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An Investment Overview On Alliance Data Systems

Alliance Data Systems Corporation (ADS) has traded much lower through 2018. Market-wide worries about rate increases pulled back valuation premiums overall.

The company’s market is particularly exposed to interest rate risks. This situation justifies a pullback, but I believe that the dramatic selloff it’s currently experiencing is unwarranted and overdone.

Source: Finviz, Quote ADS.

Business

ADS is a marketing consulting firm that utilizes data analytics to provide its clients with market insights and other services. It’s also exposed to the financial sector through unsecured credit, which is dependent on consumer spending on associated stores.

Their market mainly consists of big corporations and business that require consulting services. Bank of America (NYSE:BAC), General Motors (NYSE:GM), FedEx (NYSE:FDX), Kellogg (NYSE:K), and Marriott (NYSE:MAR) are among their clients. ADS provides them with customer loyalty programs from data captured in client interactions. With this data, it can run algorithms and extract insights that are valuable for clients.

Source: Alliance’s logos.

Naturally, ADS has longstanding client relations, which makes it a relatively predictable entity. Business wise, they operate in the following segments: LoyaltyOne, Epsilon, and Card Services.

LoyaltyOne: This segment consists of the popular AIR MILES reward program. It also offers other short-term loyalty programs and loyalty services like consulting, analytics, and mobile applications. Epsilon: Provides clients with marketing services like CRM, agency services, data, and affiliate marketing. Card Services: This section of the business operates from receivables financing, processing services, and marketing services. This segment behaves very similarly to a credit card company.

Source: Alliance Data Systems 2017 annual report and author’s elaboration.

Segment Breakdown

Out of the three segments, Card Services is the most prominent component of the company. In 2017, it reported total revenues of $4.17 billion. The same year the other two segments, LoyaltyOne and Epsilon, reached $3.58 billion together. The card services business is the most important for Alliance Data Systems.

Source: Alliance Data Systems 2017 annual report and author’s elaboration.

Going more in-depth into this segment, I found that the credit they give to their clients is unsecured. Because of this, they have to go to underwriters to securitize the debt and be able to sell it more efficiently. For this reason, ADS behaves similarly to a credit card company, where it has to run its big data algorithms to select the amount of exposure to each client and account approvals.

Source: Alliance Data Systems 2017 annual report.

This process of selection with big data analytics helps ADS keep its client delinquencies down. Last year, that figure sat at roughly 5%, but it’s slowly rising year over year. This massive exposure to the Card Services market and their high levels of debt makes the company particularly sensitive to interest rate fluctuations.

Interest Rate Risk

Management recognizes that higher interest rates will reduce their FCF. Furthermore, it could derail any potential acquisitions or delay capital expenditures. Just for 2017, their interest expense was a whopping $564.4 million (7.3% of total revenues).

In other words, almost 35% of their operating expenses are paying off interest and other costs on their debt. This expense covers securitization funding costs, interest on deposits, and interest on long-term debt.

From their balance sheet, we can see that deposits (36%), their debt (20%), and other borrowings (29%) fund 84% of the company’s assets. These percentages indicate that ADS is a highly leveraged company, although these figures are somewhat acceptable for businesses within the credit market.



Source: Alliance Data Systems 2017 annual report.

However, as interest rates rise, this could pose a severe problem for ADS. A mere 1% increase or decrease in rates could have a change in interest rate expense of $112 million. I expect interest rates to continue to rise this year. The ten-year could reach even 4% by EOY 2018. This market risk is material for ADS. Although, management expects to be able to hedge for this risk through derivatives and other interest rate securities.

I think that it’s probably for this reason that ADS has traded lower this year. The crack in the bull market happened last February. It’s always hard to pinpoint a specific cause for the pullback, but many agree it had something to do with rates rising. The 10-year treasury bond cracked 3% and that influences market prices.

The problem is that ADS stock has additional interest rate risk for the reasons I previously pointed out. On top of that, it’s exposed to the credit card market, which is experiencing an increasing delinquency rate. As the Fed continues to tighten, ADS should see its costs and delinquencies rise, which could have a negative impact on results. As an added worry, the LIBOR is also increasing, which should drag results even further.

On The Other Hand

President Trump has brought with him a new age of deregulation and lower taxes for corporations. These should benefit particularly to ADS. Firstly, because Alliance Data previously paid one of the highest tax rates among Fortune 500 companies, hence, because of the tax cuts signed in 2017, it’ll add $100 million in FCF for 2018.

Moreover, on the regulatory side of the business, the company’s Card Service segment is subject to the Dodd-Frank regulations. These rules will most likely be reversed or eliminated soon. Hence, Alliance’s business should benefit because of deregulation.

Source: Statista – Management consulting market size.

Also, the other two segments of ADS should be ok in my opinion. The marketing and management consulting market is expected to keep growing at a reasonable pace for the next few years. Secular growth should occur even despite the rise of ad blockers, cookie blockers, and tracking protection lists (TPLs). Nevertheless, those unlikely risks could render the company’s marketing services obsolete.

Furthermore, other systemic risks shouldn’t affect the company. For example, management claims that inflation is unlikely to hit their results for the time being.

Also, the AIR MILES and BrandLoyalty programs will benefit from the 2018 FIFA World Cup. This event should increase consumer spending with ADS and help generate double-digit growth in both of these segments.

Buybacks and Dividends

ADS is a very shareholder-friendly company. It has a stock repurchase program and recently announced quarterly dividends payable to shareholders. Their stock repurchases were done at the 225-240 range. These transactions give us an idea of where we’re likely to find buying pressure.

Source: Alliance Data Systems 2017 annual report.

During 2017, ADS bought back 2.3 shares of its stock to the tune of $553.7 million. It still has left $446 million in dry powder to keep repurchasing its shares. Have in mind that it previously bought its shares at the 225-240 price range. Because of this, I’d imagine that management should find the current share price very attractive.

Source: Alliance Data Systems 2017 annual report.

Conclusion

ADS is a good value option. It’s a stable business that’s growing reasonable overall. At its currently low multiples, it looks like an attractive candidate for a value portfolio. ADS sports a meager PE ratio of 15.72, and its forward PE sits at 8.20.

It’s also a company that has shown interest in its shares at higher levels than its current price tag and has enough free cash flow to buy back more shares. Also, its recent dividend announcement adds another shareholder-friendly aspect to the stock.

Nevertheless, investors should take caution with ADS because it’s particularly exposed to interest rate risks. The firm’s management has shown prudence and skill so far in this area. Moreover, they’re aware of such systemic risks, and they’re hedging their business through derivatives and other interest rate securities. Still, further rate increases should slow down Alliance’s secular growth.

All in all, ADS presents risks that justify a slight pullback. However, after such a massive selloff, it currently offers an attractive value proposition for investors.

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Bank of America (BAC) Position Boosted by Annex Advisory Services LLC

Annex Advisory Services LLC increased its holdings in Bank of America (NYSE:BAC) by 9.0% in the first quarter, according to its most recent 13F filing with the Securities and Exchange Commission (SEC). The institutional investor owned 56,835 shares of the financial services provider’s stock after buying an additional 4,682 shares during the quarter. Annex Advisory Services LLC’s holdings in Bank of America were worth $1,704,000 at the end of the most recent reporting period.

Other hedge funds have also modified their holdings of the company. Burt Wealth Advisors grew its holdings in Bank of America by 4,013.1% in the 3rd quarter. Burt Wealth Advisors now owns 4,401 shares of the financial services provider’s stock worth $112,000 after buying an additional 4,294 shares in the last quarter. HWG Holdings LP bought a new position in Bank of America in the 3rd quarter worth approximately $116,000. Avestar Capital LLC bought a new position in Bank of America in the 4th quarter worth approximately $135,000. Gradient Investments LLC bought a new position in Bank of America in the 4th quarter worth approximately $150,000. Finally, Taylor Hoffman Wealth Management bought a new position in Bank of America in the 4th quarter worth approximately $151,000. 69.96% of the stock is owned by institutional investors and hedge funds.

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BAC has been the subject of a number of research reports. Barclays increased their price target on Bank of America from $35.00 to $37.00 and gave the company an “equal weight” rating in a research note on Tuesday, April 17th. Vetr lowered Bank of America from a “hold” rating to a “sell” rating and set a $28.21 price target for the company. in a research note on Tuesday, February 13th. Royal Bank of Canada increased their price target on Bank of America to $35.00 and gave the company an “outperform” rating in a research note on Thursday, January 18th. ValuEngine lowered Bank of America from a “buy” rating to a “hold” rating in a research note on Wednesday, April 18th. Finally, Zacks Investment Research lowered Bank of America from a “buy” rating to a “hold” rating in a research note on Tuesday, February 13th. Nine analysts have rated the stock with a hold rating and fifteen have assigned a buy rating to the company’s stock. Bank of America has a consensus rating of “Buy” and an average price target of $32.13.

BAC opened at $30.92 on Monday. The firm has a market cap of $314.69 billion, a PE ratio of 16.90, a P/E/G ratio of 1.50 and a beta of 1.37. The company has a debt-to-equity ratio of 0.96, a current ratio of 0.92 and a quick ratio of 0.91. Bank of America has a fifty-two week low of $22.07 and a fifty-two week high of $33.05.

Bank of America (NYSE:BAC) last released its quarterly earnings data on Monday, April 16th. The financial services provider reported $0.62 earnings per share for the quarter, topping the consensus estimate of $0.59 by $0.03. The business had revenue of $23.10 billion during the quarter, compared to analyst estimates of $23.04 billion. Bank of America had a return on equity of 9.40% and a net margin of 19.65%. The company’s revenue was up 4.1% compared to the same quarter last year. During the same period last year, the company posted $0.41 EPS. equities research analysts forecast that Bank of America will post 2.55 earnings per share for the current fiscal year.

The business also recently disclosed a quarterly dividend, which will be paid on Friday, June 29th. Stockholders of record on Friday, June 1st will be paid a dividend of $0.12 per share. This represents a $0.48 annualized dividend and a dividend yield of 1.55%. The ex-dividend date is Thursday, May 31st. Bank of America’s dividend payout ratio is presently 26.23%.

About Bank of America

Bank of America Corporation, through its subsidiaries, provides banking and financial products and services for individual consumers, small- and middle-market businesses, institutional investors, large corporations, and governments worldwide. It operates through four segments: Consumer Banking, Global Wealth & Investment Management (GWIM), Global Banking, and Global Markets.

Institutional Ownership by Quarter for Bank of America (NYSE:BAC)

Shepherd Financial Partners LLC Has $2.38 Million Holdings in Bank of America (BAC)

Shepherd Financial Partners LLC lowered its position in Bank of America (NYSE:BAC) by 3.1% in the first quarter, according to the company in its most recent disclosure with the SEC. The firm owned 79,477 shares of the financial services provider’s stock after selling 2,531 shares during the period. Bank of America comprises approximately 0.6% of Shepherd Financial Partners LLC’s investment portfolio, making the stock its 28th biggest position. Shepherd Financial Partners LLC’s holdings in Bank of America were worth $2,380,000 at the end of the most recent quarter.

Several other institutional investors have also recently modified their holdings of the business. Checchi Capital Advisers LLC raised its position in shares of Bank of America by 6.8% during the 1st quarter. Checchi Capital Advisers LLC now owns 91,918 shares of the financial services provider’s stock worth $2,757,000 after purchasing an additional 5,841 shares during the last quarter. Allen Capital Group LLC raised its position in shares of Bank of America by 25.9% during the 1st quarter. Allen Capital Group LLC now owns 29,099 shares of the financial services provider’s stock worth $873,000 after purchasing an additional 5,991 shares during the last quarter. FSI Group LLC raised its position in shares of Bank of America by 45.2% during the 1st quarter. FSI Group LLC now owns 298,840 shares of the financial services provider’s stock worth $8,962,000 after purchasing an additional 92,999 shares during the last quarter. FormulaFolio Investments LLC raised its position in shares of Bank of America by 32.2% during the 1st quarter. FormulaFolio Investments LLC now owns 30,728 shares of the financial services provider’s stock worth $922,000 after purchasing an additional 7,482 shares during the last quarter. Finally, Putnam FL Investment Management Co. raised its position in shares of Bank of America by 2.9% during the 1st quarter. Putnam FL Investment Management Co. now owns 243,860 shares of the financial services provider’s stock worth $7,313,000 after purchasing an additional 6,769 shares during the last quarter. Institutional investors and hedge funds own 69.96% of the company’s stock.

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Bank of America opened at $30.89 on Friday, MarketBeat.com reports. The company has a quick ratio of 0.91, a current ratio of 0.92 and a debt-to-equity ratio of 0.96. The firm has a market cap of $314.69 billion, a P/E ratio of 16.88, a PEG ratio of 1.50 and a beta of 1.37.

Bank of America (NYSE:BAC) last posted its quarterly earnings results on Monday, April 16th. The financial services provider reported $0.62 earnings per share for the quarter, beating the consensus estimate of $0.59 by $0.03. Bank of America had a net margin of 19.65% and a return on equity of 9.40%. The business had revenue of $23.10 billion during the quarter, compared to analysts’ expectations of $23.04 billion. During the same quarter in the prior year, the company posted $0.41 EPS. The business’s revenue for the quarter was up 4.1% on a year-over-year basis. sell-side analysts forecast that Bank of America will post 2.55 earnings per share for the current year.

The company also recently declared a quarterly dividend, which will be paid on Friday, June 29th. Stockholders of record on Friday, June 1st will be paid a $0.12 dividend. The ex-dividend date is Thursday, May 31st. This represents a $0.48 annualized dividend and a dividend yield of 1.55%. Bank of America’s dividend payout ratio (DPR) is 26.23%.

Several research analysts recently weighed in on the stock. ValuEngine downgraded shares of Bank of America from a “buy” rating to a “hold” rating in a research report on Tuesday, January 16th. Barclays increased their price objective on shares of Bank of America from $35.00 to $37.00 and gave the company an “equal weight” rating in a report on Tuesday, April 17th. Royal Bank of Canada increased their price objective on shares of Bank of America to $35.00 and gave the company an “outperform” rating in a report on Thursday, January 18th. Vetr downgraded shares of Bank of America from a “buy” rating to a “hold” rating and set a $34.13 price objective for the company. in a report on Monday, March 12th. Finally, Vining Sparks assumed coverage on shares of Bank of America in a report on Monday, April 16th. They issued a “buy” rating and a $35.00 price objective for the company. Nine research analysts have rated the stock with a hold rating and fifteen have issued a buy rating to the company’s stock. Bank of America has a consensus rating of “Buy” and an average target price of $32.13.

About Bank of America

Bank of America Corporation, through its subsidiaries, provides banking and financial products and services for individual consumers, small- and middle-market businesses, institutional investors, large corporations, and governments worldwide. It operates through four segments: Consumer Banking, Global Wealth & Investment Management (GWIM), Global Banking, and Global Markets.

Want to see what other hedge funds are holding BAC? Visit HoldingsChannel.com to get the latest 13F filings and insider trades for Bank of America (NYSE:BAC).

Institutional Ownership by Quarter for Bank of America (NYSE:BAC)

Shepherd Financial Partners LLC Has $2.38 Million Holdings in Bank of America (BAC)

Shepherd Financial Partners LLC lowered its position in Bank of America (NYSE:BAC) by 3.1% in the first quarter, according to the company in its most recent disclosure with the SEC. The firm owned 79,477 shares of the financial services provider’s stock after selling 2,531 shares during the period. Bank of America comprises approximately 0.6% of Shepherd Financial Partners LLC’s investment portfolio, making the stock its 28th biggest position. Shepherd Financial Partners LLC’s holdings in Bank of America were worth $2,380,000 at the end of the most recent quarter.

Several other institutional investors have also recently modified their holdings of the business. Checchi Capital Advisers LLC raised its position in shares of Bank of America by 6.8% during the 1st quarter. Checchi Capital Advisers LLC now owns 91,918 shares of the financial services provider’s stock worth $2,757,000 after purchasing an additional 5,841 shares during the last quarter. Allen Capital Group LLC raised its position in shares of Bank of America by 25.9% during the 1st quarter. Allen Capital Group LLC now owns 29,099 shares of the financial services provider’s stock worth $873,000 after purchasing an additional 5,991 shares during the last quarter. FSI Group LLC raised its position in shares of Bank of America by 45.2% during the 1st quarter. FSI Group LLC now owns 298,840 shares of the financial services provider’s stock worth $8,962,000 after purchasing an additional 92,999 shares during the last quarter. FormulaFolio Investments LLC raised its position in shares of Bank of America by 32.2% during the 1st quarter. FormulaFolio Investments LLC now owns 30,728 shares of the financial services provider’s stock worth $922,000 after purchasing an additional 7,482 shares during the last quarter. Finally, Putnam FL Investment Management Co. raised its position in shares of Bank of America by 2.9% during the 1st quarter. Putnam FL Investment Management Co. now owns 243,860 shares of the financial services provider’s stock worth $7,313,000 after purchasing an additional 6,769 shares during the last quarter. Institutional investors and hedge funds own 69.96% of the company’s stock.

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Bank of America opened at $30.89 on Friday, MarketBeat.com reports. The company has a quick ratio of 0.91, a current ratio of 0.92 and a debt-to-equity ratio of 0.96. The firm has a market cap of $314.69 billion, a P/E ratio of 16.88, a PEG ratio of 1.50 and a beta of 1.37.

Bank of America (NYSE:BAC) last posted its quarterly earnings results on Monday, April 16th. The financial services provider reported $0.62 earnings per share for the quarter, beating the consensus estimate of $0.59 by $0.03. Bank of America had a net margin of 19.65% and a return on equity of 9.40%. The business had revenue of $23.10 billion during the quarter, compared to analysts’ expectations of $23.04 billion. During the same quarter in the prior year, the company posted $0.41 EPS. The business’s revenue for the quarter was up 4.1% on a year-over-year basis. sell-side analysts forecast that Bank of America will post 2.55 earnings per share for the current year.

The company also recently declared a quarterly dividend, which will be paid on Friday, June 29th. Stockholders of record on Friday, June 1st will be paid a $0.12 dividend. The ex-dividend date is Thursday, May 31st. This represents a $0.48 annualized dividend and a dividend yield of 1.55%. Bank of America’s dividend payout ratio (DPR) is 26.23%.

Several research analysts recently weighed in on the stock. ValuEngine downgraded shares of Bank of America from a “buy” rating to a “hold” rating in a research report on Tuesday, January 16th. Barclays increased their price objective on shares of Bank of America from $35.00 to $37.00 and gave the company an “equal weight” rating in a report on Tuesday, April 17th. Royal Bank of Canada increased their price objective on shares of Bank of America to $35.00 and gave the company an “outperform” rating in a report on Thursday, January 18th. Vetr downgraded shares of Bank of America from a “buy” rating to a “hold” rating and set a $34.13 price objective for the company. in a report on Monday, March 12th. Finally, Vining Sparks assumed coverage on shares of Bank of America in a report on Monday, April 16th. They issued a “buy” rating and a $35.00 price objective for the company. Nine research analysts have rated the stock with a hold rating and fifteen have issued a buy rating to the company’s stock. Bank of America has a consensus rating of “Buy” and an average target price of $32.13.

About Bank of America

Bank of America Corporation, through its subsidiaries, provides banking and financial products and services for individual consumers, small- and middle-market businesses, institutional investors, large corporations, and governments worldwide. It operates through four segments: Consumer Banking, Global Wealth & Investment Management (GWIM), Global Banking, and Global Markets.

Want to see what other hedge funds are holding BAC? Visit HoldingsChannel.com to get the latest 13F filings and insider trades for Bank of America (NYSE:BAC).

Institutional Ownership by Quarter for Bank of America (NYSE:BAC)

Better Buy: Bank of America Corporation vs. JPMorgan

A decade after the financial crisis, big banks have seen their businesses recover and become stronger than ever. Bank of America (NYSE:BAC) and JPMorgan Chase (NYSE:JPM) have the most assets of any two U.S. banks, and their stocks have done quite well recently.

At this point, interest rates are starting to become more favorable for banking institutions, and both B of A and JPMorgan have consumer-facing operations that can take advantage of those trends. Yet after already having seen their shares climb, smart investors want to know which big bank is the smarter play right now. Below, we’ll look more closely at Bank of America and JPMorgan by using some key metrics that should reveal how the two are doing and which has more promising prospects for shareholders.

Stock performance and valuation

Both Bank of America and JPMorgan have delivered solid performance over the past 12 months. Their returns are nearly identical, with JPMorgan just eking out the win, rising 25% compared to B of A’s 24% gain since May 2017.

Three people in an open lobby with a sign saying Chase in the background.

Image source: JPMorgan Chase.

In terms of simple earnings-based valuations, the two stocks are quite close to each other. If you start with backward-looking profits, JPMorgan looks a little cheaper, trading at 17 times trailing earnings compared to a multiple of 19 for B of A. However, the two banks switch places when you look at projected forward earnings, as Bank of America trades with a forward multiple of just 10, compared to JPMorgan’s corresponding figure of 11.

However, investors often judge asset quality by offering a bigger premium to book value, and there, B of A looks cheaper. The Charlotte-based bank trades at just 1.2 times book value, compared to more than 1.6 for JPMorgan. That’s enough to give Bank of America a slightly cheaper look, but it’s one that JPMorgan shareholders would argue shows greater market confidence in their stock rather than B of A’s.

Dividends

Bank investors have had to be patient to see dividends come back at many financial institutions. Bank of America and JPMorgan have both strived to restore former payouts. JPMorgan’s 2% yield outpaces the 1.6% yield that Bank of America currently pays.

JPMorgan had a real edge in getting its dividend back to where it had been before the financial crisis. With its first post-crisis dividend boost coming in 2011, the New York-based bank was able to surpass its old record payout by 2014. Since 2010, the company has raised its dividend eight times and now pays more than 11 times what it did at the bottom of the market. By contrast, Bank of America didn’t make its first dividend increase until 2014, and although the current $0.12 per share payout is 12 times what it paid throughout most of the early 2010s, it still pales in comparison to its pre-crisis quarterly distributions. JPMorgan has a clear edge on the dividend front.

Growth prospects and risk

2018 is shaping up to be a good year for banks, and both B of A and JPMorgan are aiming to take advantage. Bank of America’s first-quarter results showed impressive growth in most key areas, including outstanding loans, total deposit balances, brokerage assets at its Merrill Edge consumer brokerage unit, and total assets under management at B of A’s wealth management operations. More efficient operations have helped boost returns on equity and assets, and the company has embraced the digital revolution by making a wider range of services available by mobile device. Although the company didn’t take full advantage of market volatility during the first quarter by boosting trading revenue, Bank of America still expects interest spreads to rise further, adding to overall profitability over time.

For JPMorgan, the first quarter had a lot of good news. Growth in core loans and deposits outpaced Bank of America’s gains, and JPMorgan also saw nice rises in client investment assets, commercial loans, credit card transactions, and wealth management. JPMorgan also got a nice boost from its equity trading unit, which saw record-high revenue. As with B of A, fixed-income trading at JPMorgan Chase was sluggish, but attention to cost discipline and a nice tailwind from lower tax rates under the new tax laws helped to push the bank forward. JPMorgan sees strong economic conditions globally, and it believes that those favorable factors will continue to help the bank grow throughout 2018 and beyond.

Staying on the fast track

Bank of America has done a lot to bounce back more aggressively over the past year, but JPMorgan Chase was quicker to start growing again after the crisis, and it’s maintained that head-start. Even with higher valuations, JPMorgan looks like the better buy for those who want to maximize their chances for future growth.

Buy Bank of America Corp Stock on Strong Earnings Results

On Monday, Bank of America Corp (NYSE:BAC) reported fiscal first-quarter results. The banking giant beat on both earnings per share and revenue expectations. Despite the good results, BAC stock was down in early Monday trading before rallying about 1% in the afternoon.

So what gives?

Unfortunately for bullish investors, the reaction by Bank of America stock isn’t much of a surprise. It follows the same pattern — top- and bottom-line beat, followed by a stock-price decline — as JPMorgan Chase & Co. (NYSE:JPM), Citigroup Inc (NYSE:C) and Wells Fargo & Co (NYSE:WFC).

The price action creates a quandary to many investors, given the fundamental backdrop the banks are operating within. Interest rates are on the rise, allowing the banks to pocket billions more in profit on an annual basis. The economy is good, growth is strong and the valuations are downright cheap.

The lack of enthusiasm following the results is surprising. One reason could be the fear of an inverting bond spread. I touched on this fear recently with JPMorgan. Despite JPM’s great earnings results, shares turned lower too.

As the yield spread between between long-term Treasuries and short-term Treasuries continues to shrink, many fear what this could be trying to tell us. Bears will say that it means we could be approaching a recession. The 10-year and 2-year Treasury yield spreads and the 30-year and 5-year yield spreads are at their lowest levels since 2007, the time of the financial crisis. Coupled with the Federal Reserve decreasing its balance sheet, the economy could be on shaky ground.

Bulls, on the other hand, have a simple explanation. Following the Great Recession, the Fed was forced to cut interest rates down to zero in hopes of spurring economic growth. Now that the economy is chugging along with encouragement, we need to “normalize” these interest rates and raise them. That — the bulls say — is inflating the yield on short-term bonds while having less of an effect on long-term Treasuries.

The Quarter and Year for BAC

That all seems complicated and under the radar to many investors. But it’s a serious concern being talked about on Wall Street. How it relates to BAC stock specifically is outside of my scope, though. Meaning that, if a recession were looming on the horizon, which I don’t believe to be the case for 2018, then why wouldn’t more stocks be under pressure? Why just the banks? Any cyclical business would be at risk, as would the market as a whole.

When I look at BAC stock, it doesn’t scream “sell!” If anything, I want to find a spot to buy the bank.

In the quarter, revenue grew 3.8% year over year (YoY), while earnings per share of 62 cents came in 3 cents per share ahead of expectations. While revenue growth was just okay, earnings jumped almost 40% YoY. That’s tremendous growth and not just a one-time boost.

Analysts see the company’s fiscal first quarter playing out for the whole year. Meaning that they expect 3.8% revenue growth in 2018 and full-year earnings growth of 36%. That’s darn impressive; and 2019 shouldn’t be weak either. Short of a recession, analysts are looking for sales growth to accelerate to 4.1% and for earnings to grow another 14%.

It leaves BAC stock trading at a paltry 11.8 times 2018 earnings and at just 10.4 times 2019 estimates. While not massive, it’s also worth noting that Bank of America stock has a 1.6% dividend yield too. How can shares sell at such a discount given this growth rate and strong backdrop?

That’s one reason why, like JPM, I think shares should be heading higher, not lower, on earnings.

Trading Bank of America Stock

Support at $29 has been quite strong, despite there being no obvious reason as to why — at least when looking at the charts that is. Still, though, this level held up during panic selling in the S&P 500 in February, as well as further trade-war selling in March. It’s still holding above this level post-earnings.

trading BAC stock price
Click to Enlarge

This leads me to believe that BAC stock will stay above these levels. Below $29 and I would become much more concerned. It would also be more encouraging to see Bank of America back above its 50-day and 100-day moving averages. If so, it puts a retest of the $32.50 breakout we were watching last month back in play.

Keep in mind Goldman Sachs Group Inc (NYSE:GS) reports earnings on Tuesday, while Morgan Stanley (NYSE:MS) reports earnings on Wednesday.

Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell. As of this writing, Bret Kenwell held a position in JPM. 

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Leading and Lagging Sectors

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In trading on Thursday, basic materials shares fell by 0.45 percent. Meanwhile, top losers in the sector included Companhia Siderurgica Nacional (ADR) (NYSE: SID), down 13 percent, and Dominion Diamond Corp (NYSE: DDC), down 9 percent.

Top 10 Services Stocks For 2016: Williams-Sonoma Inc.(WSM)

Williams-Sonoma, Inc. operates as a specialty retailer of home products. It offers culinary and serving equipment, including cookware, cookbooks, cutlery, informal dinnerware, glassware, table linens, specialty foods, and cooking ingredients; and bridal and gift items under the Williams-Sonoma brand name. The company also provides home furnishing categories, including furniture, textiles, decorative accessories, lighting, and tabletop items under the West Elm brand name; bed and bath products under the Pottery Barn brand name; and children?s furnishings and accessories under the Pottery Barn Kids brand name. Williams-Sonoma, Inc. sells its home products through four retail store concepts, which include Williams-Sonoma, Pottery Barn, Pottery Barn Kids, and West Elm; six direct-mail catalogs that comprise Williams-Sonoma, Pottery Barn, Pottery Barn Kids, Pottery Barn Bed and Bath, PBteen, and West Elm; and six e-commerce Websites, which consist of williams-sonoma.com, potte rybarn.com, potterybarnkids.com, pbteen.com, westelm.com, and wshome.com. As of January 30, 2011, it operated 592 stores, including 260 Williams-Sonoma, 193 Pottery Barn, 85 Pottery Barn Kids, 36 West Elm, and 18 outlet stores located in 44 states of the United States; Washington, D.C.; Canada; and Puerto Rico. The company was founded in 1956 and is headquartered in San Francisco, California.

Advisors’ Opinion:

  • [By Monica Gerson]

    Williams-Sonoma, Inc. (NYSE: WSM) is estimated to post its quarterly earnings at $0.50 per share on revenue of $1.08 billion. Williams-Sonoma shares gained 1.50 percent to close at $50.88 on Tuesday.

Top 10 Services Stocks For 2016: Outerwall Inc.(OUTR)

 

Outerwall Inc., through its subsidiaries, provides automated retail solutions primarily in the United States, Canada, Puerto Rico, Ireland, and the United Kingdom. Its Redbox segment owns and operates approximately 40,480 Redbox kiosks in 33,060 locations that enable consumers to rent or purchase movies and video games. The companys Coinstar segment owns and operates approximately 20,930 coin-counting kiosks in 19,660 locations, which enable consumers to convert their coin to cash, convert coins and paper bills to stored value products, and exchange gift cards for cash. The companys ecoATM segment owns and operates approximately 2,250 kiosks in 2,020 locations that enable consumers to purchase and sell electronic devices for cash at self-service kiosks. Its ecoATM segment also operates gazelle.com, a direct-to-consumer online solution for the purchase and sale of certain electronic devices for cash. The companys other co ncepts and investments include identifying, evaluating, building, acquiring, and developing self-service concepts in the automated retail space. The company was formerly known as Coinstar, Inc. and changed its name to Outerwall Inc. in June 2013. Outerwall Inc. was founded in 1991 and is headquartered in Bellevue, Washington.

Advisors’ Opinion:

  • [By Monica Gerson]

    Shares of Outerwall Inc (NASDAQ: OUTR) surged over 8 percent in Monday’s after-hours trading session following news for investors the company has begun the process of exploring strategic and financial alternatives. Outerwall’s Board also announced the raising of the company’s quarterly dividend from $0.30 to $0.60 per share. Outerwall shares jumped 8.11 percent to $37.18 in the after-hours trading session.

Top Gas Utility Stocks To Watch For 2016: MEDIFAST INC(MED)

Medifast, Inc., through its subsidiaries, engages in the production, distribution, and sale of weight management and disease management products, and other consumable health and diet products in the United States. The company?s product lines include weight and disease management, meal replacement, and vitamins. It also operates weight control centers that offer Medifast programs for weight loss and maintenance, customized patient counseling, and inbody composition analysis. The company markets its products under the Medifast and Essential brand names, including shakes, appetite suppression shakes, women?s health shakes, diabetics shakes, joint health shakes, coronary health shakes, calorie burn drinks, calorie burn flavor infusers, antioxidant shakes, antioxidant flavor infusers, bars, crunch bars, soups, chili, oatmeal, pudding, scrambled eggs, hot cocoa, cappuccino, chai latte, iced teas, fruit drinks, pretzels, puffs, brownie, pancakes, soy crisps, crackers, and omega 3 and digestive health products. Medifast Inc. sells its products through various channels of distribution comprising Web, call center, independent health advisors, medical professionals, weight loss clinics, and direct consumer marketing supported via the phone and the Web; Take Shape for Life, a physician led network of independent health coaches; and weight control centers. The company was founded in 1980 and is headquartered in Owings Mills, Maryland.

Advisors’ Opinion:

  • [By Lisa Levin]

    In trading on Friday, non-cyclical consumer goods & services shares rose by just 0.3 percent. Meanwhile, top losers in the sector included Medifast Inc (NYSE: MED), down 5 percent, and Bridgford Foods Corporation (NASDAQ: BRID), down 6 percent.

Top 10 Services Stocks For 2016: Starbucks Corporation(SBUX)

Starbucks Corporation purchases and roasts whole bean coffees. It operates approximately 16,858 stores, including 8,833 company-operated stores and 8,025 licensed stores. The company offers approximately 30 blends and single-origin premium arabica coffees. It also provides handcrafted beverages, such as fresh-brewed coffee, hot and iced espresso beverages, coffee and non-coffee blended beverages, Vivanno smoothies, and Tazo teas; and merchandise products, including home espresso machines, coffee brewers and grinders, coffee mugs and accessories, packaged goods, music, books, and gift items. In addition, it offers fresh food items, which comprise baked pastries, sandwiches, salads, oatmeal, yogurt parfaits, and fruit cups. Further, it also provides VIA ready brew coffee, bottled frappuccino beverages, discoveries chilled cup coffee, doubleshot espresso drinks, iced coffee, whole bean coffee, and ice creams. The company?s brand portfolio includes Tazo tea, Ethos water, Seatt le?s Best Coffee, and Torrefazione Italia Coffee. Starbucks Corporation sells its products in approximately 50 countries worldwide. Starbucks Corporation was founded in 1971 and is based in Seattle, Washington.

Advisors’ Opinion:

  • [By Reuters]

    Brent Lewin/Bloomberg via Getty Images Coffee chain Starbucks has asked U.S. customers to leave their guns at home after being dragged into an increasingly fractious debate over U.S. gun rights in the wake of multiple mass shootings. While many U.S. restaurant chains and retailers don’t allow firearms on their properties, Starbucks’ policy had been to default to local gun laws, including “open carry” regulations in many U.S. states that allow people to bring guns into stores. In August, this led gun-rights advocates to hold a national “Starbucks Appreciation Day” to thank the firm for its stance, pulling the company deeper into the fierce political fight. Locations for Starbucks Appreciation Day events included Newtown, Conn., where 20 children and six adults were shot dead in an elementary school in December. Starbucks (SBUX) closed that shop before the event was scheduled to begin. Chief executive Howard Schultz said in an open letter to customers late Tuesday that Starbucks Appreciation Day events “disingenuously portray Starbucks as a champion of ‘open carry.’ To be clear: we do not want these events in our stores.” The coffee chain didn’t, however, issue an outright ban on guns in its nearly 7,000 company-owned cafes, saying this would potentially require staff to confront armed customers. The Seattle-based company hoped to give “responsible gun owners a chance to respect its request,” Schultz said. The CEO told Reuters the policy change wasn’t the result of the Newtown Starbucks Appreciation Day event, which prompted the Newtown Action Alliance to call on the company to ban guns at all of its U.S. stores. Nor was it in response to the mass shootings this week at the Washington Navy Yard. “We’ve seen the ‘open carry’ debate become increasingly uncivil and, in some cases, even threatening,” Schultz wrote, noting that “some anti-gun activists have also played a role in ratcheting up the rhetoric and friction,” at times soliciting and confronting empl

  • [By Victor Mora]

    Starbucks provides in-demand coffee and tea products and services to consumers around the world. The company is reportedly ready to expand to Colombia, where it sources most of its beans. The stock has been flying higher in recent years and is now trading at all-time high prices. Over the past four quarters, earnings and revenues have been rising, which have led to upbeat investors in the company. Relative to its peers and sector, Starbucks has been a year-to-date performance leader. Look for Starbucks to continue to OUTPERFORM.

Top 10 Services Stocks For 2016: Stage Stores, Inc.(SSI)

 

Stage Stores, Inc. operates as a specialty department store retailer in small and mid-sized towns and communities in the United States. Its merchandise portfolio comprises moderately priced brand name and private label apparel, accessories, cosmetics, footwear, and home goods. The company also offers merchandise direct-to-consumer through its e-commerce Website and send program. As of January 30, 2016, it operated 834 specialty department stores in 39 states and a direct-to-consumer channel under the BEALLS, GOODY’S, PALAIS ROYAL, PEEBLES, and STAGE nameplates. The company was founded in 1988 and is headquartered in Houston, Texas.

Advisors’ Opinion:

  • [By Monica Gerson]

    Stage Stores Inc (NYSE: SSI) shares fell 15.11 percent to $5.00 in pre-market trading after the company reported weaker-than-expected Q1 results and lowered its full-year outlook.

Top 10 Services Stocks For 2016: Liberty Interactive Corporation(QVCA)

Liberty Interactive Corporation, incorporated on February 28, 2006, owns interests in subsidiaries and other companies, which are primarily engaged in the video and online commerce industries. Through its subsidiaries and affiliates, the Company operates in North America, Europe and Asia. The Company’s principal businesses and assets include its subsidiaries QVC, Inc. (QVC), zulily, llc (zulily), Bodybuilding.com, LLC (Bodybuilding) and CommerceHub and Evite, Inc. (Evite). The Company’s segments include QVC, zulily, and Corporate and other.

Bodybuilding is an e-retailer of nutritional and dietary supplements. Bodybuilding also hosts an online health and fitness publication, offering free daily fitness content, workouts, video-based training plans, recipes, health advice and motivational stories. The online e-retail model combines detailed product information and real-time user reviews on approximately 15,000 health and fitness supplements and accessories.

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CommerceHub provides a cloud-based e-commerce fulfillment and marketing software platform of integrated supply, demand and delivery solutions for large retailers, online marketplaces and digital marketing channels, as well as consumer brands, manufacturers, distributors and other market participants. CommerceHub’s software platform acts as a hub that allows trading partners to conduct omni-channel commercial relationships in consumer and business-to-business e-commerce markets. Approximately 9,500 trading partners have access to CommerceHub’s platform daily to exchange critical information with each other, including orders, invoices, product information and other electronic documents. Evite is an online invitation and social event planning service on the Web. In addition to invitations, Evite also offers party ideas, planning checklists and other tools.

QVC

QVC markets and sells a range of consumer products primarily through live merchandis e-focused televised shopping programs distributed to approxi! mately 360 million households each day and through its Websites, including QVC.com, and other interactive media, such as mobile applications. In the United States, QVC distributes its programming live 24 hours per day, 364 days per year and presents on over 770 products every week. Internationally, QVC distributes live programming 8 to 24 hours per day, depending on the market. QVC classifies its products into over six groups: home, beauty, apparel, jewelry, accessories and electronics. QVC’s televised shopping programs reached approximately 140 million television households outside of the United States, primarily in Germany, Austria, Japan, the United Kingdom, the Republic of Ireland, Italy and France. In addition, QVC’s joint venture in China reached approximately 110 million homes. Internationally, QVC-International also broadcasts pre-recorded shows on additional channels that offer viewers access to a range of QVC programming options. These channels include QVC Beauty & Style and QVC Plus in Germany and QVC Beauty, QVC Extra, QVC Style and QVC +1 in the United Kingdom.

QVC distributes its television programs, through satellite and optical fiber, to cable television and direct-to-home satellite system operators for retransmission to their subscribers in the United States, Germany, Japan, the United Kingdom, France and neighboring countries. In the United States, QVC uplinks its analog and digital programming transmissions using a third-party service. QVC’s Web and mobile platforms are integrated with its televised programming and product distribution capabilities.

Zulily

Zulily is an online retailer. Zulily’s merchandise includes women’s, children’s and men’s apparel, children’s merchandise and other products, such as kitchen accessories and home decor. Zulily launches a range of flash sales events. These events feature thousands of product styles from different vendors and typically last for over 70 h ours. Zulily acquires new e-mail subscribers through a set o! f paid an! d unpaid marketing channels, including affiliate channels and partners, customer referrals, direct navigation, display advertising, key word search campaigns, search engine optimization, social media and television ads. Zulily acquires customers once through paid and unpaid sources, and then drives engagement and repeat purchases from those customers over a long period of time through the sending of daily e-mails and mobile push communications.

The Company competes with Amazon, Travelocity, Priceline, American Express and Navigant International.

Advisors’ Opinion:

  • [By Scott Rubin]

    Stock gainers included Mercadolibre Inc (NASDAQ: MELI), up almost 14 percent, and Nu Skin Enterprises, Inc. (NYSE: NUS), which added 12 percent. The positive gains in both stocks were due to strong earnings reports. Shares of Liberty Interactive Group (NASDAQ: QVCA) plunged almost 22 percent on Friday due to disappointing sales growth in its fiscal second quarter. Pharmaceutical giant Bristol-Myers Squibb Co (NYSE: BMY) lost 16 percent after a disappointing study involving its Opdivo drug.

Top 10 Services Stocks For 2016: Annaly Capital Management Inc(NLY)

 

Annaly Capital Management, Inc. owns a portfolio of real estate related investments in the United States. It invests in various types of agency mortgage-backed securities and related derivatives to hedge these investments; and residential credit investments, such as credit risk transfer securities and non-agency mortgage-backed securities. The company also acquires, finances, and manages commercial loans and other commercial real estate debt, commercial mortgage-backed securities, and other commercial real estate-related assets. In addition, it engages in corporate middle market lending transactions; and operates as a broker-dealer. The company has elected to be taxed as a real estate investment trust (REIT). As a REIT, it is not subject to federal income tax to the extent that it distributes its taxable income to its shareholders. Annaly Capital Management, Inc. was founded in 1997 and is based in New York, New York.

Advisors’ Opinion:

  • [By Amanda Alix]

    It was just about one year ago that QE3 made its debut, and mortgage REITs, particularly agency-only players like Annaly Capital (NYSE: NLY  ) , Armour Residential (NYSE: ARR  ) , and American Capital Agency (NASDAQ: AGNC  ) began moaning about the increased competition for mortgage-backed securities guaranteed by Fannie Mae and Freddie Mac.

  • [By Ben Levisohn]

    Hatteras Financial (HTS) has jumped 9.4% to $15.60 after agreeing to be purchased byAnnaly Capital Management (NLY) for $1.5 billion.Annaly Capital Management has dropped 1.1% to $$10.30.

  • [By Boniface Murigu]

    It’s no secret that mREITs such as American Capital Agency (NASDAQ: AGNC  ) (NASDAQ: AGNC  ) (NASDAQ: AGNC  ) , Annaly Capital Management (NYSE: NLY  ) (NYSE: NLY  ) (NYSE: NLY  ) ,and CYS Investmentshave gone through a very turbulent trading period, with all major players losing a sizable share of market value.

Top 10 Services Stocks For 2016: Home Depot, Inc. (The)(HD)

 

The Home Depot, Inc. operates as a home improvement retailer. It operates The Home Depot stores that sell various building materials, home improvement products, and lawn and garden products, as well as provide installation, home maintenance, and professional service programs to do-it-yourself, do-it-for-me (DIFM), and professional customers. The company offers installation programs that include flooring, cabinets, countertops, water heaters, and sheds; and professional installation in various categories sold through its in-home sales programs, such as roofing, siding, windows, cabinet refacing, furnaces, and central air systems, as well as acts as a contractor to provide installation services to its DIFM customers through third-party installers. It primarily serves home owners; and renovators/remodelers, general contractors, repairmen, installers, small business owners, and tradesmen. The company also sells its products throug h online. As of December 31, 2015, it had 2,274 stores, including 1,977 in the United States, 182 in Canada, and 115 in Mexico. The Home Depot, Inc. was founded in 1978 and is based in Atlanta, Georgia.

Advisors’ Opinion:

  • [By Ben Levisohn]

    Credit Suisse analystSeth Sigman and team see slowing growth for Home Depot (HD) and Lowe’s (LOW) when they release their earnings but also believe that should remain a bright spot in retail:

    Michael Nagle/Bloomberg News

    We see limited/less upside for HD and LOW in Q2relative to prior quarters, and expect sequentially lower growth, as iswell documented by now. But, we expect Q2 results to outshine whatseems to be a weakening broader retail landscape, and we believeresults improved throughout the quarter as data today confirmed.Further, these stocks have underperformed the market by ~300 bpssince reporting Q1. As such, if one wants retail exposure, HD/LOWshould remain a good place to be.

    Shares of Home Depot have fallen 0.6% to $136.16 at 2:14 p.m. today, while Lowe’s has dipped 0.1% to $81.53.

  • [By Ben Levisohn]

    Credit Suisse analysts Seth Sigman and Kieran McGrath argue that both Home Depot (HD) and Lowe’s (LOW) will beat first -quarter earnings forecasts, but Home Depot is a “better way to play” earnings. They explain why:

    Michael Nagle/Bloomberg News

    Home Depot/Lowe’s are positioned to deliver upside to Q1 expectations. With that relatively well known, our incremental analysis revisits the differences in housing trends and demand drivers inHome Depot vs.Lowe’s markets down to the store-level, helping explain the recent comps gap, as well as assess the sales and margin upside or recoverability inLowe’s case, as that remains a key consideration for investors and valuation.

    The call: We believeHome Depot is the better way to play Q1 (even as these stocks move together on a longer term basis), as its markets have still outperformed Lowe’s, and its Pro oriented categories likely benefited more from weather. For Lowe’s, based on its market differences and more challenging seasonal trends in April, we assume the gap remains wide and similar to 4Q15. That said, our analysis supports thatLowe’s has opportunities to narrow the gap as the year goes on. And its EPS outlook on its own supports upside to its stock.

    Shares of Home Depot have gained 0.5% to $136.37 at 3:25 p.m. today, while Lowe’s has risen 0.6% to $75.98.

  • [By Ben Levisohn]

    We wondered if Advance Auto Parts (AAP) just had a bad quarter or something more serious, whether there was beauty in being boring for Home Depot (HD), and just how risky Ford Motors’ (F) autonomous driving plan might be.

  • [By Jonas Elmerraji]

    Home Depot (HD) is enjoying some strong performance in 2013. Shares of the world’s largest home improvement retailer have rallied more than 22% since the calendar flipped over to January, besting the broad market’s impressive climb higher over the same period. More recently, HD has been tracking sideways, but that doesn’t mean that the upside is over in this home improvement stock. Here’s how to trade it.

    HD is currently forming a rectangle pattern, a setup that’s formed by a horizontal resistance level above shares at $80 and horizontal support below shares at $72. The setup gets its name because those two lines effectively “box in” shares of Home Depot right now. That makes it an “if/then trade.”

    An if/then trade is a contingent trade that doesn’t have directional bias — in other words, the ultimate direction of the trade is determined by the direction that HD breaks out of its channel. So, if HD breaks above resistance at $80, then it’s time to buy shares. If they slide below $72 support, then it’s time to short. There’s no trade until one of those conditions is met.

Top 10 Services Stocks For 2016: H&R Block, Inc.(HRB)

 

H&R Block, Inc., through its subsidiaries, provides tax preparation, banking, and other services to the general public primarily in the United States, Canada, and Australia. The company offers assisted income tax return preparation and related services through a system of retail offices operated directly by the company or by franchisees; and online tax services, such as tax advice, professional and do-it-yourself (DIY) tax return preparation, and electronic filing services through its Website hrblock.com. It also develops and markets DIY desktop income tax preparation software; and develops and provides applications for mobile devices, which offer tax and related services. In addition, the company provides refund anticipation checks, H&R Block Emerald Advance lines of credit and Prepaid MasterCard, and Peace of Mind Extended Service Plan, Tax Identity Shield, and Cash Back refund discount programs. Further, it offers tradition al retail banking services primarily to its assisted and DIY tax clients. The company was founded in 1946 and is headquartered in Kansas City, Missouri.

Advisors’ Opinion:

  • [By Monica Gerson]

    Shares of H & R Block Inc (NYSE: HRB) surged over 12 percent on Friday as the company reported better-than-expected results for its fourth quarter and lifted its quarterly dividend to $0.22 per share. H & R Block shares gained 0.29 percent to $24.30 in the after-hours trading session.

  • [By Ben Levisohn]

    H&R Block (HRB) has climbed 3.1% to $22.20 after beating earnings forecasts by a penny and hiking its dividend.

    Cliffs Natural Resources (CLF) has gained 1.2% to $5.16 after getting upgraded to Outperform from Market Perform at Macquarie.

  • [By Lisa Levin]

    H & R Block Inc (NYSE: HRB) was down, falling around 14 percent to $20.42 as the company reported a disappointing tax season. The company announced plans to lower 13 percent of its workforce. Oppenheimer downgraded H&R Block from Outperform to Perform.

Top 10 Services Stocks For 2016: Wendy’s/Arby’s Group Inc.(WEN)

The Wendy’s Company operates as a quick-service hamburger company in the United States. The company, through its subsidiary, Wendy’s International, Inc., operates as a franchisor of the Wendy’s restaurant system. As of December 26, 2011, the Wendy’s system comprised approximately 6,500 franchise and company restaurants in the United States and the United States territories, as well as in 26 other countries worldwide. The company was formerly known as Wendy’s/Arby’s Group, Inc. and changed its name to The Wendy’s Company in July 2011. The Wendy’s Company was founded in 1884 and is headquartered in Dublin, Ohio.

Advisors’ Opinion:

  • [By Monica Gerson]

    Analysts expect Wendys Co (NASDAQ: WEN) to report its quarterly earnings at $0.06 per share on revenue of $352.08 million. Wendys shares rose 1.79 percent to $11.38 in after-hours trading.