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Is Schneider National, Inc. (NYSE:SNDR) Worth US$17.57 Based On Its Intrinsic Value?
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Today we'll do a simple run through of a valuation method used to estimate the attractiveness of Schneider National, Inc. (NYSE:SNDR) as an investment opportunity by taking the expected future cash flows and discounting them to their present value. This is done using the Discounted Cash Flow (DCF) model. Don't get put off by the jargon, the math behind it is actually quite straightforward.
Remember though, that there are many ways to estimate a company's value, and a DCF is just one method. Anyone interested in learning a bit more about intrinsic value should have a read of theSimply Wall St analysis model.
View our latest analysis for Schneider National
We're using the 2-stage growth model, which simply means we take in account two stages of company's growth. In the initial period the company may have a higher growth rate and the second stage is usually assumed to have a stable growth rate. In the first stage we need to estimate the cash flows to the business over the next ten years. Where possible we use analyst estimates, but when these aren't available we extrapolate the previous free cash flow (FCF) from the last estimate or reported value. We assume companies with shrinking free cash flow will slow their rate of shrinkage, and that companies with growing free cash flow will see their growth rate slow, over this period. We do this to reflect that growth tends to slow more in the early years than it does in later years.
Generally we assume that a dollar today is more valuable than a dollar in the future, so we need to discount the sum of these future cash flows to arrive at a present value estimate:
[{"": "Levered FCF ($, Millions)", "2019": "$257.16", "2020": "$276.04", "2021": "$222.00", "2022": "$190.07", "2023": "$172.49", "2024": "$162.74", "2025": "$157.63", "2026": "$155.46", "2027": "$155.23", "2028": "$156.34"}, {"": "Growth Rate Estimate Source", "2019": "Analyst x5", "2020": "Analyst x5", "2021": "Analyst x1", "2022": "Est @ -14.38%", "2023": "Est @ -9.25%", "2024": "Est @ -5.65%", "2025": "Est @ -3.14%", "2026": "Est @ -1.38%", "2027": "Est @ -0.15%", "2028": "Est @ 0.72%"}, {"": "Present Value ($, Millions) Discounted @ 9.13%", "2019": "$235.65", "2020": "$231.80", "2021": "$170.83", "2022": "$134.03", "2023": "$111.46", "2024": "$96.36", "2025": "$85.53", "2026": "$77.29", "2027": "$70.73", "2028": "$65.28"}]
Present Value of 10-year Cash Flow (PVCF)= $1.28b
"Est" = FCF growth rate estimated by Simply Wall St
We now need to calculate the Terminal Value, which accounts for all the future cash flows after this ten year period. The Gordon Growth formula is used to calculate Terminal Value at a future annual growth rate equal to the 10-year government bond rate of 2.7%. We discount the terminal cash flows to today's value at a cost of equity of 9.1%.
Terminal Value (TV)= FCF2029× (1 + g) ÷ (r – g) = US$156m × (1 + 2.7%) ÷ (9.1% – 2.7%) = US$2.5b
Present Value of Terminal Value (PVTV)= TV / (1 + r)10= $US$2.5b ÷ ( 1 + 9.1%)10= $1.05b
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 $2.33b. In the final step we divide the equity value by the number of shares outstanding.This results in an intrinsic value estimate of $13.14. Compared to the current share price of $17.57, the company appears potentially 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. 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 Schneider National 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 9.1%, which is based on a levered beta of 1.073. 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 Schneider National, I've compiled three further aspects you should further research:
1. Financial Health: Does SNDR 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 SNDR'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 SNDR? 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 NYSE 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. |
It's gotten so bad for the Mets that the team's play-by-play man is (politely) destroying one of the players on air
(Insert opening paragraph about how we bash the New York Mets too much, but the franchise just makes it so easy on a daily basis that it's impossible not to. Use "it's like watching a car wreck" analogy, because "you can't look away." Related links to past instances here , here and here .) There, that about covers it. Well, well, well folks, the Mets are at it again. Mere days after hitting what appeared to be rock bottom, when manager Mickey Callaway verbally attacked a reporter and pitcher Jason Vargas threatened that same reporter, they've somehow dug a deeper hole. Since the clubhouse debacle over the weekend, and the ensuing apologies, re-apologies and non-apologies, the Metropolitans have lost three straight to the bitter rival Philadelphia Phillies, the last two of which were blown by their gas can bullpen, bringing the team's collective blown save total to 19. Shocker alert: that's the most in the MLB. They've now lost 11 of 16 and sit 11 games out of first in the NL East and 5.5 games out of the second wild card. It can't get worse, can it? Of course it can! These are the Mets we're talking about after all. It's gotten so bad, that the team's well-respected play-by-play man Gary Cohen felt the need to lecture Vargas, who pitched on Wednesday night, and pitched well I might add, over him not actually issuing an apology to Newsday reporter Tim Healey. The Mets ownership issued one, the general manager and manager issued one, but Vargas never actually did. We can debate for days whether that even means a damn thing, but the fact is Vargas never just said "I'm sorry." As he warmed up for the bottom of the third inning in Philly, Cohen took him to task over this: https://twitter.com/SNYtv/status/1144078647818539009 In the words of the immortal Vince Lombardi, "WHAT THE HELL'S GOIN' ON OUT HERE?!?!?" We got broadcasters lecturing players for almost a full three minutes over something that happened a full 72 hours ago! Cohen is one of the best in the business, but this felt so strange. And yet, Mets fans are at such a loss that the majority of them had nothing but praise for Cohen, at least in the replies to SNY's tweet. I'll say this, nothing Cohen said is wrong, but I couldn't help but feel like I was taking crazy pills watching that. He's literally dragging a guy who was on the mound as it was happening. Just a wild, wild move. In other words, just another Wednesday in MetsLand. RELATED: Meet the Mess - The best backpages in New York Mets history Originally Appeared on Golf Digest |
Grab Swisscom AG (VTX:SCMN) Today With A Solid 4.5% Dividend Yield
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Swisscom AG (VTX:SCMN) is a true Dividend Rock Star. Its yield of 4.5% makes it one of the market's top dividend payer. In the past ten years, Swisscom has also grown its dividend from CHF19 to CHF22. Below, I have outlined more attractive dividend aspects for Swisscom for income investors who may be interested in new dividend stocks for their portfolio.
See our latest analysis for Swisscom
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:
• It is paying an annual yield above 75% of dividend payers
• It consistently pays out dividend without missing a payment or significantly cutting payout
• Its dividend per share amount has increased over the past
• It is able to pay the current rate of dividends from its earnings
• It has the ability to keep paying its dividends going forward
Swisscom's dividend yield stands at 4.5%, which is on the low-side for Telecom stocks. But the real reason Swisscom 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.
Reliability is an important factor for dividend stocks, particularly for income investors who want a strong track record of payment and a positive outlook for future payout. SCMN has increased its DPS from CHF19 to CHF22 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 SCMN a true dividend rockstar.
The company currently pays out 74% of its earnings as a dividend, according to its trailing twelve-month data, which means that the dividend is covered by earnings. Going forward, analysts expect SCMN's payout to remain around the same level at 79% of its earnings. Assuming a constant share price, this equates to a dividend yield of around 4.5%. In addition to this, EPS is forecasted to fall to CHF28.14 in the upcoming year.
If you want to dive deeper into the sustainability of a certain payout ratio,you may wish to consider the cash flow of the business. Cash flow is important because companies with strong cash flow can usually sustain higher payout ratios.
There aren't many other stocks out there with the same track record as Swisscom, so I would certainly recommend further examining the stock if its dividend characteristics appeal to you. 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. Below, I've compiled three fundamental aspects you should look at:
1. Future Outlook: What are well-informed industry analysts predicting for SCMN’s future growth? Take a look at ourfree research report of analyst consensusfor SCMN’s outlook.
2. Valuation: What is SCMN 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 SCMN 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. |
KB Home (KBH) Q2 Earnings & Revenues Top, Shares Up 5.4%
KB Home’s KBH shares gained 5.4% in yesterday’s after-hour trading, after the homebuilder beat earnings and revenue expectations in second-quarter fiscal 2019.The results mainly benefited from continued progress of the Returns-Focused Growth plan, given stellar average community count growth. The company remains upbeat about further improvement in results in the second half of this year. This is a stark contrast from industry giant Lennar Corporation’s LEN soft view for the fiscal third quarter due to tariff-related woes.Although the company’s results declined on a year-over-year basis, the $2.2-billion backlog is expected to drive gross margin improvement in the remainder of the year. KB Home believes declining mortgage rates, steady economic growth, high consumer confidence and favorable demographics, in particular household formation, to continue providing a healthy backdrop for the housing industry, which includes biggies like Lennar, PulteGroup, Inc. PHM and D.R. Horton, Inc. DHI.Earnings & Revenue DiscussionQuarterly earnings of 51 cents per share outpaced the Zacks Consensus Estimate of 39 cents by 30.8% but declined 10.5% from 57 cents a year ago.Total revenues of $1,021.8 million surpassed the consensus mark of $935 million by 9.3%. However, the top line declined 7.2% year over year, mainly due to lower average selling price (“ASP”) of homes delivered.Segment DetailsHomebuilding Revenues:In the reported quarter, the segment's revenues fell 7% from the prior-year period to $1,018.7 million due to lower ASP of homes delivered. While land generated $0.9 million in revenues (down from $6.9 million a year ago), housing revenues totaled $1,017.8 million (declining 6.8%).Net orders grew 15.1% from the prior-year quarter to 4,064 homes, increasing in double digits across all regions served by the company. Value of net orders also increased 12.5% from the year-ago quarter to $1.53 billion.Moreover, number of homes delivered increased 1.9% from the year-ago level to 2,768 units. Deliveries increased in two regions (Central and Southeast). However, ASP fell 8% from a year ago to $368,000, mainly due to a shift in geographic mix of homes delivered. Lower ASP in the West Coast region also added to the woes.At the end of the reported quarter, average community count was 252, up 17% year over year. The company’s backlog totaled 5,927 homes (as of May 31, 2019), up 2% from a year ago. Potential housing revenues from backlog declined 2.8% from the prior-year period to $2.17 billion.MarginsHousing gross margin increased 10 basis points (bps) year over year to 17.2% in the quarter. The increase reflects lower amortization of previously capitalized interest and a change in the company’s accounting for certain model complex costs.Adjusted housing gross profit margin (a metric that excludes the amortization of previously capitalized interest and inventory-related charges) contracted 90 bps year over year to 21.3%.As a percentage of housing revenues, selling, general and administrative (SG&A) expenses were 12.1%, up 170 bps from the year-ago figure. The rise was mainly led by lower housing revenues, higher marketing expenses to support new community openings and the impact of ASC 606 adoption.Homebuilding operating margin deteriorated 170 bps on a year-over-year basis to 5.1%. After adjusting for inventory-related charges, operating margin came in at 5.5%, down 180 bps.Financial Servicesrevenues grew 13.9% year over year to $3.1 million.
KB Home Price, Consensus and EPS Surprise
KB Home price-consensus-eps-surprise-chart | KB Home Quote
Financial PositionKB Home had homebuilding cash and cash equivalents of $178.9 million as of May 31, 2019, lower than $574.4 million on Nov 30, 2018. Inventories were $3,780.9 million, up from $3,582.8 million as of Nov 30, 2018. KB Home had total liquidity of $597.4 million at the end of the quarter.In the quarter under review, it used $180.9 million of net operating cash flow, mainly for investments in inventories.The company spent nearly $399 million, of which 33.1% allotted for new land acquisitions, on land acquisitions and development in the quarter.Its debt-to-capital ratio was 45.8% (improving 390 bps) as of May 31, 2019. Net debt to capital was 43.3% (reflecting an increase of 170 bps), which came in within the target range of 35-45% for the current year under the Returns-Focused Growth Plan.Q3 GuidanceKB Home expects to boost average community count year over year over the next two quarters and remains committed to realize a 10-15% increase in 2019.It expects third-quarter housing revenues in the range of $1.1-$1.18 billion and ASP to be around $395,000-$400,000.Assuming no inventory-related charges, the company expects housing gross margin to improve sequentially to the range of 17.9-18.5% and the figure is projected to further grow in the fourth quarter.Homebuilding operating margin (excluding the impact of any inventory-related charges) is expected within 6.4-7%.Moreover, SG&A ratio is projected in the range of 11.3-11.9%.Effective tax rate is estimated to be 26% for the remaining quarters of 2019.Fiscal 2019 GuidanceKB Home expects housing revenues in the range of $4.45-$4.6 billion. ASP will likely be in the range of $385,000-$390,000. Homebuilding operating margin (excluding the impact of any inventory-related charges) is expected in the range of 6.7-7.3%.KB Home expects housing gross margin, excluding inventory-related charges, within 17.9-18.5%. SG&A ratio is projected in the range of 11-11.6%.Peer ReleaseLennar Corporation reported better-than-expected results in second-quarter fiscal 2019 (ended May 31, 2019), after missing estimates in the preceding quarter. Earnings and revenues increased on a year-over-year basis during the quarter.Zacks RankCurrently, KB Home carries a Zacks Rank #3 (Hold). You can seethe complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Breakout Biotech Stocks with Triple-Digit Profit PotentialThe biotech sector is projected to surge beyond $775 billion by 2024 as scientists develop treatments for thousands of diseases. They’re also finding ways to edit the human genome to literally erase our vulnerability to these diseases.Zacks has just released Century of Biology: 7 Biotech Stocks to Buy Right Now to help investors profit from 7 stocks poised for outperformance. Our recent biotech recommendations have produced gains of +98%, +119% and +164% in as little as 1 month. The stocks in this report could perform even better.See these 7 breakthrough stocks now>>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days.Click to get this free reportD.R. Horton, Inc. (DHI) : Free Stock Analysis ReportPulteGroup, Inc. (PHM) : Free Stock Analysis ReportLennar Corporation (LEN) : Free Stock Analysis ReportKB Home (KBH) : Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment Research |
Bayer Sets Up Special Committee to Tackle Glyphosate Lawsuits
Bayer AGBAYRY announced its decision to create a special litigation committee of the supervisory board to help resolve a multi-billion dollar glyphosate litigation issue. The company also said that it has hired high-profile U.S. lawyer John H. Beisner to fight its glyphosate litigationsand advise the supervisory board.
Meanwhile, activist investor, Elliott Advisors (UK) Limited, disclosed a 1.1-billion-euro ($1.3 billion) stake in Bayer.
The company is facing more than 13,000 lawsuits, claiming its glyphosate-based products, including Roundup weedkillers, manufactured by its subsidiary Monsanto to cause cancer. Bayer has already lost threesuits in U.S. courts. Year to date, the company’s share price has declined 3% against the industry’s growth of 5.3%, mainly due the ongoing litigation issues.
Elliott believes the creation of the supervisory board and the hiring of Beisner will provide Bayer relevant litigation expertise and resolve itsongoing glyphosate litigation. The stock rose more than 5% following the news.
Bayer has been stating that glyphosate-based products are completely safe to use and do not cause cancer. The company has stated in the past that decades of scientific studies have shown the chemical to be safe for human use.
However, there have been debates by environmentalists, regulators, researchers and lawyers about whether Roundup causes cancer.
The newly-established supervisory board committee will closely look into these issues, consult with management and make recommendations on the litigation strategy. Both management and the supervisory board have also hired Ken Feinberg as mediator. Feinberg has an outstanding track record as mediator in some of the most complex settlements. The company has taken up these measures to mitigate the litigation uncertainty’s negative impact on its stock price movement.
Bayer Aktiengesellschaft Price
Bayer Aktiengesellschaft price | Bayer Aktiengesellschaft Quote
Zacks Rank and Stocks to Consider
Bayer currently has a Zacks Rank #3 (Hold).
Some better-ranked stocks in the large-cap pharmaceutical sector include Novartis AG NVS, Pfizer PFE and Merck and Co., Inc. MRK. All of them carry a Zacks Rank #2 (Buy). You can seethe complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Novartis’ earnings per share estimates increased from $4.98 to $5.01 for 2019 and from $5.48 to $5.56 for 2020 over the past 60 days. Share price of the company has increased 23.6% year to date.
Pfizer’s earnings per share estimates increased from $2.86 to $2.88 for 2019 over the past 60 days. Share price of the company has increased 0.2% year to date.
Merck’s earnings per share estimates have moved up from $4.65 to $4.74 for 2019 and from $5.19 to $5.28 for 2020 in the past 60 days. Share price of the company has increased 10.8% year to date.
Breakout Biotech Stocks with Triple-Digit Profit PotentialThe biotech sector is projected to surge beyond $775 billion by 2024 as scientists develop treatments for thousands of diseases. They’re also finding ways to edit the human genome to literally erase our vulnerability to these diseases. Zacks has just released Century of Biology: 7 Biotech Stocks to Buy Right Now to help investors profit from 7 stocks poised for outperformance. Our recent biotech recommendations have produced gains of+98%,+119%and+164%in as little as 1 month. The stocks in this report could perform even better.
See these 7 breakthrough stocks now>>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days.Click to get this free reportNovartis AG (NVS) : Free Stock Analysis ReportMerck & Co., Inc. (MRK) : Free Stock Analysis ReportPfizer Inc. (PFE) : Free Stock Analysis ReportBayer Aktiengesellschaft (BAYRY) : Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment Research |
1Spatial Plc's (LON:SPA) Earnings Dropped -19%, Did Its Industry Show Weakness Too?
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When 1Spatial Plc (LON:SPA) released its most recent earnings update (31 January 2019), I wanted to understand how these figures stacked up against its past performance. The two benchmarks I used were 1Spatial's average earnings over the past couple of years, and its industry performance. These are useful yardsticks to help me gauge whether or not SPA actually performed well. Below is a quick commentary on how I see SPA has performed.
View our latest analysis for 1Spatial
SPA is loss-making, with the most recent trailing twelve-month earnings of -UK£1.4m (from 31 January 2019), which compared to last year has become more negative. However, the company's loss seem to be contracting over the medium term, with the five-year earnings average of -UK£3.7m. Each year, for the past five years SPA has seen an annual decline in revenue of -3.9%, on average. This adverse movement is a driver of the company's inability to reach breakeven.
Viewing growth from a sector-level, the UK it industry has been growing its average earnings by double-digit 10% over the prior twelve months,
Given that 1Spatial is loss-making, with operating expenses (opex) growing year-on-year at 3.8%, it may need to raise more cash over the next year. It currently has UK£6.4m in cash and short-term investments, however, opex (SG&A and one-year R&D) reached UK£8.9m in the latest twelve months. Even though this is analysis is fairly basic, and 1Spatial still can cut its overhead in the near future, or raise debt capital instead of coming to equity markets, the outcome of this analysis still gives us an idea of the company’s timeline and when things will have to start changing, since its current operation is unsustainable.
While past data is useful, it doesn’t tell the whole story. Companies that incur net loss is always hard to forecast what will happen in the future and when. The most valuable step is to assess company-specific issues 1Spatial may be facing and whether management guidance has steadily been met in the past. You should continue to research 1Spatial to get a better picture of the stock by looking at:
1. Future Outlook: What are well-informed industry analysts predicting for SPA’s future growth? Take a look at ourfree research report of analyst consensusfor SPA’s outlook.
2. Financial Health: Are SPA’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 January 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. |
Reasons to Hold Carpenter Technology in Your Portfolio for Now
Carpenter Technology Corporation CRS ) looks promising at the moment, backed by strong demand across most of its end-markets, acquisitions, continued execution of its commercial strategy and strong financial position. Carpenter Technologyhas a Zacks Rank #3 (Hold) and a VGM Score of A. Here V stands for Value, G for Growth and M for Momentum. The company’s score is a weighted combination of these three scores. Such a score allows you to eliminate the negative aspects of stocks and select winners. In fact, our research shows that stocks with a VGM Score of A or B, when combined with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3, make solid investment choices. Below, we briefly discuss few other factors that make the stock worth holding on to. Ahead of the Industry: The stock has gained around 33.9% year to date, outperforming the industry’s growth of 18.3%. Underpriced: Carpenter Technology has a forward 12 month Enterprise Value to EBITDA ratio of 7.2, which is below the industry average of 8.3. Positive Earnings Surprise History: The companyhas outpaced the Zacks Consensus Estimate in three of the trailing four quarters, with an average positive earnings surprise of 5.66%. Poised for Improved Q4: In the third quarter of fiscal 2019, the company’s backlog rose 9% sequentially and 44% year over year, which bodes well for fourth-quarter fiscal 2019 performance. For the Specialty Alloys Operations (SAO) segment, the company expects continued positive demand across most end-use markets for fourth quarter of fiscal 2019. Operating income is anticipated to increase 5-10% sequentially, after adjusting for insurance recovery. For the Performance Engineered Products (PEP) segment, the company anticipates continued demand for titanium products to drive revenues in the fourth quarter of fiscal 2019. Operating income is projected to remain flat sequentially after adjusting for insurance benefit. The company also plans to make continued investments in additive manufacturing. Story continues The Zacks Consensus Estimate for earnings per share (EPS) for fourth quarter-fiscal 2019 is currently pegged at 94 cents, suggesting year-over-year growth of 8.05%. Estimates Northbound: The Zacks Consensus Estimate for EPS for fiscal 2019 and fiscal 2020 have gone up 5% and 1%, respectively, over the past 90 days. Solid Growth Projections: The Zacks Consensus Estimate for EPS for fiscal 2019 is currently pegged at $3.44, indicates year-over-year improvement of 37.60%. The estimate for fiscal 2020 EPS is at $3.89, suggesting year-over-year growth of 13.18%. Other Growth Drivers: Sales to the Aerospace and Defense end-use market continues to be robust, reflecting the impact of a strong product mix for materials utilized in aerospace engine applications and strong demand for defense applications driven by specific programs. Strong market conditions within the orthopedic and cardiology sub-markets will continue to bolster sales. The company intends to increase titanium capacity, backed by planned expansion of Dynamet business unit within the next fiscal year. Sales to the Energy end-use market has also been increasing on the back of oil and gas sub-market expansion and improved demand for power generation applications. Carpenter Technology remains focused on continued execution of its commercial strategy. Through the ongoing implementation of the Carpenter Operating Model, the company has unlocked incremental capacity via efficiency and productivity improvements. The company also increased focus and investment in targeted growth areas such as additive manufacturing and soft magnetics. The investment in the soft magnetics portfolio remains on track with $100 million investment in precision strip hot rolling mill. Carpenter Technology will also continue to grow on the back of its acquisitions which include LPW Technology Ltd., CalRAM, and Puris LLC. Return on Equity (ROE): Carpenter Technology’s ROE of 9.9% is higher than the ROE of 8.9% for the industry, highlighting its efficiency in utilizing shareholders’ funds. Stocks to Consider A few better-ranked stocks in the Basic Materials space are Materion Corporation MTRN, Flexible Solutions International Inc FSI and AngloGold Ashanti Limited AU, all currently sporting a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here. Materion has an expected earnings growth rate of 27.3% for 2019. The company’s shares have gained 44.34% so far this year. Flexible Solutions has an outstanding projected earnings growth rate of 342.9% for the current year. The company’s shares have soared 204.44% year to date. AngloGold has an estimated earnings growth rate of 90.6% for the ongoing year. Its shares have surged 41.19% this year so far. Breakout Biotech Stocks with Triple-Digit Profit Potential The biotech sector is projected to surge beyond $775 billion by 2024 as scientists develop treatments for thousands of diseases. They’re also finding ways to edit the human genome to literally erase our vulnerability to these diseases. Zacks has just released Century of Biology: 7 Biotech Stocks to Buy Right Now to help investors profit from 7 stocks poised for outperformance. Our recent biotech recommendations have produced gains of +98% , +119% and +164% in as little as 1 month. The stocks in this report could perform even better. See these 7 breakthrough stocks now>> Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Flexible Solutions International Inc. (FSI) : Free Stock Analysis Report AngloGold Ashanti Limited (AU) : Free Stock Analysis Report Materion Corporation (MTRN) : Free Stock Analysis Report Carpenter Technology Corporation (CRS) : Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research |
Want To Invest In 1Spatial Plc (LON:SPA)? Here's How It Performed Lately
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Understanding how 1Spatial Plc (LON:SPA) is performing as a company requires looking at more than just a years' earnings. Today I will run you through a basic sense check to gain perspective on how 1Spatial is doing by comparing its latest earnings with its long-term trend as well as the performance of its it industry peers.
See our latest analysis for 1Spatial
SPA is loss-making, with the most recent trailing twelve-month earnings of -UK£1.4m (from 31 January 2019), which compared to last year has become more negative. However, the company's loss seem to be contracting over the medium term, with the five-year earnings average of -UK£3.7m. Each year, for the past five years SPA has seen an annual decline in revenue of -3.9%, on average. This adverse movement is a driver of the company's inability to reach breakeven.
Eyeballing growth from a sector-level, the UK it industry has been growing its average earnings by double-digit 10% over the previous year,
Since 1Spatial is loss-making, with operating expenses (opex) growing year-on-year at 3.8%, it may need to raise more cash over the next year. It currently has UK£6.4m in cash and short-term investments, however, opex (SG&A and one-year R&D) reached UK£8.9m in the latest twelve months. Even though this is analysis is fairly basic, and 1Spatial still can cut its overhead in the near future, or open a new line of credit instead of issuing new equity shares, the outcome of this analysis still helps us understand how sustainable the 1Spatial’s operation is, and when things may have to change.
While past data is useful, it doesn’t tell the whole story. With companies that are currently loss-making, it is always difficult to envisage what will happen in the future and when. The most valuable step is to examine company-specific issues 1Spatial may be facing and whether management guidance has steadily been met in the past. I suggest you continue to research 1Spatial to get a more holistic view of the stock by looking at:
1. Future Outlook: What are well-informed industry analysts predicting for SPA’s future growth? Take a look at ourfree research report of analyst consensusfor SPA’s outlook.
2. Financial Health: Are SPA’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 January 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. |
LEGH or INVH: Which Is the Better Value Stock Right Now?
Investors interested in Real Estate - Operations stocks are likely familiar with Legacy Housing (LEGH) and Invitation Home (INVH). But which of these two stocks offers value investors a better bang for their buck right now? We'll need to take a closer look.
The best way to find great value stocks is to pair a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system. The Zacks Rank is a proven strategy that targets companies with positive earnings estimate revision trends, while our Style Scores work to grade companies based on specific traits.
Both Legacy Housing and Invitation Home have a Zacks Rank of # 2 (Buy) right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that both of these companies have improving earnings outlooks. But this is just one factor that value investors are interested in.
Value investors analyze a variety of traditional, tried-and-true metrics to help find companies that they believe are undervalued at their current share price levels.
The Style Score Value grade factors in a variety of key fundamental metrics, including the popular P/E ratio, P/S ratio, earnings yield, cash flow per share, and a number of other key stats that are commonly used by value investors.
LEGH currently has a forward P/E ratio of 11.17, while INVH has a forward P/E of 21.12. We also note that LEGH has a PEG ratio of 0.56. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. INVH currently has a PEG ratio of 2.64.
Another notable valuation metric for LEGH is its P/B ratio of 1.50. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, INVH has a P/B of 1.69.
Based on these metrics and many more, LEGH holds a Value grade of A, while INVH has a Value grade of D.
Both LEGH and INVH are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that LEGH is the superior value option right now.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days.Click to get this free reportLegacy Housing Corporation (LEGH) : Free Stock Analysis ReportInvitation Home Inc. (INVH) : Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment Research |
XELB or GOOS: Which Is the Better Value Stock Right Now?
Investors interested in Retail - Apparel and Shoes stocks are likely familiar with XCel Brands (XELB) and Canada Goose (GOOS). But which of these two stocks offers value investors a better bang for their buck right now? We'll need to take a closer look.
The best way to find great value stocks is to pair a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system. The Zacks Rank is a proven strategy that targets companies with positive earnings estimate revision trends, while our Style Scores work to grade companies based on specific traits.
XCel Brands has a Zacks Rank of #2 (Buy), while Canada Goose has a Zacks Rank of #3 (Hold) right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that XELB has an improving earnings outlook. But this is just one factor that value investors are interested in.
Value investors analyze a variety of traditional, tried-and-true metrics to help find companies that they believe are undervalued at their current share price levels.
The Style Score Value grade factors in a variety of key fundamental metrics, including the popular P/E ratio, P/S ratio, earnings yield, cash flow per share, and a number of other key stats that are commonly used by value investors.
XELB currently has a forward P/E ratio of 3.63, while GOOS has a forward P/E of 28.90. We also note that XELB has a PEG ratio of 0.36. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. GOOS currently has a PEG ratio of 1.02.
Another notable valuation metric for XELB is its P/B ratio of 0.27. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, GOOS has a P/B of 13.16.
Based on these metrics and many more, XELB holds a Value grade of A, while GOOS has a Value grade of D.
XELB stands above GOOS thanks to its solid earnings outlook, and based on these valuation figures, we also feel that XELB is the superior value option right now.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days.Click to get this free reportXcel Brands, Inc (XELB) : Free Stock Analysis ReportCanada Goose Holdings Inc. (GOOS) : Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment Research |
Is Serco Group plc's (LON:SRP) Balance Sheet Strong Enough To Weather A Storm?
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Stocks with market capitalization between $2B and $10B, such as Serco Group plc (LON:SRP) with a size of UK£1.7b, do not attract as much attention from the investing community as do the small-caps and large-caps. Surprisingly though, when accounted for risk, mid-caps have delivered better returns compared to the two other categories of stocks. This article will examine SRP’s financial liquidity and debt levels to get an idea of whether the company can deal with cyclical downturns and maintain funds to accommodate strategic spending for future growth. Note that this commentary is very high-level and solely focused on financial health, so I suggest you dig deeper yourselfinto SRP here.
View our latest analysis for Serco Group
SRP has shrunk its total debt levels in the last twelve months, from UK£292m to UK£254m – this includes long-term debt. With this debt repayment, the current cash and short-term investment levels stands at UK£63m , ready to be used for running the business. Moreover, SRP has generated UK£2.7m in operating cash flow in the last twelve months, resulting in an operating cash to total debt ratio of 1.1%, indicating that SRP’s operating cash is less than its debt.
At the current liabilities level of UK£675m, it appears that the company may not have an easy time meeting these commitments with a current assets level of UK£644m, leading to a current ratio of 0.95x. The current ratio is calculated by dividing current assets by current liabilities.
With debt reaching 66% of equity, SRP may be thought of as relatively highly levered. This is not unusual for mid-caps as debt tends to be a cheaper and faster source of funding for some businesses. 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 SRP's case, the ratio of 7.74x suggests that interest is appropriately covered, which means that lenders may be inclined to lend more money to the company, as it is seen as safe in terms of payback.
Although SRP’s debt level is towards the higher end of the spectrum, its cash flow coverage seems adequate to meet debt obligations which means its debt is being efficiently utilised. But, its lack of liquidity raises questions over current asset management practices for the mid-cap. Keep in mind I haven't considered other factors such as how SRP has been performing in the past. I suggest you continue to research Serco Group to get a better picture of the stock by looking at:
1. Future Outlook: What are well-informed industry analysts predicting for SRP’s future growth? Take a look at ourfree research report of analyst consensusfor SRP’s outlook.
2. Valuation: What is SRP 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 SRP 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. |
Adtalem Arm Partners With Dillard, Boosts Physician Diversity
In order to increase the numbers of African-American doctors in the United States,Adtalem Global Education Inc.‘s ATGE Ross University School of Medicine (“RUSM”) has partnered with Louisiana-based Dillard University.Per the agreement, eligible Dillard students will be able to receive a scholarship for the first semester covering full tuition in the medical school. They will also have to spend their initial two years of school at the RUSM campus in Barbados.Adtalem’s Commitment to Address Diversity in MedicineRUSM — one of the medical and veterinary schools of Adtalem — has a diverse student population, of which nearly one-fourth of the total students are African-American and Hispanic. Of the total U.S. physicians, African Americans make up only 6%. Notably, RUSM African-American graduates were more than 80 students, surpassing the average of eight in most U.S. medical schools.On that note, RUSM recently agreed upon a similar partnership with Charles Drew University of Medicine and Science, Agricultural and Mechanical University, as well as Tuskegee University. Also, the company entered into the Historically Black Colleges and Universities (“HBCU”) Partnership Challenge, created by the Congressional Bipartisan HBCU Caucus, to increase diversity in key workforce sectors.Tie-ups with corporations, hospitals, government agencies and professional organizations enabled the company to reduce exposure to Title IV funding.Coming to price performance, shares of Adtalem have declined 5.6% so far this year against its industry’s 30.8% growth. The company has been recording lower profits over the last few quarters. The declining earnings were mainly due to certain restructuring charges related to the closing of the Ross University School of Medicine campus in Dominica and real estate consolidations.
Nevertheless, collaborations and strategic initiatives taken up by Adtalem will probably help to spur growth and regain momentum. Notably, in the second quarter of fiscal 2019, growth of new student enrollment was 4.9% and that of total student enrollment was 2.9% year over year. The company remains optimistic about the demand trend in the medical and healthcare segment from both students and employees.Zacks Rank & Key PicksCurrently, Adtalem carries a Zacks Rank #4 (Sell). Some better-ranked stocks in the same space include Strategic Education, Inc. STRA, YogaWorks, Inc. YOGA and Bright Horizons Family Solutions Inc. BFAM. While Strategic Education and YogaWorks sport a Zacks Rank #1 (Strong Buy), Bright Horizons carries a Zacks Rank #2 (Buy). You can seethe complete list of today’s Zacks #1 Rank stocks here.Strategic Education, YogaWorks and Bright Horizons’ earnings for the current year are expected to grow 36.2%, 17.1%, and 12.8%, respectively.Breakout Biotech Stocks with Triple-Digit Profit PotentialThe biotech sector is projected to surge beyond $775 billion by 2024 as scientists develop treatments for thousands of diseases. They’re also finding ways to edit the human genome to literally erase our vulnerability to these diseases.Zacks has just released Century of Biology: 7 Biotech Stocks to Buy Right Now to help investors profit from 7 stocks poised for outperformance. Our recent biotech recommendations have produced gains of +98%, +119% and +164% in as little as 1 month. The stocks in this report could perform even better.See these 7 breakthrough stocks now>>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days.Click to get this free reportBright Horizons Family Solutions Inc. (BFAM) : Free Stock Analysis ReportStrategic Education Inc. (STRA) : Free Stock Analysis ReportAdtalem Global Education Inc. (ATGE) : Free Stock Analysis ReportYogaWorks, Inc. (YOGA) : Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment Research |
E-mini Dow Jones Industrial Average (YM) Futures Technical Analysis – June 27, 2019 Forecast
September E-mini Dow Jones Industrial Average futures are trading lower on Thursday, shortly before the cash market opening. Weighing on prices are worries over U.S.-China trade relations ahead of a meeting between U.S. President Trump and Chinese President Xi Jinping at the G-20 summit in Osaka, Japan on Saturday.
Weakness in shares of Dow component Boeing is also weighing on the blue chip average. Boeing stock is down 3% in premarket trading after the FAA said it had found a new issue with the 737 Max aircraft. An international aviation body said U.S. regulators need to work on returning the Boeing 737 Max in step with international regulators, as “aviation cannot function efficiently without this coordinated effort.”
In other news, U.S. Final GDP came in as expected at 3.1%, however, Weekly Unemployment Claims rose to 227K, higher than the 220K forecast.
At 13:27 GMT,September E-mini Dow Jones Industrial Averagefutures are trading 26566, up 16 or +0.07%.
The main trend is up according to the daily swing chart. However, momentum has been trending lower since the formation of the closing price reversal top at June 21.
A trade through 26922 will negate the closing price reversal top and signal a resumption of the uptrend. This will put the Dow in a position to challenge the October 3, 2018 main top at 27031.
The main trend will change to down on a trade through 25897.
The short-term range is 25897 to 26922. Its retracement zone at 26410 to 26289 is the first downside target. Since the trend is up, look for buyers on the first test of this area. They are going to try to form a secondary higher bottom.
The main range is 24626 to 26922. If the trend changes to down then look for the selling to extend into its retracement zone at 25774 to 25503.
Based on the early price action, the direction of the September E-mini Dow Jones Industrial Average on Thursday is likely to be determined by trader reaction to the uptrending Gann angle at 26537.
A sustained move over 26537 will indicate the presence of buyers. The first upside target is the downtrending Gann angle at 26858. Overtaking this angle will indicate the buying is getting stronger with potential target angles coming in at 26794 and 26858. The latter is the last potential resistance angle before the 26922 main top.
A sustained move under 26537 will signal the presence of sellers. The next target is the short-term retracement zone at 26410 to 26289, followed by an uptrending Gann angle at 26217. Look for buyers to come in on a test of this area. They will be trying to form a secondary higher bottom.
Thisarticlewas originally posted on FX Empire
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FAA Finds New Flaw in 737 Max: Will Airline Stocks Suffer?
Airlines in the United States and Europe have been bearing the brunt of the grounding of Boeing’s best-selling jets for the past few months. Those who were expecting Boeing’s BA 737 Max to return to service any time soon were in for a disappointment as the Federal Aviation Administration (FAA) discovered another potential safety issue with the jet.
Per a CNN report, the problem involves a microprocessor. The failure of the microprocessor during a flight can push the airplane's nose down. This comes as a major disappointment, with Boeing working on software upgrades for months, following the crash of 737 Max 8 jets in Ethiopia and Indonesia, which resulted in the grounding of this model in March.
Economic Impact on the Airline Industry
Airlines are incurring loss of hundreds of millions of dollars due to the grounding.
Southwest Airlines LUV, which operates the world's largest fleet of 737 Max planes, said it has already lost $200 million in the first quarter as it had to cancel flights, primarily due to the grounding of the plane.
Per a BBC report, American Airlines AAL estimates the grounding to cost it $350 million, as it has cancelled more than 15,000 flights till August.
Though United Continental Holdings UAL has not revealed the extent of the damage that the grounding of 737 MAX will cause, FlightGlobal estimates the total number of flights impacted to be around 3,440.
In fact, share price of these airlines have been witnessing a downside. In the week following 737’s grounding on Mar 14, the stocks declined as we can see below:
What Next?
In May, FAA representatives had said that approval of the 737 MAX jets may take place as early as late June. However, it is quite evident now that the plane will stay grounded until the FAA and regulators in other countries thoroughly examine the aircraft and give final approval for flight. A few analysts believe that the latest setback may delay the plane’s return to service by one to three months, which implies further increase in costs for the aforementioned airline stocks.
As a result of the 737 grounding, services in North America were disrupted the most initially. This is because Southwest Airlines, Air Canada and American Airlines are the three largest operators of the 737 Max aircraft in the world. However, these airlines accommodated passengers by putting them on other flights, using alternative aircraft and bringing old jets back into action.
The recently provided optimistic projections for the second-quarter reporting cycle by major airline stocks came as a ray of hope. For the soon-to-be- reported quarter, Southwest Airlines anticipates revenue per available seat miles (RASM: a key measure of unit revenue) to increase 6.5-7.5% year over year compared with 5.5-7.5% expected earlier. Air Canada, last month, reported a surprise quarterly profit that sent shares up more than 5% per a Reuters report.
These projections imply better prospects for airline stocks, at least for now. However, as uncertainty still looms over 737’s return to service, the ultimate impact of grounding of the best-selling jet on the airline industry remains to be seen.
Breakout Biotech Stocks with Triple-Digit Profit PotentialThe biotech sector is projected to surge beyond $775 billion by 2024 as scientists develop treatments for thousands of diseases. They’re also finding ways to edit the human genome to literally erase our vulnerability to these diseases.Zacks has just released Century of Biology: 7 Biotech Stocks to Buy Right Now to help investors profit from 7 stocks poised for outperformance. Our recent biotech recommendations have produced gains of+98%,+119%and+164%in as little as 1 month. The stocks in this report could perform even better.See these 7 breakthrough stocks now>>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days.Click to get this free reportUnited Continental Holdings, Inc. (UAL) : Free Stock Analysis ReportSouthwest Airlines Co. (LUV) : Free Stock Analysis ReportAmerican Airlines Group Inc. (AAL) : Free Stock Analysis ReportThe Boeing Company (BA) : Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment Research |
What does Serco Group plc's (LON:SRP) Balance Sheet Tell Us About Its Future?
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Mid-caps stocks, like Serco Group plc (LON:SRP) with a market capitalization of UK£1.7b, aren’t the focus of most investors who prefer to direct their investments towards either large-cap or small-cap stocks. While they are less talked about as an investment category, mid-cap risk-adjusted returns have generally been better than more commonly focused stocks that fall into the small- or large-cap categories. Let’s take a look at SRP’s debt concentration and assess their financial liquidity to get an idea of their ability to fund strategic acquisitions and grow through cyclical pressures. Note that this information is centred entirely on financial health and is a top-level understanding, so I encourage you to look furtherinto SRP here.
See our latest analysis for Serco Group
Over the past year, SRP has reduced its debt from UK£292m to UK£254m – this includes long-term debt. With this reduction in debt, the current cash and short-term investment levels stands at UK£63m , ready to be used for running the business. Moreover, SRP has generated UK£2.7m in operating cash flow in the last twelve months, resulting in an operating cash to total debt ratio of 1.1%, indicating that SRP’s debt is not covered by operating cash.
With current liabilities at UK£675m, it seems that the business arguably has a rather low level of current assets relative its obligations, with the current ratio last standing at 0.95x. The current ratio is calculated by dividing current assets by current liabilities.
With a debt-to-equity ratio of 66%, SRP 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 SRP's case, the ratio of 7.74x suggests that interest is appropriately covered, which means that lenders may be less hesitant to lend out more funding as SRP’s high interest coverage is seen as responsible and safe practice.
SRP’s high cash coverage means that, although its debt levels are high, the company is able to utilise its borrowings efficiently in order to generate cash flow. But, its 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 SRP has company-specific issues impacting its capital structure decisions. I suggest you continue to research Serco Group to get a better picture of the stock by looking at:
1. Future Outlook: What are well-informed industry analysts predicting for SRP’s future growth? Take a look at ourfree research report of analyst consensusfor SRP’s outlook.
2. Valuation: What is SRP 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 SRP 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 Kind Of Investor Owns Most Of Storm Resources Ltd. (TSE:SRX)?
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A look at the shareholders of Storm Resources Ltd. (TSE:SRX) can tell us which group is most powerful. Large companies usually have institutions as shareholders, and we usually see insiders owning shares in smaller companies. Warren Buffett said that he likes 'a business with enduring competitive advantages that is run by able and owner-oriented people'. So it's nice to see some insider ownership, because it may suggest that management is owner-oriented.
Storm Resources is not a large company by global standards. It has a market capitalization of CA$215m, which means it wouldn't have the attention of many institutional investors. Our analysis of the ownership of the company, below, shows that institutions own shares in the company. Let's delve deeper into each type of owner, to discover more about SRX.
Check out our latest analysis for Storm Resources
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 52% of Storm Resources. This suggests some credibility amongst professional investors. But we can't rely on that fact alone, since institutions make bad investments sometimes, just like everyone does. 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 Storm Resources's historic earnings and revenue, below, but keep in mind there's always more to the story.
Investors should note that institutions actually own more than half the company, so they can collectively wield significant power. Hedge funds don't have many shares in Storm Resources. There is some analyst coverage of the stock, but it could still become more well known, with time.
The definition of company insiders can be subjective, and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. The company management answer to the board; and the latter should represent the interests of shareholders. Notably, sometimes top-level managers are on the board, themselves.
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 information suggests that insiders maintain a significant holding in Storm Resources Ltd.. Insiders own CA$26m worth of shares in the CA$215m company. I would say this shows alignment with shareholders, but it is worth noting that the company is still quite small; some insiders may have founded the business. You canclick here to see if those insiders have been buying or selling.
The general public, with a 35% stake in the company, will not easily be ignored. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.
While it is well worth considering the different groups that own a company, there are other factors that are even more important.
I always like to check for ahistory of revenue growth. You can too, by accessing this free chart ofhistoric revenue and earnings in thisdetailed graph.
But ultimatelyit is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look atthis free report showing whether analysts are predicting a brighter future.
NB: Figures in this article are calculated using data from the last twelve months, which refer to the 12-month period ending on the last date of the month the financial statement is dated. This may not be consistent with full year annual report figures.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
5 Reasons to Add Quanta Services Stock to Your Portfolio Now
Quanta Services Inc.PWR has been gaining investors’ confidence on the back of strong base business activity and robust end-market prospects of both of the segments, namely Electric Power and Pipeline and Industrial Infrastructure.Shares of the company have gained 25.4% so far this year compared with its industry’s 23.7% collective growth. Also, the company has outperformed the S&P 500’s 15.1% rise in the said period. Encouragingly, its earnings surpassed the Zacks Consensus Estimate in five of the trailing seven quarters.Notably, earnings estimates have been upwardly revised over the past few weeks, suggesting that sentiments on Quanta Services are moving in the right direction. Earnings estimates for 2019 and 2020 have advanced 3.7% and 2.2%, respectively, over the past 60 days. This positive trend signifies bullish analysts’ sentiments and justifies the company’s Zacks Rank #2 (Buy), indicating robust fundamentals and the expectation of outperformance in the near term. You can seethe complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
What’s Working in Favor of the Stock?Solid Performance & Prospects of Electric Power Operations:This segment has been exhibiting stellar performance over the last few quarters, given higher revenues and margins. The performance was mainly backed by robust spending by electric utilities on grid modernization and system hardening, as well as by gas utilities on distribution system modernization and safety programs.Precisely, Quanta Services’ communications infrastructure services business is performing brilliantly. For instance, communications operations ended 2018 on a strong note, contributing to revenue growth of more than 50% from a year ago, driven by U.S. operations. The trend continued in the first quarter 2019 as well. The company expects communications operations to generate approximately $500 million of revenues in 2019, with mid-single-digit operating income margins on a full-year basis. Prospects of the Electric Power segment remain robust, given its solid backlog position. As of Mar 31, 2019, the segment’s 12-month backlog was $4.5 billion and total backlog was $8.4 billion.Promising Prospects for Pipeline and Industrial Infrastructure Services Operations:The company’s prospects for industrial services look good, given expanding utility-based gas distribution and Integrity operations. The segment has significant opportunities, which include supporting mainline and midstream infrastructure, downstream industrial services, natural gas distribution, pipeline integrity, MSAs, pipeline logistics management, horizontal directional drilling, as well as drill services and engineering.Meanwhile, large pipeline projects across North America continue to aid its pipeline construction operations. This division is well positioned to benefit from LNG and petroleum export development in the United States and Canada.Solid Inorganic Drive:Acquisitions have been Quanta Services’ preferred mode of boosting market share and developing incremental backlog. The company completed one acquisition during the January to March quarter of 2019 and four acquisitions during 2018. The 2018 buyout of Northwest Lineman College, a dominant educational and training organization, enabled it to offer training services across the entire lifespan of a line worker's career. Again, the acquisition of specialized services company, Stronghold, provided high pressure and critical path solutions to downstream and midstream energy markets.Upbeat View & Solid Growth Prospects:Buoyed by strong performance in first-quarter 2019 and increased visibility for electric power services, the company lifted 2019 expectation. It now expects adjusted earnings in the range of $3.40-$3.86 per share versus $3.30-$3.75 expected earlier. Revenues are projected in the range of $11.2-11.6 billion, up from prior expectation of $10.8-$11.2 billion. Adjusted EBITDA is now expected in the range of $905-$1 billion versus $875-$975 million projected earlier.Overall, Quanta Services has solid growth prospects, as is evident from the Zacks Consensus Estimate for 2019 earnings of $3.64 per share, which indicates 29.5% year-over-year improvement.Superior ROE:Its return on equity (“ROE”) supports growth potential. The company’s ROE of 12.7% compares favorably with the industry’s average of 11.3%, implying that it is efficient in using its shareholders’ funds.Other Stocks to ConsiderOther top-ranked stocks in the Construction space include AECOM ACM, Altair Engineering Inc. ALTR and KBR, Inc. KBR, each carrying a Zacks Rank #2.AECOM has a solid earnings surprise history, having surpassed the consensus mark in all the trailing four quarters, with the average being 6.2%.Altair Engineering’s earnings for the current year are expected to increase 53.7%.KBR’s earnings surprise history is also impressive, having outpaced the consensus estimate in the preceding four quarters, with the average being 8.9%.Breakout Biotech Stocks with Triple-Digit Profit PotentialThe biotech sector is projected to surge beyond $775 billion by 2024 as scientists develop treatments for thousands of diseases. They’re also finding ways to edit the human genome to literally erase our vulnerability to these diseases.Zacks has just released Century of Biology: 7 Biotech Stocks to Buy Right Now to help investors profit from 7 stocks poised for outperformance. Our recent biotech recommendations have produced gains of +98%, +119% and +164% in as little as 1 month. The stocks in this report could perform even better.See these 7 breakthrough stocks now>>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days.Click to get this free reportQuanta Services, Inc. (PWR) : Free Stock Analysis ReportKBR, Inc. (KBR) : Free Stock Analysis ReportAECOM (ACM) : Free Stock Analysis ReportAltair Engineering Inc. (ALTR) : Free Stock Analysis ReportTo read this article on Zacks.com click here. |
Guy Verhofstadt brands Boris Johnson a liar
Guy Verhofstadt has launched a furious rant against Boris Johnson's Brexit plans (Getty) If Boris Johnson had hoped for civil negotiations with the EU if he becomes Prime Minister he may be in for a surprise. Guy Verhofstadt , the EU Parliaments Brexit negotiator, has unleashed a scathing attack on the favourite to take over as Tory leader , accusing him of "false promises, pseudo-patriotism, and foreigner bashing. The gloves well and truly came off Mr Verhofstadt, who said Mr Johnson will struggle to deliver his key Brexit plans, while also taking a sideswipe at his supporters. Mr Verhofstadt accused Mr Johnson of making "false promises" (AP) He ranted: To those of us watching from the outside, the debate between the candidates confirms that they have learned nothing whatsoever from the past two years of negotiations with the EU. "Though Johnson will most likely soon find himself in a position where he must make good on his promises, he continues to spread untruths. "Chief among them is the myth that Britain can tear up the withdrawal agreement that May negotiated with the EU, withhold its financial commitments to the bloc, and simultaneously start negotiating free-trade deals. Read more from Yahoo News UK: The corridors of powder: Cocaine found in Houses of Parliament Diane Abbott 'beginning to worry' about Corbyns Brexit strategy London violence: Teenager dies in Shepherds Bush stabbing "To Johnsons followers, however, he is more prophet than politician. Only he can deliver a mythical 'true Brexit' that will deliver the prosperity promised during the referendum campaign. Mr Verhofstadt also stated that the EU will eclipse Britain when it comes to trade with the rest of the world. He added: "With Johnson likely taking power in late July, Europe will have offered still more proof that Brexit is not only unnecessary but also detrimental to Britains economic interests. Mr Johnson has vowed to take Britain out of the EU by October 31 (AP) "The 'buccaneering' Brexiteers might then finally have to explain what it is theyre still complaining about. Mr Johnson may not be too concerned with the attack on his character, which may only shore up support from Eurosceptics in his party determined to make him Prime Minister in July. ---Watch the latest videos from Yahoo UK--- View comments |
Could The Storm Resources Ltd. (TSE:SRX) Ownership Structure Tell Us Something Useful?
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If you want to know who really controls Storm Resources Ltd. (TSE:SRX), then you'll have to look at the makeup of its share registry. Institutions often own shares in more established companies, while it's not unusual to see insiders own a fair bit of smaller companies. I quite like to see at least a little bit of insider ownership. As Charlie Munger said 'Show me the incentive and I will show you the outcome.'
Storm Resources is a smaller company with a market capitalization of CA$215m, so it may still be flying under the radar of many institutional investors. Our analysis of the ownership of the company, below, shows that institutions own shares in the company. We can zoom in on the different ownership groups, to learn more about SRX.
See our latest analysis for Storm Resources
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 52% of Storm Resources. 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 Storm Resources's historic earnings and revenue, below, but keep in mind there's always more to the story.
Since institutional investors own more than half the issued stock, the board will likely have to pay attention to their preferences. Hedge funds don't have many shares in Storm Resources. There is a little analyst coverage of the stock, but not much. So there is room for it to gain more coverage.
The definition of company insiders can be subjective, and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. 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.
It seems insiders own a significant proportion of Storm Resources Ltd.. Insiders have a CA$26m stake in this CA$215m business. It is great to see insiders so invested in the business. It might be worth checkingif those insiders have been buying recently.
The general public, with a 35% 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.
It's always worth thinking about the different groups who own shares in a company. But to understand Storm Resources better, we need to consider many other factors.
Many find it usefulto take an in depth look at how a company has performed in the past. You can accessthisdetailed graphof past earnings, revenue and cash flow.
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. |
Oracle (ORCL) Rolls Out New Capabilities to Enhance Database
OracleORCL recently introduced “Autonomous Database Dedicated service.” The implementation of the new offering enables enterprise customers shift database workloads to autonomous cloud seamlessly in a secure and reliable infrastructure.Notably, the latest service utilizes Oracle Cloud platform’s Exadata Infrastructure, which offers high workload isolation, security and performance functionalities.Additionally, the company rolled out innovative capabilities, including Oracle SQL Developer Web, Oracle Application Express (APEX), and Oracle REST Data Services. The latest services are aimed at enabling developers to design and implement robust data-driven applications.The latest capabilities favor adoption of Oracle Database. In fact, Jasci, an order management software and cloud warehouse provider, is utilizing Oracle Database and Oracle Cloud to enhance performance.
Past Month Price Performance
An expanding customer base is instilling confidence in this Zacks Rank #2 (Buy) stock. Notably, shares of Oracle have returned approximately 9.4% in the past month, outperforming the industry’s rally of 3.9%. In the same period, the stock has outperformed S&P 500 index’s growth of 3.8%.Tactical Portfolio Expansion Approach to Boost AdoptionOracle is strategically expanding Autonomous Database portfolio by incorporating robust machine learning capabilities. It enables the company to aid customers with personalized automated database services, accelerating their business processes.Markedly, Oracle’s Database services running on the company’s public cloud platform, lowers costing and pricing parameters of its offerings. This provides the company an edge in the Database-as-a-Service market and reinforces its competitive position against Amazon’s AMZN cloud computing platform, Amazon Web Services.Oracle is leaving no stone unturned to enhance functionalities of cloud-based applications and its autonomous database, which bode well. At Oracle’s Analytics Summit, the company recently made a slew of additions to Oracle Analytics Cloud Platform suite of services. Oracle also entered into a partnership with Microsoft MSFT, which is expected to enhance the companies’ presence in the enterprise cloud market.We expect the adoption of new database services and latest cloud-based offerings to generate incremental revenues for the company in the days ahead. Moreover, synergies from Micrsoft Azure partnership are likely to act as a tailwind.Growth Prospects AplentyIncreasing spending on public cloud platforms and growing clout of digital transformation favor the initiatives taken by Oracle to strengthen its database and cloud platform.Per IDC data, global spending on public cloud services and related infrastructure is envisioned to hit $210 billion in 2019, up 23.8% over 2018. Moreover, per a MarketsandMarkets report, digital transformation market is projected to hit $665 billion by 2023 at a CAGR of 18.1% from $290 billion in 2018.We believe the company is well poised to capitalize on growth opportunities of its domain on the back of its ongoing efforts in the domain.Another PickAnother top-ranked stock worth considering in the same industry is Rosetta Stone Inc. RST, sporting Zacks Rank #1 (Strong Buy). You can seethe complete list of today’s Zacks #1 Rank stocks here.Long-term earnings growth rate for Rosetta Stone is pegged at 12.5%.Breakout Biotech Stocks with Triple-Digit Profit PotentialThe biotech sector is projected to surge beyond $775 billion by 2024 as scientists develop treatments for thousands of diseases. They’re also finding ways to edit the human genome to literally erase our vulnerability to these diseases.Zacks has just released Century of Biology: 7 Biotech Stocks to Buy Right Now to help investors profit from 7 stocks poised for outperformance. Our recent biotech recommendations have produced gains of +98%, +119% and +164% in as little as 1 month. The stocks in this report could perform even better.See these 7 breakthrough stocks now>>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days.Click to get this free reportAmazon.com, Inc. (AMZN) : Free Stock Analysis ReportOracle Corporation (ORCL) : Free Stock Analysis ReportMicrosoft Corporation (MSFT) : Free Stock Analysis ReportRosetta Stone (RST) : Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment Research |
Big Pharma Gets Bigger
In this episode ofMarketFoolery, host Chris Hill talks with senior analyst Jason Moser about some fresh business news.AbbVie(NYSE: ABBV)andAllergan(NYSE: AGN)plan to join up, but the market doesn't seem that happy for them. Warren Buffett cryptically reported that there's no tension betweenBerkshire Hathaway(NYSE: BRK-A)(NYSE: BRK-B)and 3G (and their terrible investment that isKraft Heinz(NASDAQ: KHC)). Doth the world's most famous investor protest too much? Plus, Moser shares some investing takeaways he had during his vacation. Find out what makesZoetis(NYSE: ZTS),Spotify(NYSE: SPOT), andSlack(NYSE: WORK)companies to watch, and mourn the fact that the eternally usefulTripAdvisor(NASDAQ: TRIP)can't figure out how to build a compelling business.
To catch full episodes of all The Motley Fool's free podcasts, check out ourpodcast center. A full transcript follows the video.
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This video was recorded on June 25, 2019.
Chris Hill:It's Tuesday, June 25th. Welcome toMarketFoolery! I'm Chris Hill. Joining me in studio, back in the United States of America, it's Jason Moser, looking tanned, rested, and ready.
Jason Moser:I feel like, in my defense, I probably am always looking tanned to some level. I was adopted, so I don't know necessarily the bloodline there, but we've all determined that there must be some Mediterranean in me.
Hill:But as someone who sees you pretty much every day, you're looking tanner.
Moser:Maybe a little bit tanner. There was a lot of sun there. You're a little bit closer to the equator in Costa Rica.
Hill:Yeah. We'll get to that. And we'll get to some drama, or maybe not drama, between Warren Buffett and 3G Capital. We'll unpack that as well. Once again, we're going to start with a big deal. This time in the healthcare space. I'm saying healthcare. The huge umbrella of healthcare. AbbVie buying Allergan. Allergan, the maker of Botox. This is a $63 billion deal, cash and stock. Allergan, if you're a shareholder, you're having a heck of a good day because the buyout price is 45% higher than yesterday's close. I am curious, though, at the fact that Allergan is now only trading up about 25-28% higher. We'll get to whether or not this deal goes through. This is yet another big deal.
Moser:Whether it goes through is going to be interesting, just from the perspective that it wasn't all that long ago that there was an offer made for Allergan for quite a bit more than today's offer. But then also, the recent calls have been for the company actually to split up and spin off some of its assets to realize more value that way. And then you find yourself where you are today as a shareholder, the deal, is that going to be the best way to realize value for Allergan shareholders? I don't know. Maybe. I feel like it is a deal that brings together two companies that can likely do more together than separately. There's not a lot of overlap there.
I look at this space, it feels like the chipmaker space in the sense that they're always stuck on this wheel of never-ending innovation. You've always got to come up with something new, the next big thing. If you don't come up with that next big thing, the fall from grace can be pretty severe.
Allergan, I think most people probably know it for Botox. I'm a little bit conflicted there. I know there's some therapeutic implications there with migraines. It seems to be more something people associate with wrinkles and cosmetic stuff. You have to wonder how necessary that is, other than just someone's vanity, and I don't have a lot of sympathy for that. But it's a difficult line of work. Drugs face a lot of scrutiny. There are going to be plenty of failures. It's questionable, honestly, today, whether you should be using some of them. Interesting to see how this all plays out.
Hill:Yesterday, Dan Kline and I talked about the merger in the casino industry withEldoradoandCaesars. That's one that, at least to hear Dan Kline tell it, over the long term, he feels good about that deal. Clearly, based on what's happening with shares of AbbVie today, it looks like there are plenty of people who don't like this deal, or at least think that they are paying too much for Allergan, because shares of AbbVie are down about 15%, and it's not like this stock's been lighting the world on fire the last 18 months.
Moser:Yeah. We talk about that a lot. The acquirer usually feels a little bit of a pinch on the day of a deal. The acquired feels a little bit of a bump. It does seem like these are heavier reactions than we might normally see. I do get that. When you look at Allergan, its overall business, you're talking essentially, between Botox cosmetics and therapeutics, that's more than $2.5 billion of the company's overall sales, and that growth is clearly slowing down, if you look at those numbers. But then, when you look at the two companies combined, there are risks out there when it comes to generics. A lot of these drugs that they've been benefiting from for so long are starting to come off patent now. Generics are a common threat. There was a depression drug recently that Allergan had trouble with.
I do think we are hitting a new generational mentality that is going to question whether we need a lot of these drugs, whether it's depression -- I mean, they're serious problems. I'm not making light of something like depression. Any of these things require attention. But these commercials for these drugs, it takes more time for them to read off the side effects and potential implications as opposed to the benefits of the drug. Remember thatSimpsons-- God, I'll always go back toThe Simpsons. Remember thatSimpsonsa while back, where Homer was approached to be the spokesman for Viagragain? Remember that? "It gives you a lot of hair and what you need down there." [laughs] But then, "Possible side effects include loss of scalp and penis." That's what was said next, and that's what these drugs always feel like! You see this little benefit, and you're like, "That's nice!" Then you hear about the side effects, and you're like, "Why the hell would I take that thing? It sounds like I may die! Maybe I'd rather do it on my own terms." There is something they have to figure out there. I'm not sure it's so simple. It does feel like this space is only becoming more pointed in that direction, where you question the benefits vs. the costs. So, the consolidation is not terribly surprising. But two companies with slowing growth doesn't necessarily make one company that can then accelerate growth.
Hill:Speaking of slowing growth, let's talk about Kraft Heinz. Shares are down about 50% or so this year. There have been reports of trouble between Berkshire Hathaway and 3G capital. Bears remembering that those two teamed up a few years back to buy Kraft Heinz and got a lot of headlines at the time, and rightly so, in part because Warren Buffett had, up to that point, a track record of making acquisitions essentially on his own. So at the time, it was like, "Wow, here's this new deal." Also, Buffett has been critical in the past of private equity. It raised a couple of eyebrows that Berkshire Hathaway would team up with a private equity firm, even one with the reputation of 3G Capital, and then go out and buy Kraft Heinz.
Apparently, these reports... you hear little rumblings here and there. It never struck me as something that was front-page news. Maybe I missed it. I don't know thatThe Wall Street Journalhad some splashy headline on the front page about some big rift. But apparently, Warren Buffett felt the need to reach out to CNBC and come out today and say that there's no tension between Berkshire Hathaway and 3G. He really downplayed these reports.
I don't know your reaction, but my reaction was, first of all, given what's happened, given the way Kraft Heinz has performed, particularly over the last two years, the writedowns that have happened for Berkshire Hathaway, the fact that Buffett has had to come out and say, "Oh, yeah, we paid too much for this," I think any reasonable person would expect there to be some level of tension. That seems like a little bit of he doth protest too much.
Moser:Your Slack message made me laugh on my way to work. "Really? Shouldn't there be some tension?" Yeah, you're damn right there should be tension! The stock has gotten killed, and for a lot of not necessarily easy-to-fix reasons. Misreporting notwithstanding, restatements notwithstanding --
Hill:Just to add parenthetically, yes, Kraft Heinz, also some accounting problems.
Moser:We've certainly we've seen other companies have that. You're talking about something that's very fixable. You can recover from it. The thing about this deal that always struck me, on the surface, it's right in his wheelhouse. Consumer brands, not tech-related. It's food. It's something you associate with our childhood. A lot of these brands, you and I associate with our childhoods. I think that's part of the problem. I know he said that the biggest problem facing Kraft Heinz is that Heinz overpaid when merging with Kraft in July, and then they made a mistake in overpaying for that investment. I think it goes far deeper than that. I think these are brands that are not resonating with younger generations of consumers today. I don't think that necessarily changes so quickly, particularly when you see the attitudes toward what people are eating, the brands that are coming up from that, the nature of being able to get out there and brand build that didn't exist when we were growing up, via social media and other channels.
It's not to say that this is some trip to zero. I don't think that's the case. There's value in Kraft and Heinz and Philly cream cheese and whatnot. But I don't look at those as brands that are going to be leading the way going forward. For them to just think that overpaying was the problem misses the point entirely.
Hill:I'm not rooting against Berkshire Hathaway. I'm not rooting against Warren Buffett. But to be completely honest, part of me is heartened by the fact that, yeah, Warren Buffett's human. He would probably like a mulligan on this one. From time to time, we talk about sunk costs, and how that's hard to fight against as an investor. Turns out, it's hard for Warren Buffett to fight against. At the time of this deal in 2013, one of the things Buffett said at the time was, "Oh, yeah, I've had my eye on Heinz going back to 1980." For more than 30 years, he had, on some level, been looking at the Heinz business and saying, "Boy, I sure would like to get some of that."
Moser:And ironically, had he made that investment back then, I'm sure things would have worked out a lot better. You hit on something there that I would love to know. Given a mulligan, if you could have this deal for half of what you paid for it, would you do it again? I'd ask Buffett that question. Would you do it again if you could do it for half? Maybe he would, maybe he wouldn't. I think the value investor in him quite possibly would. I would still question that. Again, it goes back to, sometimes things are cheap for a reason.
Hill:U.S. News and World Reporthas come out with their annual list of the best places to travel to. Paris coming in at No. 1, followed by New Zealand's South Island, then Rome, Tahiti, and London, rounding out the top five. No. 29 on the list, Costa Rica.
Moser:Hey!
Hill:I do want to hear not only what kind of time you had in Costa Rica with your family, but also to the extent that you had business takeaways.
Moser:I always do.
Hill:But I did note that in the write-up,U.S. News and World Reportincluded this caveat when it comes to Costa Rica. I'm quoting here. "Just make sure you plan a visit during the country's dry season between mid-December and April." I read that this morning and thought, "Huh, let me check the calendar."
Moser:First question.
Hill:"I'm pretty sure Jason's trip fell outside that window."
Moser:It definitely did. First and foremost, I thank my lovely wife for lobbing this idea up many months ago. Once she said Costa Rica, I thought, "Hey, I'm all in!" That's a place we'd never been and would love to go visit. We planned it for a while. Thankfully for us, the weather worked out really well. We had a couple of days that were total rainouts. Very fortunate that on those days, we didn't have anything planned. The house that we rented was on top of a mountain on the Pacific Ocean side of the country, so we had a nice view and easy way to spend the day, even when the weather was bad. That's first time we've ever been. I loved it! I feel like if you love nature and wildlife and animals, that's a place you need to go visit. I can't speak to the other side of the country. From what I've understood, the Pacific side is better from a wildlife perspective. Certainly, we got to see a lot of it.
Hill:From a business standpoint, I know from following you on Twitter, you were reading John Carreyrou's book,Bad Blood.
Moser:That was just entertainment. I'd spoken with Greg Gauges, a member of ours, at Fool Fest. He had told me -- I was waiting to just watch the documentary on HBO. He said, "Dude, read the book, then watch the documentary; or watch the documentary, then read the book. Either way, do both." I took him up on that. No regrets. It was a terrific book!
I look at that trip, and man, there's so many things I did, that we did, that touch my portfolio in one way or another. The easy thing is to come back and talk about payments and travel. I'm not going to talk about that. I think I've talked about that before, traveling. But because of Costa Rica, because of the nature and wildlife side of it -- we went to an animal sanctuary one day. They were helping injured animals in the jungle recover, so they get hopefully put them back out. We went horseback riding one day through the jungle and on the beach. It was really cool. Saw tons of wildlife. It was so cool. It got me thinking that one of the companies I talk about a lot on the show,Idexx Laboratories. The other one that doesn't get as much attention is Zoetis, ticker ZTS. They're in the business of the animal health, medicines, and vaccines. Whether it's companion animals like dogs, cats, horses, or livestock animals, Zoetis is essentially the world's biggest company when it comes to this. Spun out ofPfizera while back. A little bit of a bigger company, perhaps the growth isn't quite like aRule Breaker. Plays in a very, very large and growing market. Pays a nice little dividend. Well-led. I own shares personally. Zoetis struck me as one that, from the wildlife perspective, I'm certain that some of their stuff was being used down there.
And then, from an entertainment perspective, beyond the book, I do think Spotify is building a strong entertainment platform. Beyond music. I think it's going to become an entertainment platform that people use for so many different things. They've got such a large user base now with a lot of data they can pull from that. They're building their own content. I think they'll be able to do a lot of stuff with it. So, Spotify is another one.
The Fats Domino award, that goes to TripAdvisor. Ain't that a shame? It's such a helpful service, and for whatever reason, they just cannot build a compelling business from it. I said it from the Bahamas, and Costa Rica was no exception, I got so much help from TripAdvisor on the trip there. But for whatever reason, they've not been able to build a compelling business out of it, at least yet. Maybe that'll change.
One to keep an eye on, even when you take a vacation, work never seems to escape you, particularly if you love your work like I do. With the new AR service, I was in touch with some people here back and forth, and Slack was really helpful from that perspective. Ticker WORK. New listing, obviously. Everything from work to, I got to go have dinner down there with Mario Gatica and his wife Sophia. They're Fools and they've been to an Austin event and more recently at Fool Fest. We got to go see them in their home country. That was really cool! Posted a picture of that on Slack. People here at work loved it. A lot of different things that the platform does. I like the integrations with other companies we like out there that are doing neat stuff, helping workplaces communicate better. That was what was going through my mind when I wasn't completely unplugging.
Hill:Nice! Glad you unplugged and I'm glad you made it back!
Moser:Thanks, man!
Hill:As always, people on the program may have interest in the stocks they talk about, and The Motley Fool may have formal recommendations for or against, so don't buy or sell stocks based solely on what you hear. That'll do it for this edition ofMarketFoolery! The show is mixed by Dan Boyd. I'm Chris Hill. Thanks for listening! We'll see you tomorrow!
Chris Hillhas no position in any of the stocks mentioned.Jason Moserowns shares of IDXX, TripAdvisor, and Zoetis. The Motley Fool owns shares of and recommends Berkshire Hathaway (B shares), IDXX, and TripAdvisor. The Motley Fool has adisclosure policy. |
RevPAR & ADR Growth Continue to Drive Hotels & Motels Stocks
The Zacks Hotels and Motels industry includes companies that own, lease, manage, develop, and franchise hotels and resorts. Some vacation ownership and exchange companies are also part of the space.
Let’s take a look at the industry’s three major themes:
• The Hotels and Motels industry is likely to be driven by increase in occupancy and average daily rate (ADR). Per a STR (formerly known as Smith Travel Research) report, in first-quarter 2019, the U.S. hotel industry reported revenue per available room (RevPAR) and ADR growth of 1.5% and 1.1%, respectively. Moreover, occupancy rate in the first-quarter increased 0.4% to 61.8%. The industry witnessed rise in occupancy rate across all sectors, from luxury to economy. The momentum is likely to continue in 2019 but at a slower rate. That’s because most of the hotel companies in the United States have been witnessing slowing RevPAR trends of late owing to muted international visits.
• The industry participants have been benefiting from several factors like a strong domestic economy, higher income, increased consumer confidence and a strong labor market. As people are steadfast on spending time with loved ones and keep looking for unique experiences at all price points, demand for offerings is on the rise. Per GlobalData, luxury hotels in the United States are likely to increase to 1,067 by the end of 2019. By 2022, the figure is likely to increase to 1,123. The hotel industry will benefit from increase in Chinese tourists to the United States.
• However, higher costs continue to be a concern for the industry. With an improvement in the economy and drop in unemployment levels, industry players are struggling to control their largest operating expense — labor costs. Rising salaries, wages and benefits have been adding to labor costs.
Zacks Industry Rank Indicates Bright Prospects
The Zacks Hotels and Motels industry is grouped within the broader Consumer Discretionary Sector.
The group’s Zacks Industry Rank, which is basically the average of the Zacks Rank of all the member stocks, indicates encouraging near-term prospects. The Zacks Hotels and Motels industry currently carries a Zacks Industry Rank #79, which places it in the top 31% of 256 Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperforms the bottom 50% by a factor of more than 2 to 1.
The industry’s position in the top 50% of the Zacks-ranked industries is a result of positive earnings outlook for the constituent companies in aggregate. Looking at the aggregate earnings estimate revisions, it appears that analysts are gradually gaining confidence in this group’s earnings growth potential. Since Jan 31, 2019, the industry’s earnings estimate for the current year has gone up 1.5%.
Before we present a few stocks that you may want to consider for your portfolio, let’s take a look at the industry’s recent stock-market performance and valuation picture.
Industry Underperforms S&P 500 & Sector
The Zacks Hotels and Motels industry has underperformed its own sector and the Zacks S&P 500 composite over the past year.
Over this period, the industry has declined 2% compared with the sector’s decline of 1.8%. The Zacks S&P 500 composite has however rallied 6% in the said time frame.
Hotels & Motels Industry’s Valuation
On the basis of the trailing 12-month EV/EBITDA, which is a commonly used multiple for valuing Hotels and Motels stocks, the industry is currently trading at 15.16X compared with the S&P 500’s 11.29X. It is also above the sector’s trailing 12-month EV/EBITDA ratio of 12.52X.
Over the last five years, the industry has traded as high as 23.00X, as low as 10.94X and at the median of 14.31X, as the chart below shows.
Bottom Line
Rise in occupancy rate and commercial transient demand will continue to drive the industry in 2019. Further, we note that rising employment, higher real income and increased household net worth reinforced consumer confidence and sentiment. This resulted in a steady rise in business and leisure travel, and higher transaction volumes, which are likely to continue. Moreover, increase in the number of luxury hotels will continue to drive the industry higher. However, limited labor and higher costs will remain overhangs.
None of the stocks in the Hotels and Motels space currently sport a Zacks Rank #1 (Strong Buy). So, we are presenting four stocks with a Zacks Rank #2 (Buy). You can seethe complete list of today’s Zacks #1 Rank stocks here.Choice Hotels International, Inc.(CHH): The company is one of the largest hotel franchisors in the world. Earnings for 2019 are likely to witness growth of 7.5%. Further, the company’s earnings surpassed the Zacks Consensus Estimate in all the trailing four quarters, with the average being 7.9%.
Price and Consensus: CHH
Red Lion Hotels Corporation(RLH): The company operates as a hospitality and leisure company in the United States. Earnings for 2019 are likely to witness growth of 102.2%.
Price and Consensus: RLH
Hilton Worldwide Holdings Inc.(HLT): The company owns, leases, manages, develops, and franchises hotels and resorts. Currently, the company has a Zacks Rank #2. Earnings beat the consensus estimate in three of the trailing four quarters, with the average being 5.6%. Earnings for 2019 are likely to witness growth of 39.1%.
Price and Consensus: HLT
Wyndham Destinations, Inc.(WYND): The company operates as a vacation ownership as well as exchange firm in the United States and worldwide. Earnings surpassed the consensus estimate in the preceding four quarters, with the average being 5.9%. Earnings for 2019 are likely to witness growth of 14.9%.
Price and Consensus: WYND
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Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days.Click to get this free reportWYNDHAM DESTINATIONS, INC. (WYND) : Free Stock Analysis ReportRed Lion Hotels Corporation (RLH) : Free Stock Analysis ReportHilton Worldwide Holdings Inc. (HLT) : Free Stock Analysis ReportChoice Hotels International, Inc. (CHH) : Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment Research |
Is Now The Time To Look At Buying Cubic Corporation (NYSE:CUB)?
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Cubic Corporation (NYSE:CUB), which is in the aerospace & defense business, and is based in United States, saw a double-digit share price rise of over 10% in the past couple of months on the NYSE. As a stock with high coverage by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock. But what if there is still an opportunity to buy? Let’s take a look at Cubic’s outlook and value based on the most recent financial data to see if the opportunity still exists.
Check out our latest analysis for Cubic
According to my valuation model, Cubic seems to be fairly priced at around 7.59% above my intrinsic value, which means if you buy Cubic today, you’d be paying a relatively fair price for it. And if you believe the company’s true value is $57.87, then there isn’t really any room for the share price grow beyond what it’s currently trading. So, is there another chance to buy low in the future? Given that Cubic’s share is fairly volatile (i.e. its price movements are magnified relative to the rest of the market) this could mean the price can sink lower, giving us an opportunity to buy later on. This is based on its high beta, which is a good indicator for share price volatility.
Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio. 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. Cubic’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?CUB’s optimistic future growth appears to have been factored into the current share price, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the track record of its management team. Have these factors changed since the last time you looked at the stock? Will you have enough confidence to invest in the company should the price drop below its fair value?
Are you a potential investor?If you’ve been keeping an eye on CUB, now may not be the most advantageous time to buy, given it is trading around its fair value. However, the optimistic prospect is encouraging for the company, which means it’s worth diving deeper into other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.
Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on Cubic. You can find everything you need to know about Cubic inthe latest infographic research report. If you are no longer interested in Cubic, 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. |
Thyssenkrupp workers demand clear strategy for steel unit
DUISBURG, Germany (Reuters) - Powerful labour leaders at Thyssenkrupp have called on the group's management to come up with a clear strategy for its steel unit, which will remain part of the conglomerate after a failed attempt to merge it with Tata Steel.
"We're core business now. That requires the need for investments," Tekin Nasikkol, head of the works council of Thyssenkrupp Steel Europe, told journalists. "We reject pure restructuring plans and tough cost cut programmes."
Thyssenkrupp's steel unit has come under pressure due to falling prices and high raw material costs and faces 2,000 job cuts, the same level of layoffs that would have been carried out under the previous merger plans with Tata Steel.
Thyssenkrupp Steel Europe's second-quarter adjusted operating profit plunged 81% to 37 million euros ($42.05 million).
The elevators-to-submarines group last month scrapped the joint venture plan after it became apparent that the European Commission would block it, causing a u-turn in strategy. Thyssenkrupp now expects to keep a majority in the business in the long-term.
Chief Executive Guido Kerkhoff told Reuters a day earlier that the situation in the steel market remained tough and that there were no signs of a turnaround. "We want to develop the steel business on our own," he said.
($1 = 0.8798 euros)
(Reporting by Tom Kaeckenhoff; Writing by Christoph Steitz; Editing by Keith Weir) |
S&P 500 rises on investor optimism ahead of G20 summit
By Stephen Culp
NEW YORK (Reuters) - The S&P 500 and the Nasdaq closed higher in a broad-based rally on Thursday as investors looked to the G20 summit in Osaka, Japan this weekend for progress in the long-running U.S.-China trade dispute, which has whipsawed markets for months.
The benchmark S&P 500 snapped its four-day losing streak, closing within 1% of its all-time high, reached a week ago.
The Dow closed slightly lower, dragged down by Boeing Co.
Optimism fueled by a China Morning Post report that the world's two largest economies have agreed to a tentative trade war truce was dampened by a Wall Street Journal article saying that Chinese President Xi Jinping will present President Donald Trump with a set of conditions to be met by the United States before reaching any settlement.
Expectations of a deal were muddied further when White House economic adviser Larry Kudlow said the United States may move ahead with further tariffs on Chinese goods after the two leaders meet this weekend at the Group of 20 summit in Japan. Trump and Xi are expected to discuss a way forward regarding tariffs and other issues when they meet.
"Today's trading is a G20 pregame," said Matt Forester, chief investment officer of BNY Mellon's Lockwood Advisors in New York. "Given the tone of today's markets, people believe there will be some diminishment of trade tensions coming out of the meeting."
"No pair of geopolitical rivals in history have had more connection to each other's economies," Forester added. "There's a lot of pressure to get this right."
The Dow Jones Industrial Average fell 10.24 points, or 0.04%, to 26,526.58, the S&P 500 gained 11.14 points, or 0.38%, to 2,924.92 and the Nasdaq Composite added 57.79 points, or 0.73%, to close at 7,967.76.
Of the 11 major sectors in the S&P 500, all but energy stocks ended the session higher.
Chipmakers, whose revenue exposure to China makes them vulnerable to tariffs, ended the session higher. The Philadelphia Semiconductor index rose 1.5%.
"Chipmakers are a proxy for trade optimism," said Chuck Carlson, chief executive officer at Horizon Investment Services in Hammond, Indiana. "They have become the trade du jour for traders betting for or against a trade deal" between the United States and China.
Ford Motor Co advanced 2.9% after the automaker announced it would cut 12,000 jobs in its troubled Ford Europe segment.
Boeing Co dropped 2.9% following a Reuters report on Wednesday that the U.S. Federal Aviation Administration identified a new safety risk in the planemaker's grounded 737 MAX aircraft.
Conagra Brands reported quarterly earnings that missed analyst estimates because of waning demand and manufacturing challenges. Its shares fell 12.1%.
Higher drug prices and an increase in prescription volume helped Walgreens Boots Alliance Inc beat quarterly earnings expectations, sending its stock up 4.1%.
Advancing issues outnumbered declining ones on the NYSE by a 2.50-to-1 ratio; on Nasdaq, a 2.92-to-1 ratio favored advancers.
The S&P 500 posted 6 new 52-week highs and 1 new low; the Nasdaq Composite recorded 36 new highs and 62 new lows.
Volume on U.S. exchanges was 6.14 billion shares, compared to the 6.98 billion average for the full session over the last 20 trading days.
(Reporting by Stephen Culp; Editing by Bill Berkrot) |
Dova Receives Approval for Doptelet in Europe, Stock Up
Shares of Dova Pharmaceuticals, Inc. DOVA gained 3.3% on Jun 26 after the company’s lead drug, Doptelet, received marketing authorization from the European Commission for treating severe thrombocytopenia in adult patients with chronic liver disease (“CLD”) who are scheduled to undergo an invasive procedure. The authorization allows the company to market the drug in 28 countries constituting the European Union, plus Iceland, Norway, and Liechtenstein. The company is currently seeking partnerships for commercialization of the drug in Europe. The drug has been available in the United States since last year. The company has a co-promotion agreement with the Salix division of Bausch Health Companies BHC, for commercialization of Doptelet in the United States. Shares of Dova have increased 39.8% so far this year compared with the industry’s rise of 8.5%. The approval of the drug in Europe was based on data from two phase III studies, which evaluated two doses of Doptelet — 40 mg and 60 mg — in patients with thrombocytopenia and CLD. Treatment with the drug increased the proportion of patients who did not require platelet transfusions or rescue procedures for bleeding up to seven days following a scheduled procedure. The increase in the number of patients was superior compared to a placebo. The drug also achieved superior results compared to placebo in increasing the proportion of patients with platelet count equal to or greater than 50,000/µL and increase in platelet count from baseline. The drug has generated sales of $11.7 million since its approval in May 2018 in the United States. The recent approval in Europe is expected to increase the sales of the drug following a successful launch. Dova is also developing Doptelet as a treatment for chronic immune thrombocytopenia (“ITP”) and chemotherapy-induced thrombocytopenia (“CIT”). A supplemental new drug application is under review in the United States seeking label expansion of the drug to include ITP patients. A decision is expected shortly. An approval will boost the prospects of the drug. A phase III study is evaluating the drug in CIT patients. Top-line data is expected in the first half of 2020. Doptelet faces competition from Shionogi's Mulpleta (lusutrombopag) for its approved indication in the United States and Europe. Moreover, there are several drugs approved for treating ITP including Rigel Pharmaceuticals RIGL Tavalisse, Novartis’ NVS Promacta and Amgen’s Nplate. Several other companies including Bristol-Myers are developing their candidate for ITP indication. Story continues There is no approved drug for the treatment of CIT. Amgen is evaluating Nplate in a late-stage study in CIT patients. Dova Pharmaceuticals, Inc. Price Dova Pharmaceuticals, Inc. Price Dova Pharmaceuticals, Inc. price | Dova Pharmaceuticals, Inc. Quote Zacks Rank Dova currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here . Breakout Biotech Stocks with Triple-Digit Profit Potential The biotech sector is projected to surge beyond $775 billion by 2024 as scientists develop treatments for thousands of diseases. They’re also finding ways to edit the human genome to literally erase our vulnerability to these diseases. Zacks has just released Century of Biology: 7 Biotech Stocks to Buy Right Now to help investors profit from 7 stocks poised for outperformance. Our recent biotech recommendations have produced gains of +98% , +119% and +164% in as little as 1 month. The stocks in this report could perform even better. See these 7 breakthrough stocks now>> Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Novartis AG (NVS) : Free Stock Analysis Report Rigel Pharmaceuticals, Inc. (RIGL) : Free Stock Analysis Report Bausch Health Cos Inc. (BHC) : Free Stock Analysis Report Dova Pharmaceuticals, Inc. (DOVA) : Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research View comments |
Here's Why I Think SSP Group (LON:SSPG) Might Deserve Your Attention Today
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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.
In contrast to all that, I prefer to spend time on companies likeSSP Group(LON:SSPG), which has not only revenues, but also profits. Now, I'm not saying that the stock is necessarily undervalued today; but I can't shake an appreciation for the profitability of the business itself. Loss-making companies are always racing against time to reach financial sustainability, but time is often a friend of the profitable company, especially if it is growing.
Check out our latest analysis for SSP Group
As one of my mentors once told me, share price follows earnings per share (EPS). That means EPS growth is considered a real positive by most successful long-term investors. As a tree reaches steadily for the sky, SSP Group's EPS has grown 25% each year, compound, over three years. If the company can sustain that sort of growth, we'd expect shareholders to come away winners.
Careful consideration of revenue growth and earnings before interest and taxation (EBIT) margins can help inform a view on the sustainability of the recent profit growth. While we note SSP Group's EBIT margins were flat over the last year, revenue grew by a solid 6.6% to UK£2.6b. That's progress.
You can take a look at the company's revenue and earnings growth trend, in the chart below. For finer detail, click on the image.
You don't drive with your eyes on the rear-view mirror, so you might be more interested in thisfreereport showing analyst forecasts for SSP Group'sfutureprofits.
It makes me feel more secure owning shares in a company if insiders also own shares, thusly more closely aligning our interests. As a result, I'm encouraged by the fact that insiders own SSP Group shares worth a considerable sum. Given insiders own a small fortune of shares, currently valued at UK£63m, they have plenty of motivation to push the business to succeed. That's certainly enough to make me think that management will be very focussed on long term growth.
You can't deny that SSP Group has grown its earnings per share at a very impressive rate. That's attractive. I think that EPS growth is something to boast of, and it doesn't surprise me that insiders are holding on to a considerable chunk of shares. Fast growth and confident insiders should be enough to warrant further research. So the answer is that I do think this is a good stock to follow along with. While we've looked at the quality of the earnings, we haven't yet done any work to value the stock. So if you like to buy cheap, you may want tocheck if SSP Group is trading on a high P/E or a low P/E, relative to its industry.
Of course, you can do well (sometimes) buying stocks thatare notgrowing earnings anddo nothave insiders buying shares. But as a growth investor I always like to check out companies thatdohave those features. You can accessa free list of them here.
Please note the insider transactions discussed in this article refer to reportable transactions in the relevant jurisdiction
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
Joaquin Phoenixs Joker Eyes Potential Awards Season Launch at Venice Film Festival Report
Click here to read the full article. Superhero films arent the kind of movies one necessarily associates with major international film festivals, but that could soon change thanks to Warner Bros. upcoming fall tentpole Joker . A new report from Deadline says the Joaquin Phoenix -starring comic book drama could be heading to the Venice Film Festival , the event most associated with the kickoff to the fall awards season. Sources tell Deadline Joker is sitting out Comic-Con (reports have already hit that Warner Bros. is skipping this year) in favor of a fall springboard which might just be Venice. Warner Bros. has often used the Venice Film Festival to launch its Oscar contenders. Last year, the studio brought Lady Gaga and Bradley Cooper to the Lido for the headline-making world premiere of A Star Is Born. The music drama was a big hit at the festival and went on to earn eight Academy Award nominations, including Best Picture, Best Actor for Cooper, and Best Actress for Gaga. The studio had similar success world premiering Alfonso Cuaróns Gravity at the 2013 festival. The space drama opened Venice and went on to earn 10 Oscar nominations and seven wins, including Cuarón for Best Director. Related stories 'Justice League' Fans Are Already Begging New Warner Bros. CEO to Release the Snyder Cut New Warner Bros. Entertainment CEO Ann Sarnoff Is the Woman WarnerMedia Needs Phoenix is also a staple of the Venice Film Festival, having most recently attended in 2018 for the world premiere of Jacques Audiards The Sisters Brothers. Phoenix won the festivals Best Actor Volpi Cup in 2012 for his leading turn in Paul Thomas Andersons The Master. With a Venice Film Festival launch for Joker, Warner Bros. could be positioning Phoenixs performance as the infamous Batman villain for awards consideration. Its not a stretch given Phoenix is a three-time Oscar nominee (The Master, Walk the Line, and Gladiator) and one of the most respected actors of his generation. The role is also already an Oscar-winning one thanks to Heath Ledgers turn as the Joker in Christopher Nolans The Dark Knight. Superhero films broke through with the Academy in a big way earlier this year thanks to Black Panther, which became the first comic book movie nominated for Best Picture. Black Panther, nominated for seven Oscars, won three prizes. Story continues Joker stars Phoenix in an origin story of the Batman villain. The Hangover and War Dogs director Todd Phillips directed the movie, which co-stars Robert De Niro, Zazie Beetz, Frances Conroy, and Brian Tyree Henry. Phillips intended for the film to resemble the gritty tone of Martin Scorseses Mean Streets and Taxi Driver. Warner Bros. is releasing Joker in theaters nationwide October 4. The studio also has the awards contender The Goldfinch arriving in theaters this fall. IndieWire has reached out to Warner Bros. for further comment. Launch Gallery: 'Joker' Set Photos: Joaquin Phoenix Is One Terrifying Clown in Behind-the-Scenes Look at Todd Phillips' Film Sign up for Indiewire's Newsletter . For the latest news, follow us on Facebook , Twitter , and Instagram . |
Introducing STEICO (FRA:ST5), The Stock That Zoomed 214% In The Last Five Years
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The worst result, after buying shares in a company (assuming no leverage), would be if you lose all the money you put in. But on the bright side, if you buy shares in a high quality company at the right price, you can gain well over 100%. For example, theSTEICO SE(FRA:ST5) share price has soared 214% in the last half decade. Most would be very happy with that. Meanwhile the share price is 1.3% higher than it was a week ago.
View our latest analysis for STEICO
In his essayThe Superinvestors of Graham-and-DoddsvilleWarren Buffett described how share prices do not always rationally reflect the value of a business. One imperfect but simple way to consider how the market perception of a company has shifted is to compare the change in the earnings per share (EPS) with the share price movement.
Over half a decade, STEICO managed to grow its earnings per share at 25% a year. This EPS growth is remarkably close to the 26% average annual increase in the share price. This indicates that investor sentiment towards the company has not changed a great deal. In fact, the share price seems to largely reflect the EPS growth.
You can see below how EPS has changed over time (discover the exact values by clicking on the image).
Thisfreeinteractive report on STEICO'searnings, revenue and cash flowis a great place to start, if you want to investigate the stock further.
It is important to consider the total shareholder return, as well as the share price return, for any given stock. The TSR incorporates the value of any spin-offs or discounted capital raisings, along with any dividends, based on the assumption that the dividends are reinvested. So for companies that pay a generous dividend, the TSR is often a lot higher than the share price return. We note that for STEICO the TSR over the last 5 years was 231%, which is better than the share price return mentioned above. And there's no prize for guessing that the dividend payments largely explain the divergence!
We regret to report that STEICO shareholders are down 11% for the year (even including dividends). Unfortunately, that's worse than the broader market decline of 3.2%. Having said that, it's inevitable that some stocks will be oversold in a falling market. The key is to keep your eyes on the fundamental developments. Longer term investors wouldn't be so upset, since they would have made 27%, each year, over five years. If the fundamental data continues to indicate long term sustainable growth, the current sell-off could be an opportunity worth considering. Before deciding if you like the current share price, check how STEICO scores on these3 valuation metrics.
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 DE 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. |
Heatwave pushes French power use to near-record as fans whirl
PARIS (Reuters) - French electricity demand on Thursday rose to 59.4 gigawatts (GW) by 1040 GMT, close to a 59.5 GW summer record seen two years ago as a heatwave across France and western Europe increased demand for cooling, grid operator RTE said.
A spokeswoman said power consumption was 10 percent higher than normal for this period of the year as the people turn on fans and coolers at full blast due to scorching temperatures.
Demand is expected to ease on Friday, the spokeswoman said.
Soaring temperatures have been recorded across France this week, with Thursday and Friday expected see record June temperatures with forecasters expecting temperatures over 8 degrees Celsius above seasonal normal.
Electricity demand increases France by over 500 megawatts for every one degree of temperature increase above seasonal level.
On the supply side, power generation from French nuclear, hydropower, solar and wind sources largely covered demand with output at over 63 GW, leaving France a net power exporter throughout the day, according to RTE data.
Record winter power demand - which is much higher because about a third of French homes use electric heating - was 102 GW, reached on February 2012.
France typically does the maintenance of its nuclear fleet in spring, summer and autumn, when power demand is relatively lower.
French utility EDF, which operates France's 58 nuclear reactors that accounts for over 75 percent of its electricity needs, has said the current heatwave would not impact nuclear power production.
The utility had to curb output at some reactors last year during a prolonged heatwave, as environmental regulations limit the volume of cooling water its nuclear reactors can pump out of rivers and how much warm water they can release during hot weather.
(Reporting by Bate Felix; Editing by Geert De Clercq) |
Welton Primary School 'discourages classroom socialising'
Children at Welton Primary School in Hull are reportedly discouraged from socialising in the classroom (Google) A primary school in Hull has been criticised as “weird” by parents after it started enforcing a policy of discouraging classroom socialising between pupils. Welton Primary School sent home a letter to parents that told them that the policy was designed to help children make “good progress”. Away from the classroom, pupils at the school are divided into colour groups and must take part in pre-determined activities set by the school at playtime, according to Hull Live . One mum who has found out bout the rule as her child moved from foundation stage into Year 1 described the rules as “weird”. Parents have described the school's policy as 'weird' (Getty/stock photo) She said: "The kids are dictated to about who they are to play with - it's weird. "It's the only free time they have. It would be like telling a colleague they had eat lunch with somebody specific. "The kids are banded like yellow etc and that's who they have to play with. They should be able to free play. Apparently the 'children come in calmer.'" She added: "I really don't know what is going on in the headteacher's head, saying socialisation is a 'barrier to to pupil outcomes.’ Read more from Yahoo News UK: Boris shrugs off girlfriend row to stay on course for Number 10 The corridors of powder: Cocaine found in Houses of Parliament London violence: Teenager dies in Shepherds Bush stabbing "Other schools keep children together as a class but here they also purposely split them, even from foundation. I don't like that.” Defending the policy, headteacher Nikki Pidgeon said: "While we are keen to see the children making friends, socialising in the classroom is discouraged to ensure that their lessons are inclusive of all children working as a team, regardless of their external friendship group. "Every class has the same set of school expectations that encourage children to get better at working together and to ensure that the children are able to use their social skills in a way that help each other to learn and make good progress.” Mrs Pidgeon added that the playground rules have been in force for the past 10 years, arguing the approach “offers a menu of things the children can choose from every day”. ---Watch the latest videos from Yahoo UK--- |
Don’t Buy CTS Corporation (NYSE:CTS) Until You Understand Its ROCE
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Today we'll look at CTS Corporation (NYSE:CTS) and reflect on its potential as an investment. 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. Second, we'll look at its ROCE compared to similar companies. Then we'll determine how its current liabilities are affecting its ROCE.
ROCE measures the 'return' (pre-tax profit) a company generates from capital employed in its business. Generally speaking a higher ROCE is better. Ultimately, it is a useful but imperfect metric. Renowned investment researcher Michael Mauboussinhas suggestedthat a high ROCE can indicate that 'one dollar invested in the company generates value of more than one dollar'.
The formula for calculating the return on capital employed is:
Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities)
Or for CTS:
0.14 = US$68m ÷ (US$574m - US$98m) (Based on the trailing twelve months to March 2019.)
So,CTS has an ROCE of 14%.
Check out our latest analysis for CTS
ROCE is commonly used for comparing the performance of similar businesses. We can see CTS's ROCE is around the 12% average reported by the Electronic industry. Independently of how CTS compares to its industry, its ROCE in absolute terms appears decent, and the company may be worthy of closer investigation.
We can see that , CTS currently has an ROCE of 14% compared to its ROCE 3 years ago, which was 11%. This makes us think about whether the company has been reinvesting shrewdly. You can click on the image below to see (in greater detail) how CTS's past growth compares to other companies.
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. This is because ROCE only looks at one year, instead of considering returns across a whole cycle. Future performance is what matters, and you can see analyst predictions in ourfreereport on analyst forecasts for the company.
Current liabilities are short term bills and invoices that need to be paid in 12 months or less. The ROCE equation subtracts current liabilities from capital employed, so a company with a lot of current liabilities appears to have less capital employed, and a higher ROCE than otherwise. To check the impact of this, we calculate if a company has high current liabilities relative to its total assets.
CTS has total assets of US$574m and current liabilities of US$98m. As a result, its current liabilities are equal to approximately 17% of its total assets. Low current liabilities are not boosting the ROCE too much.
With that in mind, CTS's ROCE appears pretty good. There might be better investments than CTS out there,but you will have to work hard to find them. These promising businesses withrapidly growing earningsmight be right up your alley.
For those who like to findwinning investmentsthisfreelist of growing companies with recent insider purchasing, could be just the ticket.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
Stock Market News for Jun 27, 2019
Markets closed mostly lower on Wednesday as investors remained uncertain of a positive outcome to a crucial meeting between President Donald Trump and Chinese President Xi Jinping at the G-20 summit in Japan later this week. Technology stocks, however, bucked the declining trend and ended in the green banking on Micron’s upbeat guidance.
The Dow Jones Industrial Average (DJI) decreased 0.04%, to close at 26,536.82. The S&P 500 decreased 0.1% to close at 2,913.78. The tech-laden Nasdaq Composite Index closed at 7,909.97, gaining nearly 0.3%. The fear-gauge CBOE Volatility Index (VIX) decreased 0.43% to close at 16.21. Advancers outnumbered decliners on the NYSE by a 1.37-to-1 ratio. A 1.19-to-1 ratio favored advancers on Nasdaq.
Comments from Mnuchin on U.S.-China Trade Deal
Treasury Secretary Steven Mnuchin told CNBC on Jun 26 that United States and China were close to a trade deal, and expressed his optimism around this weekend’s Trump-Jinping talks. Mnuchin’s comments lifted markets earlier in the session.
“We were about 90% of the way there [with a deal] and I think there’s a path to complete this,”Mnuchin said. However, optimism over a possible trade deal faded during the trading session as analysts doubted whether at all the deal between U.S.-China gets settled. After all, President Trump suggested that he is happy to collect tariffs from China if both the countries are unable to reach a significant trade deal.
Trump said, “My Plan B with China is to take billions and billions a month…and we’ll do less business with them.” The president also said that should the trade negotiations reach a point of no return, he would levy taxes on Chinese goods that aren’t already under the tariffs umbrella.
Tech Bounced Back on Micron Outlook
Micron Technology Inc. MU reported quarterly earnings of $1.05 per share, which easily beat the Zacks Consensus Estimate of $0.78 per share. In fact, the Micron stock was up more than 13% on Jun 26 on the company’s upbeat outlook. Micron Chief Executive Sanjay Mehrotra said that demand for DRAM is expected to “return to healthy year-over-year growth” in the fourth quarter. He cited that the demand for NAND is also rising “as elasticity kicks in response to price declines over the last year”.
Micron’s upbeat guidance helped semiconductor stocks climb higher. Some of the notable chip stocks including NVIDIA Corporation NVDA and On Semiconductor ON saw their shares gain 5.1% and 4.2%, respectively. Both companies carry a Zacks Rank #3 (Hold). You can seethe complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Durable Goods Numbers Discouraging
When it comes to economic data, U.S. durable-goods orders dropped 1.3% in May. This dip marks the third time in four months, which was largely because of The Boeing Company’s BA issues with its 737 Max jets, which were grounded globally after two fatal crashes earlier this year.
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Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days.Click to get this free reportThe Boeing Company (BA) : Free Stock Analysis ReportNVIDIA Corporation (NVDA) : Free Stock Analysis ReportON Semiconductor Corporation (ON) : Free Stock Analysis ReportMicron Technology, Inc. (MU) : Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment Research |
What Type Of Shareholder Owns Suncor Energy Inc.'s (TSE:SU)?
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The big shareholder groups in Suncor Energy Inc. (TSE:SU) have power over the company. Insiders often own a large chunk of younger, smaller, companies while huge companies tend to have institutions as shareholders. We also tend to see lower insider ownership in companies that were previously publicly owned.
With a market capitalization of CA$65b, Suncor Energy is rather large. We'd expect to see institutional investors on the register. Companies of this size are usually well known to retail investors, too. Taking a look at our data on the ownership groups (below), it's seems that institutions own shares in the company. Let's delve deeper into each type of owner, to discover more about SU.
See our latest analysis for Suncor Energy
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.
As you can see, institutional investors own 70% of Suncor Energy. This can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of Suncor Energy, (below). Of course, keep in mind that there are other factors to consider, too.
Institutional investors own over 50% of the company, so together than can probably strongly influence board decisions. Hedge funds don't have many shares in Suncor Energy. There are a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.
The definition of company insiders can be subjective, and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO.
Most consider insider ownership a positive because it can indicate the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.
Our most recent data indicates that insiders own less than 1% of Suncor Energy Inc.. Being so large, we would not expect insiders to own a large proportion of the stock. Collectively, they own CA$35m of stock. It is always good to see at least some insider ownership, but it might be worth checkingif those insiders have been selling.
The general public, with a 29% stake in the company, will not easily be ignored. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.
While it is well worth considering the different groups that own a company, there are other factors that are even more important.
Many find it usefulto take an in depth look at how a company has performed in the past. You can accessthisdetailed graphof past earnings, revenue and cash flow.
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. |
India’s Frightening 10-Yr Crypto FUD Jail Term Kills Bitcoin Exchange Koinex
The move by the Reserve Bank of India (RBI) to ban banks from offering their services to cryptocurrency-related businesses has claimed another victim – Koinex crypto exchange.
In ablog post, the co-founder and CEO of Koinex, Rahul Raj, announced that the exchange’s last day of business would be Thursday, June 27, just two months shy of the exchange celebrating its second-year anniversary. Raj described the development as a ‘sad day for all digital assets and blockchain enthusiasts in India’.
But while the hostile environment contributed significantly to the closure of the crypto exchange, Raj stated that a recent proposal to impose a 10-year jail sentence on anyone buying and selling cryptocurrencies had effectively signed Koinex’s death warrant:
…a proposed piece of legislation called the ‘Banning of Cryptocurrencies and Regulation of Official Digital Currencies Bill 2019’ has created enough FUD in the Indian crypto trading community to result into a sharp decline in trading volumes and instil a clear discomfort for all the law-abiding citizens…
Customers of the cryptocurrency exchange now have until July 15 to withdraw their funds. Users whose funds were frozen after the RBI issued a circular last year in April prohibiting financial institutions falling under its regulatory orbit from having any dealings with firms and individuals engaging in crypto-related activity will also be refunded using Koinex’s own resources in the next five weeks. A convenience fee ranging between 10 and 2000 rupees will be levied on the funds, however.
The anti-crypto stance taken by India will come at a great cost to the world’s second-largest country by population. While Koinex has indicated that it will remain committed to ‘enabling financial sovereignty and deepen financial inclusion’ without necessarily using cryptocurrencies, it is likely to take the expertise, intellectual property and other resources acquired in the cryptocurrency and blockchain field to places where they are valued.
Read the full story on CCN.com. |
Top jobs posted to Monster include tractor-trailer driver, registered nurse, analysis shows
In the last six months, a slew ofjobshave been posted looking for potential candidates — and companies are looking to fill some roles more than others.
Monstercompiled a list of the top 10 jobs that have been posted on its website, and while several of the positions are technology-related, some roles are completely out of that field. Tractor-trailer driver was among the most posted jobs, and the position usually only requires a candidate to have a high school diploma and driver’s license. The job growth over 10 years is at 6 percent and drivers usually make an average of $71,000 a year.
Many employers are also looking for registered nurses, who make an average of $70,000 a year. The position has a 15 percent job growth over the course of a decade.
A software developer position had the most job growth — at 31 percent — over 10 years. A candidate may oversee a company’s entire software development process such as writing code, testing designs and analyzing users’ experiences. Those who take on the role could make about $99,000.
Other top jobs with a median salary of $70,000 or higher include industrial engineer, network systems administrator and systems analyst.
Product demonstrator and customer service representative positions were also among the top jobs listed on Monster. People in these roles make roughly $30,000 a year.
Computer support specialist, usually part of an organization’s IT department, is also among the most-posted positions. Monster said many companies require a candidate with a bachelor’s degree, but some request a high school diploma or associate degree. The median salary runs at $42,000 with an 11 percent job growth over a decade.
For those who fit, a maintenance and repair technician role would likely involve overseeing “the daily functions of the workspace, maintain and repair equipment, and coordinate the daily tasks of the maintenance staff.” The average median salary is $52,000.
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Monster also conducted a survey that showed 67 percent of people believe the job market has moved in favor of those looking for employment. The research found New York City, Houston, Atlanta, Chicago, Phoenix, Dallas, Washington, D.C., St. Louis, Mo., Charlotte, N.C., and Boston were the cities with the most jobs in the first half of 2019.
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Russell remake and G20 leave Wall Street primed for blowout volume
By Chuck Mikolajczak NEW YORK (Reuters) - U.S. equity markets are set up for a blast of volume on Friday, as investors prepare for news on the U.S.-China trade dispute from the Group of 20 meeting and the annual reconstitution of the Russell indexes, traditionally one of the largest trading days of the year. The rebalance of the Russell indexes happens each year and becomes final on the fourth Friday in June. Stocks are added or deleted from Russell's family of indexes, including the Russell 1000 large cap and Russell 2000 small cap, prompting fund managers to adjust portfolios to reflect new weightings. This telegraphed adjustment increases demand for buying and selling stocks, resulting in additional trading volume, which crests right before the market close on the fourth Friday. This year's rebalance happens to coincide with the G20 meeting in Osaka, Japan, that will be highlighted by a meeting on Saturday between U.S. President Donald Trump and Chinese President Xi Jinping, putting investors on alert for any signs of a thaw or further breakdown in trade relations between the two world's two largest economies. While the meeting between the two leaders will not take place until well after U.S. markets have closed on Friday, many expect there will be news on the trade front ahead of the meeting, similar to comments by U.S. Treasury Secretary Steve Mnuchin on Wednesday. The timing has fueled comparisons to the rebalancing of Russell's indexes in 2016, which came on the heels of the vote for Britain to leave the European Union and resulted in nearly 15.3 billion shares traded in U.S. exchanges when all was said and done. That number has only been bested since by the 15.33 billion shares traded on Dec. 21, when the Nasdaq confirmed it was in a bear market and the S&P 500 was en route to its worst December performance since 1931. "It is always one of the biggest trading days of the year," said Nicholas Colas, co-founder at DataTrek Research in New York. "To me the one really different thing is this G20 meeting, and we are seeing the effect it has on market sentiment and anything can happen in Osaka." Passive funds will rebalance on the day of the reconstitution to minimize any tracking error, while active managers try to take advantage of any price dislocations earlier, resulting in a surge of volume toward the market close as the reconstitution becomes final. "People are gaming this out kind of through the month of June and trying to figure out what goes in and where," Colas said. Story continues As of Dec. 31, 2017, about $9 trillion was benchmarked to or invested in products based on Russell U.S. indexes, according to FTSE Russell's most recent data. Approximately $1.2 trillion are in passive investment products such as exchange traded funds (ETFs) and mutual funds. Ivan Cajic, Virtu Financial's Americas director of index and ETF research, projects turnover across the Russell 3000 to total about $70 billion. According to Nasdaq, last year's rebalance resulted in nearly 1.19 billion shares, representing $39.26 billion, changing hands during its "closing cross" in 0.935 second. Due to the size of the trade and the number of stocks involved, FTSE Russell takes steps to be transparent to market participants regarding its methodology for inclusion, which includes factors such as market capitalization, home country and company structure, while also releasing preliminary lists of stocks that may be affected. Those steps allow Russell to continue with the rebalance despite events that may cause additional market volatility. "(Brexit) was the test, I use that as an example," said Rolf Agather, managing director of North America applied research at FTSE Russell. "People say, 'Well you have the Brexit vote on the same day, what is Russell going to do?' We follow the rules and it works out pretty well." While Russell has not made any major changes to its methodology for inclusion this year, many market participants will be watching the placement of many of the recent initial public offerings. Because many of these companies waited to go public, their size is likely to put them right into Russell's large-cap indexes. Virtu's Cajic noted that stocks such as Uber Technologies, Lyft and Beyond Meat have contributed to volatility across the names expected to be added to the Russell 1000, which have underperformed stocks that are expected to be removed from the index. Generally, stocks being added to an index would see an uptick in price while those being removed would show a decline. Recent IPOs must have debuted before Russell's "rank day" this year of May 10 to be eligible in the rebalance. Russell adds IPOs after the rank day on a quarterly basis, and any IPOs that missed the cutoff, such as Slack Technologies , will have to wait until the next rank date, of Aug 17. "Clearly for small-cap investors, they wouldve liked to have opportunities to own some of these stocks," said Steve DeSanctis, equity strategist at Jefferies in New York. "You want stocks that have these good growth prospects and the fact they stayed private for so much longer, now they are out of their market cap," he said. "They never got a chance to swing at that particular pitch." (Reporting by Chuck Mikolajczak; Editing by Alden Bentley and Leslie Adler) View comments |
The First Trailer for ‘Charlie’s Angels’ Is Here, and Noah Centineo Plays...a Nerd?
Photo credit: Getty Images From Cosmopolitan Today, we finally got a first look at the upcoming Charlie’s Angels movie. The cast is absolutely killer-Kristen Stewart, Elizabeth Banks, and Sam Claflin, to name a few-and judging by what the cast and crew has said so far, it’s going to be a totally new spin on the classic we all know and love. We’ll still get to see plenty of action and general badassery, but this new installment is bringing a whole new vibe. So, what’s the deal with this reboot? Here’s everything we know so far: THE TRAILER IS HERE. If you’re ready to watch KStew kick some ass and Noah Centineo be...a nerd?? Please watch the above and prepare to freak out. Some background: It’s not a remake. Don’t worry, y’all: Dylan (Drew Barrymore), Natalie (Cameron Diaz), and Alex (Lucy Liu) aren’t being replaced. The new Charlie’s Angels film will be a continuation of the story line rather than a remake, and director Elizabeth Banks has her own vision in mind. “We are not trying to do an impression of the last one,” Kristen Stewart told the Hollywood Reporter . Photo credit: . The new Angels are recruits to the Townsend Agency, which has grown into a global security and intelligence service. Per Entertainment Weekly , Sabina Wilson (Kristen Stewart) is the hard-partying, highly skilled wild card; Jane Kano (Ella Balinska) is the ex-MI6 muscle of the group; and Elena Houghlin ( Aladdin ’s Naomi Scott) is the MIT-trained scientist who, Elizabeth told EW , serves as “the heart of the movie.” View this post on Instagram Good morning, Angels! 👌🏼 We have an exclusive first look at Kristen Stewart, Naomi Scott, and Ella Balinska in Elizabeth Banks' updated #CharliesAngels movie. Link in bio for more details. 📷: Nadja Klier/Sony; Chiabella James/Sony A post shared by Entertainment Weekly (@entertainmentweekly) on Apr 11, 2019 at 8:50am PDT It’s hitting theaters this fall. Charlie’s new Angels will make their debut later this year when the movie gets released nationwide November 15 . There’s no official trailer yet, but you can check out pictures from the movie here . Story continues It’s inspired by the Mission: Impossible franchise. You won’t be seeing any cheesy stunts or mythical creatures in the new Charlie’s Angels , but you will see a healthy dose of teamwork-which Elizabeth says was modeled after the Mission: Impossible crew. “Those films work best when the team is together, when Ving Rhames is in it, and Simon [Pegg] is in it, and Rebecca Ferguson. That sensibility really matters to me,” she told EW . Photo credit: Paramount Our bae Noah Centineo will be in it. Charlie’s Angels is all about the ladies, but that doesn’t mean they can’t have some amazing (and cute) male allies. Lucky for us, Noah Centineo was chosen to assist the Angels through his character, Langston. Not much has been revealed about his role yet, but we do know he’s on their side. “I don’t want to give too much away, but he’s a friend mostly to Naomi’s character,” Elizabeth told EW . Photo credit: Emma McIntyre - Getty Images There’s a new Bosley in town. In the previous versions of Charlie’s Angels , Bosley was always played by a man. But now, the Angels’ loyal aide will actually be played by three people-including Elizabeth. She, Djimon Hounsou, and Patrick Stewart will all be Bosleys, which is now a ranking title in the agency rather than an actual name. It’s going to be all about female empowerment. Although Charlie’s Angels are total badasses, they haven’t always been portrayed in the most forward-thinking way (*cough* MALE GAZE *cough*). But that’s about to change with the newest installment. “It was important to me to make a movie about women working together and supporting each other and not make a movie about their romantic entanglements or their mother they don’t call enough,” Elizabeth told EW . “When I’m at work, I don’t talk about those things. I get on with my job. It felt important to do that for the Angels, to treat them with the respect their skill set demands. “I mean, women can do anything. That’s not just my personal belief. That’s the core belief of Charlie’s Angels .” A big HELL YES to that! Photo credit: Columbia Pictures The OG Angels are here for it. In case you’re wondering what the old Charlie’s Angels think of the new girls, they’re totally supportive. “To me, I think it’s very exciting,” Lucy told the Hollywood Reporter . “It’s like Sherlock Holmes. The material in itself is a very different type of literature-and it’s not necessarily literature. But it is something that people keep coming back to and they’re drawn to. That’s something that needs to be explored, and if it needs to be explored on all different levels, then it should be. It will only be a more positive result for women.” ('You Might Also Like',) 16 Unexpected Fashion Rules That the Royal Family Follows The 8 Best Clarifying Shampoos for Getting Rid of Product Buildup Here's How to Flawlessly Conceal Your Acne |
Company News for Jun 27, 2019
• Apple Inc.’s AAPL shares rose 2.2% after autonomous-driving startup Drive.ai was bought by the iPhone-maker
• General Mills, Inc.’s GIS shares fell 4.5% after the branded consumer foods manufacturer reported revenues of $4.16 billion for its fiscal Q4, which fell short of expectations
• FedEx Corporation FDX gained 2.5% after the company’s fourth-quarter fiscal 2019 of $5.01 per share beat the Zacks Consensus Estimate of $4.81
• Big Lots, Inc.’s BIG shares rose 2.6% after the retailer announced that former Abercrombie & Fitch executive Jonathan Ramsden will join as chief financial officer in August
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days.Click to get this free reportApple Inc. (AAPL) : Free Stock Analysis ReportGeneral Mills, Inc. (GIS) : Free Stock Analysis ReportBig Lots, Inc. (BIG) : Free Stock Analysis ReportFedEx Corporation (FDX) : Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment Research |
Transneft to pay Kazakhstan $15 per barrel for tainted oil
MOSCOW (Reuters) - Russia's pipeline monopoly Transneft plans to compensate Kazakhstan for tainted oil at a rate of $15 per barrel though the deal has yet to be formalised, two industry sources said on Thursday.
Transneft is expected to compensate Kazakhstan a total of around $76 million, which includes quality losses, demurrage and storage costs, the sources added.
Russian oil flows have been contaminated with chemicals along several transit routes since the end of April. Around 700,000 tonnes of Kazakh oil sent via Russia's port of Ust-Luga was also affected.
Transneft was not available for comment.
The compensation agreement is the first such deal since the contamination in April and could serve as a template for other agreements, including with Western buyers of Russian oil.
(Reporting by Alexander Ershov and Alla Afanasyeva, editing by Deepa Babington) |
Do You Know What Sureserve Group plc's (LON:SUR) P/E Ratio Means?
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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 show how you can use Sureserve Group plc's (LON:SUR) P/E ratio to inform your assessment of the investment opportunity. Based on the last twelve months,Sureserve Group's P/E ratio is 18.62. That means that at current prices, buyers pay £18.62 for every £1 in trailing yearly profits.
See our latest analysis for Sureserve Group
Theformula for P/Eis:
Price to Earnings Ratio = Price per Share ÷ Earnings per Share (EPS)
Or for Sureserve Group:
P/E of 18.62 = £0.29 ÷ £0.016 (Based on the year to March 2019.)
The higher the P/E ratio, the higher the price tag of a business, relative to its trailing earnings. That is not a good or a bad thingper se, but a high P/E does imply buyers are optimistic about the future.
Earnings growth rates have a big influence on P/E ratios. That's because companies that grow earnings per share quickly will rapidly increase the 'E' in the equation. That means even if the current P/E is high, it will reduce over time if the share price stays flat. And as that P/E ratio drops, the company will look cheap, unless its share price increases.
Sureserve Group's earnings made like a rocket, taking off 95% last year. And earnings per share have improved by 131% annually, over the last three years. So you might say it really deserves to have an above-average 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 (18.6) for companies in the commercial services industry is roughly the same as Sureserve Group's P/E.
That indicates that the market expects Sureserve Group will perform roughly in line with other companies in its industry. If the company has better than average prospects, then the market might be underestimating it. I would further inform my view by checkinginsider buying and selling., among other things.
It's important to note that the P/E ratio considers the market capitalization, not the enterprise value. So it won't reflect the advantage of cash, or disadvantage of debt. In theory, a company can lower its future P/E ratio by using cash or debt to invest in growth.
Spending on growth might be good or bad a few years later, but the point is that the P/E ratio does not account for the option (or lack thereof).
Net debt is 28% of Sureserve Group's market cap. While it's worth keeping this in mind, it isn't a worry.
Sureserve Group's P/E is 18.6 which is above average (16.3) in the GB market. The company is not overly constrained by its modest debt levels, and its recent EPS growth is nothing short of stand-out. So on this analysis a high P/E ratio seems reasonable.
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. So thisfreereport on the analyst consensus forecastscould help you make amaster moveon this stock.
But note:Sureserve Group may not be the best stock to buy. So take a peek at thisfreelist of interesting companies with strong recent earnings growth (and a P/E ratio below 20).
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
Oil Drifts After Big Rally; Focus on G20, OPEC Meetings
By Barani Krishnan
Investing.com – After the biggestcrude inventories declinein three years, oil's immediate fate hangs on President Xi Jinping of China and President Vladimir Putin of Russia, and maybe even Saudi Arabia Crown Prince Mohammed bin Salman.
Crude prices were little changed on Thursday after the previous day’s near-3% rally, as traders remained wary of the outcomes of meetings that Xi, Putin and Salman have with U.S. President Donald Trump at the G20 summit in Osaka, Japan, beginning tomorrow.
New York-traded West Texas Intermediate crude was up 7 cents, or 0.1%, at $59.45 per barrel by 1:23 PM ET (17:23 GMT). It rose 2.7% on Wednesday.
The September contract for London-traded Brent crude slipped by 3 cents, or 0.1%, to $65.66. Brent, the benchmark for oil outside of the U.S., settled up 2.2% in the previous session.
Trump is scheduled to meet Putin in Osaka on Friday. He is scheduled to have breakfast with Salman on Saturday and meet later in the day with Xi.
Putin will have to decide by next week on Russia’s cooperation with Saudi Arabia in extending oil production cuts under their OPEC+ pact. The Saudi-led OPEC meets on Monday among its 14 members and a day later with the group of 10 oil-producing allies led by Russia to talk about extending supply cuts that had been on since December.
If OPEC+ pushes for cuts till the year end, that could heighten the rally in oil and work against Trump, who wants both crude and pump prices of gasoline to remain low as he campaigns for reelection in 2020.
Putin has close ties with the Saudis and Salman, partly due to their common stake in protecting their oil interests.
Even so, analysts believe Trump will have two aces to play, with Salman and Xi.
Olivier Jakob, founder of Swiss consultancy PetroMatrix, referred to the likely leverage the U.S. president has over the Saudis, who want higher security for oil tankers in the Persian Gulf after a spate of attacks over the last month blamed on Iran.
Tehran, locked in an escalating battle of words with the U.S. over sanctions on its oil, has denied responsibility for the attacks. It has also refused to come to a meeting with Trump to resolve the matter.
With U.S. gasoline prices on the rise, when Trump meets the Saudi crown prince, he “will likely ask again for higher supplies (of oil) as the U.S. pays for security of tankers in the Strait of Hormuz,” Jakob said.
With Xi, the president could have a bigger ace to play.
Trump has been sending out mixed signals on the likely outcome of the talks with the Chinese leader from the time he tweeted a week ago that he had a “very good” phone call with Xi as they agreed on the Osaka meeting.
Trump said on Wednesday that a trade deal with China was possible, but added that he was happy with the way things were and was still considering more tariffs on Beijing. He said all these even as U.S. Treasury Secretary Steve Mnuchin kept insisting the two countries were “90% of the way” toward a trade deal.
White House economic advisor Larry Kudlow said today the U.S. could still move forward with increased tariffs on Chinese goods, further clouding the trade picture.
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Will Russia impose fines for crypto mining?
The Russian government has threatened to ban cryptocurrency mining in the past, but it is currently not criminalised at this time as the legal precedents surrounding it are still unclear. Today, industrial-scale miners have supplanted those who hoped to mine some Bitcoins on old video cards. Prudent blockchain architects designed the system so that the more currency is mined, the harder it becomes to mine it. Therefore, it is only profitable to mine cryptocurrency on an industrial scale. The mining law in Russia: What you need to know The government has made numerous threats that mining will be banned in Russia, but mining is not criminalised at this time. The law in Russia still lacks definition when it comes to crypto mining, which leads to various sometimes extravagant interpretations by law enforcement agencies. According to representatives of the government in Russia, there is no question that mining will be banned eventually, along with the introduction of a special tax regime for crypto traders. The original version of the Russian governments draft law on digital assets doesnt contain much information regarding mining, but it should be expanded after refinement. The initial version of the law determines that mining is an activity aimed at creating cryptocurrency. This introduces two categories of miners: Household miners that do not exceed the energy consumption limits set by the government. Professional miners who should legalise their activities by opening a company or registering as an individual entrepreneur. Mining cryptocurrency in Russia A person engaged in crypto mining can theoretically be held accountable for engaging in illegal business activities. After the adoption of this new law however, mining in Russia will become an official occupation. We can say that the use of cryptocurrency is not illegal in Russia because it is not considered money, but rather a property asset that has some value. The head of the State Duma Committee on the Russian Financial Market, Anatoly Aksakov, has said: I will note that actions with cryptocurrency that are not conditional on Russian legislation will be considered illegitimate. This means that in terms of mining, it will be forbidden to organize the issue, circulation, and exchange of these tools. Administrative liability in the form of a fine will be provided for this. We believe that cryptocurrencies created on open blockchains are illegitimate tools. This statement has made many people nervous. But the head of the working group on cryptocurrency in the State Duma, Elina Sidorenko, believes that there will be no fines, and Aksakovs words are just an attempt to attract the attention of the press and media. Story continues Miner control and electricity tariffs To fall into the category of a professional miner, it is necessary to consider the limits set by the government. Currently, in every administrative area, there are social norms of consumption. A small rig of several video cards consumes many times more than any social standard. Therefore, the best option for miners is to move to Russian regions with the cheapest electricity tariffs, which in the future will help turn these localities into industrial mining parks. Taxes for mining cryptocurrency in Russia Crypto miners in Russia are required to pay tax to the state in accordance with the nature of their business activities. As a professional miner, individuals will have to pay income tax of 13%. People who do not exceed the established limits of electricity consumption will not be taxed. It is possible that tax benefits will be applied in the future similar to those in Belarus, where taxation rates are reduced 3-5% for mining. Remember, if youre thinking about mining crypto, you should take into account the expenses for the purchase of the equipment, electricity, equipment depreciation, rent, and maintenance, which in the first years of use can significantly exceed the income from mining. Conclusion While mining cryptocurrency in Russia is not officially illegal, there is still a grey area that needs addressing before people can be comfortable conducting operations there. The introduction of clear laws and regulations around mining in Russia will bring business and give impetus for the development of innovative projects. These laws will provide a higher level of security for such activities and should contribute to the development of many related industries. If you want to find out more about cryptocurrency mining and what you need to get started, check out our guides here . The post Will Russia impose fines for crypto mining? appeared first on Coin Rivet . View comments |
5 Best Leveraged ETFs of June
After the May swoon, the bulls returned to the stock market in June driven by central banks across the world that are once again moving to ease monetary policies. Some are signaling interest rate cut while some are launching fresh stimulus to tackle global growth headwinds.In particular, the Federal Reserve in its latest meeting showed its readiness to cut interest rates if needed while European Central Bank (ECB) also kept interest rates on hold at record-low levels until at least the second half of 2020. Meanwhile, the Bank of Japan also pledged to maintain the current low rates “at least until the spring of 2020” (read: ECB Considers Further Stimulus: ETFs to Top & Flop).Lower rates will make borrowings cheaper, providing a boost to both investment in new projects and repayment of higher-rate debt. It will also lead to strong economic growth and prove to be a boon for the stock market. Notably, the S&P 500 is set for its best June since 1955 while the Dow Jones Industrial Average is on track for its strongest June return since 1938.
Stocks have also been witnessing an upside on hopes of resumption of trade talks between the United States and China later this week as well as a slew of mergers and acquisitions. However, rising Middle East tension, geopolitical tension and global growth slowdown weighed on the stocks.While volatility and uncertainty prevail, the bullish fundamentals have resulted in huge demand for leveraged ETFs as investors seek to register big gains in a short span. Leveraged funds provide multiple exposure (i.e. 2x or 3x) to the daily performance of the underlying index by employing various investment strategies such as swaps, futures contracts and other derivative instruments. Due to their compounding effect, investors can enjoy higher returns in a very short period of time, provided the trend remains a friend.Below we have highlighted five best leveraged ETFs of June.Direxion Daily Gold Miners Bull 3X Shares NUGT – Up 61.7%Global growth concerns and geopolitical tensions have raised the appeal of gold as a store of value and a hedge against market turmoil. Additionally, a dovish Fed is providing support to the bullion. NUGT provides three times exposure to the daily performance of the NYSE Arca Gold Miners Index. It charges 91 bps in annual fees and has amassed $1.4 billion in its asset base. Volume is heavy, with around 9.5 million shares exchanged per day on an average (read: Gold is Now the Hottest Trade: ETFs to Add More Shine).Direxion Daily Russia Bull 3X Shares RUSL – Up 27.4%Russian stocks have been on a smooth ride driven by the rate cut by the country’s central bank. The rate cuts will allow more cheap money flows into the economy, thereby boosting the Russian stock market. The ETF creates three times long position in the MVIS Russia Index and has amassed about $92 million in its asset base while charging 90 bps in fees per year. Volume is moderate as it exchanges around 137,000 shares a day on average.Daily Robotics, Artificial Intelligence & Automation Index Bull 3X Shares UBOT – Up 24.8%This product seeks to deliver three times the daily performance of the Indxx Global Robotics and Artificial Intelligence Thematic Index. It has accumulated $21.4 million in its asset base and trades in average daily volume of 135,000 shares. The ETF charges 95 bps in annual fees (read: Bulls Roar Again in June: Leveraged ETFs in Focus).ProShares Ultra Basic Materials UYM – Up 23%The materials sector, which tends to be the most sensitive to global economic growth expectations, has performed extremely well on the back of Fed’s rate cut signal. As the sector is heavily dependent on interest rates for capital expenditures, lower rates are a boon. This ETF provides two times the returns of the daily performance of the Dow Jones U.S. Basic Materials Index. It has amassed $44 million and trades in average daily volume of 8,000 shares. UYM charges 95 bps in fees per year (read: Materials Sector Leading in June: 5 ETF Winners).Direxion Daily Technology Bull 3x Shares TECL – Up 22.6%This ETF targets the technology sector with three times exposure to the Technology Select Sector Index. It has amassed about $748 million in its asset base and charges 95 bps in fees per year. Volume is good as it exchanges more than 326,000 shares a day on average.Bottom LineWhile this strategy is highly beneficial for short-term traders, it could lead to huge losses compared to traditional funds in fluctuating or seesawing markets. Further, their performance could vary significantly from the actual performance of their underlying index over a longer period when compared to the shorter period (such as, weeks or months) due to their compounding effect (see: all the Leveraged Equity ETFs here).Still, for ETF investors who are bullish on equities for the near term, any of the above products could make an interesting choice. Clearly, a near-term long could be intriguing for those with high-risk tolerance, and a belief that the “trend is the friend” in this corner of the investing world.Want key ETF info delivered straight to your inbox?Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week. Get it free >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days.Click to get this free reportDirexion Daily Technology Bull 3X Shares (TECL): ETF Research ReportsDirexion Daily Gold Miners Index Bull 3x Shares (NUGT): ETF Research ReportsDirexion Daily Russia Bull 3x Shares (RUSL): ETF Research ReportsProShares Ultra Basic Materials (UYM): ETF Research ReportsDirexion Daily Robtcs, Art Intlligence & Auto Indx Bul 3X Shrs (UBOT): ETF Research ReportsTo read this article on Zacks.com click here.Zacks Investment ResearchWant the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report |
What Makes Booz Allen Hamilton (BAH) a Strong Momentum Stock: Buy Now?
Momentum investing revolves around the idea of following a stock's recent trend in either direction. In the 'long' context, investors will be essentially be "buying high, but hoping to sell even higher." With this methodology, taking advantage of trends in a stock's price is key; once a stock establishes a course, it is more than likely to continue moving that way. The goal is that once a stock heads down a fixed path, it will lead to timely and profitable trades.
Even though momentum is a popular stock characteristic, it can be tough to define. Debate surrounding which are the best and worst metrics to focus on is lengthy, but the Zacks Momentum Style Score, part of the Zacks Style Scores, helps address this issue for us.
Below, we take a look atBooz Allen Hamilton (BAH), which currently has a Momentum Style Score of B. We also discuss some of the main drivers of the Momentum Style Score, like price change and earnings estimate revisions.
It's also important to note that Style Scores work as a complement to the Zacks Rank, our stock rating system that has an impressive track record of outperformance. Booz Allen Hamilton currently has a Zacks Rank of #2 (Buy). Our research shows that stocks rated Zacks Rank #1 (Strong Buy) and #2 (Buy) and Style Scores of A or B outperform the market over the following one-month period.
You can see the current list of Zacks #1 Rank Stocks here >>>
Set to Beat the Market?
In order to see if BAH is a promising momentum pick, let's examine some Momentum Style elements to see if this defense contractor holds up.
Looking at a stock's short-term price activity is a great way to gauge if it has momentum, since this can reflect both the current interest in a stock and if buyers or sellers have the upper hand at the moment. It's also helpful to compare a security to its industry; this can show investors the best companies in a particular area.
For BAH, shares are up 1.41% over the past week while the Zacks Government Services industry is down 1.74% over the same time period. Shares are looking quite well from a longer time frame too, as the monthly price change of 3.42% compares favorably with the industry's 1.32% performance as well.
While any stock can see its price increase, it takes a real winner to consistently beat the market. That is why looking at longer term price metrics -- such as performance over the past three months or year -- can be useful as well. Over the past quarter, shares of Booz Allen Hamilton have risen 12.25%, and are up 50.73% in the last year. In comparison, the S&P 500 has only moved 3.85% and 9.57%, respectively.
Investors should also pay attention to BAH's average 20-day trading volume. Volume is a useful item in many ways, and the 20-day average establishes a good price-to-volume baseline; a rising stock with above average volume is generally a bullish sign, whereas a declining stock on above average volume is typically bearish. BAH is currently averaging 920,462 shares for the last 20 days.
Earnings Outlook
The Zacks Momentum Style Score encompasses many things, including estimate revisions and a stock's price movement. Investors should note that earnings estimates are also significant to the Zacks Rank, and a nice path here can be promising. We have recently been noticing this with BAH.
Over the past two months, 4 earnings estimates moved higher compared to 1 lower for the full year. These revisions helped boost BAH's consensus estimate, increasing from $2.96 to $3.01 in the past 60 days. Looking at the next fiscal year, 3 estimates have moved upwards while there have been 1 downward revision in the same time period.
Bottom Line
Given these factors, it shouldn't be surprising that BAH is a #2 (Buy) stock and boasts a Momentum Score of B. If you're looking for a fresh pick that's set to soar in the near-term, make sure to keep Booz Allen Hamilton on your short list.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days.Click to get this free reportBooz Allen Hamilton Holding Corporation (BAH) : Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment Research |
Here's Why Momentum Investors Will Love W.R. Berkley (WRB)
Momentum investing revolves around the idea of following a stock's recent trend in either direction. In the 'long' context, investors will be essentially be "buying high, but hoping to sell even higher." With this methodology, taking advantage of trends in a stock's price is key; once a stock establishes a course, it is more than likely to continue moving that way. The goal is that once a stock heads down a fixed path, it will lead to timely and profitable trades.
While many investors like to look for momentum in stocks, this can be very tough to define. There is a lot of debate surrounding which metrics are the best to focus on and which are poor quality indicators of future performance. The Zacks Momentum Style Score, part of the Zacks Style Scores, helps address this issue for us.
Below, we take a look atW.R. Berkley (WRB), a company that currently holds a Momentum Style Score of B. We also talk about price change and earnings estimate revisions, two of the main aspects of the Momentum Style Score.
It's also important to note that Style Scores work as a complement to the Zacks Rank, our stock rating system that has an impressive track record of outperformance. W.R. Berkley currently has a Zacks Rank of #2 (Buy). Our research shows that stocks rated Zacks Rank #1 (Strong Buy) and #2 (Buy) and Style Scores of A or B outperform the market over the following one-month period.
You can see the current list of Zacks #1 Rank Stocks here >>>
Set to Beat the Market?
Let's discuss some of the components of the Momentum Style Score for WRB that show why this insurance company shows promise as a solid momentum pick.
Looking at a stock's short-term price activity is a great way to gauge if it has momentum, since this can reflect both the current interest in a stock and if buyers or sellers have the upper hand at the moment. It's also helpful to compare a security to its industry; this can show investors the best companies in a particular area.
For WRB, shares are up 1.92% over the past week while the Zacks Insurance - Property and Casualty industry is flat over the same time period. Shares are looking quite well from a longer time frame too, as the monthly price change of 4.78% compares favorably with the industry's 0.94% performance as well.
While any stock can see a spike in price, it takes a real winner to consistently outperform the market. Over the past quarter, shares of W.R. Berkley have risen 14.6%, and are up 35.81% in the last year. In comparison, the S&P 500 has only moved 3.85% and 9.57%, respectively.
Investors should also take note of WRB's average 20-day trading volume. Volume is a useful item in many ways, and the 20-day average establishes a good price-to-volume baseline; a rising stock with above average volume is generally a bullish sign, whereas a declining stock on above average volume is typically bearish. Right now, WRB is averaging 600,485 shares for the last 20 days.
Earnings Outlook
The Zacks Momentum Style Score also takes into account trends in estimate revisions, in addition to price changes. Please note that estimate revision trends remain at the core of Zacks Rank as well. A nice path here can help show promise, and we have recently been seeing that with WRB.
Over the past two months, 1 earnings estimate moved higher compared to none lower for the full year. These revisions helped boost WRB's consensus estimate, increasing from $2.60 to $2.61 in the past 60 days. Looking at the next fiscal year, 1 estimate has moved upwards while there have been no downward revisions in the same time period.
Bottom Line
Given these factors, it shouldn't be surprising that WRB is a #2 (Buy) stock and boasts a Momentum Score of B. If you're looking for a fresh pick that's set to soar in the near-term, make sure to keep W.R. Berkley on your short list.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days.Click to get this free reportW.R. Berkley Corporation (WRB) : Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment Research |
Flowserve (FLS) Is Up 3.49% in One Week: What You Should Know
Momentum investing revolves around the idea of following a stock's recent trend in either direction. In the 'long' context, investors will be essentially be "buying high, but hoping to sell even higher." With this methodology, taking advantage of trends in a stock's price is key; once a stock establishes a course, it is more than likely to continue moving that way. The goal is that once a stock heads down a fixed path, it will lead to timely and profitable trades.
Even though momentum is a popular stock characteristic, it can be tough to define. Debate surrounding which are the best and worst metrics to focus on is lengthy, but the Zacks Momentum Style Score, part of the Zacks Style Scores, helps address this issue for us.
Below, we take a look atFlowserve (FLS), a company that currently holds a Momentum Style Score of B. We also talk about price change and earnings estimate revisions, two of the main aspects of the Momentum Style Score.
It's also important to note that Style Scores work as a complement to the Zacks Rank, our stock rating system that has an impressive track record of outperformance. Flowserve currently has a Zacks Rank of #2 (Buy). Our research shows that stocks rated Zacks Rank #1 (Strong Buy) and #2 (Buy) and Style Scores of A or B outperform the market over the following one-month period.
You can see the current list of Zacks #1 Rank Stocks here >>>
Set to Beat the Market?
In order to see if FLS is a promising momentum pick, let's examine some Momentum Style elements to see if this company that makes pumps, valves and other parts for the oil and gas industries holds up.
A good momentum benchmark for a stock is to look at its short-term price activity, as this can reflect both current interest and if buyers or sellers currently have the upper hand. It's also helpful to compare a security to its industry; this can show investors the best companies in a particular area.
For FLS, shares are up 3.49% over the past week while the Zacks Manufacturing - General Industrial industry is up 1.03% over the same time period. Shares are looking quite well from a longer time frame too, as the monthly price change of 7.05% compares favorably with the industry's 5.03% performance as well.
While any stock can see a spike in price, it takes a real winner to consistently outperform the market. Shares of Flowserve have increased 8.4% over the past quarter, and have gained 25.58% in the last year. On the other hand, the S&P 500 has only moved 3.85% and 9.57%, respectively.
Investors should also pay attention to FLS's average 20-day trading volume. Volume is a useful item in many ways, and the 20-day average establishes a good price-to-volume baseline; a rising stock with above average volume is generally a bullish sign, whereas a declining stock on above average volume is typically bearish. FLS is currently averaging 797,237 shares for the last 20 days.
Earnings Outlook
The Zacks Momentum Style Score encompasses many things, including estimate revisions and a stock's price movement. Investors should note that earnings estimates are also significant to the Zacks Rank, and a nice path here can be promising. We have recently been noticing this with FLS.
Over the past two months, 5 earnings estimates moved higher compared to none lower for the full year. These revisions helped boost FLS's consensus estimate, increasing from $2.14 to $2.19 in the past 60 days. Looking at the next fiscal year, 4 estimates have moved upwards while there have been 2 downward revisions in the same time period.
Bottom Line
Given these factors, it shouldn't be surprising that FLS is a #2 (Buy) stock and boasts a Momentum Score of B. If you're looking for a fresh pick that's set to soar in the near-term, make sure to keep Flowserve on your short list.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days.Click to get this free reportFlowserve Corporation (FLS) : Free Stock Analysis ReportTo read this article on Zacks.com click here. |
Snowden: ‘The Most Important Thing Bitcoin Is Missing Right Now Is Privacy’
Bitcoin’s biggest flaw is its lack of privacy, said Edward Snowden at the Bitcoin 2019 conference.
The cybersecurity expert noted the importance of privacy as a source of liberty.
“The lack of privacy is an existential threat to bitcoin. Is the only protection users have from political change,” Snowden said.
Related:Samourai Wallet Releases Privacy-Enhancing CoinJoin Feature
Snowden also stated that he was a bitcoin supporter and even used an encrypted service that he paid for with bitcoins in order to communicate with journalists in 2013.
Talking about his experience being pursued by the United States government for sharing NSA data, Snowden pointed out the unrealistic expectations from regulators who want to be in control of cryptocurrencies.
Going in-depth about the regulations from banks and governments, Snowden also exposed the necessity for exchanges to defend their users’ privacy. He fears that if one of the exchanges gave up information, soon all of them would follow.
“If you actually go into the terms of big exchanges like Coinbase, they only want to cover themselves. They expose you, they close your account and keep your funds,” Snowden said.
Related:Facebook’s Libra Cryptocurrency: A Technical Deep Dive
He also disliked the development of financial cryptocurrency services, claiming that many of them are starting to look too much like banks.
“Something unforgivable is that you guys keep developing services trying to be banks, and the world doesn’t need more banks,” he said.
Snowden also talked about theShadow Brokers, a group of hackers that auctioned NSA information in exchange for bitcoin in 2016.
He noted that the hacking case was the starting point of a governmental war on cryptocurrencies. In short, he said, regulation doesn’t work unless it becomes overly intrusive.
“If tracking bitcoin was possible then the NSA would have caught them,” he said. He said Satoshi Nakamoto was in the same position: he could navigate the system and leave no trace.
“If you know how the system works, you can still have privacy,” he said.
Edward Snowden speaks at Bitcoin 2019 via video link, photo by Diana Aguilar
• Tendermint Says Last Month’s Cosmos Vulnerability Exposed Security Loophole
• Crypto’s Connection to the Hong Kong Protests |
Eva Longoria Opens Up About the 'Hard' Balance of Work and Motherhood: 'You Just Do It'
Having returned to work weeks after giving birth to her first child in June 2018, Eva Longoria arguably makes balancing motherhood and a career look easy. But the Dora and the Lost City of Gold actress, 44, admits it’s anything but in a new cover story for Parents magazine’s August issue, where she and her 1-year-old son Santiago Enrique pose for an adorable photo shoot and Longoria opens up about how life has changed in all aspects since she became a mom. “Going back to work was hard. Breastfeeding while working was hard, just for the timing of the pumping and the feedings and the sleeping and the not sleeping,” she said — but, “You just do it and get it done.” Longoria admits her baby boy makes parenting “easy” for her and husband José “Pepe” Bastón , primarily thanks to little Santi’s sunny disposition and easygoing nature: “He’s healthy, he’s funny, he’s sweet, he sleeps, he eats.” Want all the latest pregnancy and birth announcements, plus celebrity mom blogs? Click here to get those and more in the PEOPLE Parents newsletter . Eva Longoria and son Santiago for Parents magazine Eva Longoria for Parents magazine | Bernardo Doral RELATED: When Santi Met Mickey! Eva Longoria Celebrates Her Son’s First Birthday with Disneyland Trip Santi may only have just turned 1 year old, but Longoria — who was one of the founders of the Time’s Up movement — is wasting no time in showing him the importance behind it. And to that end, the star is focused on leading by example. “I feel there’s more pressure to raise a good man today in this world and to make sure he understands equality and feminism ,” she says. “But it’s not about telling him, it’s about showing him in his everyday life.” One example? The fact that Longoria has hired a majority female production staff for her new ABC drama series Grand Hotel , on which she stars and serves as an executive producer. Eva Longoria and son Santiago for Parents magazine Eva Longoria and son Santiago cover Parents magazine | Bernardo Doral RELATED: Roselyn Sanchez Remembers Eva Longoria Directing Grand Hotel While Breastfeeding: “It’s Inspirational” Story continues “The stakes are higher now that I have a child,” she adds elsewhere in the interview. “I need to make sure I’m doing my part to leave the world a better place — for him and for all the children of our future.” And while her on-set vs. at-home methods work for her family, Longoria realizes and respects the fact that every parent-child dynamic is different and has its own unique set of parameters. “I aim to be a good mom to Santi, but as far as having opinions and really planting my flag in the ground and saying, ‘This is the system I use and everybody should use it,’ I’m definitely not doing that,” she insists. Dora and the Lost City of Gold opens in theaters on Aug. 9. |
StanChart, HSBC sharpen EU focus to help clients cut path through Brexit, red tape
By Lawrence White LONDON (Reuters) - Just as Britain moves to sever its ties with the European Union, two of its biggest banks, HSBC and Standard Chartered, are building up their operations in the bloc in a bid to win more business helping clients grappling with red tape and Brexit. HSBC this month launched an internal 'Europe Means Business' campaign aimed at building internal awareness of its capabilities in the region and prompting staff to pitch the Asia-focused bank's abilities to clients in other markets. Meanwhile StanChart has in the last year and a half increased its staff in Frankfurt from 90 to 200, its head of corporate and institutional banking Simon Cooper said. "Brexit was the catalyst for us to set up a local subsidiary in Europe ... but strategically it makes sense anyway," said Cooper, adding that StanChart plans to hire 'tens' more in the German financial hub, as well as in Paris. The loss of some EU market access for British financial firms resulting from Brexit means many large companies that have traditionally run all their European finances from London, now need a bank that can help them operate between multiple hubs. For HSBC and StanChart, which make more than two thirds of their revenues in Asia and have seen Europe as less important, that means refocusing on the world's largest trading bloc. Europe and the Americas contributed just 11 percent of StanChart revenues in 2018, while for HSBC, Europe including its very large British business, contributed 30 percent. Both banks hope to lean on existing relationships in their strongholds in Asia, as well as a growing client base in other parts of the world to feed their European operations. Their bids for more European business are aimed not so much at investment banking such as advice on mergers, but the more day-to-day activities of trade finance and cash management known as 'transaction banking'. This is a lucrative business, with overall revenues for the Europe, Middle East and Africa region climbing to $10 billion in 2018, from $9.5 billion the previous year, data from industry analytics firm Coalition shows. Story continues HSBC vies for a top 3 spot in competing for that pot with U.S. rivals Citigroup and JP Morgan, while StanChart ranks between seventh and tenth, Coalition data reveals. OPPORTUNITY BECKONS Firms working in Europe are seeking guidance on dealing with evolving EU regulations such as a new payment services directive which is set to transform banking by allowing customers to manage their finances through third party providers. On the flipside, StanChart is also targeting smaller corporates in EU countries that have significant business in its core markets of Asia, Africa and the Middle East, Cooper said. "A quick analysis showed there are something like 1,000 companies in Germany that operate in three or more of our markets, we're very under-penetrated among this European client base and so there's a real opportunity there," he said. For HSBC, the renewed focus on Europe is less about hiring new staff in its 12 continental EU markets than galvanising them to work more closely together, James Emmett, the bank's Chief Executive for the region, said. "Our priority is to build the leading international bank in Europe, and we have a unique opportunity to do that because the franchise is already in place," he said. Emmett said that companies from countries including China and the U.S. are increasingly seeking to work with a single bank in continental Europe to manage their cash flow, financing and other needs, especially as Brexit looms. "Chinese companies, for example, aren't saying they'll pull out of the UK into Europe, but they want us to help them manage between the two," Emmett said. (Reporting by Lawrence White; Editing by Alexander Smith) |
Adrian Chiles' drugs confession: Which famous actress did he smoke marijuana with?
Television presenter Adrian Chiles takes a drink during a UEFA Euro 2016 qualifying, Group E match at the St Jakob-Park Stadium, Basel. (Credit: PA) Adrian Chiles has revealed he recently smoked a joint with a “famous actress”. The 52-year-old TV presenter opened up about his history with drugs in a column for The Guardian, claiming he has only taken drugs twice in his life - once at a school disco aged 15 and once in March this year. Chiles revealed: “I was in a hotel bar in Manchester having fallen into conversation with quite a famous actor. After a while, she said to me: ‘Come out for some spliff.’ Next thing, I’m sitting outside, pulling on a joint the size of a fencepost. I felt a bit funny at first, and then decidedly peculiar. She soon went inside, possibly because I had completely stopped speaking. As well as losing the power of speech, it turned out that my motor functions had all but deserted me, too. And I was overwhelmed with nausea. Read more: Adrian Chiles on Daybreak: I sat there like a bag of potatoes “Eventually, I managed to stand up and execute a kind of grandpa shuffle back into the hotel lobby, and make my way past pitying eyes to the lift and my room. I felt utterly awful. I contemplated a quick headbang to expunge it from my system, but thought better of it. I lay on the floor, which seemed to be the thing moving least, and shut my eyes. A very vivid array of colours danced on the inside of my eyelids.” The former co-host of The One Show said his latest experience of smoking marijuana had had some positive effects, but he did not intend to do it again. He said: “I slept the best sleep I have slept in ages that night. But I am still not touching the stuff again.” Chiles recently presented a documentary for BBC One’s Panorama, Britain’s Drink Problem. Writing about the show he admitted: “I’ve drunk more alcohol than is good for me all my life.... And my intake is almost certainly a factor in my trio of other middle-aged maladies: hypertension, reflux and anxiety/depression.” View comments |
Will Gaming Stocks' Dry Spell Persist Amid Trade Tensions?
The U.S.-China trade debacle escalated after U.S. President Donald Trump lifted tariffs from 10% to 25% on $200 billion worth of Chinese imports. China struck back with tariff hikes on $60 billion worth of U.S. goods. Although the current situation appears to be somewhat of a stalemate, with each country having limited options, economies around the world and a few particularly volatile industries are bearing the brunt. Given the backdrop, it is but obvious that investors have become weary of the gaming industry, in which majority of companies derive maximum business from Macao, Asia’s largest gambling hub. In the month of May, gambling revenues from Macau increased 1.8% year over year to 25.95 billion patacas ($3.21 billion). Sequentially, the metric was up nearly 10%, in line with analysts’ expectations. Despite the sales recovery in Macau, the Gaming industry has lost 1.8% over the past three months against the S&P 500 market’s rally of 2.4%. Per a report by CalvinAyre, it is not only the gaming companies with Macao operations that are hurt by the tariff war. Companies like Penn National PENN, Boyd Gaming BYD and more are also seeing a drop in share prices. Gaming Industry 3-month Share Price Comparing With S&P 500 Gaming Operators’ Dependence on Macao Business In 2002, China exposed Macao's gambling business to outside competition which has considerably benefitted U.S. casino operators. But with the trade fiasco, speculation has it that China may reconsider the presence of notable U.S casino operators in Macao. Moreover, China may demand casino operators to apply for new concessions from the government before 2022. It is widely speculated that all U.S. concessionaires like Wynn Resorts WYNN, Las Vegas Sands LVS and MGM Resorts MGM will not have their licenses renewed after those expire in 2022. In such a case, these gaming giants will be facing huge losses as they have extensive properties in Macao and had derived nearly half of the city's casino revenues last year. Overall, gambling revenues in Macao increased 14% to $37.6 billion in 2018, per Reuters. Story continues Las Vegas Sands has invested the maximum in Macao and holds nearly a quarter of the market. The company derives around 60% of its global revenues and operating profit from Macau. Markedly, Las Vegas Sands has invested more than $13 billion in Macao since 2004, consistently contributing to Macao's diversification and appeal as a business and leisure tourism destination. The company is also likely to spend $2 billion over the next couple of years. Meanwhile, both Wynn Resorts and MGM Resorts have been offering various promotional allowances and undertaking initiatives to attract gambling patrons in Macao. The companies face substantial threat on the face of a potential outbreak of a trade war. Of late, in Macao, Wynn Resorts has been seen as failing to drive substantial transformation, making it more vulnerable. Is There a Silver Lining? Despite the tensed situation, GGRAsia ’s analytical firm speculates that there is a chance that America-based operators will hardly face any repercussion. The analytical group thinks that all the concessionaries will have their licenses renewed in 2022. However, it is to be noted that the licenses will involve additional costs, if the trade war continues. Our Take Not only is the tariff war being devastating for companies with large Macao operations, the flagging China property prices are affecting the high-end VIP segment. Increased costs stemming from the current situation will worsen the situation for these companies. However, we believe that casino operators have substantial opportunities in their domestic operations. Rising tourist visits to Las Vegas is proving conducive for most companies. Breakout Biotech Stocks with Triple-Digit Profit Potential The biotech sector is projected to surge beyond $775 billion by 2024 as scientists develop treatments for thousands of diseases. They’re also finding ways to edit the human genome to literally erase our vulnerability to these diseases. Zacks has just released Century of Biology: 7 Biotech Stocks to Buy Right Now to help investors profit from 7 stocks poised for outperformance. Our recent biotech recommendations have produced gains of +98% , +119% and +164% in as little as 1 month. The stocks in this report could perform even better. See these 7 breakthrough stocks now>> Click to get this free report MGM Resorts International (MGM) : Free Stock Analysis Report Wynn Resorts, Limited (WYNN) : Free Stock Analysis Report Las Vegas Sands Corp. (LVS) : Free Stock Analysis Report Penn National Gaming, Inc. (PENN) : Free Stock Analysis Report Boyd Gaming Corporation (BYD) : Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research |
Does Sureserve Group plc's (LON:SUR) P/E Ratio Signal A Buying Opportunity?
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Today, we'll introduce the concept of the P/E ratio for those who are learning about investing. We'll apply a basic P/E ratio analysis to Sureserve Group plc's (LON:SUR), to help you decide if the stock is worth further research.What is Sureserve Group's P/E ratio?Well, based on the last twelve months it is 18.62. That corresponds to an earnings yield of approximately 5.4%.
See our latest analysis for Sureserve Group
Theformula for price to earningsis:
Price to Earnings Ratio = Share Price ÷ Earnings per Share (EPS)
Or for Sureserve Group:
P/E of 18.62 = £0.29 ÷ £0.016 (Based on the year to March 2019.)
A higher P/E ratio means that buyers have to paya higher pricefor each £1 the company has earned over the last year. That isn't 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.
Probably the most important factor in determining what P/E a company trades on is the earnings growth. If earnings are growing quickly, then the 'E' in the equation will increase faster than it would otherwise. And in that case, the P/E ratio itself will drop rather quickly. So while a stock may look expensive based on past earnings, it could be cheap based on future earnings.
Sureserve Group's 95% EPS improvement over the last year was like bamboo growth after rain; rapid and impressive. Even better, EPS is up 131% per year over three years. So you might say it really deserves to have an above-average P/E ratio.
The P/E ratio indicates whether the market has higher or lower expectations of a company. The image below shows that Sureserve Group has a P/E ratio that is roughly in line with the commercial services industry average (18.6).
Its P/E ratio suggests that Sureserve Group shareholders think that in the future it will perform about the same as other companies in its industry classification. If the company has better than average prospects, then the market might be underestimating it. I would further inform my view by checkinginsider buying and selling., among other things.
One drawback of using a P/E ratio is that it considers market capitalization, but not the balance sheet. That means it doesn't take debt or cash into account. Theoretically, a business can improve its earnings (and produce a lower P/E in the future) by investing in growth. That means taking on debt (or spending its cash).
While growth expenditure doesn't always pay off, the point is that it is a good option to have; but one that the P/E ratio ignores.
Net debt is 28% of Sureserve Group's market cap. While that's enough to warrant consideration, it doesn't really concern us.
Sureserve Group trades on a P/E ratio of 18.6, which is above the GB market average of 16.3. Its debt levels do not imperil its balance sheet and its EPS growth is very healthy indeed. So on this analysis a high P/E ratio seems reasonable.
When the market is wrong about a stock, it gives savvy investors an opportunity. People often underestimate remarkable growth -- so investors can make money when fast growth is not fully appreciated. So thisfreereport on the analyst consensus forecastscould help you make amaster moveon this stock.
Of courseyou might be able to find a better stock than Sureserve Group. So you may wish to see thisfreecollection of other companies that have grown earnings strongly.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
How Does Sureserve Group plc (LON:SUR) Affect Your Portfolio Volatility?
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If you own shares in Sureserve Group plc (LON:SUR) then it's worth thinking about how it contributes to the volatility of your portfolio, overall. In finance, Beta is a measure of volatility. Modern finance theory considers volatility to be a measure of risk, and there are two main types of price volatility. The first type is company specific volatility. Investors use diversification across uncorrelated stocks to reduce this kind of price volatility across the portfolio. The other type, which cannot be diversified away, is the volatility of the entire market. Every stock in the market is exposed to this volatility, which is linked to the fact that stocks prices are correlated in an efficient market.
Some stocks are more sensitive to general market forces than others. Beta can be a useful tool to understand how much a stock is influenced by market risk (volatility). However, Warren Buffett said 'volatility is far from synonymous with risk' in his 2014 letter to investors. So, while useful, beta is not the only metric to consider. To use beta as an investor, you must first understand that the overall market has a beta of one. Any stock with a beta of greater than one is considered more volatile than the market, while those with a beta below one are either less volatile or poorly correlated with the market.
View our latest analysis for Sureserve Group
Given that it has a beta of 1.49, we can surmise that the Sureserve Group share price has been fairly sensitive to market volatility (over the last 5 years). Based on this history, investors should be aware that Sureserve Group 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 Sureserve Group fares in that regard, below.
With a market capitalisation of UK£46m, Sureserve Group is a very small company by global standards. It is quite likely to be unknown to most investors. It has a relatively high beta, suggesting it is fairly actively traded for a company of its size. Because it takes less capital to move the share price of a small company like this, when a stock this size is actively traded it is quite often more sensitive to market volatility than similar large companies.
Since Sureserve Group tends to moves up when the market is going up, and down when it's going down, potential investors may wish to reflect on the overall market, when considering the stock. In order to fully understand whether SUR is a good investment for you, we also need to consider important company-specific fundamentals such as Sureserve Group’s financial health and performance track record. I highly recommend you dive deeper by considering the following:
1. Future Outlook: What are well-informed industry analysts predicting for SUR’s future growth? Take a look at ourfree research report of analyst consensusfor SUR’s outlook.
2. Financial Health: Are SUR’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.
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. |
2019 Annual Meeting Invitation and Investor Day
CLEVELAND, OH / ACCESSWIRE / June 27, 2019 /Mace®Security International, Inc. (MACE), a globally recognized leader in personal safety products, today announced details for its annual Investor Day to be hosted Thursday, July 18, 2019 at the company's Cleveland headquarters. Presentations are scheduled to start following the annual shareholders meeting at approximately 10:30 am EDT and conclude at approximately 12:00 pm EDT. A live question and answer session will be included in the session.
Mace's Investor Day 2019 will feature an overview of the company, a discussion of business performance and strategy, and a showcase of current products, branding, and previously announced licensing initiatives.
Speakers include:
Gary Medved, President and Chief Executive OfficerMark Barrus, Senior Vice President and Chief Financial OfficerJulie Koenig, Vice President of Sales
About Mace®Security International, Inc.:
Mace®Security International, Inc. (MSI) is a globally recognized leader in personal safety and security. Based in Cleveland, Ohio, the company has spent more than 40 years designing and manufacturing consumer and tactical products for personal defense and security under its world-renowned Mace®Brand - the original trusted brand of defense spray products. The company also offers aerosol defense sprays and tactical products for law enforcement and security professionals worldwide through its MTS Brand®, Vigilant®Brand alarms which are the world-wide leader and number one recognized brand in personal alarms, and Tornado®Brand pepper spray. MSI distributes and supports Mace®Brand products and services through mass market retailers, wholesale distributors, independent dealers, e-commerce channels, and other distributors. For more information, visitwww.mace.com.
Forward-Looking Statements
This presentation contains certain forward-looking information within the meaning of the Private Securities Litigation Reform Act of 1995. The words "may," "will," "expect," "intend," "estimate," "anticipate," "aspiration," "objective," "project," "believe," "continue," "on track" or "target" or the negative thereof and similar expressions, among others, identify forward-looking statements. All forward looking statements are based on information currently available to management. Such forward-looking statements are subject to certain risks and uncertainties that could cause events and the Company's actual results to differ materially from those expressed or implied. Please see the disclosure regarding forward-looking statements on the Company's Annual Report on the OTCQX website or onwww.mace.com. The company assumes no obligation to update any forward-looking statements.
Related Linkshttp://www.mace.com
Investor Relations Contact:
Mark E. BarrusSenior Vice President, Chief Financial Officer, and SecretaryMbarrus@mace.com(216) 539-0485
SOURCE:Mace Security International, Inc.
View source version on accesswire.com:https://www.accesswire.com/550063/2019-Annual-Meeting-Invitation-and-Investor-Day |
A Closer Look At Sureserve Group plc's (LON:SUR) Uninspiring ROE
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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 Sureserve Group plc (LON:SUR).
Our data showsSureserve Group has a return on equity of 6.0%for the last year. That means that for every £1 worth of shareholders' equity, it generated £0.060 in profit.
See our latest analysis for Sureserve Group
Theformula for return on equityis:
Return on Equity = Net Profit ÷ Shareholders' Equity
Or for Sureserve Group:
6.0% = UK£2.4m ÷ UK£40m (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 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 measures a company's profitability against the profit it retains, and any outside investments. The 'return' is the profit over the last twelve months. A higher profit will lead to a higher ROE. So, all else being equal,a high ROE is better than a low one. 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. The limitation of this approach is that some companies are quite different from others, even within the same industry classification. As is clear from the image below, Sureserve Group has a lower ROE than the average (9.8%) in the Commercial Services industry.
Unfortunately, that's sub-optimal. We prefer it when the ROE of a company is above the industry average, but it's not the be-all and end-all if it is lower. Nonetheless, it could be useful todouble-check if insiders have sold shares recently.
Most companies need money -- from somewhere -- to grow their 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 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.
While Sureserve Group does have some debt, with debt to equity of just 0.36, we wouldn't say debt is excessive. Its ROE isn't particularly impressive, but the debt levels are quite modest, so the business probably has some real potential. Conservative use of debt to boost returns is usually a good move for shareholders, though it does leave the company more exposed to interest rate rises.
Return on equity is useful for comparing the quality of different businesses. In my book the highest quality companies have high return on equity, despite low debt. All else being equal, a higher ROE is better.
Having said that, while ROE is a useful indicator of business quality, you'll have to look at a whole range of factors to determine the right price to buy a stock. It is important to consider other factors, such as future profit growth -- and how much investment is required going forward. So you might want to take a peek at thisdata-rich interactive graph of forecasts for the company.
Of course,you might find a fantastic investment by looking elsewhere.So take a peek at thisfreelist of interesting companies.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
Noah Tomlin case: 2-year-old Virginia boy allegedly disappeared from his bed
Police are searching for a missing 2-year-old boy after he allegedly disappeared from his home in the middle of the night.
Noah Tomlin was reportedly last seen around 1 a.m. Monday in bed at his family's mobile home in Hampton, Va.,CNNreports. Policesaythe child was wearing a white and green striped pajama shirt and a diaper at the time.
The toddler's mother reported him missing around 11:30 a.m. that same day, launching a dayslong intensive police search for the child.
On Wednesday afternoon, Hampton Police Chief Terry Sultshared an updateon the hunt for Noah, saying that while authorities are "still hopeful" they will locate the child "safe and sound," they are also "looking at all potential aspects that this case could lead us to."
"We have looked on land, water," Sult said during apress conference. "We have checked trash, dumpsters. We have checked neighborhoods, houses, underneath buildings and sheds. We actually covered the area multiple times with different teams so we would have different eyes checking the same locations repeatedly."
The police chief added that investigators will be shifting search efforts to a local landfill, but clarified there was "no specific information" or tips that led them to do so.
"We are looking at everything from the child walking off to the abduction scenario," Sult said. "There is nothing that we’re not looking at."
The boy's parents are said to be cooperating with the investigation. His mother is "holding up as well as you could expect under the circumstances," according to Sult.
Anyone with information regarding the boy's whereabouts is urged to call the Hampton Police Division at 757-727-6111.
"There's somebody out there that likely knows something," Sult said. "We need that piece of information to help guide us." |
Based On Its ROE, Is Sureserve Group plc (LON:SUR) A High Quality Stock?
Want to participate in a short research study ? Help shape the future of investing tools and you could win a $250 gift card! Many investors are still learning about the various metrics that can be useful when analysing a stock. This article is for those who would like to learn about Return On Equity (ROE). To keep the lesson grounded in practicality, we'll use ROE to better understand Sureserve Group plc ( LON:SUR ). Our data shows Sureserve Group has a return on equity of 6.0% 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 £0.060. View our latest analysis for Sureserve Group How Do I Calculate Return On Equity? The formula for ROE is: Return on Equity = Net Profit ÷ Shareholders' Equity Or for Sureserve Group: 6.0% = UK£2.4m ÷ UK£40m (Based on the trailing twelve months to March 2019.) It's easy to understand the 'net profit' part of that equation, but 'shareholders' equity' requires further explanation. It is the capital paid in by shareholders, plus any retained earnings. Shareholders' equity can be calculated by subtracting the total liabilities of the company from the total assets of the company. What Does ROE Mean? ROE looks at the amount a company earns relative to the money it has kept within the business. The 'return' is the yearly profit. That means that the higher the ROE, the more profitable the company is. So, all else equal, investors should like a high ROE . That means ROE can be used to compare two businesses. Does Sureserve Group Have A Good Return On Equity? Arguably the easiest way to assess company's ROE is to compare it with the average in its industry. Importantly, this is far from a perfect measure, because companies differ significantly within the same industry classification. As shown in the graphic below, Sureserve Group has a lower ROE than the average (9.8%) in the Commercial Services industry classification. LSE:SUR Past Revenue and Net Income, June 27th 2019 That's not what we like to see. We prefer it when the ROE of a company is above the industry average, but it's not the be-all and end-all if it is lower. Still, shareholders might want to check if insiders have been selling . How Does Debt Impact ROE? Companies usually need to invest money to grow their profits. That cash can come from retained earnings, issuing new shares (equity), or debt. In the case of the first and second options, the ROE will reflect this use of cash, for growth. In the latter case, the debt used for growth will improve returns, but won't affect the total equity. That will make the ROE look better than if no debt was used. Story continues Combining Sureserve Group's Debt And Its 6.0% Return On Equity Sureserve Group has a debt to equity ratio of 0.36, which is far from excessive. 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. The Key Takeaway Return on equity is a useful indicator of the ability of a business to generate profits and return them to shareholders. Companies that can achieve high returns on equity without too much debt are generally of good quality. If two companies have the same ROE, then I would generally prefer the one with less debt. Having said that, while ROE is a useful indicator of business quality, you'll have to look at a whole range of factors to determine the right price to buy a stock. The rate at which profits are likely to grow, relative to the expectations of profit growth reflected in the current price, must be considered, too. So you might want to check this FREE visualization of analyst forecasts for the company . But note: Sureserve Group 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. View comments |
Auto Stock Roundup: TSLA Might Miss Delivery Target, KMX Q1 Earnings Top
Tesla, Inc.’s TSLA vehicle delivery in North America so far in second-quarter 2019 is below its expectation, per Electrek. In fact, the auto giant may fall short of its delivery target for the quarter. Notably, in first-quarter 2019, its vehicle production and delivery number also witnessed sequential declines. However, per the company, there is no shortage of orders and the target is likely to be met.Recall pertaining to the non-compliance of the emission standards again cropped up. German auto giant Daimler AG DDAIF may have to recall 60,000 Mercedes diesel cars in Germany. Regulators alleged that the software fitted in the cars was aimed at distorting emission test results. The affected models include Mercedes-Benz GLK 220 produced between 2012 and 2015.CarMax Inc. KMX reported first-quarter fiscal 2020 results this week. Its earnings and revenues surpassed the Zacks Consensus Estimate. Moreover, both improved on a year-over-year basis.Recap of the Week’s Most Important Stories1. CarMax posted net earnings per share of $1.59 in first-quarter fiscal 2020 (ended May 31, 2019), up 19.5% from $1.33 in the year-ago period. Moreover, earnings surpassed the Zacks Consensus Estimate of $1.49. The company’s net earnings grew 11.8% year over year to $266.7 million.Further, net sales and operating revenues in the reported quarter increased 12% year over year to $5.37 billion. The figure beat the Zacks Consensus Estimate of $5.22 billion. Total gross profit rose 12.3% year over year to $742.4 million.In first-quarter fiscal 2020, CarMax’s used-vehicle sales rose 12.9% from the prior-year period to $4.54 billion as units sold increased 13% to 224,268 vehicles. The average selling price of used vehicles declined 0.1% from the year-ago quarter to $20,050. Comparable store used-vehicle units sold rose 9.5% from the prior-year level. This robust performance reflects improved conversion and solid growth in web traffic.Wholesale vehicle revenues rose 7.3% from a year ago to $662.4 million in the reported quarter. Units sold increased 6.6% year over year to 120,768 vehicles, courtesy of growth in store base and appraisal buy rate. The average selling price of wholesale vehicles rose 0.2% from the prior-year quarter to $5,213.Other sales and revenues increased 6.1% year over year. Moreover, the extended protection plan’s (EPP) revenues rose 11.2% from the year-ago level.CarMax Auto Finance (“CAF”) reported year-over-year growth of 0.3% in income to $116 million in the quarter under review, reflecting collective effects of 7.9% rise in average managed receivables and a slightly lower total interest margin percentage. (Read more: CarMax Earnings Surpass Estimates in Q1, Rise Y/Y)CarMax currently carries a Zacks Rank #3 (Hold). You can seethe complete list of today’s Zacks #1 Rank (Strong Buy) stocks here..2. Daimler should recall 60,000 Mercedes diesel cars in Germany, per Reuters. Regulators alleged that the software fitted in the cars was aimed at distorting emission test results. The affected models include Mercedes-Benz GLK 220 produced between 2012 and 2015.Recently, non-compliance of the emission standards resulted in a large number of recalls. Notably, in March 2019, Fiat Chrysler Automobiles N.V. (FCAU) announced a recall of approximately 965,000 gasoline vehicles that don’t comply with the U.S. emission standards. The flawed vehicles are from the United States and Canada, which will require catalytic converter replacements. Also, Jaguar Land Rover recalled 44,000 cars in the U.K. over issues related to carbon dioxide emissions.The news of this recall by Daimler was first reported by Bild am Sonntag, the German national newspaper. In April, Bild am Sonntag reported that the German auto regulator was investigating the doubtful software used in the Mercedes-Benz GLK 220 CDI vehicles produced between 2012 and 2015. However, Daimler said that it would appeal against the recall decision but it will cooperate with regulators. (Read more: Daimler to Recall Mercedes Diesel Vehicles in Germany)
Daimler currently carries a Zacks Rank #4 (Sell).3. General Motors Company GM is set to invest an additional $20 million for upgrading the Arlington Assembly plant in Texas, per Reuters. This announcement comes prior to the launch of full-size sports utility vehicles (SUVs). Notably, this investment will not add to the production capacity of the plant.Arlington Assembly is a large plant in the country, which employs about 4,500 people. Since 2015, the company has invested $1.4 billion in this plant. Moreover, a couple of years ago, General Motors started construction on a supplier park close to the main assembly plant, which was projected to employ 1,250 people.This plant upgrade was required as the company is preparing to start producing all-new SUVs. The plant upgrade will include making improvements in the plant’s conveyance system and refurbishing paint robots. (Read more: General Motors to Invest $20M to Upgrade Texas Plant)General Motors currently carries a Zacks Rank #3.4. Tesla delivered 49,000 vehicles in North America so far in second-quarter 2019, per Reuters. According to Electrek, this is below the electric vehicle (EV) giant’s expectation and is likely to affect its goal of creating a record for new vehicle delivery in the quarter.In first-quarter 2019, Tesla’s vehicle production and delivery numbers witnessed sequential declines of 10.9% and 31%, respectively. In the same quarter, it managed to produce roughly 77,100 vehicles — consisting of 62,950 Model 3, and 14,150 Model S and X. Out of the total delivered figure of 63,000 units, the company’s Model 3 accounted for 50,900 while Model S and X were 12,100. This raised concerns about its ability to make profits and meet the delivery target while encountering issues pertaining to cash flow and manufacturing.However, Tesla’s chief executive officer, Elon Musk, stated that the company has enough orders to set a record for vehicle deliveries in the second quarter. In a leaked email, he has added that there is no scarcity of orders but right vehicles are not all in right locations yet.Tesla currently carries a Zacks Rank #5 (Strong Sell).PerformanceIn the past week, General Motors has gained the most. Tesla stock declined the most.In the past six months, Tesla has declined the most while AutoZone, Inc. AZO recorded maximum gain.
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What’s Next in the Auto Space?Watch out for the usual news releases over the next week.Breakout Biotech Stocks with Triple-Digit Profit PotentialThe biotech sector is projected to surge beyond $775 billion by 2024 as scientists develop treatments for thousands of diseases. They’re also finding ways to edit the human genome to literally erase our vulnerability to these diseases.Zacks has just released Century of Biology: 7 Biotech Stocks to Buy Right Now to help investors profit from 7 stocks poised for outperformance. Our recent biotech recommendations have produced gains of +98%, +119%and +164%in as little as 1 month. The stocks in this report could perform even better.See these 7 breakthrough stocks now>>
undefinedundefinedCarMax, Inc. (KMX) : Free Stock Analysis ReportGeneral Motors Company (GM) : Free Stock Analysis ReportTesla, Inc. (TSLA) : Free Stock Analysis ReportDaimler AG (DDAIF) : Free Stock Analysis ReportAutoZone, Inc. (AZO) : Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment Research |
US pending home sales up 1.1% in May
WASHINGTON (AP) — More Americans signed contracts to purchase homes in May compared with the prior month, a sign buyers may be ready take advantage of low interest rates and stabilizing home prices.
The National Association of Realtors says that its pending home sales index rose 1.1% to a reading of 105.4.
Home sales have been slowing even with average 30-year mortgage rates slipping below 4% last month. During the first five months of the year, purchases of new homes fell 3.7% compared to the same period in 2018, although existing home sales — the bulk of the market — rebounded in May.
U.S. home price gains slowed for the 13th straight month in April.
Pending sales is a measure of home purchases that are usually completed a month or two later. |
Canadian dollar climbs to five-month high as yield gap vs U.S. slides
By Fergal Smith
TORONTO (Reuters) - The Canadian dollar strengthened to a near five-month high against the greenback on Thursday as the additional return on holding U.S. bonds fell to the lowest in more than one year.
The gap between Canada's 2-year yield and its U.S. equivalent, which was 84 basis points in March, narrowed by 1.7 basis points to less than 30 basis points in favor of the U.S. bond, its smallest differential since February 2018.
The narrowing in the yield differential comes after the Federal Reserve shifted from hiking interest rates in December to signaling last week that it could cut rates as early as July.
"We haven't seen that in Canada, as far as that pivot to the dovish side," said Michael Greenberg, a portfolio manager at Franklin Templeton Multi-Asset Solutions. "At this point Canada is holding up pretty well."
Average weekly earnings of non-farm payroll employees rose by 2.9% in April, the fastest pace since August last year, adding to evidence that Canada's economy is recovering after a slow down around the turn of the year.
Canadian gross domestic product data for April is due on Friday.
At 3:44 p.m. (1944 GMT), the Canadian dollar <CAD=D4> was trading 0.2% higher at 1.3102 to the greenback, or 76.32 U.S. cents. The currency touched its strongest level since Feb. 4 at 1.3092.
The loonie is on track to gain 3.2% in June, while it has gained more than 4% since the start of the year, the best performance among G10 currencies.
Money markets see about a 40% chance of an interest rate cut this year by the Bank of Canada, while they expect at least two rate cuts from the Federal Reserve. <BOCWATCH>
Still, Canada is a major exporter of commodities, including oil, so its economy could be hurt if progress is not reached on the U.S.-China trade dispute at the G20 summit this weekend.
If the trade war were to drag on and the Fed cuts interest rates, then the Bank of Canada would likely ease more than the market is expecting, Greenberg said.
U.S. crude oil futures <CLc1> held on to strong gains over the past two weeks, settling 0.1% higher at $59.43 a barrel.
Canadian government bond prices were higher across a flatter yield curve, with the 10-year <CA10YT=RR> rising 32 cents Canadian to yield 1.468%. Earlier in the session, the 10-year yield touched its highest since June 12 at 1.522%.
(Reporting by Fergal Smith; Editing by Richard Chang) |
You Might Like Superior Industries International, Inc. (NYSE:SUP) But Do You Like Its Debt?
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While small-cap stocks, such as Superior Industries International, Inc. (NYSE:SUP) with its market cap of US$81m, are popular for their explosive growth, investors should also be aware of their balance sheet to judge whether the company can survive a downturn. Given that SUP is not presently profitable, it’s essential to evaluate the current state of its operations and pathway to profitability. 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 SUP here.
SUP's debt level has been constant at around US$679m over the previous year which accounts for long term debt. At this stable level of debt, the current cash and short-term investment levels stands at US$54m , ready to be used for running the business. Moreover, SUP has generated cash from operations of US$170m in the last twelve months, leading to an operating cash to total debt ratio of 25%, meaning that SUP’s operating cash is sufficient to cover its debt.
With current liabilities at US$188m, it appears that the company has been able to meet these commitments with a current assets level of US$382m, leading to a 2.04x current account ratio. The current ratio is calculated by dividing current assets by current liabilities. Generally, for Auto Components companies, this is a reasonable ratio since there is a bit of a cash buffer without leaving too much capital in a low-return environment.
Since total debt levels exceed equity, SUP is a highly leveraged company. This is somewhat unusual for small-caps companies, since lenders are often hesitant to provide attractive interest rates to less-established businesses. However, since SUP is presently loss-making, there’s a question of sustainability of its current operations. Running high debt, while not yet making money, can be risky in unexpected downturns as liquidity may dry up, making it hard to operate.
Although SUP’s debt level is towards the higher end of the spectrum, its cash flow coverage seems adequate to meet obligations which means its debt is being efficiently utilised. This may mean this is an optimal capital structure for the business, given that it is also meeting its short-term commitment. I admit this is a fairly basic analysis for SUP's financial health. Other important fundamentals need to be considered alongside. I suggest you continue to research Superior Industries International to get a more holistic view of the small-cap by looking at:
1. Future Outlook: What are well-informed industry analysts predicting for SUP’s future growth? Take a look at ourfree research report of analyst consensusfor SUP’s outlook.
2. Valuation: What is SUP 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 SUP 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. |
Spider-Man: Far From Home reviews largely praise Tom Holland's next film
Is the Marvel Cinematic Universe in good hands after, you know, what happened at the end of Avengers: Endgame ? The answer, per the majority of critics coming out of early screenings of Spider-Man: Far From Home , the answer is yes. Directed by Spider-Man: Homecoming ‘s Jon Watts, Tom Holland ‘s next solo outing as Marvel’s web-slinger “solidifies him as the new and improved heart of the MCU,” as Mashable’s Alexis Nedd writes. Other critics, including EW’s Darren Franich, praise Jake Gyllenhaal’s “clever, careful performance” as Mysterio, a new mysterious face on the block. Still in mourning for mentor Tony Stark and grappling with the world asking who will be the new Iron Man, Peter just wants to go on his school trip to Europe and profess his feelings for MJ (Zendaya). But Nick Fury (Samuel L. Jackson) pops in to recruit Spider-Man for a mission combating these Elemental creatures emerging around the world. Also returning for the Spidey sequel includes Cobie Smulders as Agent Maria Hill, Jacob Batalon as Ned, Marisa Tomei as Aunt May, and Jon Favreau as Happy. Variety ‘s Owen Gleiberman calls Far From Home “closer, in spirit, to the good Tobey Maguire films,” while The Wrap ‘s Alonso Duralde writes how Watts and the screenwriters “carved out a space for Spider-Man that feels uniquely breezy and charming while still fitting the larger structure of the Marvel movies.” To be fair, not everyone came out of theaters singing the film’s praises. IndieWire’s David Ehrlich called it “a cute but painfully unadventurous bit of superhero housekeeping,” as Vanity Fair ‘s Richard Lawson felt annoyed by “how the film smirks and winks as if it’s in on the fatigue, offering an illusion of cool when at heart it’s as slavishly on-message as everything else.” Read more reviews below. Darren Franich ( Entertainment Weekly ) “I wound up liking Far From Home more than any Spider-Man film this decade. There’s something eerie in the constant assertion of Tony Stark as Tycoon SuperJesus — but don’t underestimate the shifty layers the final act. The hero worship has a slippery quality here, with a less cheerful purpose than the sincere devotion of Homecoming or Into the Spider-Verse . The teen characters really are a blast, even if one key person skips a whole movie of development between scenes. Some digital effects look good in a boring way, and then some digital effects look bad in a perfect way. ‘Is this real?’ asks Spider-Man. In the end, I really didn’t know. Far From Home succeeds with an unusual, troubling virtue: The best parts are the most fake.” Story continues Todd McCarthy ( The Hollywood Reporter ) “The young cast, led by Tom Holland as the bashful web-slinger and Zendaya as a shy girl slow to lose her inhibitions, is plenty appealing as well as funny. But without a proper, full-on villain, as well as an adequate substitute for Robert Downey Jr.’s late, oft-mentioned Tony Stark, this comes off as a less than glittering star in the Marvel firmament. It pales even more when compared to Sony’s wildly imaginative animated feature of last year, Spider-Man: Into the Spider-Verse .” Owen Gleiberman ( Variety ) “Where does Far From Home fall on the scale of Spider-Man movies? It’s more urgent than the last one (and should be even bigger at the box office), with a richer sense of malevolence, and Holland’s kid-in-over-his-head hero — awkward and ingenuous, romantic and quicksilver — is alive inside in a way that Andrew Garfield’s Peter never was. Far From Home gets closer, in spirit, to the good Tobey Maguire films.” Alonso Duralde ( The Wrap ) “In a year that’s only half-done, audience members would be forgiven for having superhero fatigue after Captain Marvel, Shazam! and Avengers: Endgame . (It’s almost welcome news that we aren’t getting the next MCU movie until 2020.) But with a focus on character-based comedy, coming-of-age anxieties, and super-battles that exist in very specific geographical locations, returning writers Chris McKenna and Erik Sommers and director Jon Watts have carved out a space for Spider-Man that feels uniquely breezy and charming while still fitting the larger structure of the Marvel movies. (They even play with that structure, and with deep cuts from the MCU’s history, in very clever ways.)” Richard Lawson ( Vanity Fair ) “If yet another Marvel movie is a little self-conscious about being yet another Marvel movie, does that excuse it from being, well, yet another Marvel movie? That’s the tricky territory that Spider-Man: Far From Home (co-released by Sony on July 2) finds itself in, barely two months after Avengers: Endgame swept across the globe, taking some major heroes with it. Watching the trailer for Far From Home , I found myself thinking, this? Again? Already?? In response, Jon Watts’s film seems to nod its head and say, ‘I know, know,’ a little sheepish about its mere existence. But then it ups and does all the old Marvel stuff anyway, seeming more and more earnest and ardent about this factory-cult as it goes.” Matt Singer ( ScreenCrush ) “Watts and his team faced a tough task with this movie, following two gigantic Avengers and the dimension-jumping Spider-Man: Into the Spider-Verse . Their smart solution was to tell a classical story in that Lee/Ditko mold. While no one says ‘with great power comes great responsibility,’ this is about as faithful an adaptation of those old Amazing Spider-Man fables as has been brought to the screen so far. And it sets the stage perfectly, with a shocking cliffhanger, for whatever Marvel has in store for us next.” Mike Ryan ( UPROXX ) “So, yes, Spider-Man: Far From Home is funny and clever – in the end, Peter just wants to enjoy his class trip to Europe with the hopes of growing closer to MJ (Zendaya) – but it’s also a movie about both mourning and deception. Peter is still reeling from the loss of Tony Stark, who remains a specter wherever Peter turns. Peter’s emotions are raw, which also leaves him more susceptible to forces preying on his emotional state. It’s a movie filled with surprises (I don’t say that lightly) that leaves Peter, and a viewer, wondering who is real and who can be trusted. Yet it never feels like a movie filled with dread. It’s a hopeful tone, which, after the last two Avengers movies, is very welcome.” David Ehrlich ( IndieWire ) “Don’t be fooled by the title, or the fact that Marvel finally shot a movie outside of Atlanta: Spider-Man: Far From Home is a cute but painfully unadventurous bit of superhero housekeeping that only exists to clean up the cataclysmic mess that Avengers: Endgame left behind. As a piece of connective tissue in an ever-metastasizing cinematic universe, Tom Holland’s sophomore (solo) outing as Peter Parker does a clever job of closing the door on one phase and nudging it open to another; it’s funny and colorful and hinges on some MCU deep-cuts that even the most hardcore fans won’t be able to anticipate. As a stand-alone story, however — another predictable call to action about the burdens of growing up and becoming the person that others believe you can be — it’s a hollow exercise in going through the motions.” Alexis Nedd ( Mashable ) “Tom Holland instantly proved to be the perfect Spider-Man way back in Captain America: Civil War , but his performance now solidifies him as the new and improved heart of the MCU. Holland is so magnetic in Far From Home that even when Peter makes stupid choices (and hoo boy, he really craps the bed a few times), he is granted instant forgiveness. Peter is 16 years old in this movie, and much is made of the tension between him shouldering the burden of heroism while still being an actual child in a post–Iron Man world. Watching Peter experience grief, stress, and guilt over his role in this new reality is pretty difficult stuff, but in Holland’s hands the emotional journey Peter takes feels natural and relatable.” Charles Pulliam-Moore ( io9 ) “Because Spider-Man: Far From Home is the first major Marvel Cinematic Universe film set explicitly after the events of Avengers: Endgame , the great responsibility resting on its shoulders is twofold. Not only does the movie have to bring its titular hero back down to Earth from the most epic adventure of his life, it also has the vital job of setting an overarching tone and perspective for the next phase of Marvel’s grand cinematic project. The great thing is that the film does all of that and a whole hell of a lot more.” Spider-Man: Far From Home will open in theaters on July 2. Related content: Avengers: Endgame officially coming back to theaters with Spider-Man sneak peek Samuel L. Jackson calls out Spider-Man: Far From Home poster that flips Fury’s eyepatch Spider-Man star Tom Holland and Stephen Colbert help rescue puppies get adopted |
Is SVMK Inc.'s (NASDAQ:SVMK) Balance Sheet Strong Enough To Weather A Storm?
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Small-cap and large-cap companies receive a lot of attention from investors, but mid-cap stocks like SVMK Inc. (NASDAQ:SVMK), with a market cap of US$2.1b, are often out of the spotlight. Surprisingly though, when accounted for risk, mid-caps have delivered better returns compared to the two other categories of stocks. SVMK’s financial liquidity and debt position will be analysed in this article, to get an idea of whether the company can fund opportunities for strategic growth and maintain strength through economic downturns. Remember this is a very top-level look that focuses exclusively on financial health, so I recommend a deeper analysisinto SVMK here.
Check out our latest analysis for SVMK
SVMK's debt levels have fallen from US$411m to US$306m over the last 12 months , which also accounts for long term debt. With this reduction in debt, the current cash and short-term investment levels stands at US$166m to keep the business going. On top of this, SVMK has generated US$47m in operating cash flow over the same time period, resulting in an operating cash to total debt ratio of 16%, meaning that SVMK’s current level of operating cash is not high enough to cover debt.
With current liabilities at US$145m, it appears that the company has maintained a safe level of current assets to meet its obligations, with the current ratio last standing at 1.31x. The current ratio is the number you get when you divide current assets by current liabilities. Usually, for Software companies, this is a suitable ratio since there's a sufficient cash cushion without leaving too much capital idle or in low-earning investments.
With debt reaching 92% of equity, SVMK may be thought of as relatively highly levered. This is not unusual for mid-caps as debt tends to be a cheaper and faster source of funding for some businesses. But since SVMK is currently unprofitable, there’s a question of sustainability of its current operations. Maintaining a high level of debt, while revenues are still below costs, can be dangerous as liquidity tends to dry up in unexpected downturns.
SVMK’s high cash coverage means that, although its debt levels are high, the company is able to utilise its borrowings efficiently in order to generate cash flow. This may mean this is an optimal capital structure for the business, given that it is also meeting its short-term commitment. Keep in mind I haven't considered other factors such as how SVMK has been performing in the past. I recommend you continue to research SVMK to get a more holistic view of the mid-cap by looking at:
1. Future Outlook: What are well-informed industry analysts predicting for SVMK’s future growth? Take a look at ourfree research report of analyst consensusfor SVMK’s outlook.
2. Valuation: What is SVMK 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 SVMK 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. |
This Marijuana REIT Boosted Its Dividend 33%, but Is It a Good Income Stock?
Marijuana is a smoking hot niche today, withindustry watchers providing massive growth projectionsfor demand as the drug's legal availability increases. The stocks associated with the sector are hot, too. One interesting way to play the space without actually buying a marijuana grower is through areal estate investment trust(REIT) likeInnovative Industrial Properties(NYSE: IIPR).
This fast-growing REIT is rewarding investors with big dividend growth, which might be tempting to income investors looking for a way tojump into the marijuana sector. However, most should think carefully about that choice.
The first thing to understand about Innovative Industrial Properties is that it is, in fact, a wonderful way to invest in the pot industry. Since it doesn't actually grow marijuana, it sidesteps the still material legal and regulatory issues involved in the space. Moreover, it is providing an important resource to the industry -- cash to help fund growth.
Image source: Getty Images
Essentially, Innovative Industrial buys growing facilities from marijuana growers who instantly rent the property back under long-term leases. That allows the grower to keep using the property and provides it with cash that it can put toward expanding its business (or, perhaps, to reduce leverage). Innovative Industrial, meanwhile, expands its portfolio and gets a new long-term lease. It's a win-win scenario that allows Innovative Industrial to grow along with the industry.
Furthermore, for those who might still be a little concerned about the legal issues surrounding marijuana, Innovative Industrial provides a bit of a backstop. Not only does it sidestep legal issues by being a landlord, but it theoretically could repurpose the properties it owns and lease them to companies not involved with pot. A marijuana grower would probably have a much harder time repositioning itself, if it were even possible.
As a relatively new REIT with a unique niche, Innovative has been growing like a weed. To put a number on that, it ended 2018 with around a dozen properties, and by mid-2019, it had 22. It has become a vital source of capital to the some of the biggest names in the industry.
Now add in the income the REIT legally has to direct toward shareholders and Innovative starts to look enticing for dividend investors interested in the marijuana space, a fast-growing sector not exactly known for income. Innovative's swiftly expanding portfolio has also led to incredible dividend growth, with the most recent increase coming in at a massive 33%. If you are looking for a relatively safe way to invest in the marijuana industry while also generating some income, Innovative is a great option.
That said, income investors should think carefully before making a buy call here. For starters, even after rapid dividend growth, the yield is a miserly 1.8% (you could easily get that much by investing in anS&P 500 indexETF). Like the marijuana growers that Innovative Industrial counts as tenants, the REIT's shares have been bid up by Wall Street's hype machine. To put a number on that, the stock is up more than 500% since its late 2017 IPO. It has clearly gotten caught up in the marijuana investing craze. While its business has physical assets to backstop it, that doesn't mean it will be able to live up to the currently high expectations built into the price of virtually all marijuana-related stocks.
IIPRdata byYCharts.
As for the safety provided by the property portfolio, there are some issues to consider. For example, grow houses are very specific structures. Repurposing a grow house would require a time consuming and potentially expensive overhaul of a property. Innovative could replace a tenant with another grower, of course, but that only works if the industry doesn't get sidelined in some way. In other words, if the marijuana sector as a whole falters for some reason, Innovative's business will likely take at least a temporary hit, if not more. It is, then, a safer way to play the marijuana sector, but far from a "safe" real estate investment.
The next issue to keep in mind is that Innovative is still a relatively tiny REIT. Even after the massive run-up in price and swift portfolio growth, it sports just a $1.2 billion market cap and a portfolio of roughly 22 highly targeted assets. REIT industry giantRealty Incomehas a $22.6 billion market cap and a diversified portfolio of around 6,000 properties. Innovative Industrial is growing fast, aided by its small size, but don't overlook the risk associated with investing in a tiny, highly focused property owner. Trouble with one property or lessee could have a material impact on its financial results.
To the REIT's credit, it has so far managed to expand the portfolio with just modest use of leverage. That ups the safety quotient here. But Innovative has increasingly been using debt to fund its acquisitions. So, what is now a strength still needs to be monitored closely as management executes its business plans. It is unlikely that low leverage will remain a point of differentiation for very long. And if management gets caught up in the search for growth, leverage could easily turn into a net negative.
At the end of the day, Innovative Industrial Properties is a very interesting marijuana stock. But it is not a great income stock, even with the massive dividend growth numbers it has put up. The yield is too low, the stock has risen alarmingly fast, and the still-modest portfolio is highly focused on a niche asset class that has little history behind it. Income investors should easily be able tofind higher-yielding REITswith much stronger backstories. Unless you are specifically looking for exposure to the marijuana sector, Innovative Industrial Properties is probably best avoided by income investors today.
More From The Motley Fool
• Beginner's Guide to Investing in Marijuana Stocks
• Marijuana Stocks Are Overhyped: 10 Better Buys for You Now
• Your 2019 Guide to Investing in Marijuana Stocks
Reuben Gregg Brewerhas no position in any of the stocks mentioned. The Motley Fool recommends Innovative Industrial Properties. The Motley Fool has adisclosure policy. |
Abercrombie & Fitch To Sell CBD Products At 160 Stores
Abercrombie & Fitch Co.(NYSE:ANF) will begin selling CBD products at more than 160 stores, the companysaid in a press release.
What Happened
Abercrombie initially tested CBD products made byGreen Growth Brands Inc(OTC:GGBXF) at 10 stores in May and is ready to expand the relationship across more than 160 core Abercrombie & Fitch stores.
Abercrombie will sell CBD-infused body lotions, muscle balms, lip balms and sugar scrubs. Green Growth's products are made with CBD, which is derived from hemp and was made legal in late 2018. Supporters of CBDargueit can help with insomnia, pain and inflammation.
Why It's Important
Abercrombie is a brand that "understands how to connect" with its core customer both in the U.S. and internationally, said Green Growth Brands CEO Peter Horvath. Coupled with the company's "incredible" brand recognition, the CBD company is "excited at the prospect of building our partnership together."
Cannabis-focused research firm Brightfield Group as saying the CBD market could expand to a billion industry by 2022.
Need more cannabis news?Check out all of our coverage here.
Photo credit: Phillip Pessar, Flickr
See more from Benzinga
• Big Lots Analyst Still Bearish After New CFO Appointment
• Abercrombie CEO: Smaller Stores Offer 'More Intimate' Feel
© 2019 Benzinga.com. Benzinga does not provide investment advice. All rights reserved. |
Is Now The Time To Put Spirit of Texas Bancshares (NASDAQ:STXB) On Your Watchlist?
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For beginners, it can seem like a good idea (and an exciting prospect) to buy a company that tells a good story to investors, even if it completely lacks a track record of revenue and profit. Unfortunately, high risk investments often have little probability of ever paying off, and many investors pay a price to learn their lesson.
In contrast to all that, I prefer to spend time on companies likeSpirit of Texas Bancshares(NASDAQ:STXB), which has not only revenues, but also profits. Even if the shares are fully valued today, most capitalists would recognize its profits as the demonstration of steady value generation. Conversely, a loss-making company is yet to prove itself with profit, and eventually the sweet milk of external capital may run sour.
See our latest analysis for Spirit of Texas Bancshares
The market is a voting machine in the short term, but a weighing machine in the long term, so share price follows earnings per share (EPS) eventually. Therefore, there are plenty of investors who like to buy shares in companies that are growing EPS. As a tree reaches steadily for the sky, Spirit of Texas Bancshares's EPS has grown 32% each year, compound, over three years. If the company can sustain that sort of growth, we'd expect shareholders to come away winners.
I like to see top-line growth as an indication that growth is sustainable, and I look for a high earnings before interest and taxation (EBIT) margin to point to a competitive moat (though some companies with low margins also have moats). Not all of Spirit of Texas Bancshares's revenue this year is revenuefrom operations, so keep in mind the revenue and margin numbers I've used might not be the best representation of the underlying business. Spirit of Texas Bancshares maintained stable EBIT margins over the last year, all while growing revenue 26% to US$60m. That's progress.
You can take a look at the company's revenue and earnings growth trend, in the chart below. For finer detail, click on the image.
The trick, as an investor, is to find companies that aregoing toperform well in the future, not just in the past. To that end, right now and today, you can checkour visualization of consensus analyst forecasts for future Spirit of Texas Bancshares EPS100% free.
Like standing at the lookout, surveying the horizon at sunrise, insider buying, for some investors, sparks joy. Because oftentimes, the purchase of stock is a sign that the buyer views it as undervalued. Of course, we can never be sure what insiders are thinking, we can only judge their actions.
Any way you look at it Spirit of Texas Bancshares shareholders can gain quiet confidence from the fact that insiders shelled out US$215k to buy stock, over the last year. And when you consider that there was no insider selling, you can understand why shareholders might believe that lady luck will grace this business. Zooming in, we can see that the biggest insider purchase was by Director Robert Beall for US$133k worth of shares, at about US$22.25 per share.
Along with the insider buying, another encouraging sign for Spirit of Texas Bancshares is that insiders, as a group, have a considerable shareholding. Indeed, they hold US$42m worth of its stock. That's a lot of money, and no small incentive to work hard. Those holdings account for over 14% of the company; visible skin in the game.
While insiders already own a significant amount of shares, and they have been buying more, the good news for ordinary shareholders does not stop there. That's because on our analysis the CEO, Dean Bass, is paid less than the median for similar sized companies. I discovered that the median total compensation for the CEOs of companies like Spirit of Texas Bancshares with market caps between US$200m and US$800m is about US$1.7m.
The CEO of Spirit of Texas Bancshares only received US$816k in total compensation for the year ending December 2018. That's clearly well below average, so at a glance, that arrangement seems generous to shareholders, and points to a modest remuneration culture. CEO compensation is hardly the most important aspect of a company to consider, but when its reasonable that does give me a little more confidence that leadership are looking out for shareholder interests. I'd also argue reasonable pay levels attest to good decision making more generally.
For growth investors like me, Spirit of Texas Bancshares's raw rate of earnings growth is a beacon in the night. On top of that, insiders own a significant stake in the company and have been buying more shares. So it's fair to say I think this stock may well deserve a spot on your watchlist. Now, you could try to make up your mind on Spirit of Texas Bancshares by focusing on just these factors,oryou couldalsoconsider how its price-to-earnings ratio compares to other companies in its industry.
As a growth investor I do like to see insider buying. But Spirit of Texas Bancshares isn't the only one. You can see aa free list of them here.
Please note the insider transactions discussed in this article refer to reportable transactions in the relevant jurisdiction
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
4 out 5 top selling Nike products cost more than $130
With Nike (NKE) set to announce fiscal Q4 earnings on Thursday, it sits atop the global footwear and apparel mountain. Last year Nike pulled in an industry-leading $36.4 billion in revenue, up 6% from the previous year. According to data from Cowen Equity Research, 4 out of 5 top selling Nike products retail for more than $130 — and with the average men's shoe retailing for around $70, that's saying something.
Since its creation in 1972, the brand that urges everyone to "Just Do It" seems to have an uncanny ability to be ahead of the curve on which sportswear will resonate with consumers. UBS analyst Jay Sole, who covers Nike, spoke to Yahoo Finance about how the swoosh brand entices consumers with premium-priced products:
"The product has to be fresh, and it has to be cool," he said.
One of Nike's top-selling models in both women's and men's category is the Air VaporMax, which hit shelves in 2017. The sneaker’s signature feature is the sole, which is comprised of a series of air-filled pods.
The unique engineering paid off, and even with its hefty $190 price tag. For Nike, when the products at the high end are really successful, it can put a halo over the entire business and help drive its business, Sole tells Yahoo Finance.
"Nike's number one objective, year in and year out, is to make, exciting fresh, new innovative cool looking products that people want to buy … I think as long as they do that they'll continue to be successful," said Sole.
Reggie Wade is a writer for Yahoo Finance. Follow him on Twitter at@ReggieWade.
Read more:
• Foot Locker makes $100M bet on popular online sneaker marketplace GOAT
• The hottest resale sneakers by state
• How Nike took over the NBA sneaker game
• Read the latest financial and business news from Yahoo Finance
Follow Yahoo Finance onTwitter,Facebook,Instagram,Flipboard,LinkedIn, andreddit. |
Boston Scientific Strong on Growth Goals and Future Launches
At an investment community meeting in New York City of late,Boston Scientific CorporationBSX presented a review of its long-term growth strategy and offered plans for product pipeline and strategic investments. According to the company, this is aimed at improving its clinical and economic outcomes, sustaining category leadership in served markets and expanding into high-growth, adjacent markets.
Overall, this long-range strategy is expected to help the company deliver a strong financial performance across its MedSurg, Rhythm and Neuro, and Cardiovascular segments.
An Outline of the Strategy
The plan focuses on spaces like category leadership strategy, product diversification into faster-growth markets and expansion of portfolio and capabilities across geographies. In this regard, Boston Scientific noted that last year, it invested approximately $1 billion in R&D and also announced 10 strategic acquisitions in support of its category leadership scheme.
Based on these investments, the company expects to introduce approximately 75 products by 2022. Going by the company’s report, “many of these innovations are focused on adjacencies that are expected to expand our leadership in $22 billion in high growth markets by 2022.” According to the company, by 2022, these product launches will help 80% of its sales to reach high and moderate -growth markets.
Per a Mass Device report, “The company is looking to shift about 35% of its sales to high-growth markets, compared with about 25% today, and to cut low-margin sales to roughly 20%, versus about 30% today.”
In terms of geographic growth, Boston Scientific is working on widening its footprint in the emerging markets along with increasing patient access to care and supporting steady broad-based progress through physician training capabilities, channel explosion and local partnerships.
Financial Goals
During the period from 2019 to 2022, the company is targeting double-digit adjusted earnings per share via the company’s ongoing adjusted operating margin improvement initiatives, which is projected to drive 50-100 basis points of expansion annually. The company has also targeted an organic revenue CAGR of 6-9% during the 2020-2022 time frame.
Share Price Performance
Over the past year, shares of Boston Scientific have outperformed the industry it belongs to. The stock has rallied 27.3% compared with 6.9% rise of the industry.
Zacks Rank & Key Picks
Boston Scientific carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the broader medical space are Cerner Corporation CERN, Penumbra PEN and The Cooper Companies COO, each with a Zacks Rank #2 (Buy). You can seethe complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Cerner’s long-term earnings growth rate is expected to be 13.5%.
Penumbra’s long-term earnings growth rate is projected at 21.5%.
Cooper Companies’ long-term earnings growth rate is estimated at 10.8%.
Breakout Biotech Stocks with Triple-Digit Profit PotentialThe biotech sector is projected to surge beyond $775 billion by 2024 as scientists develop treatments for thousands of diseases. They’re also finding ways to edit the human genome to literally erase our vulnerability to these diseases.Zacks has just released Century of Biology: 7 Biotech Stocks to Buy Right Now to help investors profit from 7 stocks poised for outperformance. Our recent biotech recommendations have produced gains of+98%,+119%and+164%in as little as 1 month. The stocks in this report could perform even better.See these 7 breakthrough stocks now>>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days.Click to get this free reportCerner Corporation (CERN) : Free Stock Analysis ReportPenumbra, Inc. (PEN) : Free Stock Analysis ReportBoston Scientific Corporation (BSX) : Free Stock Analysis ReportThe Cooper Companies, Inc. (COO) : Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment Research |
Inovio Up on Enrollment Closure in Cervical Dysplasia Study
Inovio Pharmaceuticals, Inc.INO announced that it has completed enrollment in the pivotal phase III study, REVEAL 1, which is currently evaluating VGX-3100 for the treatment of cervical dysplasia caused by human papillomavirus (HPV). The study successfully achieved the recruitment target of 198 subjects. Its investigation of the indication holds immense significance as the same can progress to cervical cancer when left untreated.
VGX-3100, an HPV immunotherapy, is the most advanced candidate in Inovio’s pipeline. If approved, it will be the first immunotherapy and a non-surgical treatment option for women with late-stage cervical dysplasia.
Shares of Inovio rallied 19.8% following this news on Wednesday. However, the stock has dropped 24.5% so far this year versus the industry’s increase of 3.9%.
The phase III study is evaluating the efficacy of VGX-3100 to regress cervical HSIL (high-grade squamous intraepithelial lesions) and eradicate the HPV infection that causes these lesions. The primary endpoint of the study is regression of cervical HSIL and virologic clearance of HPV 16 and/or HPV 18 in the cervix.
Notably, this March, Inovio started enrolling patients in the confirmatory REVEAL 2 study. The program is designed to assess the cervical tissue changes at nine months after being treated with three dose regimens of VGX-3100 at months zero, one and three each.
Based on data from the REVEAL 2 analysis, Inovio plans to submit a regulatory filing, seeking an approval for VGX-3100 in 2021. Two more phase II probes are examining the efficacy of VGX-3100 on patients with vulvar dysplasia and anal dysplasia.
We would like to remind investors that last August, Inovio entered into a partnership agreement with the AIDS Malignancy Consortium to evaluate VGX-3100 for treating HPV-associated precancerous conditions in patients, who have tested positive for HIV.
Moreover, last month, Inovio formed a companion diagnostic partnership with the Dutch pharmaceutical company, Qiagen N.V. QGEN. This collaboration is aimed at creating a liquid biopsy companion diagnostic test to guide the selection of patients, who would benefit from Inovio’s VGX-3100.
Zacks Rank & Stocks to Consider
Inovio currently carries a Zacks Rank #3 (Hold). Better-ranked stocks in the healthcare sector include Acorda Therapeutics, Inc. ACOR and Repligen Corporation RGEN, both sporting a Zacks Rank #1 (Strong Buy). You can seethe complete list of today’s Zacks #1 Rank stocks here.
Acorda’s loss per share estimates have been narrowed 6.5% for 2019 and 6.9% for 2020 over the past 60 days.
Repligen’s earnings estimates have been revised 9.4% upward for 2019 and 9.8% upward for 2020 over the past 60 days. The stock has soared 54.6% year to date.
Breakout Biotech Stocks with Triple-Digit Profit Potential
The biotech sector is projected to surge beyond $775 billion by 2024 as scientists develop treatments for thousands of diseases. They’re also finding ways to edit the human genome to literally erase our vulnerability to these diseases.Zacks has just released Century of Biology: 7 Biotech Stocks to Buy Right Now to help investors profit from 7 stocks poised for outperformance. Our recent biotech recommendations have produced gains of+98%,+119%and+164%in as little as 1 month. The stocks in this report could perform even better.
See these 7 breakthrough stocks now>>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days.Click to get this free reportAcorda Therapeutics, Inc. (ACOR) : Free Stock Analysis ReportRepligen Corporation (RGEN) : Free Stock Analysis ReportQIAGEN N.V. (QGEN) : Free Stock Analysis ReportInovio Pharmaceuticals, Inc. (INO) : Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment Research |
French nudists and burkini bathers in heatwave pool standoff
High noon is approaching between nudists and burkini bathers in Grenoble - AFP Hundreds of French nudists are threatening to "bare all" against burkini -clad bathers in an unlikely showdown at public baths in Grenoble as an ongoing row over the body-covering garment has resurfaced in the heatwave. The city in southeastern France - which is sweltering in temperatures of over 40 degrees Celsius - obliges women to wear one-piece swimming costumes close to the body in swimming pools while men must wear Speedo-style trunks rather than shorts, for hygiene and security reasons. But in recent days, a group of Muslim women called Citizen’s Alliance of Grenoble has twice turned up to pools in the city at the foot of the French Alps wearing the burkini. In their first attempt, around 15 women managed to enter the pool on May 17 and filmed themselves bathing, saying they had done so "to defend freedom of religion”. Last Sunday, a group were fined €35 (£30) each for doing so. Undaunted, they have called on Facebook for a third “operation burkini” this Sunday, claiming they are the “Muslim Rosa Parks” of France, a nod to the US civil rights icon. Désobéissance civique des musulmanes grenobloises pour des piscines publiques qui respectent la liberté de conscience. @_Pourquoi @EricPiolle #burkini #islamoféminisme pic.twitter.com/nyAvjsryKK — AllianceCitoyenne (@alliancecitoyen) June 23, 2019 In response to the high-profile action, Grenoble residents have launched a rival “citizens’ secular, ecologist” Facebook group called “Everyone Naked”, calling on all members to turn up to the pool “baring all” to take on the “burkini brigade”. Story continues They accuse the Green mayor, Eric Piolle, of “worrying inaction”. Some 231 people say they will come naked and a further 1,300 have expressed an interest. Among those is a Socialist regional councillor, Stéphane Gemmani, who confessed he was still in two minds whether to show up “nude or not”. Caught in the crossfire, lifeguards downed tools this week saying they weren’t able to focus on their job and the two pools were shut despite the heatwave. "We are working towards a positive solution" to the problem, said the town hall, which has made it clear it has no intention of lifting the burkini ban despite the heatwave. The pro-burkini group said it had decided to act after 630 people signed a petition asking for the rules to be changed so Muslim women could bathe in public baths. liberté de conscience. Libre accès aux services publics. #burkini #BurkiNiqueLesXenophobes pic.twitter.com/e1CG3qc0sl — AllianceCitoyenne (@alliancecitoyen) June 23, 2019 Adrien Roux, national head of the Citizen’s Alliance, said: “(The mayor) hasn’t uttered a word on the fact that due to their religious beliefs, hundreds of Muslim women can’t go swimming. Republican principles should protect their freedom of conscience: a public service must be open to all,” he told Le Figaro. “Some think these are Islamists who want to wreak havoc in France. They are just asking for the rules to take into account diversity” as is the case in the town of Rennes, northern France, or Germany and the Netherlands, he said. But Amine El-Khatmi, president of secularist group Republican Spring, retorted: “These are not poor Muslim mums wilting in the heat but political militants at work." “Next time, it will be: 'We want to book the whole pool because we can’t bathe with others',” she warned. Matthieu Chamussy of the opposition Right-wing Republicans party, said: "Political Islam is moving forward step by step and the cause of women receding." Nouvelle intrusion en maillot couvrant à #Grenoble . Action coup de poing menée ce jour à la piscine Jean Bron. Le règlement municipal n’est plus appliqué, l’islamisme politique avance pas à pas, la cause des femmes recule. @EricPiolle que faites-vous? pic.twitter.com/CsOuxS05QC — Matthieu Chamussy (@m_chamussy) June 23, 2019 Marlène Schiappa, the gender equality minister, was more nuanced. She said she was against “community segregation” by a “tiny minority” and that the message behind was to “create a new norm: cover yourself”. But she added that the debate should not lead to discrimination and that "women, whatever their religion or way of life, should be able to access municipal baths". The mayor said the row had gone over his head and called for the state to intervene to “remove all ambiguity on the status of body-covering swimming costumes”. France - the country with Europe's largest Muslim population - was the first European country to ban the full veil in public spaces in 2011. However, it is up to municipalities to fix the rules on the burkini. The garment was at the heart of a standoff in several French seaside towns three years ago. Some towns banned the garment, claiming it was a security threat, only to have the bans later overturned by a court. Want the best of The Telegraph direct to your email and WhatsApp? Sign up to our free twice-daily Front Page newsletter and new audio briefings . |
Amazon Web Services to boost Argentina presence with data 'Edge
By Cassandra Garrison
BUENOS AIRES, June 27 (Reuters) - Amazon Web Services (AWS), a unit of Amazon.com Inc, said on Thursday it will bolster its presence in Latin America with an "Edge" location in Argentina, its first in the country that will help speed up use for local users.
The so-called "Edge," to be located in capital Buenos Aires, where AWS opened an office in April 2018, will help deliver data, videos and applications at higher speeds and improve cyber security, the company said.
An AWS spokeswoman declined to reveal the investment amount or how many jobs the location would create but said it would "indirectly generate positions and support to local workforce development."
"We are always opening positions in the local market," the spokeswoman said.
The location, which will be the seventh in Latin America, will go online this year. In March, AWS announced that Colombia would be its sixth Edge location. The others are in Sao Paolo and Rio de Janeiro.
The announcement comes amid speculation about where in the region the tech giant will install its next data center, which would allow local companies and governments to store information on the cloud. Chile and Argentina are vying for Amazon's investment.
In April, AWS said it will help astronomers in Chile crunch data gleaned from telescopes using its cloud computing services.
AWS is a fast-growing part of Amazon's overall business. In the first quarter of 2019, it reported revenue of $7.7 billion, up by 41 percent over the same period a year ago, accounting for nearly 13 percent of Amazon's overall sales. (Reporting by Cassandra Garrison; Editing by Steve Orlofsky) |
Is Severn Trent Plc (LON:SVT) Potentially Underrated?
Want to participate in ashort research study? Help shape the future of investing tools and you could win a $250 gift card!
Severn Trent Plc (LON:SVT) is a stock with outstanding fundamental characteristics. When we build an investment case, we need to look at the stock with a holistic perspective. In the case of SVT, it is a dependable dividend-paying company with a an impressive track record of delivering benchmark-beating performance. Below is a brief commentary on these key aspects. For those interested in understanding where the figures come from and want to see the analysis, take a look at thereport on Severn Trent here.
Over the past year, SVT has grown its earnings by 32%, with its most recent figure exceeding its annual average over the past five years. In addition to beating its historical values, SVT also outperformed its industry, which delivered a growth of 5.2%. This is an notable feat for the company.
For those seeking income streams from their portfolio, SVT is a robust dividend payer as well. Over the past decade, the company has consistently increased its dividend payout, reaching a yield of 4.5%.
For Severn Trent, there are three pertinent aspects you should further research:
1. Future Outlook: What are well-informed industry analysts predicting for SVT’s future growth? Take a look at ourfree research report of analyst consensusfor SVT’s outlook.
2. Financial Health: Are SVT’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 Attractive Alternatives: Are there other well-rounded stocks you could be holding instead of SVT? 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. |
This High-Yield Dividend Stock Could Be 20% Undervalued
Shares of Williams Companies (NYSE: WMB) have already rallied about 25% this year. However, the natural gas pipeline giant's stock could have even more upside, with one analyst believing it remains undervalued by as much as 20%. That untapped upside adds to Williams Companies' appeal, since it also pays its investors an above-average dividend that currently yields 5.5%. Because of that, investors are getting paid very well to wait for that upside to materialize. A light bulb next to stacks of coins and a calculator. Image source: Getty Images. Drilling down into the sum of the parts An analyst at Raymond James recently upgraded Williams Companies stock from "outperform" to "strong buy," while setting a $32 share price target -- about 16% above its current trading price. The main factor driving that bullish view is the analyst's belief that Williams trades at a 20% discount to its "sum-of-the-parts" value, which is an approximation of what the company would be worth if it was broken up and sold off in pieces. Williams' recent asset sales help back up that view. The company has completed three transactions involving gathering and processing assets over the past year, two of which were with strategic buyers while the other was with a pension fund . On average, the company sold these assets for about 14 times their EBITDA . These transaction values suggest that Williams' remaining gathering and processing assets could also be worth 14 times their EBITDA, if not more, since its Northeast gathering and processing operations are on track to growth their EBITDA at a 15% compound annual rate through 2021. For perspective, Williams Companies currently trades at an enterprise value to EBITDA multiple of about 11.5 times. In addition to its valuable gathering and processing business, Williams owns the Transco pipeline system, which is the nation's largest natural gas pipeline by volume. The nearly 1,800-mile pipeline, which stretches from South Texas to New York City, has been rapidly expanding over the years. That has enabled the company to more than double the revenue it collects from this system in the last decade. Meanwhile, Williams has more growth coming down the pipeline, which should expand the system's revenue from its current level of less than $2 billion per year up to its target of $2.5 billion by 2022. This pipeline system's size and growth potential make it an extremely valuable asset. Story continues Williams Companies also owns several other midstream assets, including infrastructure supporting deepwater oil and gas production in the Gulf of Mexico and natural gas pipelines systems in Florida and the Northwest. These assets provide the company with predictable cash flow and growth potential. As such, they could be worth more than the market currently values them as part of Williams. An energy complex in the form of two people shaking hands. Image source: Getty Images. Private equity continues to pay a premium for midstream assets While the public market value for midstream companies remains well below the historical average, private valuations are red hot. That's because private equity funds have loads of cash that they're using to buy midstream assets. For example, last year oil giant Occidental Petroleum (NYSE: OXY) sold an oil pipeline system and export facility associated with the fast-growing Permian Basin to a private equity-backed company for 14 times EBITDA. That's well above the 8 to 12 multiple these businesses typically fetch in a sale. Occidental Petroleum is likely hoping that it can net a similar premium when it sells a portion of its stake in an MLP it will soon inherit . Oil and gas producer Devon Energy (NYSE: DVN) experienced something similar when it sold its stake in EnLink Midstream (NYSE: ENLC) last year to a private equity fund. Devon was able to get $3.125 billion for its majority interest in EnLink Midstream, valuing the company at 12 times cash flow. For perspective, Devon Energy's valuation at the time was a mere seven times cash flow, which showed just how much more valuable some of its parts were to a private market investor. Private equity funds don't seem to have any problem paying a premium price for midstream assets, which helps support the view that Williams' deserves a higher market valuation. Proving its value Williams Companies has sold more than $5 billion in assets since 2017. While the main purpose of those sales has been to improve its balance sheet, the company has also been able to cash in on the premium price buyers were willing to pay for these assets. These sales by Williams and others support the view that Williams trades at a discount to the underlying value of its assets. Shares of the company could therefore have significant future upside as the market narrows this valuation gap. That could enable investors to earn some big-time total returns when adding the company's high-yielding dividend. More From The Motley Fool 10 Best Stocks to Buy Today The $16,728 Social Security Bonus You Cannot Afford to Miss 20 of the Top Stocks to Buy (Including the Two Every Investor Should Own) What Is an ETF? 5 Recession-Proof Stocks How to Beat the Market Matthew DiLallo has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy . |
EMERGING MARKETS-Brazil's real, stocks weaken on pension reform concerns
June 27 (Reuters) - Brazil's real weakened on Thursday, hit by concerns about the passage of the country's pension reform bill and economic growth, while uncertainty ahead of U.S.-China talks at the G20 summit hindered gains in other Latin American currencies. The real fell about 0.6% to hit a weekly low against the dollar after a Brazilian special congressional pension committee canceled a meeting that would have given its verdict on the government's signature bill, a legislative aide said. The move makes it more difficult to put the bill to a plenary vote before parliament breaks for recess on July 18, further delaying the much-needed reforms to revive economic growth. Adding to woes, Brazil's central bank slashed its 2019 economic growth forecast to 0.8% from 2.0% and said growth is likely to be lower than previously expected through 2021. Sao Paulo-listed shares fell 0.8%, with banking stocks such as Itau Unibanco Holding and Banco Bradesco, sensitive to news on pension reforms, leading declines. The biggest gainer was Grupo Pao de Acucar, which jumped over 10% after its parent French retailer Casino announced a restructuring plan for the Brazilian subsidiary. The Mexican peso and other currencies in the region edged lower amid uncertainty about trade talks between the U.S. and Chinese leaders at the G20 Summit. Mexico's central bank is expected to hold its benchmark interest rate steady at 8.25%, according to a Reuters poll, as annual inflation slowed this month despite signs of weakness in the economy. Banxico will publish its monetary policy statement on Thursday at 1 p.m. local time (1800 GMT). "While growth keeps disappointing and inflation converges slowly towards Banxico's inflation target, the lack of clarity regarding Pemex's business plan will likely keep Banxico on the sidelines and wait for further confirmation of core inflation easing," Morgan Stanley analysts wrote in a note. The peso has been hit hard by concerns about trade with the United States and well as credit rating downgrade on the debt-laden state oil company Pemex. Latin American stock indexes and currencies at 1400 GMT Stock indexes daily % Latest change MSCI Emerging Markets 1053.82 0.56 MSCI LatAm 2808.46 -1.22 Brazil Bovespa 99628.25 -1.05 Mexico IPC 43612.54 -0.41 Chile IPSA - - Argentina MerVal - - Colombia IGBC 12679.14 0.59 Currencies daily % change Latest Brazil real 3.8711 -0.64 Mexico peso 19.1700 -0.23 Chile peso 678.9 0.01 Colombia peso 3194.2 -0.40 Peru sol - - Argentina peso 42.7500 -0.43 (interbank) (Reporting by Sruthi Shankar in Bengaluru; Editing by Cynthia Osterman) |
Protect your home with the Amazon Cloud Cam — on sale for $30 off
TL;DR:The intuitiveAmazon Cloud Camsecurity camera is on sale for $89.99, down from $119.99.
Like most people, you probably store some pretty valuable stuff in your home. Unfortunately, you can’t constantly be there to watch over everything — you’ve got a life, we get it. But asecurity cameracan be your eyes and ears while you’re away.
TheAmazon Cloud Camhas tons of reviews sharing stories of caught thieves and stopped fires, and right now you can grab the security cameraon sale for $30 off, bring the price down to $89.99.
With this camera, you can stay connected 24/7 and catch activity as it happens, with the ability to watch, download, and share 1080p Full HD video clips. You’ll also get notifications when motion and activity are detected.Read more...
More aboutSecurity Camera,Home Security,Mashable Shopping,Amazon Cloud Cam, andTech |
A Spotlight On Severn Trent Plc's (LON:SVT) Fundamentals
Want to participate in ashort research study? Help shape the future of investing tools and you could win a $250 gift card!
Attractive stocks have exceptional fundamentals. In the case of Severn Trent Plc (LON:SVT), there's is a notable dividend-paying company with a a strong history of delivering benchmark-beating performance. In the following section, I expand a bit more on these key aspects. If you're interested in understanding beyond my broad commentary, read the fullreport on Severn Trent here.
Over the past year, SVT has grown its earnings by 32%, with its most recent figure exceeding its annual average over the past five years. In addition to beating its historical values, SVT also outperformed its industry, which delivered a growth of 5.2%. This is what investors like to see!
SVT is also a dividend company, with ample net income to cover its dividend payout, which has been consistently growing over the past decade, keeping income investors happy.
For Severn Trent, I've compiled three relevant aspects you should further examine:
1. Future Outlook: What are well-informed industry analysts predicting for SVT’s future growth? Take a look at ourfree research report of analyst consensusfor SVT’s outlook.
2. Financial Health: Are SVT’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 Attractive Alternatives: Are there other well-rounded stocks you could be holding instead of SVT? 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. |
India wins U.S. solar case at WTO but impact disputed
By Tom Miles
GENEVA (Reuters) - India won a World Trade Organization challenge to solar industry incentives in eight U.S. states on Thursday, although the United States told the panel the ruling would have little or no impact.
India brought the dispute to the WTO in 2016 after a successful U.S. challenge to India's own solar power policies, which Washington said had cut U.S. solar exports to India by more than 90%.
The WTO panel upheld India's claim that California, Connecticut, Delaware, Massachusetts, Michigan, Minnesota, Montana and Washington had broken the rules by incentivising the use of local content, thereby discriminating against Indian and other imported solar suppliers.
But the WTO's ruling included U.S. arguments which suggested India's complaint would have little, if any, effect.
"First, India appears to have no significant trading interest in the measures at issue in this dispute. Second, most of the measures at issue are no longer in legal effect or are due to expire within the next two years, as India is aware," the United States said.
"Third, records confirm that nearly half of the measures at issue have fallen into general disuse and are essentially moribund," it added.
In its legal arguments, India said that it was not relevant whether there had been an actual financial contribution and that it could not be expected to wait until there was a payment under one of the disputed subsidies to bring a WTO dispute.
(Reporting by Tom Miles; editing by Stephanie Nebehay and Alexander Smith) |
Ahead Of G-20 Summit, Leveraged China ETF Stirs
Geopolitical events and the related headlines are often the ideal catalysts for leveraged regional and single-country exchange traded funds. With the G-20 summit looming, the time could be right for theDirexion Daily FTSE China Bull 3X Shares(NYSE:YANG).
What Happened
President Donald Trump and Chinese President Xi Jinping will meet at the G-20 summit in Japan, a get together that is widely expected to bring muchanticipated reliefto the trade tensions between the world's two largest economies.
“What remains far more crucial about this meeting is whether it helps steer the increasingly complex relationship back on a familiar course or whether it stirs winds and currents that sweep us further off into uncharted waters,”according to a recent noteby Christopher Smart of the Barings Investment Institute.
YANG attempts to delivertriple the daily returnsof the FTSE China 50 Index, a popular gauge of Chinese large caps trading in Hong Kong.
Why It's Important
Ahead of the G-20 meeting, there have some signs traders are betting on a favorable outcome and are using the triple-leveraged YANG to make those bets.
On Tuesday, YANG saw inflows of $2.45 million, a total exceeded by just seven other Direxion leveraged ETFs, according to issuer data. That brought YANG's five-day inflow total to $4.80 million, good for seventh-best among Direxion's leveraged funds.
YANG's underlying index allocates over 45% of its weight to financial services stocks, but the fund has adequate leverage to some tariff-sensitive sectors, including communication services, consumer discretionary and technology.
What's Next
Given his penchant for harsh rhetoric aimed at China, President Trump could find the meeting with Xi not to be to his liking and talks deteriorate from there. Not saying that is going to happen, but traders can make that bet with YANG's bearish counterpart, theDirexion Daily FTSE China 3X Bear Shares(NYSE:YINN). YINN tries to deliver triple the daily inverse returns of the FTSE China 50 Index.
In what may prove to be a positive sign, there has not recently been much in the way of unusual activity in the bearish YINN, according to Direxion data. YINN is up nearly 2% this week.
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Voya Financial Up 33% Year to Date: Will the Rally Continue?
Voya Financial Inc.’s VOYA shares have surged 33.3% year to date, outperforming the industry's rise of 17.1% and Zacks S&P 500 composite’s increase of 15.1%. With market capitalization of $7.7 billion, average volume of shares traded in the last three months was 1.4 million.
Voya Financial has been benefiting from its focus on high-growth, high-return, capital-light businesses, solid market presence and cost-savings initiatives. The company remains committed to its goal of annual EPS growth of at least 10% in each of the next three years (2019-2021). The company has a favorable Growth Score of B. This style score analyzes the growth prospects of a company.Voya’s core businesses — Retirement, Investment Management and Employee Benefits — are expected to drive the company’s earnings. While industry experts estimate retirement industry assets to grow 3-4% on average over the next three years, Voya expects its Retirement business to boost earnings by 4% to 7% (over the three year period ending 2021). Expansion of distribution network and achievement of efficiencies through automation should help the company outperform the industry.Further, Investment Management earnings are expected to grow 5% to 8% (over the 3-year period ending with 2021.) while Employee Benefits earnings are expected to increase in the range of 7% to 10% (from 2019-2021).Voya is also on track to achieve $230 million to $250 million in annual rate cost savings by the end of 2020.Return on equity — a measure of profitability — is 8.5%, better than the industry average of 8.3%. This reflects the company’s prudent usage of its shareholders’ funds.Voya Financial boasts a solid capital position with risk-based capital ratio of 475%, above the new target of 400%. Its free cash flow conversion is currently 85% to 95%, supporting the projected free cash flow yield of nearly 10%.The company has a solid capital management that helps it enhance shareholders value. While the company has a $500 million share buyback authorization, its dividend currently yields 0.1%. Voya targets a dividend yield of at least 1% in third quarter of 2019.Voya Financial delivered positive earnings surprise in three of the last four reported quarters with the average beat being 5.03%. It currently has a Zacks Rank #3 (Hold).The consensus mark for earnings translates into year-over-year improvement of 36.1% for 2019 and 15.3% for 2020.Voya Financial has a favorable VGM Score of B. This style score analyzes the growth prospects of a company. This style score helps identify stocks with the most attractive value, best growth, and most promising momentum.Stocks to ConsiderSome better-ranked stocks in the life insurance industry are American Equity Investment Life Holding Company AEL, Lincoln National Corporation LNC and FGL Holdings FG. Each of these stocks carries a Zacks Rank #2 (Buy). You can seethe complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.American Equity provides life insurance products and services in the United States. The company delivered positive surprise of 6.59% in the last reported quarter.Lincoln National operates multiple insurance and retirement businesses in the United States.. The company delivered positive surprise of 2.88% in the last reported quarter.FGL Holdings sells individual life insurance products and annuities in the United States. The company delivered positive surprise of 23.33% in the last reported quarter.Breakout Biotech Stocks with Triple-Digit Profit PotentialThe biotech sector is projected to surge beyond $775 billion by 2024 as scientists develop treatments for thousands of diseases. They’re also finding ways to edit the human genome to literally erase our vulnerability to these diseases.Zacks has just released Century of Biology: 7 Biotech Stocks to Buy Right Now to help investors profit from 7 stocks poised for outperformance. Our recent biotech recommendations have produced gains of +98%, +119% and +164% in as little as 1 month. The stocks in this report could perform even better.
See these 7 breakthrough stocks now>>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days.Click to get this free reportLincoln National Corporation (LNC) : Free Stock Analysis ReportAmerican Equity Investment Life Holding Company (AEL) : Free Stock Analysis ReportVoya Financial, Inc. (VOYA) : Free Stock Analysis ReportFGL Holdings (FG) : Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment Research |
Q1 GDP Remains Unchanged
The final look atQ1 GDP is 3.1%. This remains a very good number. Because it is a lagging indicator (at this point), we don’t see things like the prolonged U.S.-China trade war showing up much in the data — in fact, it could be argued that positive aspects of Q1 GDP amounted to squirreling away assets ahead of the down times economically that the trade war brought about.
What the Fed — you know, that governing body that decides interest rates — pays closer attention to is thePersonal Consumption Expenditures (PCE), which came in lighter than expected at +0.9%. Consensus had this at +1.3%. But “core” PCE — stripping out volatile commodity costs — came in at +1.2%, close to in-line.
Initial Jobless Claimsstepped out of its long-term (and extremely strong) 200-225K range, posting 227K new claims last week. This follows the 216K reported a week ago. It seems the sub-200K days may be behind us, but anything under 250K can still be viewed as positive for the domestic workforce. Also, let’s not jump at a single data point as evidence of anything — first we must establish a higher weekly claims rate overall before deciding the peak of U.S. employment has passed.
Continuing Claimswere also higher — 1.688 million versus 1.665 million last time — but still in-line with historical awesomeness. Not until these numbers begin approaching 2 million on a given week should we be concerned about the long-term unemployed.
In other news, an additional problem has emerged ahead of the re-launch ofBoeing’sBA 737 MAX: in a simulator test, its runway stabilizer malfunctioned. Analysts have discussed the need to replace the plane’s microprocessor, which would further delay the plane’s certification. Not welcome news for what investors had been hoping would be a clean return to Boeing’s revenue stream.
President Trump arrived in Osaka, Japan this morning, ahead of theG-20 summit. The meeting of the top 20 economies in the world is taking a back seat, however, to the prospect of Trump and China’s President Xi Jinping holding a private meeting Saturday. There are hopes the trade war between the U.S. and China may get back on track — if not to an actual deal, at least a temporary truce being arrived at.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days.Click to get this free reportThe Boeing Company (BA) : Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment Research |
STM Group (LON:STM) Shareholders Have Enjoyed An Impressive 137% Share Price Gain
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STM Group Plc(LON:STM) shareholders might be concerned after seeing the share price drop 13% in the last month. But that doesn't change the fact that shareholders have received really good returns over the last five years. Indeed, the share price is up an impressive 137% in that time. To some, the recent pullback wouldn't be surprising after such a fast rise. Only time will tell if there is still too much optimism currently reflected in the share price.
See our latest analysis for STM Group
There is no denying that markets are sometimes efficient, but prices do not always reflect underlying business performance. By comparing earnings per share (EPS) and share price changes over time, we can get a feel for how investor attitudes to a company have morphed over time.
During the last half decade, STM Group became profitable. That kind of transition can be an inflection point that justifies a strong share price gain, just as we have seen here. Since the company was unprofitable five years ago, but not three years ago, it's worth taking a look at the returns in the last three years, too. We can see that the STM Group share price is up 5.0% in the last three years. During the same period, EPS grew by 16% each year. This EPS growth is higher than the 1.6% average annual increase in the share price over the same three years. So you might conclude the market is a little more cautious about the stock, these days. This unenthusiastic sentiment is reflected in the stock's reasonably modest P/E ratio of 6.77.
The company's earnings per share (over time) is depicted in the image below (click to see the exact numbers).
Thisfreeinteractive report on STM Group'searnings, revenue and cash flowis a great place to start, if you want to investigate the stock further.
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. It's fair to say that the TSR gives a more complete picture for stocks that pay a dividend. As it happens, STM Group's TSR for the last 5 years was 168%, which exceeds the share price return mentioned earlier. This is largely a result of its dividend payments!
STM Group shareholders are down 23% for the year (even including dividends), but the market itself is up 1.7%. Even the share prices of good stocks drop sometimes, but we want to see improvements in the fundamental metrics of a business, before getting too interested. On the bright side, long term shareholders have made money, with a gain of 22% per year over half a decade. It could be that the recent sell-off is an opportunity, so it may be worth checking the fundamental data for signs of a long term growth trend. Most investors take the time to check the data on insider transactions. You canclick here to see if insiders have been buying or selling.
But note:STM Group may not be the best stock to buy. So take a peek at thisfreelist of interesting companies with past earnings growth (and further growth forecast).
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on GB exchanges.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
Amazon Web Services to boost Argentina presence with data 'Edge'
By Cassandra Garrison
BUENOS AIRES (Reuters) - Amazon Web Services (AWS), a unit of Amazon.com Inc, said on Thursday it will bolster its presence in Latin America with an "Edge" location in Argentina, its first in the country that will help speed up use for local users.
The so-called "Edge," to be located in capital Buenos Aires, where AWS opened an office in April 2018, will help deliver data, videos and applications at higher speeds and improve cyber security, the company said.
Jeffrey Kratz, AWS's general manager for public sector in Latin America, Canada and Caribbean, said the investment in Argentina was worth "millions of dollars of infrastructure" and that Edge locations had been shown to boost the performance of internet services as much as 90 percent.
Kratz also said that uncertainty about the outcome of Argentina's presidential election in October was not a factor in the choice of Buenos Aires as an Edge location, adding that AWS works with more than 7,000 governments around the world.
"What drives us is what the customers are asking - not necessarily [whether it is ] an election year or not," Kratz said in an interview with Reuters.
The location, which will be the seventh in Latin America, will go online this year. In March, AWS announced that Colombia would be its sixth Edge location. The others are in Sao Paolo and Rio de Janeiro.
An AWS spokeswoman declined to say how many jobs the Buenos Aires location would create but said it would "indirectly generate positions and support to local workforce development."
"We are always opening positions in the local market," the spokeswoman said.
The announcement comes amid speculation about where in the region the tech giant will install its next data center, which would allow local companies and governments to store information on the cloud. Chile and Argentina are vying for Amazon's investment.
Kratz said there would be "no announcements today" when asked about future plans for a data center in Chile or Argentina.
In April, AWS said it will help astronomers in Chile crunch data gleaned from telescopes using its cloud computing services.
AWS is a fast-growing part of Amazon's overall business. In the first quarter of 2019, it reported revenue of $7.7 billion, up by 41 percent over the same period a year ago, accounting for nearly 13 percent of Amazon's overall sales.
(Reporting by Cassandra Garrison; Editing by Steve Orlofsky) |
Walgreens Boots (WBA) Q3 Earnings Top Estimates, Margins Dip
Walgreens Boots Alliance, Inc.WBA reported adjusted earnings per share (EPS) of $1.47 for third-quarter fiscal 2019, down 3.9% year over year (down 2.4% at constant exchange rate or CER). However, the figure exceeded the Zacks Consensus Estimate by 3.5%.
On a reported basis, net earnings came in at $1 billion, reflecting a 23.6% decline from the prior-year quarter. Reported EPS came in at $1.13, down 16.2% on a year-over-year basis.
Sluggishness in Retail Pharmacy International and margin contractions put pressure on the bottom line during the quarter.
Total Sales
Walgreens Boots recorded total sales of $34.59 billion in the fiscal third quarter, up 0.7% year over year and 2.9% at constant exchange rate or CER. The top line edged pastthe Zacks Consensus Estimate of $34.53 billion. Year-over-year growth was led by improvements within the Retail Pharmacy USA and Pharmaceutical Wholesale divisions, partially offset by a dull performance within Retail Pharmacy International.
Segments in Detail
Walgreens Boots reports through three segments: Retail Pharmacy USA, Retail Pharmacy International and Pharmaceutical Wholesale.
Retail Pharmacy USA
The segment’s sales came in at $26.5 billion in the third quarter, highlighting an improvement of 2.3% year over year. Excluding the impact of store optimization following the acquisition of Rite Aid stores, organic sales growth was 2.9% year over year.
Walgreens Boots Alliance, Inc. Price, Consensus and EPS Surprise
Walgreens Boots Alliance, Inc. price-consensus-eps-surprise-chart | Walgreens Boots Alliance, Inc. Quote
Pharmacy sales, accounting for 73.9% of the Retail Pharmacy USA division’s sales in the quarter, increased 4.3% from the year-ago quarter on higher brand inflation, prescription volume and growth in central specialty. Pharmacy sales at comparable stores improved 6% while prescriptions filled in comparable stores rose 4.7% year over year in the quarter. The impact of store optimization following the acquisition of Rite Aid stores caused a 2.9% dip in retail sales. Comparable retail sales slid 1.1% year over year.
Retail Pharmacy International
Revenues at the Retail Pharmacy International division decreased 7.3% on a year-over-year basis to $2.8 billion in the fiscal third quarter. Sales were down 1.6% at CER considering a 1% slip in Boots UK.
In the United Kingdom, comparable pharmacy sales inched up 0.8% and comparable retail sales declined 2.6% in the reported quarter.
Pharmaceutical Wholesale
The Pharmaceutical Wholesale division’s quarterly sales were $5.9 billion, down 1.7% year over year (up 8.3% at CER, banking on growth in the emerging markets).
Margins
Gross profit in the reported quarter fell 4.2% year over year to $7.45 billion. However, gross margin contracted 111 basis points (bps) to 21.5%.
Selling, general and administrative (SG&A) expenses remained relatively flat year over year at $6.24 billion. Adjusted operating income deteriorated 21.2% to $1.21 billion. Overall, operating margin shrank 98 bps to 3.5%.
Financial Condition
Walgreens Boots exited the fiscal third quarter with cash and cash equivalents of $839 million compared with $818 million at the end of second-quarter fiscal 2019. Long-term debt was $12.13 billion compared with $12.69 billion at the end of the fiscal second quarter. Year to date, the company generated operating cash flow of $3.22 billion compared with $5.45 billion in the year-ago period.
Guidance Intact
Walgreens Boots maintained its earlier-provided adjusted EPS guidance for fiscal 2019, flat with the year-ago period’s figure at CER.The Zacks Consensus Estimate for this metric is pegged at $5.99.
Our Take
Walgreens Boots’ fiscal third quarter adjusted earnings as well as revenues outpaced the respective Zacks Consensus Estimate.
Overall, the Retail Pharmacy USA division witnessed comparable prescription growth and also benefited from a strong retail prescription market. Within this segment, Walgreens Boots has been making a good progress on account of expanding prescription volumes. Meanwhile, tough market conditions, particularly in retail, have been inducing sluggishness in the Retail Pharmacy International division. However, the company is taking steps to accelerate the digitalization and transformation initiatives of its business. Margin pressure persists as a major overhang on the stock.
Zacks Rank & Key Picks
Walgreens currently carries a Zacks Rank #4 (Sell).
Some better-ranked stocks in the broader medical space are Cerner Corporation CERN, Penumbra PEN and The Cooper Companies COO, each with a Zacks Rank #2 (Buy). You can seethe complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Cerner’s long-term earnings growth rate is expected to be 13.5%.
Penumbra’s long-term earnings growth rate is projected at 21.5%.
Cooper Companies’ long-term earnings growth rate is estimated at 10.8%.
Breakout Biotech Stocks with Triple-Digit Profit PotentialThe biotech sector is projected to surge beyond $775 billion by 2024 as scientists develop treatments for thousands of diseases. They’re also finding ways to edit the human genome to literally erase our vulnerability to these diseases.Zacks has just released Century of Biology: 7 Biotech Stocks to Buy Right Now to help investors profit from 7 stocks poised for outperformance. Our recent biotech recommendations have produced gains of+98%,+119%and+164%in as little as 1 month. The stocks in this report could perform even better.See these 7 breakthrough stocks now>>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days.Click to get this free reportCerner Corporation (CERN) : Free Stock Analysis ReportPenumbra, Inc. (PEN) : Free Stock Analysis ReportThe Cooper Companies, Inc. (COO) : Free Stock Analysis ReportWalgreens Boots Alliance, Inc. (WBA) : Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment Research |
If You Like EPS Growth Then Check Out Steppe Cement (LON:STCM) Before It's Too Late
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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. Unfortunately, high risk investments often have little probability of ever paying off, and many investors pay a price to learn their lesson.
So if you're like me, you might be more interested in profitable, growing companies, likeSteppe Cement(LON:STCM). Now, I'm not saying that the stock is necessarily undervalued today; but I can't shake an appreciation for the profitability of the business itself. In comparison, loss making companies act like a sponge for capital - but unlike such a sponge they do not always produce something when squeezed.
Check out our latest analysis for Steppe Cement
In business, though not in life, profits are a key measure of success; and share prices tend to reflect earnings per share (EPS). So like a ray of sunshine through a gap in the clouds, improving EPS is considered a good sign. It is therefore awe-striking that Steppe Cement's EPS went from US$0.0056 to US$0.041 in just one year. When you see earnings grow that quickly, it often means good things ahead for the company.
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. The good news is that Steppe Cement is growing revenues, and EBIT margins improved by 11 percentage points to 16%, over the last year. That's great to see, on both counts.
In the chart below, you can see how the company has grown earnings, and revenue, over time. For finer detail, click on the image.
Steppe Cement isn't a huge company, given its market capitalization of US$60m. That makes it extra important to check on itsbalance sheet strength.
I always like to check up on CEO compensation, because I think that reasonable pay levels, around or below the median, can be a sign that shareholder interests are well considered. For companies with market capitalizations under US$200m, like Steppe Cement, the median CEO pay is around US$321k.
The Steppe Cement CEO received total compensation of only US$30k in the year to December 2018. You could consider this pay as somewhat symbolic, which suggests the CEO does not need a lot of compensation to stay motivated. CEO remuneration levels are not the most important metric for investors, but when the pay is modest, that does support enhanced alignment between the CEO and the ordinary shareholders. It can also be a sign of good governance, more generally.
Steppe Cement's earnings have taken off like any random crypto-currency did, back in 2017. With rocketing profits, its seems likely the business has a rosy future; and it may have hit an inflection point. Meanwhile, the very reasonable CEO pay reassures me a little, since it points to an absence profligacy. So Steppe Cement looks like it could be a good quality growth stock, at first glance. That's worth watching. While we've looked at the quality of the earnings, we haven't yet done any work to value the stock. So if you like to buy cheap, you may want tocheck if Steppe Cement is trading on a high P/E or a low P/E, relative to its industry.
You can invest in any company you want. But if you prefer to focus on stocks that have demonstrated insider buying, here isa list of companies with insider buying in the last three months.
Please note the insider transactions discussed in this article refer to reportable transactions in the relevant jurisdiction
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
What Investors Should Know About Southwest Gas Holdings, Inc.'s (NYSE:SWX) Financial Strength
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Small-cap and large-cap companies receive a lot of attention from investors, but mid-cap stocks like Southwest Gas Holdings, Inc. (NYSE:SWX), with a market cap of US$4.8b, are often out of the spotlight. However, history shows that overlooked mid-cap companies have performed better on a risk-adjusted manner than the smaller and larger segment of the market. This article will examine SWX’s financial liquidity and debt levels to get an idea of whether the company can deal with cyclical downturns and maintain funds to accommodate strategic spending for future growth. Note that this information is centred entirely on financial health and is a top-level understanding, so I encourage you to look furtherinto SWX here.
View our latest analysis for Southwest Gas Holdings
SWX's debt levels surged from US$2.0b to US$2.3b over the last 12 months , which accounts for long term debt. With this growth in debt, SWX's cash and short-term investments stands at US$97m , ready to be used for running the business. On top of this, SWX has generated cash from operations of US$536m in the last twelve months, resulting in an operating cash to total debt ratio of 23%, indicating that SWX’s operating cash is sufficient to cover its debt.
At the current liabilities level of US$974m, it appears that the company may not be able to easily meet these obligations given the level of current assets of US$830m, with a current ratio of 0.85x. The current ratio is the number you get when you divide current assets by current liabilities.
With debt reaching 96% of equity, SWX may be thought of as relatively highly levered. This is not unusual for mid-caps as debt tends to be a cheaper and faster source of funding for some businesses. 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 SWX's case, the ratio of 3.78x suggests that interest is appropriately covered, which means that lenders may be inclined to lend more money to the company, as it is seen as safe in terms of payback.
Although SWX’s debt level is towards the higher end of the spectrum, its cash flow coverage seems adequate to meet debt obligations which means its debt is being efficiently utilised. But, its 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 SWX has been performing in the past. I suggest you continue to research Southwest Gas Holdings to get a better picture of the stock by looking at:
1. Future Outlook: What are well-informed industry analysts predicting for SWX’s future growth? Take a look at ourfree research report of analyst consensusfor SWX’s outlook.
2. Historical Performance: What has SWX'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 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. |
Supreme Court Redistricting Decision Could Reshape Politics
The Supreme Court dealt a huge blow to efforts to combat the drawing of electoral districts for partisan gain on Thursday in a ruling that could embolden political line-drawing after the 2020 census.
On the court’s final day of decisions before a summer break, the conservative justices ruled that federal courts have no role to play in the dispute over the practice known as partisan gerrymandering. The next round of redistricting will take place in 2021, once census results are available.
In another politically charged case decided Thursday, the court blocked for now the Trump administration’s effort to add a citizenship question to the next census. It’s unclear whether the Trump administration has time to address the court’s concerns. Printing of census forms is supposed to begin next week.
There was no immediate response from the White House on either Supreme Court decision Thursday.
In the redistricting case, voters and elected officials should be the arbiters of what is a political dispute, Chief Justice John Roberts said in his opinion for the court.
The court rejected challenges to Republican-drawn congressional districts in North Carolina and a Democratic district in Maryland.
“Our conclusion does not condone excessive partisan gerrymandering,” Roberts wrote, acknowledging that the North Carolina and Maryland maps are “highly partisan.”
But he said courts are the wrong place to settle these disputes.
In a dissent for the four liberals, Justice Elena Kagan wrote, “For the first time ever, this court refuses to remedy a constitutional violation because it thinks the task beyond judicial capabilities.” Kagan, in mournful tones, read a summary of her dissent in court to emphasize her disagreement.
Federal courts in five states concluded that redistricting plans put in place under one party’s control could go too far and that there were ways to identify and manage excessively partisan districts. Those courts included 15 federal judges appointed by Republican and Democratic presidents reaching back to Jimmy Carter.
But the five Republican-appointed justices decided otherwise.
The decision effectively reverses the outcome of rulings in Maryland, Michigan, North Carolina and Ohio, where courts had ordered new maps drawn, and ends proceedings in Wisconsin, where a retrial was supposed to take place this summer after the Supreme Court last year threw out a decision on procedural grounds.
Critics of partisan manipulation of electoral maps say that when one party controls redistricting, it can exaggerate and entrench its power, even in states that are otherwise closely divided between Republicans and Democrats.
Republicans were the big beneficiaries of the most recent round of redistricting in 2011, following the once-a-decade census, because they scored resounding victories in the 2010 elections.
The court was examining two cases, from Maryland and North Carolina, with strong evidence that elected officials charged with drawing and approving congressional districts acted for maximum partisan advantage. In North Carolina, Republicans ran the process and sought to preserve a 10-3 split in the congressional delegation in favor of the GOP, even as statewide races are usually closely divided. In Maryland, Democrats controlled redistricting and sought to flip one district that had been represented by a Republican for 20 years.
Both plans succeeded, and lower courts concluded that the districts violated the Constitution.
Proponents of limiting partisan gerrymandering still have several routes open to them. Among those are challenges in state courts, including a pending North Carolina lawsuit.
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Boeing sees fix for latest 737 MAX software flaw in September
By David Shepardson, Eric M. Johnson and Tracy Rucinski
(Reuters) - Boeing Co <BA.N> will take until at least September to fix a newly identified problem on its grounded 737 MAX, a company official told Reuters, meaning the workhorse jet's return to service will be delayed until October at the earliest, significantly longer than most airlines had expected.
Boeing shares closed 3% lower on Thursday, after the Chicago-based company told air carriers that it would complete the latest software update for the 737 MAX by September after a new issue arose last week during a simulator test.
That is later than most airlines had expected: American Airlines <AAL.O> Chief Executive Doug Parker said on June 12 it was "highly likely" flights would resume by mid-August. Most airlines have taken the MAX off their schedules until early September.
Once Boeing completes the update, the U.S. Federal Aviation Administration must review the fix and the results of a certification test flight that will not be scheduled until at least September, a process that will take at least two to three weeks. The new timeline means the plane is not likely to resume flying commercially until at least October, leading to thousands more flight cancellations.
Southwest Airlines Co <LUV.N> has said it will need 30 days after the FAA grants approval before it can resume flights.
The FAA declined to comment Thursday on the timeline but said on Wednesday it is "following a thorough process, not a prescribed timeline, for returning the Boeing 737 MAX to passenger service. The FAA will lift the aircraft’s prohibition order when we deem it is safe to do so."
Boeing is grappling with the fallout of two crashes of its 737 MAX jet within five months, killing a combined 346 people and prompting a worldwide grounding in March and a slew of litigation.
Boeing has been working on an upgrade for a stall-prevention system known as MCAS since the first 737 MAX crash on a Lion Air flight in Indonesia in October, when pilots were believed to have lost a tug of war with software that repeatedly pushed the nose down.
A new problem with MAX software emerged last week when FAA test pilots were reviewing potential failure scenarios of the flight control computer in a MAX simulator, a Boeing official told Reuters.
Under one scenario where a specific fault in a microprocessor caused an uncommanded movement of the plane's horizontal tail, it took pilots too long to recognize a loss of control known as runaway stabilizer, the Boeing official said.
Southwest, the world’s largest MAX operator with 34 jets and dozens more on order, said on Thursday it was extending 737 MAX cancellations until early October.
American Airlines and United Airlines <UAL.O>, which also operate the MAX in the United States, have pulled the planes from their schedules into early September and said they had no further comment on Thursday.
Air Canada <AC.TO>, another large MAX operator, said it was "still reviewing" whether to extend its flight cancellations beyond September.
SETTLEMENT TALKS
Meanwhile on Thursday, Boeing lawyers said they were negotiating settlements with the families of dozens of Lion Air crash victims, meaning the planemaker can avoid prolonged and potentially costly court litigation.
However, the families of some victims of the second 737 MAX crash on Ethiopian Airlines on March 10 are not ready to settle, their lawyers told a Chicago judge on Thursday.
"There are families who insist on knowing what Boeing knew, when they knew it, what they did about it and what they're going to do about it to prevent events like this in the future," attorney Robert Clifford, who represents families of several Ethiopian Airline victims, said at a court hearing.
A judge granted a request by Clifford and other plaintiff lawyers for discovery over objections by Boeing, meaning the planemaker must turn over documents about the MAX.
A status hearing on the Ethiopian litigation is scheduled for Sept. 17.
Boeing has said it estimates over $1 billion in costs just from its 737 MAX production slowdown as deliveries of its top-selling jet remain frozen. The estimate does not include potential compensation to victims and airlines.
(Reporting by Tracy Rucinski in Chicago, David Shepardson in Washington and Eric M. Johnson in Seattle; additional reporting by Allison Lampert in Montreal and Ankit Ajmera in Bengaluru; editing by Marguerita Choy and Bill Rigby) |
The 2020 Ford Super Duty Tremor Is Your Ultimate Off-Road Tow Rig
Photo credit: Ford From Road & Track Want a truck that can handle itself off road and has a huge towing capacity? Well, Ford has the thing for you: The new Tremor package for its Super Duty pickups, which includes aggressive all-terrain tires, a reworked suspension, and lots of other new off-roading hardware. Meet your new go-anywhere tow rig. The Tremor off-road package is new for 2020, and can be optioned on an F-250 or F-350. This isn't some surface-level appearance pack, either. Ford made a lot of changes, which included installing bespoke twin-tube dampers, retuned springs, an electronic locking rear differential, a limited-slip front differential, and 35-inch Goodyear tires. The front end is two inches taller, allowing for 10.8 inches of ground clearance and a water fording depth of 33 inches. The Tremor's approach angle is 31.65 degrees, while departure angle is 24.51 degrees. Other additions include power-operated running boards, extended-axle vent tubes, and skid plates. The Super Duty Tremor gets five selectable drive modes: Normal, for around-town driving, Tow/Haul for—you guessed it—towing things, Eco for saving fuel, Slippery for low-traction conditions, and Deep snow/sand for driving on loose surfaces. You can order the Tremor package with only one Super Duty body configuration—single-rear-wheel SuperCrew with a 6.75-foot bed—but it's available with the XLT, Lariat, King Ranch, and Platinum trims. Buyers can pick between Ford's all-new 7.3-liter V-8 or a 6.7-liter Power Stroke diesel. The sole transmission is a 10-speed automatic. Ford says that if you want the Tremor package on an F-250, you'll have to also option the high-capacity trailer-tow package. The Tremor package will be available upon the 2020 Super Duty's launch later this year. ('You Might Also Like',) 16 of the Most Interesting Engine Swaps We've Ever Seen See 70 Years of the Greatest Ferraris Ever Built These Are the 14 Best New Cars for Less Than $45,000 |
Season 6 of ‘Bachelor in Paradise’ Is ‘the Craziest Season to Date,’ According to Wells Adams
Bartender Wells Adams just confirmed that Chris Harrison isn’t kidding when he says season six of Bachelor in Paradise will be the most dramatic to date. On a recent episode of his podcast, Your Favorite Thing , the 34-year-old reality star discussed the upcoming season of the popular dating series. While he can’t give away any spoilers, he admitted that even he couldn’t believe what went down on the beaches of Mexico. “I can’t comment on any of this stuff obviously, but we’re in for one hell of a ride, sister,” he told his co-host, Brandi Cyrus. Adams went on to say that it’s unlike any other season of BiP , adding, “It is bonkers. Like, right before I left, I did like all of my coverage and interviews and stuff…they have the normal questions they would ask me, and then at the end the producer was like, ‘Is there anything you want to say?’ And I was like, ‘I think this was the craziest season to date!’” Earlier this month, ABC announced the cast list for season six, including Blake Hortsmann, Clay Harbor, Tayshia Adams, Cam Ayala, John Paul Jones, Demi Burnett, Derek Peth, Caelynn Miller-Keyes, Wills Reid, Hannah Godwin and Chris Bukowski. There’s also a chance that contestants like Luke S., Dustin and—dare we say—Luke P. will get added to the list once Hannah Brown’s season of The Bachelorette comes to an end. Although Adams didn’t reveal any further details about the upcoming season of BiP , we wouldn’t be surprised if Luke P. is responsible for whatever drama ensues. Season six of Bachelor in Paradise will premiere on Monday, August 5, on ABC. RELATED: All the Signs that Jed Wins Hannah Brown’s Season of ‘The Bachelorette’ |
FDA Accepts Sanofi's BLA for Meningitis Vaccine to Review
Sanofi SNY announced that the FDA has accepted for review its biologics license application (BLA) for MenQuadfi, a meningococcal vaccine candidate, currently being developed for the prevention of meningococcal meningitis. The regulatory body has set an action date of Apr 25, 2020. On approval, the MenQuadfi vaccine will be available in a fully liquid presentation. The BLA was based on positive data from the phase II/III studies, seeking an approval for use of the meningococcal (Groups A, C, Y, W) vaccine in patients aged two years and above. Shares of Sanofi have dipped 0.6% so far this year against the industry’s rise of 3.3%. Sanofi conducted the studies across the United States, Europe, Asia and Latin America. Additional phase III studies are also on course by the company in Africa. The ongoing program includes subjects of different ages, varying from infants aged 6 weeks to older adults. The overall objective of this evaluation is to assess the vaccine’s ability to help prevent meningococcal meningitis, a rare but serious bacterial infection, in patients across a broad range of age groups. We remind investors that Sanofi possesses one of the world’s leading vaccine operations. Apart from pediatric vaccines, the company’s portfolio includes influenza vaccines, adult and adolescent booster vaccines, meningitis vaccines plus travel and endemic vaccines. Sanofi also holds a strong position in both seasonal and pre-pandemic influenza vaccine spaces. Last December, the FDA approved Sanofi’s pediatric vaccine Vaxelis, which has been developed for active immunization to prevent six different diseases in children aged six weeks to four years. Vaxelis has been jointly developed by Sanofi and Merck MRK. Both companies are working on the vaccine production with a commercial launch expected not before 2020. Notably, last November, the European Commission granted a marketing authorization to Sanofi’s dengue vaccine, Dengvaxia. The vaccine is already available across 20 countries for the prevention of dengue. Story continues Total sales of the company's vaccine division, Sanofi Pasteur, in the first quarter of 2019 (including the emerging markets) grossed 873 million euros, reflecting a 20.1% increase, driven by a strong performance of its Polio/Pertussis/Hib vaccines in the emerging markets and Japan. Sanofi is focused on fortifying its vaccine business further. Meanwhile, last week, Sanofi entered into a collaboration contract with Google, a subsidiary of Alphabet Inc. GOOG, to establish a new virtual healthcare innovation laboratory for transforming future medicines and healthcare services with the aid of latest data technologies. With this partnership, Sanofi is looking to gain a better understanding of patients and their diseases as well as improve its patients' and customer experience. The company is also eyeing to enhance operational efficiency while developing new therapies via emerging data technologies. Zacks Rank & Stock to Consider Sanofi currently carries a Zacks Rank #3 (Hold). A better-ranked stock in the large cap pharma sector is Novartis AG NVS, which sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here . Novartis’ earnings estimates have moved 0.6% north for 2019 and 1.5% for 2020 over the past 60 days. The stock has gained 6.3% year to date. Breakout Biotech Stocks with Triple-Digit Profit Potential The biotech sector is projected to surge beyond $775 billion by 2024 as scientists develop treatments for thousands of diseases. They’re also finding ways to edit the human genome to literally erase our vulnerability to these diseases. x` Zacks has just released Century of Biology: 7 Biotech Stocks to Buy Right Now to help investors profit from 7 stocks poised for outperformance. Our recent biotech recommendations have produced gains of +98% , +119% and +164% in as little as 1 month. The stocks in this report could perform even better. See these 7 breakthrough stocks now>> Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Alphabet Inc. (GOOG) : Free Stock Analysis Report Novartis AG (NVS) : Free Stock Analysis Report Sanofi (SNY) : Free Stock Analysis Report Merck & Co., Inc. (MRK) : Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research |
How Financially Strong Is Southwest Gas Holdings, Inc. (NYSE:SWX)?
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Stocks with market capitalization between $2B and $10B, such as Southwest Gas Holdings, Inc. (NYSE:SWX) with a size of US$4.8b, do not attract as much attention from the investing community as do the small-caps and large-caps. While they are less talked about as an investment category, mid-cap risk-adjusted returns have generally been better than more commonly focused stocks that fall into the small- or large-cap categories. SWX’s financial liquidity and debt position will be analysed in this article, to get an idea of whether the company can fund opportunities for strategic growth and maintain strength through economic downturns. Remember this is a very top-level look that focuses exclusively on financial health, so I recommend a deeper analysisinto SWX here.
See our latest analysis for Southwest Gas Holdings
SWX's debt levels surged from US$2.0b to US$2.3b over the last 12 months – this includes long-term debt. With this growth in debt, SWX's cash and short-term investments stands at US$97m to keep the business going. Additionally, SWX has generated US$536m in operating cash flow in the last twelve months, leading to an operating cash to total debt ratio of 23%, signalling that SWX’s debt is appropriately covered by operating cash.
With current liabilities at US$974m, it seems that the business may not have an easy time meeting these commitments with a current assets level of US$830m, leading to a current ratio of 0.85x. The current ratio is the number you get when you divide current assets by current liabilities.
With a debt-to-equity ratio of 96%, SWX 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 SWX's case, the ratio of 3.78x suggests that interest is appropriately covered, which means that lenders may be less hesitant to lend out more funding as SWX’s high interest coverage is seen as responsible and safe practice.
SWX’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. 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 SWX has been performing in the past. I recommend you continue to research Southwest Gas Holdings to get a better picture of the stock by looking at:
1. Future Outlook: What are well-informed industry analysts predicting for SWX’s future growth? Take a look at ourfree research report of analyst consensusfor SWX’s outlook.
2. Historical Performance: What has SWX'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 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. |
Libra Is More Like PayPal Than Bitcoin
Facebook(NASDAQ: FB)is a big tech company with big goals. And if you're one of those people who fear that the big tech companies are becoming too powerful, then you may want to avert your eyes for this one: Facebook is getting its own currency.
A cryptocurrency, to be exact. Called "Libra," Facebook's new innovation is being developed in partnership with other major companies, includingVisaandPayPal(NASDAQ: PYPL). The idea is unprecedented but, in some important ways, not quite as earth-shattering as it looks. Thanks to some crucial differences between Facebook's Libra and typical cryptocurrencies like Bitcoin, the former is going to feel a whole lot more like the banking and transaction apps we already have. Though the future may hold some big changes, the Libra of the present looks a whole lot like a new way to solve the same problem that spawned PayPal and Venmo.
Image source: Getty Images.
First things first: While there are important differences between Libra and Bitcoin, Facebook isn't making things up when it says it has a cryptocurrency.
Like Bitcoin, Libra is a currency. It can be exchanged for dollars and back again. Libra can be used between private parties, not just in transactions involving Facebook or its partners -- meaning that Libra is much more than one of the in-app and in-game currencies that consumers are already used to.
And, like Bitcoin, Libra will use blockchain technology to track what money is where. The secure ledger created back the blockchain keeps cryptocurrencies like Libra and Bitcoin from being easily hacked -- which was the obvious concern that kept "digital money" a fantasy until blockchain emerged as a solution.
Finally, Libra will be exchanged on existing transaction apps -- including PayPal. So when we say that it'slikePayPal, what do we mean?
Far and away the most important difference between Libra and Bitcoin is that Libra will be managed in such a way as to keep its value stable relative to the U.S. dollar. When dollars or euros are exchanged for Libra, those dollars or Euros will be held in a bank account -- meaning that there will be a corresponding amount of stable currency backing every bit of Libra in circulation.
By contrast, Bitcoin is not managed by a central bank or organization, nor is its value pegged to that of a more stable currency. That's a huge part of why Bitcoin's value has beensuch a roller coaster ridefor speculators. Facebook and its partners at the top of the currency's governing entity -- the Libra Association -- hope to avoid this and keep Libra stable.
Libra won't make its founders money by skyrocketing in value. Instead the idea is to give Libra users a way to pay for things quickly and without transaction fees. Libra, Facebook says, is safe, stable, and private. Facebook and its partners will use it as a foundation for financial services businesses.
PayPal was once the high-tech future of financial transactions. That's a role Libra wants to take on next. Libra is the PayPal of currencies, if you will.
Right now, using Libra looks like another way to complete online transactions quickly and securely. But there are good reasons Facebook opted for a currency instead of a clone of PayPal orApple's Apple Pay.
Facebook is taking steps to reassure Libra users that they won't be watched (for instance, Libra transactions will be managed by a new company, Calibra, and won't be linked to Facebook accounts). But if Facebook does ever sneak a peek, it would have a new source of information about how people spend their money, much as credit card companies do now. Tech and banking experts have already voiced concerns about privacy. (Not so coincidentally, Facebook's early entry into the cryptocurrency world keeps rivals likeAlphabetfrom getting a head start in crypto and using their position to look at Facebook ad sales and other things Facebook would rather keep hidden.)
And plenty of future complications are possible. The Libra Association wants to keep the currency stable, but it could theoretically attempt to shift the value of the currency later on. Tax implications for Facebook and for Libra users, in general, are dizzying. These issues, too, have experts and regulators protesting ahead of Libra's 2020 launch. And that launch date is best read as tentative,as Libra faces regulatory hurdles and other issues that could slow down its rollout.
The idea of a tech-backed cryptocurrency raises plenty of potential issues, but there's no need to contemplate the dystopian in order to see the opportunity that Facebook is chasing here. Libra could offer Facebook and its partners an efficient new platform on which to build financial services like the ones already offered by PayPal and Venmo.
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Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to its CEO, Mark Zuckerberg, is a member of The Motley Fool's board of directors.Stephen Lovelyowns shares of Apple and Facebook. The Motley Fool owns shares of and recommends Alphabet (A shares), Alphabet (C shares), Apple, Facebook, PayPal Holdings, and Visa. The Motley Fool has the following options: long January 2020 $150 calls on Apple and short January 2020 $155 calls on Apple. The Motley Fool has adisclosure policy. |
Dog the Bounty Hunter Tearfully Says 'Beth Isn't Dead, She's Sleeping'
Dog the Bounty Hunter fought back tears while he talked about his wife Beth Chapman's last moments. Duane "Dog" Chapman walked outside of his home in Honolulu, Hawaii hours after Beth died, and was joined by other family members who consoled the bounty hunter while he spoke. Wearing an all denim outfit, Dog told reporters the family is "trying to celebrate the life, but we're mourning the death." The reality star showed gratitude for the millions of condolences sent by fans and loved one, and gloated a little that Beth is "Trending #1 on Twitter." He also warned fans from donating to unauthorized funds for Beth, as Dog says, "we don't need any money at all," urging people to send flowers instead of cash. Dog said Beth "knew this day would come," but admitted her death came quicker than the family was expecting. Choked up by tears, the star described his late wife's clothes and makeup that remains exactly where she had left it. Not missing a moment for a little laugh, Dog also described how Beth was "somewhat of a control person," and made sure to leave him notes around the house. "I loved her so much," he said, adding he strongly feels "Beth isn't dead, she's sleeping." The Chapman family set up an easel holding up a photo of Beth outside of their home for fans to come leave flowers in honor of the star. They also decorated her Mercedes sedan, with the license plate "MRSDOG," in beautiful Hawaiian flowers. As we first reported, the family plans on cremating Beth , per her final wishes. The family is also planning two memorials -- one in Hawaii and the other in Colorado, where Beth's family lives. View comments |
European Hemp Market Offers Major Obstacles Along With Speculative Rewards
By William Sumner, Hemp Business Journal Contributor
While much has been made about the nascent hemp markets in the United States and Canada, the European market has proven to be enticing on its own: The Hemp Business Journal estimates that by 2020 Europe will see approximately $1.5 billion in sales, whereas the U.S. market is respectively expected to reach $1.2 billion by 2022.
Given that growth potential in the European hemp market, the Hemp Business Journal notes two trends that investors and entrepreneurs ought take note of:
Canadian LPs and the Scramble for Europe
One of the biggest industry trends in recent years has been the influx of licensed cannabis producers from Canada entering the European hemp market. For example, last yearMaricann Group(CSE: MARI) announced that it would acquire the Swedish hemp producer Haxxon. Similarly,Aurora Cannabis(TSX: ACB) acquired one of Europe's largest hemp producers, Agropro UAB, as well as the hemp processor and distributor Borela UAB.
Notably,The Green Organic Dutchman(TSX: TGOD) announced in August 2018 that it had signed a definitive agreement to acquire Europe's leading organic hemp-based cannabidiol (CBD) oil product, HemPoland, for CAD$20.4 million (USD$15.6 million), along with a CAD$13.5 million (USD$10.3 million) cash investment for rapid European expansion.
There are two main reasons why Canadian LPs are scrambling to gain ground in Europe's hemp market: The first is that the European hemp market has a lot of room for growth and very few actors operating in that space when compared to the North American market. Instead of trying to compete in a crowded marketplace, Canadian LPs are opting to go for the low-hanging, yet lucrative, fruit.
The second reason is that by establishing a European foothold now, Canadian LPs will be better positioned to transition to cannabis production whenever legalization ever takes hold in the European Union. As the EU's hemp industry continues to grow, expect to see more Canadian LPs start to dabble in the market.
Europe is Hesitant to Embrace CBD
Earlier this year, theEuropean Food Safety Authority(EUFSA) classified CBD as a "novel food" additive, meaning that any food or extract containing CBD will be required to undergo safety evaluations before being sold in the EU. Though the ruling had a chilling effect on the European CBD market, many have been holding out hope that regulators might be convinced to reverse their position, a bet that for now appears more unlikely by the day.
Recently, theGerman Federal Office of Consumer Protection and Food Safety(BVL) echoed the EUFSA's position, stating that CBD products could not be sold in the country at all unless the product in question undergoes safety evaluations. As one of the most populous and economically prosperous countries in the EU, Germany's stance on CBD has been seen by many as a blow to the European hemp industry.
Should the U.S. Food and Drug Administration (FDA) move to allow CBD as a nutritional substance, circumstances in Europe may change, but barring that, it seems unlikely that the EU will alter its position on CBD any time soon.
William Sumner
William Sumner is a writer for the hemp and cannabis industry. Hailing from Panama City, Florida, William covers various topics such as hemp legislation, investment, and business. William's writing has appeared in publications such as Green Market Report, Civilized, and MJINews. You can follow William on Twitter: @W_Sumner.
The postEuropean Hemp Market Offers Major Obstacles Along with Speculative Rewardsappeared first on New Frontier Data.
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Should You Take Money From Your 401(k) to Pay Debt?
Tax benefits and automatic deductions make a401(k) planone of the most powerful tools for retirement savings. Between your regular contributions,matching contributions from your employerand the power ofcompound interest, you have a prime opportunity to accumulate wealth for your golden years.
Retirement planning may take a backseat if you’re carrying a significant amount of student loans or credit card debt though. In fact, you may find yourself considering taking money out of your 401k to pay debt. While that could reduce your financial obligations in the short term, there are some pros and cons to evaluate before making a withdrawal.
Are You Eligible to Withdraw Money From a 401(k)?
First, you’ll have to determine whether you are able to use your 401(k) savings to pay debt. Your plan administrator andthe IRS guidelinesare great resources but generally, 401(k) distributions are allowed if:
• You reach age 59 1/2
• You die, become disabled or are otherwise withdrawn from the workforce
• Your employer terminates your plan and doesn’t replace it with another
• The distribution is related to afinancial hardship
That last one is important because not all employers allow hardship distributions from a 401(k). Even if your plan does allow hardship distributions, you must demonstrate that the funds will address an immediate and heavy financial need. That includes things like:
• Paying medical expenses for yourself, your spouse or your dependents
• Purchasing a principal residence
• Paying tuition, educational fees or room and board for yourself, spouse or dependents
• Avoiding eviction or foreclosure
• Funeral expenses
Keep in mind that every employer is different. Even if your employer allows a hardship distribution, they may not recognize each of these scenarios. In most cases, you won’t be able to contribute to your plan within six months of taking a hardship withdrawal.
Early Withdrawal Penalties
Typically, a10% penaltyapplies when you take money from a 401(k) or other qualified retirement plan before reaching age 59 1/2. Early withdrawals are also subject to regular income tax. And as with most plans, you’re only able to withdraw the amount you contributed to the account rather than any employer-provided cash.
Using a 401(k) Loan to Pay Off Debt
If you aren’t eligible for a hardship distribution and want to avoid the stiff tax penalties associated with cashing out your plan, you may have a third option. Some companies allow plan participants to borrow from themselves using a401(k) loan.
These loans tend to carry a lower interest rate than alternative options, are not taxed and do not impact your credit score. Even if you have to pay an origination fee, the fee is likely lower than the tax penalties you would face from an early withdrawal. Yet there are some downsides to a 401(k) loan.
The most you can borrow against your 401(k) is 50% of yourvested account balance, or $50,000, whichever is less. In other words, you can’t just pull all of your retirement savings out. You can have more than one loan out at a time, but the total amount owed can’t be more than the limit. Most 401(k) loans must be repaid within five years. If you’re married, your employer may require your spouse to consent to the loan.
Plus, your employer may temporarily suspend new contributions into the plan until you’ve repaid the loan. That means that while you’re paying back what you’ve borrowed, you’re not adding anything else to the balance.
The money you withdraw also doesn’t have an opportunity to benefit from compounding interest, which could stunt your nest egg’s growth. And if you separate from your employer before the loan is repaid, the IRS requires you pay the remaining loan balance in full within 60 or 90 days. If you don’t repay it in time, the entire amount becomes a taxable distribution subject to income tax and the 10% early withdrawal penalty.
When Does Taking Money Out of a 401(k) to Pay Debt Make Sense?
To determine whether withdrawing from your 401(k) makes sense, crunch the numbers. Compare the interest rate on your debt with the tax penalties you would face. High interest rates on significant debt may necessitate drastic measures. If you’re considering a 401(k) loan, make sure you have a disciplined financial plan. 401(k) loans can also be a powerful option for eliminating high-interest debt, but they can still set you back.
Be honest about where you stand, too. If you have a relatively large starting balance, using your plan might not make a huge difference in the long run. If you’realready behind on saving, however, taking money from your 401(k) could create a big problem come retirement. There is also an emotional element to borrowing against your retirement. Once you tap those funds, it could be tempting to do it again.
The Takeaway
Using your 401(k) as a piggy bank may not seem like such a bad thing. Depending on what you owe, you could wipe out all of your debt at once. But taking money out of your 401(k) to pay debt could lead to tax penalties and delayed retirement. Worse yet, you could put your long-term financial health in jeopardy. Consider your options carefully and ensure you understand the implications of each before you decide.
Tips for Balancing Debt and Retirement Planning
• Saving for retirement while paying off debt can be challenging. Afinancial advisorcan help you develop strategies for both. An advisor can also discuss the potential tax implications if you decide to tap your employer-sponsored plan.SmartAsset’s free toolmatches you with financial advisors in your area in 5 minutes. If you’re ready to be matched with local advisors that will help you achieve your financial goals,get started now.
• Explore alternatives to a 401(k) withdrawal before making a final decision. There are numerous options that may be a better fit, such as using a 0% APRbalance transfer credit cardto consolidate debt, gettinga personal line of creditor borrowing against your home equity. Each of these can be used to pay down debt, while leaving your retirement savings intact.
Photo credit: ©iStock.com/nesneJkraM, ©iStock.com/Bill Oxford, ©iStock.com/Anchiy
The postShould You Take Money From Your 401(k) to Pay Debt?appeared first onSmartAsset Blog.
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Does Staffline Group plc (LON:STAF) Have A Particularly Volatile Share Price?
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If you own shares in Staffline Group plc (LON:STAF) then it's worth thinking about how it contributes to the volatility of your portfolio, overall. In finance, Beta is a measure of volatility. Volatility is considered to be a measure of risk in modern finance theory. Investors may think of volatility as falling into two main categories. First, we have company specific volatility, which is the price gyrations of an individual stock. Holding at least 8 stocks can reduce this kind of risk across a portfolio. The second type is the broader market volatility, which you cannot diversify away, since it arises from macroeconomic factors which directly affects all the stocks on the market.
Some stocks 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. A stock with a beta below one is either less volatile than the market, or more volatile but not corellated with the overall market. In comparison a stock with a beta of over one tends to be move in a similar direction to the market in the long term, but with greater changes in price.
View our latest analysis for Staffline Group
Staffline Group has a five-year beta of 0.97. This is reasonably close to the market beta of 1, so the stock has in the past displayed similar levels of volatility to the overall market. Using history as a guide, we might surmise that the share price is likely to be influenced by market voltility going forward but it probably won't be particularly sensitive to it. 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 Staffline Group's revenue and earnings in the image below.
Staffline Group is a rather small company. It has a market capitalisation of UK£40m, which means it is probably under the radar of most investors. It doesn't take much money to really move the share price of a company as small as this one. That makes it somewhat unusual that it has a beta value so close to the overall market.
It is probable that there is a link between the share price of Staffline Group and the broader market, since it has a beta value quite close to one. However, long term investors are generally well served by looking past market volatility and focussing on the underlying development of the business. If that's your game, metrics such as revenue, earnings and cash flow will be more useful. In order to fully understand whether STAF is a good investment for you, we also need to consider important company-specific fundamentals such as Staffline Group’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 STAF’s future growth? Take a look at ourfree research report of analyst consensusfor STAF’s outlook.
2. Past Track Record: Has STAF 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 STAF's historicalsfor more clarity.
3. Other Interesting Stocks: It's worth checking to see how STAF 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. |
Should You Be Adding Stryker (NYSE:SYK) To Your Watchlist Today?
Want to participate in a short research study ? Help shape the future of investing tools and you could win a $250 gift card! It's only natural that many investors, especially those who are new to the game, prefer to buy shares in 'sexy' stocks with a good story, even if those businesses lose money. But as Peter Lynch said in One Up On Wall Street , 'Long shots almost never pay off.' So if you're like me, you might be more interested in profitable, growing companies, like Stryker ( NYSE:SYK ). While profit is not necessarily a social good, it's easy to admire a business than can consistently produce it. Conversely, a loss-making company is yet to prove itself with profit, and eventually the sweet milk of external capital may run sour. See our latest analysis for Stryker How Fast Is Stryker Growing? As one of my mentors once told me, share price follows earnings per share (EPS). That makes EPS growth an attractive quality for any company. As a tree reaches steadily for the sky, Stryker's EPS has grown 30% each year, compound, over three years. If the company can sustain that sort of growth, we'd expect shareholders to come away winners. Careful consideration of revenue growth and earnings before interest and taxation (EBIT) margins can help inform a view on the sustainability of the recent profit growth. Stryker maintained stable EBIT margins over the last year, all while growing revenue 9.0% to US$14b. That's progress. In the chart below, you can see how the company has grown earnings, and revenue, over time. Click on the chart to see the exact numbers. NYSE:SYK Income Statement, June 27th 2019 While we live in the present moment at all times, there's no doubt in my mind that the future matters more than the past. So why not check this interactive chart depicting future EPS estimates, for Stryker ? Are Stryker Insiders Aligned With All Shareholders? We would not expect to see insiders owning a large percentage of a US$76b company like Stryker. But we are reassured by the fact they have invested in the company. Notably, they have an enormous stake in the company, worth US$9.2b. Coming in at 12% of the business, that holding gives insiders a lot of influence, and plenty of reason to generate value for shareholders. So it might be my imagination, but I do sense the glimmer of an opportunity. Story continues Should You Add Stryker To Your Watchlist? Given my belief that share price follows earnings per share you can easily imagine how I feel about Stryker's strong EPS growth. I think that EPS growth is something to boast of, and it doesn't surprise me that insiders are holding on to a considerable chunk of shares. So this is very likely the kind of business that I like to spend time researching, with a view to discerning its true value. While we've looked at the quality of the earnings, we haven't yet done any work to value the stock. So if you like to buy cheap, you may want to check if Stryker is trading on a high P/E or a low P/E , relative to its industry. Although Stryker certainly looks good to me, I would like it more if insiders were buying up shares. If you like to see insider buying, too, then this free list of growing companies that insiders are buying , could be exactly what you're looking for. Please note the insider transactions discussed in this article refer to reportable transactions in the relevant jurisdiction We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com . This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
Why Shares of Conagra Are Down on Thursday
Shares ofConagra Brands(NYSE: CAG)traded down more than 9% on Thursday morning after the food services company reported weaker-than-expected earnings and lowered full-year profit guidance.
Before markets opened on Thursday, Conagra said it had earned $0.36 per share in its fiscal fourth quarter on sales of $2.61 billion, falling short of consensus expectations for $0.41 per share in earnings on revenue of $2.66 billion.
CEO Sean Connolly in a statement blamed the miss on "transitory events," including "intensified promotional competition in certain categories, several isolated manufacturing-related challenges, and weak performance in our Ardent Mills joint venture."
Image source: Getty Images.
The company is also in the process of integrating Pinnacle Foods, which it bought last October.
ConAgra also cut its full-year fiscal 2020 adjusted earnings guidance to $2.08 to $2.18 per share, down from $2.10 to $2.20, in part to reflect the company's divestiture of its Gelit frozen pasta business. Analysts had been expecting $2.16 per share in earnings.
ConAgra said it sees reported net sales growth of 13.5% to 14% in fiscal 2020, driven by strong consumption trends in the frozen and snacks businesses. Connolly said the Pinnacle integration is going according to plan and should help spark growth in years to come, including helping in the red-hot meat substitute area.
"With a multi-year innovation pipeline now in place for the Pinnacle portfolio, and more opportunity in plant-based meat alternatives than previously forecasted, we are as optimistic as ever about the long-term value creation potential of the acquisition," he said.
ConAgrashares dropped 44% in 2018, and even after Thursday's fall are still up more than 20% year to date. The company seems to be moving in the right direction, but the quarterly results were a reminder to investors not to get ahead of themselves when buying into a recovery.
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Lou Whitemanhas no position in any of the stocks mentioned. The Motley Fool is short shares of Conagra Brands. The Motley Fool has adisclosure policy. |
Bank of America ends business with detention center operators
Bank of America (BAC) will stop financing companies providing prisoner and immigrant detention services for federal and state governments “as expeditiously as possible," a bank spokesperson told Yahoo Finance.
CoreCivic (CXW) and The GEO Group (GEO), the two dominant players in the private prison space, have previously borrowed money from Bank of America, JPMorgan Chase, and Wells Fargo.
JPMorgan Chase (JPM) ended its relationship withthe private prison businessback in March, Reuters reported. Wells Fargo (WFC)said in its business standards report published in Januarythat the bank's credit exposure to private prison companies "has significantly decreased and is expected to continue to decline." Wells Fargo added that it's "not actively marketing to that sector."
The issue of Bank of America’s business dealings with private prisons surfaced at the bank’s annual meeting of stockholders in late April. At the time, Bank of America’s leadership acknowledged that it’s a “highly emotional issue” and that they were “extremely engaged in the conversation,” especially through the firm’s environmental social governance (ESG) committee.
“Ultimately, policymakers are going to have to take on the criminal justice issue more broadly as well as immigration reform,” one of the executives said at the annual meeting. “While that’s happening, we are engaged in the due diligence through the risk framework and through extreme extensive engagement with stakeholders.”
Since that time, Bank of America has met with academics, criminal justice experts, special interest groups, and civil rights leaders. The firm also toured some of these facilities and had “intensive engagement” with the "limited number of clients" the firm has providing those private prison services.
“We appreciate steps they have taken to properly execute their contractual and humanitarian responsibilities, including seeking the counsel of civil rights leaders and legal advocates,” the bank spokesperson said in the statement.
Bank of America added that the private sector “is attempting to respond to public policy and government needs and demands in the absence of long standing and widely recognized reforms needed in criminal justice and immigration policies.”
But after discussing the issue for some time, the bank decided it was best stop to doing business with private prisons.
“Lacking further legal and policy clarity, and in recognition of the concerns of our employees and stakeholders in the communities we serve, it is our intention to exit these relationships,” the spokesperson said.
In a statement,GEO Group CEO George Zoley saidBank of America's decision to cut off financing would result in "no impact" to its revolving credit facility, which remains at $900 million.
Zoley added that GEO Group's centers "are not overcrowded and comply with performance-based standards, which were first established under President Barack Obama’s administration."
Zoley continued: "These modern Processing Centers provide safe and humane residential care, high quality medical services, and enhanced amenities including artificial turf soccer fields, flat screen TVs in living areas, indoor and outdoor recreation, classrooms, multipurpose rooms, and libraries."
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Julia La Roche is a finance reporter at Yahoo Finance. Follow her onTwitter.
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