20ac59.01", "2028": "\u20ac54.08"}]
Present Value of 10-year Cash Flow (PVCF)= €1.06b
"Est" = FCF growth rate estimated by Simply Wall St
The second stage is also known as Terminal Value, this is the business's cash flow after the first stage. For a number of reasons a very conservative growth rate is used that cannot exceed that of a country's GDP growth. In this case we have used the 10-year government bond rate (0.5%) to estimate future growth. In the same way as with the 10-year 'growth' period, we discount future cash flows to today's value, using a cost of equity of 9.2%.
Terminal Value (TV)= FCF2029× (1 + g) ÷ (r – g) = €130m × (1 + 0.5%) ÷ (9.2% – 0.5%) = €1.5b
Present Value of Terminal Value (PVTV)= TV / (1 + r)10= €€1.5b ÷ ( 1 + 9.2%)10= €627.30m
The total value is the sum of cash flows for the next ten years plus the discounted terminal value, which results in the Total Equity Value, which in this case is €1.69b. The last step is to then divide the equity value by the number of shares outstanding.This results in an intrinsic value estimate of €26.2. Relative to the current share price of €32.96, the company appears slightly overvalued at the time of writing. Valuations are imprecise instruments though, rather like a telescope - move a few degrees and end up in a different galaxy. Do keep this in mind.
We would point out that the most important inputs to a discounted cash flow are the discount rate and of course the actual cash flows. If you don't agree with these result, have a go at the calculation yourself and play with the assumptions. The DCF also does not consider the possible cyclicality of an industry, or a company's future capital requirements, so it does not give a full picture of a company's potential performance. Given that we are looking at Cargotec as potential shareholders, the cost of equity is used as the discount rate, rather than the cost of capital (or weighted average cost of capital, WACC) which accounts for debt. In this calculation we've used 9.2%, which is based on a levered beta of 1.331. Beta is a measure of a stock's volatility, compared to the market as a whole. We get our beta from the industry average beta of globally comparable companies, with an imposed limit between 0.8 and 2.0, which is a reasonable range for a stable business.
Whilst important, DCF calculation shouldn’t be the only metric you look at when researching a company. The DCF model is not a perfect stock valuation tool. Rather it should be seen as a guide to "what assumptions need to be true for this stock to be under/overvalued?" If a company grows at a different rate, or if its cost of equity or risk free rate changes sharply, the output can look very different. What is the reason for the share price to differ from the intrinsic value? For Cargotec, I've compiled three further factors you should look at:
1. Financial Health: Does CGCBV have a healthy balance sheet? Take a look at ourfree balance sheet analysis with six simple checkson key factors like leverage and risk.
2. Future Earnings: How does CGCBV's growth rate compare to its peers and the wider market? Dig deeper into the analyst consensus number for the upcoming years by interacting with ourfree analyst growth expectation chart.
3. Other High Quality Alternatives: Are there other high quality stocks you could be holding instead of CGCBV? Exploreour interactive list of high quality stocksto get an idea of what else is out there you may be missing!
PS. Simply Wall St updates its DCF calculation for every FI stock every day, so if you want to find the intrinsic value of any other stock justsearch here.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
Is There Now An Opportunity In Cargotec Corporation (HEL:CGCBV)?
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Cargotec Corporation (HEL:CGCBV), which is in the machinery business, and is based in Finland, saw a decent share price growth in the teens level on the HLSE over the last few months. With many analysts covering the mid-cap stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. But what if there is still an opportunity to buy? Today I will analyse the most recent data on Cargotec’s outlook and valuation to see if the opportunity still exists.
See our latest analysis for Cargotec
According to my valuation model, the stock is currently overvalued by about 25.79%, trading at €32.96 compared to my intrinsic value of €26.2. This means that the opportunity to buy Cargotec at a good price has disappeared! But, is there another opportunity to buy low in the future? Since Cargotec’s share price is quite volatile, this could mean it can sink lower (or rise even further) in the future, giving us another chance to invest. 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. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company's future expectations. Cargotec’s earnings over the next few years are expected to double, indicating a very optimistic future ahead. This should lead to stronger cash flows, feeding into a higher share value.
Are you a shareholder?CGCBV’s optimistic future growth appears to have been factored into the current share price, with shares trading above its fair value. At this current price, shareholders may be asking a different question – should I sell? If you believe CGCBV should trade below its current price, selling high and buying it back up again when its price falls towards its real value can be profitable. But before you make this decision, take a look at whether its fundamentals have changed.
Are you a potential investor?If you’ve been keeping an eye on CGCBV for a while, now may not be the best time to enter into the stock. The price has surpassed its true value, which means there’s no upside from mispricing. However, the optimistic prospect is encouraging for CGCBV, which means it’s worth diving deeper into other factors in order to take advantage of the next price drop.
Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on Cargotec. You can find everything you need to know about Cargotec inthe latest infographic research report. If you are no longer interested in Cargotec, 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. |
Should Ahimsa Industries (NSE:AHIMSA) Be Disappointed With Their 55% Profit?
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These days it's easy to simply buy an index fund, and your returns should (roughly) match the market. But one can do better than that by picking better than average stocks (as part of a diversified portfolio). For example, theAhimsa Industries Limited(NSE:AHIMSA) share price is up 55% in the last year, clearly besting than the market return of around 1.6% (not including dividends). That's a solid performance by our standards! We'll need to follow Ahimsa Industries for a while to get a better sense of its share price trend, since it hasn't been listed for particularly long.
Check out our latest analysis for Ahimsa Industries
We don't think that Ahimsa Industries's modest trailing twelve month profit has the market's full attention at the moment. We think revenue is probably a better guide. Generally speaking, we'd consider a stock like this alongside loss-making companies, simply because the quantum of the profit is so low. It would be hard to believe in a more profitable future without growing revenues.
In the last year Ahimsa Industries saw its revenue shrink by 60%. The stock is up 55% in that time, a fine performance given the revenue drop. We can correlate the share price rise with revenue or profit growth, but it seems the market had previously expected weaker results, and sentiment around the stock is improving.
The graphic below depicts how earnings and revenue have changed over time (unveil the exact values by clicking on the image).
You can see how its balance sheet has strengthened (or weakened) over time in thisfreeinteractive graphic.
Ahimsa Industries shareholders should be happy with thetotalgain of 55% over the last twelve months. A substantial portion of that gain has come in the last three months, with the stock up 29% in that time. Demand for the stock from multiple parties is pushing the price higher; it could be that word is getting out about its virtues as a business. Is Ahimsa Industries cheap compared to other companies? These3 valuation measuresmight help you decide.
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 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. |
Democrats debate ‘who is this economy really working for?’
Democratic presidential candidates took the stage for their first televised debate Wednesday night in Miami, and for part of the two hours, focused on the millions of Americans who have not been enriched by stock market highs and an economy not boosting all.
Right off the bat, the 10 candidates weighed in one of the central issues in the U.S. –income inequality; 10% of the wealthiest households in the U.S. own 60% of the wealth. They also revealed their disagreements over how the health care system should be set up.
Sen. Amy Klobuchar of Minnesota was the first to call out President Trump by name at the debate. “We know that not everyone is sharing in this prosperity,” she said. “And Donald Trump just sits in the White House and gloats about what’s going on, when you have so many people that are having trouble affording college and having trouble affording their premiums.”
Massachusetts Sen. Elizabeth Warren, who has advocated for the breakup of big corporations like Amazon, Google, and Apple, blamed a flawed structural system for income inequality.
“Who is this economy really working for? It's doing great for a thinner and thinner slice at the top,” Warren said. “It's doing great for giant drug companies. It's just not doing great for people who are trying to get a prescription filled.”
She went on: “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,” and advocated for “structural change in our government, in our economy, and in our country.”
Sen. Cory Booker of New Jersey pointed out that key economic indicators that economists use to measure the strength of the economy such as GDP falls short of acknowledging the financial challenges of everyday Americans. He highlighted the struggles faced by the African-American community.
[Read more about the 2020 presidential candidates]
“I live in a low-income black and brown community. I see every single day that this economy is not working for average Americans,” Booker said. “The indicators that are being used, from GDP to Wall Street’s rankings, is not helping people in my community. It is about time that we have an economy that works for everybody, not just the wealthiest in our nation.”
‘Rigged’ economy
Beto O’Rourke, former Texas congressman, criticized Trump’s signature 2017 tax cuts and advocated for higher corporate taxes.
“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 to 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.” O’Rourke said he would raise the corporate tax rate to 28%.
New York City Mayor Bill De Blasio who is advocating for a 70 percent tax rate on the wealthy pointed out that there’s plenty of money in America, but that according to him, it’s just in the wrong hands.
Former Maryland Congressman John Delaney attempted to differentiate himself from other candidates on stage and pointed to his experience of creating jobs as an entrepreneur. He pushed for raising the minimum wage. Washington Gov. Jay Inslee advocated for more jobs in green energy, saying climate change would be his top priority.
The second debate Thursday night will feature 10 more Democratic candidates.
Follow Sibile Marcellus on@SibileTV
More from Sibile:
Here’s what graduates regret the most about college
Women are about to reach a new workplace milestone
Southern states that voted for Trump see lower incomes than rest of U.S.
Trump is to blame for strong dollar, not the Fed: Economist
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Why We’re Not Impressed By Ahimsa Industries Limited’s (NSE:AHIMSA) 7.0% 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 are going to look at Ahimsa Industries Limited ( NSE:AHIMSA ) to see whether it might be an attractive investment prospect. Specifically, we're going to calculate its Return On Capital Employed (ROCE), in the hopes of getting some insight into the business. First of all, we'll work out how to calculate ROCE. Then we'll compare its ROCE to similar companies. Finally, we'll look at how its current liabilities affect its ROCE. Return On Capital Employed (ROCE): What is it? ROCE measures the 'return' (pre-tax profit) a company generates from capital employed in its business. In general, businesses with a higher ROCE are usually better quality. Overall, it is a valuable metric that has its flaws. Author Edwin Whiting says to be careful when comparing the ROCE of different businesses, since 'No two businesses are exactly alike.' So, How Do We Calculate ROCE? 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 Ahimsa Industries: 0.07 = ₹11m ÷ (₹349m - ₹196m) (Based on the trailing twelve months to March 2019.) So, Ahimsa Industries has an ROCE of 7.0%. Check out our latest analysis for Ahimsa Industries Does Ahimsa Industries Have A Good ROCE? One way to assess ROCE is to compare similar companies. In this analysis, Ahimsa Industries's ROCE appears meaningfully below the 17% average reported by the Chemicals industry. This performance is not ideal, as it suggests the company may not be deploying its capital as effectively as some competitors. Putting aside Ahimsa Industries's performance relative to its industry, its ROCE in absolute terms is poor - considering the risk of owning stocks compared to government bonds. There are potentially more appealing investments elsewhere. Story continues Ahimsa Industries's current ROCE of 7.0% is lower than 3 years ago, when the company reported a 23% ROCE. So investors might consider if it has had issues recently. You can see in the image below how Ahimsa Industries's ROCE compares to its industry. Click to see more on past growth. NSEI:AHIMSA Past Revenue and Net Income, June 27th 2019 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 Ahimsa Industries is cyclical, it could make sense to check out this free graph of past earnings, revenue and cash flow . How Ahimsa Industries's Current Liabilities Impact Its ROCE Liabilities, such as supplier bills and bank overdrafts, are referred to as current liabilities if they need to be paid within 12 months. Due to the way the ROCE equation works, having large bills due in the near term can make it look as though a company has less capital employed, and thus a higher ROCE than usual. To counter this, investors can check if a company has high current liabilities relative to total assets. Ahimsa Industries has total liabilities of ₹196m and total assets of ₹349m. As a result, its current liabilities are equal to approximately 56% of its total assets. Current liabilities of this level result in a meaningful boost to Ahimsa Industries's ROCE. Our Take On Ahimsa Industries's ROCE Ahimsa Industries's ROCE is also pretty low (in absolute terms), making the stock look unattractive on this analysis. You might be able to find a better investment than Ahimsa Industries. If you want a selection of possible winners, check out this free list of interesting companies that trade on a P/E below 20 (but have proven they can grow earnings). If you like to buy stocks alongside management, then you might just love this free list 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 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. |
Japan Display to receive $100 million investment from Apple as part of bailout deal
By Makiko Yamazaki
TOKYO (Reuters) - Japan Display Inc <6740.T> said on Friday it would receive a $100 million investment from a customer, which a source said was Apple Inc <AAPL.O>, as part of a bailout deal led by a Chinese investment firm for the smartphone screen maker.
Japan Display is facing a funding crunch due to Apple's recent shift away from liquid-crystal displays (LCDs) and disappointing sales of the iPhone XR, the only LCD model in Apple's 2018 line-up.
Apple, which accounted for 60.6% of Japan Display's revenue in the last financial year ended March, will join a consortium led by China's Harvest Group in investing up to 80 billion yen ($743 million), said a person briefed on the matter.
Apple declined to comment.
Japan Display said in a statement Harvest had formalized its decision to inject nearly $500 million, including the $100 million investment from the unidentified customer.
In a separate statement later on Friday, the Japanese company said another consortium member, Hong Kong-based activist investor Oasis Management, has decided to invest $150 million to $180 million. The investment is dependent on conditions including no major cuts in orders from a main customer.
The total investment from Harvest, Apple and Oasis will be still short of Japan Display's $743 million target. The company said it is in talks with other potential investors to join the deal.
The Asahi newspaper first reported on Apple's planned investment on Thursday, sending Japan Display shares up as much as 32%. On Friday, the stock was flat.
Japan Display had been pursuing a bailout deal with a Chinese-Taiwanese consortium, but the suitors repeatedly delayed making a formal decision in order to reassess the company's prospects.
Taiwanese screen maker TPK Holding Co Ltd <3673.TW> and financial firm CGL Group dropped out of the process earlier this month.
Japan Display owes Apple over $900 million for the $1.5 billion cost of building a smartphone screen plant four years ago.
To help stabilize Japan Display's finances, Apple has agreed to slow the pace of repayment for two years and to consider increasing orders from Japan Display.
The U.S. tech giant will also procure some organic light-emitting diode (OLED) screens from Japan Display for the Apple Watch later this year.
Japan Display was formed in 2012 by combining the liquid-crystal display businesses of Hitachi Ltd <6501.T>, Toshiba Corp <6502.T> and Sony Corp <6758.T> in a government-brokered deal.
($1 = 107.6700 yen)
(Reporting by Makiko Yamazaki and Kevin Buckland; Additional reporting by Stephen Nellis in San Francisco; Editing by Mark Potter and Christopher Cushing) |
Should Agro Phos (India) Limited (NSE:AGROPHOS) Focus On Improving This Fundamental Metric?
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Many investors are still learning about the various metrics that can be useful when analysing a stock. This article is for those who would like to learn about Return On Equity (ROE). By way of learning-by-doing, we'll look at ROE to gain a better understanding of Agro Phos (India) Limited (NSE:AGROPHOS).
Agro Phos (India) has a ROE of 2.4%, based on the last twelve months. That means that for every ₹1 worth of shareholders' equity, it generated ₹0.024 in profit.
See our latest analysis for Agro Phos (India)
Theformula for ROEis:
Return on Equity = Net Profit ÷ Shareholders' Equity
Or for Agro Phos (India):
2.4% = ₹8.3m ÷ ₹347m (Based on the trailing twelve months to March 2019.)
Most readers would understand what net profit is, but it’s worth explaining the concept of shareholders’ equity. It is all earnings retained by the company, plus any capital paid in by shareholders. 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. A higher profit will lead to a higher ROE. So, all else being equal,a high ROE is better than a low one. That means ROE can be used to compare two businesses.
By comparing a company's ROE with its industry average, we can get a quick measure of how good it is. However, this method is only useful as a rough check, because companies do differ quite a bit within the same industry classification. If you look at the image below, you can see Agro Phos (India) has a lower ROE than the average (13%) in the Chemicals 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 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. That will make the ROE look better than if no debt was used.
Agro Phos (India) has a debt to equity ratio of 0.55, which is far from excessive. Its ROE is rather low, and it does use some debt, albeit not much. That's not great to see. 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. All else being equal, a higher ROE is better.
Having said that, while ROE is a useful indicator of business quality, you'll have to look at a whole range of factors to determine the right price to buy a stock. Profit growth rates, versus the expectations reflected in the price of the stock, are a particularly important to consider. Check the past profit growth by Agro Phos (India) by looking at thisvisualization of past earnings, revenue and cash flow.
But note:Agro Phos (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. |
Tele2 (STO:TEL2 B) Shareholders Have Enjoyed A 88% Share Price Gain
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By buying an index fund, investors can approximate the average market return. But many of us dare to dream of bigger returns, and build a portfolio ourselves. For example,Tele2 AB (publ)(STO:TEL2 B) shareholders have seen the share price rise 88% over three years, well in excess of the market return (19%, not including dividends). However, more recent returns haven't been as impressive as that, with the stock returning just 24% in the last year, including dividends.
Check out our latest analysis for Tele2
While the efficient markets hypothesis continues to be taught by some, it has been proven that markets are over-reactive dynamic systems, and investors are not always rational. One flawed but reasonable way to assess how sentiment around a company has changed is to compare the earnings per share (EPS) with the share price.
Tele2 was able to grow its EPS at 3.8% per year over three years, sending the share price higher. This EPS growth is lower than the 23% average annual increase in the share price. This suggests that, as the business progressed over the last few years, it gained the confidence of market participants. That's not necessarily surprising considering the three-year track record of earnings growth. This optimism is also reflected in the fairly generous P/E ratio of 49.44.
The image below shows how EPS has tracked over time (if you click on the image you can see greater detail).
It's good to see that there was some significant insider buying in the last three months. That's a positive. On the other hand, we think the revenue and earnings trends are much more meaningful measures of the business. It might be well worthwhile taking a look at ourfreereport on Tele2's earnings, revenue and cash flow.
It is important to consider the total shareholder return, as well as the share price return, for any given stock. The TSR is a return calculation that accounts for the value of cash dividends (assuming that any dividend received was reinvested) and the calculated value of any discounted capital raisings and spin-offs. So for companies that pay a generous dividend, the TSR is often a lot higher than the share price return. In the case of Tele2, it has a TSR of 118% for the last 3 years. That exceeds its share price return that we previously mentioned. This is largely a result of its dividend payments!
It's good to see that Tele2 has rewarded shareholders with a total shareholder return of 24% in the last twelve months. That's including the dividend. That's better than the annualised return of 19% over half a decade, implying that the company is doing better recently. Someone with an optimistic perspective could view the recent improvement in TSR as indicating that the business itself is getting better with time. Investors who like to make money usually check up on insider purchases, such as the price paid, and total amount bought.You can find out about the insider purchases of Tele2 by clicking this link.
Tele2 is not the only stock insiders are buying. So take a peek at thisfreelist of growing companies with insider buying.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on SE exchanges.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
Is Tele2 AB (publ) (STO:TEL2 B) A Financially Sound Company?
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Small-caps and large-caps are wildly popular among investors; however, mid-cap stocks, such as Tele2 AB (publ) (STO:TEL2 B) with a market-capitalization of kr92b, rarely draw their attention. Surprisingly though, when accounted for risk, mid-caps have delivered better returns compared to the two other categories of stocks. TEL2 B’s financial liquidity and debt position will be analysed in this article, to get an idea of whether the company can fund opportunities for strategic growth and maintain strength through economic downturns. Note that this information is centred entirely on financial health and is a top-level understanding, so I encourage you to look furtherinto TEL2 B here.
Check out our latest analysis for Tele2
TEL2 B has built up its total debt levels in the last twelve months, from kr11b to kr32b , which includes long-term debt. With this increase in debt, the current cash and short-term investment levels stands at kr916m to keep the business going. On top of this, TEL2 B has produced kr6.7b in operating cash flow during the same period of time, resulting in an operating cash to total debt ratio of 21%, meaning that TEL2 B’s current level of operating cash is high enough to cover debt.
Looking at TEL2 B’s kr15b in current liabilities, the company may not be able to easily meet these obligations given the level of current assets of kr13b, with a current ratio of 0.86x. The current ratio is the number you get when you divide current assets by current liabilities.
With a debt-to-equity ratio of 70%, TEL2 B can be considered as an above-average leveraged company. This is not unusual for mid-caps as debt tends to be a cheaper and faster source of funding for some businesses. No matter how high the company’s debt, if it can easily cover the interest payments, it’s considered to be efficient with its use of excess leverage. A company generating earnings after interest and tax at least three times its net interest payments is considered financially sound. In TEL2 B's case, the ratio of 13.32x suggests that interest is comfortably covered, which means that lenders may be inclined to lend more money to the company, as it is seen as safe in terms of payback.
TEL2 B’s high cash coverage means that, although its debt levels are high, the company is able to utilise its borrowings efficiently in order to generate cash flow. Though its lack of liquidity raises questions over current asset management practices for the mid-cap. Keep in mind I haven't considered other factors such as how TEL2 B has been performing in the past. I recommend you continue to research Tele2 to get a more holistic view of the stock by looking at:
1. Future Outlook: What are well-informed industry analysts predicting for TEL2 B’s future growth? Take a look at ourfree research report of analyst consensusfor TEL2 B’s outlook.
2. Valuation: What is TEL2 B 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 TEL2 B 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. |
Estimating The Fair Value Of IT Link SA (EPA:ITL)
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Does the June share price for IT Link SA (EPA:ITL) reflect what it's really worth? Today, we will estimate the stock's intrinsic value by taking the expected future cash flows and discounting them to today's value. This is done using the Discounted Cash Flow (DCF) model. It may sound complicated, but actually it is quite simple!
Remember though, that there are many ways to estimate a company's value, and a DCF is just one method. Anyone interested in learning a bit more about intrinsic value should have a read of theSimply Wall St analysis model.
See our latest analysis for IT Link
We're using the 2-stage growth model, which simply means we take in account two stages of company's growth. In the initial period the company may have a higher growth rate and the second stage is usually assumed to have a stable growth rate. To begin with, we have to get estimates of the next ten years of cash flows. Where possible we use analyst estimates, but when these aren't available we extrapolate the previous free cash flow (FCF) from the last estimate or reported value. We assume companies with shrinking free cash flow will slow their rate of shrinkage, and that companies with growing free cash flow will see their growth rate slow, over this period. We do this to reflect that growth tends to slow more in the early years than it does in later years.
Generally we assume that a dollar today is more valuable than a dollar in the future, so we discount the value of these future cash flows to their estimated value in today's dollars:
[{"": "Levered FCF (\u20ac, Millions)", "2019": "\u20ac2.40", "2020": "\u20ac2.20", "2021": "\u20ac2.00", "2022": "\u20ac1.87", "2023": "\u20ac1.79", "2024": "\u20ac1.74", "2025": "\u20ac1.71", "2026": "\u20ac1.69", "2027": "\u20ac1.69", "2028": "\u20ac1.68"}, {"": "Growth Rate Estimate Source", "2019": "Analyst x1", "2020": "Analyst x1", "2021": "Analyst x1", "2022": "Est @ -6.45%", "2023": "Est @ -4.3%", "2024": "Est @ -2.79%", "2025": "Est @ -1.73%", "2026": "Est @ -0.99%", "2027": "Est @ -0.47%", "2028": "Est @ -0.11%"}, {"": "Present Value (\u20ac, Millions) Discounted @ 8.84%", "2019": "\u20ac2.21", "2020": "\u20ac1.86", "2021": "\u20ac1.55", "2022": "\u20ac1.33", "2023": "\u20ac1.17", "2024": "\u20ac1.05", "2025": "\u20ac0.95", "2026": "\u20ac0.86", "2027": "\u20ac0.79", "2028": "\u20ac0.72"}]
Present Value of 10-year Cash Flow (PVCF)= €12.48m
"Est" = FCF growth rate estimated by Simply Wall St
The second stage is also known as Terminal Value, this is the business's cash flow after the first stage. For a number of reasons a very conservative growth rate is used that cannot exceed that of a country's GDP growth. In this case we have used the 10-year government bond rate (0.7%) to estimate future growth. In the same way as with the 10-year 'growth' period, we discount future cash flows to today's value, using a cost of equity of 8.8%.
Terminal Value (TV)= FCF2029× (1 + g) ÷ (r – g) = €1.7m × (1 + 0.7%) ÷ (8.8% – 0.7%) = €21m
Present Value of Terminal Value (PVTV)= TV / (1 + r)10= €€21m ÷ ( 1 + 8.8%)10= €8.98m
The total value is the sum of cash flows for the next ten years plus the discounted terminal value, which results in the Total Equity Value, which in this case is €21.46m. To get the intrinsic value per share, we divide this by the total number of shares outstanding.This results in an intrinsic value estimate of €13.19. Relative to the current share price of €13.8, the company appears around fair value at the time of writing. The assumptions in any calculation have a big impact on the valuation, so it is better to view this as a rough estimate, not precise down to the last cent.
Now the most important inputs to a discounted cash flow are the discount rate, and of course, the actual cash flows. You don't have to agree with these inputs, I recommend redoing the calculations yourself and playing with them. The DCF also does not consider the possible cyclicality of an industry, or a company's future capital requirements, so it does not give a full picture of a company's potential performance. Given that we are looking at IT Link as potential shareholders, the cost of equity is used as the discount rate, rather than the cost of capital (or weighted average cost of capital, WACC) which accounts for debt. In this calculation we've used 8.8%, which is based on a levered beta of 1.218. Beta is a measure of a stock's volatility, compared to the market as a whole. We get our beta from the industry average beta of globally comparable companies, with an imposed limit between 0.8 and 2.0, which is a reasonable range for a stable business.
Valuation is only one side of the coin in terms of building your investment thesis, and it shouldn’t be the only metric you look at when researching a company. The DCF model is not a perfect stock valuation tool. Rather it should be seen as a guide to "what assumptions need to be true for this stock to be under/overvalued?" If a company grows at a different rate, or if its cost of equity or risk free rate changes sharply, the output can look very different. For IT Link, There are three pertinent aspects you should further examine:
1. Financial Health: Does ITL have a healthy balance sheet? Take a look at ourfree balance sheet analysis with six simple checkson key factors like leverage and risk.
2. Future Earnings: How does ITL's growth rate compare to its peers and the wider market? Dig deeper into the analyst consensus number for the upcoming years by interacting with ourfree analyst growth expectation chart.
3. Other High Quality Alternatives: Are there other high quality stocks you could be holding instead of ITL? Exploreour interactive list of high quality stocksto get an idea of what else is out there you may be missing!
PS. The Simply Wall St app conducts a discounted cash flow valuation for every stock on the EPA every day. If you want to find the calculation for other stocks justsearch here.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
Money problems keep most Americans up, but here's how to sleep better
More than half of U.S. adults lose sleep because they are worried about money, but doctors say there are a few simple things you can do to get some shut-eye.
A new report fromBankratereleased Thursday found the biggest money stressor that keeps people awake at night is everyday expenses. “That’s alarming,” said Bankrate analyst Ted Rossman. “Because that’s just a basic need that a lot of people are struggling with.”
The report surveyed 2,504 adults and found 56% lose sleep over money-related stress and 32% cite worry about everyday expenses as the cause of an occasional bout of insomnia.
“We see this come up time and time again, there are just a lot of people that are very close to the edge living paycheck to paycheck,” Rossman said.
He points to last winter’s U.S. government shutdown as an example. Eight-hundred thousand federal employees stopped getting paychecks and asYahoo Finance reportedworried about some of the same issues covered in the new Bankrate survey. Among those issues are paying down credit card debt or keeping a roof over your head.
The Bankrate report found 18% of adults blame credit card debt for tossing and turning when they try to fall asleep. The same amount, 18%, worry about making a mortgage or rent payment. Worrying about educational expenses kept 11% of adults awake while 5% blamed stock market volatility.
Dr. Andrew Varga, MD, PhD, at Mt. Sinai Hospital’s Integrated Sleep Center in New York City said an occasional restless night is nothing to lose sleep over. “As a general rule of thumb if there is a life stressor that causes an issue for more than a month then this might be a chronic issue that warrants interventions,” he said.
Dr. Varga warns against changing your behavior when a sleepless night strikes. Watching TV or getting something to eat may seem like a good idea, but Varga said “These are things that you definitely should not be doing in the middle of the night” because over time they can become habits that prevent you from returning to a normal sleep pattern.
“For people who have insomnia keeping a rigid schedule is useful,” he said. “You should have a pretty dedicated bed time and a pretty dedicated wake time.”
If that doesn’t work, Varga recommends shortening the time you spend sleeping by either going to bed a little later or getting up a little earlier. “So the duration should be about seven hours or even less. I usually try to target something in the beginning that is between six and seven hours.”
Having a plan to tackle the financial issues that cause stress can also help, Rossman said, adding that cutting expenses may be easier for most people than getting a second job and trying to earn more money.
“There are a lot of people paying $500 a month on new car payments. Could they drive a cheaper used car instead and bank the savings?” said Rossman. That may help alleviate the stress over saving for retirement, an issue that kept 24% of adults awake at night.
It isn’t about eliminating fun from your life, Rossman said, but finding a way to do things less expensively. “The nice thing about cutting on recurring expenses is that it has that 12-times benefit, it helps you each and every month,” he said. It also makes tackling other issues something you can sleep on.
Adam Shapiro is co-anchor of Yahoo Finance On the Move.
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Was Schneider Electric S.E.'s (EPA:SU) Earnings Growth Better Than The Industry's?
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Assessing Schneider Electric S.E.'s (EPA:SU) past track record of performance is a valuable exercise for investors. It enables us to reflect on whether the company has met or exceed expectations, which is a great indicator for future performance. Today I will assess SU's recent performance announced on 31 December 2018 and evaluate these figures to its longer term trend and industry movements.
Check out our latest analysis for Schneider Electric
SU's trailing twelve-month earnings (from 31 December 2018) of €2.4b has increased by 5.0% compared to the previous year.
However, this one-year growth rate has been lower than its average earnings growth rate over the past 5 years of 6.8%, indicating the rate at which SU is growing has slowed down. What could be happening here? Well, let's examine what's going on with margins and whether the rest of the industry is facing the same headwind.
In terms of returns from investment, Schneider Electric has fallen short of achieving a 20% return on equity (ROE), recording 11% instead. Furthermore, its return on assets (ROA) of 6.0% is below the FR Electrical industry of 6.0%, indicating Schneider Electric's are utilized less efficiently. However, its return on capital (ROC), which also accounts for Schneider Electric’s debt level, has increased over the past 3 years from 10% to 11%. This correlates with a decrease in debt holding, with debt-to-equity ratio declining from 51% to 34% over the past 5 years.
Schneider Electric's track record can be a valuable insight into its earnings performance, but it certainly doesn't tell the whole story. Positive growth and profitability are what investors like to see in a company’s track record, but how do we properly assess sustainability? I recommend you continue to research Schneider Electric to get a better picture of the stock by looking at:
1. Future Outlook: What are well-informed industry analysts predicting for SU’s future growth? Take a look at ourfree research report of analyst consensusfor SU’s outlook.
2. Financial Health: Are SU’s operations financially sustainable? Balance sheets can be hard to analyze, which is why we’ve done it for you. Check out ourfinancial health checks here.
3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore ourfree list of these great stocks here.
NB: Figures in this article are calculated using data from the trailing twelve months from 31 December 2018. This may not be consistent with full year annual report figures.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
Interested In Schneider Electric S.E. (EPA:SU)? Here's What Its Recent Performance Looks Like
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For long term investors, improvement in profitability and outperformance against the industry can be important characteristics in a stock. In this article, I will take a look at Schneider Electric S.E.'s (EPA:SU) track record on a high level, to give you some insight into how the company has been performing against its historical trend and its industry peers.
See our latest analysis for Schneider Electric
SU's trailing twelve-month earnings (from 31 December 2018) of €2.4b has increased by 5.0% compared to the previous year.
However, this one-year growth rate has been lower than its average earnings growth rate over the past 5 years of 6.8%, indicating the rate at which SU is growing has slowed down. What could be happening here? Well, let’s take a look at what’s going on with margins and if the rest of the industry is facing the same headwind.
In terms of returns from investment, Schneider Electric has fallen short of achieving a 20% return on equity (ROE), recording 11% instead. Furthermore, its return on assets (ROA) of 6.0% is below the FR Electrical industry of 6.0%, indicating Schneider Electric's are utilized less efficiently. However, its return on capital (ROC), which also accounts for Schneider Electric’s debt level, has increased over the past 3 years from 10% to 11%. This correlates with a decrease in debt holding, with debt-to-equity ratio declining from 51% to 34% over the past 5 years.
Though Schneider Electric's past data is helpful, it is only one aspect of my investment thesis. Companies that have performed well in the past, such as Schneider Electric gives investors conviction. However, the next step would be to assess whether the future looks as optimistic. I recommend you continue to research Schneider Electric to get a more holistic view of the stock by looking at:
1. Future Outlook: What are well-informed industry analysts predicting for SU’s future growth? Take a look at ourfree research report of analyst consensusfor SU’s outlook.
2. Financial Health: Are SU’s operations financially sustainable? Balance sheets can be hard to analyze, which is why we’ve done it for you. Check out ourfinancial health checks here.
3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore ourfree list of these great stocks here.
NB: Figures in this article are calculated using data from the trailing twelve months from 31 December 2018. This may not be consistent with full year annual report figures.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
These Factors Make IT Link SA (EPA:ITL) An Interesting Investment
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Attractive stocks have exceptional fundamentals. In the case of IT Link SA (EPA:ITL), there's is a company that has been able to sustain great financial health, trading at an attractive share price. Below, I've touched on some key aspects you should know on a high level. If you're interested in understanding beyond my broad commentary, take a look at thereport on IT Link here.
ITL's strong financial health means that all of its upcoming liability payments are able to be met by its current cash and short-term investment holdings. This indicates that ITL has sufficient cash flows and proper cash management in place, which is an important determinant of the company’s health. ITL’s earnings amply cover its interest expense. Paying interest on time and in full can help the company get favourable debt terms in the future, leading to lower cost of debt and helps ITL expand. ITL's shares are now trading at a price below its true value based on its PE ratio of 16.63x, compared to the industry and wider stock market ratio, which means it is relatively cheaper than its peers.
For IT Link, there are three fundamental factors you should look at:
1. Future Outlook: What are well-informed industry analysts predicting for ITL’s future growth? Take a look at ourfree research report of analyst consensusfor ITL’s outlook.
2. Historical Performance: What has ITL's returns been like over the past? Go into more detail in the past track record analysis and take a look atthe free visual representations of our analysisfor more clarity.
3. Other Attractive Alternatives: Are there other well-rounded stocks you could be holding instead of ITL? 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. |
Warren Holds Her Own as Lesser-Knowns Step Up in First Debate
And they’re off.
Wednesday night’s inaugural Democratic debate for next year’s race for the White House was every bit as contentious and lively as pundits predicted, with the field of 10 candidates all touting their support for universal health care, immigrants’ rights, taxing corporations and reforming gun laws—while speaking at times in Spanish if the opportunity presented itself.
Night one of the 20-candidate event spread over two nights included candidates interrupting one another, interrupting moderators, sometimes insulting one another, or even complimenting their rivals occasionally. A technical glitch occurred midway through the two-hour event in Miami, as moderator Chuck Todd indicated he and fellow moderator Rachel Maddow were hearing the microphones of the moderators who’d handled the first hour. The issue prompted a break while debate organizers at the 2,200-seat Arsht Center for the Performing Arts repaired the audio.
The candidate spreads for Wednesday night and Thursday night in Miami were chosen at random by NBC, and U.S. Sen. Elizabeth Warren of Massachusetts fulfilled pundits’ predictions that she would perform well as the highest-polling candidate in her field of 10 on the stage. Warren carefully outlined various plans that all fell under the umbrella of paying attention to the little person, ending the trend of breaks to large corporations, and doing real research on national problems like gun violence.
“Just who is this economy working for?” asked Warren. “It’s doing great for a thinner and thinner slice at the top.”
As of Wednesday, Warren was polling as third from the top of Democratic candidates behind former Vice President Joe Biden and U.S. Sen. Bernie Sanders of Vermont.
Other standout performers of the night, who either dominated the anything-goes conversations or outlined solid plans were former U.S. Housing Secretary Julian Castro, U.S. Rep. Tim Ryan of Ohio, U.S. Sen. Cory Booker of New Jersey, U.S. Rep. Tulsi Gabbard and New York City Mayor Bill de Blasio.
Political observers agreed Warren won the debate but other lesser knowns successfully seized the opportunity to stand out, interjecting often with solid concepts.
“Many of them were quite strong tonight,” said Democratic strategist Rebecca Katz, who was watching from the audience in Miami. “I thought Warren won early on with her plans and folks had to react to things that she laid out. I thought Castro and maybe de Blasio did the best of breaking through a little bit and making folks interested in their candidacies.”
“If you had to name a winner, I think it was probably Elizabeth Warren simply because she had the clearest and most coherent sort of approach to everything that was asked,” political consultant Ed Kilgore said. “She never went over time, she never shouted, she never had to beg for attention.”
Over the course of the two hours, some verbal sparring over immigration became heated as Castro condemned Section 1325 of the U.S. Code that, he said, authorities have used to justify the separation of children at the U.S.-Mexico border from their families. And he attacked fellow Texan and Democratic candidate Beto O’Rourke, a former congressman, for not calling for the section’s repeal.
Booker, who frequently mentioned during the debate that he lives in inner city Newark, said such treatment of children happens not only at the border but in communities at the hands of U.S. Immigration and Customs Enforcement.
De Blasio said the images that surfaced this week of a Salvadoran father and daughter who drowned in the Rio Grande at the border should pull at the heart strings of every American. Anyone who thinks immigrants are to blame for hardships in their lives is engaging in faulty thinking, he said.
“The immigrants didn’t do that to you, the big corporations did that too you,” de Blasio said. “The one percent did that to you.”
Ryan made several impassioned mini speeches during the night—as long as the 60-second time limit for answers would allow—including one in which he lamented that U.S. inmates at Guantanamo Bay, Cuba, are treated better than immigrants detained at the border with Mexico.
“What kind of country are we running here when we have a president of the United States that’s so focused on hate and fear and vision?” Ryan asked.
Along with Maddow and Todd, Lester Holt and Savannah Guthrie of NBC News, and Jose Diaz-Balart of Telemundo and NBC News, also moderated.
The Democratic National Committee chose to spread the first debate over two nights because of the large number of candidates who qualified to take part based on number of donors and poll numbers. The highest-polling candidates—Warren and O’Rourke—were at center stage, while the lowest polling candidates—de Blasio and former U.S. Rep. John Delaney of Maryland—held up the ends.
The opening debate stood out not only for its energy, but also becausethree women were on the stage. U.S. Sen. Amy Klobuchar vowed she would never be influenced by big pharma and U.S. Rep. Tulsi Gabbard of Hawaii said her extensive military experience would serve the country well. At one point, when Washington state Gov. Jay Inslee touted his work supporting a woman’s right to abortion, Klobuchar interjected, “I just want to say there are three women up here who have fought pretty hard for a woman’s right to choose.”
Conversations on criminal justice, race, and gun control also summoned lots of emotion among the candidates with Booker saying seven people were shot in his neighborhood just last week and calling for more attention to harassment and murder of black trans Americans.
O’Rourke said the country needs to stop warehousing the mentally ill in prisons and those with mental challenges need access to the help and support they need.
Night two of the debates takes place at 9 p.m. E.T. Thursday with a lineup of 10 more candidates led by frontrunner Biden.
—4 times 2020 candidates clashed during theDemocratic debate
—5 things to watch for onnight 2of the Democratic presidential debate
—What the2020 Democratic candidates didn’t sayduring the first debate
—Julián Castrobreaks out in a debate defined by border policy and immigration
—Can socialism win in 2020?Democrats aren’t embracing it |
Trump, Dems clash over who is to blame for migrant deaths
WASHINGTON (AP) President Donald Trump and Democrats clashed Wednesday over who was to blame for the deaths of a migrant father and his daughter whose drowned bodies were seen in searing photos from the U.S.-Mexico border. "Watching that image of Oscar and his daughter Valeria was heartbreaking. It should also piss us all off," former Obama housing chief Julian Castro said during the first of two nights of Democratic presidential debates. "And it should spur us to action." Trump, when asked about the image, said, "I hate it." But he argued the deaths would not have happened without Democrats dragging their feet on congressional legislation to toughen security at the border. "I know it could stop immediately if the Democrats change the law. They have to change the laws. And then that father, who probably was this wonderful guy, with his daughter, things like that wouldn't happen." The photo of Oscar Alberto Martinez Ramirez and daughter Valeria, who were trying to cross into the U.S. after fleeing from El Salvador when they were swept into the Rio Grande, added an emotional punch to a debate at the center of the 2020 White House contest. Trump is campaigning on hard-line immigration policies aimed at reducing the flow of migrants coming to the U.S. policies Democrats have called inhumane. Castro, also a former San Antonio mayor, said that if elected, he'd use executive orders to immediately end the Trump administration's "zero tolerance" immigration policies, which briefly led to immigrant families being separated at the border. Other candidates made similar promises, and said they'd work with Congress to hammer out pathways to U.S. citizenship for millions of immigrants living in the country illegally especially those brought here as children. But there wasn't total agreement on immigration among the 10 presidential hopefuls on the debate stage. When former congressman Beto O'Rourke said "we will spare no expense to reunite families" that remain separated, Castro interrupted, demanding to know why his fellow Texan won't agree with him that crossing the U.S.-Mexico border illegally should be fully decriminalized. Story continues "I just think it's a mistake, Beto," Castro said, dismissing O'Rourke's concern that doing so could protect drug- and people-smugglers. "I think that you should do your homework on this issue." Wednesday's debate also featured a lot of Spanish, with O'Rourke speaking at length in the language during his first answer, and later getting and answering a question in it. New Jersey Sen. Cory Booker and Castro also spoke briefly in Spanish. Before the debate started, several Democratic candidates visited a detention facility for immigrant teenagers about 40 miles southwest of Miami, in Homestead, Florida. "There were children who were being marched like little soldiers, like little prisoners," said Massachusetts Sen. Elizabeth Warren, who wasn't allowed inside but was permitted to look over the fence. California Rep. Eric Swalwell and Sen. Amy Klobuchar of Minnesota also visited the facility. O'Rourke and Vermont Sen. Bernie Sanders are planning to go, as are Castro, Sens. Kamala Harris of California and Kirsten Gillibrand of New York, former Rep. John Delaney and Pete Buttigieg, the mayor of South Bend, Indiana. The Senate and House have approved separate legislation to provide funding for the care of migrants streaming into the U.S., but the bills have yet to be merged and the next step is unclear. Congressional leaders hope to send Trump a compromise measure before lawmakers leave town for a July 4 recess. Senate Minority Leader Chuck Schumer called Trump blaming Democrats "a disgrace," admonishing the president: "You are head of the Executive Branch. You control what's happening at the border." From the scorching Sonora desert to the at-times fast-moving Rio Grande, the U.S.-Mexico border can be perilous for those attempting to cross illegally. Two babies, a toddler and a woman were found dead on Sunday, overcome by heat. Elsewhere, three children and an adult from Honduras died in April after their raft capsized on the Rio Grande, and a 6-year-old from India was found dead earlier this month in Arizona. ___ Associated Press writers Alan Fram in Washington and Alexandra Jaffe in Miami contributed to this report. |
Examining eDreams ODIGEO S.A.’s (BME:EDR) Weak Return On Capital Employed
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Today we are going to look at eDreams ODIGEO S.A. (BME:EDR) 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.
First of all, we'll work out how to calculate ROCE. Next, we'll compare it to others in its industry. Then we'll determine how its current liabilities are affecting its ROCE.
ROCE is a 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. Overall, it is a valuable metric that has its flaws. 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'.
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 eDreams ODIGEO:
0.10 = €90m ÷ (€1.3b - €403m) (Based on the trailing twelve months to March 2019.)
Therefore,eDreams ODIGEO has an ROCE of 10%.
Check out our latest analysis for eDreams ODIGEO
When making comparisons between similar businesses, investors may find ROCE useful. We can see eDreams ODIGEO's ROCE is around the 12% average reported by the Online Retail industry. Independently of how eDreams ODIGEO compares to its industry, its ROCE in absolute terms appears decent, and the company may be worthy of closer investigation.
You can see in the image below how eDreams ODIGEO's ROCE compares to its industry. Click to see more on past growth.
When considering ROCE, bear in mind that it reflects the past and does not necessarily predict the future. 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. Since the future is so important for investors, you should check out ourfreereport on analyst forecasts for eDreams ODIGEO.
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 counteract this, we check if a company has high current liabilities, relative to its total assets.
eDreams ODIGEO has total assets of €1.3b and current liabilities of €403m. As a result, its current liabilities are equal to approximately 31% of its total assets. eDreams ODIGEO has a middling amount of current liabilities, increasing its ROCE somewhat.
eDreams ODIGEO's ROCE does look good, but the level of current liabilities also contribute to that. eDreams ODIGEO shapes up well under this analysis,but it is far from the only business delivering excellent numbers. You might also want to check thisfreecollection of companies delivering excellent earnings growth.
If you are like me, then you willnotwant to miss thisfreelist of growing companies that insiders are buying.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
Despite Its High P/E Ratio, Is eDreams ODIGEO S.A. (BME:EDR) Still Undervalued?
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This article is written for those who want to get better at using price to earnings ratios (P/E ratios). We'll look at eDreams ODIGEO S.A.'s (BME:EDR) P/E ratio and reflect on what it tells us about the company's share price. Based on the last twelve months,eDreams ODIGEO's P/E ratio is 39.94. That is equivalent to an earnings yield of about 2.5%.
See our latest analysis for eDreams ODIGEO
Theformula for P/Eis:
Price to Earnings Ratio = Price per Share ÷ Earnings per Share (EPS)
Or for eDreams ODIGEO:
P/E of 39.94 = €3.6 ÷ €0.090 (Based on the trailing twelve months to March 2019.)
A higher P/E ratio means that buyers have to paya higher pricefor each €1 the company has earned over the last year. 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.'
When earnings fall, the 'E' decreases, over time. Therefore, even if you pay a low multiple of earnings now, that multiple will become higher in the future. A higher P/E should indicate the stock is expensive relative to others -- and that may encourage shareholders to sell.
eDreams ODIGEO shrunk earnings per share by 51% over the last year. And it has shrunk its earnings per share by 8.8% per year over the last three years. This growth rate might warrant a low P/E ratio.
The P/E ratio essentially measures market expectations of a company. You can see in the image below that the average P/E (23.9) for companies in the online retail industry is lower than eDreams ODIGEO's P/E.
Its relatively high P/E ratio indicates that eDreams ODIGEO shareholders think it will perform better than other companies in its industry classification. Clearly the market expects growth, but it isn't guaranteed. So investors should always consider the P/E ratio alongside other factors, such aswhether company directors have been buying shares.
Don't forget that the P/E ratio considers market capitalization. So it won't reflect the advantage of cash, or disadvantage of debt. 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.
eDreams ODIGEO has net debt worth 70% of its market capitalization. If you want to compare its P/E ratio to other companies, you should absolutely keep in mind it has significant borrowings.
eDreams ODIGEO has a P/E of 39.9. That's higher than the average in the ES market, which is 17.3. With meaningful debt and a lack of recent earnings growth, the market has high expectations that the business will earn more in the future.
Investors have an opportunity when market expectations about a stock are wrong. If the reality for a company is better than it expects, you can make money by buying and holding for the long term. So thisfreereport on the analyst consensus forecastscould help you make amaster moveon this stock.
Of course,you might find a fantastic investment by looking at a few good candidates.So take a peek at thisfreelist of companies with modest (or no) debt, trading on a P/E 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. |
Dividend Hunters Should Consider Valiant Holding AG (VTX:VATN), With A 4.1% Yield
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If you are an income investor, then Valiant Holding AG (VTX:VATN) should be on your radar. Valiant Holding AG operates as a holding company for Valiant Bank AG that provides various banking products and services for retail clients, private clients, self-employed individuals, and small and medium-sized businesses in Switzerland. Over the past 10 years, the CHF1.7b market cap company has been growing its dividend payments, from CHF3.1 to CHF4.4. Currently yielding 4.1%, let's take a closer look at Valiant Holding's dividend profile.
View our latest analysis for Valiant Holding
It is a stock that pays a stable and consistent dividend, having done so reliably for the past decade with the expectation of this continuing into the future. More specifically:
• Its annual yield is among the top 25% of dividend payers
• It consistently pays out dividend without missing a payment or significantly cutting payout
• Its has increased its dividend per share amount over the past
• It is able to pay the current rate of dividends from its earnings
• It is able to continue to payout at the current rate in the future
Valiant Holding currently yields 4.1%, which is high for Banks stocks. But the real reason Valiant Holding stands out is because it has a proven track record of continuously paying out this level of dividends, from earnings, to shareholders and can be expected to continue paying in the future. This is a highly desirable trait for a stock holding if you're investor who wants a robust cash inflow from your portfolio over a long period of time.
If dividend is a key criteria in your investment consideration, then you need to make sure the dividend stock you're eyeing out is reliable in its payments. VATN has increased its DPS from CHF3.1 to CHF4.4 in the past 10 years. During this period it has not missed a payment, as one would expect for a company increasing its dividend. This is an impressive feat, which makes VATN a true dividend rockstar.
Valiant Holding has a trailing twelve-month payout ratio of 58%, meaning the dividend is sufficiently covered by earnings. In the near future, analysts are predicting a higher payout ratio of 67% which, assuming the share price stays the same, leads to a dividend yield of around 5.1%. Moreover, EPS should increase to CHF7.69. The higher payout forecasted, along with higher earnings, should lead to greater dividend income for investors moving forward.
When assessing the forecast sustainability of a dividendit is also worth considering the cash flow of the business. Cash flow is important because companies with strong cash flow can usually sustain higher payout ratios.
Investors of Valiant Holding can continue to expect strong dividends from the stock. With its favorable dividend characteristics, if high income generation is still the goal for your portfolio, then Valiant Holding is one worth keeping around. However, given this is purely a dividend analysis, I urge potential investors to try and get a good understanding of the underlying business and its fundamentals before deciding on an investment. There are three fundamental aspects you should further research:
1. Future Outlook: What are well-informed industry analysts predicting for VATN’s future growth? Take a look at ourfree research report of analyst consensusfor VATN’s outlook.
2. Valuation: What is VATN worth today? Even if the stock is a cash cow, it's not worth an infinite price. Theintrinsic value infographic in our free research reporthelps visualize whether VATN is currently mispriced by the market.
3. Other Dividend Rockstars: Are there strong dividend payers with better fundamentals out there? Check out 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. |
China's industrial profits rise 1.1% in May as sales quicken
BEIJING (Reuters) - Bolstered by improving sales and better margins, profits for China's industrial companies rose in May, bucking a months-long downtrend.
But analysts are unsure if the modest gains can last. China's industrial profits have been faltering for over a year as the economy slows and the U.S.-Sino trade war escalates, weighing on manufacturing investment and output.
Profits rose 1.1% in May from a year earlier to 565.6 billion yuan ($82.21 billion), according to data released by the National Bureau of Statistics (NBS) on Thursday, following a 3.7% fall in April.
In the first five months, industrial firms earned profits of 2.38 trillion yuan, down 2.3% from a year earlier, compared with a 3.4% drop in January-April.
The uptick in May was driven by quicker sales and slower increases in corporate costs, Zhu Hong of the statistics bureau said in a statement accompanying the data, adding that better margins in equipment manufacturing and the coal sector attributed to the bulk of the increase.
Moreover, profits in high-tech manufacturing and emerging industries both turned positive in May after declining the month before.
"The modest pick-up in high-tech industry might suggest the effect of value-added tax (VAT) cuts is kicking in," said Lu Ting, chief China economist at Nomura.
Ting noted, however, that the rebound was still relatively weak and was likely to be short-lived as the trade war drags on.
Leaders from both countries will meet in Japan on Saturday to see if they can get trade negotiations back on track after talks broke down in May.
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.
TECH WAR
Even if further tariff action is suspended, worries are growing that the trade standoff with the United States is morphing into a technology war that will put more strain on China's higher-value manufacturing.
Washington last month effectively banned U.S. firms from doing business with Huawei Technologies, the world's largest telecoms network gear maker, citing national security concerns. Many governments and tech companies around the world have fallen in line with the U.S. curbs.
While China's overall tech industry profits rose last month, earnings for telecommunications and electronic equipment manufacturers, which are more vulnerable to U.S. tariffs than other product classes, declined 13.0% in Jan-May.
Producer price inflation, one gauge of industrial profitability, has been easing since early 2017. It slowed to 0.6% in May, while industrial output growth unexpectedly cooled to a 17-year low of 5%.
To support the economy and spur domestic demand, policymakers have stepped up approvals for big infrastructure projects, freed up more funds for lending and cut taxes. The People's Bank of China (PBOC) has slashed banks' reserve requirement ratios six times since early 2018, with further cuts expected in coming months.
The biggest share of profits was still dominated by upstream sectors in January-May, seeing faster growth.
China's crude steel output hit a record high in May, even as a jump in prices of raw materials, particularly iron ore, cut into mills' profit margins.
Steel demand from downstream sectors in China has turned "very strong", Singapore-based data analytics company Tivlon Technologies said this week.
But a continued crackdown on air pollution has weighed on smokestack industries. The country's top steelmaking city of Tangshan last week summoned 48 companies and ordered them to trim output to reduce smog.
Profits at China's state-owned industrial firms were down 9.7% on an annual basis for the first five months, according to the statistics bureau.
Liabilities of industrial firms rose 5.3% year-on-year as of end-May versus a 5.5% increase by end-April.
Private sector profits rose 6.6% in Jan-May, from 4.1 percent in the first four months.
(Reporting by Stella Qiu and Min Zhang; Editing by Kim Coghill) |
Interested In Société Fermière du Casino Municipal de Cannes (EPA:FCMC)? Here's How It Performed Recently
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For long term investors, improvement in profitability and outperformance against the industry can be important characteristics in a stock. In this article, I will take a look at Société Fermière du Casino Municipal de Cannes's (EPA:FCMC) track record on a high level, to give you some insight into how the company has been performing against its historical trend and its industry peers.
View our latest analysis for Société Fermière du Casino Municipal de Cannes
FCMC's trailing twelve-month earnings (from 30 April 2019) of €15m has declined by -20% 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 16%, indicating the rate at which FCMC is growing has slowed down. Why could this be happening? Well, let's look at what's occurring with margins and if the entire industry is feeling the heat.
In terms of returns from investment, Société Fermière du Casino Municipal de Cannes has fallen short of achieving a 20% return on equity (ROE), recording 6.1% instead. However, its return on assets (ROA) of 4.0% exceeds the FR Hospitality industry of 3.5%, indicating Société Fermière du Casino Municipal de Cannes has used its assets more efficiently. Though, its return on capital (ROC), which also accounts for Société Fermière du Casino Municipal de Cannes’s debt level, has declined over the past 3 years from 7.9% to 7.6%.
Société Fermière du Casino Municipal de Cannes's track record can be a valuable insight into its earnings performance, but it certainly doesn't tell the whole story. Companies that are profitable, but have unpredictable earnings, can have many factors influencing its business. You should continue to research Société Fermière du Casino Municipal de Cannes to get a better picture of the stock by looking at:
1. Future Outlook: What are well-informed industry analysts predicting for FCMC’s future growth? Take a look at ourfree research report of analyst consensusfor FCMC’s outlook.
2. Financial Health: Are FCMC’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 30 April 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. |
Société Fermière du Casino Municipal de Cannes (EPA:FCMC): Does The Earnings Decline Make It An Underperformer?
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For investors with a long-term horizon, examining earnings trend over time and against industry peers is more insightful than looking at an earnings announcement in one point in time. Investors may find my commentary, albeit very high-level and brief, on Société Fermière du Casino Municipal de Cannes (EPA:FCMC) useful as an attempt to give more color around how Société Fermière du Casino Municipal de Cannes is currently performing.
Check out our latest analysis for Société Fermière du Casino Municipal de Cannes
FCMC's trailing twelve-month earnings (from 30 April 2019) of €15m has declined by -20% 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 16%, indicating the rate at which FCMC is growing has slowed down. What could be happening here? Well, let's look at what's going on with margins and if the rest of the industry is feeling the heat.
In terms of returns from investment, Société Fermière du Casino Municipal de Cannes has fallen short of achieving a 20% return on equity (ROE), recording 6.1% instead. However, its return on assets (ROA) of 4.0% exceeds the FR Hospitality industry of 3.5%, indicating Société Fermière du Casino Municipal de Cannes has used its assets more efficiently. Though, its return on capital (ROC), which also accounts for Société Fermière du Casino Municipal de Cannes’s debt level, has declined over the past 3 years from 7.9% to 7.6%.
Though Société Fermière du Casino Municipal de Cannes'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 influencing its business. I recommend you continue to research Société Fermière du Casino Municipal de Cannes to get a better picture of the stock by looking at:
1. Future Outlook: What are well-informed industry analysts predicting for FCMC’s future growth? Take a look at ourfree research report of analyst consensusfor FCMC’s outlook.
2. Financial Health: Are FCMC’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 30 April 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. |
Taking A Look At Dalhoff Larsen & Horneman A/S's (CPH:DLH) ROE
Want to participate in a short research study ? Help shape the future of investing tools and you could win a $250 gift card! While some investors are already well versed in financial metrics (hat tip), this article is for those who would like to learn about Return On Equity (ROE) and why it is important. To keep the lesson grounded in practicality, we'll use ROE to better understand Dalhoff Larsen & Horneman A/S ( CPH:DLH ). Dalhoff Larsen & Horneman has a ROE of 12% , based on the last twelve months. That means that for every DKK1 worth of shareholders' equity, it generated DKK0.12 in profit. View our latest analysis for Dalhoff Larsen & Horneman How Do You Calculate Return On Equity? The formula for ROE is: Return on Equity = Net Profit ÷ Shareholders' Equity Or for Dalhoff Larsen & Horneman: 12% = ø9.4m ÷ ø77m (Based on the trailing twelve months to December 2018.) It's easy to understand the 'net profit' part of that equation, but 'shareholders' equity' requires further explanation. It is all earnings retained by the company, plus any capital paid in by shareholders. You can calculate shareholders' equity by subtracting the company's total liabilities from its total assets. What Does Return On Equity Mean? ROE looks at the amount a company earns relative to the money it has kept within the business. The 'return' is the amount earned after tax over the last twelve months. That means that the higher the ROE, the more profitable the company is. So, as a general rule, a high ROE is a good thing . That means ROE can be used to compare two businesses. Does Dalhoff Larsen & Horneman Have A Good ROE? One simple way to determine if a company has a good return on equity is to compare it to the average for its industry. However, this method is only useful as a rough check, because companies do differ quite a bit within the same industry classification. You can see in the graphic below that Dalhoff Larsen & Horneman has an ROE that is fairly close to the average for the Trade Distributors industry (12%). Story continues CPSE:DLH Past Revenue and Net Income, June 27th 2019 That's not overly surprising. ROE tells us about the quality of the business, but it does not give us much of an idea if the share price is cheap. If you are like me, then you will not want to miss this free list of growing companies that insiders are buying. How Does Debt Impact Return On Equity? Companies usually need to invest money to grow their profits. The cash for investment can come from prior year profits (retained earnings), issuing new shares, or borrowing. In the first two cases, the ROE will capture this use of capital to grow. In the latter case, the debt used for growth will improve returns, but won't affect the total equity. Thus the use of debt can improve ROE, albeit along with extra risk in the case of stormy weather, metaphorically speaking. Dalhoff Larsen & Horneman's Debt And Its 12% ROE While Dalhoff Larsen & Horneman does have a tiny amount of debt, with debt to equity of just 0.089, we think the use of debt is very modest. Its very respectable ROE, combined with only modest debt, suggests the business is in good shape. 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. In Summary Return on equity is a useful indicator of the ability of a business to generate profits and return them to shareholders. A company that can achieve a high return on equity without debt could be considered a high quality business. If two companies have around the same level of debt to equity, and one has a higher ROE, I'd generally prefer the one with higher ROE. Having said that, while ROE is a useful indicator of business quality, you'll have to look at a whole range of factors to determine the right price to buy a stock. It is important to consider other factors, such as future profit growth -- and how much investment is required going forward. So I think it may be worth checking this free this detailed graph of past earnings, revenue and cash flow . But note: Dalhoff Larsen & Horneman may not be the best stock to buy . So take a peek at this free list of interesting companies with high ROE and low debt. We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com . This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
With A Return On Equity Of 8.3%, Has HAEMATO AG's (FRA:HAE) Management Done Well?
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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. To keep the lesson grounded in practicality, we'll use ROE to better understand HAEMATO AG (FRA:HAE).
Our data showsHAEMATO has a return on equity of 8.3%for the last year. One way to conceptualize this, is that for each €1 of shareholders' equity it has, the company made €0.083 in profit.
See our latest analysis for HAEMATO
Theformula for return on equityis:
Return on Equity = Net Profit ÷ Shareholders' Equity
Or for HAEMATO:
8.3% = €6.3m ÷ €76m (Based on the trailing twelve months to December 2018.)
Most readers would understand what net profit is, but it’s worth explaining the concept of shareholders’ equity. 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 profit over the last twelve months. That means that the higher the ROE, the more profitable the company is. So, as a general rule,a high ROE is a good thing. Clearly, then, one can use ROE to compare different companies.
By comparing a company's ROE with its industry average, we can get a quick measure of how good it is. Importantly, this is far from a perfect measure, because companies differ significantly within the same industry classification. You can see in the graphic below that HAEMATO has an ROE that is fairly close to the average for the Healthcare industry (9.5%).
That isn't amazing, but it is respectable. ROE tells us about the quality of the business, but it does not give us much of an idea if the share price is cheap. If you like to buy stocks alongside management, then you might just love thisfreelist of companies. (Hint: insiders have been buying them).
Virtually all companies need money to invest in the business, to grow profits. That cash can come from issuing shares, retained earnings, or debt. In the first and second cases, the ROE will reflect this use of cash for investment in the business. In the latter case, the use of debt will improve the returns, but will not change the equity. That will make the ROE look better than if no debt was used.
While HAEMATO does have some debt, with debt to equity of just 0.20, we wouldn't say debt is excessive. The fact that it achieved a fairly good ROE with only modest debt suggests the business might be worth putting on your watchlist. Conservative use of debt to boost returns is usually a good move for shareholders, though it does leave the company more exposed to interest rate rises.
Return on equity is one way we can compare the business quality of different companies. A company that can achieve a high return on equity without debt could be considered a high quality business. If two companies have around the same level of debt to equity, and one has a higher ROE, I'd generally prefer the one with higher ROE.
But ROE is just one piece of a bigger puzzle, since high quality businesses often trade on high multiples of earnings. Profit growth rates, versus the expectations reflected in the price of the stock, are a particularly important to consider. So I think it may be worth checking thisfreereport on analyst forecasts for the company.
Of course,you might find a fantastic investment by looking elsewhere.So take a peek at thisfreelist of interesting companies.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
A Look At D'Ieteren SA's (EBR:DIE) Exceptional Fundamentals
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Building up an investment case requires looking at a stock holistically. Today I've chosen to put the spotlight on D'Ieteren SA (EBR:DIE) due to its excellent fundamentals in more than one area. DIE is a highly-regarded dividend-paying company that has been able to sustain great financial health over the past. 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 D'Ieteren here.
DIE's strong financial health means that all of its upcoming liability payments are able to be met by its current cash and short-term investment holdings. This implies that DIE manages its cash and cost levels well, which is a key determinant of the company’s health. DIE appears to have made good use of debt, producing operating cash levels of 3.24x total debt in the prior year. This is a strong indication that debt is reasonably met with cash generated.
DIE pays a decent dividend yield to its shareholders, higher than the low-risk savings rate, which is what investors want in order to compensate them for the risk of holding a stock. That said, please remember that dividend yields are a function of stock prices and corporate profits, both of which can be volatile.
For D'Ieteren, I've put together three important factors you should look at:
1. Future Outlook: What are well-informed industry analysts predicting for DIE’s future growth? Take a look at ourfree research report of analyst consensusfor DIE’s outlook.
2. Historical Performance: What has DIE's returns been like over the past? Go into more detail in the past track record analysis and take a look atthe free visual representations of our analysisfor more clarity.
3. Other Attractive Alternatives: Are there other well-rounded stocks you could be holding instead of DIE? 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. |
Calculating The Intrinsic Value Of Pharmasimple SA (EPA:ALPHS)
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Today we will run through one way of estimating the intrinsic value of Pharmasimple SA (EPA:ALPHS) by projecting its future cash flows and then discounting them to today's value. I will be using the Discounted Cash Flow (DCF) model. Don't get put off by the jargon, the math behind it is actually quite straightforward.
Remember though, that there are many ways to estimate a company's value, and a DCF is just one method. If you want to learn more about discounted cash flow, the rationale behind this calculation can be read in detail in theSimply Wall St analysis model.
View our latest analysis for Pharmasimple
We are going to use a two-stage DCF model, which, as the name states, takes into account two stages of growth. The first stage is generally a higher growth period which levels off heading towards the terminal value, captured in the second 'steady growth' period. To begin with, we have to get estimates of the next ten years of cash flows. Where possible we use analyst estimates, but when these aren't available we extrapolate the previous free cash flow (FCF) from the last estimate or reported value. We assume companies with shrinking free cash flow will slow their rate of shrinkage, and that companies with growing free cash flow will see their growth rate slow, over this period. We do this to reflect that growth tends to slow more in the early years than it does in later years.
Generally we assume that a dollar today is more valuable than a dollar in the future, so we need to discount the sum of these future cash flows to arrive at a present value estimate:
[{"": "Levered FCF (\u20ac, Millions)", "2019": "\u20ac-2.80", "2020": "\u20ac-0.20", "2021": "\u20ac0.90", "2022": "\u20ac1.37", "2023": "\u20ac1.89", "2024": "\u20ac2.38", "2025": "\u20ac2.82", "2026": "\u20ac3.20", "2027": "\u20ac3.50", "2028": "\u20ac3.74"}, {"": "Growth Rate Estimate Source", "2019": "Analyst x1", "2020": "Analyst x1", "2021": "Analyst x1", "2022": "Est @ 52.77%", "2023": "Est @ 37.16%", "2024": "Est @ 26.23%", "2025": "Est @ 18.58%", "2026": "Est @ 13.23%", "2027": "Est @ 9.48%", "2028": "Est @ 6.86%"}, {"": "Present Value (\u20ac, Millions) Discounted @ 12.23%", "2019": "\u20ac-2.49", "2020": "\u20ac-0.16", "2021": "\u20ac0.64", "2022": "\u20ac0.87", "2023": "\u20ac1.06", "2024": "\u20ac1.19", "2025": "\u20ac1.26", "2026": "\u20ac1.27", "2027": "\u20ac1.24", "2028": "\u20ac1.18"}]
Present Value of 10-year Cash Flow (PVCF)= €6.05m
"Est" = FCF growth rate estimated by Simply Wall St
After calculating the present value of future cash flows in the intial 10-year period, we need to calculate the Terminal Value, which accounts for all future cash flows beyond the first stage. For a number of reasons a very conservative growth rate is used that cannot exceed that of a country's GDP growth. In this case we have used the 10-year government bond rate (0.7%) to estimate future growth. In the same way as with the 10-year 'growth' period, we discount future cash flows to today's value, using a cost of equity of 12.2%.
Terminal Value (TV)= FCF2029× (1 + g) ÷ (r – g) = €3.7m × (1 + 0.7%) ÷ (12.2% – 0.7%) = €33m
Present Value of Terminal Value (PVTV)= TV / (1 + r)10= €€33m ÷ ( 1 + 12.2%)10= €10.34m
The total value is the sum of cash flows for the next ten years plus the discounted terminal value, which results in the Total Equity Value, which in this case is €16.39m. The last step is to then divide the equity value by the number of shares outstanding.This results in an intrinsic value estimate of €10.51. Compared to the current share price of €8.86, the company appears about fair value at a 16% discount to where the stock price trades currently. Valuations are imprecise instruments though, rather like a telescope - move a few degrees and end up in a different galaxy. Do keep this in mind.
Now the most important inputs to a discounted cash flow are the discount rate, and of course, the actual cash flows. You don't have to agree with these inputs, I recommend redoing the calculations yourself and playing with them. The DCF also does not consider the possible cyclicality of an industry, or a company's future capital requirements, so it does not give a full picture of a company's potential performance. Given that we are looking at Pharmasimple as potential shareholders, the cost of equity is used as the discount rate, rather than the cost of capital (or weighted average cost of capital, WACC) which accounts for debt. In this calculation we've used 12.2%, which is based on a levered beta of 1.691. Beta is a measure of a stock's volatility, compared to the market as a whole. We get our beta from the industry average beta of globally comparable companies, with an imposed limit between 0.8 and 2.0, which is a reasonable range for a stable business.
Valuation is only one side of the coin in terms of building your investment thesis, and it shouldn’t be the only metric you look at when researching a company. The DCF model is not a perfect stock valuation tool. Rather it should be seen as a guide to "what assumptions need to be true for this stock to be under/overvalued?" If a company grows at a different rate, or if its cost of equity or risk free rate changes sharply, the output can look very different. For Pharmasimple, I've put together three additional factors you should further research:
1. Financial Health: Does ALPHS have a healthy balance sheet? Take a look at ourfree balance sheet analysis with six simple checkson key factors like leverage and risk.
2. Future Earnings: How does ALPHS's growth rate compare to its peers and the wider market? Dig deeper into the analyst consensus number for the upcoming years by interacting with ourfree analyst growth expectation chart.
3. Other High Quality Alternatives: Are there other high quality stocks you could be holding instead of ALPHS? Exploreour interactive list of high quality stocksto get an idea of what else is out there you may be missing!
PS. The Simply Wall St app conducts a discounted cash flow valuation for every stock on the EPA every day. If you want to find the calculation for other stocks justsearch here.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
Democrats give recognition to gender inclusivity at first debate
At the first presidential debate of the 2020 Democratic primary, three candidates gave nods to gender inclusivity during their responses to questions about economic growth, health care and LGBT rights. Sen. Elizabeth Warren of Massachusetts set the stage fielding her first question by using “Latinx,” a gender-neutral alternative to “Latino,” when asked about whether her bold policy proposals such as universal childcare , breaking up big tech companies , and student debt cancellation would be risky for a stabilizing economy. “Who’s this economy really working for? It’s doing great for [a] thinner and thinner slice at the top,” she responded. “It’s doing great for giant drug companies. It’s just not doing great for people who’re trying to get a prescription filled. It’s doing great for people who want to invest in private prisons. Just not for the African-Americans and Latinx whose families were torn apart, whose lives are destroyed and whose communities are ruined.” From left, Elizabeth Warren, Cory Booker and Julián Castro. (Photos: Mike Seger/Reuters) Former Housing and Urban Development Secretary Julián Castro received applause from the live audience when he included trans people in his comments about abortion rights and “reproductive justice.” “I don’t believe only in reproductive freedom. I believe in reproductive justice,” Castro said when asked if his health care plan would cover abortion. “What that means is that just because a woman or let’s also not forget someone in the trans community, a trans female is poor doesn’t mean they shouldn’t have the right to exercise the right to choose. And so I absolutely would cover the right to have an abortion.” When the debate shifted to LGBT rights and the Equality Act, which would protect LGBT citizens from discrimination in federal programs, Sen. Cory Booker of New Jersey drew attention to the violence faced by black trans women. “We do not talk enough about trans-Americans, especially African-American trans-Americans, and the incredibly high rate of murder right now,” the senator from New Jersey said to a room of applause. “We don't talk enough about how many children, about 30 percent of LGBTQ kids who do not go to school because of fear. It's not enough just to be on the Equality Act.” “We need to have a president that will fight to protect LGBTQ Americans every single day from violence,” he added. _____ Read more from Yahoo News: 5 key takeaways in the first Democratic debate 'BORING!': How the Trump team reacted to the debate Beto breaks into Spanish in first answer NBC hot mic mars a moment Health care question divides the field View comments |
An Examination Of Autostrade Meridionali S.p.A. (BIT:AUTME)
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Attractive stocks have exceptional fundamentals. In the case of Autostrade Meridionali S.p.A. (BIT:AUTME), there's is a well-regarded dividend-paying company that has been able to sustain great financial health over the past. In the following section, I expand a bit more on these key aspects. For those interested in understanding where the figures come from and want to see the analysis, read the fullreport on Autostrade Meridionali here.
AUTME's strong financial health means that all of its upcoming liability payments are able to be met by its current cash and short-term investment holdings. This suggests prudent control over cash and cost by management, which is a crucial insight into the health of the company. Debt funding requires timely payments on interest to lenders. AUTME’s earnings sufficiently covered its interest in the prior year, which indicates there’s low risk associated with the company not being able to meet these key expenses.
AUTME’s reputation for being one of the best dividend payers in the market is supported by the fact that it has been steadily growing its dividend payments over the past ten years and currently is one of the top yielding companies on the markets, at 4.8%.
For Autostrade Meridionali, I've put together three important aspects you should further examine:
1. Future Outlook: What are well-informed industry analysts predicting for AUTME’s future growth? Take a look at ourfree research report of analyst consensusfor AUTME’s outlook.
2. Historical Performance: What has AUTME's returns been like over the past? Go into more detail in the past track record analysis and take a look atthe free visual representations of our analysisfor more clarity.
3. Other Attractive Alternatives: Are there other well-rounded stocks you could be holding instead of AUTME? Exploreour interactive list of stocks with large potentialto get an idea of what else is out there you may be missing!
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
What Makes CBo Territoria Société Anonyme (EPA:CBOT) A Great Dividend Stock?
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CBo Territoria Société Anonyme (EPA:CBOT) is a true Dividend Rock Star. Its yield of 6.3% makes it one of the market's top dividend payer. In the past ten years, CBo Territoria Société Anonyme has also grown its dividend from €0.060 to €0.22. Below, I have outlined more attractive dividend aspects for CBo Territoria Société Anonyme for income investors who may be interested in new dividend stocks for their portfolio.
View our latest analysis for CBo Territoria Société Anonyme
It is a stock that pays a stable and consistent dividend, having done so reliably for the past decade with the expectation of this continuing into the future. More specifically:
• Its annual yield is among the top 25% of dividend payers
• It has paid dividend every year without dramatically reducing payout in the past
• Its has increased its dividend per share amount over the past
• It can afford to pay the current rate of dividends from its earnings
• It is able to continue to payout at the current rate in the future
The company's dividend yield stands at 6.3%, which is high for Real Estate stocks. But the real reason CBo Territoria Société Anonyme stands out is because it has a proven track record of continuously paying out this level of dividends, from earnings, to shareholders and can be expected to continue paying in the future. This is a highly desirable trait for a stock holding if you're investor who wants a robust cash inflow from your portfolio over a long period of time.
If there's one type of stock you want to be reliable, it's dividend stocks and their stable income-generating ability. In the case of CBOT it has increased its DPS from €0.060 to €0.22 in the past 10 years. It has also been paying out dividend consistently during this time, as you'd expect for a company increasing its dividend levels. This is an impressive feat, which makes CBOT a true dividend rockstar.
The company currently pays out 70% of its earnings as a dividend, according to its trailing twelve-month data, which means that the dividend is covered by earnings. In the near future, analysts are predicting lower payout ratio of 47% which, assuming the share price stays the same, leads to a dividend yield of around 6.3%. In addition to this, EPS is also forecasted to fall to €0.28 in the upcoming year. The lower EPS on top of a lower payout ratio will lead to a fall in dividend payment moving forward.
When assessing the forecast sustainability of a dividendit is also worth considering the cash flow of the business. A company with strong cash flow, relative to earnings, can sometimes sustain a high pay out ratio.
CBo Territoria Société Anonyme ticks all the boxes for what I look for in a dividend stock. If you are looking to build an income focused portfolio, this could be one to include. However, given this is purely a dividend analysis, you should always research extensively before deciding whether or not a stock is an appropriate investment for you. I always recommend analysing the company's fundamentals and underlying business before making an investment decision. Below, I've compiled three relevant aspects you should look at:
1. Future Outlook: What are well-informed industry analysts predicting for CBOT’s future growth? Take a look at ourfree research report of analyst consensusfor CBOT’s outlook.
2. Historical Performance: What has CBOT's returns been like over the past? Go into more detail in the past track record analysis and take a look atthe free visual representations of our analysisfor more clarity.
3. Other Dividend Rockstars: Are there strong dividend payers with better fundamentals out there? Check out 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. |
Dividend Hunters Should Consider CBo Territoria Société Anonyme (EPA:CBOT), With A 6.3% Yield
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If you are an income investor, then CBo Territoria Société Anonyme (EPA:CBOT) should be on your radar. CBo Territoria Société Anonyme develops, promotes, manages, and sells real estate properties in France. Over the past 10 years, the €116m market cap company has been growing its dividend payments, from €0.060 to €0.22. Currently yielding 6.3%, let's take a closer look at CBo Territoria Société Anonyme's dividend profile.
See our latest analysis for CBo Territoria Société Anonyme
It is a stock that pays a reliable and steady dividend over the past decade, at a rate that is competitive relative to the other dividend-paying companies on the market. More specifically:
• It is paying an annual yield above 75% of dividend payers
• It has paid dividend every year without dramatically reducing payout in the past
• Its dividend per share amount has increased over the past
• It is able to pay the current rate of dividends from its earnings
• It is able to continue to payout at the current rate in the future
The company's dividend yield stands at 6.3%, which is high for Real Estate stocks. But the real reason CBo Territoria Société Anonyme stands out is because it has a high chance of being able to continue to pay dividend at this level for years to come, something that is quite desirable if you are looking to create a portfolio that generates a steady stream of income.
If there's one type of stock you want to be reliable, it's dividend stocks and their stable income-generating ability. CBOT has increased its DPS from €0.060 to €0.22 in the past 10 years. During this period it has not missed a payment, as one would expect for a company increasing its dividend. These are all positive signs of a great, reliable dividend stock.
CBo Territoria Société Anonyme has a trailing twelve-month payout ratio of 70%, meaning the dividend is sufficiently covered by earnings. In the near future, analysts are predicting lower payout ratio of 47% which, assuming the share price stays the same, leads to a dividend yield of around 6.3%. In addition to this, EPS is also forecasted to fall to €0.28 in the upcoming year. The lower EPS on top of a lower payout ratio will lead to a fall in dividend payment moving forward.
When assessing the forecast sustainability of a dividendit is also worth considering the cash flow of the business. Cash flow is important because companies with strong cash flow can usually sustain higher payout ratios.
Investors of CBo Territoria Société Anonyme can continue to expect strong dividends from the stock. With its favorable dividend characteristics, if high income generation is still the goal for your portfolio, then CBo Territoria Société Anonyme is one worth keeping around. However, given this is purely a dividend analysis, you should always research extensively before deciding whether or not a stock is an appropriate investment for you. I always recommend analysing the company's fundamentals and underlying business before making an investment decision. There are three key factors you should further examine:
1. Future Outlook: What are well-informed industry analysts predicting for CBOT’s future growth? Take a look at ourfree research report of analyst consensusfor CBOT’s outlook.
2. Historical Performance: What has CBOT's returns been like over the past? Go into more detail in the past track record analysis and take a look atthe free visual representations of our analysisfor more clarity.
3. Other Dividend Rockstars: Are there strong dividend payers with better fundamentals out there? Check out 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. |
Photo of Salvadoran refugees shows power of still images
NEW YORK (AP) — From Bosnia to West Africa, she has witnessed tragedy. But the photo of two drowned Salvadoran refugees this week still left Corinne Dufka in shock. "It's horrific," Dufka, an associate director at Human Rights Watch, says of the picture, which shows a father and his 23-month old daughter dead, face down in the Rio Grande. "Photojournalism is full of images which have illuminated the gravity of a situation, made it less possible to ignore it or spurred both ordinary people and policy makers to action." In a world of unremitting information and video-driven chaos, the still photograph is an older and perhaps seemingly limited medium. But a solitary, silent shot can make remote news feel urgent and personal. The deaths of Óscar Alberto Martínez Ramírez and his daughter Valeria, documented in an image made by journalist Julia Le Duc and distributed by The Associated Press this week, became an instant, singular moment in the immigration debate. Pope Francis expressed "profound sadness." The UN Refugee Agency called it "powerful visual evidence of people dying during their dangerous journeys across borders." Senate Minority Leader Charles Schumer stood by a blown-up copy of the photo Wednesday as he called for the passage of a $4.6 billion border funding bill. "Images have a way of piercing through indifference and unlocking empathy and shame that can be catalytic drivers of policy," Suzanne Nossel, CEO of the literary and human rights organization PEN America, said in an email Wednesday. She said that goes for everything from "the first photos of emaciated survivors of the Holocaust" to "the haunting images of men behind barbed wire in war-torn Bosnia" to "the sight of the corpse of a Syrian refugee toddler washed up on a beach." "You can have statistics about a given issue, like how many children are being held in refugee camps. But then you have an image and it makes it all human," says Mark Lubell, executive director of the International Center for Photography. Story continues "It's that unique way of bringing something to a scale we can comprehend," Lubell says. "Photos give you the space and time to really think about something." The still photograph has crystallized some of modern history's most joyous and traumatic occasions, whether it's Joe Rosenthal's iconic image of the flag-raising on Iwo Jima, which became a renowned memorial; Alfred Eisenstaedt's photo of a sailor kissing a woman in Times Square as the country celebrated the end of World War II; or Nick Ut's AP image of a young Vietnamese girl, naked and screaming after a South Vietnamese napalm attack. Defiance was never more memorably dramatized than by Jeff Widener's widely distributed AP picture of a single man standing before a procession of tanks in China's Tiananmen Square. Thousands died in the Sept. 11 terrorist attacks, but the day's lonely doom was viscerally captured by Richard Drew's iconic "Falling Man" photo for the AP, which has inspired a documentary and Don DeLillo novel of the same name. The Life magazine picture by John Filo from 1970 of a teen-age girl looking up in horror as she knelt by a classmate shot by the National Guard was so jarring that James Michener shaped his book "Kent State" around it, and Neil Young wrote the protest song "Ohio," which he and bandmates David Crosby, Graham Nash and Stephen Stills recorded and released within days. Some pictures become embedded in our minds but don't necessarily change them. Polls taken at the time of the Kent State shootings showed the majority of the public siding with the National Guard over the students protesting the Vietnam War. President Donald Trump's response to the picture of Salvadoran refugees was to blame the deaths on Democrats. Other images not only recorded history, but helped make it. Karen Irvine, curator of Chicago's Museum of Contemporary Photography, cites pictures of police tear-gassing civil rights protesters. Timothy B. Tyson, author of "The Blood of Emmett Till," says the grotesque image of the black teenager murdered in 1955 by whites in Mississippi was a crucial part of the civil rights movement. Rosa Parks would see the picture in Jet Magazine and cite it as a factor in refusing to give up her seat on a segregated bus in Montgomery, Alabama — leading to her arrest and the beginning of an historic boycott. Julian Bond and John Lewis were among the future activists driven in part by the Till murder. "That photo was both local and global. It nationalized and even globalized the violence of America's race relations," Tyson says. "The photograph tied North and South together and convened black America as one congregation, into a kind of church where horror was transfigured into resolve." The greatest photographs never lose their power to bring us back to the time and place they were taken. Lubell wonders if, one day, a photograph will help make climate change an issue that even deniers can't avoid. He notes that for all of the climate-related disasters, from fires in California to famine in Africa, there is still no singular still image with the impact of "Falling Man" or the Salvadoran refugees. "We're all trying to understand climate change on a macro level, but we're also looking for those individual moments," he says. "The picture of the Salvadorans is that kind of moment." ___ Follow AP National Writer Hillel Italie on Twitter at @hitalie. |
What Kind Of Shareholder Owns Most Tysnes Sparebank (OB:TYSB-ME) Stock?
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If you want to know who really controls Tysnes Sparebank (OB:TYSB-ME), then you'll have to look at the makeup of its share registry. Insiders often own a large chunk of younger, smaller, companies while huge companies tend to have institutions as shareholders. I quite like to see at least a little bit of insider ownership. As Charlie Munger said 'Show me the incentive and I will show you the outcome.'
Tysnesrebank is not a large company by global standards. It has a market capitalization of øre119m, which means it wouldn't have the attention of many institutional investors. In the chart below below, we can see that institutions don't own shares in the company. We can zoom in on the different ownership groups, to learn more about TYSB-ME.
Check out our latest analysis for Tysnesrebank
We don't tend to see institutional investors holding stock of companies that are very risky, thinly traded, or very small. Though we do sometimes see large companies without institutions on the register, it's not particularly common.
There are many reasons why a company might not have any institutions on the share registry. It may be hard for institutions to buy large amounts of shares, if liquidity (the amount of shares traded each day) is low. If the company has not needed to raise capital, institutions might lack the opportunity to build a position. Alternatively, there might be something about the company that has kept institutional investors away. Tysnesrebank might not have the sort of past performance institutions are looking for, or perhaps they simply have not studied the business closely.
Hedge funds don't have many shares in Tysnesrebank. We're not picking up on any analyst coverage of the stock at the moment, so the company is unlikely to be widely held.
The definition of an insider can differ slightly between different countries, but members of the board of directors always count. The company management answer to the board; and the latter should represent the interests of shareholders. Notably, sometimes top-level managers are on the board, themselves.
I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions.
Our most recent data indicates that insiders own a reasonable proportion of Tysnes Sparebank. Insiders own øre20m worth of shares in the øre119m company. This may suggest that the founders still own a lot of shares. You canclick here to see if they have been buying or selling.
The general public, with a 40% stake in the company, will not easily be ignored. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.
Our data indicates that Private Companies hold 43%, of the company's shares. 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.
I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too.
I like to dive deeperinto how a company has performed in the past. You can accessthisinteractive graphof past earnings, revenue and cash flow for free.
Of coursethis may not be the best stock to buy. So take a peek at thisfreefreelist 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. |
Should You Be Concerned About Van Lanschot Kempen N.V.'s (AMS:VLK) Historical Volatility?
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If you're interested in Van Lanschot Kempen N.V. (AMS:VLK), 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. Volatility is considered to be a measure of risk in modern finance theory. Investors may think of volatility as falling into two main categories. 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 mimic the volatility of the market quite closely, while others demonstrate muted, exagerrated or uncorrelated price movements. Beta is a widely used metric to measure a stock's exposure to market risk (volatility). Before we go on, it's worth noting that Warren Buffett pointed out in his 2014 letter to shareholders that 'volatility is far from synonymous with risk.' Having said that, beta can still be rather useful. The first thing to understand about beta is that the beta of the overall market is one. Any stock with a beta of greater than one is considered more volatile than the market, while those with a beta below one are either less volatile or poorly correlated with the market.
See our latest analysis for Van Lanschot Kempen
Given that it has a beta of 0.81, we can surmise that the Van Lanschot Kempen share price has not been strongly impacted by broader market volatility (over the last 5 years). This suggests that including it in your portfolio will reduce volatility arising from broader market movements, assuming your portfolio's weighted average beta is higher than 0.81. 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 Van Lanschot Kempen's revenue and earnings in the image below.
Van Lanschot Kempen is a small cap stock with a market capitalisation of €817m. Most companies this size are actively traded. Small companies can have a low beta value when company specific factors outweigh the influence of overall market volatility. That might be happening here.
The Van Lanschot Kempen doesn't usually show much sensitivity to the broader market. This could be for a variety of reasons. Typically, smaller companies have a low beta if their share price tends to move a lot due to company specific developments. Alternatively, an strong dividend payer might move less than the market because investors are valuing it for its income stream. This article aims to educate investors about beta values, but it's well worth looking at important company-specific fundamentals such as Van Lanschot Kempen’s financial health and performance track record. I urge you to continue your research by taking a look at the following:
1. Future Outlook: What are well-informed industry analysts predicting for VLK’s future growth? Take a look at ourfree research report of analyst consensusfor VLK’s outlook.
2. Past Track Record: Has VLK 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 VLK's historicalsfor more clarity.
3. Other Interesting Stocks: It's worth checking to see how VLK 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. |
Huawei Loses Trade Secret Case Versus Ex-Employee's Startup
(Bloomberg) -- Huawei Technologies Co. stole trade secrets from a company co-founded by a former employee, a U.S. jury said Wednesday as it rejected claims that China’s largest technology company was the real victim in the dispute.
The jury in Sherman, Texas, said Huawei didn’t benefit from the theft and awarded no damages to the startup, CNEX Labs Inc. Still, the verdict following a three-week trial could provide ammunition to critics who say Huawei doesn’t play by the rules in the global technology playground.
Huawei said it was evaluating the verdict. “We are disappointed that the jury didn’t support Huawei’s claims based on the evidence,” Jason Ding, director of the company’s intellectual property rights department, told reporters at its Shenzhen base on Thursday.
Huawei and CNEX had each accused the other of stealing inside information regarding data storage. The eight-person jury heard testimony involving dueling tales of intrigue, disloyalty and corporate espionage. The trial featured an inside look at the Chinese maker of smartphones and networking gear, as well as the sometimes cutthroat battle over highly skilled employees with the talent to develop the next generation of technology.
Overshadowing the case is Huawei’s position firmly in the middle of the trade conflict between the U.S. and China, with President Donald Trump seeking to sharply curtail the company’s ability to do business. In the U.S., Huawei is fighting a criminal indictment that accuses it of stealing critical phone-testing technology from T-Mobile US Inc.
The trial in Sherman, about an hour north of Dallas, marks a rare instance in which Huawei has accused a former employee of stealing secrets.
The dispute concerns solid-state drives, which are made up of chips called Nand flash memory that store information on semiconductors. They access data much more quickly than traditional magnetic disk-based technology.
For CNEX, its reputation and relationships with technology companies like Microsoft Corp. were at stake. The company is working to develop a method to make the drives faster and cheaper, a crucial need when it comes to storing and retrieving the massive amounts of data kept on cloud storage.
“Because we are a new business without revenue or profits, the jury was not able to award CNEX any money damages,” Matthew Gloss, general counsel for CNEX, said in a statement following the verdict.
“This case was never about the money,” he said after the hearing. “The case was about saving the company.”
Huawei lawyers at the trial had no comment and company officials didn’t immediately respond to queries seeking comment. The jury said that Huawei, but not its U.S. research unit Futurewei Technologies Inc., had stolen CNEX trade secrets. The jury found that CNEX had not proved that either of the companies were “unjustly enriched.” Gloss said it was because CNEX was able to get its product sample back quickly.
Founded Startup
CNEX was founded in 2013 by two former Marvell Technology Group Ltd. executives and researcher Yiren “Ronnie” Huang, whose previous job at Futurewei in California was at the heart of the trial.
Huawei claimed that Huang had wanted to set up his own business but couldn’t get backing so joined Futurewei in 2011. While there, according to Huawei, Huang used a team to develop new technology for the storage devices and then left the company to help start CNEX three days later. There, he and other CNEX founders claimed Huawei’s ideas as their own and poached other Huawei employees, Huawei claimed.
The jury found there were no Huawei trade secrets in the case. CNEX had argued that anything Huawei claimed was secret was actually public information.
Huang, who is on leave from CNEX, said he came up with the ideas long before joining Futurewei, and left when he realized the company didn’t have much to offer.
The jury found that Huang was in violation of his employment agreement’s patent application disclosure provision, but that Futurewei wasn’t harmed by that failure. Huawei had said Huang began seeking patents in the months after joining CNEX, and told the jury it was based on work he had done at Futurewei.
CEO Testified
CNEX Chief Executive Officer Alan Armstrong said he asked Huang to help found CNEX after being introduced by a mutual friend because of Huang’s work with other companies. Any former Huawei employees who joined CNEX did so because they were “very unhappy where they were working and wanted to come to a startup,” Armstrong told the jury.
CNEX contends that Huawei posed as a potential customer to get secret details of its plans and, when that didn’t work, persuaded Xiamen University to work as a research partner with CNEX so it could surreptitiously turn over plans.
District Court Judge Amos Mazzant, who presided over the trial, also is overseeing a Huawei lawsuit against the U.S. government. The company is asking Mazzant to rule that a ban on federal agencies and contractors buying its gear is unconstitutional.
The case is Huawei Technologies Co. v. Huang, 17-893, U.S. District Court for the Eastern District of Texas (Sherman)
(Updates with Huawei’s reaction to verdict in the third paragraph.)
--With assistance from Gao Yuan.
To contact the reporters on this story: Susan Decker in Washington at sdecker1@bloomberg.net;Dennis Robertson in Sherman, Texas at drobertson28@bloomberg.net
To contact the editors responsible for this story: Jon Morgan at jmorgan97@bloomberg.net, John Harney, Robert Jameson
For more articles like this, please visit us atbloomberg.com
©2019 Bloomberg L.P. |
What Kind Of Shareholders Own Valmec Limited (ASX:VMX)?
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The big shareholder groups in Valmec Limited (ASX:VMX) have power over the company. Generally speaking, as a company grows, institutions will increase their ownership. Conversely, insiders often decrease their ownership over time. I generally like to see some degree of insider ownership, even if only a little. As Nassim Nicholas Taleb said, 'Don’t tell me what you think, tell me what you have in your portfolio.'
With a market capitalization of AU$28m, Valmec is a small cap stock, so it might not be well known by many institutional investors. In the chart below below, we can see that institutional investors have bought into the company. We can zoom in on the different ownership groups, to learn more about VMX.
See our latest analysis for Valmec
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 7.5% of Valmec. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. 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 Valmec's historic earnings and revenue, below, but keep in mind there's always more to the story.
Valmec is not owned by hedge funds. There is some analyst coverage of the stock, but it could still become more well known, with time.
While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO.
Insider ownership is positive when it signals leadership are thinking like the true owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative in some circumstances.
Our most recent data indicates that insiders own the majority of Valmec Limited. This means they can collectively make decisions for the company. Given it has a market cap of AU$28m, that means they have AU$15m worth of shares. It is good to see this level of investment. You cancheck here to see if those insiders have been buying recently.
The general public holds a 23% stake in VMX. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.
We can see that Private Companies own 16%, of the shares on issue. It might be worth looking deeper into this. If related parties, such as insiders, have an interest in one of these private companies, that should be disclosed in the annual report. Private companies may also have a strategic interest in the company.
I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too.
I like to dive deeperinto how a company has performed in the past. You can accessthisinteractive graphof past earnings, revenue and cash flow, for free.
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. |
Read This Before You Buy Endor AG (MUN:E2N) 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 Endor AG's (MUN:E2N), to help you decide if the stock is worth further research.Endor has a price to earnings ratio of 25.29, based on the last twelve months. That is equivalent to an earnings yield of about 4.0%.
View our latest analysis for Endor
Theformula for price to earningsis:
Price to Earnings Ratio = Share Price ÷ Earnings per Share (EPS)
Or for Endor:
P/E of 25.29 = €12.5 ÷ €0.49 (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 necessarily good or bad, but a high P/E implies relatively high expectations of what a company can achieve in the future.
Earnings growth rates have a big influence on P/E ratios. When earnings grow, the 'E' increases, over time. And in that case, the P/E ratio itself will drop rather quickly. Then, a lower P/E should attract more buyers, pushing the share price up.
It's nice to see that Endor grew EPS by a stonking 31% in the last year. And earnings per share have improved by 11% annually, over the last five years. I'd therefore be a little surprised if its P/E ratio was not relatively high.
The P/E ratio indicates whether the market has higher or lower expectations of a company. The image below shows that Endor has a lower P/E than the average (48.2) P/E for companies in the tech industry.
This suggests that market participants think Endor 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. 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. In other words, it does not consider any debt or cash that the company may have on the balance sheet. Hypothetically, a company could reduce its future P/E ratio by spending its cash (or taking on debt) to achieve higher earnings.
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.
Endor's net debt is 0.2% of its market cap. The market might award it a higher P/E ratio if it had net cash, but its unlikely this low level of net borrowing is having a big impact on the P/E multiple.
Endor's P/E is 25.3 which is above average (19.7) in the DE market. The company is not overly constrained by its modest debt levels, and its recent EPS growth is nothing short of stand-out. So to be frank we are not surprised it has a high P/E ratio.
Investors should be looking to buy stocks that the market is wrong about. People often underestimate remarkable growth -- so investors can make money when fast growth is not fully appreciated. Although we don't have analyst forecasts, you might want to assessthis data-rich visualizationof earnings, revenue and cash flow.
Of course,you might find a fantastic investment by looking at a few good candidates.So take a peek at thisfreelist of companies with modest (or no) debt, trading on a P/E 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. |
UPDATE 2-Trump demands withdrawal of India's 'unacceptable' tariff hike
(Adds India reaction, context)
By Neha Dasgupta
NEW DELHI, June 27 (Reuters) - U.S. President Donald Trump on Thursday demanded India withdraw retaliatory tariffs imposed by New Delhi this month, calling the duties "unacceptable" in a stern message that signals trade ties between the two countries are fast deteriorating.
India slapped higher duties on 28 U.S. products after the United States withdrew tariff-free entry for certain Indian goods. Washington is also upset with New Delhi's plans to restrict cross-border data flows and impose stricter rules on e-commerce that hurt U.S. firms operating in India.
"I look forward to speaking with Prime Minister Modi about the fact that India, for years having put very high tariffs against the United States, just recently increased the tariffs even further," Trump said on Twitter.
"This is unacceptable and the tariffs must be withdrawn!" said Trump, who will meet Modi at this week's G20 summit in Japan.
Government sources rejected Trump's argument, saying Indian tariffs were not that high compared to other developing countries and U.S. tariffs on some items were much higher.
India's trade ministry did not immediately respond to a Reuters email seeking comment.
Trump's tweet came hours after U.S. Secretary of State Mike Pompeo left New Delhi after meeting Modi. Pompeo had said the nations were "friends who can help each other all around the world" and the current differences were expressed "in the spirit of friendship".
In one tweet, though, Trump may have badly undermined Pompeo's efforts to reduce friction between the two countries.
Trump in May scrapped trade privileges for India under the Generalized System of Preferences (GSP), under which New Delhi was the biggest beneficiary that allowed duty-free exports of up to $5.6 billion.
India initially issued an order in June last year to raise import taxes as high as 120% on a slew of U.S. items, incensed by Washington's refusal to exempt it from higher steel and aluminium tariffs.
But New Delhi repeatedly delayed raising tariffs as the two nations engaged in trade talks. Trade between them was worth $142.1 billion in 2018, with India having a surplus of $24.2 billion.
The relationship took a big hit with India's sudden introduction of new e-commerce rules for foreign investors in February.
That angered the United States which saw a protectionist New Delhi effort to help small traders at the expense of U.S. firms such as Walmart and Amazon.com Inc.
Companies such as Mastercard and Visa have also been battling Indian central bank rules that mandate them to store their data only in India. (Reporting by Neha Dasgupta; additional reporting by Clarence Fernandez in Singapore; Editing by Darren Schuettler and Martin Howell) |
Do You Like Endor AG (MUN:E2N) At This P/E Ratio?
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The goal of this article is to teach you how to use price to earnings ratios (P/E ratios). We'll show how you can use Endor AG's (MUN:E2N) P/E ratio to inform your assessment of the investment opportunity.Endor has a P/E ratio of 25.29, based on the last twelve months. That means that at current prices, buyers pay €25.29 for every €1 in trailing yearly profits.
Check out our latest analysis for Endor
Theformula for price to earningsis:
Price to Earnings Ratio = Price per Share ÷ Earnings per Share (EPS)
Or for Endor:
P/E of 25.29 = €12.5 ÷ €0.49 (Based on the year to December 2018.)
A higher P/E ratio implies that investors paya higher pricefor the earning power of the business. 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. When earnings grow, the 'E' increases, over time. That means unless the share price increases, the P/E will reduce in a few years. Then, a lower P/E should attract more buyers, pushing the share price up.
Endor increased earnings per share by a whopping 31% last year. And it has bolstered its earnings per share by 11% per year over the last five years. I'd therefore be a little surprised if its P/E ratio was not relatively high.
The P/E ratio essentially measures market expectations of a company. If you look at the image below, you can see Endor has a lower P/E than the average (48.2) in the tech industry classification.
This suggests that market participants think Endor will underperform other companies in its industry. Many investors like to buy stocks when the market is pessimistic about their prospects. It is arguably worth checkingif insiders are buying shares, because that might imply they believe the stock is undervalued.
One drawback of using a P/E ratio is that it considers market capitalization, but not the balance sheet. Thus, the metric does not reflect cash or debt held by the company. In theory, a company can lower its future P/E ratio by using cash or debt to invest in 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.
Endor's net debt is 0.2% of its market cap. It would probably trade on a higher P/E ratio if it had a lot of cash, but I doubt it is having a big impact.
Endor's P/E is 25.3 which is above average (19.7) in the DE market. Its debt levels do not imperil its balance sheet and its EPS growth is very healthy indeed. So to be frank we are not surprised it has a high P/E ratio.
Investors have an opportunity when market expectations about a stock are wrong. If the reality for a company is better than it expects, you can make money by buying and holding for the long term. Although we don't have analyst forecasts, you could get a better understanding of its growth by checking outthis more detailed historical graphof earnings, revenue and cash flow.
Of course,you might find a fantastic investment by looking at a few good candidates.So take a peek at thisfreelist of companies with modest (or no) debt, trading on a P/E 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. |
Alexandria Ocasio-Cortez Mocks Beto and Booker’s ‘Humorous’ Spanish Skills at Democratic Debate
CBS Rep. Alexandria Ocasio-Cortez is not ready to make a 2020 endorsement quite yet. But that wasn’t going to stop her from sharing her thoughts about the first of two Democratic primary debates with Stephen Colbert. As the “AOC!” chants died down, Colbert began by asking the congresswoman what she thought about all of the Spanish being spoken on stage by candidates, including Beto O’Rourke and Cory Booker. “I loved it, because, I represent the Bronx and there was a lot of Spanglish in the building,” she answered, explaining that she “thought it was humorous, sometimes, at times” because she thought some candidates might start saying “I will not give you an answer to your question” in Spanish. “But it was good,” she added. “I thought it was a good gesture to the fact that we are a diverse country.” From there, Ocasio-Cortez said that to her, some candidates seemed like high school students who got called on without having read the book. “They’ll be like, ‘Yes, the hero was courageous and the protagonist of the story,’” she joked. Exclusive: Steve Bannon Gets Caught in a Crazy Impeachment Lie About AOC Samantha Bee Torches ‘Dum-Dum’ Meghan McCain for Giving Trump a Pass on E. Jean Carroll Rape Allegation Asked who she thinks will make it to the next debate, Ocasio-Cortez first mentioned Elizabeth Warren, to which Colbert said, “I think she knocked it out of the park.” She also thought Julian Castro did a “fantastic job.” She didn’t have quite as kind things to say about “underdog” candidates like Tim Ryan and John Delaney. “I’ll be honest, I really do think that this was a breakaway night,” she said. “I think Elizabeth Warren really distinguished herself, I think Julian Castro really distinguished himself. I think Cory Booker did a great job in talking about criminal justice.” As for NBC’s moderators, the woman behind the Green New Deal said, “I don’t think that we are discussing climate change the way we need to be discussing climate change,” adding, “You can’t just say, ‘Is Miami going to exist in 50 years?’ we need to say, ‘What are you going to do about this?’” Story continues Looking ahead to Thursday night, Ocasio-Cortez reiterated her argument that former Vice President Joe Biden is not necessarily the “safe choice” many Democratic voters appear to think he is. “I think it’s dangerous to assume that any candidate is a quote-unquote ‘safe choice,’” she said. “That you pick one candidate and that’s just going to deliver an election for you. But with respect to Vice President Biden, it’s more about an overall electoral strategy.” “I think there’s this idea that we have to sacrifice everything,” she continued. “That we can’t talk about working class issues, that we can’t talk about criminal justice issues, that we can’t talk about immigration because it isolates this very small sliver of Obama-to-Trump voters. And I think that that’s a mistake. Because if we sacrifice the issues of so many communities, I think we depress turnout. And what we need is more people to turn out next year than have ever turned out in American history.” 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. |
Huawei Personnel Worked With China’s Military on Research Projects
(Bloomberg) -- Sign up for Next China, a weekly email on where the nation stands now and where it's going next.
Several Huawei Technologies Co. employees have collaborated on research projects with Chinese armed forces personnel, indicating closer ties to the country’s military than previously acknowledged by the smartphone and networking powerhouse.
Over the past decade, Huawei workers have teamed with members of various organs of the People’s Liberation Army on at least 10 research endeavors spanning artificial intelligence to radio communications. They include a joint effort with the investigative branch of the Central Military Commission -- the armed forces’ supreme body -- to extract and classify emotions in online video comments, and an initiative with the elite National University of Defense Technology to explore ways of collecting and analyzing satellite images and geographical coordinates.
Those projects are just a few of the publicly disclosed studies that shed light on how staff at China’s largest technology company teamed with the People’s Liberation Army on research into an array of potential military and security applications. Bloomberg culled the papers from published periodicals and online research databases used mainly by Chinese academics and industry specialists. The authors of the treatises, which haven’t been reported in the media previously, identified themselves as Huawei employees and the company name was prominently listed at the top of the papers.
“Huawei is not aware of its employees publishing research papers in their individual capacity,” spokesman Glenn Schloss said in a messaged statement. “Huawei does not have any R&D collaboration or partnerships with the PLA-affiliated institutions,” he said. “Huawei only develops and produces communications products that conform to civil standards worldwide, and does not customize R&D products for the military.”
China’s defense ministry didn’t respond to a faxed request for comment. Huawei Chief Legal Officer Song Liuping on Thursday reaffirmed the spokesman’s comments. “Huawei doesn’t customize products nor provide research for the military,” he told reporters in Shenzhen. “We are not aware of the papers some employees have published. We don’t have such joint-research projects” with the PLA.
The Trump administration has imposed strict limits on Huawei’s ability to do business with U.S. companies and urged allies to follow suit, saying it poses a national security threat. Washington has zeroed in on what it says is Huawei’s close association with the armed forces in part because billionaire founder Ren Zhengfei -- a self-avowed Party loyalist -- was an officer who worked on communications during his military tenure.
It’s unclear whether the studies Bloomberg saw -- dating back to 2006 and discovered during a search of an online database used in part by professors to root out plagiarism among college students -- encompassed every instance of Huawei-employee collaboration with the PLA. Many sensitive projects are classified or just never make it online. While researchers with both Huawei and the military published thousands of papers according to that database, only the 10 Bloomberg saw were joint efforts. And the company employs upwards of 180,000 people.
Tech companies and military agencies have been collaborating around the world for decades, generating many of the technologies that underpin the modern internet. In China, that public-private relationship is particularly close-knit because of Beijing’s sway in every sector of the economy. But Huawei consistently plays down suggestions that Ren’s background influences the corporation in any way, and says its relationship with the military is minimal and non-political.
The research papers show one area of overlap, at least in terms of personnel. While they don’t prove that Huawei itself has close links to the Chinese military, they do show that the company’s relationship -- or at least that of its employees -- with the PLA is more nuanced than its executives have previously outlined publicly.
Huawei has said it never discloses sensitive information to the government and wouldn’t even if asked. Ren himself has shrugged off Huawei’s relationship with the military since he emerged from semi-seclusion in January to speak with foreign media for the first time in years.
“We have no cooperation with the military on research,” he told reporters in Shenzhen in January, according to a transcript that Huawei provided. “Perhaps we sell them a small amount of civilian equipment. Just how much, I’m not clear on because we don’t regard them as a core customer.”
The armed forces too have strongly denied official links to Huawei. “Huawei is not a military company,” Defense Minister General Wei Fenghe said at the Shangri-La Dialogue in Singapore in June. “Do not think that because the head of Huawei used to serve in the military, then the company that he built is part of the military.”
Yet the extent of Huawei’s military ties remains a topic of intense scrutiny in the U.S. because of the role the PLA has had in issues ranging from ratcheting up tensions in the South China Sea to alleged acts of state-sponsored hacking. Its opaque operations and far-reaching powers in a country obsessed with stability have also raised concerns. Chairmanship of the Central Military Commission is often thought to be key to maintaining power in the country, which is why Xi Jinping and his predecessors were appointed heads of the body. The leader has doubled down on a policy dubbed “civil-military integration,” which aims to harness technology for military purposes. Beijing has thus encouraged greater participation from private companies in the defense sector.
Bloomberg was unable to contact the employees listed or determine whether they remain at the company.
The online sentiment classification study, which lists Shanghai-based Huawei employee Li Hui as its lead author -- focused on video and improving the accuracy of natural language processing algorithms. It yielded “very high accuracy,” according to a paper published in the May 2019 edition of Netinfo Security, a journal owned by a research institute of the Ministry of Public Security. Researchers used 240,000 comments to train their AI algorithms before testing them on a data pool of a million entries.
Li identified his or her employer as Shanghai Huawei Technology Co. The three co-researchers listed on the paper hailed from the PLA’s central committee, an elite IT research lab, and another military unit, the paper showed. The project was funded by the National 242 Information Security Project, a program created by Beijing to support IT security research efforts.
Wong Kam Fai, a Chinese University of Hong Kong professor who studies natural language processing, said that it’s common that universities in China and companies would collaborate with the government or military. Chinese “universities are quite open to working with the military. If it’s very sensitive, it will be classified.”
Wong said the papers on using technology to detect emotions in videos weren’t particularly cutting edge, which partly explains why they can be made public. “Different projects have different sensitivity levels and sometimes the government will own the IP,” he added. “It’s possible that there’s a lot of research that people are just not seeing, because some military research is sensitive and classified.”
In addition, researchers sometimes put their employer’s name on papers without notifying the company, or wait till the paper comes out before doing. That’s because there’s a good chance some papers may never get published.
The author of a 2006 paper on America’s combat network radio -- Zheng Chuangming, from the Shenzhen Huawei Base -- looked into how U.S. software algorithms helped boost efficiency and conserve power. Zheng had published a more general paper on the same system only months earlier but listed his affiliation on that earlier document as the state-owned 7th Research Institute of China Electronics Group Corporation.
Another Huawei employee, Li Jie, is listed as working with two military researchers on the genesis and outlook of the geographical information system, used to collate and parse location data. That’s according to a study included in papers published after an academic seminar on telecommunications in the northern city of Dalian in 2009. It’s not clear if Li, who worked in the Foundation Department of Huawei Technologies Co., remains with the company. One of his co-researchers came from the National University of Defense Technology, one of the country’s best military academies. A third author was from a PLA entity that only showed up as a unit designation, according to publicly available information.
And in yet another paper published in 2013, Huawei employee Zhou Jian worked with a PLA hospital on ways to help doctors better detect heart signals. The study was funded by the PLA’s 12th Five Year project, according to an introduction to the paper posted on cnki.cn, an online archive of academic research papers. Zhou is identified as an employee of Huawei Technologies Co.
“In the U.S. they have similar arrangements as well. The U.S. has military grants,” Wong said. “There are many sources of funding, including from the military for research.”
(Updates with chief legal officer’s comment in the fifth paragraph.)
--With assistance from Lulu Yilun Chen and Peter Martin.
To contact Bloomberg News staff for this story: Edwin Chan in Hong Kong at echan273@bloomberg.net;Gao Yuan in Beijing at ygao199@bloomberg.net
To contact the editors responsible for this story: Peter Elstrom at pelstrom@bloomberg.net, ;Tom Giles at tgiles5@bloomberg.net, Edwin Chan, Colum Murphy
For more articles like this, please visit us atbloomberg.com
©2019 Bloomberg L.P. |
Is Now An Opportune Moment To Examine Erste Group Bank AG (VIE:EBS)?
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Today we're going to take a look at the well-established Erste Group Bank AG (VIE:EBS). The company's stock saw significant share price movement during recent months on the WBAG, rising to highs of €37.07 and falling to the lows of €31.3. 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 Erste Group Bank's current trading price of €31.8 reflective of the actual value of the large-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Erste Group Bank’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.
Check out our latest analysis for Erste Group Bank
According to my valuation model, Erste Group Bank seems to be fairly priced at around 11% below my intrinsic value, which means if you buy Erste Group Bank today, you’d be paying a fair price for it. And if you believe the company’s true value is €35.78, then there isn’t much room for the share price grow beyond what it’s currently trading. Is there another opportunity to buy low in the future? Since Erste Group Bank’s share price is quite volatile, we could potentially see it sink lower (or rise higher) in the future, giving us another chance to buy. 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. However, with a negative profit growth of -2.1% expected over the next couple of years, near-term growth certainly doesn’t appear to be a driver for a buy decision for Erste Group Bank. This certainty tips the risk-return scale towards higher risk.
Are you a shareholder?Currently, EBS appears to be trading around its fair value, but given the uncertainty from negative returns in the future, this could be the right time to reduce the risk in your portfolio. Is your current exposure to the stock optimal for your total portfolio? And is the opportunity cost of holding a negative-outlook stock too high? Before you make a decision on the stock, take a look at whether its fundamentals have changed.
Are you a potential investor?If you’ve been keeping an eye on EBS for a while, now may not be the most optimal time to buy, given it is trading around its fair value. The price seems to be trading at fair value, which means there’s less benefit from mispricing. In addition to this, the negative growth outlook increases the risk of holding the stock. However, there are also other important factors we haven’t considered today, which can help crystalize your views on EBS should the price fluctuate below its true value.
Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on Erste Group Bank. You can find everything you need to know about Erste Group Bank inthe latest infographic research report. If you are no longer interested in Erste Group Bank, 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. |
Why Erste Group Bank AG (VIE:EBS) Could Be Worth Watching
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Let's talk about the popular Erste Group Bank AG (VIE:EBS). The company's shares received a lot of attention from a substantial price movement on the WBAG over the last few months, increasing to €37.07 at one point, and dropping to the lows of €31.3. 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 Erste Group Bank's current trading price of €31.8 reflective of the actual value of the large-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Erste Group Bank’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.
View our latest analysis for Erste Group Bank
The stock seems fairly valued at the moment according to my valuation model. It’s trading around 11% below my intrinsic value, which means if you buy Erste Group Bank today, you’d be paying a reasonable price for it. And if you believe the company’s true value is €35.78, then there’s not much of an upside to gain from mispricing. Although, there may be an opportunity to buy in the future. This is because Erste Group Bank’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.
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 Erste Group Bank, it is expected to deliver a negative earnings growth of -2.1%, 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?EBS seems fairly priced right now, but given the uncertainty from negative returns in the future, this could be the right time to de-risk your portfolio. Is your current exposure to the stock beneficial for your total portfolio? And is the opportunity cost of holding a negative-outlook stock too high? Before you make a decision on the stock, take a look at whether its fundamentals have changed.
Are you a potential investor?If you’ve been keeping tabs on EBS for a while, now may not be the most advantageous time to buy, given it is trading around its fair value. The stock appears to be trading at fair value, which means there’s less benefit from mispricing. Furthermore, the negative growth outlook increases the risk of holding the stock. However, there are also other important factors we haven’t considered today, which can help gel your views on EBS should the price fluctuate below its true value.
Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on Erste Group Bank. You can find everything you need to know about Erste Group Bank inthe latest infographic research report. If you are no longer interested in Erste Group Bank, 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. |
Democratic debate winners and losers: Elizabeth Warren triumphs while Beto O'Rourke flounders
The Democrat Party 2020 presidential election debate in Miami was the major chance for the many of the candidates involved to pitch themselves to a national audience. The 10 candidates on the stage, with another 10 debating tomorrow, had around 10 minutes maximum to make sure they stood out. Some triumphed, some failed. The candidates were: Cory Booker, Beto O'Rourke, Elizabeth Warren , Julián Castro, Amy Klobuchar, Tulsi Gabbard, Tim Ryan, John Delaney, Bill de Blasio, and Jay Inslee. Ms Warren is the frontrunner of those names when it comes to the national polls, with Mr Booker and Mr O'Rourke the other candidates with solid name recognition. Here are our winners and losers from the two hours of questions, impassioned statements and squabbles. Winners Elizabeth Warren The senator from Massachusetts was the person to beat in the debate and would have expected the other candidates to come after her. Getting through the two hours without a major slip or spat would have been enough. But Ms Warren did more than that. She has set herself up as the candidate with plans, putting out more policy plans than almost anyone else among the more than 20 Democrat candidates. That showed in a strong first hour that involved questions on her favourite topics - healthcare and the economy. She has called for "structural change" in many departments and that message was relayed strongly. Other candidates will be bemoan her airtime, the third most among the candidates, and the fact she was given the last word. A quieter second half to the debate might be picked up by some - but giving other candidates a chance to fight with each other for the limelight left her looking quite stately. Cory Booker The New Jersey senator spoke for the longest amount of time, 10 minutes and 55 seconds, but he used it effectively. He was involved in most of the topics and had one standout moment talking about violence against the LGBT+ community and particularly. "We do not talk enough about transgender Americans — especially African-American trans Americans," he said to a cheer from the audience. Mr Booker had decent name recognition before the debate and will not have done his standing any harm. Julian Castro The former San Antonio mayor had been running under the radar - but had a very strong night. He managed to carve out more than nine minutes of speaking time and made sure he took advantage of an emphasis on immigration for a large section of the debate. Gained a cheer for his quote that the the photograph of the bodies of Oscar Alberto Martínez and his 23-month-old daughter, Angie Valeria who drowned crossing the Rio Grande should "p*** us all off". Story continues Painted President Donald Trump as cruel over his border policies in the wake of that and made former Texas Congressman Beto O'Rourke look slightly foolish when the pair clashed over what to do over immigration at the southern border. Amy Klobuchar The centrist candidate sounded level-headed throughout the debate, whether she landed enough big hits is open to question - but she got a couple of quips in about Mr Trump's unsuitability for office. She also scored a big point in taking Washington Governor Jay Inslee to task in trying to claim credit over legislating to protect a woman's right to choice an abortion in his state. Ms Klobuchar said that there were "three women on the stage" who had fought hard to protect those rights. Lower-polling candidates Tim Ryan and John Delaney got in a decent amount of airtime each - around seven minutes - and scored some decent soundbites on immigration and climate policy. Mr Inslee's major issue is global warming and much of his four minutes of talking was taken up with discussion of it. He will take that as a win. Losers Beto O'Rourke The former Texas congressman, who shot to national attention during his close-but-no-cigar run for the Senate in 2018 in a deeply Republican state, had a bad night. He has been able to raise a lot of money from donations, but was out of his depth on policy here and sounded forced. Speaking Spanish was a good way to reach out to the Latino vote - but being beaten on immigration issues by Mr Castro was not. He needs to start looking like a well-rounded candidate to lift his sagging poll numbers. But he did not do that here. Bill De Blasio The New York mayor wanted to show off his policies on wages and gun control to a national audience. What he actually did was repeatedly talk over others and failed to make much of an impact. Will have done his likeability with voters some harm. Tulsi Gabbard Ms Gabbard was the most searched candidate on Google during the debate, and that is likely what she would want. Pushed her military credentials when speaking about foreign policy which should win some fans, However, pivoting questions to her military record when it did not call for it, such as when being asked about the gender pay gap will have left a sour taste. The debate format It was always going to be difficult for candidates to make inroads in a format that had 10 people on stage on each of two nights. Policy was generally front and centre, which will have pleased party leadership, but in reality we will not get a true idea of candidates and their ideals for another few months. View comments |
How Do Analysts See Northgate plc (LON:NTG) Performing In The Next Couple Of Years?
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The most recent earnings announcement Northgate plc's (LON:NTG) released in June 2019 suggested that the company experienced a strong tailwind, leading to a double-digit earnings growth of 19%. Below, I've presented key growth figures on how market analysts perceive Northgate's earnings growth outlook over the next couple of years and whether the future looks even brighter than the past. Note that I will be looking at net income excluding extraordinary items to get a better understanding of the underlying drivers of earnings.
View our latest analysis for Northgate
Market analysts' consensus outlook for this coming year seems rather muted, with earnings expanding by a single digit 8.1%. The growth outlook in the following year seems much more optimistic with rates arriving at double digit 20% compared to today’s earnings, and finally hitting UK£68m by 2022.
While it is helpful to understand the growth rate year by year relative to today’s figure, it may be more insightful to estimate the rate at which the company is growing on average every year. The advantage of this approach is that we can get a better picture of the direction of Northgate's earnings trajectory over the long run, irrespective of near term fluctuations, which may be more relevant for long term investors. To calculate this rate, I've 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 9.2%. This means that, we can anticipate Northgate will grow its earnings by 9.2% every year for the next couple of years.
For Northgate, I've compiled three important factors you should further research:
1. Financial Health: Does it have a healthy balance sheet? Take a look at ourfree balance sheet analysis with six simple checkson key factors like leverage and risk.
2. Future Earnings: How does NTG's growth rate compare to its peers and the wider market? Dig deeper into the analyst consensus number for the upcoming years by interacting with ourfree analyst growth expectation chart.
3. Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of NTG? 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. |
Brief Commentary On Anglo American plc's (LON:AAL) Fundamentals
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Attractive stocks have exceptional fundamentals. In the case of Anglo American plc (LON:AAL), there's is a company that has been able to sustain great financial health, trading at an attractive share price. 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 Anglo American here.
AAL is financially robust, with ample cash on hand and short-term investments to meet upcoming liabilities. This suggests prudent control over cash and cost by management, which is a crucial insight into the health of the company. AAL seems to have put its debt to good use, generating operating cash levels of 0.78x total debt in the most recent year. This is also a good indication as to whether debt is properly covered by the company’s cash flows. AAL is currently trading below its true value, which means the market is undervaluing the company's expected cash flow going forward. According to my intrinsic value of the stock, which is driven by analyst consensus forecast of AAL's earnings, investors now have the opportunity to buy into the stock to reap capital gains. Also, relative to the rest of its peers with similar levels of earnings, AAL's share price is trading below the group's average. This further reaffirms that AAL is potentially undervalued.
For Anglo American, I've compiled three relevant factors you should further examine:
1. Future Outlook: What are well-informed industry analysts predicting for AAL’s future growth? Take a look at ourfree research report of analyst consensusfor AAL’s outlook.
2. Historical Performance: What has AAL's returns been like over the past? Go into more detail in the past track record analysis and take a look atthe free visual representations of our analysisfor more clarity.
3. Other Attractive Alternatives: Are there other well-rounded stocks you could be holding instead of AAL? 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. |
Anglo American plc (LON:AAL): Immense Growth Potential?
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Looking at Anglo American plc's (LON:AAL) earnings update in December 2018, the consensus outlook from analysts appear somewhat bearish, with earnings expected to grow by 9.1% in the upcoming year against the higher past 5-year average growth rate of 49%. By 2020, we can expect Anglo American’s bottom line to reach US$3.9b, a jump from the current trailing-twelve-month of US$3.5b. In this article, I've outline a few earnings growth rates to give you a sense of the market sentiment for Anglo American in the longer term. For those keen to understand more about other aspects of the company, you canresearch its fundamentals here.
Check out our latest analysis for Anglo American
Longer term expectations from the 17 analysts covering AAL’s stock is one of negative sentiment. Broker analysts tend to forecast up to three years ahead due to a lack of clarity around the business trajectory beyond this. To understand the overall trajectory of AAL's earnings growth over these next fews years, I've fitted a line through these analyst earnings forecast to determine an annual growth rate from the slope.
This results in an annual growth rate of -1.4% based on the most recent earnings level of US$3.5b to the final forecast of US$3.3b by 2022. This leads to an EPS of $2.43 in the final year of projections relative to the current EPS of $2.8. Earnings decline appears to be a result of cost growth exceeding top-line growth of 2.1% in the next three years. With this high cost growth, margins is expected to contract from 13% to 11% by the end of 2022.
Future outlook is only one aspect when you're building an investment case for a stock. For Anglo American, I've compiled three fundamental factors you should further research:
1. Financial Health: Does it have a healthy balance sheet? Take a look at ourfree balance sheet analysis with six simple checkson key factors like leverage and risk.
2. Valuation: What is Anglo American 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 Anglo American is currently mispriced by the market.
3. Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of Anglo American? 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. |
Investors shun UK tech startups amid fears Brexit Britain 'closing itself off'
Investment in UK startups is stalling. Photo: Neil Godwin/Future Publishing via Getty Images More investors are shunning UK tech startups because they think Britain is “closing itself off” through Brexit, a spokesman for the tech industry has warned. Giles Derrington, head of Brexit policy at the techUK trade body, said a no-deal Brexit would threaten Britain’s reputation as the “obvious global hub” for tech investment outside the US. Boris Johnson and Jeremy Hunt, the two remaining candidates in the race to be next Conservative leader and UK prime minister, have both talked up their willingness to lead Britain out of the EU without a deal. Derrington said at a Westminster select committee hearing on Wednesday: “Lots of people who work in tech are very internationally minded. What we are seeing, rightly or wrongly, is the reputation that the UK is somehow closing itself off from the rest of the world.” READ MORE: No-deal Brexit could spark ‘flurry of profit warnings’ from UK firms He claimed the “reputational damage” was already affecting recruitment in a sector suffering from skills shortages. He also said the number of venture capital deals in Britain had plummeted in the first three months of 2019, with a recent KPMG report revealing a 57% drop in successful deals. Jeremy Hunt takes a selfie with supporters. Photo: Press Association The figures showed the overall value of deals held steady at more than £1.19bn ($1.56 billion) compared to the previous year, despite the dramatic drop in transactions. Derrington said Britain still had the highest venture capital funding in Europe, but said it was down 20% on two years ago whereas investment in second-place Germany was up 30%. “The gap is closing,” he told MPs. Derrington said more established firms were still attracting funding, but warned newer, more innovative but riskier startups were losing out as Brexit uncertainty deterred investment. He said such firms could end up moving and growing in France, the Netherlands or other countries instead, with Britain feeling the consequences later down the line. Venture capital funds were already “splitting the difference” by investing in other countries as well as the UK, he added. Story continues READ MORE: London now has more fintech unicorns than San Francisco Just four years ago, “you didn’t bother to look anywhere else” but the UK if you were investing in tech outside the US, according to Derrington. But he said firms and investors were now increasingly considering other countries, aware they could face different data protection rules and financial regulation in the UK to the rest of the EU. Other governments abroad have begun making “quite good offers,” including “strong” pro-tech arguments and policies in France, according to Derrington. The KPMG report also showed UK tech firms were ploughing through their backlogs of work offering digital services at the fastest rate since 2011, which could suggest a slowdown in new orders. READ MORE: No-deal Brexit means more bureaucracy for electrical manufacturers But he suggested UK tech still had a bright future, adding: “Tech is still a growing sector, the UK is still a very good place for tech companies and therefore there will still be tech investment. “The question is the scale and level of that investment compared to what it would have been.” The UK tech spokesman also said his membership, which includes more than 900 firms, were most worried about a no-deal Brexit’s impact on other sectors, and its knock-on effects. A catastrophic hit to UK car manufacturing from new delays or tariffs could spill over into a steep drop in spending with Britain’s digital advertising firms, he said. |
Why REITs are better than buy-to-let for property investment
A row of houses stand on a residential street in Weybridge, UK. Photo: Jack Taylor/Getty Images For over a decade now, Real Estate Investment Trusts (REITs) have operated in the UK. REITs give investors a great tax-efficient vehicle to invest in the property market — better, perhaps, than the traditional buy-to-let market. If you want to get involved in the property market and are weighing your options, here are five reasons why REITs might be a better bet than becoming a landlord through buy-to-let. Diversity of portfolio REITs are made up of investments in multiple property assets. This gives you an excellent diversity of portfolio without the trouble of investing in each individual property yourself. You can also easily invest in multiple sectors by purchasing shares in different REITs, such as one focused on residential and another on retail. READ MORE: Self-build revolution: The pros and cons of building your own home from scratch Spread risk Because there is a large number of property investments bundled together under one REIT, the risk is spread out. So if one particular investment goes south, plenty of others are there to shore up the REIT’s overall performance. With buy-to-let, you are often tying up your money in one or a handful of properties, creating a greater exposure to potential loss. Taxation In recent years the government has hit the buy-to-let sector with a number of tax rises, such as higher stamp duty, to hinder the politically-unpopular landlord market. These measures have dramatically increased the cost of business for buy-to-let investors, making it a less attractive prospect. By contrast, REITs have a favourable tax environment. As the firm Property Investment Partners puts it, “As most of a REIT’s taxable income is distributed to shareholders by way of dividends, it is largely exempt from corporation tax, which means that the usual double taxation — corporation tax plus the additional tax on distributed dividends — is eliminated.” READ MORE: Why letting young people plunder their pensions to buy property is a terrible idea Story continues Involvement REIT investors need only monitor the property markets their investments are exposed to, as well as the trust’s general performance, which is easy compared to the effort buy-to-let investors must go to. Landlords need to make sure they have tenants, are complying with housing regulations, can handle problems relating to their tenants, and so on. Then add to that monitoring the health of the local housing market where they’re invested. The work of a buy-to-let investor is much more involved than that of a REIT investor. Quick sale Offloading your REIT investment is the same as selling shares. It’s quick and easy, allowing you to cash in or to cut losses swiftly. Buy-to-let investors, on the other hand, must go through the legal rigmarole of selling property to offload their investments, which is expensive and long-winded. There’s no quick exit for buy-to-let investors. |
Labour Jeremy Corbyn Brexit second referendum EU debate
Jeremy Corbyn has been accused of sitting on the fence on the issue of a second referendum over Brexit. Photo: Brian Lawless/AP Labour leader Jeremy Corbyn has faced criticism from Remain campaigners for failing to take a stronger position in favour of an EU referendum. Corbyn delayed moving towards a stronger position in favour of an EU referendum in order to consult unions further over the next two weeks, as he allegedly faced criticism from John McDonnell and other allies at this weeks NEC meeting. Speaking on the delay, pro-EU group Best for Britain CEO Naomi Smith said: “The country needs an opposition that opposes Brexit. "Right now Labour is being squeezed from both sides of the electorate. Voters are leaving the party in their droves, with three and a half fold more leaving for Remain parties than Brexit-backing ones. "Those around the Labour leader know this. But while they want to take a while with this decision, time is not something we have.” While much of the public criticism faced by Corbyn has been from pro-EU activists, Labour MPs who oppose a referendum are becoming increasingly concerned. A handful of shadow ministers are believed to be seriously considering resigning should Corbyn push the whips harder on the issue, Yahoo Finance can reveal. With a view that the whips office will push harder for shadow ministers to support a referendum, a source close to one shadow minister told Yahoo Finance they expect to resign if the Withdrawal Agreement is brought back in September, as Labour will likely table an amendment in favour of a second referendum. “It’s party policy and it’s still not good enough for them [the pro-EU activists],” said one referendum opponent. “The whips let shadow ministers get away with abstaining last time around, we don’t think they’ll let that happen again.” While resignations are expected, they are unlikely to be immediate. Sources close to an anti-referendum shadow minister said that an announced change in policy isn’t the end of the world given how many times Labour have allowed MPs to veer away from party line previously. Story continues About 20 MPs have been named to Yahoo Finance as likely to oppose Labour’s new policy, but those involved in organising the group of sceptics believe that the majority of those will not resign over the issue. “For many, the damage [of the party being seen as pro-EU] has already been done, so they might as well stay. Others like Karen [Lee, John McDonnell’s PPS] have been talked into the policy change by people like Diane Abbott.” Shadow ministers such as Jo Platt, Gloria De Piero and Liz McInnes are anticipated to resign if an unequivocal position is taken, with shadow cabinet members such as Rebecca Long-Bailey, Ian Lavery and Sue Hayman thought to be sympathetic with their position. Labour figures expect the situation to come to a head if the Withdrawal Agreement is brought back in September. |
With EPS Growth And More, Cake Box Holdings (LON:CBOX) Is Interesting
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Some have more dollars than sense, they say, so even companies that have no revenue, no profit, and a record of falling short, can easily find investors. But as Warren Buffett has mused, 'If you've been playing poker for half an hour and you still don't know who the patsy is, you're the patsy.' When they buy such story stocks, investors are all too often the patsy.
If, on the other hand, you like companies that have revenue, and even earn profits, then you may well be interested inCake Box Holdings(LON:CBOX). While profit is not necessarily a social good, it's easy to admire a business than can consistently produce it. Loss-making companies are always racing against time to reach financial sustainability, but time is often a friend of the profitable company, especially if it is growing.
View our latest analysis for Cake Box Holdings
In the last three years Cake Box Holdings's earnings per share took off like a rocket; fast, and from a low base. So the actual rate of growth doesn't tell us much. As a result, I'll zoom in on growth over the last year, instead. Cake Box Holdings has grown its trailing twelve month EPS from UK£0.069 to UK£0.075, in the last year. That amounts to a small improvement of 8.5%.
I like to take a look at earnings before interest and (EBIT) tax margins, as well as revenue growth, to get another take on the quality of the company's growth. While Cake Box Holdings did well to grow revenue over the last year, EBIT margins were dampened at the same time. So if EBIT margins can stabilize, this top-line growth should pay off for shareholders.
In the chart below, you can see how the company has grown earnings, and revenue, over time. To see the actual numbers, click on the chart.
Cake Box Holdings isn't a huge company, given its market capitalization of UK£70m. That makes it extra important to check on itsbalance sheet strength.
Like that fresh smell in the air when the rains are coming, insider buying fills me with optimistic anticipation. Because oftentimes, the purchase of stock is a sign that the buyer views it as undervalued. However, insiders are sometimes wrong, and we don't know the exact thinking behind their acquisitions.
The good news for Cake Box Holdings shareholders is that no insiders reported selling shares in the last year. So it's definitely nice that Jaswir Singh bought UK£10.0k worth of shares at an average price of around UK£1.60.
On top of the insider buying, we can also see that Cake Box Holdings insiders own a large chunk of the company. Indeed, with a collective holding of 52%, company insiders are in control and have plenty of capital behind the venture. To me this is a good sign because it suggests they will be incentivised to build value for shareholders over the long term. With that sort of holding, insiders have about UK£36m riding on the stock, at current prices. That should be more than enough to keep them focussed on creating shareholder value!
One important encouraging feature of Cake Box Holdings is that it is growing profits. Better yet, insiders are significant shareholders, and have been buying more shares. To me, that all makes it well worth a spot on your watchlist, as well as continuing research. Of course, just because Cake Box Holdings is growing does not mean it is undervalued. If you're wondering about the valuation, check outthis gauge of its price-to-earnings ratio, as compared to its industry.
The good news is that Cake Box Holdings is not the only growth stock with insider buying. Here'sa a list of them... with insider buying in the last three months!
Please note the insider transactions discussed in this article refer to reportable transactions in the relevant jurisdiction
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
2 Norwegian shipping executives indicted in antitrust case
BALTIMORE (AP) — Two Norwegian shipping executives have been indicted on charges that they participated in a sprawling antitrust conspiracy. The case against the two Norwegian businessmen has been unsealed in federal court in Baltimore. It's part of an ongoing U.S. investigation into bid rigging and other anticompetitive actions in the international shipping industry. The accused men were once top executives at Oslo-based Hoegh Autoliners. Prosecutors have identified them as Ingar Skiaker and Oyvind Ervik. It's unclear whether they had lawyers who could comment. In a Wednesday statement, Assistant Attorney General Makan Delrahim said a U.S. investigation revealed that collusion was "endemic and rampant" in the shipping industry for years. He says Hoegh Autoliners has already pleaded guilty and been sentenced to pay a $21 million fine. The company didn't immediately return an email. View comments |
Zain brings 5G to Saudi Arabia with Nokia
Press Release
5G realizes digital transformation and growth of the country in support of Saudi Arabia`s Vision 203027 June 2019
Espoo, Finland - Zain Saudi Arabia (Zain KSA), one of the world`s first 5G network operators, is bringing unprecedented change to the Kingdom of Saudi Arabia with the roll out of its 5G network using Nokia`s end-to-end portfolio. Under a three-year deal, thousands of 5G sites are being deployed bringing faster speeds and higher quality across its networks to support a renaissance in services for both the industrial sector and consumers.
As well as enhancing mobile broadband services in the Kingdom, the ultra-high bandwidth and low-latency 5G network will enable new applications and services for advanced industrial automation, improved education, healthcare, entertainment, and more.
Eng. Sultan Abdulaziz AlDeghaither, CEO of Zain KSA, said:"Zain Saudi is a pioneer in introducing next-gen telecoms services and with this 5G deployment we continue that tradition as we will launch a wide range of new applications and services for our customers. We are confident that our long-term partner Nokia`s technologies and professional services will build a reliable and highly secure 5G network to revolutionize the way people live and work."
Amr K. El Leithy, head of the Middle East and Africa marketat Nokia, said:"We are committed to transforming the service experience for Zain`s customers and enhancing industrial productivity by enabling extreme broadband services.This contract, which includes 5G RAN, backhaul, security and services, demonstrates the breadth of our full-portfolio strengths and depth of global expertise in deploying these next-generation projects."
The deal introduces 5G using 2.6 GHz and 3.5 GHz, along with massive Multiple Input Multiple Output (mMIMO) to deliver enhanced network capacity, coverage, and improved downlink and uplink speeds. In addition, the deal will introduce E-Band microwave in certain areas to allow for ultra-high-capacity backhaul networks.
Nokia currently has 43 commercial 5G deals with operators around the world and is involved in more than 100 5G-related customer engagements. As with Zain KSA, many of Nokia`s commercial deals involve radio access technology as well as additional technology from Nokia`s end-to-end portfolio - a sign that operators are recognizing Nokia`s unique position and capability as the right choice for networks with long-term evolution in mind. Read about Nokia`s5G commercial contracts.
Overview of the solution for the 5G deployment:
• Nokia AirScaleradio platform to enhance efficiency and scale easily as needed
• Nokia 5G Anyhaul:Nokia Wavence`s E-band microwave radio with multi-frequency carrier aggregation will support multi-gigabit capacities and low-latency microwave transport
• Nokia NetGuard Security Managementsolution to ensure a highly secure 5G network
• Nokia Services:Full turnkey services including covering network planning, integration, implementation, project management, logistics and technical support
Resources:
• Web page:Nokia 5G
About NokiaWe create the technology to connect the world. We develop and deliver the industry`s only end-to-end portfolio of network equipment, software, services and licensing that is available globally. Our customers include communications service providers whose combined networks support 6.1 billion subscriptions, as well as enterprises in the private and public sector that use our network portfolio to increase productivity and enrich lives.
Through our research teams, including the world-renowned Nokia Bell Labs, we are leading the world to adopt end-to-end 5G networks that are faster, more secure and capable of revolutionizing lives, economies and societies. Nokia adheres to the highest ethical business standards as we create technology with social purpose, quality and integrity.www.nokia.com
Media Inquiries
Kannan KNokia Media RelationsPhone: +971 529 823 406E-mail:kannan.k@nokia.com
Nokia CommunicationsPhone: +358 10 448 4900Email:press.services@nokia.com
This announcement is distributed by West Corporation on behalf of West Corporation clients.The issuer of this announcement warrants that they are solely responsible for the content, accuracy and originality of the information contained therein.Source: NOKIA via GlobeNewswireHUG#2246662 |
South Koreans get 5G service in 'scariest place' on North Korea border
By Ju-min Park
TAESUNG FREEDOM VILLAGE, South Korea (Reuters) - South Korean mobile carrier KT Corp said on Thursday it launched 5G services in one of the world's most heavily armed border zones separating the two Koreas.
The next generation technology is available in Taesung Freedom Village - a South Korean community in the 4-km (2.5-mile) wide Demilitarized Zone (DMZ) between North and South Korea that former U.S. President Bill Clinton once called "the scariest place on Earth".
Isolated North Korea and the wealthy, democratic South are still technically at war after the 1950-53 Korean War ended in an armistice, not a peace treaty.
The new technology will give villagers better access to online services, such as yoga classes, and enable them to water crops by remote control, KT said.
"Life here will get easier because villagers are normally escorted by military when they need to work on farms," Chae Uk, a KT official, told reporters during a tour of the village where the company installed two 5G base stations.
The 200 residents - who live only 400 meters (437 yards) from a border guarded by heavily-armed soldiers, barbed wire and anti-tank barricades - cannot leave their homes or work in the fields without a military escort.
South Korea's intelligence service tested the 5G stations to ensure network signals do not cross the border, Chae said.
KT, a former state-run company, also operates military hot lines between the Koreas and landline networks in a jointly-run industrial complex just north of the border.
South Korea is racing to market 5G and expand coverage throughout the country, hoping it will spur breakthroughs in fields such as smart cities and autonomous cars.
The technology can offer 20-times faster data speeds than 4G long-term evolution (LTE) networks and better support for artificial intelligence and virtual reality with low latency.
However, network speeds may be slow inside the village school which is heavily protected against stray bullets, KT said.
Village mayor Kim Dong-gu welcomed the arrival of 5G in their "island on land".
"Now our place with so many restrictions and tensions in reality has a nice virtual life," he told reporters.
(Reporting by Ju-min Park; Editing by Darren Schuettler) |
Are Vesuvius plc's (LON:VSVS) Interest Costs Too High?
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Vesuvius plc (LON:VSVS) is a small-cap stock with a market capitalization of UK£1.5b. While investors primarily focus on the growth potential and competitive landscape of the small-cap companies, they end up ignoring a key aspect, which could be the biggest threat to its existence: its financial health. Why is it important? Understanding the company's financial health becomes vital, since poor capital management may bring about 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, potential investors would need to take a closer look, and I suggest youdig deeper yourself into VSVS here.
VSVS has built up its total debt levels in the last twelve months, from UK£436m to UK£485m , which accounts for long term debt. With this increase in debt, VSVS's cash and short-term investments stands at UK£237m to keep the business going. On top of this, VSVS has produced UK£142m in operating cash flow in the last twelve months, resulting in an operating cash to total debt ratio of 29%, signalling that VSVS’s debt is appropriately covered by operating cash.
With current liabilities at UK£394m, it seems that the business has maintained a safe level of current assets to meet its obligations, with the current ratio last standing at 2.35x. The current ratio is calculated by dividing current assets by current liabilities. For Machinery 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 debt reaching 42% of equity, VSVS may be thought of as relatively highly levered. This is somewhat unusual for small-caps companies, since lenders are often hesitant to provide attractive interest rates to less-established businesses. No matter how high the company’s debt, if it can easily cover the interest payments, it’s considered to be efficient with its use of excess leverage. A company generating earnings before interest and tax (EBIT) at least three times its net interest payments is considered financially sound. In VSVS's case, the ratio of 17.11x suggests that interest is comfortably covered, which means that lenders may be inclined to lend more money to the company, as it is seen as safe in terms of payback.
Although VSVS’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 VSVS's liquidity needs, this may be its optimal capital structure for the time being. Keep in mind I haven't considered other factors such as how VSVS has been performing in the past. I suggest you continue to research Vesuvius to get a better picture of the small-cap by looking at:
1. Future Outlook: What are well-informed industry analysts predicting for VSVS’s future growth? Take a look at ourfree research report of analyst consensusfor VSVS’s outlook.
2. Valuation: What is VSVS 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 VSVS 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. |
What Does Vesuvius plc's (LON:VSVS) Balance Sheet Tell Us About It?
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While small-cap stocks, such as Vesuvius plc (LON:VSVS) with its market cap of UK£1.5b, 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, since poor capital management may bring about 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, potential investors would need to take a closer look, and I suggest youdig deeper yourself into VSVS here.
VSVS's debt levels surged from UK£436m to UK£485m over the last 12 months , which includes long-term debt. With this increase in debt, VSVS currently has UK£237m remaining in cash and short-term investments , ready to be used for running the business. Moreover, VSVS has produced cash from operations of UK£142m over the same time period, leading to an operating cash to total debt ratio of 29%, signalling that VSVS’s debt is appropriately covered by operating cash.
With current liabilities at UK£394m, the company has been able to meet these obligations given the level of current assets of UK£926m, with a current ratio of 2.35x. The current ratio is calculated by dividing current assets by current liabilities. For Machinery companies, this ratio is within a sensible range since there is a bit of a cash buffer without leaving too much capital in a low-return environment.
VSVS is a relatively highly levered company with a debt-to-equity of 42%. This is a bit unusual for a small-cap stock, since they generally have a harder time borrowing than large more established companies. No matter how high the company’s debt, if it can easily cover the interest payments, it’s considered to be efficient with its use of excess leverage. A company generating earnings before interest and tax (EBIT) at least three times its net interest payments is considered financially sound. In VSVS's case, the ratio of 17.11x suggests that interest is comfortably covered, which means that lenders may be willing to lend out more funding as VSVS’s high interest coverage is seen as responsible and safe practice.
Although VSVS’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 VSVS'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 VSVS has company-specific issues impacting its capital structure decisions. I recommend you continue to research Vesuvius to get a better picture of the small-cap by looking at:
1. Future Outlook: What are well-informed industry analysts predicting for VSVS’s future growth? Take a look at ourfree research report of analyst consensusfor VSVS’s outlook.
2. Valuation: What is VSVS 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 VSVS 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. |
Estimating The Intrinsic Value Of D4t4 Solutions Plc (LON:D4T4)
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How far off is D4t4 Solutions Plc (LON:D4T4) from its intrinsic value? Using the most recent financial data, we'll take a look at whether the stock is fairly priced by taking the expected future cash flows and discounting them to their present value. I will use the Discounted Cash Flow (DCF) model. Don't get put off by the jargon, the math behind it is actually quite straightforward.
We generally believe that a company's value is the present value of all of the cash it will generate in the future. However, a DCF is just one valuation metric among many, and it is not without flaws. Anyone interested in learning a bit more about intrinsic value should have a read of theSimply Wall St analysis model.
View our latest analysis for D4t4 Solutions
We use what is known as a 2-stage model, which simply means we have two different periods of growth rates for the company's cash flows. Generally the first stage is higher growth, and the second stage is a lower growth phase. In the first stage we need to estimate the cash flows to the business over the next ten years. Where possible we use analyst estimates, but when these aren't available we extrapolate the previous free cash flow (FCF) from the last estimate or reported value. We assume companies with shrinking free cash flow will slow their rate of shrinkage, and that companies with growing free cash flow will see their growth rate slow, over this period. We do this to reflect that growth tends to slow more in the early years than it does in later years.
Generally we assume that a dollar today is more valuable than a dollar in the future, so we discount the value of these future cash flows to their estimated value in today's dollars:
[{"": "Levered FCF (\u00a3, Millions)", "2019": "\u00a38.10", "2020": "\u00a35.30", "2021": "\u00a35.50", "2022": "\u00a35.66", "2023": "\u00a35.80", "2024": "\u00a35.92", "2025": "\u00a36.03", "2026": "\u00a36.13", "2027": "\u00a36.22", "2028": "\u00a36.31"}, {"": "Growth Rate Estimate Source", "2019": "Analyst x1", "2020": "Analyst x1", "2021": "Analyst x1", "2022": "Est @ 2.96%", "2023": "Est @ 2.44%", "2024": "Est @ 2.08%", "2025": "Est @ 1.82%", "2026": "Est @ 1.64%", "2027": "Est @ 1.52%", "2028": "Est @ 1.43%"}, {"": "Present Value (\u00a3, Millions) Discounted @ 7.92%", "2019": "\u00a37.51", "2020": "\u00a34.55", "2021": "\u00a34.38", "2022": "\u00a34.17", "2023": "\u00a33.96", "2024": "\u00a33.75", "2025": "\u00a33.54", "2026": "\u00a33.33", "2027": "\u00a33.13", "2028": "\u00a32.94"}]
Present Value of 10-year Cash Flow (PVCF)= £41.26m
"Est" = FCF growth rate estimated by Simply Wall St
We now need to calculate the Terminal Value, which accounts for all the future cash flows after this ten year period. The Gordon Growth formula is used to calculate Terminal Value at a future annual growth rate equal to the 10-year government bond rate of 1.2%. We discount the terminal cash flows to today's value at a cost of equity of 7.9%.
Terminal Value (TV)= FCF2029× (1 + g) ÷ (r – g) = UK£6.3m × (1 + 1.2%) ÷ (7.9% – 1.2%) = UK£95m
Present Value of Terminal Value (PVTV)= TV / (1 + r)10= £UK£95m ÷ ( 1 + 7.9%)10= £44.51m
The total value is the sum of cash flows for the next ten years plus the discounted terminal value, which results in the Total Equity Value, which in this case is £85.77m. In the final step we divide the equity value by the number of shares outstanding.This results in an intrinsic value estimate of £2.19. Compared to the current share price of £2.61, the company appears around fair value at the time of writing. Remember though, that this is just an approximate valuation, and like any complex formula - garbage in, garbage out.
The calculation above is very dependent on two assumptions. The first is the discount rate and the other is the cash flows. Part of investing is coming up with your own evaluation of a company's future performance, so try the calculation yourself and check your own assumptions. The DCF also does not consider the possible cyclicality of an industry, or a company's future capital requirements, so it does not give a full picture of a company's potential performance. Given that we are looking at D4t4 Solutions as potential shareholders, the cost of equity is used as the discount rate, rather than the cost of capital (or weighted average cost of capital, WACC) which accounts for debt. In this calculation we've used 7.9%, which is based on a levered beta of 1.007. Beta is a measure of a stock's volatility, compared to the market as a whole. We get our beta from the industry average beta of globally comparable companies, with an imposed limit between 0.8 and 2.0, which is a reasonable range for a stable business.
Although the valuation of a company is important, it shouldn’t be the only metric you look at when researching a company. The DCF model is not a perfect stock valuation tool. Rather it should be seen as a guide to "what assumptions need to be true for this stock to be under/overvalued?" If a company grows at a different rate, or if its cost of equity or risk free rate changes sharply, the output can look very different. For D4t4 Solutions, I've put together three additional aspects you should further research:
1. Financial Health: Does D4T4 have a healthy balance sheet? Take a look at ourfree balance sheet analysis with six simple checkson key factors like leverage and risk.
2. Future Earnings: How does D4T4's growth rate compare to its peers and the wider market? Dig deeper into the analyst consensus number for the upcoming years by interacting with ourfree analyst growth expectation chart.
3. Other High Quality Alternatives: Are there other high quality stocks you could be holding instead of D4T4? Exploreour interactive list of high quality stocksto get an idea of what else is out there you may be missing!
PS. Simply Wall St updates its DCF calculation for every GB stock every day, so if you want to find the intrinsic value of any other stock justsearch here.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
Estimating The Fair Value Of D4t4 Solutions Plc (LON:D4T4)
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How far off is D4t4 Solutions Plc (LON:D4T4) from its intrinsic value? Using the most recent financial data, we'll take a look at whether the stock is fairly priced by estimating the company's future cash flows and discounting them to their present value. I will use the Discounted Cash Flow (DCF) model. It may sound complicated, but actually it is quite simple!
We generally believe that a company's value is the present value of all of the cash it will generate in the future. However, a DCF is just one valuation metric among many, and it is not without flaws. If you want to learn more about discounted cash flow, the rationale behind this calculation can be read in detail in theSimply Wall St analysis model.
Check out our latest analysis for D4t4 Solutions
We are going to use a two-stage DCF model, which, as the name states, takes into account two stages of growth. The first stage is generally a higher growth period which levels off heading towards the terminal value, captured in the second 'steady growth' period. To begin with, we have to get estimates of the next ten years of cash flows. Where possible we use analyst estimates, but when these aren't available we extrapolate the previous free cash flow (FCF) from the last estimate or reported value. We assume companies with shrinking free cash flow will slow their rate of shrinkage, and that companies with growing free cash flow will see their growth rate slow, over this period. We do this to reflect that growth tends to slow more in the early years than it does in later years.
A DCF is all about the idea that a dollar in the future is less valuable than a dollar today, so we discount the value of these future cash flows to their estimated value in today's dollars:
[{"": "Levered FCF (\u00a3, Millions)", "2019": "\u00a38.10", "2020": "\u00a35.30", "2021": "\u00a35.50", "2022": "\u00a35.66", "2023": "\u00a35.80", "2024": "\u00a35.92", "2025": "\u00a36.03", "2026": "\u00a36.13", "2027": "\u00a36.22", "2028": "\u00a36.31"}, {"": "Growth Rate Estimate Source", "2019": "Analyst x1", "2020": "Analyst x1", "2021": "Analyst x1", "2022": "Est @ 2.96%", "2023": "Est @ 2.44%", "2024": "Est @ 2.08%", "2025": "Est @ 1.82%", "2026": "Est @ 1.64%", "2027": "Est @ 1.52%", "2028": "Est @ 1.43%"}, {"": "Present Value (\u00a3, Millions) Discounted @ 7.92%", "2019": "\u00a37.51", "2020": "\u00a34.55", "2021": "\u00a34.38", "2022": "\u00a34.17", "2023": "\u00a33.96", "2024": "\u00a33.75", "2025": "\u00a33.54", "2026": "\u00a33.33", "2027": "\u00a33.13", "2028": "\u00a32.94"}]
Present Value of 10-year Cash Flow (PVCF)= £41.26m
"Est" = FCF growth rate estimated by Simply Wall St
After calculating the present value of future cash flows in the intial 10-year period, we need to calculate the Terminal Value, which accounts for all future cash flows beyond the first stage. For a number of reasons a very conservative growth rate is used that cannot exceed that of a country's GDP growth. In this case we have used the 10-year government bond rate (1.2%) to estimate future growth. In the same way as with the 10-year 'growth' period, we discount future cash flows to today's value, using a cost of equity of 7.9%.
Terminal Value (TV)= FCF2029× (1 + g) ÷ (r – g) = UK£6.3m × (1 + 1.2%) ÷ (7.9% – 1.2%) = UK£95m
Present Value of Terminal Value (PVTV)= TV / (1 + r)10= £UK£95m ÷ ( 1 + 7.9%)10= £44.51m
The total value, or equity value, is then the sum of the present value of the future cash flows, which in this case is £85.77m. In the final step we divide the equity value by the number of shares outstanding.This results in an intrinsic value estimate of £2.19. Compared to the current share price of £2.61, the company appears around fair value at the time of writing. Valuations are imprecise instruments though, rather like a telescope - move a few degrees and end up in a different galaxy. Do keep this in mind.
The calculation above is very dependent on two assumptions. The first is the discount rate and the other is the cash flows. Part of investing is coming up with your own evaluation of a company's future performance, so try the calculation yourself and check your own assumptions. The DCF also does not consider the possible cyclicality of an industry, or a company's future capital requirements, so it does not give a full picture of a company's potential performance. Given that we are looking at D4t4 Solutions as potential shareholders, the cost of equity is used as the discount rate, rather than the cost of capital (or weighted average cost of capital, WACC) which accounts for debt. In this calculation we've used 7.9%, which is based on a levered beta of 1.007. Beta is a measure of a stock's volatility, compared to the market as a whole. We get our beta from the industry average beta of globally comparable companies, with an imposed limit between 0.8 and 2.0, which is a reasonable range for a stable business.
Although the valuation of a company is important, it shouldn’t be the only metric you look at when researching a company. The DCF model is not a perfect stock valuation tool. Rather it should be seen as a guide to "what assumptions need to be true for this stock to be under/overvalued?" If a company grows at a different rate, or if its cost of equity or risk free rate changes sharply, the output can look very different. For D4t4 Solutions, I've put together three relevant aspects you should further examine:
1. Financial Health: Does D4T4 have a healthy balance sheet? Take a look at ourfree balance sheet analysis with six simple checkson key factors like leverage and risk.
2. Future Earnings: How does D4T4's growth rate compare to its peers and the wider market? Dig deeper into the analyst consensus number for the upcoming years by interacting with ourfree analyst growth expectation chart.
3. Other High Quality Alternatives: Are there other high quality stocks you could be holding instead of D4T4? Exploreour interactive list of high quality stocksto get an idea of what else is out there you may be missing!
PS. Simply Wall St updates its DCF calculation for every GB stock every day, so if you want to find the intrinsic value of any other stock justsearch here.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
Is Dolphin Drilling ASA's (OB:DDASA) CEO Overpaid Relative To Its Peers?
Want to participate in a short research study ? Help shape the future of investing tools and you could win a $250 gift card! Ivar Brandvold has been the CEO of Dolphin Drilling ASA ( OB:DDASA ) since 2009. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Next, we'll consider growth that the business demonstrates. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. This process should give us an idea about how appropriately the CEO is paid. See our latest analysis for Dolphin Drilling How Does Ivar Brandvold's Compensation Compare With Similar Sized Companies? Our data indicates that Dolphin Drilling ASA is worth øre66m, and total annual CEO compensation is US$722k. (This is based on the year to December 2017). While we always look at total compensation first, we note that the salary component is less, at US$644k. We took a group of companies with market capitalizations below US$200m, and calculated the median CEO total compensation to be US$323k. Thus we can conclude that Ivar Brandvold receives more in total compensation than the median of a group of companies in the same market, and of similar size to Dolphin Drilling ASA. However, this doesn't necessarily mean the pay is too high. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous. The graphic below shows how CEO compensation at Dolphin Drilling has changed from year to year. OB:DDASA CEO Compensation, June 27th 2019 Is Dolphin Drilling ASA Growing? Over the last three years Dolphin Drilling ASA has shrunk its earnings per share by an average of 18% per year (measured with a line of best fit). It saw its revenue drop -48% over the last year. Unfortunately, earnings per share have trended lower over the last three years. And the impression is worse when you consider revenue is down year-on-year. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. It could be important to check this free visual depiction of what analysts expect for the future . Story continues Has Dolphin Drilling ASA Been A Good Investment? Given the total loss of 96% over three years, many shareholders in Dolphin Drilling ASA are probably rather dissatisfied, to say the least. It therefore might be upsetting for shareholders if the CEO were paid generously. In Summary... We compared total CEO remuneration at Dolphin Drilling ASA with the amount paid at companies with a similar market capitalization. As discussed above, we discovered that the company pays more than the median of that group. We think many shareholders would be underwhelmed with the business growth over the last three years. Arguably worse, investors are without a positive return for the last three years. Some might well form the view that the CEO is paid too generously! If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Dolphin Drilling. Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies, that have HIGH return on equity and low debt. We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com . This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
Weaning U.S. power sector off fossil fuels would cost $4.7 trillion: study
By Nichola Groom
(Reuters) - Eliminating fossil fuels from the U.S. power sector, a key goal of the "Green New Deal" backed by many Democratic presidential candidates, would cost $4.7 trillion and pose massive economic and social challenges, according to a report released on Thursday by energy research firm Wood Mackenzie.
That would amount to $35,000 per household, or nearly $2,000 a year for a 20-year plan, according to the study, which called the price tag for such a project "staggering."
The report is one of the first independent cost estimates for what has become a key issue in the 2020 presidential election, with most Democrats proposing multi-trillion-dollar plans to eliminate U.S. carbon emissions economy-wide.
Front-runner Joe Biden's plan to get to zero emissions, for example, carries a $1.7 trillion price tag, while Beto O'Rourke's proposal comes in at $5 trillion. Representative Alexandria Ocasio-Cortez, one of the authors of the "Green New Deal," a non-binding Congressional resolution, put the cost of a comprehensive climate solution at around $10 trillion.
Such ideas aim to tap into a growing sense of urgency about global warming on both sides of the political divide, but have been panned by President Donald Trump and many Republicans as being unfeasible, costly, and a threat to the economy.
A Reuters/Ipsos poll https://www.reuters.com/article/us-usa-election-climatechange/americans-demand-climate-action-reuters-poll-idUSKCN1TR15W on Wednesday showed most Americans back "aggressive" climate change action like that proposed by Democrats, but that support falls off dramatically if they sense the initiatives would cost them.
"COMPLETE REDESIGN"
Wood Mackenzie's report focuses solely on what it would cost to green the U.S. power sector, a top contributor to greenhouse gas emissions – but does not include costs for other sectors like transport, agriculture or manufacturing.
The report said the transition would require "a complete redesign of the power sector" to adapt to a system of mostly intermittent resources like wind and solar energy that rely on the wind blowing and sun shining to generate electricity.
It estimated that 1,600 gigawatts of wind and solar capacity would have to be added, at a cost of around $1.5 trillion. That's more than 11 times the nation's current wind and solar capacity. And while the costs of wind and solar have come down, a sharp increase in demand could strain supply chains and send prices of key materials like steel and copper upward.
The study also said 900 GW of energy storage would be required to make sure wind and solar assets can work reliably even when the weather isn’t cooperating, 900 times more than is currently installed. That sharp increase in investment in still-nascent energy storage technology would raise the cost of all-renewable generation to $4 trillion, the report said.
Finally, adding 200,000 miles of high voltage transmission to get wind and solar energy from the plains or deserts to major metropolitan areas would add another $700 billion.
The report warned that sharp increases in customer electricity rates to pay for such a transition could also result in a public backlash against aggressive climate policies and ultimately slow progress.
"If you move too fast you run the risk of upending the entire initiative," Dan Shreve, one of the report's authors, said in an interview.
The report said extending the timeframe for such a transition to allow for newer technologies to be developed and including nuclear power plants and some portion of natural gas generation could reduce the costs significantly.
Allowing gas to supply 20% of the nation's power needs, for example, would reduce renewable energy costs by 20% and energy storage investment by 60%, Wood Mackenzie said.
(Reporting by Nichola Groom; editing by Richard Valdmanis and Phil Berlowitz) |
Slumbering FX confounds traders, prompts fear of rude awakening
By Tommy Wilkes and Tom Finn
LONDON (Reuters) - Currency markets are so listless, the head of European foreign exchange sales at Nomura has taken to selling bonds instead.
Pitching currency opportunities to clients is pointless without the big exchange rate swings that pique investor interest, Fabrizio Russo told Reuters.
"There's no point. When markets are quiet there's really no point in calling (clients)."
"I've been selling them bonds," he added, contrasting the slow pace with the frenzied buying of European government bonds in recent weeks.
Russo's experience is echoed in dealing rooms across London, the main trading centre for the $5.1 trillion-a-day FX market. Some trading veterans said it reminded them of conditions before the 2008 global financial crisis erupted.
Deutsche Bank's Currency Volatility Index has declined since 2017 to its lowest in 4-1/2 years and currently stands at about two-thirds its levels of early 2019 and less than half the peaks of three years ago.
For an interactive chart: https://tmsnrt.rs/2V7E5Iw
Low 'vol', shorthand for implied volatility gauges embedded in options markets, reflects relative order in exchange rates -- markets without the big pricing gaps that offer money-making opportunities and increase demand for hedging products.
And with central banks expected to extend their decade-long stimulus programmes, the FX funk could be extended as short and long-term interest rates converge towards zero again and rate gaps between major currencies shrink once more.
Just how resistant currency markets are to shake-ups was evident on June 18, the day European Central Bank President Mario Draghi shocked markets by signalling more rate cuts may be coming. He sent 10-year German bond yields to record lows, while French borrowing costs fell below 0% for the first time and European shares jumped 2%.
But the euro? It slipped 0.4%, a tiny move by historical standards and only its fourth-largest daily change in June.
Euro/dollar, the world's biggest currency pair, has not traded below $1.10 or above $1.16 since October, a range of little more than 4%, even with trade war and recession threats and the U.S. Federal Reserve's U-turn on interest rates.
In contrast, volatility in U.S. Treasuries has surged to its highest since April 2017, while the equity market "fear" index VIX remains above multi-year lows plumbed in 2017.
"The Fed is totally in play and rates are moving drastically and there's no translation to FX. It's odd to see," said Russell LaScala, Deutsche Bank's co-head of foreign exchange. "It's become this very sleepy asset class."
SHORTING VOL
One question is whether this unusual calm could end in panic, as in March 2008 when Deutsche's volatility index rocketed to over 12, after spending most of 2007 stuck below 7.
Options show little sign of that. One-year implied euro-dollar vol has slumped to 6, from nearly 8 in January.
But while there's no shortage of political and economic uncertainties arguing for a volatility resurgence, the change of market behaviour could sow the seeds of its eventual end.
Many traders have been lured into 'short vol' strategies whereby, for example, they buy an option earning them a "premium" so long as euro/dollar remains between $1.11 and $1.15 for the next month. If volatility surges, smashing the currency out of its range, traders lose their original payment.
In 2017, becalmed U.S. stocks tempted many on Wall St into short vol bets that eventually exploded in February 2018 -- dubbed "volmageddon" -- on the relatively minor trigger of a punchy U.S. inflation reading.
"It's a very risky strategy. But at the same time it's paid off for four years," Deutsche Bank's LaScala said, describing recent late entrants to the vol selling trade as "tourists".
Scant volatility is also prompting bond and equity managers to cut back on hedging, typically used to insure against losses.
Nomura's Russo said investors who had held yen as a risk hedge were disappointed when the Japanese currency didn't rise more during December's equity rout. It firmed around 3% that month while Wall Street fell 10%.
Many have since stopped using yen, long viewed as a safe haven, to hedge portfolios, he said.
Similarly, the euro, often a hedge against European risks, has barely responded to recent selloffs in Italian bonds.
Hedge funds have also trimmed bets on currency direction.
Nomura's Russo said the Fed's dovish turn has sparked some interest, especially from investors prepared to bet the dollar had peaked. He has been telling clients "they have to be ready" if volatility does return.
NO DIRECTION
Low volatility has been bad for bank earnings. Daily average currency trading volumes have been down about 10% annual from last year in recent months on platforms such as CLS.
With trading profits heavily reliant on vol, investment banks' FX revenues were just $16.3 billion last year compared to $18.4 billion in 2015, data firm Coalition estimates.
One senior trader said forex revenues at his London-based bank have shrunk 5% a year for several years.
"You can't make any money out of something that doesn't move. Low volatility is fine but very low volatility is not," said Richard Benson, head of portfolio investments at asset manager Millennium Global.
With investors on the sidelines, traders are spending more time at client lunches and less time transacting.
James, an FX trader for a British bank who asked for his surname not to be used, sometimes listens to music at his desk.
"Looking at these stubbornly stable prices on my screen ... It's like watching paint dry," he lamented.
(Additional reporting by Ritvik Carvalho; Editing by Sujata Rao and Catherine Evans) |
Is Headlam Group plc (LON:HEAD) An Attractive Dividend Stock?
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Today we'll take a closer look at Headlam Group plc (LON:HEAD) from a dividend investor's perspective. Owning a strong business and reinvesting the dividends is widely seen as an attractive way of growing your wealth. 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.
A high yield and a long history of paying dividends is an appealing combination for Headlam Group. We'd guess that plenty of investors have purchased it for the income. 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 Headlam Group for its dividend, and we'll go through these below.
Explore this interactive chart for our latest analysis on Headlam Group!
Dividends are usually paid out of company earnings. If a company is paying more than it earns, then the dividend might become unsustainable - hardly an ideal situation. As a result, we should always investigate whether a company can afford its dividend, measured as a percentage of a company's net income after tax. Headlam Group paid out 63% of its profit as dividends, over the trailing twelve month period. 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.
We also measure dividends paid against a company's levered free cash flow, to see if enough cash was generated to cover the dividend. The company paid out 59% of its free cash flow, which is not bad per se, but does start to limit the amount of cash Headlam Group has available to meet other needs. It's positive to see that Headlam Group's dividend is covered by both profits and cash flow, since this is generally a sign that the dividend is sustainable, and a lower payout ratio usually suggests a greater margin of safety before the dividend gets cut.
Consider gettingour latest analysis on Headlam Group's financial position here.
One of the major risks of relying on dividend income, is the potential for a company to struggle financially and cut its dividend. Not only is your income cut, but the value of your investment declines as well - nasty. Headlam Group has been paying dividends for a long time, but for the purpose of this analysis, we only examine the past 10 years of payments. The dividend has been cut by more than 20% on at least one occasion historically. During the past ten-year period, the first annual payment was UK£0.23 in 2009, compared to UK£0.25 last year. Dividend payments have grown at less than 1% a year over this period.
Modest growth in the dividend is good to see, but we think this is offset by historical cuts to the payments. It is hard to live on a dividend income if the company's earnings are not consistent.
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. It's good to see Headlam Group has been growing its earnings per share at 17% a year over the past 5 years. Earnings per share have been growing rapidly, but given that it is paying out more than half of its earnings as dividends, we wonder how Headlam Group will keep funding its growth projects in the future.
Dividend investors should always want to know if a) a company's dividends are affordable, b) if there is a track record of consistent payments, and c) if the dividend is capable of growing. Headlam Group's is paying out more than half its income as dividends, but at least the dividend is covered by both reported earnings and cashflow. Next, earnings growth has been good, but unfortunately the dividend has been cut at least once in the past. Ultimately, Headlam Group comes up short on our dividend analysis. It's not that we think it is a bad company - just that there are likely more appealing dividend prospects out there on this analysis.
Earnings growth generally bodes well for the future value of company dividend payments. See if the 4 Headlam Group analysts we track are forecasting continued growth with ourfreereport on analyst estimates for the company.
Looking for more high-yielding dividend ideas? Try ourcurated list of dividend stocks with a yield above 3%.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
KB Home (KBH) Q2 2019 Earnings Call Transcript
Image source: The Motley Fool.
KB Home(NYSE: KBH)Q2 2019 Earnings CallJun 26, 2019,5:00 p.m. ET
• Prepared Remarks
• Questions and Answers
• Call Participants
Operator
Good afternoon. My name is Devon, and I will be your conference operator today. I would like to welcome everyone to KB Home 2019 second-quarter earnings conference call. [Operator instructions] Today's conference call is being recroded, and will be avaialbe for replay at the company's website, kbhome.com, through July 26.
Now I will like to turn the call over to Jill Peters, senior vice president, investor relations. Jill, thank you, you may begin.
Jill Peters--Senior Vice President, Investor Relations
Thank you, Devon. Good afternoon, everyone, and thank you for joining us today to review our results for the second quarter of fiscal 2019. With me are Jeff Mezger, chairman, president, and chief executive officer; Jeff Kaminski, executive vice president and chief financial officer; Matt Mandino, executive vice president and chief operating officer; Bill Hollinger, senior vice president and chief accounting officer; and Thad Johnson, senior vice president and treasurer. Before we begin, let me note that during this call, items will be discussed that are considered forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.
These statements are not guarantees of future results, and the company does not undertake any obligation to update them. Due to factors outside of the company's control, including those detailed in today's press release and in filings with the Securities and Exchange Commission, actual results could be materially different from those stated or implied in the forward-looking statements. In addition, a reconciliation of the non-GAAP measures referenced during today's discussion to their most directly comparable GAAP measures can be found in today's press release and/or on the investor relations page of our website at kbhome.com. And with that, I will turn the call over the Jeff Mezger.
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Jeff Mezger--Chairman, President, and Chief Executive Officer
Thank you, Jill, and good afternoon. We continued to deliver solid performance in the second quarter under our returns-focused growth plan, which prioritizes the profitable growth of our business and greater productivity and efficiency of our assets. Our execution on this plan has been consistent and strong since we launched it in 2016 and has produced measurable results. We have realized significant growth in our community count this year, which filled a 15% year-over-year increase in our second quarter net orders.
In addition, by substantially reducing our debt while growing our active inventory, we expect to lower our annual interest incurred in 2019 by more than $40 million since the plan was introduced. In the second quarter, we accelerated our community count growth by successfully opening 43 new communities, bringing our total openings over the last 12 months 123, which had us well positioned for the spring selling season. Our second quarter average community count was up 17% from a year ago, reflecting increases in all four regions, with three of our regions producing greater than 20% growth. We expect to continue growing our average community count year over year over the next two quarters and remain committed to realizing a 10% to 15% increase for the year, which sets us up well as we look ahead to 2020.
We generated just over $1 billion in total revenues in the second quarter and diluted earnings per share of $0.51. Our housing gross profit margin, excluding the inventory-related charges, held even with our 2019 first quarter at 17.6%. While this result was lower year over year, we are encouraged by the composition of our $2.2 billion backlog, which we expect to drive gross margin improvement over the balance of the year, as Jeff will share with you shortly. From a macro perspective, the combination of a decline in mortgage interest rates, along with steady economic growth, high consumer confidence and favorable demographics, in particular household formation, continues to provide a healthy backdrop for our industry.
In addition, the buyer pause that the industry experienced in the latter part of 2018 has generally moderated home prices, which is positive for the market given the significant levels of price appreciation over the past few years. On the other side of the equation, supply remains insufficient to meet demand, stemming from the under production of new homes over multiple years and the shortage of existing home inventory, particularly at the price points where we operate. These factors contributed to the solid market conditions that we saw in the early weeks of March, which we spoke of on our last earnings conference call. On a per-community basis, net orders were a healthy 5.4 per month, which closely tracked the prior year quarter's robust absorption pace.
Our business gained momentum as the second quarter progressed fueled in large part by the significant number of new community openings that I discussed earlier, resulting in a 15% year-over-year increase in net orders. Each of our four regions produced a double-digit increase in the second quarter. Net order value expanded by 13% in the second quarter to $1.5 billion. This result help bolster our backlog value to $2.2 billion as I mentioned earlier.
In terms of units, our backlog in the second quarter was up about 2% year over year. Moving on to the regional commentary, our net orders were up 18% in our West Coast region driven by an increase in average community count and a healthy pace of 5.7 net orders per community per month, compared to 6.2 net orders in the year-earlier quarter. In Northern and Central California, we experienced generally solid market conditions. In the Bay Area, we expanded our average community count, contributing to net order growth of more than 20% while achieving an absorption pace slightly ahead of our company average.
As we are now successfully rebuilding our Bay Area community count, the division's order result supports our expectation for a sequentially higher company ASP and gross margin in the second half of this year. In Southern California, our net order trends improved. In both our Los Angeles and Inland Empire divisions, net orders increased by roughly 25% driven by community count growth in areas with healthy market conditions. We view these results positively as we have been monitoring our Inland Empire business for any ripple effect from conditions along the coast.
Within our coastal business, the smallest of our California divisions in terms of units, while market conditions are softer than the Inland areas, the net order decline that we experienced was primarily due to the sellout of one community in San Diego that alone produced nearly 30% of this division's net orders in our 2018 second quarter. Finally, in April, we were pleased to successfully open our first community in Seattle, in Pierce County, a commuter market southeast of the city. When we started up our Seattle business, we identified an opportunity to offer affordable product in the high $300,000 to $400,000 price range, targeting first-time and first move-up buyers. Our first community, Falling Water, is aligned with this market approach, with an ASP starting at $385,000 as compared to a median new home price of $620,000 and a median existing home price of $465,000 across the three-county metro Seattle area.
We expect deliveries from this community by the end of the year and look forward to our second community in Seattle opening later this year as well. In our Central region, our largest in terms of units, net orders increased 11% driven by our Houston and Colorado divisions. In Houston, the combination of a strong economy, population growth and our positioning at affordable price points in desirable areas resulted in the highest quarterly net sales for this division in over a decade. The most active sales volume price band in Houston is between $200,000 and $300,000, and with our ASP of roughly $245,000, we are offering in the sweet spot of this market.
Elsewhere in the region, our Colorado division opened five new communities in the second quarter. The openings were well received in this supply constrained market, contributing to a 45% increase in net orders. Demand in the Denver housing market is strong driven by positive in-migration and job growth. We are well positioned to meet this demand with our ASP of approximately $485,000 in between the median new home price of $525,000, a median resale price of $425,000, on point with our pricing strategy, providing affordable product in attractive areas.
In addition to these specific market updates, I would also like to comment on KBHS, our mortgage joint venture with Stearns Lending. In the two years since becoming fully operational, KBHS has provided high-quality level of service to our home buyers, helping to drive our customer satisfaction scores higher. In addition the JV's consistent performance has supported our divisions as well, enabling more predictability in deliveries and contributing to our ability to successfully deliver homes to our buyers on time. With a capture rate of nearly 70% in the second quarter, growing significantly from 52% in the year-ago quarter, and our expectation for continued enhanced execution from KBHS, we anticipate a meaningful increase in the income contribution from our JV in the second half of this year.
In closing, with a backlog value of $2.2 billion and a considerable number of new communities still to open this year, we are well positioned to deliver year-over-year growth in revenue and profitability by the fourth quarter of this year and for momentum entering 2020. With strong execution on our core business strategy to increase our scale, we have achieved a top five market share ranking in just over 70% of our divisions as compared to roughly 50% when we launched our plan. We have a business model with our build-to-order approach that allows us the flexibility to move with demand and react quickly to market changes. This differentiates us and contributes to our growing share of first-time buyers, which increased to 55% of our business in the second quarter.
We are poised for a strong finish to 2019 and look forward to updating you on our progress moving forward. With that, I'll now turn the call over to Jeff for the financial review. Jeff?
Jeff Kaminski--Executive Vice President and Chief Financial Officer
Thank you, Jeff, and good afternoon, everyone. I will now provide highlights of our financial results for the second quarter as well as our outlook for the third-quarter and full-year 2019. We are very pleased with our second quarter performance, particularly our strong backlog conversion which helped drive housing revenues, and the solid absorption pace in community count growth that led to a 15% year-over-year increase in net orders. We believe we are well positioned for a strong second half of the year and expect to generate improvements in virtually all our key financial metrics.
In the second quarter, our housing revenues were just over $1 billion as compared to $1.1 billion in the prior-year period, reflecting an 8% decrease in our overall average selling price that was partially offset by a 2% increase in the number of homes delivered. The primary drivers of the overall housing revenue decrease were a lower proportion of total deliveries from our West Coast region and a decline in our West Coast region average selling price that stem from both a mix shift toward deliveries in lower price inland markets and the absence of certain communities with high average selling prices that closed out in prior quarters. The 2,768 homes we delivered in the quarter represented a backlog conversion rate of 60%. This strong performance reflected several factors, including a sequential and year-over-year reduction in construction cycle time, an increase in closings financed by our mortgage joint venture and a higher percentage of standing inventory that was both sold and closed within the quarter.
We ended the second quarter with over 5,900 homes in backlog, an increase of 2% versus the prior year. Our ending backlog value was $2.17 billion as compared to the year-earlier level of $2.24 billion, which represented our highest second quarter backlog value in 11 years. Considering the quarter-end backlog and expected future net orders, we currently anticipate third-quarter housing revenues in a range of $1.1 billion to $1.18 billion. For the full year, we believe our housing revenues will range from $4.45 billion to $4.6 billion.
In the second quarter, our overall average selling price of homes delivered decreased 8% year over year to approximately $368,000 due to the impact from our West Coast region that I previously mentioned and a mix shift in our Central region with the lower proportion of deliveries from our Colorado operations. We believe the expected increase mix of West Coast region deliveries driven by the successful rebuilding of our California community count will result in higher average selling prices in the second half of the year. For the 2019 third quarter, we are projecting an overall average selling price in the range of $395,000 to $400,000 and believe our ASP for the full year will be in a range of $385,000 to $390,000. Homebuilding operating income decreased from the year-earlier quarter to $52 million or 5.1% of revenues.
Excluding inventory-related charges of $4.3 million in the quarter and $6.5 million in the year-earlier quarter, this metric was 5.5%, compared to 7.3%. For the third quarter, we expect our homebuilding operating income margin, excluding the impact of any inventory-related charges, will be in the range of 6.4% to 7%. For the full-year 2019, we expect this metric to be in the range of 6.7% to 7.3%. Our housing gross profit margin for the second quarter was 17.2%, compared to 17.1% for the prior-year period.
Excluding inventory-related charges, our gross margin for the quarter was 17.6%, compared to 17.7% for the 2018 second quarter. The current year metric reflected favorable impacts from lower amortization of capitalized interest as well as the change in the classification of certain model complex cost due to our adoption of the new revenue accounting standard, ASC 606. These favorable impacts were offset by pricing pressure on fourth quarter and first-quarter orders due to weaker marketing conditions during those periods, the effect of certain high-ASP and high-margin West Coast communities having closed out in previous quarters and reduced operating leverage due to lower housing revenues and higher fixed community level expenses supporting community count growth. Our adjusted housing gross profit margin, which excludes inventory-related charges as well as the amortization of previously capitalized interest, was 21.3% for the second quarter compared to 22.2% for the same period in 2018.
Assuming no inventory-related charges, we expect the sequential increase in our third-quarter housing gross profit margin to a range of 17.9% to 18.5% and further improvement in the fourth quarter. Considering this expected favorable trend, we believe our full-year housing gross profit margin, excluding inventory-related charges, will be within the same range of 17.9% to 18.5%. Our selling, general and administrative expense ratio of 12.1% for the quarter was up as compared to the 2018 second quarter record low ratio of 10.4%. The increase mainly reflected the ASC 606 impact mentioned earlier, reduced operating leverage due to lower housing revenues, increased marketing expenses to support new community openings and the impact of legal recoveries and favorable legal settlements in the prior-year period.
As we continue to prioritize containment of overhead costs and expect to realize favorable leverage impacts from higher housing revenues in the second half of the year, we are forecasting our third-quarter SG&A expense ratio to be in the range of 11.3% to 11.9% and our full-year 2019 ratio to be in the range of 11% to 11.6%. Income tax expense for the quarter was $9.3 million, which reflected $5.2 million of favorable impacts from federal energy tax credits and benefits from stock-based compensation. Without these impacts, the effective tax rate for the quarter would have approximated 26%. We expect our effective tax rate for the remaining quarters of 2019 to be approximately 26%, excluding potential impacts from stock-based compensation.
Overall, we reported net income for the second quarter of $47.5 million or $0.51 per diluted share. For modeling purposes, diluted earnings per share for the remaining quarters of 2019 should be calculated using approximately 92.5 million shares, which reflects the 8.4 million reduction in our diluted share count due to first-quarter repayment of our convertible senior notes. Approximately 93.5 million shares should be used for the full-year calculation, representing a year-over-year decrease of 7%. Turning now to community count.
Our second quarter average of 252 was up 17% from 215 in the same quarter of 2018. We ended the quarter with 255 communities, including 27 communities or 11% that were previously classified as land held for future development. As we continue to successfully implement our strategy of monetizing these inactive assets and with less than $200 million in this inventory category at quarter end, we expect to see further declines in the number of reactivated communities in the future. We invested $399 million in land, land development and fees during the second quarter, with $132 million of the total representing new land acquisitions.
Over the past 12 months, in addition to the capital allocated to pay down debt, we deployed over $1.8 billion into land-related investments and opened 123 new communities, as Jeff mentioned earlier. On a year-over-year basis, we anticipate our third-quarter average community count will increase in the range of 15% to 18% as compared to the 2018 third quarter. We still expect our average community count for the 2019 full year to be up approximately 10% to 15% year over year. We ended the second quarter with total liquidity of approximately $600 million, including $179 million of cash and $419 million available under our unsecured revolving credit facility.
Earlier in the year, we entered into a new $50 million unsecured letter of credit facility separate from our existing $500 million unsecured revolving credit facility. Over time, we anticipate that most of our letters of credit will be transferred to or issued under this new line, which will free up capacity on the revolver and enhance liquidity. At quarter end, our debt-to-capital ratio of 45.8% improved by 930 basis points as compared to the second quarter of last year, reflecting a $280 million increase in stockholders' equity combined with $500 million of debt reduction. As we continue to drive improvements in our credit metrics, we have tightened once again our leverage objective from a 35% to 45% net debt-to-capital target to a debt-to-capital ratio within that same range.
While our quarter-end ratio was just above the upper limit of our revised target range, we expect our debt-to-capital ratio to be within this range by year-end. Along with our return of capital to shareholders in the form of our quarterly dividend, our capital allocation priorities remain consistent with a focus on investment in land assets to grow the business and improve returns and continue deleveraging the balance sheet to retain earnings growth enhanced by future debt reduction. In summary, our second quarter highlights included a strong backlog conversion rate driving over $1 billion in housing revenues, a measurable increase in community count and a healthy sales pace per community contributing to a 15% year-over-year increase in net orders, a sequential expansion of our operating margin and a significant improvement in our debt-to-capital ratio to 45.8%. We believe that our expanded community count and solid quarter-end backlog value position us to achieve growth in housing revenues and improvement in both our gross and operating margins during the second half of this year.
We will now take your questions. Devon, please open the lines.
Operator
[Operator instructions] Our first question comes from the line of Alan Ratner with Zelman and Associates. Please proceed with your questions.
Alan Ratner--Zelman and Associates -- Analyst
Hey, guys. Good afternoon. Congrats. Really, really great results.
So first question, I was hoping you might be able to talk a little bit about what you're seeing on the incentive environment. I think there's a lot of confusion out there right now on exactly what's going on. I mean you have a few builders talking about incentives coming down, but it sounds like they're still at fairly elevated levels across the industry. At the same time, I look at your absorption numbers and they're extremely strong, and it would seem like you should have some pricing power at that type of a sales pace.
So do you have an ability to push price now? Or are you kind of being a little bit conservative there just given how many communities you're opening up? And just any general commentary you could have on that front would be great.
Jeff Mezger--Chairman, President, and Chief Executive Officer
Well, Alan, thanks for the recognition on the quarter. As you know, our business model doesn't really focus much on incentives. We believe in offering the consumer the best value and price and then personalization in our studios. So we don't have a heavy incentive business model.
We did -- there is some closing cost we pay in certain communities where the buyers may not have the cash to close without it. I think in the quarter, our sales incentives were up 30 bps, was it, Jeff? Up 30 bps sequentially, so it's not a big mover for us. I think the markets are pretty rational. I do think overall the industry is backing off of their incentives or pushing price.
And as we look at our communities, we did raise price during the quarter in the majority of our communities, so we were able to take some price while holding the fairly strong absorption rate.
Alan Ratner--Zelman and Associates -- Analyst
Great. And I assume that -- would that kind of continue through the quarter, through May and into June? Or did you see kind of progressively that the pricing power improving through that period?
Jeff Mezger--Chairman, President, and Chief Executive Officer
Well, I don't want to talk June because we're just closing the second quarter. But within our second quarter, I would say it was pretty consistent through the quarter. We manage each asset every week based on how our sales are going. And if we have an opportunity to take price, we'll take price.
If the community where sales are a little softer, we won't take price. I would say it was fairly consistent through the quarter. As we shared in our prepared remarks, we did see our sales strengthening sequentially from March to April to May.
Alan Ratner--Zelman and Associates -- Analyst
Got it. That's very helpful. Second question if I could, just for Jeff K., thank you for the updated targets on the leverage and the goals there. You have been incredibly opportunistic through this cycle with buybacks, especially when your stock is seemingly disconnected with reality.
And it would seem like we're kind of entering one of those periods right now, stocks back below book value and in the face of what I perceive to be extremely strong results. So can you talk about a little bit just the willingness or the opportunity there to maybe deviate a little bit from that target? If the stock remains at these low levels for an extended period of time, would you be willing to do a similar buyback like you've been in the past?
Jeff Kaminski--Executive Vice President and Chief Financial Officer
Right. Well, let's first talk about the target level. I mean it's a pretty wide range, right? It's 35% to 45%. We're just above the range right now at the end of the second quarter.
And with just retained earnings growth alone by the end of the year, we could clearly see that to be well within it. It is a wide range for a reason. It's there to allow us flexibility on capital allocation decisions as we go forward due to market conditions. But as you know, I think you're using the right words with our stock buybacks in the past.
They have been opportunistic buybacks. They're not -- it's not a scheduled program at this point. We're still focused on our two main capital priorities, capital allocation priorities, of growing the business and improving our returns as well as getting the leverage in place. But we've been opportunistic in the past and with fairly modest buybacks at certain points in time, and I'd say we'd still be open to that but no prediction of where we're going with it at this point.
Alan Ratner--Zelman and Associates -- Analyst
Great. And if I could just go back real quickly just to clarify something that Jeff M. said on the incentives, I just want to clarify it. I think you mentioned incentives were up.
I assume that's on closings, not on orders, so a little bit of a backward-looking data point there.
Jeff Mezger--Chairman, President, and Chief Executive Officer
Correct.
Alan Ratner--Zelman and Associates -- Analyst
OK. Got it. Thanks guys. Good luck.
Operator
Our next question comes from the line of Stephen East with Wells Fargo. Please proceed with your question.
Truman Patterson--Wells Fargo Securities -- Analyst
Hi. Good afternoon, guys. This is actually Truman Patterson on for Stephen. Nice quarter.
So thanks for clearing up the incentive commentary. I realize you guys don't use a lot of incentives, but you said that pricing was up in the majority of communities. Is there any way you guys might be able to quantify the magnitude of that improvement from first quarter to second or maybe the percentage of the communities that you actually saw some base pricing power?
Jeff Mezger--Chairman, President, and Chief Executive Officer
Truman, it's very hard to quantify that because every asset is unique, and it could be $1,000 on a $500,000 house or $5,000 on a $300,000 house. It just depends on how the community is pacing. And I think a part we're sharing, we expect margin improvement going forward, and part of that is just the price that we've been able to take.
Truman Patterson--Wells Fargo Securities -- Analyst
OK. OK, thanks. That actually segues nice into my follow-up. Just a little bit more clarity on the gross margin ramp in the back half of 2019.
It seems like a little bit of that is just a little bit better pricing, if you will. But could you maybe walk us through the moving parts because it seems like there's a pretty nice ramp in the back half of the year that hit your guidance, anyway you can just walk us through the moving parts to get investors comfortable?
Jeff Kaminski--Executive Vice President and Chief Financial Officer
Sure. Yeah, there's several things that are coming into play there. I mean the one -- and we should never lose sight of the mix impact that you see in all this. We have a fairly large change in our portfolio.
As I mentioned during the prepared remarks, and I think Jeff mentioned as well, we opened 123 new communities since the end of the second quarter of last year. That was on a base of 210. So we ended the second quarter last year 210 communities, opened 123 new and closeout of 78. So there's been a pretty large churn in communities that we're selling out of right now that will provide third and fourth-quarter deliveries.
On top of that, when you look at some of the tailwinds that we have, we should continue to enjoy some year-over-year positives from the improvements that we've implemented in our capital structure. So the lower interest incurred is now coming through in lower amortized interest, and we expect to see more of that as we go through the rest of the year. And the new community openings themselves should be providing a higher uptick in gross margins in a lot of those communities. And a lot of those communities are actually replacing reactivated communities at lower-margin levels.
So we'll see some impact from that as well. So when you roll it all up, we do expect to see two quarters of sequential improvement and a full fiscal year that will be in that 17.9% to 18.5% range.
Operator
Our next question comes from the line of Nishu Sood with Deutsche Bank. Please proceed with your question.
Nishu Sood--Deutsche Bank -- Analyst
Thank you. The absorption pace was really strong in the second quarter. At the end of March, you had anticipated that it would be similar to '17, the second quarter in 2017, which would imply kind of continued down double-digit pace as you saw, and the housing market was weaker. What changed so dramatically? I mean it implies a really serious ramp in April and May, just wanted to understand the drivers of that.
Where there successful grand openings? Jeff K., you were just mentioning how many communities you've opened. Did that boost the absorptions? What changed so dramatically from the end of March?
Jeff Mezger--Chairman, President, and Chief Executive Officer
Well, Nishu, I can make a couple of comments and then turn it to Jeff. At the time we guided on the absorption pace, we were early in the spring, so it's still unclear to us how strong the spring would be. And we also had the variable of so many communities yet to open, and you wonder if the communities are going to hit as expected and as planned. And for the most part, the community openings hit and -- but I wouldn't just attribute it to that.
Our overall sales rate around the system was pretty good. We target strategically to optimize our assets. We target about four a month on average. You have to do better than four in your strongest selling part of the year, which is right now.
So that 5.4 is right on track for us to optimize the asset. Anything else you want to add?
Jeff Kaminski--Executive Vice President and Chief Financial Officer
Yeah. Just as we move through the quarter, we saw a pretty nice ramp. I mean when we were doing the call, at the time of the call, we were actually only up single digit over the prior year, so that was tracking about the 2017 absorption pace. And it just started picking up and getting progressively better as we enter the quarter.
As Jeff mentioned, the new communities performed very well. And importantly, a large proportion of them opened when they were supposed to open, and we had a lot of openings in the quarter. I think we said last call that we were expecting to open over 35, and we ended up opening 43 new communities so that helped us well. But I think just general market conditions, the way we had our product positioned, I think some of the changes we made in positioning and modifying the product has helped and we're right price point at the right place at the right time, and we did really well on sales as a result.
Nishu Sood--Deutsche Bank -- Analyst
Got it. No, that sounds really encouraging. And I think -- I know you're not commenting on June in particular. But as we think about some of the factors that you described, how should we think about the sustainability of some of those factors? Is there going to be a continued rate of new community openings which might impact it? Or say, sequential trends, would you be able to expect them to continue? The third quarter of last year had a pretty nice absorption pace as well.
So I guess what it boils down to is would you expect to be able to sustain or meet that rate in the third quarter.
Jeff Mezger--Chairman, President, and Chief Executive Officer
Nishu, you're correct. We don't want to talk about the third quarter. My expectation is that we'll see the normal seasonal trends that you typically see from Q2 to Q3. We don't see any storm clouds on the horizon in the housing markets because there's no inventory, rates are low and people are out there looking and buying.
So I think you'll see the normal seasonal trends. We do have a lot of openings still coming at us here in the third quarter, and we're hopeful that we produce nice sales numbers as the quarter rolls through.
Operator
Our next question comes from the line of Matthew Bouley with Barclays. Please proceed with your question.
Christina Chiu--Barclays -- Analyst
Hi. This is actually Christina Chiu on for Matt. Thanks for taking the question. And just looking at California, you had an 18% order growth.
And I was wondering if you could elaborate and provide more color on what caused the strength there and what you're expecting regionally in the back half of the year.
Jeff Mezger--Chairman, President, and Chief Executive Officer
OK. Christina, I can make a few comments, and then Jeff can offer some more. As we shared in the prepared comments, Northern Cal overall did very well. And if you look at the inland areas, I touched on our LA business, Inland Empire, Central Valley, Sacramento, they're all very good right now.
In the Bay Area, we're bridging through this. We had a slowdown in community count as we've successfully sold through a lot of high-priced margin communities last year, and it's taken some time to reload and get the new communities open. And that's what we started to see in our order results here in Q2. The expected openings hit.
And while it's higher priced on average than anywhere else we operate in the state, it's still at a low price relative to the Bay Area, and I think that's why you saw some strong sales. As we shared, in the Bay Area, we're on the affordable side, and there's such a shortage of housing up there. The price points are compelling. When you move down to Southern Cal, coastal is a small business for us.
We want to grow it, but it's still a little soft, and it's the higher-priced goods. The -- our view on that market is it held steady, that sales rates are similar. We're not seeing pricing pressure. So price is holding.
It's just not as robust as the inland areas are. And because prices are holding, it's continuing to fuel a lot of demand out in the more affordable inland areas of Southern Cal. So overall, we're pleased with what we're seeing in California right now.
Christina Chiu--Barclays -- Analyst
Got it. And then given your lot position at this stage of the year, nearly 55,000 lots, are you comfortable highlighting at least directionally what community count growth could look like beyond 2019?
Jeff Kaminski--Executive Vice President and Chief Financial Officer
No, not at this point. We really try not to get too far out ahead on things like that as far as guidance goes, we're seeing obviously a really nice cadence this year. We've been very successful in opening communities. And I'll say actually relatively on time, at least within the same quarters, is what we plan.
And we're looking forward to the next couple of quarters of year-over-year growth. And we'll bubble up again later in the year and give you guys more guidance on what 2020 is going to look like.
Operator
Our next question comes from the line of Stephen Kim with Evercore ISI. Please proceed with your question.
Stephen Kim--Evercore ISI -- Analyst
Yeah, thanks very much guys. And thanks for all the color and good job in the quarter. Your guidance is really interesting obviously because it suggests a nice margin ramp, and I want to talk about that for a sec. One of the things we get a lot is people wondering whether there's a lag effect from rates.
And as we think about that, your build-to-order business model, which seemed to be well teed up to capture a drop in rates that happens maybe better than guys that do more spec building because the fellows who decide to sign on the dotted line and buy one of your homes, little time goes by and, all of a sudden, they can afford more, and they can cut back and maybe buy some more goodies to stick in the house. And so I was curious as to, just generally, have you seen that. And is there any way that you can quantify the delta between the price that you initially sell the house at and what you ultimately are closing the house at? Is that a delta that you can monitor? Is that -- has it widened in the last few months? And do you project it to widen in the next several months?
Jeff Kaminski--Executive Vice President and Chief Financial Officer
Well, Stephen, I guess a few things just on the business model itself. We try to lock in all the option and choices before starting the house. And in fact, we don't try to, that's what we do, do. So we actually require the customers to lock in on their options before start.
So you don't really see a creep in the price of the house once we're under construction. That's the one way we're able to really still build efficiently and not -- and stay away from the customization and more toward the personalization part of our strategy. So that's one point. The second, I think when you look at what happens with the lower rate environment, you certainly would see less cancellations.
If rates were moving up, you could potentially see some cans coming out of the inability to still qualify for a loan at the new rate. Our cancellations ticked down three points or so this quarter, which I think was an indication partially of that anyway, so that's a good thing. But I think overall, the strength of the market and the build-to-order approach, I think, definitely has a lot to do with our strong sales base. And you see it almost every quarter with our pace versus the rest of the industry.
We're always one of the highest sales paces in the quarter. And I think a lot of that's a result of customers like the ability to personalize their homes, and they like the business model. So I think that -- I'm not sure it gets right to the answer to your question or right to your question, but that's kind of what we're seeing right now in the market.
Stephen Kim--Evercore ISI -- Analyst
Yeah. I guess the only difference would be if there's maybe a couple of weeks or maybe a three-week lag between when you take the order and when you actually start the house. I imagine it's not too great a period of time though, so that probably isn't a huge factor. Could you talk a little bit then about what you're seeing in your margins as we look -- I'm drilling into this very nice ramp you seem to be forecasting for your gross margin into the fourth quarter implied through your year in the 3Q guide you've given.
Can you talk a little bit about what you're seeing in terms of input costs that are informing your view on that -- your margin for the year relative to the 3Q margin that you talked about? Particularly, I'm thinking lumber. Are you anticipating that you're going to see a benefit all the way through your fourth quarter before the spike in lumber futures that we've just seen maybe weighs on your 1Q of next year? Just trying to get a sense for input cost inflation movements.
Jeff Kaminski--Executive Vice President and Chief Financial Officer
Sure. Yeah, the input cost side is pretty good news for us. We just had our second consecutive quarter of decreases in the input cost. And we talked about it in a lot of conference calls in the past, we use an index approach to it.
We think it's probably the cleanest way to show it where you're taking out factors like square footage differences and things like that. So we'll index the house. And we'll calculate what that indexed house will build for at a point in time, and then we'll compare that index to the same house indexed at a later point in time. So if you can compare end of the second quarter to end of the year, we're actually down 1.1% in our budget for that indexed house.
And I think where that's coming from is a couple factors. One, certainly the lumber cost decreases have been there and have helped that, and they've also helped to offset what we view as somewhat moderate increases in other input costs. And we think there's been some moderation due to the market pause in the fourth quarter and the first quarter. So the one good part of the market pause is we felt that we've experienced some moderation in increases.
On a year-over-year basis, our largest decreases or advantages favorable to margin came in obviously to the lumber category. In the drywall category, net offset increases in a few of the other commodity categories like cement, roofing and plumbing. On a year-over-year basis, we're actually also down, less than 1% down but still down on a year-over-year basis. So the input story -- the input cost story, for us has been pretty favorable.
Obviously, there's a few watch-outs. You have the whole tariff issue. That's a watch-out for us. And as you pointed out, the increase in the lumber's futures is also a watch-out.
But because we are in look-back pricing and we obviously crossed out the house at the point in time when we frame it, we do think there's still more favorability coming from lumber before any potential downside that we could experience by the end of the year depending what the market does.
Operator
Our next question comes of the line of Mike Dahl with RBC Capital Markets. Please proceed with your question.
Mike Dahl--RBC Capital Markets -- Analyst
Hi. Thanks for taking my questions and nice results. I wanted to start on the order side. And one of the things that you guys have been pretty vocal about and proactive about is kind of the shift to smaller floor plans and at least introducing smaller plan options into newer communities.
So I wanted to ask if, even anecdotally, you can give us any update or color on how those smaller floor plans are performing or performed through the quarter. Presumably, to get this type of order number, it had to be fairly broad-based but just wondering if you could give us anything specific on the newer plan options.
Jeff Mezger--Chairman, President, and Chief Executive Officer
Mike, as I shared in the comments, our sales were up double-digit in every region. So it definitely was broad-based in the strength of the sales. We've introduced smaller plans. We've modeled them in many locations.
Coincident with that shift, we had a drop in interest rates. So I think it's tempered the need a little bit, if you will. We are seeing with a lower advertised price that we're drawn in a bigger pool of buyers where they're coming in and may not have thought they could afford it. And then they get in and once they understand what they qualified for, they'll move to a little bit larger home, so it is helping to expand our marketing and create a bigger pool.
Our sales in the quarter on the unstarted homes, so our presale square footage ticked down just incrementally. It could be just a function of mix by market. So I wouldn't call it a trend yet and we're certainly monitoring it, so it's helped us from a marketing standpoint. But with the rate decline, people will move up to the biggest home they can afford.
Mike Dahl--RBC Capital Markets -- Analyst
OK. Yeah.
Jeff Mezger--Chairman, President, and Chief Executive Officer
And as we're well positioned for when -- whenever rates do go back up, we're already there.
Mike Dahl--RBC Capital Markets -- Analyst
Right. OK. Yeah, helpful and makes sense. And then second question just around margins.
And Jeff K., I think you kind of alluded to a couple of different things helping you to kind of bridge to the year-end an implied 4Q margin, which makes sense, but I wanted to follow up and try to get a little more quantification of two of the issues. One, you've continued to benefit from the lower interest amortization. So any update on how to think about that delta as we move through the year. And then the second part, you mentioned reactivated communities, that mix starting to kind of be reduced and help your margins by year-end.
I thought of that as more of a 2020 occurrence. Can you just help us -- how much is that starting to help by the end of this year and how to think about that potential support as that mix continues to decline of the reactivated communities?
Jeff Kaminski--Executive Vice President and Chief Financial Officer
Right. OK, let's -- we'll take the interest amortization first because that's probably the simpler and more straightforward. We talked about during last quarter's call that we expected year-over-year benefit in interest amortization of between 80 and 100 basis points per quarter for the full year. In the first quarter, we were up 100.
This quarter, we were 80. And we still expect to be within that same range the next two quarters. So 80 to 100 basis points per quarter year over year is still a good number. On the reactivated communities, what you see there is you definitely see a lag from the point in time when they enter community count or when the community count starts declining to when it's actually running through the revenues and impacting the overall gross margins.
In the quarter -- in the second quarter, we really didn't see any benefit from the prior year because we had a fairly high revenue number coming from reactivated communities partially because of the strong sales that we saw relative to last year in those communities. So it was pretty well even with the prior year. We do expect to see some incremental improvement by the fourth quarter as the count continues to decline. But I would say you are correct in saying that most of that improvement we'll see yet in 2020, which will be nice because there'll be another tailwind or a continued tailwind for us as we get into the next fiscal year.
Operator
Our next question comes from the line of John Lovallo with Bank of America Merrill Lynch. Please proceed with your question.
John Lovallo--Bank of America Merrill Lynch -- Analyst
Hey, guys thank you for fitting me in here. The first question, Jeff K., you brought up tariffs. I'm just curious, it seems like to me that that would be a pretty small impact. I mean I think one of your competitors just laid out something like $500 per home.
I was wondering if you guys maybe had an estimate through list 1, 2, 3 and then maybe if -- on list 4 us as well.
Jeff Kaminski--Executive Vice President and Chief Financial Officer
We -- I would say, at this point, we're really not seeing any impact, any material impact at all on our cost. It may be being absorbed through the supply chain or we may be seeing certain increases here and there that are getting offset by others, but it hasn't been significant for us to even be all that focused on at this point.
John Lovallo--Bank of America Merrill Lynch -- Analyst
OK. Yes, that's encouraging. And then clearly, demand is getting a little bit better here. And it's been-- I think it's been largely focused at lower price points.
Have you guys seen any improvement though at -- as we move up the price point spectrum, are you starting to see increasing demand like kind of the first, maybe even second-time move-up?
Jeff Mezger--Chairman, President, and Chief Executive Officer
John, I think that the first comment that there's strong demand at the price points that we operate at, our first move-up communities are hitting their pro formas just like our entry level. We don't have as many first move-up, and very little, if any, second move-up even come to mind for me right now. So we'll be -- we're watchful of what happens to pricing in the markets. My general sense is the higher-priced goods are a softer demand than the price points that we operate at.
But our first move-up programs are selling well too.
Operator
Our next question comes from the line of Mike Rehaut with J. P. Morgan. Please proceed with your question.
Mike Rehaut--J.P. Morgan -- Analyst
Hi. Good afternoon. Thanks for taking my question and congrats on the results. First question, I just wanted to circle back, if I could, to the sales pace.
I think that was really one of the big upside surprises relative to your prior expectation. Again, that 2Q sales pace you had originally expected would match 2017, and instead it roughly matched 2018. So in your prior answer, you talked about a few different factors, but it just seemed the answer itself that you gave was just more kind of generic in terms of, yes, things just overall performed a little bit better. I guess I just wanted to make sure from my perspective or maybe from investors' perspective, I think the initial reaction would be, wow, those new communities really did perform a lot better or -- and perhaps there was a -- between that and the combination of some conservatism that that was really the ultimate driver there.
And oftentimes, when you have new community openings, you really want these new communities to start off strong, and they can be an outsized contribution to results. So I'm just trying to -- I just wanted to ask if I speaking about that correctly. Or by contrast, was there some region or regions that really just kind of -- the switch flips back on and you really just had some disproportionate strength from some regions recovering a lot better than you might have expected a few months ago.
Jeff Mezger--Chairman, President, and Chief Executive Officer
Mike, I can say a couple things. You're not totally correct on the it's just coming from the new communities. It's a frustrating statistic for me to share our average community count because it could be open for one month, two months, three months or one day in the quarter. And it's really a 90-day lag before the communities blend in and really start to gain strong momentum.
So if it opened in March, it may have served a full quarter. But the communities we opened in mid-May didn't drive that absorption up. And if you think of it from a math perspective, you got 255 communities, and yet 43 openings, and you still average the same as the year before that tells you that the existing communities that were already open performed well to hit that kind of an average. If you look at it regionally, the one I would highlight is California where we typically have a higher sales pace per community on average because you have to turn a bigger asset base with the community count growth there and the sales rate that we saw in California that they again lifted our company average.
Jeff Kaminski--Executive Vice President and Chief Financial Officer
Yes, Mike, the other thing, I think as Jeff was saying, we did see across-the-board improvement. It doesn't mean every single community in every market, but it was pretty broad-based for the quarter. I think a lot of it is just the business model and where we're competing. I mean you read it all over the place with the industry news about the return of first-time buyer and the entry level picking up, and being at the right price point is very important.
And the company stayed very disciplined over the last several years, especially as we were rebuilding community count, to make sure we were putting communities on the ground that met those parameters. And it's very natural for our company to operate in that space. It's been a strategy of the company for a long time. So for me, it was gratifying, I guess, to see the results at the end of the quarter coming off some of the base communities that we've had in the ground for a long time as well as for the new communities.
But Jeff said it right, I mean we opened 43 communities, and there were not many of them that were opened for 13 weeks. And they would average into the count at 21 and a half because we're 0 at the beginning and 43 at the end, a two-point average, so that they certainly didn't drag us down. But I don't think that you could point to that as saying was that a single point of focus. But that said, we are pleased with how they're performing and hope the rest of the communities we open this year perform equally as well.
Mike Rehaut--J.P. Morgan -- Analyst
No, that's great. I appreciate that. I guess secondly, shifting to the gross margins, and obviously you reiterated your outlook for improvement there. As we think about 3Q and 4Q, I think the math would work more or less that you have perhaps even a little bit of -- a greater sequential improvement, it seems like.
If I'm kind of getting to the midpoints of your guidance ranges, let's see, yes, maybe perhaps equal to or a little bit better of a sequential improvement in 4Q versus 3Q, at least, let's say, a similar amount of improvement. So I'm just trying to get a sense...
Jeff Mezger--Chairman, President, and Chief Executive Officer
[Inaudible]
Mike Rehaut--J.P. Morgan -- Analyst
Yeah. So I'm trying to get a sense...
Jeff Mezger--Chairman, President, and Chief Executive Officer
[Inaudible]
Mike Rehaut--J.P. Morgan -- Analyst
OK. Good, good. So I'm just trying to get a sense for, as you look for the drivers of those improvements, would you say it's equal parts revenue leverage and mix? Or I guess how would you rank order the drivers of that improvement as it relates to across, let's say, operating leverage if mix is a contributor and obviously input cost with lumbar and such?
Jeff Kaminski--Executive Vice President and Chief Financial Officer
Sure. Well, let's start right up top, right? and let you guys know how we come up with our guidance ranges and how we actually estimate and forecast the rest of the year. And you could start with our backlog value. I mean we had about $2.2 billion in backlog at the end of the second quarter, which is a pretty high percentage of our expected third and fourth-quarter revenues.
So we've already priced that product. We already have budgets on the cost. We know the land cost. We know about what the studio ad will be, some of those -- some of that backlog hasn't benched through the studio process yet.
But we know on average about what that takes, and we basically just forecast out our deliveries on a community by community, division by division, region by region on a total company basis and roll off the margins coming off of that. We're getting obviously more confident in the ability to forecast. This is the first time we've gone out to the full year. Because of the backlog and because of the quarter we just had and because of what we saw during the spring selling season, we definitely have a higher level of confidence in the guidance ranges that we have out there and what we're seeing.
As far as the gross margin specifically, certainly, we always see better leverage in the back half of the year, in the third and fourth quarters, and this year is no exception. We do expect to see some pickup from higher top-line revenues leveraging the fixed cost that we have in cost of sales. And the remainder of that, exactly as you kind of outlined, does come from mix. And not the least of which is we expect to see a higher West Coast mix later in the year when we typically do carry higher margins, and we have some pretty high-margin communities coming to market that will be delivering out in the fourth quarter, so all of that's helpful.
And we're pretty encouraged by the year, and we like the progression. Certainly, after some pretty tough market conditions in the fourth quarter, in early first quarter, it was welcomed to see the market come back to us in the second quarter. And to be able to build that level of backlog and have the visibility out for the rest of the year is important for our business model.
Operator
Our next question comes from the line of Scott Schrier with Citi. Please proceed with your question.
Scott Schrier--Citi -- Analyst
Hi, good afternoon. I wanted to ask a little bit more on the conversions to the smaller floor plans, understanding about the lower rates. Does the lower number and the other maths of costs, does that make it maybe a little more efficient to try to push more of the larger plans? How flexible are you in your communities to kind of shift around the number of smaller plans that you have to -- as you alluded to earlier, as more of a marketing tool to bring people in? And how do you think about keeping the smaller plan in the community versus potentially going back to the larger plans versus the smaller plan but possibly get more out of the design studio from both lower rates and then, from your perspective, the trend that you've seen in input cost and the efficiencies associated with that?
Jeff Mezger--Chairman, President, and Chief Executive Officer
Well, you bring up an interesting topic. And what we try to toggle, we use the term bracket to median income. We try to make our product attainable by the median income in that zip code. And we'll look at the median income, and then how can we position the product to make the most money per lot that can be attainable for the median income.
So over here in the higher-income area, the smallest model may be 1,800 square feet. And over here, it may be 1,200 square feet. And the beauty of this for us is that it's the buyer picking it, not us building it and then selling. So we constantly are tracking which end of the footage spectrum the buyers are tilting to in a community.
If they're tilting up big, we'll push the price. We may introduce an even bigger home. If they're moving to the smaller products, you push the price the best you can and everything in between. So it's pretty fluid each week in every community that's out there, but we go to -- optimize how much money can we make on every lot.
Scott Schrier--Citi -- Analyst
Got it. And on a year-to-date basis, it looks like your Southwest, your Southeast ASPs are up quite a bit year-on-year. Can you talk about some of the drivers whether there's any granularity into the different mix or regional considerations or potentially, on a like-for-like basis, how much pricing you're able to get in some of those regions?
Jeff Kaminski--Executive Vice President and Chief Financial Officer
Right. So you're speaking -- you said Southeast and Southwest, right? Yes, they're both up. The -- there's a little bit of division mix, particularly in the Southwest, where our ASPs in the Vegas market are higher than our ASPs in the Arizona market. And they've accelerated by a higher pace as well for the year, so most of that came out of the Vegas market in the Southwest.
In the Southeast, you see it pretty much across Florida and even in the Carolinas in our business there where a lot of that is just replacement communities, probably at a higher price point. I don't think -- when you look at it, we couldn't say we got 6.4% price increase in the Southeast on a year-over-year basis, but there's definitely some price in there along with community mix. Outside of that, I don't know if I could get any more granular or detailed on -- than that high level for you.
Operator
Ladies and gentlemen, we have reached the end of our question-and-answer session as well as the teleconference. [Operator signoff]
Duration: 63 minutes
Jill Peters--Senior Vice President, Investor Relations
Jeff Mezger--Chairman, President, and Chief Executive Officer
Jeff Kaminski--Executive Vice President and Chief Financial Officer
Alan Ratner--Zelman and Associates -- Analyst
Truman Patterson--Wells Fargo Securities -- Analyst
Nishu Sood--Deutsche Bank -- Analyst
Christina Chiu--Barclays -- Analyst
Stephen Kim--Evercore ISI -- Analyst
Mike Dahl--RBC Capital Markets -- Analyst
John Lovallo--Bank of America Merrill Lynch -- Analyst
Mike Rehaut--J.P. Morgan -- Analyst
Scott Schrier--Citi -- Analyst
More KBH analysis
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This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see ourTerms and Conditionsfor additional details, including our Obligatory Capitalized Disclaimers of Liability.
Motley Fool Transcribinghas 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. |
What Kind Of Shareholders Own Sportech PLC (LON:SPO)?
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The big shareholder groups in Sportech PLC (LON:SPO) have power over the company. Insiders often own a large chunk of younger, smaller, companies while huge companies tend to have institutions as shareholders. Companies that used to be publicly owned tend to have lower insider ownership.
With a market capitalization of UK£63m, Sportech is a small cap stock, so it might not be well known by many institutional investors. In the chart below below, we can see that institutions own shares in the company. Let's delve deeper into each type of owner, to discover more about SPO.
Check out our latest analysis for Sportech
Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to companies that are included in major indices.
Sportech already has institutions on the share registry. Indeed, they own 84% of the company. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It's therefore worth looking at Sportech's earnings history, below. Of course, the future is what really matters.
Since institutional investors own more than half the issued stock, the board will likely have to pay attention to their preferences. We note that hedge funds don't have a meaningful investment in Sportech. There is some analyst coverage of the stock, but it could still become more well known, with time.
While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.
Insider ownership is positive when it signals leadership are thinking like the true owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative in some circumstances.
Shareholders would probably be interested to learn that insiders own shares in Sportech PLC. In their own names, insiders own UK£797k worth of stock in the UK£63m company. This shows at least some alignment, but I usually like to see larger insider holdings. You canclick here to see if those insiders have been buying or selling.
The general public, with a 10% stake in the company, will not easily be ignored. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.
Our data indicates that Private Companies hold 4.2%, of the company's shares. Private companies may be related parties. Sometimes insiders have an interest in a public company through a holding in a private company, rather than in their own capacity as an individual. While it's hard to draw any broad stroke conclusions, it is worth noting as an area for further research.
It's always worth thinking about the different groups who own shares in a company. But to understand Sportech better, we need to consider many other factors.
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.
If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can checkthis free report showing analyst forecasts for its future.
NB: Figures in this article are calculated using data from the last twelve months, which refer to the 12-month period ending on the last date of the month the financial statement is dated. This may not be consistent with full year annual report figures.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
Amazon Prime Day adds a July 10th concert headlined by Taylor Swift
Everyone from Walmart toTargettoeBayis coming for Amazon's online shopping crown, and now its Christmas-in-July event is adding yet another wrinkle:a concert. Leading up to to the two-dayPrime Day 2019on July 15th and 16th, Amazon Music will put on a show -- streamed live via Prime Video of course -- with performances from SZA, Dua Lipa and Becky G, not to mention a little-known headliner, Taylor Swift.
Subscribers in 200 countries can tune in for the show July 10th at 9 PM ET. After it airs live, it will be available for replay for a "limited time," and it will also tie-in with promos for other Amazon stuff. Previews planned for the stream include teasers forJack Ryan,Marvelous Mrs. Maisel,Carnival Row, its superheroes-gone-bad showThe BoysandUndone,which comes from the duo behind Netflix'sBojack Horseman.
Also, Prime members are being encouraged to try the Amazon Music Unlimited subscription service with an offer that keeps the price at .99 cents per month for the first four months. Asking Alexa to play the Prime Day Concert playlist now will turn up selections from the featured artists, and once the show is on, the assistant can tune straight to the video for you.
This isn't an entirely new concept either, as in China Alibabaputs on massive extravaganzas around the Singles' Day sales, which last year featured a concert by Mariah Carey. If Amazon and the rest want to stoke buyers' interest in between the traditional holidays then putting on a weeklong hypefest is apparently worth a shot. |
ECA SA (EPA:ECASA): Should The Future Outlook Worry You?
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In December 2018, ECA SA (EPA:ECASA) released its earnings update. Generally, analyst consensus outlook seem bearish, with profits predicted to drop by 0.06% next year. However, this is still an improvement on its past 5-year earnings growth rate of -15%, on average. Presently, with latest-twelve-month earnings at €5.8m, we should see this fall to €5.8m by 2020. Below is a brief commentary around ECA's earnings outlook going forward, which may give you a sense of market sentiment for the company. For those keen to understand more about other aspects of the company, you canresearch its fundamentals here.
Check out our latest analysis for ECA
The longer term view from the 3 analysts covering ECASA is one of positive sentiment. Generally, broker analysts tend to make predictions for up to three years given the lack of visibility beyond this point. To get an idea of the overall earnings growth trend for ECASA, I’ve plotted out each year’s earnings expectations and inserted a line of best fit to determine an annual rate of growth from the slope of this line.
From the current net income level of €5.8m and the final forecast of €11m by 2022, the annual rate of growth for ECASA’s earnings is 19%. This leads to an EPS of €1.25 in the final year of projections relative to the current EPS of €0.66. With a current profit margin of 5.4%, this movement will result in a margin of 7.3% by 2022.
Future outlook is only one aspect when you're building an investment case for a stock. For ECA, there are three relevant factors you should look at:
1. Financial Health: Does it have a healthy balance sheet? Take a look at ourfree balance sheet analysis with six simple checkson key factors like leverage and risk.
2. Valuation: What is ECA 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 ECA is currently mispriced by the market.
3. Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of ECA? 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. |
ECA SA (EPA:ECASA): Are Analysts Right About The Drop In Earnings?
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Looking at ECA SA's (EPA:ECASA) earnings update in December 2018, it seems that analyst forecasts are fairly pessimistic, with profits predicted to drop by 0.06% next year. However, compared to its 5-year track record of the average earnings growth rate of -15%, this is still an improvement. With trailing-twelve-month net income at current levels of €5.8m, the consensus growth rate suggests that earnings will decline to €5.8m by 2020. I will provide a brief commentary around the figures and analyst expectations in the near term. Investors wanting to learn more about other aspects of the company shouldresearch its fundamentals here.
View our latest analysis for ECA
The longer term view from the 3 analysts covering ECASA is one of positive sentiment. Generally, broker analysts tend to make predictions for up to three years given the lack of visibility beyond this point. To understand the overall trajectory of ECASA's earnings growth over these next fews years, I've fitted a line through these analyst earnings forecast to determine an annual growth rate from the slope.
From the current net income level of €5.8m and the final forecast of €11m by 2022, the annual rate of growth for ECASA’s earnings is 19%. This leads to an EPS of €1.25 in the final year of projections relative to the current EPS of €0.66. With a current profit margin of 5.4%, this movement will result in a margin of 7.3% by 2022.
Future outlook is only one aspect when you're building an investment case for a stock. For ECA, I've compiled three key aspects you should look at:
1. Financial Health: Does it have a healthy balance sheet? Take a look at ourfree balance sheet analysis with six simple checkson key factors like leverage and risk.
2. Valuation: What is ECA 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 ECA is currently mispriced by the market.
3. Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of ECA? 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. |
Chinese Consumers Are Stepping up Boycotts of American Brands Like Starbucks, GM and Apple
When it comes to trade, you can win the battle—but lose the war, as American companies are finding out.
Zhang Ping, China’s Consul General in Los Angeles, wrote in a statement toFortunethat President Xi Jinping and President Trump agreed to meet on sidelines of the G20 Osaka Summit and both economic teams would maintain communication on the trade issues. But even if there’s a deal, everything may not go back to normal right away. A new survey of Chinese consumers shows a majority boycotting U.S. goods and having an increasingly negative view of American companies.
“The Chinese market is huge—it’s a large market that U.S. companies want to have access to,” said Nicole Lamb-Hale, managing director of Kroll Associates and former assistant commerce secretary in international trade during the Obama administration.
In their 2018 fiscal years, for example, 43.5% ofGeneral Motorssales were in China and 20.6% of Apple’s sales were from the country. As of Sept. 30, 2018, 23% of all company-owned and operated Starbucks locations were in China, with China and Asia Pacific representing 18.1% of net revenues.
Until now, Chinese consumers have been “pretty favorable toward U.S. brands,” Lamb-Hale said. That may be subsiding.
While 77% “often buy American goods,” more than half, 56%, “avoided buying an American productto show their support for China,” according to the survey data from advisory firm Brunswick Group. The survey polled 1,000 consumers, which may seem like a small number compared to the 1.4 billion population but it’s large enough for a mathematically valid poll.
In addition, 68% of Chinese consumers said their “opinion of American companies has gotten worse” as a result of the dispute.
Some experts said such studies should be carefully considered. “Polls from inside China must be taken with a substantial amount of salt,” said Lionel Jensen, associate professor of East Asian languages and cultures at the University of Notre Dame.
“The Chinese government was previously actively promoting in a jingoistic temper the protection of the Great Wall of the ‘Motherland’ and urging the population to take up a ‘Long March’ in defense of China’s war against US goods,” Jensen said. That campaign ultimately amounted to little.
The survey’s figures may not be representative. However, Linda Lim, professor emerita of corporate strategy and international business at the University of Michigan and a long-time China watcher, thinks the results “look pretty reliable.”
“Chinese people’s own view has evolved in a much more nationalistic direction than before,” Lim said. “This is even stronger now because of all the rhetoric that has come from the U.S.” As she notes, there’s a lot of rhetoric coming from the U.S. in which people say, “China’s a strategic competitor so we can’t allow them to get ahead of us.” The tone fuels the nationalism and provides justification for more extreme Chinese consumer reactions, like boycotts.
That doesn’t mean China’s market will immediately disappear for American corporations, Notre Dame’s Jensen said. “Chinese tastes for U.S. goods such asStarbucksare well established even as Luckin, its China competitor, is expanding its presence,” he said, adding that “fear of loss of market share by U.S. companies substantially embedded in China would be misplaced.”
William Hurst, an associate professor of political science at Northwestern University, said he thinks demand will recover once tensions are resolved. He sees a bigger issue with “manufacturing and services that are moving to third countries to get around tariffs and trade restrictions China and the U.S. are placing on each other.”
But the potential economic danger to U.S. companies goes beyond the trade war and consumer resentment. Chinese manufacturers are offering better quality good for a lower price than many American brands, and those products will become the first choice for customers, Lim said.
“You discover the Chinese substitute for Starbucks is not bad,” Lim said. “Once people switch, it’s very hard to get them to switch back for a lot of psychological reasons.”
Lamb-Hale agrees. “The longer that this goes on—and I’m hopeful there’s some progress at the G20 around keeping the negotiations going—the riskier it is that even when things loosen up, people will have moved on,” she said.
The result could be a Huawei phone in every pocket, a Dongfeng Motors car in every garage, and a Luckin Coffee on every corner.
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The Biggest Airline Innovation of This Century
WhenSkift Airline Weeklystarted publishing in 2004, it was a vastly different world. Think of it—YouTube launched that year in a world without smartphones, and the internet was something we accessed from desktop computers. In the airline world, B747s plied between the big hubs that still dominated networks. There have been many innovations in the airline world: Ancillary revenues, online booking, apps, and other tech and business-model innovations — but there’s one we think stands out.
The Boeing 787 Dreamliner.
Let’s look at why. In 2004, neither the B787 nor the A380 had yet taken to the skies, although the A380 would make its debut shortly after we began publishing. And what a debut it was. Airbus, after planning for a double-deck aircraft since the 1990s, finally had one that could challenge Boeing’s long dominance of the very large aircraft market, critical for flying between the world’s hub airports. There was a lot of irrational exuberance around the A380: Airlines were proposing onboard gyms, day-care centers, and showers (which Emirates ultimately did provide on its A380s), and orders came rolling in.
Boeing took a different tack. The U.S. company initially bet on speed, not size, designing the Sonic Cruiser, which would fly just under the speed of sound. Airlines were at first intrigued but were put off by the aircraft’s possible fuel burn, especially after the Sept. 11 terrorist attacks hobbled the industry. So Boeing, needing anyway to replace its aging B757/767 platforms, went back to the drawing board and ultimately produced the B7E7.
This was a radical departure in aircraft design. What ultimately became the B787 was the first large aircraft to use carbon-fiber composite materials for sections of the fuselage. This is the first reason we think the B787 is one of the most important innovations in the industry since 2004.
The carbon-fiber composite fuselage sections allowed the B787 to offer a 20 percent reduction in fuel burn, which interested airlines facing ever-larger fuel bills. The list of airframe and power plant technological advancements is a long one and includes such passenger-facing innovations as a cabin pressurized at a lower altitude, larger windows, and those nifty electronic window shades, not to mention unseen innovations like a radical new electrical system that dispensed with much of the need for bleed air. But the upshot is that Boeing designed and built an aircraft with an advanced aerostructure, making possible efficient flights on long, thin routes.
And this is another of the B787s innovations. Before its launch, the long-haul business model was mostly predicated on filling large aircraft with 400 or more people and flying between hubs, where passengers would transfer to connecting flights to their final destinations. For example, both Northwest and United at the time had goldmines in their Tokyo Narita hubs, from which B747s from the U.S. unloaded passengers to connections throughout Asia.
The B787 changed all that. With its launch, airlines could begin flying profitably point-to-point, with fewer passengers. Routes like Brisbane-Wuhan, or São Paulo-Addis Ababa became not only possible, but in many cases profitable. This effect was most notable in the Pacific, where the B787 fragmented the market, to the point that both United and Delta (which inherited Northwest’s hub after the merger) started overflying their Narita hubs and ultimately de-hubbed the airport, choosing to fly direct from the U.S. to destinations throughout Asia. And ultra long-haul non-stops, like San Francisco-Singapore, also became not only possible but possibly profitable.
Arguably, the B787 paved the way for new entrants, like Norwegian, to test out the low-cost long-haul model (to mixed success), something that would have been impossible with a fleet of B747s. And tellingly, Airbus responded with its own advanced mid-sized long-haul aircraft, the A350.
The B787 became one of the best-selling wide-bodies in aviation history. And the A380? Airbus this year announced it was ending production of the aircraft.
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ALSO buys IoT platform provider
With the acquisition of the IoT platform specialist AllThingsTalk, ALSO continues to expand its technological expertise and its IoT (Internet of Things) offering. The company's platform facilitates the acquisition, aggregation, visualisation and evaluation of machine and sensor data. This enables vendors, network providers, ISVs, system integrators and resellers to offer tailor-made solutions for their IoT projects to companies in various industrial sectors
EMMEN, SWITZERLAND / ACCESSWIRE / June 27, 2019 /The use of IoT platforms for the implementation of Industry 4.0 projects has a key role to play in ensuring the future competitiveness of small and medium-sized enterprises, says Gustavo Möller-Hergt, CEO of ALSO Holding AG (SIX:ALSN). With the acquisition of AllThingsTalk, we will further expand our expertise as a solution provider in this important field and help our partners make their customers IoT-ready and monetize their products and services more effectively. We are thus addressing a fast-growing market that will reach a revenue volume of EUR 180 billion in Europe by 2023.
AllThingsTalk's IoT platform is a solution that can be used for various scenarios and tasks in the IoT environment. It enables the provision, management and control of devices, applications and services as well as the use of analysis and security tools. Among other things, the platform offers an environment for agile rapid prototyping, for the roll-out of connected products and for visualization tools.
By including the platform in its portfolio, ALSO is strengthening itsIoT Business Unit, founded in 2016, and offering its current and future partners a comprehensive ecosystem - from value-added distributors to sensor manufacturers, telecommunications and software providers to service resellers - as well as a promising option to integrate their products and services into individual IoT platform solutions and market them more comprehensively.
A further step in the coming months is the integration of the AllThingsTalk IoT platform into the ALSO Cloud Marketplace. That will enable resellers to offer consumption-based subscription and billing models for different products, services and benefits alike. «With our successful ALSO Cloud platform, Ludium's virtualization platform and AllThingsTalk's new IoT platform, ALSO is becoming a powerful technology provider», notes Gustavo Möller-Hergt on the development of his company.
Direct link to media release:https://www2.also.com/press/20190627en.pdf
Contact person ALSO Holding AG:
Ketchum Pleon GmbHManuela Rost-HeinPhone: +49 211 9541 2160E-Mail:also.press@ketchumpleon.com
ALSO Holding AG(ALSN.SW) (Emmen/Switzerland) brings providers and buyers of the ICT industry together. ALSO offer more than 550 vendors of hardware, software andIT-servicesaccess to over 100 000 buyers, who can call a broad spectrum of other customized services in the logistics, finance, and IT services sectors, as well as traditional distribution services. From the development of complex IT landscapes, the provision and maintenance of hardware and software, right through to the return, reconditioning and remarketing of IT hardware, ALSO offers all services as a one-stop shop. ALSO is represented in 18 European countries and generates total net sales of approximately 9.2 billion euros with around 4 000 employees in the fiscal year 2018. The majority shareholder of ALSO Holding AG is the Droege Group, Düsseldorf, Germany. Further information is available athttps://also.com
Droege Group
Droege Group (founded in 1988) is an independent advisory and investment company under full family ownership. The company acts as a specialist for tailor-made transformation programs aiming to enhance corporate value. Droege Group combines its corporate family-run structure and capital strength into a family-equity business model. The group carries out direct investments with its own equity in corporate spin-offs and medium-sized companies in "special situations". With the guiding principle "execution - following the rules of art", the group is a pioneer in execution-oriented corporate development. Droege Group follows a focused investment strategy based on current megatrends (knowledge, connectivity, prevention, demography, specialization, future work, shopping 4.0). Enthusiasm for quality, innovation and speed determines the company's actions. In recent years Droege Group has successfully positioned itself in domestic and international markets and operates in 30 countries. More information:https://www.droege-group.com
Disclaimer
This press release contains forward-looking statements which are based on current assumptions and forecasts of the ALSO management. Known and unknown risks, uncertainties, and other factors could lead to material differences between the forward-looking statements made here and the actual development, in particular the results, financial situation, and performance of our Group. The Group accepts no responsibility for updating these forward-looking statements or adapting them to future events or developments.
Additional features:
Document:http://n.eqs.com/c/fncls.ssp?u=ELLAFDGRIL
SOURCE:ALSO Holding AG
View source version on accesswire.com:https://www.accesswire.com/550101/ALSO-buys-IoT-platform-provider |
Indian government sources refute Trump claim that its tariffs are very high
NEW DELHI (Reuters) - India's tariffs are not that high compared to other developing countries, government sources told Reuters on Thursday, reacting to United States President Donald Trump's call to withdraw what he said were very high tariffs.
Earlier Trump tweeted that he looked forward to meeting Indian Prime Minister Narendra Modi at the G20 summit in Japan, but said that for years India had put "very high tariffs against the United States". Adding: "This is unacceptable and the tariffs must be withdrawn!"
This month, India slapped higher tariffs on 28 U.S. products in retaliation for Washington's withdrawal this month of tariff-free trade for certain Indian goods.
India's tariffs are in line with the World Trade Organization rules, the government sources said, adding that U.S. tariffs on some items were much higher than India's.
(Reporting by Neha Dasgupta; Editing by Martin Howell) |
Joe Biden Has Been in High-Pressure Debates Before. But Never Like This
For Joe Biden, the déjà vu is real. An unpopular, scandal-plagued incumbent President. Tax cuts that arent being felt in the middle class. A restless public that has lost faith in its institutions and is looking for alternatives. A confrontation with Iran. Americas self-image is in the balance, the electorate is weighing a generational change, and there are young upstarts promising to take the nation in a fresh direction. Everything old is new again this year, and 2020s election cycle feels a whole lot like 1988, when Biden first ran for President. But this time, Biden isnt the rabble-rouser in his mid-40s; hes the seasoned grandfather whos atop the polls. Bidens opponents are promising dramatic changes, while the former Vice President is pitching himself as a steady-as-she-goes figure who will buck up, not break, the status quo. All of which makes Bidens team of advisers nervous about Thursdays night debate. It will be the first time the Democratic contenders will be on the same stage with Biden, challenging each other on policy and politics. And even then, it will only be about half of the crowded field. Ten of Bidens rivals debated Wednesday night in Miami , while another nine will join Biden on the same stage for a sequel. All eyesand all the pressurewill be on the races front-runner, who last debated a political foe in public in 2012. Biden has been putting a lot of pressure on himself to get this right. Advisers likened it to the pressure he put on himself before deciding to join the race: if hes going to do this, he has to do it right this time. His campaign has been unsteady in the early going. Fundraising and online operations that loomed as possible weaknesses have turned out solid showings, and the early storylines about his non-sexual physicality with men and women alike seems to have faded. A misstep last week invoking an avowed segregationis t while preaching compromise did nothing to ding him in the polls, not even among African-Americans. Word he lifted parts of his energy plan without attribution (another unhappy echo of his plagiarism scandal in 1988) was barely a sneeze. Story continues But Biden has also been rusty on the trail. Whats more, he has not faced this level of exposure in more than six years, when he debated Paul Ryan in the fall of 2012 . During his two terms as Barack Obamas vice president, the internet turned him into the well-meaning uncle who sometimes was prone to goofiness. But that doesnt cut it when its a nine-on-one discussion, especially if any of his younger challengersand everyone except Bernie Sanders is youngerturn his four decades in service against him. Thats why Team Joe spent more than 10 hours huddled on Monday, trying to fine-tune answers theyve been practicing for weeks. Under debate rules, responses are capped at one minute. Follow-ups can go another 30 seconds. Biden sees his expertise, forged over decades in national politics, as his biggest strength. But his long-windedness could work against him in this format. Ask Biden about the Green New Deal and he will start with legislation he sponsored in the 1970s and walk audiences through the legislative history. At no point, Biden advisers say, is he prepared to attack his competitors. What youll see from the Vice President
is him making his case directly to the American people about why he should not only be the Democratic nominee but the next President of the United States. You hear a lot about Joe Biden on television but not necessarily about what his plans are and what he would do and why hes running and what his vision for America is, said Symone Sanders, a senior adviser to the Biden campaign. During the first evening, Biden was largely spared any jabs. The closest of a direct critique came from Sen. Elizabeth Warren, who said she would leverage public opinion to bring Senate Majority Leader Mitch McConnell and his Republicans in the Senate to heel. Biden has long promoted his ability to work across the aisle for compromise. Our responsibility tonight was to lead and to say who we are, Jen OMalley Dillon, Beto ORourkes campaign manager, said Wednesday. Its not our job to define the other candidates. Biden aides snarked that the rivals were lesser-known than Biden, who enjoys near-universal name recognition. I think they made a decision that the imperative was on them to introduce themselves to the American public, said Kate Beddingfield, Bidens deputy campaign manager. But with Biden on stage, that dynamic may change. And Biden does not plan to respond. A lot of people might want to talk about Joe Biden on that stage, Sanders said. Joe Biden is going to speak to the American people. Thats not to say his rivals are going to adopt a similar posture. Bidens polling advantage has not evaporated, as some rivals expected. If theyre going to overtake him, theyre going to have to knock him down a few pegs. On Thursday, Bidens rivals could try to use him as a foil. Sanders is likely to throw zingers at Biden, while South Bend, Ind., Mayor Pete Buttigieg will attempt to break into the top tier. Sen. Michael Bennet of Colorado, Sen. Kirsten Gillibrand of New York, Sen. Kamala Harris of California, Colorado Gov. John Hickenlooper, Rep. Eric Swalwell of California, author Marianne Williamson and businessman Andrew Yang will also debate and all of them know the best way to gain attention is to punch up. But it will be Biden who is literally at center stage, with a political advantage he has pursued often unsuccessfully since the 1980s. The conditions around him may feel similar in some ways. But he has never been in such a strong figure position to capture the Democratic nomination. Or had so much to lose. |
Warren emerges from first Democratic debate unscathed
By James Oliphant MIAMI (Reuters) - A lot could have gone wrong for Elizabeth Warren at Wednesday's Democratic presidential debate. It didn’t. Warren, a U.S. senator from Massachusetts, arrived in Miami riding a wave of momentum among the race's more than 20 candidates. By luck of the draw, she was onstage a night before most of the other top-tier Democratic contenders, such as former Vice President Joe Biden and U.S. Senator Bernie Sanders. As the first night's top-polling candidate, she did not falter. Her progressive platform — similar to Sanders’— largely went unchallenged by the moderates standing alongside her. Most important, her status in the race to take on Republican President Donald Trump in the November 2020 election placed her front and center for the Democratic voters watching at home, and she was given ample time at the outset to detail the populist, anti-corporate themes of her candidacy. “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 in the early moments of the debate, when viewership is typically highest. “We need to call it out. We need to attack it head- on." Warren benefited as well from the sheer chaos of the program. With 10 candidates onstage clamoring for attention and each given only a minute to respond, the evening often felt like a 10-car pileup or a round of speed dating. It was difficult for viewers to track the questions and responses as some candidates often changed the subject. They talked over one another in an effort to reassure the Democratic base that they all mostly shared a common set of progressive values, making it hard for lesser-known contenders to distinguish themselves. Given the chance to take Warren on, some centrist candidates punted. Early in the debate, U.S. Senator Amy Klobuchar of Minnesota was asked about Warren’s plan to provide tuition-free college at public universities. Instead of criticizing Warren’s plan as being too far-reaching, Klobuchar talked about her own support of community college and Pell grants for college students. Story continues The evening illustrated the difficulty Democrats may face next year if the U.S. economy remains robust. Following Warren’s lead, several candidates framed the issue in terms of the economy failing to serve middle-class, working-class and minority voters. “I live in a low-income black and brown community,” said U.S. Senator Cory Booker of New Jersey. “I see every single day that this economy is not working for average Americans.” BOOKER, CASTRO SCORE POINTS Despite Warren's strong performance, there were signs of potential pitfalls ahead. She was one of the few candidates onstage to promote the idea of doing away with private health insurance entirely in favor of Medicare. That earned some skepticism from others such as former Congressman Beto O’Rourke. Her pledge was quickly highlighted by the Republican National Committee, which promised to use it against her in an effort to alarm voters worried about changes to their coverage. Beyond Warren, the candidate who likely helped himself the most on Wednesday was Booker, who spoke more than anyone else and gave passionate, engaged answers on immigration and guns. On gun violence, Booker said it was “something that I'm tired of. And I'm tired of hearing people, all they have to offer is thoughts and prayers.” Former U.S. Housing Secretary Julian Castro also may have raised his stock by getting into a sharp exchange with O’Rourke over decriminalizing border crossings by migrants. Warren’s moment in the sun likely will be short-lived. On Thursday, Biden and Sanders will take the stage along with other top-tier White House hopefuls, including South Bend, Indiana, Mayor Pete Buttigieg and U.S. Senator Kamala Harris of California. (Reporting by James Oliphant; Editing by Colleen Jenkins and Peter Cooney) |
INSIGHT-Genius or joker? British PM favourite Johnson set to face the world
* Boris Johnson is hot favourite to become British leader
* Time as foreign secretary marked by blunders and success
* Public enigma known for comic style, contentious comments
* Aides say he's introverted, a serious man focused on goals
By Elizabeth Piper
LONDON, June 27 (Reuters) - Loose cannon or influential statesman - what kind of British prime minister would Boris Johnson make on the world stage? Judging by his time as foreign secretary, possibly both.
When Johnson was given the foreign job in 2016, after Britain voted to leave the EU, he was viewed as an unlikely choice by politicians and public alike given his tendency to court controversy with gaffes, oddball jokes and off-the-cuff remarks.
The early days seemed to confirm the worst fears of those who saw the Conservative lawmaker as an unsuitable diplomat, at a critical time when Britain needed to forge new political and commercial ties with a slew of countries.
What should have been a routine conference in Italy, the "Mediterranean Dialogues Forum" aimed at building relations with leading envoys from the West and Middle East, instead turned into something of a diplomatic incident.
Johnson made headlines by going off-script and accusing Saudi Arabia, an important regional ally, of acting as a puppeteer in proxy wars under the guise of religion.
The backlash was swift from Prime Minister Theresa May, who said his comments did not reflect "actual policy", dishing out what a government source described as a shocking and very public "cuffing" for a senior minister.
Now May is stepping down over her failure to extract Britain from the European Union. Johnson, a leader of the Brexit campaign, is the overwhelming favourite to become leader of the governing Conservative Party next month, which would also make him prime minister.
The 55-year-old, famous for his messy mop of blond hair and dishevelled style, has turned upper-class English eccentricity into a political asset in Britain and perfected a personal brand based on a comic talent and a seemingly shambolic style.
His critics say this robs him of statesman-like gravity, arguing that it's difficult to take seriously a man who once said the chance of him becoming prime minister was about as likely as finding Elvis on Mars.
However two of Johnson's aides and another veteran Conservative who knows him said that he was often misunderstood and that beneath his blustering, self-confident demeanour was a shy, serious man focused on his goals.
He is a natural introvert, two sources close his team told Reuters, adding that his shyness is often construed as arrogance, and he needs a lot of time alone before speaking in public - distinctively at odds with the public perception of Johnson being a natural, unscripted showman.
"Before speaking to a room, he needs to corral himself," said the veteran Conservative. "It's not a performance but it saps him of energy. He just needs to summon up the energy."
One aide, a government source and an EU diplomat also pointed to an influential, but behind-the-scenes, role he played as foreign secretary following the poisoning of a former Russian spy, Sergei Skripal, by a nerve agent last year in England.
One government source said Johnson had put his "shoulder to the wheel" to win international support for sanctions and Russian diplomatic expulsions from a long list of countries.
A senior European diplomat agreed that he was "professional" in this role, which attracted little publicity.
"People in Brussels didn't take Boris seriously back then," the diplomat said. "In March last year, he showed he could drop the clownish personality, he showed a will to discuss the Skripal affair in the most serious terms and to make the point to his counterparts that they needed to back Britain on this."
IRREVERENT INSURGENT
Alexander Boris de Pfeffel Johnson, to give his full name, is something of an enigma at home and abroad.
He is man of apparent contradictions, with his privileged background and bursts of Latin phrases seemingly at odds with his popular appeal when elected mayor of left-leaning London in 2008 with the biggest personal mandate in British history.
He is one of those rare politicians to be most commonly referred to by most members of the public by their first names.
Like U.S. President Donald Trump, he can emerge unscathed from gaffes and scandals that would sink any normal public figure. Other offensive remarks he has made include calling black people "piccaninnies" and saying Muslim women wearing burkas "look like letter boxes".
"Boris is a flawed character and flaky but most politicians are underneath," said Ed Costelloe, chair of the campaign group Conservative Grassroots. "It would be lovely to have Mother Theresa as prime minister, but it ain't going to happen."
In fact, some people love him all the more because he appears to be an irreverent insurgent who defies the media training of polished politics, shooting from the hip with comic timing and flair. Others seem to give him more leeway.
After his incendiary comments on Saudi Arabia, for example, two British officials said his words had not in fact gone down badly in Riyadh. "The Saudis appreciated his buffoonery, they understand his kind of humour," said one of the officials.
The biggest task ahead, should he become leader, would be withdrawal talks with the EU, which has said it will not reopen the Withdrawal Agreement agreed by May in November - a deal that was repeatedly rejected by British lawmakers and led to the original Brexit date of March 29 being pushed back.
Johnson has offended many in Europe, with remarks such as suggesting Italy should help with a Brexit deal to avoid losing out on sales of Prosecco sparkling wine and declaring it was "bollocks" to say that freedom of movement was a founding principle of the EU.
Yet the British government sources said his ability to wrestle changes to the deal from Brussels, as he has demanded, would come down to whether he can carry the support of British lawmakers and end a stalemate that has incensed EU officials.
"His success depends on whether the EU believes he can actually command a majority," said one of the sources. "The thing about the PM was that they just didn't believe she could ever get it through so were never going to give any more ground. If they think Boris can get it through, they might shift."
IT'S ALL ABOUT BREXIT
Johnson has cast himself as the only leadership candidate who can deliver Brexit on the next deadline of Oct. 31 - with or without a deal.
The sources close his team said he was approaching his bid in a similarly quiet way to the Skripal manoeuvring. He has built support through behind-the-scenes talks with lawmakers rather through media appearances and speeches - and had been conspicuously absent from public sight until this week.
He has been listening closely to the counsel of his closest aides and veteran election strategist Lynton Crosby, who is not officially on the payroll but is offering advice.
Johnson's strategy of steering clear of the airwaves and avoiding public head-to-head debates has been carefully thought through as part of a leadership campaign in the works for months in anticipation of May's announcement five weeks ago that she would step down, said the sources.
The plan appeared uncharacteristic for a man who made his name by being highly visible, including appearing in comedy shows and one of Britain's best-loved TV soap operas.
He even drew accusations from his only remaining leadership rival, Jeremy Hunt, of being a coward for avoiding head-to-head debates. Work and Pensions Secretary Amber Rudd said she found Johnson's decision to ignore live TV debates "very odd".
The strategy was partly borne of the fact that Johnson is widely viewed as a near-certainty to win the party leadership, and become prime minister, barring an unforeseen catastrophe.
Foreign Secretary Hunt voted to stay in the European Union in 2016, which is likely to count against him among the around 160,000 party members who will choose the winner and are mainly pro-Brexit.
However Johnson was forced to veer from the gameplan and break cover this week when he was faced with exactly the kind of negative publicity his team had hoped to avoid, after a neighbour called the police upon hearing Johnson and his girlfriend shouting and smashing plates.
Police found no cause for action, but the story dominated the front pages of Britain's newspapers, with some questioning Johnson's character and past - he is divorcing his second wife and has had several reported affairs.
Following the furore, he changed gear and launched into a media blitz on TV and radio.
Nonetheless, few in his party believe anything can seriously impede his cruise to 10 Downing Street.
"Boris is still well ahead with the membership who will ultimately decide who the next prime minister is," said Conservative lawmaker and Johnson supporter Andrew Bridgen.
"The overriding issue is Brexit and unfortunately Jeremy voted remain." (Reporting by Elizabeth Piper; Additional reporting by Robin Emmott in Brussels, and Andrew MacAskill and William James in London; Editing by Pravin Char) |
Building a Low-Cost, Fossil-Fuel-Free ETF Portfolio
It's easier than ever for investors just starting out to incorporate sustainability into their portfolios. A reader asked me last week about fossil-fuel-free exchange-traded funds and how they could be used in a basic fund portfolio for a beginning investor.
Here are some ideas:
State Street Global Advisors offers three fossil-fuel-free ETFs that focus on U.S. large-cap, non-U.S. developed-markets, and emerging-markets stocks. SPDR S&P 500 Fossil Fuel Reserve Free ETFSPYXhas the longest track record, launched in late 2015. Its 12% three-year annualized return through May ranks in the best decile of the large-blend Morningstar Category. Its expense ratio is 0.2%.
Investors can get non-U.S. exposure via SPDR MSCI EAFE Fossil Fuel Free ETFEFAX, which also charges 0.2%, and SPDR MSCI Emerging Markets Fossil Fuel Free ETFEEMX, which charges 0.3%. While those two funds will not hit their three-year marks until October, they have been performing in line with their category averages.
All three SPDR ETFs are based on MSCI indexes that remove companies that hold fossil-fuel reserves. According to MSCI, these are companies that have "proved & probable coal reserves and/or oil and natural gas reserves used for energy purposes." Keep in mind that such a restriction does not keep the indexes or the funds derived from them out of fossil fuels completely. These SPDR ETFs have 3.5% to 4% of assets exposed to fossil-fuel-related power generation and oil & gas production, according to Morningstar data. That's not nothing, but it is far less than the exposure of most conventional funds. The average overall fossil-fuel exposure in the funds' three Morningstar Categories is between 10% and 11% of assets.
Investing in these three reasonably priced ETFs still leaves open a couple of slots in an overall fossil-fuel-free portfolio: namely, U.S. smaller-cap stocks and bonds. Let's take a look at small caps first. Keep in mind that small-cap stocks are generally not highly exposed to fossil fuels. The average overall fossil-fuel exposure of the U.S. small-blend category is only 1.5%, so a fossil-free small-cap fund may not be a "must-have" for fossil-fuel-free investors, provided they are willing to settle for a "mostly" fossil-fuel- free portfolio.
That said, one option to consider is Nuveen ESG Small-Cap ETFNUSC, which has barely half the category average exposure to fossil fuels and none of it in actual fossil-fuel reserves (so it is fossil-fuel-reserve-free) Launched in late 2016, NUSC charges 0.4% and so far, so good on performance: Its 6.9% two-year annualized return through May ranks in the top decile of the small-blend category.
That brings us to bonds. While there are no bond ETFs that advertise themselves as fossil-fuel-free, several have a more general focus on environmental, social, and governance criteria. Again, it is important to note that the average overall fossil-fuel exposure for the intermediate bond category is only 2.1%. Nuveen ESG US Aggregate Bond ETF (0.2% expense ratio) has overall exposure of 1.3%, and the iShares ESG US Aggregate Bond ETF (0.1% expense ratio) has overall exposure of 1.6%. Both are very young funds but are based on the Bloomberg Barclays U.S. Aggregate Bond Index as modified by MSCI using ESG criteria (and slightly different MSCI indexes).
While we're on the subject of bonds, let's talk about green bonds, which are issued to finance projects that contribute to climate-change solutions. The iShares Global Green Bond ETFBGRNtracks the Bloomberg Barclays MSCI Global Green Bond Select (USD Hedged) Index and has an expense ratio of 0.2%. Because it is hedged into the U.S. dollar, the fund is protected from foreign-currency fluctuations. And because its bonds must be investment-grade and are a mix of government and corporate issues, it could fulfill part of an investment-grade bond allocation.
All of the funds discussed here have been launched within the past three years and, in two cases, within the past year.I would characterize their performance and those of the indexes they track as generally off to a good start. These funds clearly would suffer were fossil-fuel stocks to experience an extended rally. And even if your view is that you want to rid your investments of fossil-fuel exposure as we transition to a low-carbon economy, there could still be multiple short-term ups (and downs) in fossil-fuel stocks over the coming years.
On the plus side, all the ETFs discussed here and their underlying indexes are sponsored by firms that have made commitments to the broad sustainable investing space, have competitive expense ratios, and have fared reasonably well in attracting assets over a short time frame. These factors suggest to me that they have staying power. |
Jadestone Energy Inc. Announces Update on Transfer of Montara Operatorship
SINGAPORE / ACCESSWIRE / June 27, 2019 /Jadestone Energy Inc. (AIM:JSE, TSXV:JSE) ("Jadestone" or the "Company"), an independent oil and gas production company focused on the Asia Pacific region, announces an update on expected timing for transfer of Montara operatorship.
The Company continues to make good progress toward transfer of operatorship from the seller, PTTEP Australasia (Ashmore Cartier) Pty Ltd (the "Seller") to Jadestone, with acceptance of the new safety case by the Australian regulator the only remaining requirement. Jadestone is in the final stages of the acceptance process and is working through the last few remaining points by providing further written clarification. The Company anticipates formal transfer of operatorship in Q3 2019.
There continues to be no adverse impact to ongoing operations or production guidance, with Jadestone personnel seconded into key operational leadership positions, under the Seller's approved safety case. A number of changes have already been implemented, reducing opex by circa $20million on an annualised basis. Improvements in uptime performance also continue. Notwithstanding temporary disruptions from the ongoing riserless light well intervention ("RLWI") campaign and weather-related downtime in April, uptime is currently similar to the first quarter.
Jadestone's RLWI campaign on Montara is continuing as planned, with the objective of restoring gas lift to the Skua-11 and Swift-2 wells, perforating additional sands in the Swallow-1 well, and unlocking new heel volumes in the Skua-11 well.
Progress continues across the Company's portfolio including production from the Stag oilfield, with continued strong performance from the recent 49H infill well, and the Company continues to advance negotiations towards development of Nam Du/U Minh, offshore Vietnam.
The Company will provide further details in due course, with its consolidated interim financial statements for the period ending June 30, 2019 due to be released in late August.
- Ends -
Enquiries
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About Jadestone Energy Inc.
Jadestone Energy Inc. is an independent oil and gas company focused on the Asia Pacific region. It has a balanced, low risk, full cycle portfolio of development, production and exploration assets in Australia, Vietnam and the Philippines.
The Company has a 100% operated working interest in Stag, offshore Australia, and a 100% legal and beneficial interest in the Montara assets, and a 99% legal and beneficial right, title, and interest in the Montara Titles. Both the Stag and Montara assets include oil producing fields, with further development and exploration potential. The Company has a 100% operated working interest (subject to registration of PVEP's withdrawal) in two gas development blocks in Southwest Vietnam and is partnered with Total in the Philippines where it holds a 25% working interest in the SC56 exploration block.
Led by an experienced management team with a track record of delivery, who were core to the successful growth of Talisman's business in Asia, the Company is pursuing an acquisition strategy focused on growth and creating value through identifying, acquiring, developing and operating assets throughout the Asia-Pacific region.
Jadestone Energy Inc. is currently listed on the TSXV and AIM. The Company is headquartered in Singapore. For further information on Jadestone please visitwww.jadestone-energy.com.
Cautionary statements
Certain statements in this press release are forward-looking statements and information (collectively "forward-looking statements"), within the meaning of the applicable Canadian securities legislation, as well as other applicable international securities laws. The forward-looking statements contained in this press release are forward-looking and not historical facts.
Some of the forward-looking statements may be identified by statements that express, or involve discussions as to expectations, beliefs, plans, objectives, assumptions or future events or performance (often, but not always, through the use of phrases such as "will likely result", "are expected to", "will continue", "is anticipated", "is targeting", "estimated", "intend", "plan", "guidance", "objective", "projection", "aim", "goals", "target", "schedules", and "outlook"). In particular, forward-looking statements in this press release include, but are not limited to statements regarding timing of transfer of Montara operatorship, the Company's delivery of production volumes as a result of the RLWI campaign, and timing of a final investment decision on the Nam Du/U Minh development.
Because actual results or outcomes could differ materially from those expressed in any forward-looking statements, investors should not place undue reliance on any such forward-looking statements. By their nature, forward-looking statements involve numerous assumptions, inherent risks and uncertainties, both general and specific, which contribute to the possibility that the predicted outcomes will not occur. Some of these risks, uncertainties and other factors are similar to those faced by other oil and gas companies and some are unique to Jadestone. The forward-looking information contained in this news release speaks only as of the date hereof. The Company does not assume any obligation to publicly update the information, except as may be required pursuant to applicable laws.
The information contained within this announcement isconsidered to be inside information prior to its release, as defined in Article7 of the Market Abuse Regulation No. 596/2014, and is disclosed in accordancewith the Company's obligations under Article 17 of those Regulations.
Neither the TSX Venture Exchange nor its RegulationServices Provider (as that term is defined in the policies of the TSX VentureExchange) accepts responsibility for the adequacy or accuracy of this release.
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visitwww.rns.com.
SOURCE:Jadestone Energy Inc.
View source version on accesswire.com:https://www.accesswire.com/550102/Jadestone-Energy-Inc-Announces-Update-on-Transfer-of-Montara-Operatorship |
Zendaya Says She's Having a 'Pinch Me' Moment at 'Spider-Man: Far From Home' Premiere (Exclusive)
No matter how famous she gets or how many blockbuster projects she's a part of, Zendaya says she's not taking things for granted, and she's still in awe of the wild and over-the-top world of Hollywood stardom. The 22-year-old Euphoria star hit the red carpet at the premiere of Spider-Man: Far From Home , and the actress dressed for the occasion, rocking a stunning, backless black-and-red sequined gown that really stole the spotlight. Zendaya stopped to talk with ET's Keltie Knight, where she marveled at the lavish pomp and circumstance of the star-studded Hollywood premiere outside the TCL Chinese Theatre in Hollywood. "It's pretty cool," Zendaya said, appreciating the magnitude of her surroundings. "I'll always have pinch me moments. You know, like right now, this is crazy. "Especially remembering being super young and coming to different premieres and like barely getting onto the carpet," she added. "It's a cool thing." Zendaya also dished on her Spider-Man-esque ensemble, which she said was directly inspired by Tom Holland's costume from the upcoming film. Jon Kopaloff/FilmMagic "This was our homage to the Far From Home suit that he wears," Zendaya shared. "This is my own version." In the film, Zendaya plays MJ, a friend to Holland's Peter Parker throughout his trials as the world-saving web-slinger. While the second installment in franchise -- under the auspices of the Marvel Cinematic Universe -- hasn't yet hit screens, Zendaya said she's hoping to get a chance to continue playing the character. "I think, right now, it's the beginning of this really adorable romance we're watching kind of bloom on camera," Zendaya shared. Fans will get to see how Peter and MJ's relationship evolves when Spider-Man: Far From Home swings into theaters July 2. RELATED CONTENT: 'Euphoria': Your Guide to Zendaya's Shocking Teen Drama and All the Wildest Moments Story continues Tom Holland Dishes on His Favorite Marvel Bromance at 'Spider-Man: Far From Home' Premiere (Exclusive) Tom Holland Jokes 3rd 'Spider-Man' Should Take Place Somewhere Tropical Related Articles: Hollywood Bikini Bods Over 40 Biggest Celebrity Breakups of 2019 -- So Far! Celebrities in Their Underwear |
Tom Daley takes batch cooking baby food to Olympic level
Tom Daley during a photocall at the London Aquatics Centre in Stratford (Credit: PA) Tom Daley has cooked 48 meals in advance for son Robbie while he goes abroad to compete in the World Aquatic Championships. The 25-year-old British diving champion - whose son with Dustin Lance Black celebrates his first birthday today - revealed he does all the cooking at home and so has filled the freezer with healthy meals for Black to feed Robbie while he is away. Daley told Yahoo UK: “I do all of the cooking. I make all of Robbie’s food. I’m going away for three weeks for the world championships and I’ve made Robbie 48 pre-made meals in the freezer that Lance can warm up and feed him while i’m gone. View this post on Instagram A post shared by Tom Daley (@tomdaley) on Jun 27, 2019 at 5:06am PDT “I have to do it because I know that Lance won’t cook those meals, he’ll just go to the shop. I enjoy it as well. There’s something really interesting in introducing him to new flavours, it’s really fun. He loves scrambled egg.” Robbie turns one today and Daley - an ambassador for British Lion eggs - is baking him a smash cake. View this post on Instagram A post shared by British Lion Eggs (@egg_recipes) on Mar 4, 2019 at 5:02am PST The Olympic medalist revealed: “I’m baking banana smash cake, I saw online that you make a cake and when your baby smashes into it they look quite dramatic. “We had Lance’s family over last week and my family were up on the weekend and a lot of people put their presents in front of him and all he cared about was the wrapping paper and the boxes.” View this post on Instagram A post shared by Tom Daley (@tomdaley) on Jun 16, 2019 at 10:15am PDT Daley is heading to South Korea to compete for Great Britain in the FINA World Aquatic Championships and admits being away from Robbie will be tough. He said: “It’s horrible, it’s so hard. I’ve been away for two weeks at a time and I spend my whole time on Facetime. There’s not a moment when I don’t think about him, but I want to try and do what I love as well. Story continues View this post on Instagram A post shared by Tom Daley (@tomdaley) on Mar 30, 2019 at 8:47am PDT “Fatherhood has changed my perspective on everything. When I used to go away I used to think, ‘This is so exciting to see all these cool places.’ But now I just want to see Robbie. “It’s not the same seeing him on Facetime but it’s something lots of parents have to deal with if they travel fo work. It does make the reunion, very, very sweet.” Daley’s own father, Robert, died aged 40 from brain cancer in 2011. Daley said: “There are so many different lessons my dad taught me that I want to be able to pass onto Robbie. That’s part of the reason we named Robbie after him. View this post on Instagram A post shared by Tom Daley (@tomdaley) on Apr 5, 2019 at 11:34am PDT “I wish he was here to see it, but it’s the time that I get to try and be the same dad to my son that my dad was to me.” Speaking about having more children Daley said: “Lance and I have always said we want to have a big family. Right now with Robbie we’ve got our hands full. But in the future, who knows?” Tom Daley is an ambassador for British Lion eggs. For recipe inspiration and more about the essential nutrients eggs contain visit eggrecipes.co.uk |
Binance and Paxos Partner on PAX to Fiat Exchange Portal
The biggestcrypto exchangeby volumeBinanceand digital asset Trust companyPaxoshave integrated a new fiat deposit gateway on Binance’s flagship trading platform.
According to a press releasepublishedon June 26, the gateway will enable traders to exchange fiat currency for the PAX Standard (PAX)stablecoinon the Paxos platform via wire transfer. The amount will then be reflected directly as a PAX-denominated balance in their Binance accounts.
The press release claims that the new fiat on-ramp will foster increased PAX liquidity on the exchange and thus optimize price discovery for traders.
All PAX redemptions on Binance will reportedly be zero-fee, and not be subject to minimum or maximum thresholds for withdrawals and deposits.
In a statement, Binance CEO Changpeng Zhao — commonly known as “CZ” — underscored the importance of easing fiat-crypto exchange and providing support for liquid and fully-backed stablecoins such as PAX in order to grow the platform’s trading ecosystem.
Asreported, Paxos has recently enabled users to instantly redeem unlimited amounts of its tokens forUnited Statesdollars. In parallel, the firm shifted to showing user accounts for PAX and USD as a single balance on its platform to follow through with its vision of the token as a bonafide digital dollar.
Earlier this month, Binance’s Chief Financial Officerconfirmedrumorsthat the exchange would start issuing proprietary stablecoins within two months, starting with a British pound-pegged coin, Binance GBP.
The move to issue native stablecoins will purportedly reduce the market share of stalwart — albeitcontroversial— stablecoin tether (USDT) on the platform, which currently represents over 50% of its stablecoin volume.
Also this month, Binancelistedits first two stablecoin trading pairs on its non-custodial trading platform Binance DEX.
• First Stablecoin Trading Pairs Listed on Binance DEX
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• Round-Up of Crypto Exchange Hacks So Far in 2019 — How Can They Be Stopped?
• Binance Announces Bitcoin-Pegged Token on Binance Chain |
Silver Will Pause Before Going Higher
Silverwill likely find resistance near $15.60 and move slightly lower before another upside price leg takes place. Both gold and silver have begun incredible price rallies over the past 10+ days and we believe this is just the start of a much bigger price trend.
The $15.60 to $15.75 resistance level can be seen on this chart by our RED highlighted price peaks. Additionally, the upper RESISTANCE ZONE between $16.15 and $16.78 is a big range that has historically been a key price channel.
My cycle andtrend trading indicatorsare suggesting this move is far from over, yet we believe this move upward will happen in advancement legs and this first leg is nearing exhaustion. This is why we are issuing this warning to all investors right now. We believe a downward price rotation, a stalling price pattern, will set up where a technical trader will be able to acquire silver below $15.25 again very soon. The next leg higher may start fairly quickly as we don’t expect this rotation to extend out for many weeks.
See Our Previous Silver Breakout Prediction Call on June 7th
This Monthly Silver chart with our proprietary Fibonacci price modeling system suggests upside targets of $17.00 (CYAN), $17.65 (GREEN), and $18.50 (DARK RED). Our RESISTANCE ZONE level on the chart, above, aligns perfectly with these objectives because the price would first have to rally into the RESISTANCE ZONE and break through this level to push to any higher target levels.
Therefore, we believe this upside price move won’t run into any solid resistance until reaching above the $16.30 level and possibly as high as the $16.75 to $17.00 level. At that point, the price of Silver should find real resistance, stall, and set up for the next breakout move higher.
At this point, if you have not been following our research and analysis of the precious metals sector and already positioned your trades for this move, you should get another chance to set up some long trades as this downside price rotation takes place. Remember, wait for silver to fall close to or below $15.25 before targeting your new trade entry. This bottom in silver may only last for a few short trading periods, so when it happens, be ready with your orders.
The next upside leg in Silver should rally for a total of about +6% to +10% targeting the $16.25 to $17.00 price level – the RESISTANCE ZONE. After that price level is reached and price consolidates to likely form another momentum base, another upside price leg should push the price of Silver towards ourMonthly Fibonacci price targets– somewhere towards $18.00 to $18.50 before stalling again. !
I can tell you that huge moves are about to start unfolding not only in metals, or stocks but globally and some of these super cycles are going to last years. A gentleman by the name of Brad Matheny goes into great detail with his simple to understand charts and guide about this. His financial market research is one of a kind and a real eye-opener. PDF guide:2020 Cycles – The Greatest Opportunity Of Your Lifetime
As a technical analysis and trader since 1997, I have been through a few bull/bear market cycles. I believe I have a good pulse on the market and timing key turning points for both short-term swing trading and long-term investment capital. The opportunities are massive/life-changing if handled properly.
Chris Vermeulenwww.TheTechnicalTraders.com
Thisarticlewas originally posted on FX Empire
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Brexit: MPs reveal plan to block no-deal by cutting off government funding
MPs are expected to launch a fresh attempt to block a future prime minister pushing a no-deal Brexit policy by threatening to cut off vital funds for government departments. The cross-party plan, led by Conservative MP Dominic Grieve and senior Labour MP Dame Margaret Beckett , aims to force the future Tory leader to gain parliament's consent for leaving the EU without a deal. Their amendment to route finance legislation in the Commons known as "estimates" would cut off funding for government ministries if the PM failed to do so. Boris Johnson , the frontrunner in the race to replace Theresa May as Conservative leader, said this week the UK will leave the EU on 31 October "do or die" - heightening the risk of a no-deal scenario. At the latest Conservative hustings, the ex-foreign secretary again refused to rule out suspending parliament to leave the EU without the consent of the Commons, but claimed the odds of a no-deal Brexit were a "million-to-one against". But Mr Grieve, the former attorney general, told The Sun: "The suggestion that we could or should be taken out of the EU without the consent of the House of commons is fundamentally wrong, and frankly unconstitutional. "The fact that it is being suggested as a viable option is unacceptable. The Commons should put down such markers as it can that such a course of action is unacceptable." |
Pier 1 Imports plans to close 57 stores, and more closures could be coming, interim CEO says
Pier 1 Imports is increasing the number of stores expected to shutter this year.
The Texas-based home goods retailer said Wednesday it was looking to close 57 stores in the fiscal year, up a dozen fromthe April estimate of 45 stores.
“We are in active discussions with our landlords” interim CEO Cheryl Bachelder said during the company’s quarterly earnings call with analysts. “Where we have not seen landlord participation, we have begun our store closing program as we said we would."
Bachelder reiterated what she said in April – more closings could follow.
“If we are unable to achieve our performance goals, sales targets and reductions in occupancies and other costs, we could close up to 15% of our portfolio,” she said Wednesday.
Is your Dressbarn on the list?:Retailer announces first round of closings set for June and July
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In April, officials said as many as 145 stores could close as part of a 15% cut.
Days after Pier 1 reported financial results in April, S&P Global Ratings, a major credit rating agency, said the retailer was careening toward apotential bankruptcy restructuring.
According to company documents, there are more than 965 stores in the U.S. and Canada. The chain sells home décor, furniture and other accessories.
Is Toys R Us making a comeback?:A year after stores closed, there's talk of new locations
Tariff impact:China tariffs could force 'widespread store closures' and put $40 billion in sales at risk
Bachelder discussed the China tariffs during Wednesday’s meeting and said the company had “proactively planned for” and the 25% increase is in Pier 1’s financial plan.
“In fact, we’ve been taking actions to reduce our exposure to China since last summer by leveraging the strength of our global sourcing team,” she said. “With the advance of tariffs, we’ve carefully reviewed our assortment and implemented price increases to mitigate a portion of the tariff increases.”
Based on figures from global marketing research firm Coresight Research, bankruptcy filings and company earnings reports,more than 7,000 storesare already slated to be shuttered in 2019. Coresight tracked 5,864 closings in 2018.
The trade war with Chinacould force "widespread store closures" and put $40 billion in sales at risk, according to a May report by UBS investment bank.
Follow Kelly Tyko on Twitter:@KellyTyko
This article originally appeared on USA TODAY:Pier 1 Imports plans to close 57 stores, and more closures could be coming, interim CEO says |
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