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:  

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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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Barron’s is bullish on Apple, Western Digital

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 

BULLISH  MENTIONS

Apple may hit $1T in market value next year- Apple (AAPL) could soon reach a milestone, namely to be the first U.S. company with a $1T market valuation, with iPhone X and a rising stream of service revenue helping it get there, Jack Hough writes in this week’s edition of Barron’s. Hough does not thing the peak is near as Apple seems to be escaping its product supercycle peaks and troughs to post more-consistent year-to-year growth.

Opportunity seen in semiconductors as Bitcoin plummets on Friday – Last Friday, the price of Bitcoin plummeted over 25% before bouncing back, and no major crypto asset was immune to the selloff, with even Bitcoin Investment Trust momentarily changing hands at more than a 5% discount of its NAV, Crystal Kim writes in this week’s edition. But in every “bloodbath” there is an opportunity to buy, she adds, noting that while bitcoin is a possibility, a better one may be the stocks of semiconductors companies that make the chips and equipment needed to mine bitcoin and other cryptocurrencies.

Some tech still a bargain– For investors looking to buy low, there are a number of good candidates to pick up, such as Qorvo (QRVO) that features in Apple’s (AAPL) iPhone and Finisar (FNSR) that also got the nod from Apple to produce parts for augmented reality and that may be a target for Oclaro (OCLR), Tiernan Ray writes in this week’s edition of Barron’s. Additionally, Ray sees Universal Display (OLED) as the biggest beneficiary of the iPhone rise, while Cisco Systems (CSCO) should get a lift from the new tax law.

PG&E looks like a buy– A sharp drop last week in shares of PG&E (PCG) could present a buying opportunity, Andrew Bary writes in this week’s edition of Barron’s. Shares of California utilities Sempra Energy (SRE) and Edison International (EIX) also fell this past week amid concerns about their liability for this month’s wildfire outbreak in Southern California, Barron’s adds.

Investors should give REITs a chance – Income investors should give real estate investment trusts a chance, Bill Alpert writes in this week’s edition of Barron’s. Among REITs with nice payouts are Macerich (MAC), Simon Property Group (SPG), Agree Realty (ADC), National Retail Props (NNN) and Realty Income (O), he contends

Western Digital (WDC) could be worth $120 – Flash-memory prices are expected to fade in 2018, which has worried investors in Western Digital, Andrew Bary writes in this week’s edition of Barron’s. However, at $83, Western Digital shares look undervalued, as the stock could be worth $120 at $10 a share in free cash flow, Bary notes.

BEARISH  MENTION

 Bitcoin bourses should be avoided by small traders – Derivatives exchanges Chicago Board Options Exchange (CBOE) and CME (CME) recently launched futures trading on the digital cryptocurrency bitcoin, but these securities do not trade actual bitcoin and are instead based on indexes of bitcoin prices that are calculated differently, Theresa Cary writes in this week’s edition of Barron’s. Putting aside the risk reflected in last week’s bitcoin plunge, these are not retail-friendly products in their current form, she notes, adding that market observers expect that to change over the next six months.

Cryptocurrency mania may not end well – Cryptocurrency mania is obvious in the stock market activity of companies like beverage seller Long Island Iced Tea (LTEA), with shares soaring after the company said it would change its name to Long Blockchain, Vito Racanelli writes in this week’s edition of Barron’s. The real risk is regulatory as governments around the world will gradually see the cryptocurrencies as a threat to their fiat currencies and policies, he notes, adding that it is a mania and eventually the bubble will pop amid tears.


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Helios and Matheson jumps as MoviePass exceeds estimates

Helios and Matheson jumps as MoviePass tops 1M subscribers 

Helios and Matheson jumps as MoviePass exceeds initial projections

Shares of Helios and Matheson (HMNY) jumped in afternoon trading after the company said its MoviePass theater subscription services surpassed 1M paying monthly subscribers this month.

MOVIEPASS EXCEEDS 1M MONTHLY SUBSCRIBERS

Helios and Matheson, a majority owner of MoviePass, said this morning that the subscriber base for the movie theater subscription service surpassed 1M paying monthly subscribers, compared to more than 600,000 as of October 18 and approximately 20,000 as of August 14, the day before MoviePass announced its new $9.95 per month subscription price.

In a statement, the company said MoviePass has increased its subscriber base by over 6,500% since the introduction of the $9.95 per month pricing model.

MoviePass shifted to the lower price subscription model on August 15, and noted today that it has reached the 1M subscriber mark in less time than Netflix (NFLX) or Hulu (DIS, CMCSA, CMCSK, FOX, FOXA).

MoviePass CEO Mitch Lowe said:

“Our focus on creating the best movie theater subscription service experience for our subscribers has propelled our growth to date. We believe that growth will continue as we further develop our application, improve customer service, enhance exhibitor relations and fill movie theater seats for incredible films to be released in the future.”

WHAT’S NOTABLE

Helios and Matheson announced plans in November to raise its stake in MoviePass from the 53.71% it held in October. After MoviePass dropped its subscription price to $9.95, analysts predicted the service would hit 1M subscribers by the end of the year.

In October, MoviePass said its continued growth trajectory “exceeded MoviePass’ initial projections, and now MoviePass projects that it will acquire at least 3.1 million additional paying subscribers through August 18, 2018, exceeding its previous estimate of 2.5 million subscribers.

“Earlier this month, MoviePass and streaming service Fandor partnered with Costco (COST) to offer a one-year subscription plan for a flat fee of $89.99.

CITRON CAUTIOUS

Citron Research has expressed cautious comments on Helios and Matheson, saying in October that the stock will “trade back to $20…You might like product but $1+bill it isn’t. Giving away $1 for .90 no biz.” Helios and Matheson has also been mentioned cautiously by TheStreetSweeper.

PRICE ACTION

Shares of Helios and Matheson are up about 5% in Wednesday’s trading to $6.51.


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Vipshop gets $863 million cash infusion

Vipshop receives $863M from Tencent and JD

Vips receives $863M investment. Stockwinners.com
Vips receives $863M investment.

Tencent, JD.com, Vipshop announce investment, business cooperation – Tencent Holdings (TCEHY), JD.com (JD), and Vipshop (VIPS) jointly announced that Tencent and JD.com have entered into definitive agreements with Vipshop, such that Tencent and JD.com will invest an aggregate amount of approximately $863M in cash in Vipshop at the closing of the transaction.

Pursuant to the share subscription agreement, Tencent and JD.com will subscribe for newly issued Class A ordinary shares of Vipshop in the amount of approximately $604M and approximately $259M, respectively.

The purchase price will be $65.40 per Class A ordinary share, which is equivalent to $13.08 per American Depositary Share of Vipshop, five of which represent one Class A ordinary share.

The purchase price represents a 55% premium over the closing price of the ADSs as of the last trading day on December 15.

The transaction is expected to close in the near future, subject to customary closing conditions. Upon the closing, Tencent and JD.com will beneficially own, taking into account any existing holding, approximately 7% and 5.5%, respectively, of Vipshop’s total issued shares.

The Class A ordinary shares issued to Tencent and JD.com will be subject to a two-year lock up restriction. Tencent and JD.com will have the right to appoint a director and an observer, respectively, to Vipshop’s board of directors during the two-year lockup period.

After the end of the lock-up period, for so long as Tencent and JD.com hold approximately 12% and 8%, respectively, of Vipshop’s total issued shares, or otherwise by mutual agreement with Vipshop, they will maintain director and board observer rights.

Concurrently with the entry of the share subscription agreement, Tencent and JD.com have entered into business cooperation agreements with Vipshop, effective upon closing, establishing a cooperative relationship among Tencent, JD.com and Vipshop.

Under these agreements, Tencent will grant Vipshop an entry on the interface of Weixin Wallet enabling Vipshop to utilize traffic from Tencent’s Weixin platform, and JD.com will grant Vipshop entries on both the main page of JD.com’s mobile application and the main page of its Weixin Discovery shopping entry, and will assist Vipshop in achieving certain GMV targets through JD.com’s platform.

VIPS closed at $8.44. It last traded at $12.48.


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Barron’s is bullish on Alaska Air

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

Alaska air should bounce back in 2018 – While shares of Alaska Air (ALK) are down over 20% this year, they should get back up in 2018, Strauss writes in this week’s edition of Barron’s. With a lower valuation and a better dividend yield than many rivals, the company should rise after if fully integrates Virgin Air, which already is adding to earnings, he notes.

CBOE should not be treated as ‘set and forget’  – Bitcoin futures have pushed CBOE’s (CBOE) stock to a new record high, and some see the stock as a way to benefit from investors fascination with Bitcoin, Steven Sears writes in this week’s edition of Barron’s. However, Sears is recommending that investors no longer treat the shares as a “set and forget” position until it is clearer how the Bitcoin ecosystem will influence CBOE.

Spark Therapeutics selloff may be overdone – Spark Therapeutics (ONCE) shares plunged after the company released disappointing results for its hemophilia A treatment, but the selloff may be overdone given the company’s other promising treatments, Andrew Bary writes in this week’s edition of Barron’s.

More consolidation to come after Disney/Fox deal – Netflix (NFLX) success and its high valuation is forcing the rest of the TV work to scramble, Alex Eule writes in this week’s edition of Barron’s. In the wake of Disney’s (DIS) 21st Century Fox (FOXA; FOX) purchase, investors should expect more consolidation to come, he adds. Given that FOX RSN business looks very similar to MSG Networks (MSGN) and with Disney’s deal spurring a new wave of RSN interest, 208 could be the year that MSG gets sold, Barron’s says. Other potential attractive targets include AMC (AMCX) and Viacom (VIAB), Eule contends.

BEARISH  MENTIONS

Exxon (XOM) disclosure of climate-change regulation impact has risks – In a filing with the Securities and Exchange Commission, Exxon’s board acceded to a proxy request to disclose more about what tightening climate-change regulations may do to the long-term value of its hydrocarbon assets in the ground, Vito Racanelli writes in this week’s edition of Barron’s. Once Exxon discloses this information, companies that do not will be under pressure, he notes, adding that while more disclosure as a rule is good for shareholders, there are risks as it could hurt its competitive position and the ability to sell assets at a fair price.

New Apple iPhone features also bring software bugs – While each new Apple iPhone (AAPL) brings more “dazzling” features, it also brings a rising number of software bugs, Tiernan Ray writes in this week’s edition of Barron’s. Apple has little choice but to keep adding features to stay ahead of the pack, and one large cost is having to divert engineers to fix bugs, he adds.


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Tiffany seen as a take-over target

Tiffany seen as possible target for big European luxury player

Tiffany seen as a take over target. Stockwinners.com
Tiffany seen as a take over target

Shares of Tiffany (TIF) are on the rise after Citi analyst Paul #Lejuez upgraded the stock to Buy, citing currency tailwinds, tax reform and the increasing probability the jewelry retailer becomes a takeover target of an European luxury conglomerate.

BUY TIFFANY

In a research note to investors, Citi’s Lejuez upgraded Tiffany to Buy from Neutral and raised his price target on the shares to $115 from $92.

The third quarter brought several positive inflection points, he contended, noting that it was the first quarter in several years that the company saw strength in both the fashion category and the high/fine/solitaire category at the same time.

Further, Lejuez argued that the shares look attractive as currency tailwinds and tax reform should benefit the company’s earnings.

The analyst also told investors that he sees increasing probability that the jewelry retailer will become a target of an European luxury conglomerate, making Tiffany’s risk/reward that much more favorable.

Management seems to understand the challenges and opportunities and they are not sitting still, he pointed out, making the analyst more optimistic that the changes he has seen thus far have Tiffany on a better path for success.

WHAT’S NOTABLE

Earlier in the month, KeyBanc analyst Edward #Yruma also upgraded Tiffany to Overweight from Sector Weight, with a $115 price target, saying he believes the positive 1% Americas comparable sales growth in the third quarter points to the early stages of a more broad-based sales recovery.

Recent strength in silver jewelry is now being augmented by early signs of improvement in higher-end jewelry, Yruma argued, adding that he views Tiffany as a “strong brand.”

PRICE ACTION

In Thursday’s trading, shares of Tiffany have gained over 3% to $99.27.


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Disney goes shopping

Disney to acquire 21st Century Fox after spinoff of certain units for $52.4B

Disney to acquire 21st Century Fox for $52.4B

The Walt Disney Company (DIS) and Twenty-First Century Fox, Inc. (FOXA, FOX) announced that they have entered into a definitive agreement for Disney to acquire 21st Century Fox, including the Twentieth Century Fox Film and Television studios, along with cable and international TV businesses, for approximately $52.4B in stock.

Building on Disney’s commitment to deliver the highest quality branded entertainment, the acquisition of these complementary assets would allow Disney to create more appealing content, build more direct relationships with consumers around the world and deliver a more compelling entertainment experience to consumers wherever and however they choose.

Immediately prior to the acquisition, 21st Century Fox will separate the Fox Broadcasting network and stations, Fox News Channel, Fox Business Network, FS1, FS2 and Big Ten Network into a newly listed company that will be spun off to its shareholders.

Under the terms of the agreement, shareholders of 21st Century Fox will receive 0.2745 Disney shares for each 21st Century Fox share they hold.

The exchange ratio was set based on a 30-day volume weighted average price of Disney stock. Disney will also assume approximately $13.7B of net debt of 21st Century Fox.

The acquisition price implies a total equity value of approximately $52.4B and a total transaction value of approximately $66.1B which includes consolidated assets along with a number of equity investments.

SKY NEWS

Prior to the close of the transaction, it is anticipated that 21st Century Fox (FOX, FOXA) will seek to complete its planned acquisition of the 61% of Sky (SKYAY) it doesn’t already own. 21st Century Fox remains fully committed to completing the current Sky offer and anticipates that, subject to the necessary regulatory consents, the transaction will close by June 30, 2018.

Assuming 21st Century Fox completes its acquisition of Sky prior to closing of the transaction, The Walt Disney Company (DIS) would assume full ownership of Sky.

DIS closed at $107.61. FOX closed at $32.34.


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