Comcast tops Fox offer for Sky

Comcast tops Fox offer for Sky with $31B acquisition proposal 

Comcast tops Fox offer for Sky. Stockwinners.com
Comcast tops Fox offer for Sky

Comcast (CMCSA) announced a possible offer which it says is a “superior cash proposal” to acquire Sky (SKYAY).

Comcast’s announcement of a superior cash proposal of GBP 12.50 per share represents a 16% increase in value over the existing 21st Century Fox offer (FOXA) for Sky.

Comcast’s superior cash proposal implies an equity value of $31B for Sky.

“A combination would bring attractive financial benefits to Comcast shareholders, and is expected to be accretive to Comcast’s free cash flow per share in year one…The acquisition would enhance the entertainment, distribution, and technology leadership of Comcast, and importantly expand Comcast’s international footprint to more effectively compete in the rapidly changing and intensely competitive entertainment and communications landscape.

The combined business would create compelling opportunities for growth and innovation,” Comcast said in a statement.

“We think Sky is an outstanding company. It has 23 million customers and leading positions in the UK, Italy, and Germany. Sky has been a consistent innovator in its use of technology to deliver a fantastic viewing experience and has a proud record of investment in news and programming. It has great people and a very strong and capable management team.

Comcast intends to use Sky as a platform for growth in Europe. We already have a strong presence in London through our NBCUniversal international operations, and we intend to maintain Sky’s UK headquarters. Adding Sky to the Comcast family of businesses will increase our international revenues from 9% to 25% of Company revenues,” said Brian Roberts, CEO of Comcast.

SKYAYA closed at $61.60.


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Barron’s in bullish on Dropbox IPO

Barron’s, the weekly publication owned by the Wall Street Journal, in its latest issue mentions several names:

Stockwinners offers Barron's review of Stockwinners offers stocks to buy, stocks to watch, upgrades, downgrades, earnings, Stocks to Buy On Margin
Stockwinners offers Barron’s review of stocks to buy, stocks to watch

BULLISH   MENTIONS: 

Advertising companies cheaper than usual – After a tumble last year, shares of advertising companies such as Interpublic Group (IPG), Omnicom Group (OMC), Publicis Group (PUBGY), and WPP (WPP) are cheaper than usual relative to earnings, and business appears to be picking up, Jack Hough writes in this week’s edition of Barron’s. That is an opportunity for value investors, the report adds.

Quantum computing soon to be reality – Microsoft (MSFT) predicts that in five years there will be practical quantum computers, Tiernan Ray writes in this week’s edition of Barron’s. But there may be implications worth pondering, the report notes. As quantum computing grows nearer, it could ripple through technology and the race for innovative chips, software and cloud computing could be affected, Ray contends, adding that the companies that shoulder risk and reward include Intel (INTC), Nvidia (NVDA), Micron Technology (MU), Microsoft, Alphabet (GOOG; GOOGL) and Amazon (AMZN).

Dropbox IPO bodes well – In a follow-up article after Dropbox (DBX) filed a prospectus with the Securities and Exchange Commission for an initial public offering that could raise as much as $500M, Barron’s notes that the company has a private-market value of about $10B, making it one of the most valuable unicorns. A successful deal could invigorate the tech IPO market after Snap’s (SNAP) disappointing offering last year, the report adds.

May be time to consider Time Warner – Time Warner (TWX) shares look increasingly attractive as the company’s profit outlook should limit the downside if its merger deal with AT&T (T) is blocked on antitrust reasons, Andrew Bary writes in this week’s edition of Barron’s.

Many downsides when Amazon’s HQ2 comes to town – As Amazon decides on the location for its second corporate headquarters in North America, many have cautioned the 20 finalists to “be careful what you wish for,” Jon Swartz writes in this week’s edition of Barron’s. There are several downsides and prospective bidders should look no further than Silicon Valley, with workers still struggling to find affordable housing while enduring hellacious traffic and escalating costs in the area, the report noted.


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Gun stocks fall as pressure mounts on NRA

Gun stocks fall as corporate pressure mounts on NRA

Gun stocks fall as pressure mounts on NRA. Stockwinners.com
Gun stocks fall as pressure mounts on NRA – AR15

The National Rifle Association, or #NRA, an American organization that advocates for gun rights, is seeing public pressure mount from corporations that it has partnered with in the wake of the Parkland, Florida school shooting, which resulted in 17 deaths.

PARTNERSHIPS DROPPED

The nation’s largest privately owned bank, First National Bank of Omaha, said on Thursday that it will not renew its contract with the NRA for a branded Visa card.

A spokesman for the bank said in a statement, “Customer feedback has caused us to review our relationship with the NRA. As a result, First National Bank of Omaha will not renew its contract with the National Rifle Association to issue the NRA Visa Card.”

Additionally on Thursday, privately held Enterprise Holdings, which owns the Enterprise, Alamo, and National car rental brands, said it will end its partnership with the NRA — which gave NRA members discounts — next month.

FORMER PARTNERS DISTANCING THEMSELVES

Hotel companies Best Western and Wyndham Hotels, which were previously targeted for boycotts following the Newton, Connecticut elementary school shooting in 2012, have posted dozens of tweets each, letting customers know they are no longer affiliated with the NRA.

Wyndham tweeted repeatedly, “Please know, Wyndham is no longer affiliated with the NRA,” while Best Western tweeted a similar message, “Best Western Hotels & Resorts does not have an affiliation with and is not a partner of the National Rifle Association.”

MORE PARTNERSHIPS DROPPED

Over the course of the day, more companies joined the growing chorus, including Hertz (HTZ), which ended its rental car discount program with the NRA, Symantec (SYMC), which stopped its discount program with the NRA, Metlife (MET), which ended its insurance discount program with the NRA, and Chubb (CB), which will stop underwriting a NRA-branded insurance policy for gun owners.

PRICE ACTION

Publicly traded gunmakers are down in Friday’s trading on a day the broader markets are rising. American Outdoor Brands Corp (AOBC), formerly known as Smith & Wesson, is down 5.5% to $9.56, while Sturm Ruger & Company (RGR) is down 3.67% to $47.20.


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Lionsgate slides on downgrade

Lionsgate slides as analyst cuts rating on competitive, cost concerns

Lionsgate falls on downgrade. Stockwinners.com
Lionsgate falls on downgrade.

Bernstein analyst Todd Juenger downgraded Lionsgate (LGF.B) to Market Perform this morning, putting some pressure on the shares.

The analyst argued that competitive investment from rival premium and Subscription Video On Demand, or SVOD, services has gotten much more intense, while also pointing to increased programming investment at Starz.

MOVING TO THE SIDELINES

In a research note this morning, Bernstein’s Juenger downgraded Lionsgate to Market Perform from Outperform and lowered his price target on Class B shares to $30 from $35.

The analyst told investors that he believes competitive investment from rival premium and SVOD services has gotten much more intense, and noted that increased programming investment at Starz is a necessary but recurring cost of doing business, which means the normalized growth rate for Starz has to be lower.

#Juenger added that while Lionsgate likes to tell investors they offer higher-than-average growth at lower-than-average risk, he sees, at best, average growth, with higher-than-average risk.

Further, M&A is always possible, but if discussions were on-going or imminent, the company would not choose to increase investment, lower guidance, and reinstate a dividend, the analyst contended.

NEAR-TERM UPSIDE MUTED

Last week, Barrington analyst James Goss lowered his price target for Lionsgate to $34 from $40, while reiterating an Outperform rating on the stock.

The analyst noted that with the company’s repositioning its film slate under new leadership, and increasing its investment in programming for Starz, Lionsgate sees more muted growth in 2019, with a significant ramp in 2020. While Goss expects near-term upside to be muted, he believes the Starz service will be a more attractive offering in the “shifting media landscape,” which should provide further opportunities for long-term growth.

INDUSTRY CONSOLIDATION

According to a report by CNBC earlier this month, Comcast (CMCSA) could consider topping Disney’s (DIS) bid for 21st Century Fox (FOXA) if regulators approve AT&T’s (T) acquisition of Time Warner (TWX).

While no decision has been made by Comcast, Disney is already considering responses in case Comcast makes a run at Fox, the report added.

On December 14, Disney and 21st Century Fox announced they had entered into a definitive pact under which Disney will acquire 21st Century Fox, including the company’s Film and Television studios, along with cable and international TV businesses, for approximately $52.4B in stock.

As part of the deal, Fox will spin off Fox Broadcasting network and stations, Fox News, Fox Business, FS1, FS2, and Big Ten Network to its shareholders.

PRICE ACTION

In Wednesday’s trading, Class B shares of Lionsgate had dropped over 1% to $26.90.


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Albertsons and Rite Aid to merge

Rite Aid CEO to become CEO of combined Rite Aid, Albertsons

Albertsons and Rite Aid to merge

Albertsons Companies and Rite Aid Corporation (RAD) announced a definitive merger agreement under which privately held Albertsons Companies will merge with publicly traded Rite Aid.

Under the terms of the agreement, in exchange for every 10 shares of Rite Aid common stock, Rite Aid shareholders will have the right to elect to receive either (i) one share of Albertsons Companies common stock plus approximately $1.83 in cash or (ii) 1.079 shares of Albertsons Companies stock.

Depending upon the results of cash elections, upon closing of the merger, shareholders of Rite Aid will own a 28.0 percent to 29.6 percent stake in the combined company, and current Albertsons Companies shareholders will own a 70.4 percent to 72.0 percent stake in the combined company on a fully diluted basis.

Immediately following completion of the merger and assuming that all Rite Aid shareholders elect to receive shares plus cash, Albertsons Companies will have approximately 392.9 million shares outstanding on a pro forma and fully diluted basis.

Following the close of the transaction and the share exchange, Albertsons Companies’ shares are expected to trade on the New York Stock Exchange.

Albertsons Companies is backed by an investment consortium led by Cerberus Capital Management, L.P., which also includes Kimco Realty Corporation (KIM), Klaff Realty LP, Lubert-Adler Partners LP, and Schottenstein Stores Corporation.

Current Rite Aid Chairman and Chief Executive Officer John Standley will become CEO of the combined company, with current Albertsons Companies Chairman and CEO Bob Miller serving as Chairman.

The combined company is expected to be comprised of leadership from both companies and will be dual headquartered in Boise, Idaho, and Camp Hill, Pennsylvania.

The name of the combined company will be determined by transaction close.

The integrated company will operate approximately 4,900 locations, 4,350 pharmacy counters, and 320 clinics across 38 states and Washington, D.C., serving 40+ million customers per week.

Most Albertsons Companies pharmacies will be rebranded as Rite Aid, and the company will continue to operate Rite Aid stand-alone pharmacies.

The combined company expects to deliver annual run-rate cost synergies of $375 million in approximately three years and access potential annual revenue opportunities of $3.6 billion.

Over 60 percent of the cost synergies are expected to be realized within the first two years post-close. Identified revenue opportunities primarily include partnering with payors, including Rite Aid’s PBM, EnvisionRx, through preferred networks to drive additional high-value customers, connecting Rite Aid’s reliable pharmacy customer base to Albertsons Companies through loyalty programs and targeted marketing, leveraging Albertsons Companies’ grocery capabilities and Rite Aid’s pharmacy expertise to enhance the customer offering, and driving traffic through the omni-channel experience.

Cost synergies will be achieved primarily through procurement savings, leveraging efficiencies realized by a combined supply chain, combined distribution and fulfillment channels, and leveraging manufacturing capabilities.

The board of directors will be comprised of nine directors, four of whom will be named by Albertsons Companies, four of whom will be named by Rite Aid (including John Standley), and one of whom will be a jointly selected director. A majority of the Board will be independent. Lenard Tessler will serve as Lead Director.

Kimco Realty Corp (KIM) confirms its participation as an investor in connection with today’s announced execution of a definitive agreement under which Albertsons Companies will acquire all outstanding shares of Rite Aid Corporation (RAD).

RAD closed at $2.13. It last traded at $2.68.


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Barron’s in bullish on Citi, bearish on GE

Barron’s, the weekly publication owned by the Wall Street Journal, in its latest issue mentions several names:

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Stockwinners offers Barron’s review of stocks to buy, stocks to watch

BULLISH   MENTIONS: 

Hovnanian (HOV) stock too cheap to ignore- Hovnanian Enterprises offers an interesting speculative bet, because more than a decade’s worth of problems are reflected in the price, Brett Arends writes in this week’s edition of Barron’s. A successful resolution of its legal issues, a corporate turnaround, a takeover, or a continued recovery in the U.S. real estate market are all potential catalysts, he adds.

JPMorgan, Walmart cash flow yields exceed dividend yields – The cash flow yields of JPMorgan (JPM), Johnson & Johnson (JNJ), Walmart (WMT), Pfizer (PFE), Cisco (CSCO), AbbVie (ABBV), PepsiCo (PEP), 3M (MMM), Bristol-Myers (BMY), United Technologies (UTX), Texas Instruments (TXN) and Abbott Laboratories (ABT) exceed their dividend yields, a good signal for dividend coverage and growth, Lawrence Strauss writes in this week’s edition of Barron’s.

Alphabet, Citi well positioned for later stages of market rally – It is time for investors to think about how and when bull markets end, Jack Hough writes in this week’s edition of Barron’s. Groups to favor now include financials, which benefit from rising interest rates, and industrials, he notes, adding that technology still looks attractive. Alphabet (GOOG; GOOGL), Lam Research (LRCX), Citigroup (C), and Cummins (CMI) are all well positioned for the later stages of a long market rally, Hough contends.

Bears, bulls battle over Under Armour – In a follow-up story, Barron’s says that Under Armour (UA) reported fourth quarter revenue that beat Wall Street’s estimate, but is difficult to tell whether the revenue upside represents a turning point for the business. Bulls and bears both found something to support their arguments, as revenue increased but gross margin declined while inventories swelled and store count rose 22%, the report notes.

BEARISH  MENTION:

General Electric stock could drop another 10% – General Electric (GE) lost $6B in 2017 after a series of charges and impairments, cut its dividend by 50%, and its accounting is under investigation by the Securities and Exchange Commission, but lately it has been attracting fresh attention from value-oriented investors, Andrew Bary writes in this week’s edition of Barron’s. Nonetheless, the stock is not a bargain and could drop another 10% or more, he contends


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McDonald’s announces changes to Happy Meals

McDonald’s announces changes to Happy Meals

No more Chocolate Milk or Cheeseburger in Happy Meals

McDonald's announces changes to Happy Meals, Stockwinners.com
McDonald’s announces changes to Happy Meals

McDonald’s (MCD) announced an expanded commitment to families, supporting the company’s long-term global growth plan by leveraging its reach to impact children’s meals, access to reading, and keeping families together through Ronald McDonald House Charities.

By 2022, McDonald’s will make improvements to the Happy Meal menu across 120 markets to offer more balanced meals, simplify ingredients, continue to be transparent with Happy Meal nutrition information, reinforce responsible marketing to children, and leverage innovative marketing to help impact the purchase of foods and beverages that contain recommended food groups in Happy Meals.

Using rigorous nutrition criteria grounded in science and nutrition policy, by the end of 2022, at least 50 percent or more of the Happy Meals listed on menus (restaurant menu boards, primary ordering screen of kiosks and owned mobile ordering applications) in each market will meet McDonald’s new Global Happy Meal Nutrition Criteria of less than or equal to 600 calories; 10 percent of calories from saturated fat; 650mg sodium; and 10 percent of calories from added sugar.

Currently, 28 percent of Happy Meal combinations offered on menu boards in 20 major markets meet these new nutrition criteria.

To reach the goal of 50 percent or more, markets will add new menu offerings, reformulate or remove menu offerings from the Happy Meal section of the menu board.

For example, last month McDonald’s Italy introduced a new Happy Meal entree called the “Junior Chicken,” a lean protein sandwich (grilled chicken).

McDonald’s Australia is currently exploring new vegetable and lean protein options and McDonald’s France is looking at new vegetable offerings.

As consumers’ tastes and preferences continue to evolve, markets will prioritize Happy Meals and simplify ingredients by removing artificial flavors, added colors from artificial sources, and reducing artificial preservatives where feasible.

The company has made a continuous effort to meet consumers’ desire for easy access to nutrition information for menu items it serves with a goal of ensuring that nutrition information for Happy Meals is available and accessible through all McDonald’s owned websites and mobile apps used for ordering where they exist.

Customers in the U.S. will see accelerated changes to the Happy Meal menu this year.

In June 2018, 100 percent of the meal combinations offered on Happy Meal menu boards in the U.S. will be 600 calories or fewer, and 100 percent of those meal combinations will be compliant with the new nutrition criteria for added sugar, saturated fat, and 78 percent compliant with the new sodium criteria. Listing only the following entree choices: Hamburger, 4-piece and 6-piece Chicken McNuggets.

The Cheeseburger will only be available at a customer’s request.

Replacing the small French fries with kids-sized fries in the 6-piece Chicken McNugget meal, which decreases the calories and sodium in the fries serving by half.

Reformulating chocolate milk to reduce the amount of added sugar.

During this period, chocolate milk will no longer be listed on the Happy Meal menu, but will be available at a customer’s request.

Later this year, bottled water will be added as a featured beverage choice on Happy Meal menu boards.

In December 2017, McDonald’s USA completed the transition to Honest Kids Appley Ever After organic juice drink, which has 45 less calories and half the total sugar than the prior 100 percent apple juice served in the U.S. With these planned menu updates, there will be average reductions of 20 percent in calories, 50 percent in added sugars,13 percent in saturated fat and/or 17 percent in sodium, depending on the customer’s specific meal selection.

These reductions reflect the average nutrition data of U.S. Happy Meal offerings on the menu last year compared to those planned for later this year.

Already, several of the Happy Meal combinations available on U.S. menu boards today meet the new nutrition criteria and will not be changing.

MCD closed at $160.00.


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Barron’s is bullish on banks, bearish on Twitter and Snap

Barron’s, the weekly publication owned by the Wall Street Journal, in its latest issue mentions several names:

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Stockwinners offers Barron’s review of stocks to buy, stocks to watch

BULLISH   MENTIONS: 

Bigger bank payouts amid looser regulation – Helped by higher capital levels and more leeway from regulators, large-cap banks should be increasing dividends over the next several years, Lawrence Strauss writes in this week’s edition of Barron’s. Those include Bank of America (BAC), BB&T (BBT), Citigroup (C), Citizens Financial (CFG), Fifth Third Bancorp (FITB), PNC Financial (PNC), Regions Financial (RF), SunTrust (STI), U.S. Bancorp (USB) and Wells Fargo (WFC), the report notes.

Delta, Apple among stocks merit a look – Shares of Delta (DAL), Apple (AAPL), Starbucks (SBUX), D.R. Horton (DHI), Verizon (VZ), American Electric Power (AEP) and NextEra Energy (NEE) have fallen but estimates for their earnings have risen, Jack Hough writes in this week’s edition of Barron’s. These names should be worth consideration by bargain hunters, he adds.

Wells Fargo looks inexpensive, regulatory risks remain– Shares of Wells Fargo (WFC) have badly trailed rivals as the bank grapples with the fallout from scandals, Ben Walsh write’s in this week’s edition of Barron’s. And while Wells Fargo looks inexpensive relative to some other big banks, regulatory risks remain and changing the bank’s aggressive culture will not be easy, the report adds.

Market volatility putting bitcoin to the test – Bitcoin started to rebound last week, but its usefulness as a hedge against stock market volatility has lately been called into questions, Avi Salzman writes in this week’s edition of Barron’s. While Bulls argue that short-term price action does not change the longer trend, bitcoin price drop has been fueled by the same problems that it has had for year, namely unreliable exchanges and worries about manipulation and fraud, the report notes. If bitcoin is to survive as an alternate currency, the hype will have to fade and it will have to become useful, Salzman adds

BEARISH  MENTIONS

Twitter/Snap ‘hot for now,’ may not last – Results from Twitter (TWTR) and Snap (SNAP) beat expectations last week and both notched double-digit percentage gains, but this cannot last, with the thrill likely to fade in coming weeks, Tiernan Ray writes in this week’s edition of Barron’s. Twitter and Snap have years ahead of them to develop their product and innovate in ways that may give them a broader appeal, but for now they are boutiques in an advertising market of giants that includes not only Facebook (FB) but Alphabet (GOOG; GOOGL) and Amazon (AMZN), Ray adds.


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Lululemon CEO resigns over misconduct accusations

lululemon CEO Potdevin resigns over misconduct accusations 

Lululemon CEO resigns over misconduct accusations. Stockwinners.com
Lululemon CEO resigns over misconduct accusations

Shares of lululemon athletica (LULU) are in focus after the company announced the resignation of chief executive officer Laurent Potdevin for “conduct” issues.

CEO RESIGNATION

lululemon announced yesterday that Laurent Potdevin has resigned as CEO and member of the board of directors, effective immediately. Potdevin had served as CEO since January 2014.

lululemon expects all employees to exemplify the highest levels of integrity and respect for one another, and Potdevin “fell short of these standards of conduct,” the company said, adding that the board has begun a search for a new CEO.

“While this was a difficult and considered decision, the Board thanks Laurent for his work in strengthening the company and positioning it for the future,” said Glenn Murphy, executive chairman.

“Culture is at the core of lululemon, and it is the responsibility of leaders to set the right tone in our organization. Protecting the organization’s culture is one of the Board’s most important duties.”

Lululemon has promoted three members of its management team — Celeste Burgoyne, Stuart Haselden and Sun Choe — to oversee more day-to-day operations, marketing, e-commerce growth, product innovation and supply chain enhancements.

According to a Bloomberg report, Potdevin’s resignation was over misconduct that spanned a range of incidents involving multiple individuals. The misconduct was not related to finances or operations, the report noted.

GUIDANCE REAFFIRMED

In the wake of Potdevin’s resignation, lululemon looked to reassure investors by backing its fourth quarter guidance of earnings per share between $1.25-$1.27 and revenue of $905M-$915M, which compares to analysts’ estimates of $1.27 and $911.67M, respectively.

In addition, the company’s growth strategies remain on track to achieve $4B in revenue in 2020.

ANALYST COMMENTARY

Following the announcement, Jefferies analyst Randal Konik said the level of management turnover at lululemon during “this critical juncture in the company’s growth trajectory gives us some pause.”

The analyst sees better opportunities elsewhere given lululemon’s “high” valuation and “less plentiful” margin opportunity. He maintained a Hold rating on lululemon with a $72 price target.

Meanwhile, Deutsche Bank analyst Paul Trussell said that while he finds the circumstances of Potdevin’s resignation unfortunate, he has confidence in the remainder of lululemon’s management team, particularly Glenn Murphy.

The analyst recommended using any pullback in the shares as a buying opportunity and reiterated a Buy rating with a $95 price target. Citi analyst Paul Lejuez said he views the resignation as more of a positive for lululemon.

It presents the company with an opportunity to bring in a seasoned executive to take lululemon “to the next level,” the analyst said.

Lejeuz kept a Neutral rating on the shares with an $88 price target.

Additionally, KeyBanc analyst Edward Yruma said he views the departure negatively, and notes it comes after creative director Lee Holman’s departed in November.

The analyst believes Potdevin has been an integral part of the company’s stabilized performance in recent quarters.

Canaccord analyst Camilo Lyon said he does not see the departure as a major setback, but notes there is a level of uncertainty until the position is filled. Lyon reiterated his Hold rating and $75 price target.

Furthermore, Morgan Stanley analyst Kimberly Greenberger said it is likely that investors will speculate the top two contenders for the job are Murphy, executive chairman and ex-CEO of The Gap (GPS), and Stefan Larsson, the ex-CEO Ralph Lauren (RL). If lululemon picks either, Greenberger would expect the stock to react positively.

The analyst kept an Equal Weight rating and $73 price target on lululemon.

PRICE ACTION

lululemon is down 0.75% to $76.85.


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Barron’s is bullish on Danaher and GM

Barron’s, the weekly publication owned by the Wall Street Journal, in its latest issue mentions several names:  

Stockwinners offers Barron's review of Stockwinners offers stocks to buy, stocks to watch, upgrades, downgrades, earnings, Stocks to Buy On Margin
Stockwinners offers Barron’s review of stocks to buy, stocks to watch

BULLISH   MENTIONS:

Danaher among more reliable stocks– Danaher’s (DHR) results were met with cries of sell even though they were stellar as ever, sending the shares into negative territory on Monday, Ben Levisohn writes in this week’s edition of Barron’s. Fast-forward to Friday, the stock market was in freefall but the stock weathered the blast, he notes, adding that there is something to be said for Danaher’s consistency. While it will never be the fastest grower, it has grown sales at 4%-5%, quarter after quarter, while cutting costs and improving efficiency to grow earnings, making it one of the more reliable stocks out there, the report says.

General Motors shares could rise more than 35% – General Motors (GM) has been turning in strong profits, which have helped it fund research into autonomous and electric cars, Jack Hough writes in this week’s edition of Barron’s. When Tesla’s (TSLA) stock-market value surpassed General Motors last year, it was big news, but recently the latter has edged back into the top spot, he adds. Selling at just seven times forward earnings, General Motors shares have room to rise more than 35% in the year ahead, Hough contends.

Cisco, Oracle among stocks with rising dividend estimates – Some of the large-cap companies whose dividend estimates for their current fiscal year have increased by at least 2% since July include Cisco (CSCO), Texas Instruments (TXN), UnitedHealth (UNH), Oracle (ORCL), Comcast (CMCSA), 3M (MMM), AbbVie (ABBV), Boeing (BA), Union Pacific (UNP), Bank of America (BAC), Citigroup (C), Wells Fargo (WFC) and JPMorgan (JPM), Lawrence Strauss writes in this week’s edition of Barron’s.

TD Ameritrade adding round-the-clock trading – TD Ameritrade  (AMTD) is offering customers more social media capabilities and has added round-the-clock trading in 12 exchange-traded funds, from Sunday evening through Friday evening using its thinkorswim trading platform or TD Ameritrade Mobile Trader app, Theresa Carey writes in this week’s edition of Barron’s.

Apple, Facebook facing challenges, shares still holding up well – Considering the challenges they face, both Apple (AAPL) and Facebook (FB) shares held up well, Tiernan Ray writes in this week’s edition of Barron’s. Apple offered a forecast for its March quarter that missed expectations, and Wall Street now thinks that the company is reaching a bit too far in pricing the iPhone X at $999-$1150, he notes. Nonetheless, Apple is still an empire very much in control of its destiny, Ray contends. Meanwhile, Facebook said people are spending less time than before on the site, but Mark Zuckerberg calmly assured the Street that he thinks it is a good thing, the report points out.

Cisco, Salesforce among most sustainable companies – Cisco (CSCO) tops Barron’s first annual list of most sustainable companies, followed by Salesforce (CRM), Best Buy (BBY), Intuit (INTU), HP Inc. (HPQ), Texas Instruments (TXN), Microsoft (MSFT), Oshkosh (OSK), Clorox (CLX) and Xylem (XYL).

Spirit Air offers plenty of potential upside – Following a steep decline, shares of Spirit Airlines (SAVE) now trade for less than 12 times forward earnings estimates, a good value or growth play, Brett Arends writes in this week’s edition of Barron’s. Long-term investors may need to be patient because short-term headwinds pop up so frequently for airline stocks, but in return for its risks, Spirit offers reasonable valuations and plenty of potential upside, he argues

BEARISH  MENTIONS:

Musk new compensation package sets wrong targets – Tesla’s  (TSLA) new 10-year compensation package, which considers that Elon Musk could grow the company’s market capitalization from the current $58B to $650B in 2028, is not shareholder-friendly as it emphasizes market cap goals, not sustainable profits, Vito Racanelli writes in this week’s edition of Barron’s.


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Avon Products is encouraged to sell the company

Shareholder calls on Avon Products to consider a sale of the company

Shareholder calls on Avon Products to consider a sale. Stockwinners.com
Shareholder calls on Avon Products to consider a sale

A group of shareholders of Avon Products (AVP) led by Shah Capital, Barington Capital Group, L.P., and NuOrion Partners that collectively beneficially owns approximately 3.5% of the outstanding common stock announced that it has sent a letter to the board of Avon calling on the board to promptly retain a financial advisor to explore all strategic alternatives to maximize shareholder value, including a sale of the company in whole or in parts.

The Shareholder Group is extremely disappointed with the deteriorating operating and share price performance that has occurred under the stewardship of the current board.

The Shareholder Group is also dismayed by the Board’s failure to act quickly and decisively on the past recommendations its members have made to improve the long-term performance of the company, including promptly hiring a new chief executive officer – a step that has been long overdue and members of the Shareholder Group recommended over two years ago.

As a result, the Shareholder Group has lost confidence in the ability of Avon’s current Board to create meaningful long-term value for its public shareholders, and sees no reason why shareholders should continue to wait for a turnaround from a Board that has overseen a tremendous destruction of shareholder value.

The Shareholder Group therefore believes that the best course of action is for the Board to retain a financial advisor to explore the sale of the company.

The Shareholder Group believes that Avon would be highly attractive to a range of buyers due to its many positive attributes, including its well-known 130-year old brand; its vast product offering generating over $5.7 billion in sales; its strong market positions in developing countries such as Brazil, Russia and Mexico; its owned manufacturing operations; and its six million direct sales representatives.

In addition, a multinational acquirer would immediately benefit from its ability to improve Avon’s capital structure and the tax efficiency of its operations.

The Shareholder Group is convinced that a better capitalized strategic buyer would do a much better job of unlocking Avon’s tremendous value potential than the company’s current Board.

AVP closed at $2.43. The stock has a 52 weeks trading range of $1.85 – $6.03.


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Barron’s is bullish on Goldman Sachs, bearish on Snap On

Barron’s, the weekly publication owned by the Wall Street Journal, in its latest issue mentions several names:  

Stockwinners offers Barron's review of Stockwinners offers stocks to buy, stocks to watch, upgrades, downgrades, earnings, Stocks to Buy On Margin
Stockwinners offers Barron’s review of stocks to buy, stocks to watch

BULLISH   MENTIONS:

Biotech could be headed for a revival – Big biotechnology stocks could be headed for a revival, Ben Levisohn writes in this week’s edition of Barron’s. Biogen (BIIB) and Celgene (CELG) finished the week higher, AbbVie (ABBV) gained 14% after releasing earnings, and Gilead (GILD) rose 5% after a rating upgraded, he notes. Overall, the sector should also benefit from increased merger activity, lower taxes, and a less-onerous regulatory regime, the report adds.

Goldman Sachs regaining ‘its touch,’  – While Goldman Sachs’ (GS) overall financial results have been strong, with three out of four of its main business units thriving, trading has been reduced to crumbs, Jack Hough writes in this week’s edition of Barron’s. Further, its competitor, Morgan Stanley (MS), surpassed it in market value for the first time in a decade, despite Goldman Sachs shares hitting a new 52-week high, he notes. Nonetheless, this makes an opportune time to buy Goldman Sachs stock, he argues, as the bank is more diversified than it was before the financial crisis and as it becomes more prosperous given expansion in mergers, lending and money management.

Domestic companies to go on spending spree – Capital spending has picked up and shows signs of staying strong this year, with help from tax overhaul as it lowers the corporate tax and offers a chance for companies to repatriate overseas cash, Lawrence Strauss writes in this week’s edition of Barron’s. Apple, for instance, has announced that it expects to invest more than $30B in capex in the U.S. over the next five years, he notes.

BEARISH  MENTIONS

Investors should sell First Solar (FSLR), pocket gain – In a follow-up story, Barron’s notes that President Trump has imposed 30% tariffs on solar cells and modules, which will likely drive the panel’s prices higher and reshuffle the renewable-energy industry. First Solar’s products will be exempt from the tariff and its stock has jumped 54% since then, the report says, adding that investors should sell the stock and pocket that gain. Most solar stocks remain risky bets as the tariff will drive up prices in the U.S. and given the supply-demand imbalance, Barron’s contends.

Snap-On could miss consensus EPS this year. – Shares of Snap-On (SNA) have tooled along nicely for years, but the joyride may be over soon as potential headwinds could cause the company to miss consensus earnings per share expectations this year, Vito Racanelli writes in this week’s edition of Barron’s. An increasing number of borrowers are falling behind and recent evidence points to a slowdown in organic growth in the main tools division, the biggest of Snap-on’s businesses, he notes.


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Amazon names 20 finalists in race for second headquarters

Amazon names 20 finalists in race for second headquarters

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Amazon names 20 finalists in race for second headquarters

Shares of Amazon.com (AMZN) are in focus in morning trading after the company shortlisted 20 metropolitan areas for its new headquarters.

Among the candidates are New York City, Boston, Toronto, and Atlanta.

AMAZON NARROWS CHOICES FOR NEW HQ

Amazon on Thursday announced a narrowed down list of 20 metropolitan cities for its planned second headquarters.

The finalists, whittled down from 283 places that applied in October, include New York City, Boston, Atlanta and Chicago, which all have access to airports and mass transportation.

Other candidates include Dallas, Columbus, Denver, Newark, Philadelphia, Miami, Washington D.C., Toronto, Chicago, Los Angeles, Nashville and Indianapolis.

Amazon said it expects to create as many as 50,000 jobs that will be “high-paying” and generate more than $5B in investments over the next 10-15 years.

In addition to Amazon’s direct hiring and investment, construction and ongoing operation of Amazon HQ2 is expected to create tens of thousands of additional jobs and tens of billions of dollars in additional investment in the surrounding community, Amazon said.

In a statement, Holly Sullivan of Amazon Public Policy, said that “getting from 238 to 20 was very tough — all the proposals showed tremendous enthusiasm and creativity. Through this process we learned about many new communities across North America that we will consider as locations for future infrastructure investment and job creation.”

WHAT’S NOTABLE

Amazon solicited proposals in September for its second corporate headquarters.

In its request for proposals, Amazon said it was looking for a metro area with at least 1M residents, proximity to an international airport, mass transit and amenities that give it the “potential to attract and retain strong technical talent.”

The company plans to make a decision this year and will continue discussions with the 20 finalists, it said.

Amazon is also planning to grow in Seattle. In an interview with The Wall Street Journal in late 2017, Jeff Wilke, Amazon’s CEO of Worldwide Consumer, said the company planned to add 2M square feet and 6,000 people over 12 months to the Seattle headquarters.

RECENT TRUMP COMMENTS

President Donald Trump tweeted critically about the company on December 29, calling on the U.S. Postal Service to charge the online retailing giant “much more” for shipping.

Trump tweeted, “Why is the United States Post Office, which is losing many billions of dollars a year, while charging Amazon and others so little to deliver their packages, making Amazon richer and the Post Office dumber and poorer? Should be charging MUCH MORE!”

Stockwinners.com believers Toronto will be the winning city, given Trump’s hostile immigration policy. Amazon hires a large number of technical staff from other countries and an immigration-friendly policy of Canada makes a lot of sense for the company. The company already has a huge presence in that city.


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Alliance Data to launch credit cards for IKEA Group 

Alliance Data to launch co-brand, private label credit cards for IKEA Group 

Alliance Data to launch credit cards for IKEA. Stockwinners
Alliance Data to launch credit cards for IKEA

Alliance Data Systems  (ADS) announced its Columbus, Ohio-based card services business, a premier provider of branded private label, co-brand and business credit card programs, has signed a new agreement to provide branded credit card services in the United States for IKEA Group, the world’s largest furniture retailer.

The IKEA Group operates 47 stores in the U.S. and a total of 362 in 29 countries around the world.

IKEA aims to offer consumers home furnishing solutions of good design and function at affordable prices.

Alliance Data will create a loyalty-driven credit card program that combines customer insights and industry benchmarking to develop a customized rewards and benefits package tailored for the unique IKEA customer base.

The co-branded rewards card can be used for both IKEA purchases and for everyday spending needs such as gas, groceries and utilities. The card will incorporate custom program perks designed to recognize customers for their loyalty.

In order to make the card as affordable and rewarding as possible, IKEA Group in the U.S. has designed the card without an annual fee, and will reinvest resources from the card to offer customers more generous rewards.

Alliance Data will leverage its digital and mobile expertise throughout the customer’s shopping journey, including its Frictionless Mobile CreditSM, which provides a seamless application experience-throughout the store or online-and puts customers in control of how and where they want to initiate the experience.


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Box Office Battle for the New Year’s weekend

Box Office Battle: ‘Star Wars: The Last Jedi” wins New Year’s weekend

Box Office Battle: 'Star Wars: The Last Jedi'' wins New Year's weekend. Stockwinners.com
Box Office Battle: ‘Star Wars: The Last Jedi” wins New Year’s weekend

Disney (DIS) and Lucasfilm’s “Star Wars: The Last Jedi” has crossed the $1B mark at the global box office in a relatively strong New Year’s weekend in terms of moviegoing.

The film stayed atop the box office chart throughout the holidays, grossing another $52.7M from over 4,200 theaters for the three-day and $68.1M for the four-day holiday weekend. “The Last Jedi” received an A CinemaScore and got a 91% from Rotten Tomatoes.

BOX OFFICE RUNNERS-UP

Sony’s (SNE) “Jumanji: Welcome to the Jungle” came in second, with the reboot grossing $50.4M domestically from 3,765 locations for the three days and an estimated four-day haul of $66.5M.

Behind it was Comcast’s (CMCSA; CMCSK) “Pitch Perfect 3,” earning $16.8M from 3,468 theaters for the three days and an estimated $21M for the four-day weekend.

21st Century Fox’s (FOXA) “The Greatest Showman” placed number four, with $15.6M from 3,316 theaters for the three days and a projected four-day gross of $20.8M.

Rounding out the top five, “Ferdinand” is projected a four-day weekend of $14.6M. Other publicly traded companies in filmmaking include Viacom (VIAB), Lionsgate (LGF.A), and Warner Bros. (TWX).


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