Tag Archives: M

Top 10 Heal Care Stocks To Invest In Right Now

The talk was all about crises — both past and future — as some of the world’s leading economists gathered at a conference over the weekend.

While former Federal Reserve chair Ben S. Bernanke and University of California at Berkeley Professor Barry Eichengreen used presentations at a Nobel Symposium in Stockholm to address the implications and effects of past financial turbulence, others cast a wary eye on the next episode.

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Ben S. Bernanke

Photographer: Andrew Harrer/Bloomberg

Carmen Reinhart and Kenneth Rogoff of Harvard University both cautioned against complacency, with the former warning that economists and officials may last year have gone “a little too overboard” in their belief in a synchronized global upswing. Former Reserve Bank of India Governor Raghuram Rajan called for tighter oversight over shadow banking, financial technology and emerging markets. There’s a tendency to under-regulate before a crisis and then overdo it in the aftermath, he said.

Top 10 Heal Care Stocks To Invest In Right Now: Open Text Corporation(OTEX)

Advisors’ Opinion:

  • [By Dan Caplinger]

    Cloud computing has seen amazing growth in recent years, but that’s also made investors extremely demanding when it comes to the success of players in the cloud space. Like many of its peers, OpenText (NASDAQ:OTEX) promises to help enterprise customers use their information more effectively in achieving key business objectives. Those familiar with the space acknowledge OpenText’s approach to the industry, but that doesn’t make them any more forgiving when the company hasn’t lived up to their ambitious expectations for growth.

  • [By Lisa Levin]

     

    Companies Reporting After The Bell
    Booking Holdings Inc. (NASDAQ: BKNG) is projected to post quarterly earnings at $10.67 per share on revenue of $2.87 billion.
    CenturyLink, Inc. (NYSE: CTL) is expected to post quarterly earnings at $0.19 per share on revenue of $6.00 billion.
    Albemarle Corporation (NYSE: ALB) is projected to post quarterly earnings at $1.21 per share on revenue of $803.36 million.
    Spectra Energy Partners, LP (NYSE: SEP) is estimated to post quarterly earnings at $0.81 per share on revenue of $751.57 million.
    IAC/InterActiveCorp (NASDAQ: IAC) is expected to post quarterly earnings at $0.8 per share on revenue of $923.80 million.
    Open Text Corporation (NASDAQ: OTEX) is projected to post quarterly earnings at $0.62 per share on revenue of $691.75 million.
    Tutor Perini Corporation (NYSE: TPC) is expected to post quarterly earnings at $0.29 per share on revenue of $1.09 billion.
    Twenty-First Century Fox, Inc. (NASDAQ: FOXA) is projected to post quarterly earnings at $0.54 per share on revenue of $7.41 billion.
    ICU Medical, Inc. (NASDAQ: ICUI) is estimated to post quarterly earnings at $1.84 per share on revenue of $346.28 million.
    TechnipFMC plc (NYSE: FTI) is expected to post quarterly earnings at $0.33 per share on revenue of $3.13 billion.
    Synaptics Incorporated (NASDAQ: SYNA) is projected to post quarterly earnings at $0.91 per share on revenue of $401.76 million.
    The Dun & Bradstreet Corporation (NYSE: DNB) is expected to post quarterly earnings at $1.07 per share on revenue of $386.91 million.
    Matrix Service Company (NASDAQ: MTRX) is estimated to post quarterly earnings at $0.07 per share on revenue of $285.16 million.
    Maiden Holdings, Ltd. (NASDAQ: MHLD) is projected to post quarterly earnings at $0.21 per share on revenue of $739.31 million.
    tronc, Inc. (NASDAQ: TRNC) is expected to post quarterly earnings at $0.65 per share on revenue of $428.25 million.
    Copa Holdings,

  • [By Shane Hupp]

    Open Text Corp (TSE:OTEX) (NASDAQ:OTEX)’s share price hit a new 52-week high during trading on Monday . The stock traded as high as C$46.80 and last traded at C$46.53, with a volume of 121029 shares changing hands. The stock had previously closed at C$46.16.

  • [By Joseph Griffin]

    Get a free copy of the Zacks research report on Open Text (OTEX)

    For more information about research offerings from Zacks Investment Research, visit Zacks.com

  • [By Ethan Ryder]

    Wells Fargo & Company MN increased its holdings in shares of Open Text Corp (NASDAQ:OTEX) (TSE:OTC) by 4.2% during the 1st quarter, Holdings Channel reports. The institutional investor owned 99,321 shares of the software maker’s stock after purchasing an additional 4,003 shares during the period. Wells Fargo & Company MN’s holdings in Open Text were worth $3,456,000 as of its most recent SEC filing.

  • [By Shane Hupp]

    Get a free copy of the Zacks research report on Open Text (OTEX)

    For more information about research offerings from Zacks Investment Research, visit Zacks.com

Top 10 Heal Care Stocks To Invest In Right Now: Reliance Steel & Aluminum Co.(RS)

Advisors’ Opinion:

  • [By Ethan Ryder]

    Get a free copy of the Zacks research report on Reliance Steel & Aluminum (RS)

    For more information about research offerings from Zacks Investment Research, visit Zacks.com

  • [By Lee Jackson]

    Reliance Steel & Aluminum
    This is a top steel services play that the Deutsche Bank team is very positive on. Reliance Steel & Aluminum Co. (NYSE: RS) provides metals processing services and distributes a line of about 100,000 metal products, including alloy, aluminum, brass, copper, carbon steel, stainless steel, titanium and specialty steel products. Its primary processing services comprise cutting, leveling, sawing, machining and electropolishing.

  • [By Shane Hupp]

    Reliance Steel & Aluminum Co (NYSE:RS) hit a new 52-week high and low on Thursday . The company traded as low as $97.41 and last traded at $94.18, with a volume of 15817 shares trading hands. The stock had previously closed at $96.27.

Top 10 Heal Care Stocks To Invest In Right Now: ACNB Corporation(ACNB)

Advisors’ Opinion:

  • [By Stephan Byrd]

    ACNB (NASDAQ:ACNB) was upgraded by equities researchers at BidaskClub from a “sell” rating to a “hold” rating in a note issued to investors on Wednesday.

  • [By Max Byerly]

    John W. Rosenthal Capital Management Inc. lowered its holdings in shares of ACNB Co. (NASDAQ:ACNB) by 11.8% during the first quarter, HoldingsChannel reports. The firm owned 15,000 shares of the bank’s stock after selling 2,000 shares during the period. John W. Rosenthal Capital Management Inc.’s holdings in ACNB were worth $439,000 as of its most recent SEC filing.

  • [By Shane Hupp]

    BidaskClub lowered shares of ACNB (NASDAQ:ACNB) from a strong-buy rating to a buy rating in a research note published on Tuesday morning.

    NASDAQ ACNB opened at $36.80 on Tuesday. The company has a quick ratio of 0.95, a current ratio of 0.95 and a debt-to-equity ratio of 0.56. The stock has a market capitalization of $261.84 million, a price-to-earnings ratio of 13.53 and a beta of 0.34. ACNB has a 12-month low of $26.80 and a 12-month high of $41.45.

  • [By Shane Hupp]

    Media headlines about ACNB (NASDAQ:ACNB) have trended somewhat positive recently, Accern Sentiment Analysis reports. Accern identifies negative and positive news coverage by analyzing more than twenty million news and blog sources in real-time. Accern ranks coverage of public companies on a scale of negative one to one, with scores closest to one being the most favorable. ACNB earned a daily sentiment score of 0.17 on Accern’s scale. Accern also assigned news coverage about the bank an impact score of 46.0764149252742 out of 100, indicating that recent news coverage is somewhat unlikely to have an impact on the stock’s share price in the near term.

  • [By Ethan Ryder]

    BidaskClub upgraded shares of ACNB (NASDAQ:ACNB) from a buy rating to a strong-buy rating in a research report sent to investors on Monday morning.

Top 10 Heal Care Stocks To Invest In Right Now: Macy's Inc(M)

Advisors’ Opinion:

  • [By Daniel Miller, Jordan Wathen, and Jeremy Bowman]

    When it comes to dividend stocks, Coca-Cola Company (NYSE:KO) is a household name. In fact, the beverage giant just approved its 57th consecutive annual dividend increase, bumping it up to $0.40 per share and a juicy yield of 3.5%. But if investors are looking for even bigger dividend yields for their portfolios, three Motley Fool contributors suggest taking a peek at Macy’s (NYSE:M), Oaktree Capital Group (NYSE:OAK), and General Motors (NYSE:GM). Here’s why.

  • [By JJ Kinahan]

    Before the U.S. market opened, Macy's Inc. (NYSE: M) reported earnings per share of 48 cents on revenue of $5.5 billion. M was expected to report adjusted EPS of $0.36, on revenue of $5.43 billion, according to third-party consensus estimates. The beat appears to offer more evidence that the U.S. consumer is doing OK. It comes after news yesterday that U.S. retail sales rose for two consecutive months.

  • [By Motley Fool Staff]

    In this clip, host Chris Hill and Motley Fool contributor Ron Gross go through the most important numbers and trends from Nordstrom (NYSE:JWN), Macy’s (NYSE:M), and JC Penney (NYSE:JCP), explain why the stocks went in the directions they did after reports came out, and take a peek at the long-term health of each mall-based retailer.

  • [By Chris Lange]

    Macy’s Inc. (NYSE: M) released its fiscal fourth-quarter financial results before the markets opened on Tuesday. The retailer posted $2.73 in earnings per share (EPS) and $8.46 billion in revenue, which compare with consensus estimates that called for $2.53 in EPS on revenue of $8.45 billion. The same period of last year reportedly had EPS of $2.82 and $8.67 billion in revenue.

  • [By Chris Lange]

    Macy’s Inc. (NYSE: M) will share its most recent quarterly earnings on Tuesday. The consensus estimates call for $2.68 in earnings per share (EPS) on $8.65 billion in revenue. Shares ended the week at $26.74, in a 52-week trading range of $17.41 to $33.73. The consensus price target is $26.69.

  • [By ]

    Wednesday sees earnings from Macy’s (M) , Take-Two Interactive (TTWO) and Cisco Systems (CSCO) and Cramer has positive things to say about all three companies.

Top 10 Heal Care Stocks To Invest In Right Now: Citizens Financial Group, Inc.(CFG)

Advisors’ Opinion:

  • [By Shanthi Rexaline]

    Citizens Financial Group Inc (NYSE: CFG) shares were down Tuesday, dragged by macro concerns following the rise in Italian sovereign debt yields and a 14-basis point decline in the 10-year U.S. treasury yield.

  • [By Ethan Ryder]

    Citizens Financial Group Inc (NYSE:CFG) insider Randall J. Black sold 792 shares of Citizens Financial Group stock in a transaction on Tuesday, June 5th. The shares were sold at an average price of $41.49, for a total value of $32,860.08. Following the completion of the transaction, the insider now owns 34,258 shares in the company, valued at $1,421,364.42. The sale was disclosed in a document filed with the SEC, which is available at the SEC website.

  • [By Joseph Griffin]

    Mackay Shields LLC decreased its stake in shares of Citizens Financial Group Inc (NYSE:CFG) by 52.6% during the 2nd quarter, according to the company in its most recent 13F filing with the Securities and Exchange Commission. The firm owned 92,270 shares of the bank’s stock after selling 102,210 shares during the period. Mackay Shields LLC’s holdings in Citizens Financial Group were worth $3,589,000 as of its most recent SEC filing.

  • [By Stephan Byrd]

    The company also recently announced a quarterly dividend, which was paid on Thursday, February 14th. Shareholders of record on Thursday, January 31st were given a $0.32 dividend. This is an increase from Citizens Financial Group’s previous quarterly dividend of $0.27. This represents a $1.28 annualized dividend and a yield of 3.46%. The ex-dividend date of this dividend was Wednesday, January 30th. Citizens Financial Group’s payout ratio is currently 35.96%.

    COPYRIGHT VIOLATION NOTICE: “ETRADE Capital Management LLC Has $579,000 Stake in Citizens Financial Group Inc (CFG)” was posted by Ticker Report and is the sole property of of Ticker Report. If you are accessing this report on another site, it was illegally stolen and reposted in violation of international trademark & copyright law. The legal version of this report can be read at https://www.tickerreport.com/banking-finance/4195547/etrade-capital-management-llc-has-579000-stake-in-citizens-financial-group-inc-cfg.html.

    Citizens Financial Group Company Profile

Top 10 Heal Care Stocks To Invest In Right Now: Transportadora De Gas Sa Ord B(TGS)

Advisors’ Opinion:

  • [By Joseph Griffin]

    Transportadora de Gas del Sur (NYSE: TGS) and Western Gas Equity Partners (NYSE:WGP) are both oils/energy companies, but which is the superior stock? We will compare the two companies based on the strength of their risk, valuation, analyst recommendations, earnings, profitability, institutional ownership and dividends.

  • [By Joseph Griffin]

    Get a free copy of the Zacks research report on Transportadora de Gas del Sur SA ADR Class B (TGS)

    For more information about research offerings from Zacks Investment Research, visit Zacks.com

  • [By Stephan Byrd]

    TransCanada (NYSE: TRP) and Transportadora de Gas del Sur (NYSE:TGS) are both oils/energy companies, but which is the better stock? We will contrast the two companies based on the strength of their dividends, analyst recommendations, institutional ownership, risk, profitability, earnings and valuation.

  • [By Max Byerly]

    Transportadora de Gas del Sur (NYSE: TGS) and Antero Midstream Partners (NYSE:AM) are both mid-cap oils/energy companies, but which is the superior business? We will contrast the two companies based on the strength of their dividends, risk, valuation, institutional ownership, earnings, analyst recommendations and profitability.

  • [By Max Byerly]

    News stories about Transportadora de Gas del Sur (NYSE:TGS) have been trending somewhat positive on Wednesday, Accern Sentiment Analysis reports. Accern identifies negative and positive news coverage by analyzing more than twenty million news and blog sources in real time. Accern ranks coverage of public companies on a scale of negative one to positive one, with scores closest to one being the most favorable. Transportadora de Gas del Sur earned a media sentiment score of 0.10 on Accern’s scale. Accern also assigned news coverage about the energy company an impact score of 46.2643511773395 out of 100, meaning that recent news coverage is somewhat unlikely to have an impact on the company’s share price in the next few days.

Top 10 Heal Care Stocks To Invest In Right Now: Full House Resorts, Inc.(FLL)

Advisors’ Opinion:

  • [By Logan Wallace]

    Huazhu Group (NASDAQ: HTHT) and Full House Resorts (NASDAQ:FLL) are both consumer discretionary companies, but which is the better stock? We will contrast the two businesses based on the strength of their profitability, dividends, earnings, valuation, risk, analyst recommendations and institutional ownership.

Top 10 Heal Care Stocks To Invest In Right Now: Huntsman Corporation(HUN)

Advisors’ Opinion:

  • [By Logan Wallace]

    Huntsman Co. (NYSE:HUN) has earned a consensus recommendation of “Buy” from the seventeen ratings firms that are presently covering the company, MarketBeat.com reports. One investment analyst has rated the stock with a sell rating, six have given a hold rating and ten have given a buy rating to the company. The average 12-month price objective among brokers that have issued ratings on the stock in the last year is $36.50.

  • [By Rich Smith]

    Do chemicals investors have any better stocks to choose from? They do — and in fact, RBC named an alternative pick at the same time as it was recommending Chemours stock today: Chemicals maker Huntsman (NYSE:HUN).

  • [By Taylor Cox]

    Investor Events

    Annual shareholder meetings for MGP Ingredients, Inc (NASDAQ: MGPI) and Fiserv, Inc (NASDAQ: FISV), respectively
    Huntsman Corporation (NYSE: HUN) investor day

    Thursday

Top 10 Heal Care Stocks To Invest In Right Now: Adams Resources & Energy, Inc.(AE)

Advisors’ Opinion:

  • [By Shane Hupp]

    Aeternity (CURRENCY:AE) traded down 15.9% against the US dollar during the 24 hour period ending at 17:00 PM ET on June 10th. One Aeternity token can currently be purchased for approximately $2.94 or 0.00043736 BTC on popular exchanges including LATOKEN, Lykke Exchange, CoinBene and IDAX. Aeternity has a market cap of $684.89 million and approximately $14.30 million worth of Aeternity was traded on exchanges in the last 24 hours. Over the last week, Aeternity has traded down 16.7% against the US dollar.

  • [By Ethan Ryder]

    Aeternity (CURRENCY:AE) traded 0.3% lower against the US dollar during the 1 day period ending at 23:00 PM Eastern on June 16th. Aeternity has a market cap of $610.90 million and approximately $5.83 million worth of Aeternity was traded on exchanges in the last 24 hours. Over the last week, Aeternity has traded 21.4% lower against the US dollar. One Aeternity token can now be purchased for approximately $2.62 or 0.00040024 BTC on major cryptocurrency exchanges including Lykke Exchange, Binance, Koinex and Gate.io.

  • [By Logan Wallace]

    Schwab Charles Investment Management Inc. purchased a new position in Adams Resources & Energy Inc (NYSEAMERICAN:AE) during the first quarter, according to its most recent Form 13F filing with the Securities and Exchange Commission. The firm purchased 6,366 shares of the energy company’s stock, valued at approximately $277,000.

  • [By Shane Hupp]

    Aeternity (AE) uses the hashing algorithm. Its launch date was September 2nd, 2017. Aeternity’s total supply is 273,685,830 tokens and its circulating supply is 233,020,472 tokens. Aeternity’s official website is www.aeternity.com. Aeternity’s official Twitter account is @aetrnty and its Facebook page is accessible here. The Reddit community for Aeternity is /r/Aeternity and the currency’s Github account can be viewed here.

  • [By Logan Wallace]

    Aeternity (AE) uses the hashing algorithm. It launched on December 29th, 2016. Aeternity’s total supply is 273,685,830 tokens and its circulating supply is 233,020,472 tokens. The official website for Aeternity is www.aeternity.com. Aeternity’s official Twitter account is @aetrnty and its Facebook page is accessible here. The Reddit community for Aeternity is /r/Aeternity and the currency’s Github account can be viewed here.

Top 10 Heal Care Stocks To Invest In Right Now: EPAM Systems, Inc.(EPAM)

Advisors’ Opinion:

  • [By Brian Feroldi]

    EPAM Systems (NYSE:EPAM), BlackLine (NASDAQ:BL), and Paycom Software (NYSE:PAYC) all qualify as red-hot stocks right now. Each of these companies has crushed the S&P 500 year to date, and all three are currently trading near their all-time highs.

  • [By Shane Hupp]

    Get a free copy of the Zacks research report on EPAM Systems (EPAM)

    For more information about research offerings from Zacks Investment Research, visit Zacks.com

  • [By Brian Feroldi]

    So which businesses would interest Buffett today if he didn’t manage so much money? I think Axon Enterprise (NASDAQ:AAXN), Q2 Holdings (NYSE:QTWO), and EPAM Systems (NYSE:EPAM) would be his kind of companies.

  • [By Motley Fool Transcribers]

    EPAM Systems Inc  (NYSE:EPAM)Q4 2018 Earnings Conference CallFeb. 14, 2019, 8:00 a.m. ET

    Contents:
    Prepared Remarks Questions and Answers Call Participants
    Prepared Remarks:

    Operator

Top 5 Low Price Stocks For 2019

Whether you’re a newbie who just watched The Wolf of Wall Street or you’re a seasoned trader whose previous fliers on penny stocks have burned one too many holes in your pocket, the story is the same — stay away from penny stocks.

Penny stocks (classified by the SEC as anything trading under $5) are among the more volatile securities you’ll ever come across. There are a few reasons for that, not the least of which is that their low prices confuse many would-be investors. Remember, just because it trades for a dollar doesn’t mean that it’s a cheap stock.

Consider Lifeway Foods (NASDAQ:LWAY), which trades for a mere $3.60. Compare that to Danone (OTCMKTS:DANOY), trading at $15.46. Lifeway certainly appears cheaper, but with a price-to-earnings (P/E) ratio of 57 versus Danone’s P/E of 15, you’re actually paying a premium for LWAY stock.

That tiny price tag also makes penny stocks more susceptible to scammers and wild swings in price. All of this is not to say that buying penny stocks can’t go your way, but the odds are stacked against you.

Top 5 Low Price Stocks For 2019: Federal Agricultural Mortgage Corporation(AGM)

Advisors’ Opinion:

  • [By Stephan Byrd]

    Here are some of the headlines that may have impacted Accern’s rankings:

    Get Federal Agricultural Mortgage alerts:

    Zacks: Federal Agricultural Mortgage Co. (AGM) Given Average Rating of “Strong Buy” by Analysts (americanbankingnews.com) Federal Agricultural Mortgage Co. (AGM) Announces $0.58 Quarterly Dividend (americanbankingnews.com) Federal Agricultural Mortgage Corporation: Farmer Mac Declares Dividends and Announces Conference Call for First Quarter 2018 Results (twst.com) Federal Agricultural Mortgage (AGM) Set to Announce Earnings on Tuesday (americanbankingnews.com)

    Federal Agricultural Mortgage stock opened at $87.14 on Monday. The company has a market capitalization of $925.08, a PE ratio of 14.17 and a beta of 1.18. Federal Agricultural Mortgage has a twelve month low of $54.51 and a twelve month high of $92.57. The company has a quick ratio of 0.37, a current ratio of 0.37 and a debt-to-equity ratio of 2.87.

  • [By Joseph Griffin]

    Get a free copy of the Zacks research report on Federal Agricultural Mortgage Corp. Class C (AGM)

    For more information about research offerings from Zacks Investment Research, visit Zacks.com

  • [By Max Byerly]

    BlueMountain Capital Management LLC lessened its holdings in Federal Agricultural Mortgage Corp. Class C (NYSE:AGM) by 33.3% during the 2nd quarter, HoldingsChannel.com reports. The institutional investor owned 5,700 shares of the credit services provider’s stock after selling 2,840 shares during the period. BlueMountain Capital Management LLC’s holdings in Federal Agricultural Mortgage Corp. Class C were worth $510,000 as of its most recent filing with the Securities and Exchange Commission.

  • [By Shane Hupp]

    Media headlines about Federal Agricultural Mortgage Corp. Class C (NYSE:AGM) have been trending positive recently, according to Accern Sentiment. The research firm identifies negative and positive media coverage by monitoring more than twenty million news and blog sources in real-time. Accern ranks coverage of public companies on a scale of negative one to one, with scores nearest to one being the most favorable. Federal Agricultural Mortgage Corp. Class C earned a news sentiment score of 0.27 on Accern’s scale. Accern also gave media stories about the credit services provider an impact score of 46.6079928540378 out of 100, indicating that recent media coverage is somewhat unlikely to have an impact on the company’s share price in the near future.

  • [By Logan Wallace]

    Boston Advisors LLC acquired a new stake in Federal Agricultural Mortgage Corp. Class C (NYSE:AGM) in the 2nd quarter, according to its most recent Form 13F filing with the Securities and Exchange Commission. The fund acquired 42,148 shares of the credit services provider’s stock, valued at approximately $3,771,000.

  • [By Motley Fool Transcribers]

    Federal Agricultural Mortgage Corp  (NYSE:AGM)Q4 2018 Earnings Conference CallFeb. 21, 2019, 11:00 a.m. ET

    Contents:
    Prepared Remarks Questions and Answers Call Participants
    Prepared Remarks:

    Operator

Top 5 Low Price Stocks For 2019: BlackRock, Inc.(BLK)

Advisors’ Opinion:

  • [By Garrett Baldwin]

    I learned my lesson, so I only attend a conference if one speaker is on the schedule: BlackRock Inc. (NYSE: BLK) CEO Larry Fink.

    BlackRock is a world-class money manager and owns a lot of great stocks. But what it’s really good at, what I’m interested in, is generating fees for itself.

  • [By ]

    Why was the market so bullish? Cramer said it started with strong earnings from Blackrock (BLK) , up 1.4%, Delta Air Lines  (DAL) , up 2.9% and strong same-store sales from Costco (COST) which sent that stock up 2.2%.

  • [By Jim Robertson]

    Near the end of January, Enphase Energy repaid in full its senior secured term loan with Tennenbaum Capital Partners, LLC (TCP), an indirect, wholly-owned subsidiary of BlackRock (NYSE:BLK). The repayment includes a principal amount of approximately $39.5 million (plus accrued interest and fees) and the repayment will lead to the removal of liens on all of the Company’s assets. 

  • [By Matthew Frankel, Jordan Wathen, and Dan Caplinger]

    With that in mind, here’s why three of our contributors think Berkshire Hathaway (NYSE:BRK-A) (NYSE:BRK-B), Oaktree Capital (NYSE:OAK), and BlackRock (NYSE:BLK) are excellent penny stock alternatives.

Top 5 Low Price Stocks For 2019: Macy's Inc(M)

Advisors’ Opinion:

  • [By Taylor Cox]

    Notable Earnings

    Macy’s, Inc (NYSE: M) Q1 premarket
    Cisco Systems, Inc (NASDAQ: CSCO) Q3 after hours

    Investor Events

    IPO/offering lockup expirations for SailPoint Technologies Holdings, Inc (NYSE: SAIL) and Stitch Fix, Inc (NASDAQ: SFIX)
    Starbucks China investor day
    Wyndham Worldwide Corporation (NYSE: WYN) investor meeting

    Thursday
    Economic

  • [By ]

    Meanwhile, Eade was pleased with Macy’s (M) latest results, which posted same store sales growth of 4.2%, topping estimates of 1.4%.

    For exclusive investing insight from Jim Cramer, get 24/7 access to Jim’s charitable trust portfolio with a free trial to Action Alerts PLUS!

  • [By Max Byerly]

    Macy’s Inc (NYSE:M)’s share price rose 0.9% on Wednesday . The stock traded as high as $40.28 and last traded at $39.44. Approximately 633,779 shares traded hands during mid-day trading, a decline of 95% from the average daily volume of 12,534,731 shares. The stock had previously closed at $39.80.

  • [By Lisa Levin]

    Some of the stocks that may grab investor focus today are:

    Wall Street expects Macy's, Inc. (NYSE: M) to report quarterly earnings at $0.35 per share on revenue of $5.39 billion before the opening bell. Macy's shares fell 0.47 percent to $29.79 in after-hours trading.
    Analysts are expecting Cisco Systems, Inc. (NASDAQ: CSCO) to have earned $0.65 per share on revenue of $12.43 billion in the latest quarter. Cisco will release earnings after the markets close. Cisco shares declined 0.07 percent to $45.45 in after-hours trading.
    Boot Barn Holdings Inc (NYSE: BOOT) reported upbeat results for its fourth quarter and issued strong first-quarter earnings guidance. Boot Barn shares climbed 9.97 percent to $24.15 in the after-hours trading session.
    After the markets close, Flowers Foods, Inc. (NYSE: FLO) is projected to post quarterly earnings at $0.31 per share on revenue of $1.20 billion. Flowers Foods shares dropped 0.37 percent to $21.70 in after-hours trading.

    Find out what's going on in today's market and bring any questions you have to Benzinga's PreMarket Prep.

  • [By Chris Lange]

    The stock posting the largest daily percentage gain in the S&P 500 ahead of the close Wednesday was Macy’s, Inc. (NYSE: M) which rose about 4% to $29.00. The stock’s 52-week range is $17.41 to $31.04. Volume was nearly 11 million compared to the daily average volume of 11 million.

  • [By Chris Johnson]

    Although several big names have already had their turn in the earnings confessional – including Walmart Inc. (NYSE: WMT), Macy’s Inc. (NYSE: M), and Home Depot Inc. (NYSE: HD) – this week has a respectable lineup with the likes of Kohl’s Corp. (NYSE: KSS), Lowe’s Companies Inc. (NYSE: LOW), and Target Corp. (NYSE: TGT).

Top 5 Low Price Stocks For 2019: German American Bancorp, Inc.(GABC)

Advisors’ Opinion:

  • [By Logan Wallace]

    German American Bancorp, Inc. (NASDAQ:GABC) – Research analysts at FIG Partners increased their FY2018 earnings estimates for German American Bancorp in a research report issued to clients and investors on Wednesday, May 2nd. FIG Partners analyst B. Martin now anticipates that the bank will post earnings of $2.02 per share for the year, up from their prior estimate of $2.00.

Top 5 Low Price Stocks For 2019: Carter's, Inc.(CRI)

Advisors’ Opinion:

  • [By Chris Hill]

    Gross: All right. If little baby Argersinger is going to be a snappy dresser like his dad, I’ve got to go back to Carter’s (NYSE:CRI), CRI, the leading manufacturer of children’s clothing in the U.S. under names like Carter’s and OshKosh B’gosh. As I said, they’re the dominant player here. They’ve performed well over multiple market cycles, 2.2% dividend yield, buys back a ton of stock. They’re digesting the Toys R Us bankruptcy, and there are some China trade issues here, so the stock has suffered, but that makes it awfully cheap.

  • [By Steve Symington]

    Carter’s Inc. (NYSE:CRI) announced first-quarter 2018 results on Thursday morning, detailing a strong performance in spite of the negative impact of the recent bankruptcy of Toy “R” Us on its large wholesale segment. Though shares initially fell almost 5% early on, Carter’s stock recovered to trade modestly higher by this afternoon.

  • [By Max Byerly]

    Wall Street analysts predict that Carter’s, Inc. (NYSE:CRI) will announce sales of $684.12 million for the current fiscal quarter, Zacks Investment Research reports. Four analysts have issued estimates for Carter’s’ earnings, with the lowest sales estimate coming in at $680.20 million and the highest estimate coming in at $689.50 million. Carter’s posted sales of $692.12 million during the same quarter last year, which would indicate a negative year-over-year growth rate of 1.2%. The firm is scheduled to report its next earnings results on Thursday, July 26th.

  • [By Max Byerly]

    Dimensional Fund Advisors LP grew its holdings in shares of Carter’s, Inc. (NYSE:CRI) by 2.1% during the first quarter, according to its most recent Form 13F filing with the SEC. The firm owned 450,812 shares of the textile maker’s stock after purchasing an additional 9,306 shares during the period. Dimensional Fund Advisors LP owned approximately 0.96% of Carter’s worth $46,930,000 at the end of the most recent reporting period.

  • [By Joseph Griffin]

    Eagle Boston Investment Management Inc. boosted its holdings in Carter’s, Inc. (NYSE:CRI) by 15.2% during the second quarter, according to the company in its most recent filing with the Securities and Exchange Commission. The fund owned 155,087 shares of the textile maker’s stock after acquiring an additional 20,419 shares during the period. Carter’s accounts for about 1.6% of Eagle Boston Investment Management Inc.’s investment portfolio, making the stock its 10th largest position. Eagle Boston Investment Management Inc.’s holdings in Carter’s were worth $16,809,000 as of its most recent SEC filing.

  • [By Stephan Byrd]

    Carter’s, Inc. (NYSE:CRI) has received an average rating of “Buy” from the fifteen research firms that are covering the firm, Marketbeat reports. One research analyst has rated the stock with a sell rating, five have assigned a hold rating and nine have given a buy rating to the company. The average 1-year target price among brokerages that have issued a report on the stock in the last year is $119.33.

Top 10 Medical Stocks To Buy Right Now

Like it or not, by the time you turn 30, you’re basically a full-fledged adult, and with that comes certain financial responsibilities you’ll need to get a handle on. Here are three money-related goals you should aim to achieve by age 30.

1. Have a fully loaded emergency fund

Life has a way of surprising us, both for better and for worse. But sometimes, those unpleasant surprises come in the form of automobile breakdowns, busted appliances at home, or medical bills that catch us off guard. And let’s not forget the possibility of getting laid off at work — something that can happen to even the most diligent employees among us.

IMAGE SOURCE: GETTY IMAGES.

That’s why it’s crucial to have a healthy emergency fund. While you might struggle to sock away that money when you’re younger, by the time you turn 30, that account should be nice and robust. At a minimum, your emergency fund should contain enough cash to cover three months’ worth of living expenses, but for better protection, aim for six months’ worth. This means that if you typically spend $3,000 a month on bills, your goal should be to have $18,000 in savings.

Top 10 Medical Stocks To Buy Right Now: Ecolab Inc.(ECL)

Advisors’ Opinion:

  • [By ]

    Ecolab (ECL) : “That’s a terrific situation that I want you to buy more of if it comes down.”

    PTC (PTC) : “Not my cup of tea but I understand it’s in the sweet spot of tech.”

  • [By Logan Wallace]

    Investors bought shares of Ecolab Inc. (NYSE:ECL) on weakness during trading on Tuesday. $37.89 million flowed into the stock on the tick-up and $13.41 million flowed out of the stock on the tick-down, for a money net flow of $24.48 million into the stock. Of all stocks tracked, Ecolab had the 33rd highest net in-flow for the day. Ecolab traded down ($0.18) for the day and closed at $157.22

  • [By Neha Chamaria]

    Using the above method, I believe the following five stocks are some of the best Dividend Aristocrats to consider today.

    Dividend Aristocrat Payout Ratio (Last 12 Months) 5-Year Dividend CAGR*  10-Year Dividend CAGR*
    Ecolab (NYSE:ECL) 30.2% 12.9% 12.3%
    W.W. Grainger (NYSE:GWW) 45.7% 10.6% 14.2%
    Cintas Corporation (NASDAQ:CTAS) 23.7% 19.8% 13.1%
    Roper Technologies (NYSE:ROP) 14.6% 20.4% 18.5%
    A. O. Smith (NYSE:AOS) 33.6% 25.5% (2.2%)

    *Compound annual growth rate. Data source: S&P Global Market Intelligence. Table by author.

  • [By Joseph Griffin]

    Ecolab Inc. (NYSE:ECL) has received a consensus rating of “Hold” from the twenty brokerages that are presently covering the firm, Marketbeat.com reports. One investment analyst has rated the stock with a sell recommendation, ten have given a hold recommendation and nine have issued a buy recommendation on the company. The average 12-month price objective among brokers that have covered the stock in the last year is $146.00.

Top 10 Medical Stocks To Buy Right Now: Macy's Inc(M)

Advisors’ Opinion:

  • [By Adam Levine-Weinberg]

    Macy’s (NYSE:M) wrapped up its 2018 fiscal year last week. The iconic department store giant won’t report its full results until later this month, but it already reduced its full-year earnings per share guidance to a range of $3.95 to $4.00 in an early January investor update. (On the bright side, that’s still higher than Macy’s initial EPS forecast for fiscal 2018.)

  • [By Rich Duprey]

    The retailer puts part of the blame on the weather, but the cooler temps didn’t seem to effect Macy’s (NYSE: M), which reported truly robust results that had many expecting J.C. Penney would follow suit. Although Macy’s did say a few markets were impacted, they were offset by others that were not. That weather should drag down Penney when it has more stores than its rival — which should have spread out the impact more — indicates it is more of an excuse than a reason.

  • [By Chris Johnson]

    Although several big names have already had their turn in the earnings confessional – including Walmart Inc. (NYSE: WMT), Macy’s Inc. (NYSE: M), and Home Depot Inc. (NYSE: HD) – this week has a respectable lineup with the likes of Kohl’s Corp. (NYSE: KSS), Lowe’s Companies Inc. (NYSE: LOW), and Target Corp. (NYSE: TGT).

  • [By Lisa Levin]

    Some of the stocks that may grab investor focus today are:

    Wall Street expects Macy's, Inc. (NYSE: M) to report quarterly earnings at $0.35 per share on revenue of $5.39 billion before the opening bell. Macy's shares fell 0.47 percent to $29.79 in after-hours trading.
    Analysts are expecting Cisco Systems, Inc. (NASDAQ: CSCO) to have earned $0.65 per share on revenue of $12.43 billion in the latest quarter. Cisco will release earnings after the markets close. Cisco shares declined 0.07 percent to $45.45 in after-hours trading.
    Boot Barn Holdings Inc (NYSE: BOOT) reported upbeat results for its fourth quarter and issued strong first-quarter earnings guidance. Boot Barn shares climbed 9.97 percent to $24.15 in the after-hours trading session.
    After the markets close, Flowers Foods, Inc. (NYSE: FLO) is projected to post quarterly earnings at $0.31 per share on revenue of $1.20 billion. Flowers Foods shares dropped 0.37 percent to $21.70 in after-hours trading.

    Find out what's going on in today's market and bring any questions you have to Benzinga's PreMarket Prep.

  • [By Daniel B. Kline]

    To compete, traditional chains have had to become destinations — experiences that provide customers with good reason to leave the house. That has been a particularly challenging task for department stores, and Macy’s (NYSE:M) has not been immune to the troubles that have plagued its peers.

  • [By Jim Crumly]

    As for individual stocks, Constellation Brands (NYSE:STZ) announced a big investment in cannabis producer Canopy Growth (NYSE:CGC), and Macy’s (NYSE:M) reported second-quarter results.

Top 10 Medical Stocks To Buy Right Now: FuelCell Energy Inc.(FCEL)

Advisors’ Opinion:

  • [By Paul Ausick]

    FuelCell Energy Inc. (NASDAQ: FCEL) posted a decrease of 4% in short interest during the period. Some 7.42 million shares were short as of June 15. The stock closed at $1.37 on Tuesday, down about 1.4% for the day, in a 52-week range of $1.18 to $2.49. Shares traded down more than 10% in the short interest period, and days to cover dropped from 17 to six.

  • [By Logan Wallace]

    FuelCell Energy (NASDAQ: FCEL) and HRG Group (NYSE:HRG) are both oils/energy companies, but which is the superior business? We will compare the two businesses based on the strength of their dividends, valuation, risk, analyst recommendations, institutional ownership, earnings and profitability.

  • [By Joseph Griffin]

    Get a free copy of the Zacks research report on FuelCell Energy (FCEL)

    For more information about research offerings from Zacks Investment Research, visit Zacks.com

  • [By Paul Ausick]

    FuelCell Energy Inc. (NASDAQ: FCEL) posted an increase of 43.9% in short interest during the period. Some 10.68 million shares were short as of June 29. The stock closed most recently at $1.33, down about 1.5% for the day, in a 52-week range of $1.29 to $2.49. Shares traded down more than 20% in the short interest period, and days to cover dropped from six to four.

Top 10 Medical Stocks To Buy Right Now: Agenus Inc.(AGEN)

Advisors’ Opinion:

  • [By Logan Wallace]

    Agenus (NASDAQ:AGEN) was downgraded by analysts at BidaskClub from a “strong-buy” rating to a “buy” rating in a research note issued to investors on Monday.

  • [By George Budwell]

    Shares of the small-cap biotech Agenus (NASDAQ:AGEN) reversed its year-long down trend by gaining a stately 20.1% last month, according to data from S&P Global Market Intelligence. What sparked this marked turnaround?

  • [By Cory Renauer]

    Harnessing the power of the immune system to fight cancer is a big deal and Agenus Inc. (NASDAQ:AGEN) looks like a great way to follow the trend. This stock trades like a small-cap biotech, but a couple of candidates coming through its pipeline could help push annual revenue past the $1 billion mark. Plus, by this time next year, the company could have half a dozen or so new candidates in clinical trials.

Top 10 Medical Stocks To Buy Right Now: Northern Trust Corporation(NTRS)

Advisors’ Opinion:

  • [By Shane Hupp]

    Russell Investments Group Ltd. reduced its stake in shares of Northern Trust Co. (NASDAQ:NTRS) by 11.7% during the 2nd quarter, according to the company in its most recent 13F filing with the SEC. The institutional investor owned 242,179 shares of the asset manager’s stock after selling 31,938 shares during the quarter. Russell Investments Group Ltd. owned 0.11% of Northern Trust worth $24,953,000 as of its most recent SEC filing.

  • [By Stephan Byrd]

    Here are some of the news headlines that may have effected Accern’s analysis:

    Get Northern Trust alerts:

    Northern Trust Co. (NTRS) Receives Consensus Rating of “Hold” from Analysts (americanbankingnews.com) $1.50 Billion in Sales Expected for Northern Trust Co. (NTRS) This Quarter (americanbankingnews.com) Ex-Dividend Reminder: United Bankshares, CME Group and Northern Trust Corp (nasdaq.com) Zacks: Analysts Expect Northern Trust Co. (NTRS) to Post $1.62 Earnings Per Share (americanbankingnews.com) Stocks With Rising Relative Strength: Northern Trust (investors.com)

    Northern Trust opened at $106.92 on Friday, according to MarketBeat.com. The company has a quick ratio of 0.66, a current ratio of 0.66 and a debt-to-equity ratio of 0.34. The company has a market cap of $24.02 billion, a price-to-earnings ratio of 22.14, a price-to-earnings-growth ratio of 1.41 and a beta of 0.92. Northern Trust has a 12-month low of $85.69 and a 12-month high of $110.81.

  • [By Max Byerly]

    Press coverage about Northern Trust (NASDAQ:NTRS) has trended somewhat positive this week, Accern Sentiment Analysis reports. Accern identifies negative and positive media coverage by reviewing more than 20 million blog and news sources in real-time. Accern ranks coverage of publicly-traded companies on a scale of -1 to 1, with scores nearest to one being the most favorable. Northern Trust earned a media sentiment score of 0.17 on Accern’s scale. Accern also assigned news articles about the asset manager an impact score of 46.6478323403648 out of 100, meaning that recent media coverage is somewhat unlikely to have an effect on the stock’s share price in the next several days.

Top 10 Medical Stocks To Buy Right Now: RELX N.V.(RENX)

Advisors’ Opinion:

  • [By Stephan Byrd]

    Get a free copy of the Zacks research report on Relx (RENX)

    For more information about research offerings from Zacks Investment Research, visit Zacks.com

  • [By Stephan Byrd]

    Relx (NYSE:RENX) was upgraded by research analysts at Barclays to a “buy” rating in a report released on Monday.

    RENX has been the subject of several other research reports. Zacks Investment Research raised shares of Relx from a “sell” rating to a “hold” rating in a report on Thursday, August 16th. UBS Group cut shares of Relx from a “neutral” rating to a “sell” rating in a research note on Thursday, June 14th. Two investment analysts have rated the stock with a sell rating and three have given a buy rating to the company. The stock presently has an average rating of “Hold” and a consensus target price of $23.00.

Top 10 Medical Stocks To Buy Right Now: Concho Resources Inc.(CXO)

Advisors’ Opinion:

  • [By Stephan Byrd]

    CargoX (CURRENCY:CXO) traded 0.4% lower against the U.S. dollar during the 1-day period ending at 23:00 PM ET on August 18th. CargoX has a total market cap of $2.98 million and $23,802.00 worth of CargoX was traded on exchanges in the last 24 hours. In the last seven days, CargoX has traded 0.1% higher against the U.S. dollar. One CargoX token can currently be purchased for about $0.0231 or 0.00000365 BTC on exchanges including IDEX and Kucoin.

  • [By Joseph Griffin]

    Laurion Capital Management LP acquired a new stake in shares of Concho Resources Inc (NYSE:CXO) in the 2nd quarter, according to the company in its most recent Form 13F filing with the SEC. The institutional investor acquired 10,260 shares of the oil and natural gas company’s stock, valued at approximately $1,419,000.

  • [By Ethan Ryder]

    Tredje AP fonden grew its stake in Concho Resources (NYSE:CXO) by 4.4% during the 1st quarter, according to its most recent disclosure with the Securities and Exchange Commission. The institutional investor owned 13,417 shares of the oil and natural gas company’s stock after acquiring an additional 560 shares during the quarter. Tredje AP fonden’s holdings in Concho Resources were worth $2,017,000 at the end of the most recent quarter.

  • [By Lee Jackson]

    Earlier this year, this company bought RSP Permian for $9.5 billion, and most on Wall Street like the deal. Concho Resources Inc. (NYSE: CXO) is an independent oil and natural gas company engaged in the acquisition, development and exploration of oil and natural gas properties.

  • [By Max Byerly]

    Concho Resources Inc (NYSE:CXO) has been assigned an average recommendation of “Buy” from the twenty-seven research firms that are presently covering the stock, MarketBeat Ratings reports. Ten research analysts have rated the stock with a hold recommendation and sixteen have given a buy recommendation to the company. The average twelve-month price target among brokerages that have issued ratings on the stock in the last year is $177.50.

Top 10 Medical Stocks To Buy Right Now: CRA InternationalInc.(CRAI)

Advisors’ Opinion:

  • [By Stephan Byrd]

    Here are some of the news articles that may have impacted Accern Sentiment Analysis’s rankings:

    Get CRA International alerts:

    CRA International (CRAI) Q2 Earnings Beat, Revenue View Up (zacks.com) Brokerages Anticipate CRA International, Inc. (CRAI) to Post $0.52 Earnings Per Share (americanbankingnews.com) Q3 2019 EPS Estimates for CRA International, Inc. (CRAI) Boosted by William Blair (americanbankingnews.com) CRA International, Inc. (CRAI) CEO Paul Maleh on Q2 2018 Results – Earnings Call Transcript (seekingalpha.com)

    Shares of CRAI traded down $0.04 during midday trading on Friday, hitting $55.55. The stock had a trading volume of 39,451 shares, compared to its average volume of 37,310. CRA International has a 1 year low of $34.49 and a 1 year high of $58.74. The company has a market cap of $447.94 million, a P/E ratio of 29.08 and a beta of 0.80.

  • [By Ethan Ryder]

    Get a free copy of the Zacks research report on CRA International (CRAI)

    For more information about research offerings from Zacks Investment Research, visit Zacks.com

  • [By Max Byerly]

    CRA International, Inc. (NASDAQ:CRAI) Director William F. Concannon sold 9,500 shares of CRA International stock in a transaction dated Wednesday, May 30th. The stock was sold at an average price of $55.37, for a total value of $526,015.00. Following the sale, the director now directly owns 28,491 shares of the company’s stock, valued at $1,577,546.67. The sale was disclosed in a legal filing with the SEC, which is available through this hyperlink.

  • [By Joseph Griffin]

    BidaskClub downgraded shares of CRA International (NASDAQ:CRAI) from a strong-buy rating to a buy rating in a research note issued to investors on Saturday morning.

  • [By Joseph Griffin]

    Get a free copy of the Zacks research report on CRA International (CRAI)

    For more information about research offerings from Zacks Investment Research, visit Zacks.com

  • [By Joseph Griffin]

    Get a free copy of the Zacks research report on CRA International (CRAI)

    For more information about research offerings from Zacks Investment Research, visit Zacks.com

Top 10 Medical Stocks To Buy Right Now: Nicholas Financial Inc.(NICK)

Advisors’ Opinion:

  • [By Stephan Byrd]

    Nicholas Financial (NASDAQ: NICK) and CPI Card Group (NASDAQ:PMTS) are both small-cap finance companies, but which is the better investment? We will compare the two companies based on the strength of their earnings, valuation, dividends, risk, profitability, analyst recommendations and institutional ownership.

  • [By Logan Wallace]

    Nicholas Financial (NASDAQ: NICK) and Encore Capital Group (NASDAQ:ECPG) are both small-cap finance companies, but which is the better investment? We will contrast the two companies based on the strength of their dividends, institutional ownership, earnings, analyst recommendations, valuation, profitability and risk.

  • [By Ethan Ryder]

    Nicholas Financial (NASDAQ: NICK) and Encore Capital Group (NASDAQ:ECPG) are both small-cap finance companies, but which is the better investment? We will contrast the two businesses based on the strength of their analyst recommendations, dividends, earnings, profitability, institutional ownership, valuation and risk.

  • [By Max Byerly]

    Nicholas Financial, Inc. (NASDAQ:NICK) major shareholder Adam K. Peterson acquired 5,500 shares of the company’s stock in a transaction that occurred on Thursday, August 9th. The shares were acquired at an average cost of $10.80 per share, for a total transaction of $59,400.00. The purchase was disclosed in a legal filing with the SEC, which is available through this hyperlink. Major shareholders that own 10% or more of a company’s stock are required to disclose their transactions with the SEC.

Top 10 Medical Stocks To Buy Right Now: Terex Corporation(TEX)

Advisors’ Opinion:

  • [By Rich Smith]

    Shares of Terex Corporation (NYSE:TEX) closed 10.1% lower on Wednesday, even as the construction equipment maker reported Q2 earnings that met or exceeded Wall Street’s expectations.

  • [By Rich Smith]

    All year long, Terex (NYSE:TEX) stock has been pacing the S&P 500’s performance — and even leading it a bit, up 15% to the market’s 14% gain. Today, shares are moving in and out of negative territory.

  • [By Stephan Byrd]

    Asset Management One Co. Ltd. acquired a new stake in Terex Co. (NYSE:TEX) during the first quarter, according to its most recent Form 13F filing with the SEC. The firm acquired 9,770 shares of the industrial products company’s stock, valued at approximately $365,000.

  • [By Max Byerly]

    Get a free copy of the Zacks research report on Terex (TEX)

    For more information about research offerings from Zacks Investment Research, visit Zacks.com

  • [By Logan Wallace]

    Get a free copy of the Zacks research report on Terex (TEX)

    For more information about research offerings from Zacks Investment Research, visit Zacks.com

  • [By Max Byerly]

    Get a free copy of the Zacks research report on Terex (TEX)

    For more information about research offerings from Zacks Investment Research, visit Zacks.com

Top 10 Undervalued Stocks To Buy Right Now

Fiserv (FISV) has long been a darling for their shareholders. It serves as a way to invest in the financial technology industry, as well as grant exposure to the banking sector. Over the past several years, Fiserv has consistently beat the Dow and S&P 500, while also having 32 consecutive years of double-digit adjusted EPS growth.

But, Fiserv is not a “trending” company in the financial industry. Square (SQ) and PayPal (PYPL) see all the headlines, and are where investors go when they want to invest in fintech. Below, I will outline why I believe bank IT spending will continue to grow, how Fiserv is expanding while protecting their market share and revenue, and how these factors lead to Fiserv still being undervalued despite share prices rising 25% YoY.

Top 10 Undervalued Stocks To Buy Right Now: Macy's Inc(M)

Advisors’ Opinion:

  • [By Leo Sun]

    Shares of Macy’s (NYSE:M) plunged 16% on August 15 after the retailer posted its second quarter earnings. That massive decline was surprising, since Macy’s top and bottom line results beat Wall Street’s expectations.

  • [By Adam Levine-Weinberg]

    In this episode of Industry Focus: Consumer Goods, Vincent Shen and senior Motley Fool contributor Adam Levine-Weinberg dive into the latest developments from Macy’s (NYSE:M), Kohl’s (NYSE:KSS), and Dillard’s (NYSE:DDS), which have all enjoyed bullish rallies of 30% in the past month.

  • [By Chris Lange]

    When Macy’s Inc. (NYSE: M) released its fiscal second-quarter financial results before the markets opened on Wednesday, the company said that it had $0.59 in earnings per share (EPS) and $5.57 billion in revenue. The consensus estimates had called for $0.51 in EPS and revenue of $5.55 billion. The same period of last year reportedly had EPS of $0.37 on $5.55 billion in revenue.

  • [By Max Byerly]

    Macy’s Inc (NYSE:M)’s share price rose 0.9% on Wednesday . The stock traded as high as $40.28 and last traded at $39.44. Approximately 633,779 shares traded hands during mid-day trading, a decline of 95% from the average daily volume of 12,534,731 shares. The stock had previously closed at $39.80.

  • [By Motley Fool Staff]

    In this segment from MarketFoolery, host Chris Hill and senior analyst Matt Argersinger discuss the totally solid performance that department store chain Macy’s (NYSE:M) turned in for its second quarter. Despite decent results, the stock dropped by a double-digit percentage.

  • [By Adam Levine-Weinberg]

    On Wednesday, department store giant Macy’s (NYSE:M) smashed analysts’ estimates, posting strong sales and earnings growth for the first quarter. This surprisingly good news raised investors’ hopes for the moribund department store sector.

Top 10 Undervalued Stocks To Buy Right Now: Gogo Inc.(GOGO)

Advisors’ Opinion:

  • [By Dan Caplinger]

    The stock market dealt with continued volatility on Tuesday, with investors uncertain how to react to a mix of earnings and geopolitical news. Throughout most of the day, market participants were trying to predict whether the Trump administration would move forward with its plans to withdraw the U.S. from the nuclear deal with Iran, and major benchmarks stayed in a relatively tight range with a downward bias during the morning and early afternoon. After the expected announcement, the Dow fell to a triple-digit loss late in the afternoon, but it recovered by the end of the session. Adding to the gloominess was bad news regarding some key individual stocks. DISH Network (NASDAQ:DISH), Gogo (NASDAQ:GOGO), and Hertz Global Holdings (NYSE:HTZ) were among the worst performers on the day. Here’s why they did so poorly.

  • [By Joseph Griffin]

    Get a free copy of the Zacks research report on Gogo Inflight Internet (GOGO)

    For more information about research offerings from Zacks Investment Research, visit Zacks.com

  • [By Joseph Griffin]

    Global Eagle Entertainment (NASDAQ: ENT) and Gogo Inflight Internet (NASDAQ:GOGO) are both small-cap computer and technology companies, but which is the better business? We will contrast the two businesses based on the strength of their profitability, valuation, risk, earnings, dividends, analyst recommendations and institutional ownership.

  • [By Daniel Sparks]

    Shares of satellite communications company Iridium Communications (NASDAQ:IRDM) jumped as much as 16.4% on Friday, following the announcement of a partnership between Iridium and in-flight broadband connectivity and wireless entertainment services company Gogo (NASDAQ:GOGO). At the time of this writing, Iridium stock is up 11.3% on Friday.

Top 10 Undervalued Stocks To Buy Right Now: Stag Industrial, Inc.(STAG)

Advisors’ Opinion:

  • [By Tyler Crowe]

    With these basic requirements in mind, I just added two dividend stocks I think will fit this mold well in my retirement account: renewable power asset owner TerraForm Power (NASDAQ:TERP) and industrial real estate investment trust STAG Industrial (NYSE:STAG). Here’s why I think these stocks fit my mold for high-yield dividend stocks — and why you may want to consider them for your own portfolio.

  • [By Lee Jackson]

    STAG Industrial Inc. (NYSE: STAG) offers investors a 5.8% yield. Share recently traded hands at $24.35 apiece, in a 52-week range of $22.42 to $28.85. The consensus target price is $27.73.

  • [By Neha Chamaria]

    To be able to cut a check each month and maintain or raise the payout requires a company to have tenable confidence in its profit-making and cash-generating capabilities. It’s easier said than done, which is why while most companies pay dividends quarterly, and only around 40 publicly listed companies pay a dividend every month. Three such companies worth watching are STAG Industrial (NYSE:STAG), Realty Income (NYSE:O), and Pembina Pipeline (NYSE:PBA).

  • [By Dan Caplinger]

    For those who like the convenience of monthly dividend stocks, it makes sense to take a closer look at Realty Income (NYSE:O), STAG Industrial (NYSE:STAG), and Main Street Capital (NYSE:MAIN), all of which have a history of making monthly dividend payments to their shareholders.

  • [By Logan Wallace]

    BNP Paribas Arbitrage SA grew its position in shares of STAG Indl Inc/SH SH (NYSE:STAG) by 35.5% during the first quarter, according to its most recent filing with the Securities and Exchange Commission (SEC). The fund owned 29,048 shares of the real estate investment trust’s stock after buying an additional 7,604 shares during the period. BNP Paribas Arbitrage SA’s holdings in STAG Indl Inc/SH SH were worth $695,000 at the end of the most recent reporting period.

Top 10 Undervalued Stocks To Buy Right Now: ServisFirst Bancshares, Inc.(SFBS)

Advisors’ Opinion:

  • [By Stephan Byrd]

    Sierra Bancorp (NASDAQ:BSRR) and ServisFirst Bancshares (NASDAQ:SFBS) are both finance companies, but which is the superior business? We will contrast the two companies based on the strength of their dividends, profitability, risk, valuation, institutional ownership, analyst recommendations and earnings.

  • [By Shane Hupp]

    Hilton Capital Management LLC cut its stake in ServisFirst Bancshares, Inc. (NASDAQ:SFBS) by 19.3% in the first quarter, according to the company in its most recent Form 13F filing with the Securities and Exchange Commission. The fund owned 9,405 shares of the financial services provider’s stock after selling 2,245 shares during the period. Hilton Capital Management LLC’s holdings in ServisFirst Bancshares were worth $384,000 as of its most recent filing with the Securities and Exchange Commission.

  • [By Joseph Griffin]

    BidaskClub downgraded shares of ServisFirst Bancshares (NASDAQ:SFBS) from a hold rating to a sell rating in a research note released on Thursday morning.

  • [By Stephan Byrd]

    ValuEngine upgraded shares of ServisFirst Bancshares (NASDAQ:SFBS) from a hold rating to a buy rating in a report published on Tuesday.

    Several other equities research analysts have also issued reports on SFBS. BidaskClub raised shares of ServisFirst Bancshares from a buy rating to a strong-buy rating in a report on Tuesday, April 24th. Hovde Group set a $44.00 price objective on shares of ServisFirst Bancshares and gave the stock a hold rating in a report on Tuesday, January 23rd. Zacks Investment Research raised shares of ServisFirst Bancshares from a hold rating to a buy rating and set a $49.00 price objective for the company in a report on Thursday, April 19th. Finally, Sandler O’Neill reaffirmed a hold rating and issued a $45.00 price objective on shares of ServisFirst Bancshares in a report on Wednesday, March 28th. Four equities research analysts have rated the stock with a hold rating and two have issued a buy rating to the stock. ServisFirst Bancshares presently has a consensus rating of Hold and a consensus price target of $44.00.

  • [By Motley Fool Staff]

    ServisFirst Bancshares (NASDAQ:SFBS) Q1 2018 Earnings Conference CallApril 16, 2018 4:00 p.m. ET

    Contents:
    Prepared Remarks Questions and Answers Call Participants
    Prepared Remarks:

    Operator

Top 10 Undervalued Stocks To Buy Right Now: PBF Logistics LP(PBFX)

Advisors’ Opinion:

  • [By Logan Wallace]

    PBF Logistics (NYSE:PBFX) issued its quarterly earnings results on Thursday. The pipeline company reported $0.43 earnings per share for the quarter, missing the consensus estimate of $0.49 by ($0.06), MarketWatch Earnings reports. PBF Logistics had a net margin of 33.57% and a return on equity of 56.03%. The company had revenue of $64.00 million for the quarter, compared to the consensus estimate of $67.75 million. During the same quarter in the previous year, the business earned $0.55 earnings per share. PBF Logistics’s revenue was up 5.8% compared to the same quarter last year.

  • [By Joseph Griffin]

    Get a free copy of the Zacks research report on PBF Logistics (PBFX)

    For more information about research offerings from Zacks Investment Research, visit Zacks.com

  • [By Max Byerly]

    Plains GP (NYSE: PBFX) and PBF Logistics (NYSE:PBFX) are both oils/energy companies, but which is the better stock? We will contrast the two companies based on the strength of their profitability, valuation, risk, analyst recommendations, institutional ownership, earnings and dividends.

Top 10 Undervalued Stocks To Buy Right Now: Caladrius Biosciences, Inc.(CLBS)

Advisors’ Opinion:

  • [By Stephan Byrd]

    Get a free copy of the Zacks research report on Caladrius Biosciences (CLBS)

    For more information about research offerings from Zacks Investment Research, visit Zacks.com

  • [By Shane Hupp]

    Get a free copy of the Zacks research report on Caladrius Biosciences (CLBS)

    For more information about research offerings from Zacks Investment Research, visit Zacks.com

  • [By Shane Hupp]

    News coverage about Caladrius Biosciences (NASDAQ:CLBS) has trended somewhat positive on Friday, according to Accern Sentiment Analysis. The research group identifies negative and positive press coverage by analyzing more than 20 million blog and news sources. Accern ranks coverage of publicly-traded companies on a scale of negative one to one, with scores nearest to one being the most favorable. Caladrius Biosciences earned a coverage optimism score of 0.17 on Accern’s scale. Accern also gave news headlines about the biotechnology company an impact score of 45.4362129030389 out of 100, meaning that recent press coverage is somewhat unlikely to have an impact on the company’s share price in the immediate future.

  • [By Joseph Griffin]

    Get a free copy of the Zacks research report on Caladrius Biosciences (CLBS)

    For more information about research offerings from Zacks Investment Research, visit Zacks.com

Top 10 Undervalued Stocks To Buy Right Now: News Corporation(NWS)

Advisors’ Opinion:

  • [By Joseph Griffin]

    BidaskClub cut shares of News Corp Class B (NASDAQ:NWS) from a hold rating to a sell rating in a research note issued to investors on Tuesday.

    NASDAQ NWS opened at $15.55 on Tuesday. News Corp Class B has a 52 week low of $13.10 and a 52 week high of $17.70. The company has a quick ratio of 1.62, a current ratio of 1.62 and a debt-to-equity ratio of 0.02. The stock has a market capitalization of $9.12 billion, a price-to-earnings ratio of 32.60 and a beta of 1.80.

  • [By Joseph Griffin]

    New Media Inv Group (NYSE: NEWM) and News (NASDAQ:NWS) are both consumer staples companies, but which is the superior stock? We will compare the two companies based on the strength of their dividends, analyst recommendations, earnings, profitability, valuation, risk and institutional ownership.

  • [By Max Byerly]

    News articles about News Corp Class B (NASDAQ:NWS) have trended somewhat positive on Saturday, Accern Sentiment reports. The research group scores the sentiment of media coverage by analyzing more than twenty million news and blog sources in real-time. Accern ranks coverage of companies on a scale of negative one to one, with scores closest to one being the most favorable. News Corp Class B earned a media sentiment score of 0.07 on Accern’s scale. Accern also gave news stories about the company an impact score of 45.8601342975312 out of 100, indicating that recent media coverage is somewhat unlikely to have an impact on the stock’s share price in the near term.

  • [By Anders Bylund]

    Shares of media giant News Corp. (NASDAQ:NWS) (NASDAQ:NWSA) were trading much lower on Friday morning, following the release of fourth-quarter and full-year results that were slightly ahead of analyst expectations. Both of the company’s tickers fell as much as 10.7%, recovering to a roughly 10% drop by 11:05 a.m. EDT.

Top 10 Undervalued Stocks To Buy Right Now: Avago Technologies Limited(AVGO)

Advisors’ Opinion:

  • [By Stephan Byrd]

    HighPoint Advisor Group LLC acquired a new position in Broadcom Inc (NASDAQ:AVGO) in the second quarter, according to its most recent filing with the Securities and Exchange Commission (SEC). The institutional investor acquired 1,013 shares of the semiconductor manufacturer’s stock, valued at approximately $211,000.

  • [By Paul Ausick]

    When the Committee on Foreign Investment in the United States (CFIUS) essentially squashed Broadcom Ltd.’s (NASDAQ: AVGO) $117 billion bid for Qualcomm in early March, the committee cited national security concerns and Qualcomm’s industry leadership and its position as a “well-known” and “trusted” firm:

  • [By Ethan Ryder]

    Analog Devices (NASDAQ:ADI) and Broadcom (NASDAQ:AVGO) are both large-cap computer and technology companies, but which is the better investment? We will compare the two companies based on the strength of their earnings, valuation, institutional ownership, risk, profitability, analyst recommendations and dividends.

  • [By Max Byerly]

    ClariVest Asset Management LLC bought a new position in shares of Broadcom Inc (NASDAQ:AVGO) in the second quarter, according to the company in its most recent disclosure with the Securities and Exchange Commission. The fund bought 818 shares of the semiconductor manufacturer’s stock, valued at approximately $198,000.

  • [By Chris Lange]

    The S&P 500 stock posting the largest daily percentage gain ahead of the close was Broadcom Inc. (NASDAQ: AVGO) which traded up over 7% at $232.57. The stock’s 52-week range is $197.46 to $285.68. Volume was over 9 million compared to the daily average volume of 5 million.

  • [By Anders Bylund]

    This makes sense if you expect a positive outcome from the final chapter in Qualcomm’s buyout struggles. And why not? Qualcomm recently had President Trump himself reach in and chase away an unwelcome hostile takeover bid from Broadcom (NASDAQ:AVGO). With friends in high places, Qualcomm should be able to overcome nearly any roadblock along the way.

Top 10 Undervalued Stocks To Buy Right Now: ClearSign Combustion Corporation(CLIR)

Advisors’ Opinion:

  • [By Stephan Byrd]

    Headlines about Clearsign Combustion (NASDAQ:CLIR) have trended somewhat positive recently, according to Accern Sentiment Analysis. Accern scores the sentiment of news coverage by analyzing more than 20 million news and blog sources in real time. Accern ranks coverage of public companies on a scale of negative one to positive one, with scores nearest to one being the most favorable. Clearsign Combustion earned a news impact score of 0.03 on Accern’s scale. Accern also assigned media stories about the technology company an impact score of 46.3826189369742 out of 100, meaning that recent news coverage is somewhat unlikely to have an effect on the company’s share price in the next few days.

  • [By Joseph Griffin]

    Press coverage about Clearsign Combustion (NASDAQ:CLIR) has been trending somewhat positive recently, according to Accern Sentiment Analysis. Accern identifies negative and positive news coverage by monitoring more than 20 million blog and news sources. Accern ranks coverage of companies on a scale of -1 to 1, with scores closest to one being the most favorable. Clearsign Combustion earned a news sentiment score of 0.09 on Accern’s scale. Accern also assigned headlines about the technology company an impact score of 46.3610235421976 out of 100, indicating that recent news coverage is somewhat unlikely to have an effect on the company’s share price in the near term.

Top 10 Undervalued Stocks To Buy Right Now: Tiptree Financial Inc.(TIPT)

Advisors’ Opinion:

  • [By Joseph Griffin]

    TRADEMARK VIOLATION WARNING: “Tiptree (TIPT) Raised to C at TheStreet” was posted by Ticker Report and is the sole property of of Ticker Report. If you are reading this piece of content on another site, it was stolen and reposted in violation of United States and international copyright & trademark law. The original version of this piece of content can be accessed at https://www.tickerreport.com/banking-finance/3350618/tiptree-tipt-raised-to-c-at-thestreet.html.

  • [By Tim Melvin]

    This week, I ran across Tiptree Inc. (Nasdaq: TIPT) on the list of stocks with the highest VQScores. Tiptree fits most of my parameters as well so I spent a little time digging into the company further.

  • [By Stephan Byrd]

    Tiptree Inc (NASDAQ:TIPT) CFO Sandra Bell sold 8,682 shares of the business’s stock in a transaction on Monday, September 17th. The shares were sold at an average price of $6.55, for a total transaction of $56,867.10. Following the completion of the sale, the chief financial officer now directly owns 41,881 shares of the company’s stock, valued at $274,320.55. The sale was disclosed in a legal filing with the Securities & Exchange Commission, which is available through this hyperlink.

Top Value Stocks To Own Right Now

Often seen as the opposite of growth investing, value investing seeks to maximize returns by finding stocks that are undervalued by the market. According to this strategy, investors assess a stock’s intrinsic value, often through a valuation method like discounted cash flow analysis, and compare that value with the stock price. If there is a significant margin of safetybetween the value and the price, meaning the intrinsic value is greater than the market value by a pre-determined amount, the value investor will buy the stock.

In this comprehensive guide to value investing, we will first discuss key concepts in value investing, value-investing strategies, and what separates it from other schools of investing; then we’ll review the history of value investing with a focus on the fathers of value investing — Benjamin Graham and Warren Buffett — we will look at some appealing undervalued stocks today, and examine whether or not value investing is right for you.

All about value investing

What distinguishes value investing from other popular strategies is that value investors believe stocks have an inherent or intrinsic value — a concrete number they can derive through techniques like discounted cash flow analysis. While growth investors may be more concerned about the story behind the stock or itsoptionality, meaning the possibility of a future that many can’t yet see (for example,Amazon with its cloud computing division Amazon Web services), value investors focus on the numbers, seeking stocks they believe the market is undervaluing. If the intrinsic value is greater than the market value, they would consider buying it.

Top Value Stocks To Own Right Now: Macy's Inc(M)

Advisors’ Opinion:

  • [By Adam Levine-Weinberg]

    Not too long ago, shares of department store giant Macy’s (NYSE:M) were priced for disaster. The stock bottomed in early November at $17.41, just six times the company’s 2017 adjusted earnings-per-share guidance.

  • [By Timothy Green]

    Shares of Ascena Retail Group (NASDAQ:ASNA) surged on Wednesday following a positive quarterly report from department store Macy’s (NYSE:M). Ascena’s second-quarter report in March was disappointing, leading to a steep drop in the stock price, but it seems that investors are now hoping that a rising tide will lift all boats. Shares of Ascena were up about 15% at 12:20 p.m. EDT.

  • [By ]

    2. Macy’s (NYSE: M)
    This iconic American department store chain has fallen on a hard times. Once a leading name in retail, Macy’s has been reduced to a has-been in the competitive arena.

  • [By Chris Lange]

    Macys Inc. (NYSE: M) is scheduled to release its most recent quarterly results before the markets open on Wednesday. The consensus estimates from Thomson Reuters call for $0.35 in earnings per share (EPS) on $5.39 billion in revenue. The same period of last year reportedly had EPS of $0.24 and $5.34 billion in revenue.

  • [By Adam Levine-Weinberg]

    On Monday, top department store stocks including Macy’s (NYSE:M), Kohl’s (NYSE:KSS), Dillard’s (NYSE:DDS), and J.C. Penney (NYSE:JCP) lost roughly 3% to 4%. The catalyst was a negative analyst report.

Top Value Stocks To Own Right Now: OSI Systems, Inc.(OSIS)

Advisors’ Opinion:

  • [By Shane Hupp]

    Get a free copy of the Zacks research report on OSI Systems (OSIS)

    For more information about research offerings from Zacks Investment Research, visit Zacks.com

  • [By Shane Hupp]

    Here are some of the headlines that may have impacted Accern’s rankings:

    Get OSI Systems alerts:

    OSI Systems (OSIS) Rating Increased to Buy at Zacks Investment Research (americanbankingnews.com) OSI Systems (OSIS) Downgraded by BidaskClub (americanbankingnews.com) OSI Systems (OSIS) Downgraded by Zacks Investment Research to Hold (americanbankingnews.com) $274.42 Million in Sales Expected for OSI Systems, Inc. (OSIS) This Quarter (americanbankingnews.com) Zacks: Analysts Expect OSI Systems, Inc. (OSIS) Will Post Earnings of $0.94 Per Share (americanbankingnews.com)

    OSIS has been the subject of several research reports. Sidoti initiated coverage on OSI Systems in a research note on Wednesday, February 21st. They issued a “buy” rating for the company. Zacks Investment Research raised OSI Systems from a “hold” rating to a “buy” rating and set a $69.00 price objective for the company in a research note on Wednesday, April 4th. ValuEngine lowered OSI Systems from a “hold” rating to a “sell” rating in a research note on Wednesday, May 2nd. Jefferies Group lowered OSI Systems from a “buy” rating to a “hold” rating and dropped their price objective for the company from $79.00 to $70.00 in a research note on Friday, February 2nd. They noted that the move was a valuation call. Finally, BidaskClub lowered OSI Systems from a “sell” rating to a “strong sell” rating in a research note on Saturday, January 20th. One equities research analyst has rated the stock with a sell rating, two have issued a hold rating and four have given a buy rating to the stock. The company presently has an average rating of “Hold” and an average price target of $86.20.

Top Value Stocks To Own Right Now: BGC Partners, Inc.(BGCP)

Advisors’ Opinion:

  • [By Logan Wallace]

    LPL Financial (NASDAQ: LPLA) and BGC Partners (NASDAQ:BGCP) are both mid-cap finance companies, but which is the better stock? We will contrast the two companies based on the strength of their analyst recommendations, valuation, institutional ownership, risk, earnings, dividends and profitability.

  • [By ]

    BGC Partners (BGCP) : “We’re in a market where Goldman Sachs (GS) got slammed. I’m going with them.”

    Ecolab (ECL) : “That’s a terrific situation that I want you to buy more of if it comes down.”

  • [By ]

    Cramer was bearish on BGC Partners (BGCP) , Dr Pepper Snapple (DPS) , Sterling Construction Co. Inc.  (STRL) and B&G Foods (BGS) .

    Search Jim Cramer’s “Mad Money” trading recommendations using our exclusive “Mad Money” Stock Screener.

Top 10 Casino Stocks To Watch For 2019

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Most of the time when a company sells an asset to another company, the market rewards the perceived “winner” of the deal and punishes the loser. On rare occasion, the market will see a transaction as a win-win for both parties involved.

Top 10 Casino Stocks To Watch For 2019: Live Nation Entertainment, Inc.(LYV)

Advisors’ Opinion:

  • [By Anders Bylund]

    World-leading event organizer and ticker seller Live Nation Entertainment Inc. (NYSE:LYV) reported first-quarter results on Thursday. The company posted 19% top-line growth and 76% higher cash flows, and management is leaning on rock festivals and amphitheater shows to fuel further growth.

  • [By Motley Fool Staff]

    Right now, it’s time for that yearly review of the ones he picked to honor the month, and also the briefly famous pregnant giraffe: five companies, and the first letters of their tickers spelled out A-P-R-I-L. They were Axon Enterprise(NASDAQ:AAXN), Grupo Aeroportuario del Pacific(NYSE:PAC), ResMed(NYSE:RMD), Intuitive Surgical (NASDAQ:ISRG), and Live Nation(NYSE:LYV).

  • [By Anders Bylund]

    Shares of Live Nation Entertainment (NYSE:LYV) closed 12.5% higher on Friday, following the release of strong first-quarter results. Earlier in the day, share prices jumped as much as 14.9% higher.

  • [By Motley Fool Staff]

    Stock No. 5: That leads us to our “L” stock, and L is Live Nation (NYSE:LYV). This is the company that was formed by a merger of Live Nation, the concert venue and rock-star-promoting business that it is. So many musicians, today, of course, make most of their money on tours, since the sale of CDs, you might have noticed, has dropped off a cliff in recent years. Live Nation, then, bought a merger with Ticketmaster, so this is the company that sells you the tickets to come into its venues to watch the entertainment that it’s promoting. It’s a tremendously powerful model.

Top 10 Casino Stocks To Watch For 2019: McKesson Corporation(MCK)

Advisors’ Opinion:

  • [By Logan Wallace]

    News coverage about McKesson (NYSE:MCK) has been trending somewhat positive this week, Accern Sentiment Analysis reports. The research group scores the sentiment of press coverage by analyzing more than twenty million blog and news sources in real-time. Accern ranks coverage of companies on a scale of -1 to 1, with scores nearest to one being the most favorable. McKesson earned a media sentiment score of 0.16 on Accern’s scale. Accern also gave media headlines about the company an impact score of 46.6075521439733 out of 100, meaning that recent press coverage is somewhat unlikely to have an impact on the stock’s share price in the next several days.

  • [By ]

    It may be unhealthy to trade drug stocks Friday. The word on Wall Street is to not expect too much from President Trump’s speech on drug prices. That means expect the unexpected, and prepare for a volatility spike in key healthcare names such as Express Scripts (ESRX) , CVS Health (CVS) , Endo International (ENDP) , Mallinckrodt (MNK) , McKesson (MCK) and Cardinal Health (CAH) .

    Reports TheStreet’s Bill Meagher: “Evercore ISI may be an outlier as its analysts anticipate that recent speeches by officials from the Food and Drug Administration, Health and Human Services and Centers for Medicare & Medicaid Services may have telegraphed the Trump administration’s willingness to move beyond loud talk and tweets into policy discussions. In those tweets and in talks with his cabinet, Trump has been critical of the pharmaceutical sector and its pricing of prescription drugs, famously saying on at least two occasions that companies are “getting away with murder.”

  • [By Logan Wallace]

    Manning & Napier Group LLC cut its stake in shares of McKesson (NYSE:MCK) by 83.9% during the first quarter, according to the company in its most recent Form 13F filing with the Securities and Exchange Commission (SEC). The firm owned 3,165 shares of the company’s stock after selling 16,539 shares during the period. Manning & Napier Group LLC’s holdings in McKesson were worth $445,000 as of its most recent filing with the Securities and Exchange Commission (SEC).

Top 10 Casino Stocks To Watch For 2019: icad inc.(ICAD)

Advisors’ Opinion:

  • [By Lisa Levin]

     

    Losers
    Netshoes (Cayman) Limited (NASDAQ: NETS) shares dipped 43.73 percent to close at $2.87 on Tuesday as the company posted downbeat Q1 results.
    Cesca Therapeutics Inc. (NASDAQ: KOOL) shares dropped 29.01 percent to close at $0.80 after reporting Q1 results.
    SenesTech, Inc. (NASDAQ: SNES) shares fell 22.2 percent to close at $0.340 after reporting Q1 miss.
    Vipshop Holdings Limited (NYSE: VIPS) fell 19.95 percent to close at $12.08 after the company reported weaker-than-expected earnings for its first quarter on Monday.
    Image Sensing Systems, Inc. (NASDAQ: ISNS) fell 19.68 percent to close at $3.775 after reporting earnings were down year over year. First quarter earnings came in flat, down from 4 cents per share in the same quarter of last year. Sales came in at $3.01 million.
    Boxlight Corporation (NASDAQ: BOXL) dropped 18.47 percent to close at $9.62 on Tuesday after surging 77.44 percent on Monday.
    ENDRA Life Sciences Inc. (NASDAQ: NDRA) declined 16.21 percent to close at $2.43. ENDRA Life Sciences is expected to release quarterly earnings today.
    ALJ Regional Holdings, Inc. (NASDAQ: ALJJ) shares fell 16.13 percent to close at $1.79.
    Switch Inc (NYSE: SWCH) shares dropped 14.93 percent to close at $13.16 following a first-quarter earnings miss.
    Restoration Robotics Inc (NASDAQ: HAIR) fell 14.42 percent to close at $3.68 after reporting a first-quarter earnings miss.
    iCAD, Inc. (NASDAQ: ICAD) declined 13.01 percent to close at $3.41 following Q1 results.
    Intersections Inc. (NASDAQ: INTX) fell 12.44 percent to close at $1.97.
    Histogenics Corporation (NASDAQ: HSGX) declined 12.24 percent to close at $2.15.
    AZZ Inc. (NYSE: AZZ) fell 12.1 percent to close at $39.60 following Q3 earnings.
    Hallador Energy Company (NASDAQ: HNRG) fell 11.1 percent to close at $6.49.
    Integrated Media Technology Limited (NASDAQ: IMTE) dropped 10.66 percent to close at $16.93 on Tuesday.
    Myomo, Inc. (NYSE: MYO) slipp

Top 10 Casino Stocks To Watch For 2019: Covanta Holding Corporation(CVA)

Advisors’ Opinion:

  • [By Joseph Griffin]

    Danielson (NYSE: CVA) and MGE Energy (NASDAQ:MGEE) are both oils/energy companies, but which is the better stock? We will contrast the two companies based on the strength of their institutional ownership, earnings, dividends, profitability, analyst recommendations, valuation and risk.

  • [By Joseph Griffin]

    HL Financial Services LLC trimmed its holdings in shares of Danielson Holding Co. (NYSE:CVA) by 12.3% in the first quarter, HoldingsChannel reports. The firm owned 49,434 shares of the energy company’s stock after selling 6,964 shares during the quarter. HL Financial Services LLC’s holdings in Danielson were worth $717,000 as of its most recent SEC filing.

  • [By Lee Jackson]

    This company has seen solid insider buying over the past year. Covanta Holding Corp. (NYSE: CVA) is a world leader in providing sustainable waste and energy solutions. Annually, Covanta’s modern energy-from-waste facilities safely convert approximately 20 million tons of waste from municipalities and businesses into clean, renewable electricity to power 1 million homes and recycle approximately 500,000 tons of metal.

Top 10 Casino Stocks To Watch For 2019: Empire State Realty Trust, Inc.(ESRT)

Advisors’ Opinion:

  • [By ]

    Empire State Realty Trust (ESRT) : “The yield on this one is too low.”

    DowDuPont (DWDP) : “I’m not running away, I’m sticking with them.”

  • [By Logan Wallace]

    Prudential Financial Inc. cut its stake in Empire State Realty (NYSE:ESRT) by 0.5% in the 1st quarter, according to the company in its most recent disclosure with the SEC. The institutional investor owned 1,745,889 shares of the real estate investment trust’s stock after selling 8,046 shares during the quarter. Prudential Financial Inc.’s holdings in Empire State Realty were worth $29,313,000 at the end of the most recent quarter.

  • [By ]

    For example, nobody is going to come along and build another Empire State Building. In fact, you can actually invest in this building through the Empire State Realty Trust (NYSE: ESRT).

Top 10 Casino Stocks To Watch For 2019: Macy's Inc(M)

Advisors’ Opinion:

  • [By Jeremy Bowman]

    Macy’s(NYSE:M) knows this, which is why the company is focused on revamping and modernizing its stores so it can continue to attract customers. It’s shuttered underperforming stores and sold off excess real estate. It also is opening 100 of its off-price Backstage stores inside existing Macy’s locations this year, emulating a model that has worked well forTJXCompanies andNordstrom.

  • [By Lisa Levin]

    U.S. stock futures traded slightly higher in early pre-market trade, ahead of earnings from Macy's, Inc. (NYSE: M). Data on housing starts and permits for April will be released at 8:30 a.m. ET, while data on industrial production for April will be released at 9:15 a.m. ET. Federal Reserve Bank of Atlanta President Raphael Bostic is set to speak at 8:30 a.m. ET, while St. Louis Fed President James Bullard will speak at 6:30 p.m. ET.

  • [By Timothy Green]

    Shares of Ascena Retail Group (NASDAQ:ASNA) surged on Wednesday following a positive quarterly report from department store Macy’s (NYSE:M). Ascena’s second-quarter report in March was disappointing, leading to a steep drop in the stock price, but it seems that investors are now hoping that a rising tide will lift all boats. Shares of Ascena were up about 15% at 12:20 p.m. EDT.

  • [By Lisa Levin]

    Macy's Inc (NYSE: M) reported stronger-than-expected results for its first quarter and lifted guidance.

    The company said it earned 48 cents per share in the first quarter on revenue of $5.54 billion versus expectations of 35 cents per share and $5.39 billion. Management lifted its fiscal 2018 EPS guidance from $3.55-$3.75 to a new range of $3.75-$3.95.

  • [By ]

    2. Macy’s (NYSE: M)
    This iconic American department store chain has fallen on a hard times. Once a leading name in retail, Macy’s has been reduced to a has-been in the competitive arena.

Top 10 Casino Stocks To Watch For 2019: Gartner, Inc.(IT)

Advisors’ Opinion:

  • [By Logan Wallace]

    Get a free copy of the Zacks research report on Gartner (IT)

    For more information about research offerings from Zacks Investment Research, visit Zacks.com

  • [By Lisa Levin] Companies Reporting Before The Bell
    Dean Foods Company (NYSE: DF) is projected to report quarterly earnings at $0.11 per share on revenue of $1.85 billion.
    Discovery, Inc. (NASDAQ: DISCA) is expected to report quarterly earnings at $0.44 per share on revenue of $1.99 billion.
    Jacobs Engineering Group Inc. (NYSE: JEC) is estimated to report quarterly earnings at $0.89 per share on revenue of $3.63 billion.
    Henry Schein, Inc. (NASDAQ: HSIC) is expected to report quarterly earnings at $0.92 per share on revenue of $3.17 billion.
    Gartner, Inc. (NYSE: IT) is projected to report quarterly earnings at $0.57 per share on revenue of $926.18 million.
    The AES Corporation (NYSE: AES) is estimated to report quarterly earnings at $0.24 per share on revenue of $2.98 billion.
    Expeditors International of Washington, Inc. (NASDAQ: EXPD) is projected to report quarterly earnings at $0.64 per share on revenue of $1.71 billion.
    US Foods Holding Corp. (NYSE: USFD) is expected to report quarterly earnings at $0.32 per share on revenue of $5.98 billion.
    DISH Network Corporation (NASDAQ: DISH) is expected to report quarterly earnings at $0.7 per share on revenue of $3.50 billion.
    Zebra Technologies Corporation (NASDAQ: ZBRA) is estimated to report quarterly earnings at $2.06 per share on revenue of $936.98 million.
    Camping World Holdings, Inc. (NYSE: CWH) is expected to report quarterly earnings at $0.42 per share on revenue of $1.06 billion.
    Perrigo Company plc (NYSE: PRGO) is projected to report quarterly earnings at $1.14 per share on revenue of $1.21 billion.
    Petróleo Brasileiro S.A. – Petrobras (NYSE: PBR) is estimated to report quarterly earnings at $0.28 per share on revenue of $23.80 billion.
    JD.com, Inc. (NYSE: JD) is projected to report quarterly earnings at $0.18 per share on revenue of $15.65 billion.
    Valeant Pharmaceuticals International, Inc. (NYSE: VRX) is projected to report quarterly earnings at $0.6 per share o
  • [By Steve Symington]

    Gartner Inc. (NYSE:IT) announced better-than-expected first-quarter 2018 results on Tuesday, detailing double-digit percentage growth led by strong demand for its market-leading research-and-advisory services. The company also modestly reduced its full-year guidance, but only to reflect the impact of recent divestitures.

Top 10 Casino Stocks To Watch For 2019: SodaStream International Ltd.(SODA)

Advisors’ Opinion:

  • [By Stephan Byrd]

    SodaStream (NASDAQ:SODA)‘s stock had its “hold” rating reiterated by stock analysts at Jefferies Group in a research note issued to investors on Wednesday. They currently have a $82.00 price target on the stock. Jefferies Group’s target price suggests a potential downside of 5.87% from the stock’s current price. Jefferies Group also issued estimates for SodaStream’s Q2 2018 earnings at $0.74 EPS, FY2018 earnings at $3.55 EPS, Q1 2019 earnings at $0.88 EPS, Q2 2019 earnings at $0.79 EPS and Q1 2020 earnings at $0.89 EPS.

  • [By Chris Lange]

    SodaStream International Ltd. (NASDAQ: SODA) reported its fourth-quarter financial results before the markets opened on Wednesday. The company said that it had $1.13 in earnings per share (EPS) on $157.7 million in revenue, which compares with consensus estimates from Thomson Reuters of $0.80 in EPS on revenue of $151.57 million. In the same period of last year, it said it had EPS of $0.71 and $131.8 million in revenue.

  • [By Demitrios Kalogeropoulos]

    SodaStream(NASDAQ:SODA) recently announced surprisingly strong first-quarter earnings as sales growth sped up to a 25% pace and profitability improved. The seller of at-home carbonated beverage machines is benefiting from a long-term trend of rising global demand for sparkling water.

Top 10 Casino Stocks To Watch For 2019: Berkshire Hathaway Inc. (BRK-A)

Advisors’ Opinion:

  • [By Sean Williams]

    This past weekend, the most anticipated of all annual stockholder meetings kicked off. Roughly 40,000 shareholders of Berkshire Hathaway (NYSE:BRK-A)(NYSE:BRK-B) from across the country descended on Omaha, Nebraska, to hear long-term investment icons Warren Buffett and his right-hand man, Charlie Munger, speak for hours about the stock market, money, and the state of the U.S. economy.

  • [By Motley Fool Staff]

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Tencent Takes Gaming By Storm

In this episode of the Market Foolery podcast, host Mac Greer talks with Motley Fool analysts Ron Gross and Matt Argersinger about the market’s hottest stories. For a company with $500 billion in market cap, Tencent(NASDAQOTH:TCEHY) just put up some astonishing growth this quarter — and yet, the stock fell a little bit today.

Traditional retail actually saw a bright spot today with Macy’s(NYSE:M) fantastic quarterly report, but investors shouldn’t abandon all doubts about the sector just yet. Starbucks (NASDAQ:SBUX)is ramping up its growth in China to an astounding degree, and long-term investors might want to take a closer look at the coffee powerhouse for the next few years. Tune in to find out more.

A full transcript follows the video.

This video was recorded on May 16, 2018.

Mac Greer: It’s Wednesday, May 16th. Welcome to Market Foolery! I’m Mac Greer, and joining me in studio, we have Motley Fool analysts Ron Gross and Matt Argersinger. Guys, welcome!

Ron Gross: How are you?

Matt Argersinger:Hey, Mac!

Greer: How you feeling?

Gross: I’m great!

Greer: Good. Matt, you?

Argersinger:I’m good!

Greer:I’m trying to grow a beard,but I’m at that scratchy stage.

Gross:Yeah,it looks good!

Greer: Are you just saying that? [laughs]That’s so hurtful. Well,guys, later in the show we’re going to talk Starbucks. They’rereally ramping up in China,which I hear is a pretty big market,so we’re going to talk about that. And we’re also going to talk about some big earnings from China’slargest social network and gaming company.

But, Ron,I want to begin with something that we don’t say every day –good news from a traditional retailer. Shares of Macy’s up more than 5% right now onbetter than expected earnings. Is the turnaround really happening?

Gross: Well,well, well, look who’s not dead yet!

Argersinger:Yet. [laughs]

Gross: Reallyinteresting! It’s been an interesting six months for retail. If you listened to the show a year ago, we left retail for dead.

Greer:Yes we did.

Gross: Shows what we know. Andthere have certainly been some rebounds, helped by tax cuts and bonuses and tax refunds and a strong economyand almost full unemployment. So, it has been interesting.

Specific to Macy’s,they have done what they needed to do, which is close a lot of stores,maybe around 100 stores. They cutthousands of jobs, which is painful,but when business calls for it, sometimes that’s what needs to be done. And it looks like they’rereaping the benefits of that as well asthe good stuff that’s going on in the economy right now. The same-store sales up 4.7% is a huge, huge number. Now,their friends and family promotionshowed up in this quarter, versus last year, it was in a different quarter,so the comparisons are a little wonky, for lack of a better word.

Greer:What is that? What is the friends and family promotion?

Gross: Itused to be that you literally hadto know someone that worked atone of these stores, and they could pass you along adiscount. Nowadays it’s, if you breathe,you get the friends and family discount. No kidding around!

Greer: [laughs]Opposable thumbs.

Argersinger:Everyone is a friend?

Gross: Everyone is a friend of someone. It’s just abig promotion, like the old Macy’s One Day sales. That helped, the fact that it was in this quarterversus a different quarter last time around. If you strip that out, you’re probably somewhere under 2% on a same-store sales growth basis. Butstill, for a company that has really struggled, that’s still pretty darn good. Adjusted profits up 240%. Now,again, from a very low base, because the company was struggling. Still,it’s really nice to see.

They have a lot of things in the works. They’rekind of throwing some things at the wall and seeing what will stick. They have their Macy’s Backstage concept, which is their discount concept. Everyretailer has to have one nowadays, like a Nordstrom (NYSE:JWN)Rack, for example. Theyactually bought a concept store in New York City calledStory,which is a store that revamps its inventory every four to eight weeks to try to keep it fresh. That would be some Inventory management job. Their buyers have their work cut out for them. But, interesting. They’re trying a lot of different things.

They need a new CFO; theirCFO is leaving. Let’s get that in placeso they don’t miss a beatwith respect to that. But, kudos to Macy’s. I don’t know if this carries through,but this is a really strong quarter.

Greer: OK,Matt, a lot there. What do you think?

Argersinger:I mean,part of me thinks this is probably just — I’m sure Ron will agree a little bit — things got a little too pessimistic.

Gross: Yeah.

Argersinger:So, if Macy’s can have a little good news, or any of these traditional retailers can have a little good news,it’s going to spike the stock. I have to look at Macy’s though, and I say, if I’m an investor and I see a P/E of 7X — I don’t know if that’s a normalized number — and a dividend yield above 5% …

Gross: Right? [laughs]

Argersinger:Ron,what do you think? Should I look at this as,this is a deep value type of opportunity here? Maybethis is an opportunity for investors?

Gross:So, they raised guidance. On their going-forward guidance, they’re trading at 8.5X. Measurethat up against a Nordstrom, that’s around 15X, or aJCPenneyor aKohl’sthat are 17X and 12X, respectively, it certainly looks awfully cheap. And itcontinues to be a turnaround play. It’s not the kind of stock you probably want to buyand hold forever. It’s the kind of stock thatpotentially could be mispriced,and when it becomes fairly priced,you would probably want to take your profitsand go home.

Greer: OK, Ron,you mentioned some other names there, including Nordstrom and Kohl’s. Wetalk a lot about Amazon (NASDAQ:AMZN)- proofretailers orcompanies in general. When both of you guys look at traditional retail,is there a company that you think is more Amazon-proof?

Gross: Wealways talk about TJ Maxxas a company that really hasrelationships with thousands of buyers and provides areally strong value on and strong assortment to the customer. So far, that has been Amazon-proof. Itdoesn’t mean it always will be, though.

Argersinger:It’sgoing to be very hard. When I think of a lot of these companies,I think of apparel. And Amazon is making such a big investmentin that area. For a long time, I figured,are people really going to buy clothes online? Shoes? Andsure enough, over the last ten years, that model has been proven. Now,I think something like a Macy’s or Nordstromfeels like a better, more polished brand than yourJCPenney’s of the world, or yourSears, certainly, of the world. Atthe same time,I like what Ron said. There might be some value here, but youlook to get out as soon as you thinkyou have somewhat of a fair valueon these businesses. Youcannot see the outsized growth anymore for any of these brands.

Greer:OK. Ron,as we wrap up here, I know from my boots on the ground researchthat in a previous life,as a younger man —

Gross:Where’s this going?

Greer:– youworked at Macy’s. True or false?

Gross: [laughs]Yes,I will admit.

Greer: OK. What were the highlights and lowlights of Ron Gross’Macy’s career?

Gross: Thebackground is, I was in high school. I worked in the bath shop. The bath shop, for those uninformed, isthe department where they sell bath towels, primarily, and bathroom rugsand things like that. I was terrible at this job. Itmostly revolved around folding things.

Greer: Andwhy were you terrible?

Gross: I’mnot a good folder of things!

Greer: Andyou weren’t passionate about the bath shop?

Gross: Andby the way, this was before the day of bar codes and those guns and scanners. Youhad to key in every little last thing manually at the register. Ifyou made a mistake, you had to go back to the beginning. It wasjust a disaster. Myone recommendation to those kids out therewith a similar type of retail job is,do not call out sick every other week,because they just don’t appreciate when you do that.

Greer: Ah,OK, so you kind of shirked your duties.

Gross: I wasn’t a strong employee.

Greer: OK,duly noted. We like the honesty. Guys, let’s turn our attention toTencent. Tencentreporting better than expected earnings thanks tostrong growth in its mobile games,mobile payments and other digital content. Now, Matt,for those who may not be following this company, Tencent isChina’s largest social networking and gaming company. When we’re talking Tencent, we’re talking WeChat,which has more than a billion users. And,oh yeah, Tencent now has a piece of the action intwo of the biggest games in the smartphone world –PUBG and Fortnite.

Argersinger:That’s right. Youmentioned, biggest social network and video game company in China. Well,this is one of the biggest social network and video game companies in the world. You mentioned the one billion, thefirst time WeChat, which is theirbig social network, hit a billion active users, this most recent quarter.

This is a $500 billionmarket cap company. Huge. It’s one of the biggestcompanies in the world.Revenue up48% to $11.7 billionin the quarter. Operating profits up 59% to $4.9 billion. That’s an operating margin of42%. They’re in Facebookterritorywhen it comes to the profitabilityof their company, of their platform.

Andit makes sense. Like you said, it’s a social network,massive social network. They own some of the biggest video game propertiesin the world. We’re talking League of Legends,Honor of Kings, and oh, by the way, they own 40% of anAmerican company called Epic Games, which happens to publish this game called Fortnite —

Gross: And was started in Potomac, Maryland, by the way.

Argersinger:That’s right!Potomac Computer Systems, or something like that. So,they have their hands in some of the most popular intellectual property in the world. Butif you look at the other parts of the business, we talka lot about their social network and their video games, butvideo and music streaming, up 47%, that business. Advertising, which they really haven’t tapped into –in fact, management has been really hesitant to show ads in the “news feeds” of WeChat users. And yet, that business is up 55%,when they haven’t even really tapped it.

But, it really is the power of that network. You have a billion users, soanything Tencent can do, any game they launch,any video streaming service they launch or new content they create,they can immediatelydistribute that seamlessly across mobile to over a billion users. So,that is an incredibly powerful competitive advantage that Tencent has builtover the last 20 years, and it’s just really starting to shine now as a public company.

Greer:Matt, I just quoted the stock, and I hear these heady numbersand all these untapped opportunities that they’rejust beginning to explore, especially with regards to China. Andthe stock is down slightly today. What gives there?

Argersinger:Well,I’ve seen this play out a little bit with a lot of these large Chinese companies lately.I think, for whatever reason — and, Tencent in particular, because it’s listed on the pink sheets in the U.S. — but, these are all platforms that we knowand hear about and we can invest in, butwe don’t really have any experience with them. And we’renot comfortable, necessarily, with the management of Tencent orJD.comorBaiduorAlibaba, just to go through the list.

There’s a big catalyst, though, coming forward, which is, the Chinese government may soon — as early as this summer — allow domestic Chinese investors to actually buy shares in these companies. Right now, they’renot allowed to invest in these foreign-listed companies,even though these are some of the biggest companies in China. It’s as if we used Amazon in the States, butit was listed in China, and we weren’t allowed to invest in it. Well,imagine that. Imagine what the valuation of Amazon would beif that was the case. That’s what Chinese investors facewith something like Tencent. I think that’s a catalyst. And it could be happening this summer, wherea lot of Chinese investors could suddenly be able to buy shares. That’sgoing to create a huge amount of demand, I think. So,that’s one of the things, I think, that’s waiting to happen before the valuation really goes up for a lot of these companies.

Gross: That’sinteresting, because as a value guy,it has barely crossed my radar. But I do own shares of Facebook,I own shares of Google. So,I am willing to place my bets there. But, Tencent, being a Chinese company, I remain wary of that kind of stuff –to my detriment, [laughs] it would appear,because they are taking it by storm, andand this Fortnite thing is a phenomenonthat I have never seen, at least in my house.

Greer: It’sincredible. I played my first game this weekend,and I couldn’t really figure out how to jump.

Gross: You can dance, too.

Greer: Yeah,I was so far from being able to dance. What I realized is,you really have to be able to jump.

Gross: In real life, you mean?

Greer: Well,in real life, it’s helpful. But in Fortnite, I kept running into the same wallover and over, and then I just got mowed down by someone.

Argersinger:Anddriving your son, I’m sure, crazy.

Greer: Oh,my son was trying to teach me, and it started out with, “This this will be exciting,” and within a minute, he was exasperated. It was the equivalent ofthe 12 o’clockflashing on the VCR. I was that guy.I was running into a wall over and over,I couldn’t jump. I mean, it’s a much more complex game —

Gross: Oh, for sure.

Greer: — than Pong.

Gross: [laughs] Pong!

Greer: Pong,you had to adjust your paddle size. And then, that progressed to Breakout. And the only thing with Breakout isyou had to keep your cool as you broke out.

Argersinger:So,you dominated those games, but when it comes to something like Fortnite —

Greer: There are all thesevariables! You have to jump, you have to move —

Gross: Build, building is the key to Fortnite.

Argersinger:Yeah, building.

Gross: If you’re a strong builder, you can win.

Greer: No.I was just running into a wall over and over.

Gross: These games,this whole genre is called battle royale games, where100 people play at a time in a game of Fortnite.

Greer: Yeah,it’s brilliant.

Gross:It’s brilliant, and don’t forget, Fortnite doesn’t cost any money unless you want to upgrade your outfit —

Greer: Skins, Ron! Not outfits, Skins! Gosh!

Gross: Sorry, skins. Right.

Greer: So insulting!

Gross: You spend money on these microtransactions, $5 and $10 at a time,that actually turns into a real business. Hundreds of millions of dollars’ worth of business. It’s fascinating.

Greer: It’s brilliant. And you can play solo, you can play it in a pair, you can play on a team. Now, they have the Marvel tie-in with Thanos. Oh my gosh, I mean, they’re just printing money.

Argersinger:AndI’m glad Ron just mentioned the model,because it really is a model thatyou saw in nascent stages ten years ago withvideo games, but 90% of the revenue for video games was still selling you the disc,it’s $50 and that’s usually the only transaction that would happen. Now, you layer inall those microtransactions. So,it ends up, gamers spend hundreds of dollars on a single titleover the course of playing the game. And I think, that’s why you look at Tencent, it hasoperating margins above 40%.

Gross: Andjust as an aside, what’s amazing is,you can’t spend money Fortnite,for example, to upgrade your weapon and give yourself an unfair advantageand buy yourself a win. It’sliterally just aesthetics. It just looks cooler. Andkids out there are still willing — not just kids, everyone is still willing to spend those $5 and $10.

Greer: So, you’re telling me kids like to look cool?

Gross: Yeah, I guess so.

Greer: Well,the one tweak I’m going to make based on my experience is, I want a seniors’ division, where 50 and over compete in their own division. Likegolf, right? Then you have a bunch of people running into walls together.

Gross: Nice.

Argersinger:I like that. I like that a lot.

Greer: Money maker. Guys,let’s close with Starbucks, which is really ramping upin China. Matt, these numbers are staggering. OnWednesday, Starbucks announcing plans to build nearly 3,000 new stores in mainland Chinaover the next few years. For those of youscoring at home,that will mean that Starbucks will have around 6,000 storesby the end of 2022. What do you think?

Argersinger:That’s right. Credit toCNBC’s Kate Rogers,who was covering this conference that Starbucks did inChina, its two-day investor conference. Theheadline is really that Starbucks reiterated once again that their business in China isalmost certainly going to eclipse their business in the U.S.in the future. There’s just no doubt about it. And that’s partly, from what you said, they’regoing to have 6,000 stores by 2022.

Right now,they have 3,300 locationsacross 141 cities inChina. They’re opening a new location –this is according to Kate –every 15 hours now in China. So,with the new numbers they’ve put out,I looked back at my own model that I’ve done of Starbucks, looking at store counts, and this is way ahead of where I thought they would be by 2022.

So,if you’re a Starbucks shareholder, I think you probably felt a little frustratedover the last several years. The stock has kind of stagnated. Overall global compshave been low single digits. And the stock has really been stuck in place. Butnow, I look at this and I say, well,Starbucks is trading for roughly 22Xforward earnings, 2% dividend yield,buying back a lot of stock, abusiness that should still be able to grow in the high single digits, sales,especially as China becomes a greater proportion of the business.I think Starbucks looks pretty compellingright now. It’s not going to be a barnstormer,but I think you can do pretty well buying Starbucks today. And if you get the shares under $50,even better.

Greer: Yeah,it was really surprising. Shares of Starbucks down over the past year, butover the past five years, uparound 80%.

Argersinger:Right. It’s still a long-term story. So,I think, if you buy Starbucks today and you look forward to what this business could look like in five years,in China and elsewhere,pretty exciting.

Greer:I confess, when I heard you say you did your model of Starbucks,I first envisioned you building a model of a Starbucks.

Gross: [laughs]A Lego model?

Argersinger:Of aStarbucks store?

Greer: Yeah! And I’m like, “That’s kind of odd.” And then I’m like, “Oh, wait, play it cool, he’s talking financial model. OK, I got it.”I was a little worried there. I’m like, “You know what? Putthe model down, just crunch the numbers.”OKguys, my favorite closing desert island question. You’reon a desert island for the next five years,and you can only hold one of these stocks that we’ve talked about: Macy’s, Tencent, or Starbucks?

Gross:Well,it’s definitely not Macy’s.

Argersinger:[laughs] I think that’s easy.

Gross: Tencent might put upbetter numbers, but I’m just not as comfortable with it. AndStarbucks is just a solid, solid company that I can put in my portfolio andgo to that desert island and not worry about it,so I’ll go Starbucks.

Greer: Notas comfortable with Tencent, is that because of the management, or the business model, or both?

Gross:I’m just not as familiar with it, it’s a little bitmore high-growth, high-flying than I’mtypically comfortable with, and you add in the Chinese piece,and that pushes it over to Starbucks.

Greer: OK. Matty?

Argersinger: I’m going to agree with Ron. The numbers that Tencent isputting up are just staggering,but I feel a little bit less comfortable about where I see the business in five years.I think the business is going to be huge, and it’s growing in all these different areas,but I want to see more of a focus on,eventually, what they can do with this huge WeChat platform.And, whether or not the Chinese government is ever going to step in and say, “Yeah, youguys are a little too influential,” especially as WeChat gets into financial transactions, which,they already have one of the biggest payment platforms. Being able to spread that across a billion users, it makes Tencentthat much more influential in China. So, if I’m going to sleep well at night and, I think, earn 10% a year I’m going Starbucks.

Greer: OK. There you have it. Matt, Ron,thanks for joining me!

Argersinger:Thanks, Mac!

Gross: Thanks, Mac!

Greer:As always, people on the show may have interests 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’s it for this edition of Market Foolery. The show is mixed by Dan Boyd. I’m Mac Greer. Thanks for listening! We’ll see you tomorrow!

Tencent Takes Gaming By Storm

In this episode of the Market Foolery podcast, host Mac Greer talks with Motley Fool analysts Ron Gross and Matt Argersinger about the market’s hottest stories. For a company with $500 billion in market cap, Tencent(NASDAQOTH:TCEHY) just put up some astonishing growth this quarter — and yet, the stock fell a little bit today.

Traditional retail actually saw a bright spot today with Macy’s(NYSE:M) fantastic quarterly report, but investors shouldn’t abandon all doubts about the sector just yet. Starbucks (NASDAQ:SBUX)is ramping up its growth in China to an astounding degree, and long-term investors might want to take a closer look at the coffee powerhouse for the next few years. Tune in to find out more.

A full transcript follows the video.

This video was recorded on May 16, 2018.

Mac Greer: It’s Wednesday, May 16th. Welcome to Market Foolery! I’m Mac Greer, and joining me in studio, we have Motley Fool analysts Ron Gross and Matt Argersinger. Guys, welcome!

Ron Gross: How are you?

Matt Argersinger:Hey, Mac!

Greer: How you feeling?

Gross: I’m great!

Greer: Good. Matt, you?

Argersinger:I’m good!

Greer:I’m trying to grow a beard,but I’m at that scratchy stage.

Gross:Yeah,it looks good!

Greer: Are you just saying that? [laughs]That’s so hurtful. Well,guys, later in the show we’re going to talk Starbucks. They’rereally ramping up in China,which I hear is a pretty big market,so we’re going to talk about that. And we’re also going to talk about some big earnings from China’slargest social network and gaming company.

But, Ron,I want to begin with something that we don’t say every day –good news from a traditional retailer. Shares of Macy’s up more than 5% right now onbetter than expected earnings. Is the turnaround really happening?

Gross: Well,well, well, look who’s not dead yet!

Argersinger:Yet. [laughs]

Gross: Reallyinteresting! It’s been an interesting six months for retail. If you listened to the show a year ago, we left retail for dead.

Greer:Yes we did.

Gross: Shows what we know. Andthere have certainly been some rebounds, helped by tax cuts and bonuses and tax refunds and a strong economyand almost full unemployment. So, it has been interesting.

Specific to Macy’s,they have done what they needed to do, which is close a lot of stores,maybe around 100 stores. They cutthousands of jobs, which is painful,but when business calls for it, sometimes that’s what needs to be done. And it looks like they’rereaping the benefits of that as well asthe good stuff that’s going on in the economy right now. The same-store sales up 4.7% is a huge, huge number. Now,their friends and family promotionshowed up in this quarter, versus last year, it was in a different quarter,so the comparisons are a little wonky, for lack of a better word.

Greer:What is that? What is the friends and family promotion?

Gross: Itused to be that you literally hadto know someone that worked atone of these stores, and they could pass you along adiscount. Nowadays it’s, if you breathe,you get the friends and family discount. No kidding around!

Greer: [laughs]Opposable thumbs.

Argersinger:Everyone is a friend?

Gross: Everyone is a friend of someone. It’s just abig promotion, like the old Macy’s One Day sales. That helped, the fact that it was in this quarterversus a different quarter last time around. If you strip that out, you’re probably somewhere under 2% on a same-store sales growth basis. Butstill, for a company that has really struggled, that’s still pretty darn good. Adjusted profits up 240%. Now,again, from a very low base, because the company was struggling. Still,it’s really nice to see.

They have a lot of things in the works. They’rekind of throwing some things at the wall and seeing what will stick. They have their Macy’s Backstage concept, which is their discount concept. Everyretailer has to have one nowadays, like a Nordstrom (NYSE:JWN)Rack, for example. Theyactually bought a concept store in New York City calledStory,which is a store that revamps its inventory every four to eight weeks to try to keep it fresh. That would be some Inventory management job. Their buyers have their work cut out for them. But, interesting. They’re trying a lot of different things.

They need a new CFO; theirCFO is leaving. Let’s get that in placeso they don’t miss a beatwith respect to that. But, kudos to Macy’s. I don’t know if this carries through,but this is a really strong quarter.

Greer: OK,Matt, a lot there. What do you think?

Argersinger:I mean,part of me thinks this is probably just — I’m sure Ron will agree a little bit — things got a little too pessimistic.

Gross: Yeah.

Argersinger:So, if Macy’s can have a little good news, or any of these traditional retailers can have a little good news,it’s going to spike the stock. I have to look at Macy’s though, and I say, if I’m an investor and I see a P/E of 7X — I don’t know if that’s a normalized number — and a dividend yield above 5% …

Gross: Right? [laughs]

Argersinger:Ron,what do you think? Should I look at this as,this is a deep value type of opportunity here? Maybethis is an opportunity for investors?

Gross:So, they raised guidance. On their going-forward guidance, they’re trading at 8.5X. Measurethat up against a Nordstrom, that’s around 15X, or aJCPenneyor aKohl’sthat are 17X and 12X, respectively, it certainly looks awfully cheap. And itcontinues to be a turnaround play. It’s not the kind of stock you probably want to buyand hold forever. It’s the kind of stock thatpotentially could be mispriced,and when it becomes fairly priced,you would probably want to take your profitsand go home.

Greer: OK, Ron,you mentioned some other names there, including Nordstrom and Kohl’s. Wetalk a lot about Amazon (NASDAQ:AMZN)- proofretailers orcompanies in general. When both of you guys look at traditional retail,is there a company that you think is more Amazon-proof?

Gross: Wealways talk about TJ Maxxas a company that really hasrelationships with thousands of buyers and provides areally strong value on and strong assortment to the customer. So far, that has been Amazon-proof. Itdoesn’t mean it always will be, though.

Argersinger:It’sgoing to be very hard. When I think of a lot of these companies,I think of apparel. And Amazon is making such a big investmentin that area. For a long time, I figured,are people really going to buy clothes online? Shoes? Andsure enough, over the last ten years, that model has been proven. Now,I think something like a Macy’s or Nordstromfeels like a better, more polished brand than yourJCPenney’s of the world, or yourSears, certainly, of the world. Atthe same time,I like what Ron said. There might be some value here, but youlook to get out as soon as you thinkyou have somewhat of a fair valueon these businesses. Youcannot see the outsized growth anymore for any of these brands.

Greer:OK. Ron,as we wrap up here, I know from my boots on the ground researchthat in a previous life,as a younger man —

Gross:Where’s this going?

Greer:– youworked at Macy’s. True or false?

Gross: [laughs]Yes,I will admit.

Greer: OK. What were the highlights and lowlights of Ron Gross’Macy’s career?

Gross: Thebackground is, I was in high school. I worked in the bath shop. The bath shop, for those uninformed, isthe department where they sell bath towels, primarily, and bathroom rugsand things like that. I was terrible at this job. Itmostly revolved around folding things.

Greer: Andwhy were you terrible?

Gross: I’mnot a good folder of things!

Greer: Andyou weren’t passionate about the bath shop?

Gross: Andby the way, this was before the day of bar codes and those guns and scanners. Youhad to key in every little last thing manually at the register. Ifyou made a mistake, you had to go back to the beginning. It wasjust a disaster. Myone recommendation to those kids out therewith a similar type of retail job is,do not call out sick every other week,because they just don’t appreciate when you do that.

Greer: Ah,OK, so you kind of shirked your duties.

Gross: I wasn’t a strong employee.

Greer: OK,duly noted. We like the honesty. Guys, let’s turn our attention toTencent. Tencentreporting better than expected earnings thanks tostrong growth in its mobile games,mobile payments and other digital content. Now, Matt,for those who may not be following this company, Tencent isChina’s largest social networking and gaming company. When we’re talking Tencent, we’re talking WeChat,which has more than a billion users. And,oh yeah, Tencent now has a piece of the action intwo of the biggest games in the smartphone world –PUBG and Fortnite.

Argersinger:That’s right. Youmentioned, biggest social network and video game company in China. Well,this is one of the biggest social network and video game companies in the world. You mentioned the one billion, thefirst time WeChat, which is theirbig social network, hit a billion active users, this most recent quarter.

This is a $500 billionmarket cap company. Huge. It’s one of the biggestcompanies in the world.Revenue up48% to $11.7 billionin the quarter. Operating profits up 59% to $4.9 billion. That’s an operating margin of42%. They’re in Facebookterritorywhen it comes to the profitabilityof their company, of their platform.

Andit makes sense. Like you said, it’s a social network,massive social network. They own some of the biggest video game propertiesin the world. We’re talking League of Legends,Honor of Kings, and oh, by the way, they own 40% of anAmerican company called Epic Games, which happens to publish this game called Fortnite —

Gross: And was started in Potomac, Maryland, by the way.

Argersinger:That’s right!Potomac Computer Systems, or something like that. So,they have their hands in some of the most popular intellectual property in the world. Butif you look at the other parts of the business, we talka lot about their social network and their video games, butvideo and music streaming, up 47%, that business. Advertising, which they really haven’t tapped into –in fact, management has been really hesitant to show ads in the “news feeds” of WeChat users. And yet, that business is up 55%,when they haven’t even really tapped it.

But, it really is the power of that network. You have a billion users, soanything Tencent can do, any game they launch,any video streaming service they launch or new content they create,they can immediatelydistribute that seamlessly across mobile to over a billion users. So,that is an incredibly powerful competitive advantage that Tencent has builtover the last 20 years, and it’s just really starting to shine now as a public company.

Greer:Matt, I just quoted the stock, and I hear these heady numbersand all these untapped opportunities that they’rejust beginning to explore, especially with regards to China. Andthe stock is down slightly today. What gives there?

Argersinger:Well,I’ve seen this play out a little bit with a lot of these large Chinese companies lately.I think, for whatever reason — and, Tencent in particular, because it’s listed on the pink sheets in the U.S. — but, these are all platforms that we knowand hear about and we can invest in, butwe don’t really have any experience with them. And we’renot comfortable, necessarily, with the management of Tencent orJD.comorBaiduorAlibaba, just to go through the list.

There’s a big catalyst, though, coming forward, which is, the Chinese government may soon — as early as this summer — allow domestic Chinese investors to actually buy shares in these companies. Right now, they’renot allowed to invest in these foreign-listed companies,even though these are some of the biggest companies in China. It’s as if we used Amazon in the States, butit was listed in China, and we weren’t allowed to invest in it. Well,imagine that. Imagine what the valuation of Amazon would beif that was the case. That’s what Chinese investors facewith something like Tencent. I think that’s a catalyst. And it could be happening this summer, wherea lot of Chinese investors could suddenly be able to buy shares. That’sgoing to create a huge amount of demand, I think. So,that’s one of the things, I think, that’s waiting to happen before the valuation really goes up for a lot of these companies.

Gross: That’sinteresting, because as a value guy,it has barely crossed my radar. But I do own shares of Facebook,I own shares of Google. So,I am willing to place my bets there. But, Tencent, being a Chinese company, I remain wary of that kind of stuff –to my detriment, [laughs] it would appear,because they are taking it by storm, andand this Fortnite thing is a phenomenonthat I have never seen, at least in my house.

Greer: It’sincredible. I played my first game this weekend,and I couldn’t really figure out how to jump.

Gross: You can dance, too.

Greer: Yeah,I was so far from being able to dance. What I realized is,you really have to be able to jump.

Gross: In real life, you mean?

Greer: Well,in real life, it’s helpful. But in Fortnite, I kept running into the same wallover and over, and then I just got mowed down by someone.

Argersinger:Anddriving your son, I’m sure, crazy.

Greer: Oh,my son was trying to teach me, and it started out with, “This this will be exciting,” and within a minute, he was exasperated. It was the equivalent ofthe 12 o’clockflashing on the VCR. I was that guy.I was running into a wall over and over,I couldn’t jump. I mean, it’s a much more complex game —

Gross: Oh, for sure.

Greer: — than Pong.

Gross: [laughs] Pong!

Greer: Pong,you had to adjust your paddle size. And then, that progressed to Breakout. And the only thing with Breakout isyou had to keep your cool as you broke out.

Argersinger:So,you dominated those games, but when it comes to something like Fortnite —

Greer: There are all thesevariables! You have to jump, you have to move —

Gross: Build, building is the key to Fortnite.

Argersinger:Yeah, building.

Gross: If you’re a strong builder, you can win.

Greer: No.I was just running into a wall over and over.

Gross: These games,this whole genre is called battle royale games, where100 people play at a time in a game of Fortnite.

Greer: Yeah,it’s brilliant.

Gross:It’s brilliant, and don’t forget, Fortnite doesn’t cost any money unless you want to upgrade your outfit —

Greer: Skins, Ron! Not outfits, Skins! Gosh!

Gross: Sorry, skins. Right.

Greer: So insulting!

Gross: You spend money on these microtransactions, $5 and $10 at a time,that actually turns into a real business. Hundreds of millions of dollars’ worth of business. It’s fascinating.

Greer: It’s brilliant. And you can play solo, you can play it in a pair, you can play on a team. Now, they have the Marvel tie-in with Thanos. Oh my gosh, I mean, they’re just printing money.

Argersinger:AndI’m glad Ron just mentioned the model,because it really is a model thatyou saw in nascent stages ten years ago withvideo games, but 90% of the revenue for video games was still selling you the disc,it’s $50 and that’s usually the only transaction that would happen. Now, you layer inall those microtransactions. So,it ends up, gamers spend hundreds of dollars on a single titleover the course of playing the game. And I think, that’s why you look at Tencent, it hasoperating margins above 40%.

Gross: Andjust as an aside, what’s amazing is,you can’t spend money Fortnite,for example, to upgrade your weapon and give yourself an unfair advantageand buy yourself a win. It’sliterally just aesthetics. It just looks cooler. Andkids out there are still willing — not just kids, everyone is still willing to spend those $5 and $10.

Greer: So, you’re telling me kids like to look cool?

Gross: Yeah, I guess so.

Greer: Well,the one tweak I’m going to make based on my experience is, I want a seniors’ division, where 50 and over compete in their own division. Likegolf, right? Then you have a bunch of people running into walls together.

Gross: Nice.

Argersinger:I like that. I like that a lot.

Greer: Money maker. Guys,let’s close with Starbucks, which is really ramping upin China. Matt, these numbers are staggering. OnWednesday, Starbucks announcing plans to build nearly 3,000 new stores in mainland Chinaover the next few years. For those of youscoring at home,that will mean that Starbucks will have around 6,000 storesby the end of 2022. What do you think?

Argersinger:That’s right. Credit toCNBC’s Kate Rogers,who was covering this conference that Starbucks did inChina, its two-day investor conference. Theheadline is really that Starbucks reiterated once again that their business in China isalmost certainly going to eclipse their business in the U.S.in the future. There’s just no doubt about it. And that’s partly, from what you said, they’regoing to have 6,000 stores by 2022.

Right now,they have 3,300 locationsacross 141 cities inChina. They’re opening a new location –this is according to Kate –every 15 hours now in China. So,with the new numbers they’ve put out,I looked back at my own model that I’ve done of Starbucks, looking at store counts, and this is way ahead of where I thought they would be by 2022.

So,if you’re a Starbucks shareholder, I think you probably felt a little frustratedover the last several years. The stock has kind of stagnated. Overall global compshave been low single digits. And the stock has really been stuck in place. Butnow, I look at this and I say, well,Starbucks is trading for roughly 22Xforward earnings, 2% dividend yield,buying back a lot of stock, abusiness that should still be able to grow in the high single digits, sales,especially as China becomes a greater proportion of the business.I think Starbucks looks pretty compellingright now. It’s not going to be a barnstormer,but I think you can do pretty well buying Starbucks today. And if you get the shares under $50,even better.

Greer: Yeah,it was really surprising. Shares of Starbucks down over the past year, butover the past five years, uparound 80%.

Argersinger:Right. It’s still a long-term story. So,I think, if you buy Starbucks today and you look forward to what this business could look like in five years,in China and elsewhere,pretty exciting.

Greer:I confess, when I heard you say you did your model of Starbucks,I first envisioned you building a model of a Starbucks.

Gross: [laughs]A Lego model?

Argersinger:Of aStarbucks store?

Greer: Yeah! And I’m like, “That’s kind of odd.” And then I’m like, “Oh, wait, play it cool, he’s talking financial model. OK, I got it.”I was a little worried there. I’m like, “You know what? Putthe model down, just crunch the numbers.”OKguys, my favorite closing desert island question. You’reon a desert island for the next five years,and you can only hold one of these stocks that we’ve talked about: Macy’s, Tencent, or Starbucks?

Gross:Well,it’s definitely not Macy’s.

Argersinger:[laughs] I think that’s easy.

Gross: Tencent might put upbetter numbers, but I’m just not as comfortable with it. AndStarbucks is just a solid, solid company that I can put in my portfolio andgo to that desert island and not worry about it,so I’ll go Starbucks.

Greer: Notas comfortable with Tencent, is that because of the management, or the business model, or both?

Gross:I’m just not as familiar with it, it’s a little bitmore high-growth, high-flying than I’mtypically comfortable with, and you add in the Chinese piece,and that pushes it over to Starbucks.

Greer: OK. Matty?

Argersinger: I’m going to agree with Ron. The numbers that Tencent isputting up are just staggering,but I feel a little bit less comfortable about where I see the business in five years.I think the business is going to be huge, and it’s growing in all these different areas,but I want to see more of a focus on,eventually, what they can do with this huge WeChat platform.And, whether or not the Chinese government is ever going to step in and say, “Yeah, youguys are a little too influential,” especially as WeChat gets into financial transactions, which,they already have one of the biggest payment platforms. Being able to spread that across a billion users, it makes Tencentthat much more influential in China. So, if I’m going to sleep well at night and, I think, earn 10% a year I’m going Starbucks.

Greer: OK. There you have it. Matt, Ron,thanks for joining me!

Argersinger:Thanks, Mac!

Gross: Thanks, Mac!

Greer:As always, people on the show may have interests 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’s it for this edition of Market Foolery. The show is mixed by Dan Boyd. I’m Mac Greer. Thanks for listening! We’ll see you tomorrow!

J.C. Penney Company, Inc. Earnings: Another Disappointing Quarter

On Wednesday, department store giant Macy’s (NYSE:M) smashed analysts’ estimates, posting strong sales and earnings growth for the first quarter. This surprisingly good news raised investors’ hopes for the moribund department store sector.

However, J.C. Penney (NYSE:JCP) failed to match that admirable performance. In fact, it barely managed to achieve positive comparable-store sales growth last quarter. Meanwhile, gross margin eroded substantially, and the company posted an ugly loss. While management blamed the weak sales and earnings results on unfavorable weather trends, J.C. Penney’s mediocre first-quarter performance casts more doubt on its turnaround progress.

J.C. Penney’s quarter by the numbers

J.C. Penney posted a meager 0.2% increase in comparable-store sales during the first quarter, well below Macy’s 4.2% comp-sales growth (or even Macy’s 1.7% gain excluding the benefit from a shift in the timing of a major sale). Total revenue fell 4.1% year over year, due to the company closing nearly 140 stores in mid-2017.

Meanwhile, adjusted earnings per share swung to a $0.22 loss — $0.02 worse than the average analyst estimate — compared to adjusted EPS of $0.01 a year earlier (calculated based on new accounting rules implemented in 2018).

Metric

Q1 2018

Q1 2017

Year-Over-Year Change

Revenue

$2.67 billion

$2.78 billion

(4.1%)

Gross margin

33.7%

36.1%

(2.4 ppt)

SG&A expense ratio

32%

34.7%

(2.7 ppt)

Adjusted EPS

($0.22)

$0.01

N/A

Free cash flow

($421 million)

($293 million)

N/A

Data source: J.C. Penney Q1 earnings report. SG&A = sales, general, and administrative expense; ppt = percentage points.

The most disappointing aspect of J.C. Penney’s first-quarter performance was its severe decline in gross margin. Management had warned investors back in March that gross margin was likely to decrease in Q1 before improving later in the year. However, the 2.4-percentage-point decline recorded last quarter was worse than expected. The company’s first-quarter cash burn also accelerated.

To be fair, J.C. Penney’s year-over-year earnings and cash flow declines in the first quarter were driven mostly by lower real estate gains. That said, the company did get a $30 million one-time benefit during the quarter related to selling the lease for one of its stores. Without that windfall, it would have posted an even bigger loss.

Bad weather takes a toll

J.C. Penney’s 0.2% Q1 comp-sales gain came in near the low end of its full-year guidance for 0% to 2% comp-sales growth. It was also well below management’s expectations. Back in early March, CFO Jeffrey Davis indicated on the Q4 earnings call that comp-sales growth was likely to be near the high end of the full-year guidance range in the first quarter.

The exterior of a JCPenney store

Sales missed expectations at J.C. Penney last quarter. Image source: J.C. Penney.

J.C. Penney blamed its subpar performance on unseasonably cold weather during the spring selling season, particularly in the first half of April. CEO Marvin Ellison noted that during February, March, and the last two weeks of April, comp-sales growth was much stronger than the full-quarter result.

This excuse does carry some weight, as much of the country experienced more severe winter weather than normal, particularly late in the season. Indeed, it was quite surprising that Macy’s didn’t see a noticeable negative impact from weather last quarter.

On the other hand, the subpar quarterly result indicates that management’s efforts to make J.C. Penney a less weather-sensitive business have had minimal impact thus far.

Accounting changes force a guidance cut

While revenue came in worse than expected last quarter, J.C. Penney reaffirmed its guidance for full-year comp sales to be up 0% to 2%. Management was encouraged by the company’s solid sales results outside of the worst period of unseasonable weather.

However, J.C. Penney reduced its full-year EPS guidance range by $0.12. It is now calling for EPS between a loss of $0.07 and a gain of $0.13. It attributed this change to the implementation of new accounting rules, rather than to any fundamental deterioration in its outlook.

The key question for investors is whether J.C. Penney can achieve this revised EPS forecast — and ideally, a result at the high end of the guidance range. After the company’s disappointing first quarter, there isn’t much margin for error. J.C. Penney simply can’t afford any further mishaps, including bad weather.

Wednesday’s Biggest Winners and Losers in the S&P 500

Source: ThinkstockMay 16, 2018: The S&P 500 closed up 0.4% at 2,722.49. The DJIA closed up 0.3% at 24,769.14. Separately, the Nasdaq was up 0.6% at 7,398.30.

Wednesday was a positive day for the broad U.S. markets. Crude oil continued its progress, although the gain was only marginal. The S&P 500 sectors were mostly positive. The most positive sectors were materials and consumer discretionary, up 1.2% and 0.8%, respectively. The worst performing sectors were utilities and real estate down 0.8%, and 0.3%, respectively.

Crude oil was up 0.2% at $71.42.

Gold was flat at $1,290.70.

The S&P 500 stock posting the largest daily percentage loss ahead of the close Wednesday was IDEXX Laboratories, Inc. (NASDAQ: IDXX) which traded down about 4.5% at $199.42. The stocks 52-week range is $146.09 to $217.89. Volume was 1.5 million compared to the daily average volume of less than half a million.

The stock posting the largest daily percentage gain in the S&P 500 ahead of the close Wednesday was Macys, Inc. (NYSE: M) which rose about 11% to $33.16. The stocks 52-week range is $17.41 to $33.40. Volume was 52 million compared to the daily average volume of 10 million.

Market Appears Directionless Amid Geopolitical, Retail, Housing News

Before the U.S. market opened, Macy's Inc. (NYSE: M) reported earnings per share of 48 cents on revenue of $5.5 billion. M was expected to report adjusted EPS of $0.36, on revenue of $5.43 billion, according to third-party consensus estimates. The beat appears to offer more evidence that the U.S. consumer is doing OK. It comes after news yesterday that U.S. retail sales rose for two consecutive months.

In economic data this morning, April housing starts came in at 1.287 million units and building permits at 1.352 million units. Economists polled by Briefing.com were expecting April housing starts at 1.325 million units and building permits at 1.350 million units. 

In geopolitical news, North Korea cancelled talks with South Korea and threatened to nix a meeting with President Trump, saying it is displeased with U.S.-South Korea military exercises and U.S. demands that North Korea give up its nuclear program.

Although there was good news for the economy yesterday — in the form of the retail sales news and an Empire State manufacturing index that came in stronger than Wall Street analysts had expected — investors appeared to fret over inflation implications. 

The  three major U.S. indices lost ground Tuesday, with the Dow Jones Industrial Average ($DJI) snapping an 8-session winning streak. The S&P 500 (SPX) did manage to close over 2700, pointing to some strength at that technical level.

New High for 10-Year Treasury

The yield on the 10-year Treasury hit its highest point since 2011, weighing on stocks. Rising yields can make some stocks appear less attractive, particularly those that pay dividends or are loaded with debt. Treasuries are considered a “safer” investment by many, and rising yields raise the cost of borrowing. The 10-year Treasury yield rose 9 basis points to 3.08 percent after topping 3.09 percent on Tuesday. It pulled back a bit this morning to just below 3.07 percent.

The rising yields may have helped the financial sector somewhat on Tuesday as higher rates often can improve profit margins for banks. Financial stocks lost less ground than other sectors that were in the red. The action yesterday was a bit of a head scratcher, and it may be worth watching how the sector performs if rates keep rising. (The energy sector was the only gainer on Tuesday, but it rose only 0.01 percent.)

Earnings and Geopolitics

Retail earnings take center stage the remainder of the week, but aside from that it’s a little hard right now to determine what sort of catalyst is out there that could give the market back some of the “giddy-up” it had last week. Unless the retail earnings really surpass expectations in a big way, it might be difficult to figure out what the next instigator to the upside might be. Thursday looks like a big day, with Walmart Inc. (NYSE: WMT) and J C Penney Company Inc. (NYSE: JCP) scheduled to report before the open and Nordstrom, Inc. (NYSE: JWN) after the close. One question moving into these reports is whether the recent strong retail sales data might have helped the retail sector beyond M.

Trade fears also weighed on markets Tuesday after Reuters reported that the U.S. ambassador  to China said the two countries remain “very far apart” on settling trade issues. Worries over the trade spat have dogged markets over concerns about the ramifications for the economies of both countries.

chart_5_161_0.jpg
FIGURE 1: YIELDS HELP END DJIA STREAK. The Dow Jones Industrial Average ($DJI, purple line) saw its win streak end at eight yesterday as 10-year Treasury yields (candlestick) hopped to their highest level since 2011. Data source: S&P Dow Jones Indices, CME Group. Chart source: The thinkorswim® platform from TD Ameritrade. For illustrative purposes only. Past performance does not guarantee future results.

Inflation Watch Continues

Investors appear to be watching for clues as to whether the Fed will raise interest rates four times this year or stick with three. We’ll get some insight into inflation Thursday with the Philadelphia Fed index, which shows what manufacturers pay and the prices they receive. Economists polled by Briefing.com are expecting the index to drop to 20 from a prior reading of 23.2. Investors might want to consider watching what Fed funds futures do after the report is released. These financial instruments on Tuesday afternoon were pricing in a 95 percent chance of a rate hike in June, a 74.8 percent chance of another hike in September and a 42.9 percent chance for one in December.

Leading Indicators

A bit later in the day Thursday, we’ll get the Conference Board's Leading Economic Index for April. Economists polled by Briefing.com are expecting the index to rise by 0.4 percent compared with a 0.3 percent rise in March. Each month the board crunches a number of economic variables to calculate the index, so it can be a helpful snapshot for investors. Categories included in the index touch on manufacturing, unemployment claims, stock prices, building permits and consumer expectations, among other inputs.

Unemployment Reading

Considering job market tightness and what that might mean for inflation, it could be worth considering the weekly unemployment figures. On Thursday, we’ll see the latest numbers. A consensus of economists polled by Briefing.com is expecting initial claims for unemployment benefits to tick up to 216,000 from 211,000 the prior week. Although that would be an increase, continuing claims have been at historically low levels.

Information from TDA is not intended to be investment advice or construed as a recommendation or endorsement of any particular investment or investment strategy, and is for illustrative purposes only. Be sure to understand all risks involved with each strategy, including commission costs, before attempting to place any trade.

Market Appears Directionless Amid Geopolitical, Retail, Housing News

Before the U.S. market opened, Macy's Inc. (NYSE: M) reported earnings per share of 48 cents on revenue of $5.5 billion. M was expected to report adjusted EPS of $0.36, on revenue of $5.43 billion, according to third-party consensus estimates. The beat appears to offer more evidence that the U.S. consumer is doing OK. It comes after news yesterday that U.S. retail sales rose for two consecutive months.

In economic data this morning, April housing starts came in at 1.287 million units and building permits at 1.352 million units. Economists polled by Briefing.com were expecting April housing starts at 1.325 million units and building permits at 1.350 million units. 

In geopolitical news, North Korea cancelled talks with South Korea and threatened to nix a meeting with President Trump, saying it is displeased with U.S.-South Korea military exercises and U.S. demands that North Korea give up its nuclear program.

Although there was good news for the economy yesterday — in the form of the retail sales news and an Empire State manufacturing index that came in stronger than Wall Street analysts had expected — investors appeared to fret over inflation implications. 

The  three major U.S. indices lost ground Tuesday, with the Dow Jones Industrial Average ($DJI) snapping an 8-session winning streak. The S&P 500 (SPX) did manage to close over 2700, pointing to some strength at that technical level.

New High for 10-Year Treasury

The yield on the 10-year Treasury hit its highest point since 2011, weighing on stocks. Rising yields can make some stocks appear less attractive, particularly those that pay dividends or are loaded with debt. Treasuries are considered a “safer” investment by many, and rising yields raise the cost of borrowing. The 10-year Treasury yield rose 9 basis points to 3.08 percent after topping 3.09 percent on Tuesday. It pulled back a bit this morning to just below 3.07 percent.

The rising yields may have helped the financial sector somewhat on Tuesday as higher rates often can improve profit margins for banks. Financial stocks lost less ground than other sectors that were in the red. The action yesterday was a bit of a head scratcher, and it may be worth watching how the sector performs if rates keep rising. (The energy sector was the only gainer on Tuesday, but it rose only 0.01 percent.)

Earnings and Geopolitics

Retail earnings take center stage the remainder of the week, but aside from that it’s a little hard right now to determine what sort of catalyst is out there that could give the market back some of the “giddy-up” it had last week. Unless the retail earnings really surpass expectations in a big way, it might be difficult to figure out what the next instigator to the upside might be. Thursday looks like a big day, with Walmart Inc. (NYSE: WMT) and J C Penney Company Inc. (NYSE: JCP) scheduled to report before the open and Nordstrom, Inc. (NYSE: JWN) after the close. One question moving into these reports is whether the recent strong retail sales data might have helped the retail sector beyond M.

Trade fears also weighed on markets Tuesday after Reuters reported that the U.S. ambassador  to China said the two countries remain “very far apart” on settling trade issues. Worries over the trade spat have dogged markets over concerns about the ramifications for the economies of both countries.

chart_5_161_0.jpg
FIGURE 1: YIELDS HELP END DJIA STREAK. The Dow Jones Industrial Average ($DJI, purple line) saw its win streak end at eight yesterday as 10-year Treasury yields (candlestick) hopped to their highest level since 2011. Data source: S&P Dow Jones Indices, CME Group. Chart source: The thinkorswim® platform from TD Ameritrade. For illustrative purposes only. Past performance does not guarantee future results.

Inflation Watch Continues

Investors appear to be watching for clues as to whether the Fed will raise interest rates four times this year or stick with three. We’ll get some insight into inflation Thursday with the Philadelphia Fed index, which shows what manufacturers pay and the prices they receive. Economists polled by Briefing.com are expecting the index to drop to 20 from a prior reading of 23.2. Investors might want to consider watching what Fed funds futures do after the report is released. These financial instruments on Tuesday afternoon were pricing in a 95 percent chance of a rate hike in June, a 74.8 percent chance of another hike in September and a 42.9 percent chance for one in December.

Leading Indicators

A bit later in the day Thursday, we’ll get the Conference Board's Leading Economic Index for April. Economists polled by Briefing.com are expecting the index to rise by 0.4 percent compared with a 0.3 percent rise in March. Each month the board crunches a number of economic variables to calculate the index, so it can be a helpful snapshot for investors. Categories included in the index touch on manufacturing, unemployment claims, stock prices, building permits and consumer expectations, among other inputs.

Unemployment Reading

Considering job market tightness and what that might mean for inflation, it could be worth considering the weekly unemployment figures. On Thursday, we’ll see the latest numbers. A consensus of economists polled by Briefing.com is expecting initial claims for unemployment benefits to tick up to 216,000 from 211,000 the prior week. Although that would be an increase, continuing claims have been at historically low levels.

Information from TDA is not intended to be investment advice or construed as a recommendation or endorsement of any particular investment or investment strategy, and is for illustrative purposes only. Be sure to understand all risks involved with each strategy, including commission costs, before attempting to place any trade.

5 Retail Stocks Likely to Top Earnings Estimates

The earnings season, which is nearing its end, has been quite impressive this time around. However, the show is not over yet. With several retail behemoths including Walmart, Macy’s and Target, queued up to report their quarterly numbers, investors are likely to keep their eyes on the Retail-Wholesale sector’s progress card.

5 Retail Stocks Likely to Top Earnings EstimatesSource: Shutterstock

We note that the sector has gained 4.7% in a month, outdoing the S&P 500’s 2.1% growth. This can be attributable to a number of micro and macro factors, which have been viewed as positive signals for retailers’ upcoming results.

Retail on Growth Trajectory: Here’s Why

The recent uptick in consumer spending, which accounts for more than two-thirds of economic activity, bodes well. Incidentally, consumer spending inched up 0.4% in March, following 0.2% growth in January while remaining flat in February. This renewed momentum in March emerged from continued rise in income, indicating that consumers may drive economic growth in 2018. In fact, March retail sales advanced 0.6%, bearing testimony to this.

Apart from this, the sector is poised to gain from massive tax cuts and a robust labor market. Notably, the unemployment level that remained stable at 4.1% for six months till March, declined even further to 3.9% in April.

Turning to micro factors, companies in this space are also expected to gain from aggressive omni-channel efforts to keep pace with the changing consumer shopping patterns. To this end, retail players’ solid e-commerce endeavors, compelling pricing strategy, promotional activities, and efforts to strengthen portfolio and enhancing stores experience remain major drivers.

Surely, these strategic investments are eating a portion of margins but retailers are playing smart by undertaking stringent cost-cutting and restructuring activities.

Notably, total earnings of the S&P 500 retailers that have already reported results increased 26.1%, on the back of 14.9% jump in revenues, per the latest Earnings Preview. Well, about half of the retailers in the S&P 500 index released their quarterly outcomes, with 68.4% topping bottom-line estimates and 63.2% delivering positive revenue surprise.

Given the favorable backdrop, the sector is likely to catch investors’ attention. So, picking stocks that are likely to trump estimates can fetch handsome returns. This is because a stock generally picks up steam on earnings beat.

Picking the Prospective Winners for the Season

That said, let’s take a look at some gems in this space that look promising on the earnings front. These stocks carry a favorable Zacks Rank – Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) and a positive Earnings ESP.  Well, our research shows that chances of a positive earnings surprise of stocks with this combination is as high as 70%. Clearly, adding these potential winners is the one of the best investment strategies.

Compare Brokers

5 Retail Stocks Likely to Top Earnings Estimates: Kroger Co (KR)

Kroger Co (NYSE:KR), one of the largest grocery retailers, is a solid bet. The stock carries a Zacks Rank #3 and has an Earnings ESP of +4.99%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

The Zacks Consensus Estimate for first-quarter fiscal 2018 is pegged at 64 cents per share, reflecting year-over-year growth of 10.3%. Further, this estimate has gone up in the past 30 days.

This Cincinnati, OH-based company delivered an average positive earnings surprise of 2.3% in the trailing four quarters. Its long-term earnings growth rate is 5.9%. The company is slated to report results on Jun 21.

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5 Retail Stocks Likely to Top Earnings Estimates: Macy’s Inc (M)

Investors can also count on Macy’s Inc (NYSE:M), one of the leading department store retailers in the United States. The company has an Earnings ESP of +4.50% and a Zacks Rank #3.

The Zacks Consensus Estimate for first-quarter fiscal 2018 is pegged at 40 cents, which shows significant growth from the year-ago period. Also, this estimate has risen 4 cents from 36 cents over the past 30 days.

This Cincinnati, OH-based company has registered positive earnings surprise in the past three quarters and has a long-term earnings growth rate of 8.5%. The company is scheduled to report results on May 16.

Compare Brokers

5 Retail Stocks Likely to Top Earnings Estimates: Dollar General Corp. (DG)

We also suggest investing in Dollar General Corp. (NYSE:DG), one of the largest discount retailers in the United States. The company has a Zacks Rank #2 and an Earnings ESP of +1.38%.

The Zacks Consensus Estimate for first-quarter fiscal 2018 is pegged at $1.40 per share, reflecting year-over-year growth of 35.9% and an uptrend in the past 30 days.

This Goodlettsville, TN-based company delivered in-line earnings in the last reported quarter, while it topped the consensus mark in the preceding three quarters. The company with a long-term earnings growth rate of 14.6% is expected to report results on Jun 7.

Compare Brokers

5 Retail Stocks Likely to Top Earnings Estimates:

Ross Stores, Inc. (NASDAQ:ROST), an off-price retailer of apparel and home accessories in the United States, also looks promising.

The company carries a Zacks Rank #3 and has an Earnings ESP of +0.94%. The Zacks Consensus Estimate for first-quarter fiscal 2018 is pegged at $1.06 per share, reflecting year-over-year growth of 29.3%.

Estimates for the quarter have remained stable in the past 30 days. This Pleasanton, CA-based company registered average positive earnings surprise of 6.1% in the trailing four quarters and has a long-term earnings growth rate of 10%. The company is slated to report results on May 24.

Compare Brokers

5 Retail Stocks Likely to Top Earnings Estimates: Urban Outfitters, Inc. (URBN)

Last but not least, Urban Outfitters, Inc. (NASDAQ:URBN) has a Zacks Rank #2 and an Earnings ESP of +1.72%. The Zacks Consensus Estimate for first-quarter fiscal 2018 is pegged at 30 cents a share, reflecting year-over-year increase of more than 100%.

Notably, the consensus mark also rose a notch from 29 cents in the past 30 days. This Philadelphia, PA-based lifestyle specialty retailer, which offers fashion apparel and accessories, footwear, home décor and gifts products, has registered an average positive earnings surprise of 8.5% in the trailing four quarters.

The company has a long-term earnings growth rate of 12%. It is scheduled to report results on May 22.

More Stock News: This Is Bigger than the iPhone!                   

It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.

Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don’t buy now, you may kick yourself in 2020.

Click here for the 6 t

5 Retail Stocks Likely to Top Earnings Estimates

The earnings season, which is nearing its end, has been quite impressive this time around. However, the show is not over yet. With several retail behemoths including Walmart, Macy’s and Target, queued up to report their quarterly numbers, investors are likely to keep their eyes on the Retail-Wholesale sector’s progress card.

5 Retail Stocks Likely to Top Earnings EstimatesSource: Shutterstock

We note that the sector has gained 4.7% in a month, outdoing the S&P 500’s 2.1% growth. This can be attributable to a number of micro and macro factors, which have been viewed as positive signals for retailers’ upcoming results.

Retail on Growth Trajectory: Here’s Why

The recent uptick in consumer spending, which accounts for more than two-thirds of economic activity, bodes well. Incidentally, consumer spending inched up 0.4% in March, following 0.2% growth in January while remaining flat in February. This renewed momentum in March emerged from continued rise in income, indicating that consumers may drive economic growth in 2018. In fact, March retail sales advanced 0.6%, bearing testimony to this.

Apart from this, the sector is poised to gain from massive tax cuts and a robust labor market. Notably, the unemployment level that remained stable at 4.1% for six months till March, declined even further to 3.9% in April.

Turning to micro factors, companies in this space are also expected to gain from aggressive omni-channel efforts to keep pace with the changing consumer shopping patterns. To this end, retail players’ solid e-commerce endeavors, compelling pricing strategy, promotional activities, and efforts to strengthen portfolio and enhancing stores experience remain major drivers.

Surely, these strategic investments are eating a portion of margins but retailers are playing smart by undertaking stringent cost-cutting and restructuring activities.

Notably, total earnings of the S&P 500 retailers that have already reported results increased 26.1%, on the back of 14.9% jump in revenues, per the latest Earnings Preview. Well, about half of the retailers in the S&P 500 index released their quarterly outcomes, with 68.4% topping bottom-line estimates and 63.2% delivering positive revenue surprise.

Given the favorable backdrop, the sector is likely to catch investors’ attention. So, picking stocks that are likely to trump estimates can fetch handsome returns. This is because a stock generally picks up steam on earnings beat.

Picking the Prospective Winners for the Season

That said, let’s take a look at some gems in this space that look promising on the earnings front. These stocks carry a favorable Zacks Rank – Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) and a positive Earnings ESP.  Well, our research shows that chances of a positive earnings surprise of stocks with this combination is as high as 70%. Clearly, adding these potential winners is the one of the best investment strategies.

Compare Brokers

5 Retail Stocks Likely to Top Earnings Estimates: Kroger Co (KR)

Kroger Co (NYSE:KR), one of the largest grocery retailers, is a solid bet. The stock carries a Zacks Rank #3 and has an Earnings ESP of +4.99%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

The Zacks Consensus Estimate for first-quarter fiscal 2018 is pegged at 64 cents per share, reflecting year-over-year growth of 10.3%. Further, this estimate has gone up in the past 30 days.

This Cincinnati, OH-based company delivered an average positive earnings surprise of 2.3% in the trailing four quarters. Its long-term earnings growth rate is 5.9%. The company is slated to report results on Jun 21.

Compare Brokers

5 Retail Stocks Likely to Top Earnings Estimates: Macy’s Inc (M)

Investors can also count on Macy’s Inc (NYSE:M), one of the leading department store retailers in the United States. The company has an Earnings ESP of +4.50% and a Zacks Rank #3.

The Zacks Consensus Estimate for first-quarter fiscal 2018 is pegged at 40 cents, which shows significant growth from the year-ago period. Also, this estimate has risen 4 cents from 36 cents over the past 30 days.

This Cincinnati, OH-based company has registered positive earnings surprise in the past three quarters and has a long-term earnings growth rate of 8.5%. The company is scheduled to report results on May 16.

Compare Brokers

5 Retail Stocks Likely to Top Earnings Estimates: Dollar General Corp. (DG)

We also suggest investing in Dollar General Corp. (NYSE:DG), one of the largest discount retailers in the United States. The company has a Zacks Rank #2 and an Earnings ESP of +1.38%.

The Zacks Consensus Estimate for first-quarter fiscal 2018 is pegged at $1.40 per share, reflecting year-over-year growth of 35.9% and an uptrend in the past 30 days.

This Goodlettsville, TN-based company delivered in-line earnings in the last reported quarter, while it topped the consensus mark in the preceding three quarters. The company with a long-term earnings growth rate of 14.6% is expected to report results on Jun 7.

Compare Brokers

5 Retail Stocks Likely to Top Earnings Estimates:

Ross Stores, Inc. (NASDAQ:ROST), an off-price retailer of apparel and home accessories in the United States, also looks promising.

The company carries a Zacks Rank #3 and has an Earnings ESP of +0.94%. The Zacks Consensus Estimate for first-quarter fiscal 2018 is pegged at $1.06 per share, reflecting year-over-year growth of 29.3%.

Estimates for the quarter have remained stable in the past 30 days. This Pleasanton, CA-based company registered average positive earnings surprise of 6.1% in the trailing four quarters and has a long-term earnings growth rate of 10%. The company is slated to report results on May 24.

Compare Brokers

5 Retail Stocks Likely to Top Earnings Estimates: Urban Outfitters, Inc. (URBN)

Last but not least, Urban Outfitters, Inc. (NASDAQ:URBN) has a Zacks Rank #2 and an Earnings ESP of +1.72%. The Zacks Consensus Estimate for first-quarter fiscal 2018 is pegged at 30 cents a share, reflecting year-over-year increase of more than 100%.

Notably, the consensus mark also rose a notch from 29 cents in the past 30 days. This Philadelphia, PA-based lifestyle specialty retailer, which offers fashion apparel and accessories, footwear, home décor and gifts products, has registered an average positive earnings surprise of 8.5% in the trailing four quarters.

The company has a long-term earnings growth rate of 12%. It is scheduled to report results on May 22.

More Stock News: This Is Bigger than the iPhone!                   

It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.

Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don’t buy now, you may kick yourself in 2020.

Click here for the 6 t

L Brands: So Much More Than Victoria’s Secret

Things are looking good if you are a fan of the Victoria’s Secret brand. While the world’s most renowned women’s lingerie brand usually sells its good at a hefty price tag, consumers now get the opportunity to buy these articles at a large discount as new promotions and limited time offerings are being featured in the stores and on the website on a daily basis. While this is great news for the Victoria’s Secret consumer, it is a thorn in the eye of the investors who have placed their money in L Brands, the mother company behind Victoria’s Secret. L Brands shares are down 46% YTD, and some sell-side analysts are convinced that L Brands shares still face more downside.

The question one has to ask however is, whether or not Victoria’s Secret is really the most important entity within the L Brands consortium. Surely, it is undeniable that Victoria’s Secret is the most famous brand within the group, and in terms of revenues, it towers over the other brands. When shifting the focus to operating income, however, it becomes clear that there are other brands in the portfolio that are contributing more to the bottom line than Victoria’s Secret. While most bullish pitches about L brands argue that the problems at Victoria’s Secret are short-term related and that it is a strong brand that is set to make a turnaround, I look at L Brands in a different way. I do not deny the potential of a Victoria’s Secret turnaround, nor do I question the strong brand. The numbers however prove that Victoria’s Secret is in a severely troubled state, and I am of the opinion that actions chosen by management are insufficient. I however believe the case can be made that the Bath & Body Works brand is severely undervalued within the L Brands group and that the market does not fully appreciate the optionality that L Brands has in creating value by spinning off or discontinuing certain parts within the group.

An introduction

L Brands was founded in 1963 when founder and current CEO Les Wexner opened his first “The Limited” store. In 1969, Wexner took the company public and in 1982 Wexner acquired the Victoria’s Secret brand for USD 1 million. After acquiring and spinning of several brands such as Abercrombie & Fitch (ANF) and the sale of its oldest brand “The Limited”, the current L Brands group looks as follows:

Victoria’s Secret: L Brands’ flagship brand and world renowned lingerie brand. Pink: Separate store concept from Victoria’s Secret but grouped under the latter, Pink is a women’s lingerie retailer focused on teenagers, college students and young professionals. Bath & Body Works: Market leading speciality retailer in home fragrances, candles, soaps, La Senza: Women Lingerie retailer, focusing on a younger target audience than Victoria’s Secret. Henri Bendel: Upscale retailer of handbags, accessories, women clothing and fragrances.

I will go in more detail on these segments, but first, let us have a look at the revenue and operating profit contribution of these segments.

As stated in the prologue of this analysis, the Victoria’s Secret brand takes the largest part of the revenue contribution for its account. While revenue contribution declined from 63% of total sales in FY15 to 58% in FY17, the brand still contributes significantly more than the second largest contributor Bath & Body Works. La Senza & Henri Bendel are grouped under the “Other” segment.

Revenues

L Brands revenue distribution – Source: Author calculations/L Brands financial statements

While Victoria’s Secret is the main revenue contributor, it is not the main contributor towards the operating income line. While it historically generated more operating income than Bath & Body Works, the latter has overtaken Victoria’s Secret as main source of operating income. Interesting to note is the negative contribution of the other segment.

operating profit
L Brands operating profit distribution – Source: Author calculations/L Brands financial statements

Let’s take a closer look at the different segments.

Victoria’s Secret

Victoria’s Secret is the iconic women’s underwear brand that is sold globally. It is known for its yearly fashion show that is watched by millions of people in more than 200 countries and for its lingerie models, the “Victoria’s Secret Angels”.

Within L Brands, Victoria’s Secret represents three subgroups: Victoria’s Secret Lingerie, Victoria’s Secret Beauty, and Pink. One could easily assume that Victoria’s Secret Lingerie overshadows the other two in value, but it is important to understand that Victoria’s Secret Beauty features 4 of the top 20 fragrances in the US and that Pink represents a USD 3bn+ sales base with a sales/square feet ratio above the Victoria’s Secret’s shops.

As stated above, Victoria’s Secret is not doing too well at the moment due to a number of factors. The problems started when previous VS CEO Sharen Turney decided to leave the company in February 2016. Founder Lex Wesner took over the CEO role again and decided to restructure the business. The business was split up in the three aforementioned segments and each received its own leader. Denise Landman who has over 15 years of tenure at Pink would resume leading the Pink segment. Jan Singer, who worked for more than a decade at Nike (NKE) was hired to lead the lingerie segment and Greg Unis came over from Coach (TPR) to lead the beauty segment.

A more radical decision was the choice to exit the swimwear industry and other product categories, thereby giving up 1bn USD in sales in order to be able to focus on the core products, bras and panties. VS management was convinced that they could offset the operational deleveraging from the swimwear exit by accelerating the growth in underwear sales. Unfortunately, for the management, the restructuring coincided with the surge of new fashion trends. Bralettes, a more fashion inspired type of bra which offers less support than a structured bra quickly gained popularity. The lack of differentiating power within bralettes and the significantly lower average selling price created the additional problem of negative same store sales.

Some of the promotions on a random day – Source: Victoria’s Secret website

This brought Victoria’s Secret in the position where it is being forced to offer discounts after discount in order to keep its topline up. These promotions include lower prices, free items such as panties and totes, large discounts on combinations, reduced basket size to qualify for free shipping or a combination of those things. While this allows Victoria’s Secret to grow its revenues lines, it is putting significant pressure on the margins and the profitability of the brand.

Just have a look at the operating profit contribution of Victoria’s Secret over the past years

Victoria Secret Operating Profit

Victoria’s Secret operating profit – Source: Author calculations/L Brands financial statements

Furthermore the market seems to be worried about increased competition, the high exposure to B- and C-class malls and the promotional environment.

There is no denying that we are in a promotional environment and Victoria’s Secret is not the only one offering large discounts. In a way, this is related to the aforementioned surge in popularity of bralettes. While constructed bras require some sort of design expertise in order to design bras that are both fashionable and offer the necessary support, bralettes target women with an A- or B-cup size and thus require less support. This handicaps Victoria’s Secret as they cannot really leverage their manufacturing expertise within this segment and are left to compete on the fashion aspect. Needless to say, the amount of players that can compete on fashion is far larger than those that can compete on design. This has allowed players such as American Eagle Outfitters’ Aerie (NYSE:AEO) to enter the market. With no clear differentiating aspects other than brand and fashion, it is impossible for Victoria’s Secret to warrant the same premium pricing that it has for constructed bras. The lack of product differentiation has turned the bralettes market in a market that competes on price and promotions. Whether or not bralettes are here to stay is a topic on which I will not comment. If it turns out that bralettes are more fad than fashion then Victoria’s Secret will be a prime benefactor of the return to constructed bras.

As to the exposure to the B- & C-class malls, I think the market may be overreacting a bit. I think the problems that Victoria’s Secret is facing have much more to do with the promotional environment and current fashion trends than with their mall exposure. Obviously, the fall in mall foot traffic is negatively impacting Victoria’s Secret sales but L Brands has repeatedly stated that their B- and C-class malls are actually the most profitable stores that they have. While the performance between these A-malls and C-malls is almost similar, the rent expense of the latter category is far below the level of the A-malls making these stores more profitable. With 99% of the store base cash flow positive, there is no immediate issue. On the long term, it will be interesting to see how the company will position itself. In recent years, Les Wexner has voiced his belief that the mall environment will remain viable several times. According to him, this is just a phase in which the out of favour chains get replaced by more attractive brands. He stated that he would be indifferent or even happy to see the Nordstrom (NYSE:JWN) and Macy’s (NYSE:M) stores get replaced by Tesla (NASDAQ:TSLA) dealerships, restaurants and other places that attract people (source: 2017 Investor Conference). The company has therefore increased investments in its employees in order to maintain the best associates (which have a tenure of more than 10 years on average) . I have found L Brands’ focus on the digital channels to be insufficient in the recent past but I am pleased to hear that the company is now investing more in the e-commerce segment. Especially since management confirmed that online sales are more profitable than in-store sales.

Performance comparison A-malls vs C-malls – Source: Investor Handout L Brands

Some bears also claim that Victoria’s Secret fails to inspire the younger generation shoppers but a recent study by Goldman Sachs actually reveals Victoria’s Secret as one of the most loved brands for Generation Z members and Millennials.

Bath & Body Works

Bath & Body Works is the leading U.S. speciality retailer for home fragrances, candles, hand sanitzers, soaps and moisturizers. While the total revenue number generated within this segment is much smaller than that of the Victoria’s Secret segment, the B&BW operating margin that is nearly twice as high as the one of VS has resulted in Bath & Body works becoming the main contributor to the operating income line.

B&BW Operating profit
Bath & Body Works operating profit – Source: Author calculations/L Brands financial statements

The thing that attracted my attention within this segment is the continuous strong growth in topline. In the first quarter of 2017, B&BW reported $678m in revenue. Now that the total first quarter sales of 2018 are revealed, we can see that the B&BW segment generated $760m in sales, a 12% increase compared to the previous year. I checked the monthly sales calls for all three months included in this quarter and noticed that unlike the Victoria’s Secret segment, the merchandise margin remained flat compared to the previous year in all three months. The increase in revenue is thus fuelled by market share gains and increased demand instead of additional discounting.

It is clear that the recent store remodels with a White Barn integrated in the Bath & Body Works store is paying off its dividends.

When looking at the high price paid by Natura cosmetics (OTC:OTC:NUACF) for the much lower margin struggling Bodyshop, one could start to wonder how much a high margin, fast growing market leader within this segment could be worth. This is something that will be discussed in the valuation section further down in this analysis.

One could argue that B&BW brand name is less valuable than that of Victoria’s Secret and that this segment has less of a moat than the lingerie division but it is also the case that this segment is higher margin and that it is less fashion-dependable. In all cases, it is clear that Bath & Body Works is a very valuable business.

The international segment

The international segment covers those Victoria’s Secret and Bath & Body Works stores outside North America.

The division can be split up in three sub-segments: the wholly owned stores, the franchise partners and the travel retail stores.

L Brands has chosen to own and operate its own stores in the same way as it does in North America in only two foreign markets, the United Kingdom and China. The margins and other financial metrics for these stores are similar to those in the United States. The wholly owned stores represent 20% of the revenues generated in the international segment.

Travel retail represents 20-25% of the international segment’s revenues. The stores within this sub-segment are those that you can find in the various airports all over the world. The stores operate on a wholesale model that generates above company average margins of around 30%. Management believes that revenues within travel retail can increase by factor 2.5 in 5 years’ time (Source: L Brands Investor Meeting 2016).

The majority of the revenue originates from the franchise partners that operate on a royalty basis. L Brands wishes to cooperate with a limited number of partners that can each manage a large geographical area. Currently 33% of the royalties received are used to support the international sales team while 66% ends up in the operating profit line. The interesting aspect here is that there is significant operating leverage potential as you have a certain fixed cost base within the international sales team expense base.

A lot of the international market is still untapped for L Brands. The company stated that Western Europe has the same potential as the United States, yet is it is mainly untapped. As a European, I would agree with this statement. A quick check with my female colleagues confirmed that which I already discovered on my credit card after my partner takes the liberty to use it: women love the Victoria’s Secret brand and its products. Belgians who wish to order Victoria’s Secret goods however have to order it online, pay international shipping fees if they order for less than $120 and then wait for 10-14days before it arrives. It is also impossible to return goods to a store, which creates additional costs if one wishes to return the goods. Therefore I can’t grasp why L Brands hasn’t looked more aggressively for a partner that can serve these high income Western European markets. One can only imagine how much more Europeans would purchase if they actually had the opportunity to visit a store or to order it from a local distribution centre that provides free one-day shipping and returns.

While the profitability of the international segment is currently depressed due to a rapid store build-out in China and due to Brexit-related problems, it must be noted that the operating margin of this segment was in the low twenties before the China expansion. While it may take 2-3 years before start-up costs fade off and the new stores reach maturity, it should be expected that the international segment will be a large contributor to L Brands operating profit growth.

The ‘Other’-segment

This segment features all of L Brands other ventures, which mainly consist of intimates brand La Senza and high end handbag maker Henri Bendel.

These ventures have a combined revenue base of nearly $600m but sadly for L Brands, have a negative operating income of over $160m. This operating loss is not a one off result due to a one time restructuring or anything like that. The past four years, this segment has posted an operating loss with negative mid twenty operating margins.

Other segment Operating Profit
‘Other Segment’ operating profit – Source: Author calculations/L Brands financial statements

While Les Wexner, who has build out the Victoria’s Secret and Bath & Body Works segments almost from scratch, probably believes that he can also turn these brands in billion dollar ventures, the question remains if Victoria’s Secret can afford to continue to invest in these brands. Not only in terms of time and attention but also in terms of financial resources.

While it is probably impossible to eliminate the entire operating loss as the other divisions would have to take over certain overhead costs, let’s assume that the company can reduce the operating loss by $130m by shutting down Henri Bendel and La Senza. This would have lifted FY2017 operating income from $1,728m to $1,858m, thereby raising the operating margin to 14.7% from the actual 13.7%.

Moreover, shutting down these brands is a very unlikely scenario. While these brands are loss making, they do have value for private equity players. Assuming just a 0.25 EV/sales ratio would bring in $150m for L Brands if one assumes that all debt stays with L brands. A sale would also prevent the company from having to take on any restructuring costs.

Afbeeldingsresultaat voor taylor swift henri bendel

Henri Bendel add – Source: Henri Bendel Twitter Page

The question remains whether or not, CEO Wexner will be open to divesting these brands. Without the pressure of an activist investor, I would not count on an early departure from these brands.

Management

Let us have a closer look at management. As stated earlier, the founder Les Wexner currently serves as CEO and he has a 16% stake in the company. This should align his interest with that of the long term shareholders. It could however also be the case that this large stake is preventing activist investors from coming in and pushing for value creation. Elliott Management Corp’s recent win over Vivendi (OTC:OTCPK:VIVEF) in the Telecom Italia (BIT:TIT) case however shows that a large stake from an opposing shareholder does not have to prevent shareholder activism.

I believe there are both good things and bad things to say about Wexner’s management. It is clear that Les Wexner has delivered outstanding results in the past decades and that he has build one of the most renowned apparel brands in the world. Wexner has bought and sold brands at exactly the right time and he has always been on top in regarding to changes in the retail environment. It can be argued however that ever since he took back the reigns in 2016, he made some questionable decisions. Discontinuing the swimwear division to reignite growth in the lingerie division would probably have awarded Wexner with a lot of credit if it had worked out but things turned out quite differently. Victoria’s Secret discontinued its profitable swimwear line but actually saw lingerie sales declining and the company had to resort to aggressive promotions in order to maintain the top line. I am by no means a retail expert but even I know that continued promotions are very harmful for a premium brand on the long term. Let’s face it, when have you seen significant discounting on top luxury brands such as Hermes (OTC:OTCPK:HESAY)?

It is also quite clear that the almost 81-year old Wexner is not the greatest fan of e-commerce and that he has not awarded enough attention to the digital channel. His view on the mall environment may very well be correct but it does bear some risk.

An important question to ask is how long the almost 81-year old Wexner seeks to continue leading the company. His children are in their late teens and early twenties and it is well possible that Wexner wishes to spend more time with his family now that he has reached a more advanced age. Does this mean that he would be more open to a restructuring of the company, including the divestment of La Senza and Henri Bendel as well as a spinoff of Bath & Body Works? Would he be open to a sale of either Victoria’s Secret or B&BW to a private equity player? Given Wexner’s age, these may become very relevant questions in the coming years.

CFO Stuart Burgdoerfer has an excellent reputation as CFO and he has held leadership roles at some of the world’s top companies such as The home Depot (NYSE:HD), PepsiCo (NASDAQ:PEP) and Pizza Hut (NYSE:QSR).

Interesting to note is that Burgdoerfer recently sold a large amount of shares in an open market sale. He sold his shares at around $39 and $42 per share. While insider selling does not necessarily mean that the management is expecting more bad results, we should certainly assume that this is a possibility. The big question however is whether or not we should expect more bad news in the coming months. Was his open market sale triggered by his knowledge of quarterly results coming in at the lower end of the guidance or does he have knowledge of something more severe, such as a dividend cut coming up? I personally expect no large dividend cuts and I would actually prefer if the dividend was lowered in exchange for more share buybacks.

Insider Open Market Activity- Source Bloomberg Portal

Then there are also the CEOs of the various divisions:

Denise Landman: Pink

While Pink has comped negative comparable sales in the last two months, it is undeniable that she has build out a strong brand with many loyal followers. I am confident that she can continue to grow the brand in the coming years.

Greg Unis: Victoria’s Secret Beauty

Victoria’s Secret Beauty has been one of the strongest performing sections within VS ever since the restructuring. Unis has significantly reduced the number of SKUs within the beauty segment and he is well underway to growing the beauty business.

Jan Singer: Victoria’s Secret Lingerie

If I was Les Wexner, I would be starting to doubt Ms. Singer’s management of the brand. While the swimwear division was cut in order to reignite growth in the lingerie division, the performance of the latter division has been lacklustre with no clear sign of improvement. As an investor, I am particularly annoyed by Ms. Singer’s evasion of any and all questions regarding the turnaround. Regardless on whether the question is about average selling prices, margins, volumes, bralette penetration or any other subject, the answer is nearly always the same. According to Jan Singer, it is all a matter of having that customer connection, having the goods that the client needs in every part of her life, having goods that inspire her. Either Singer does not have any answers on these various questions and she herself is struggling to find solutions or she knows the answers but doesn’t wish to reveal them as they don’t paint a pretty picture about Victoria’s Secret’s future. In both cases, her evasive answers are not exactly inspiring any investors to start buying L Brands stock.

Nick Coe: Bath & Body Works

By now, it should be clear that I consider Bath & Body Works to be the gem within the L Brands group. Coe is doing a wonderful job on expanding the business and the recent results have been better than I expected.

Martin Waters: International division

Good old Martin, the chap with the fancy British accent for those who listen to the calls, is the person in charge of the international division of Victoria’s Secret and Bath & Body Works. While I would like to see a more rapid roll-out of the brands in areas such as Europe, I find Waters to be more knowledgeable and open on all investor calls than Ms. Singer. I would give Martin Waters the benefit of the doubt.

Positive to note is that all the management members are very aligned with the long term shareholders as all executives need to hold three time times their base salary in L Brands stock and the compensation committee has shown to significantly reduce compensation when the results are disappointing.

The financial picture

One of the main questions that investors have at this point is whether or not the dividend is safe. It will be hard to answer before we get more financial details when the Q1 results come out.

Free Cash Flow Overview – Source; L Brands Investor Presentation

As you can see in the table above, the dividend is covered but it was only barely covered in 2017. For 2018, L brands guided slightly higher capex spending of around $750m but it also guided towards $900 million in free cash flow (L_Brands_Q4_2017.pdf) which is more than enough to cover the $686m in dividends. One could start to wonder on whether the Q1 results coming in towards the lower end of the guidance will have any impact on the free cash flow guidance. In any case, it would require a major adjustment for the free cash flow to fall to a level that would require a large dividend cut.

It should also be taken into account that free cash flow will rapidly rise again once the international segment stops its aggressive China expansion.

Let us also have a quick look at the financial leverage

Debt Leverage Overview – Source; L Brands Investor Presentation

When looking at the pure financial net debt, you can calculate that it will come in at around 2.05 times net debt/EBITDA assuming net debt of $4,280m and a 2018E consensus EBITDA of $2,085m.

At the beginning of 2018 lease adjusted net debt/EBITDAR was 3.44x or 4.0x if you use adjusted debt/EBITDAR.

Valuation

Now it’s time to try and put a price on the stock.

In my model I have opted to assume that Victoria’s Secret only makes a minor recovery. I am sure that L Brands bulls will consider my growth numbers far too conservative but if I can prove that L Brands is undervalued using very conservative estimates, then readers should be able to imagine where the stock price could go on a larger recovery.

I assume Victoria’s Secret store sales decline by 4% each year while direct sales grow by 20% in FY18, 15% in FY19, 12.5% in FY20 and then 10% in the outer years. L Brands guides for mid- to high teens direct sales growth in their multi-year plan and VS direct sales grew by 23.4% in Q1 2018.

I expect that operating margins for the segment take a nosedive to a multi-year low of 9.5%. and then steadily recover to 12.5% in FY22. This would assume that VS operating margins never reach the 12.6% operating margin that VS had in its horrible FY17 year, let alone the 18% realized in FY15. I thus consider my estimates to be very conservative.

For B&BW I assume that stores basically grow sales by 3% each year while online sales grow at around 10%. I model slight operating margin pressure to incorporate the possibility of more discounts in this segment. In reality the operating leverage on the higher sales number could easily offset this.

Management guides the international segment to grow low- to mid-twenties percent but I choose to be a bit more conservative in the outer years. I take operating margins of 13.5% in the outer years regardless of the fact that this segment had low twenties operating margins before the China expansion. This should more than offset any bear argument that VS margins have significantly declined since then.

In my model I assume that the other segment does not get divested and that it remains loss making over the entire forecasted period.

I forecast less stock buybacks than guided by the company and less than historically bought by the company as I assume that the company will not want to raise the financial leverage and that there may not be as much cash available after maintaining the dividend.

Then comes the tricky part, what multiple should a company like L Brands be trading at? Looking at trading levels in the past years a 18x-20x multiple should be warranted. Retailers with less known brands and lower margins such as American Eagle Outfitters (NYSE:AEO) trade at 17.8 times the actual earnings. Therefore I believe that a 15x multiple for L Brands is a conservative pick.

Applying that 15x earnings multiple on the $4.37 earnings expected in FY22 brings us to a $65 in 5 years time (I assume that L Brands bulls would actually be very disappointed if L brands only reaches $65 in 5 years time). Together with the assumption that the dividend remains stable at $2.4/share, this would result in a 20% IRR based on Friday’s closing price of $32.33.

Valuation
L Brands Valution – Source: Author’s Own Calculations

Another way to look at the valuation is by looking at the value of Bath & Body Works within L Brands.

Natura Cosmetics bought The Body Shop for 18 times EBIT (Bloomberg displays The Body Shop’s EBIT at 54.8m as last reported result) . Applying that same multiple on B&BW’s FY18E EBIT would value it at an enterprise value greater than the entire L Brands enterprise value.

Valuation 2
Bath & Body Works Valution – Source: Author’s Own Calculations

Using a more conservative EV/EBIT multiple of 10x, in line with American Eagle Outfitters’ 10.64x, followed by subtracting half of L Brands net debt results in an implied share price of $26.63. One could make the case that B&BW should trade at a higher multiple than AEO as B&BW is growing faster, has much higher margins and is the clear leader in its segment, but once again I prefer to use the necessary level of conservatism.

Now that we have the conservative value of Bath & Body Works, let us see what that implies about the value of Victoria’s Secret.

L Brands Equity Value

$9,014m

B&BW Equity Value

$7,510m

Implied VS Equity Value

$1,504m

Remaining Net Debt

$2,150m

Implied VS Enterprise Value

$3,654m

Victoria’s Secret FY18E EBIT

$708m

Implied VS EV/EBIT multiple

5.16

Implied Victoria’s Secret EV/EBIT multiple – Source: Author’s Own Calculations

Even when using my very bearish Victoria’s Secret FY18E operating profit forecast, it becomes clear that given the value of B&BW, Victoria’s Secret would be trading at a mere 5.16x EV/EBIT multiple. Additionally, it assumes that the La Senza and Henri Bendel brands are worth nothing as otherwise you would still have to subtract their value from this already insanely low valuation. I also did not include the operating profit of the international division for both VS and B&BW as this is currently near break-even level but in 1-2 years this will be an asset that is significantly contributing to L brand’s bottom line.

Applying a very conservative 8x EV/EBIT multiple on my very depressed VS EBIT forecast, would still indicate a share price of $12.46 when excluding the international sales.

Valuation 3
Implied Victoria’s Secret Share Price – Source: Author’s Own Calculations

Combining the derived share prices of B&BW and VS results in a $39.09 combined share price, more than 20% above Friday’s close. This is also neglecting any value in the La Senza and Henri Bendel brands as well assuming no recovery in the VS brand and excluding the entire international division for both Victoria’s Secret and Bath & Body Works.

So why would anyone invest in L Brands? The true value of Bath & Body Works is not reflected within L brands market cap. A spin-off or sale could realise this value. L Brands has the optionality to divest its La Senza and Henri Bendel brands, thereby bringing in extra cash in addition to boosting its operating profit. The company currently pays a covered 7.42% dividend. A performance turnaround in the Victoria’s Secret brand due to either a shift back to constructed bras or due to a reduction in discounting by competitors could result in a major upswing for the L Brands stock (just see American Eagle Outfitters price graph). The International segment has significant growth prospects. Victoria’s Secret may opt to re-enter the swimwear market. What are the main risks to this investment case? Margin pressure at Victoria’s Secret may get worse, resulting from additional discounting. Continued promotions may dilute the Victoria’s Secret brand name and the company may never be able to return to the position of the undisputed leader in intimate’s apparel. The case stands and falls with the performance of Bath & Body Works. If performance at B&BW worsens significantly then the dividend may no longer be sustainable. The company may maintain its mall exposure, increasing its vulnerability to decreasing mall foot traffic. Catalysts

On the 24th of May, L Brands will reports its Q1 number. It will be interesting to see the operating margins of the different segments. In the April sales report, L Brands stated that earnings per share would come in towards the lower end of the previous guidance. It will be important to see if management gives any further details. Was it due to lower share repurchases or higher start up costs in China or was it due decreasing profitability within the Victoria’s Secrets segment? The most important question that the investment community will have is whether or not L Brands will change its full year guidance. The stock price is bound to show strong movement, whether it be increasing or decreasing. Therefore it may be optimal for real bargain hunters or for those who want to play it safe, to wait till the earnings release before starting a position.

Conclusion

L Brands is often considered as a synonym of Victoria’s Secret and things aren’t going that well for Victoria’s Secret. Therefore, the L Brands stock has taken a dive of nearly 50% this year. While a recovery of the Victoria’s Secret segment would be the fastest way back up from this point, I don’t feel comfortable predicting such a recovery any time soon. I am convinced that the potential is there but in a world where retailers are struggling, it is impossible to say when exactly the promotional environment will ease. I however believe that L Brands has multiple other levers to value creation. First of all, the value of Bath & Body Works, a fast growing higher margin segment is not reflected in the stock price. Then there is the possibility to divest the loss making La Senza and Henri Bendel brands which could help strengthen the balance sheet and significantly raise the group’s operating income. Another long term contributor will be the International division that is currently not contributing much to the bottom line due to large expenses made in the build-out of the China division. As soon as these new stores start generating revenues, the company will get a large boost from the international division. While a lot of these initiatives are 2-3 years away from being delivered or may not be realised at all depending on the choices that management makes, I believe that we are currently at a price level that doesn’t take any of the aforementioned catalysts into account. L Brands is owner operated with all executives owning a large amount of stock in comparison to their base salary and compensation schemes are focused on long term results. Nevertheless, I would welcome an activist investor that could encourage more value creation at L Brands. In the meantime, Investors can collect a 7.4% dividend yield and wait till the situation plays out. There is a small chance that the dividend gets a small cut but I do not expect a large slash in the dividend.

While this is not the usual type of investment that I make, I have decided to start a small position in L Brands after last Thursday’s correction. I will eagerly wait on the quarterly results and earnings call in order to decide on whether I want to build this up to a full position.

Disclosure: I am/we are long LB.

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.