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September 14, 2020

Arm Holdings sold for $40 billion

Nvidia to buy Arm Holdings from Softbank

Nvidia (NVDA) confirmed that it intends to buy chip design giant Arm Holdings for a total of up to $40 billion from existing owner SoftBank (SFTBY), which bought the company for $32 billion in 2016.

SoftBank will immediately receive $2 billion in cash for signing the deal. Then, it will receive another $10 billion in cash and $21.5 billion of stock in Nvidia at closing. That stake will be likely just a bit shy of 10% of the company.

Softbank bought Arm in 2016 for $32 billion

In addition, SoftBank is slated to earn $5 billion in a mix of cash and stock as a performance-based earn-out. Conditions or timing for that earn-out were not disclosed.

Nvidia buys Arm Holdings for $40 billion

Analysts’ Comments

Should Nvidia’s (NVDA) acquisition of SoftBank’s (SFTBY) ARM be allowed to proceed, it would create a “landscape-changing entity” that would combine two leading GPU and CPU architectures into a “single powerful ecosystem,” Deutsche Bank analyst Ross Seymore tells investors in a research note.

However, it this point that is likely to create the pushback from competitors and customers, says the analyst. Seymore questions whether ARM licensees would support an Nvidia acquisition saying “there could be a myriad of conflict of interest issues” whereby Nvidia could have access to competitor strategies and technologies in a variety of Nvidia-targeted markets. Seymore keeps a Hold rating on Nvidia shares.

Jefferies analyst Mark Lipacis raised the firm’s price target on Nvidia (NVDA) to $680 from $570 and keeps a Buy rating on the shares after the company announced an agreement to acquire ARM Holdings, subject to regulatory approvals. He views the deal as one that is “transformative” as it should position Nvidia to capture 80% of the ecosystem value in the data center and also unify the compute ecosystem between the edge and data center, Lipacis tells investors. Assuming the deal with Softbank (SFTBY) goes through, he thinks the merged company has a five-year EPS power of $50, said Lipacis, who also raised his “bull-case” target on Nvidia shares to $1,000.

RBC Capital analyst Mitch Steves keeps his Outperform rating on Nvidia (NVDA) after the company confirmed its acquisition of ARM Holdings last night, saying the transaction would be a positive if it can close amid the likely regulatory challenges to its completion. Steves adds that if the transaction closes, it would also be a “notable negative” for Intel (INTC), stating that Nvidia’s research and development funding would compete against Intel’s currently dominant x86 market share.

Wedbush analyst Matt Bryson made no change to his Outperform rating or $525 price target for Nvidia (NVDA) after the company and SoftBank (SFTBY) finalized an agreement whereby Nvidia will purchase ARM Holdings. While Bryson views the deal terms and expected synergies as favorable for Nvidia, the analyst believes it most likely will never be consummated unless the U.S./China relationship dynamic shifts considerably.

NVDA is up 5.8% to $514 while SFTBY is up 8.7% to $29.87.

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This article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility.

February 21, 2020

AVX sold for about $3.7B

AVX to be acquired by Kyocera for $21.75 per share in cash

AVX Corp. (AVX) announced that Kyocera and AVX have entered into a definitive merger agreement providing for the acquisition by Kyocera of all the outstanding shares of common stock of AVX not owned by Kyocera pursuant to an all-cash tender offer for $21.75 per share, followed by a squeeze-out merger in which all of the outstanding shares of AVX common stock not tendered in the Tender Offer will be converted into the right to receive $21.75 per share of common stock, in cash.

Kyocera currently owns approximately 72% of the outstanding shares of AVX common stock.

Following completion of the Transaction, AVX will become a wholly owned subsidiary of Kyocera.

Kyocera buys the rest of AVX shares that it did not own, Stockwinners

The $21.75 offer price represents a 44.6% premium over AVX’s closing price on November 26, 2019 and a 42.1%, 42.4%, and 34.9% premium over AVX’s 1-, 3- and 12- month average closing share price, respectively.

As previously announced, following receipt of a proposal from Kyocera to acquire all of the outstanding shares of AVX common stock that Kyocera does not own for a price of $19.50 in cash, the AVX board of directors appointed a special committee consisting of three independent directors of AVX for purposes of evaluating and negotiating a potential transaction with Kyocera.

Following the formation of the Special Committee, Kyocera and the Special Committee have been in discussions and negotiations regarding Kyocera’s proposal to acquire all of the outstanding shares of common stock of AVX not owned by Kyocera.

The board of AVX, acting on the recommendation of the Special Committee, has approved the Transaction and determined to recommend that the AVX stockholders tender their shares in the Tender Offer.

The Transaction is subject to customary closing conditions and is not subject to any financing condition. Kyocera has announced that it currently expects the Transaction to close in the fourth quarter of Kyocera’s fiscal year ending March 2020.

The Tender Offer will be subject to customary conditions and will not be subject to any minimum condition.

AVX is a leading worldwide manufacturer, supplier, and reseller of a broad line of electronic components, interconnect, sensing and control devices, and related products. Electronic components and connector, sensing and control products manufactured or resold by AVX are used in many types of end use products, including those in telecommunications, automotive, transportation, energy harvesting, consumer electronics, military/aerospace, medical, computer, and industrial markets.

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July 9, 2019

Acacia Communications sold for $2.6B

Cisco to acquire Acacia Communications for $70.00 per share in cash

Acacia Comms tumbles, Stockwinners.com — Acacia Comms. sold to Cisco, Stockwinners.com

Cisco (CSCO) and Acacia Communications (ACIA) announced they have entered into a definitive agreement under which Cisco has agreed to acquire Acacia.

An existing Cisco supplier, Acacia designs and manufactures high-speed, optical interconnect technologies that allow web scale companies, service providers, and data center operators to meet the fast-growing consumer demands for data.

Under the terms of the agreement, Cisco has agreed to acquire Acacia for $70.00 per share in cash, or for approximately $2.6B on a fully diluted basis, net of cash and marketable securities.

The acquisition is expected to close during the second half of Cisco’s FY2020, subject to customary closing conditions and required regulatory approvals.

Cisco, whose equipment makes up the backbone of the internet and corporate networks, has recently rekindled growth by revamping existing products and adding new software and services under a corporate makeover by Chief Executive Officer Chuck Robbins. In May, the company gave a bullish sales and profit forecast for the current period, a sign that corporations continue to spend on computer networks despite the trade dispute between China and the U.S.

Bill Gartner, who heads Cisco’s Optical Systems and Optics, wrote that Acacia’s products “are designed to transform communications networks through improvements in performance, capacity and cost.” He added that Acacia’s coherent optics technology will build on Cisco’s strength in optical, silicon, and software technologies.

Upon completion of this transaction, Acacia employees will join Cisco’s Optical Systems and Optics business within the networking and security business under David Goeckeler.

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March 27, 2019March 27, 2019

Quantenna sold for $1.07 billion

ON Semiconductor to acquire Quantenna for $24.50 per share

ON Semiconductor Corporation (ON) and Quantenna Communications, Inc. (QTNA) announced that they have entered into a definitive agreement for ON Semiconductor to acquire Quantenna for $24.50 per share in an all cash transaction.

The acquisition consideration represents equity value of approximately $1.07B and enterprise value of approximately $936M, after accounting for Quantenna’s net cash of approximately $136M at the end of fourth quarter of 2018.

The acquisition significantly enhances ON Semiconductor’s connectivity portfolio with the addition of Quantenna’s industry leading Wi-Fi technology and software capabilities.

Following consummation, the transaction is expected to be immediately accretive to ON Semiconductor’s non-GAAP earnings per share and free cash flow, excluding any non-recurring acquisition related charges, the fair value step-up inventory amortization, and amortization of acquired intangibles.

The transaction is not subject to a financing condition. ON Semiconductor intends to fund the transaction through cash on hand and available capacity under its existing revolving credit facility.

Completion of the transaction is subject to approval by Quantenna’s stockholders, regulatory approvals and other customary closing conditions.

The transaction has been approved by ON Semiconductor’s and Quantenna’s boards of directors and is expected to close in the second half of 2019.

No approval of the stockholders of ON Semiconductor is required in connection with the proposed transaction.

Note that QNTA was featured by Stockwinners on February 22 at $18.00.

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March 13, 2019March 13, 2019

5G Service coming to Chicago and Minneapolis

Verizon discloses pricing for first 5G mobile service

Verizon brings 5G service to Chicago and Minneapolis, Stockwinners

Verizon (VZ) earlier said it will launch its 5G Ultra Wideband Network in Chicago and Minneapolis on April 11.

To coincide with this launch, Verizon is offering the new 5G moto mod, which is exclusive to Verizon. Beginning March 14, customers anywhere in the U.S. can pre-order the 5G moto mod.

Verizon said: “Select areas of Chicago and Minneapolis will be the first to experience Verizon’s 5G Ultra Wideband mobile service, and the company has plans to rapidly expand the coverage area.

Last month, Verizon announced that it intends to launch its 5G Ultra Wideband network in more than 30 U.S. cities in 2019.”

It added, “For a limited time, preorder the 5G moto mod for just $50 ($349.99 retail).

5G Antennas are the size of a large pizza, Stockwinners

Verizon postpaid customers with any Verizon unlimited plan, including Go Unlimited, Beyond Unlimited or Above Unlimited, get unlimited 5G data for $10 per month (with the first three months free).

To buy a 5G moto mod, customers must either have an active moto z3 on their account or purchase a moto z3 at the same time as the 5G moto mod.”

What is 5G?

Like the earlier generation 2G, 3G, and 4G mobile networks, 5G networks are digital cellular networks, in which the service area covered by providers is divided into a mosaic of small geographical areas called cells.

Analog signals representing sounds and images are digitized in the phone, converted by an analog to digital converted transmitted as a stream of bits.

All the 5G wireless devices in a cell communicate by radio waves with a local antenna array and low power automated transceiver(transmitter and receiver) in the cell, over frequency channels assigned by the transceiver from a common pool of frequencies, which are reused in geographically separated cells.

The local antennas are connected with the telephone network and the Internet by a high bandwidth optical fiber or wireless backhaul connection. Like existing cellphones, when a user crosses from one cell to another, their mobile device is automatically “handed off” seamlessly to the antenna in the new cell.

Their major advantage is that 5G networks achieve much higher data rates than previous cellular networks, up to 10 Gbit/s; which is faster than current cable internet, and 100 times faster than the previous cellular technology, 4G LTE.

Another advantage is lower network latency (faster response time), below 1 ms (millisecond), compared with 30 – 70 ms for 4G.^[ Because of the higher data rates, 5G networks will serve not just cellphones but are also envisioned as a general home and office networking provider, competing with wired internet providers like cable. Previous cellular networks provided low data rate internet access suitable for cellphones, but a cell tower could not economically provide enough bandwidth to serve as a general internet provider for home computers.

5G networks achieve these higher data rates by using higher frequency radio waves, in or near the millimeter wave band from 30 to 300 GHz, whereas previous cellular networks used frequencies in the microwave band between 700 MHz and 3 GHz.

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November 9, 2018

Finisar sold for $3.2 billion

II-VI to acquire Finisar for $26 per share in cash/stock deal

II-VI (IIVI) and Finisar (FNSR) announced that they have entered into a definitive merger agreement under which II-VI will acquire Finisar in a cash and stock transaction with an equity value of approximately $3.2B.

Under the terms of the merger agreement, which has been unanimously approved by the Boards of Directors of both companies, Finisar’s stockholders will receive, on a pro-rated basis, $15.60 per share in cash and 0.2218x shares of II-VI common stock, valued at $10.40 per share based on the closing price of II-VI’s common stock of $46.88 on November 8, 2018.

The transaction values Finisar at $26.00 per share, or approximately $3.2B in equity value and represents a premium of 37.7% to Finisar’s closing price on November 8, 2018. Finisar shareholders would own approximately 31% of the combined company.

The combination of II-VI and Finisar would unite two innovative, industry leaders with complementary capabilities and cultures to form a formidable industry leading photonics and compound semiconductor company capable of serving the broad set of fast growing markets of communications, consumer electronics, military, industrial processing lasers, automotive semiconductor equipment and life sciences.

Together, II-VI and Finisar will employ over 24,000 associates in 70 locations worldwide upon closing of the transaction. On a pro forma basis, the combined company had approximately $2.5B of annual revenue.

The combined broad base of talent, technology and manufacturing is expected to enhance the ability to better address near-to medium-term opportunities and accelerate revenue growth.

The combined company expects to realize $150M of run-rate cost synergies within 36 months of closing. Synergies are expected to be achieved from procurement savings, internal supply of materials and components, efficient research and development, consolidation of overlapping costs and sales and marketing efficiencies.

The transaction is expected to drive accretion in Non-GAAP earnings per share for the first full year post close of approximately 10% and more than double that thereafter.

II-VI intends to fund the cash consideration with a combination of cash on hand from the combined companies’ balance sheets and $2 billion in funded debt financing.

The transaction is expected to close in the middle of calendar year 2019, subject to approval by each company’s shareholders, antitrust regulatory approvals and other customary closing conditions.Upon closing of the transaction, Dr. Mattera will continue to serve as President and CEO of the combined company.

In addition, in connection with the closing of the transaction, three Finisar board members will be appointed to the II-VI board, which will be expanded to 11 directors.

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November 6, 2018

ConvergeOne sold for $1.8 billion

ConvergeOne to be acquired by CVC for $12.50 per share

ConvergeOne Holdings (CVON) announced that it has entered into a definitive agreement to be acquired by affiliates of CVC Fund VII in an all-cash transaction valued at approximately $1.8B.

ConvergeOne Holdings, Inc. provides collaboration and technology solutions for large and medium enterprises in the United States. The company offers unified communications solutions, including communications applications, such as voice, email, presence, chat/text, and video technologies; voice and text messaging solutions; mobility and bring your own device solutions for business continuity with the seamless connection of mobile, landline, cellular, and Wi-Fi enabled devices.

Subject to customary closing conditions and regulatory approvals, ConvergeOne expects the transaction to close in the fourth quarter of 2018 or the first quarter of 2019.

ConvergeOne will maintain its corporate headquarters in Eagan, MN and continue to be led by its current executive team.

Pursuant to the terms of the merger agreement, affiliates of CVC will commence a tender offer for all of the outstanding shares of the company in an all-cash transaction valued at $12.50 per share of common stock of the company, representing a 35% premium to the thirty-day VWAP prior to October 25, 2018 and representing over a 56% premium to the closing price on ConvergeOne’s debut date on the Nasdaq on February 23.

John McKenna Jr., Chairman and CEO of ConvergeOne commented, “Today’s announcement is a tremendous accomplishment for ConvergeOne and highlights the continued success of the Company. We are extremely proud of the ConvergeOne team, and we truly appreciate our phenomenal partnership with Clearlake and our other shareholders that has resulted in significant value creation. Our team is thrilled to partner with CVC to execute on the compelling growth opportunities in the rapidly evolving collaboration and technology services market.”

CVON closed at $9.43.

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April 16, 2018

New tariff road kills: Acacia, Lumentum and Oclaro

Acacia, Oclaro plunge after U.S. bans sales to China’s ZTE

Lumentum to acquire Oclaro for $1.8B. Stockwinners.com — Oclaro tumbles on tariffs

Shares of several optical networking component providers – including Acacia Communications (ACIA), Oclaro (OCLR) and Lumentum (LITE) – are sliding after the U.S. Department of Commerce reportedly banned U.S. companies from selling components to Chinese telecom equipment maker ZTE Corp. (ZTCOY).

Loop Capital analyst James Kisner previously has noted that China’s ZTE announced it was raising $2.1B to fund the development and deployment of 5G wireless networks, which he read as a positive sign for optical component vendors. Oclaro (OCLR) and Acacia Communications (ACIA) have notable exposure to ZTE, Kisner pointed out, adding that he expected most optical component makers to benefit from 5G deployment in China.

In Monday’s trading following the news of the ZTE sales ban, Acacia shares have fallen over 18%, Oclaro has dropped 7.5% and Lumentum is down 8%.

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March 19, 2018

Universal Display, other Apple suppliers fall as company to develop own screens

Shares of organic light-emitting diode technology maker Universal Display (OLED) and other suppliers are down in morning trading amid speculation Apple (AAPL) is producing its own device displays for the first time.

APPLE DEVELOPING DISPLAYS

Apple has been quietly designing and producing limited quantities of its own MicroLED device screens for the first time “for testing purposes” using a manufacturing facility near its headquarters, Bloomberg reported Monday, citing people familiar with the matter.

The move by the company, which is significantly investing in the development of the next-generation MicroLED screens that aim to make devices slimmer and less of a drain on power, could potentially hurt a range of suppliers in the long-term, from screen makers like Samsung (SSNLF), Japan Display, Sharp (SHCAY) and LG Display (LPL) to companies like Synaptics (SYNA) and Universal Display, according to the report.

The MicroLED screens are much more difficult to produce than organic light-emitting diode screens and customers will likely have to wait a few years before the technology is released.

Apple is planning to make the new displays available first in future Apple Watch devices, but it is unlikely the screens will reach an iPhone for at least three to five years.

An Apple spokeswoman declined to comment when contacted by Bloomberg.

WHAT’S NOTABLE

LG Display is expected to start supplying some of the OLED displays for Apple’s iPhone X, shipping as many as 60M displays for the smartphone starting in June, CNBC reported in December.

At the time of the report, discussions between Apple and LG Display were ongoing and LG said, “Regarding the OLED supply deal for Apple’s iPhone X, nothing has been set in detail.

When anything is confirmed in detail, we will announce it.” Apple has previously used Samsung as its exclusive supplier of OLED panels for iPhones.

PRICE ACTION

In Monday’s trading, shares of Universal Display dropped 10.1% to $111.52. Meanwhile, shares of LG Display trading in New York were down 1.2% to $12.92, Sharp fell 2.2% to $8.05 and Synaptics dropped 1% to $47.35.

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March 12, 2018

Lumentum to acquire Oclaro for $1.8B

Lumentum to acquire Oclaro for $1.8B in cash and stock

Lumentum Holdings (LITE) and Oclaro (OCLR) announced that the two companies have signed a definitive agreement, unanimously approved by the boards of both companies, pursuant to which Lumentum will acquire all of the outstanding common stock of Oclaro. For each share of Oclaro stock held, Oclaro stockholders will be entitled to receive $5.60 in cash and 0.0636 of a share of Lumentum common stock, subject to the terms of the definitive agreement.

The transaction values Oclaro at $9.99 per share or approximately $1.8B in equity value, based on the closing price of Lumentum’s stock on March 9, of $68.98.

The transaction value represents a premium of 27% to Oclaro’s closing price on March 9 and a premium of 40% to Oclaro’s 30 day average closing price.

Oclaro stockholders are expected to own approximately 16% of the combined company at closing.

The transaction is expected to generate more than $60M of annual run-rate synergies within 12 to 24 months of the closing and be immediately accretive to non-GAAP earnings per share.

Lumentum intends to fund the cash consideration with a combination of cash on hand from the combined companies’ balance sheets and $550M in debt financing. The transaction is expected to close in the second half of calendar 2018, subject to approval by Oclaro’s stockholders, antitrust regulatory approval in the U.S. and China, and other customary closing conditions.

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March 1, 2018

Asia Pacific Wire and Cable is in play

Lonsin Capital submits indication of interest to acquire majority of APWC

LONSIN Capital Limited, together with its affiliates, representing over 5% of the shares outstanding of Asia Pacific Wire and Cable (APWC) on February 23, 2018 wrote to the Board of Directors of the Company and to the Board of Directors of the main Shareholder Pacific Electric Wire and Cable Co. the intention of interest to acquire a majority of APWC US at $4.00 per share.

The proposal would represent a 62% premium to February 22, 2018 ‘s close of $2.475 and a 47% premium to the five-year average closing price on NASDAQ.

LONSIN said, “LONSIN has expressed concern to the management, both orally and in writing, concerning the failure of the Company to take sufficient action to enhance shareholder value and to include an additional independent director on the Company’s board of directors over time.

On May 18, 2016 LONSIN wrote a requisitioned, open letter to the Board of Directors of APWC asking the Board to consider a range of measures that could help deliver enhanced shareholder value without much cost to the Company.

The Board responded by stating that they ‘took very seriously concerns about shareholder value.’…In light of the underwhelming track record of the incumbent Board and Management of APWC over the short, medium and longer term, LONSIN believes that the acquisition of the majority stake would bring ‘fresh impetus’ to APWC’s assets and ‘swiftly deliver enhanced value for all shareholders.'”

A response received from the Board of PEWC’s US legal counsel, Michael Hagan, on February 27, 2018 states that the “LONSIN letter has been circulated to the board for their consideration.”

The response goes on to state that “a substantive response to the LONSIN offer” will be issued in due course but it is unlikely to be before the March 8, 2018 owing to existing commitments of the directors.

APWC closed at $2.50.

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January 16, 2018

Blackhawk Network sold for $3.5 billion

Blackhawk to be acquired by Silver Lake, P2 Capital Partners for $45.25 a share

Blackhawk Network (HAWK) announced that Silver Lake, the global leader in technology investing, and P2 Capital Partners have agreed to acquire Blackhawk in an all-cash transaction for a total consideration of approximately $3.5 billion, which includes Blackhawk’s debt.

Under the terms of the agreement, Blackhawk stockholders will receive $45.25 per share in cash upon closing of the transaction, representing a premium of 24.0% over Blackhawk’s closing share price of $36.50 on January 12, 2018 and a premium of 29.3% over the average closing share price during the 90 calendar days ended January 12, 2018.

Blackhawk operates a leading physical and digital gift card and prepaid payments network with global scale, connecting more than 1,000 brands to over 244,000 retail distribution locations and online channels.

Upon completion of the transaction Blackhawk will operate as a private company under the leadership of the current management team.

Blackhawk’s Board of Directors has unanimously approved the definitive merger agreement and recommends that stockholders vote in favor of the transaction.

The definitive agreement has fully committed debt and equity financing, including an approximately $1.7 billion equity commitment from Silver Lake.

P2 Capital Partners, which beneficially owns approximately 5.4% of Blackhawk’s outstanding common stock, has committed to vote in favor of the proposed transaction.

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January 16, 2018

Worldwide IT spending to reach $3.7T in 2018

Gartner says worldwide IT spending to reach $3.7T in 2018

Worldwide IT spending is projected to total $3.7 trillion in 2018, an increase of 4.5 percent from 2017, according to the latest forecast by Gartner, Inc. (IT)

“Global IT spending growth began to turn around in 2017, with continued growth expected over the next few years. However, uncertainty looms as organizations consider the potential impacts of Brexit, currency fluctuations, and a possible global recession,” said John-David Lovelock, research vice president at Gartner.

“Despite this uncertainty, businesses will continue to invest in IT as they anticipate revenue growth, but their spending patterns will shift.

Projects in digital business, blockchain, Internet of Things, and progression from big data to algorithms to machine learning to artificial intelligence (AI) will continue to be main drivers of growth.”

The devices segment is expected to grow 5.6 percent in 2018. In 2017, the devices segment experienced growth for the first time in two years with an increase of 5.7 percent.

End-user spending on mobile phones is expected to increase marginally as average selling prices continue to creep upward even as unit sales are forecast to be lower.

PC growth is expected to be flat in 2018 even as continued Windows 10 migration is expected to drive positive growth in the business market in China, Latin America and Eastern Europe.

The impact of the iPhone 8 and iPhone X was minimal in 2017, as expected. However, iOS shipments are expected to grow 9.1 percent in 2018.

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January 7, 2018

Barron’s is bullish on Gold and FedEx, bearish on Caterpillar

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

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

BULLISH MENTIONS:

FedEx EPS (FDX) growth should more than triple next year – U.S. postal rates look likely to rise, pinching Amazon (AMZN) and benefiting FedEx and UPS (UPS), Jack Hough writes in this week’s edition of Barron’s. While for now UPS enjoys higher profit margins, investors should favor FedEx as years-long investment in automating and expanding its hubs has given the company a speed and efficiency advantage over the former, he adds. Earnings per share growth for FedEx should more than triple next year as tax cuts kick in, the report notes.

Deal makers now ‘on the clock.’ – Deal makers may be on the clock, especially if one believes that the bull market is in its waning stages and the Federal Reserve is serious about interest rate hikes, Alex Eule writes in this week’s edition of Barron’s. 2018 merger speculation already kicked off in a big way, with headlines that Amazon (AMZN) could buy Target (TGT) and Apple could acquire Netflix (NFLX), he notes, adding that M&A may be necessary to grow and even to survive.

Valero, Home Depot among companies expected to raise dividend – Charles Schwab (SCHW), Home Depot (HD), Valero Energy (VLO), NextEra Energy (NEE), Allstate (ALL) and Cisco Systems (CSCO) are among the large companies expected to announce healthy dividend increases soon, Lawrence Strauss writes in this week’s edition of Barron’s. These projected boosts come amid a solid outlook for dividend growth in the U.S. and globally, he adds.

Intel not to be blamed for failures of computer security – Intel (INTC) came under fire for the revelation that its chips were vulnerable, but the nature of technology and how the industry approaches computer security are the real problem, not Intel chips, Tiernan Ray writes in this week’s edition of Barron’s. There may be things Intel can do, and in fact AMD (AMD), whose chips run the same software, said its products are less vulnerable than Intel’s, he notes, but difference here are just relative as hackers’ inventiveness will continue.

Kohl’s making right moves to grow earnings. – Until recently, Kohl’s (KSS) was largely written off as a casualty of Amazon’s (AMZN) domination of the retail sector, but the stock has become one of the hottest plays in retail as investors increasingly believe that the e-Commerce giant could acquire the company, Steven Sears writes in this week’s edition of Barron’s. Even without Amazon, Kohl’s seems to be making the right moves to grow earnings, he adds.

Gold rally may be ‘just the start.’ – Gold’s recent rally could be just the start, and investors betting on a new bull market in gold can buy physical gold, mining stocks or funds that track the metal and mining shares, with junior miners typically outperforming big-caps in a gold bull market, John Kimelman writes in this week’s edition of Barron’s. Publicly traded companies in the sector include Newmont Mining (NEM), Barrick Gold (ABX), Goldcorp (GG) and Agnico Eagle (AEM).

BEARISH MENTIONS:

Bank earnings could ‘be messy.’ – The backdrop for banks could not be much better but earnings season is about to begin – with JPMorgan (JPM), Wells Fargo (WFC) and PNC Financial (PNC) expected to report on Friday – and it could “be messy,” Ben Levisohn writes in this week’s edition of Barron’s. While tax reform should be a boon for banks, it will also produce one-time charges and gains that will need to be accounted for, he adds.

Time to sell Caterpillar – In a follow-up story, Barron’s says that with Caterpillar (CAT) soaring, it is time to sell. Investors should not expect the stock to move quickly from here, as cyclical companies like Caterpillar tend to trade at high multiples of earnings at the bottom of the cycle and low multiples at the top, it adds.

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December 31, 2017

Barron’s is bullish on Chevron and Corning

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

Stockwinners offers Barron’s review of stocks to buy

BULLISH MENTIONS

Chevron positioned to benefit in 2018 – No oil major is better positioned to benefit than Chevron (CVX) in 2018, who said it would spend about $18B next year while it starts to reap the benefits from the big projects that had been consuming cash since 2011, Ben Levisohn writes in this week’s edition of Barron’s.

Corning shares could gain over 25%– Shares of Corning (GLW) could keep climbing as demand grows for optical fiber, LCD-panel glass, and Gorilla Glass, Leslie Norton writes in this week’s edition of Barron’s.

Facebook could consider cash dividend – None of the fast-growing giants, namely Facebook (FB), Amazon (AMZN), Netflix (NFLX) and Alphabet (GOOG; GOOGL), pay a cash dividend, but that may change before long, Jon Swartz writes in this week’s edition of Barron’s. Facebook is pushing up against the limits of growth, and if growth begins to taper, investors will begin calling for new strategies, such as dividends and stock buybacks, he notes. Several factors make Facebook the most likely FANG candidate to offer a dividend, perhaps as early as 2019, including sufficient earnings, Swartz contends.

‘Good time’ to buy GlaxoSmithKline stock. GalxoSmithKline’s (GSK) earnings estimates have been sliding and shares have tumbled since the summer, but now looks like a good time to buy the stock, Jack Hough writes in this week’s edition of Barron’s. While GlaxoSmithKline will suffer an earnings hit in 2018 from new generic competition, it should get back on track quickly, he contends.

BEARISH MENTIONS

Some retail stocks look vulnerable – In a follow-up story, Barron’s says that prudent investors should assume that the recent burst of sunshine will give way to more rainy days for retail. Macy’s (M) may look inexpensive but its earnings per share are expected to tumble in each of the next two years, J.C. Penney (JCP) is in a long-term fight for its existence, Sears Holdings (SHLD) makes the former look like Amazon (AMZN), and Abercrombie & Fitch (ANF) sells a deflationary good at a dying venue against a fashion headwind, the report added. On the other hand, Barron’s argued that Wal-Mart’s (WMT) improvement remains intriguing, Home Depot (HD) and TJX (TJX) remain long-term winners, and Five Below (FIVE) seems to be a genuine fast-grower.

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