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WFC | Wells Fargo warns on retail high flyer | News is free at Seeking Alpha
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WFC | 3 Wells Fargo Advantage Mutual Funds For Steady Returns | Wells Fargo NYSE WFC Advantage Funds managed more than 503 billion of assets as of Sep 30 2019 from diverse mutual fund categories The fund family manages a wide variety of mutual funds from domestic and foreign funds to money market funds asset allocation funds and fixed income funds The Wells Fargo Fund family claims that it offers funds in every key category each guided by professional investment teams that have been chosen because of their proven time tested strategies Additionally the owner of the Wells Fargo Advantage Funds brand Wells Fargo is one of the top four banks in the United States which has been maintaining its standard in the financial services sector for more than 150 years It is a highly diversified financial services company with operations not limited to the domestic market Below we share with you three top ranked Wells Fargo Advantage Funds Each has earned a Strong Buy or 2 Buy and is expected to outperform its peers in the future To view the Zacks Rank and past performance of all Wells Fargo Advantage Funds investors can Wells Fargo Utility and Telecommunications Fund Class A invests heavily in common and preferred stocks and investment grade debt securities of utilities and telecom service providers EVUAX also invests around 35 of its assets in convertible debentures of utilities and telecom companies EVUAX has three year annualized returns of 14 4 As of November 2019 EVUAX held 33 issues with 8 17 of its assets invested in Eversource Energy Wells Fargo International Bond Fund Class R6 aims for total return The fund invests majority of its assets in foreign debt securities These may comprise obligations of governments corporate bodies or supranational agencies spread across a range of currencies ESIRX has three year annualized returns of 4 8 Michael Lee has been one of the fund managers of ESIRX since 1993 Wells Fargo CoreBuilder Shares Series M seeks maximization of returns through growth of income and capital WFCMX invests more than 60 of its assets in municipal securities which offer federal income tax exempted interest WFCMX has three year annualized returns of 6 WFCMX has an expense ratio of 0 00 compared with the category average of 0 76 To view the Zacks Rank and past performance of all Wells Fargo Advantage Funds investors can Want key mutual fund info delivered straight to your inbox Zacks free Fund Newsletter will brief you on top news and analysis as well as top performing mutual funds each week |
TEVA | Antares Pharma ATRS In Focus Stock Moves 10 2 Higher | Antares Pharma Inc NASDAQ ATRS was a big mover last session as the company saw its shares rise more than 10 on the day Shares moved up after the company along with Teva Pharmaceutical Industries NYSE TEVA Ltd announced the launch of the generic equivalent to Imitrex sumatriptan succinate injection 4 mg and 6 mg single dose prefilled syringe autoinjectors in the U S This led to solid volume too with far more shares changing hands than in a normal session This stock trading in a volatile price range of 0 95 1 17 in the past one month time frame showed a pick up yesterday at 1 05 None of the estimates for this Med Dental Supplies industry stock were revised over the past 30 days However the Zacks Consensus Estimate moved down over the same time frame signaling trouble down the road So make sure to keep an eye on this stock going forward to see if yesterday s move higher lasts Antares Pharma has a Zacks Rank 4 Sell while its is 0 00 ANTARES PHARMA Price However a better ranked stock in the same space is Halyard Health Inc NYSE HYH sporting a Zacks Rank 1 Strong Buy Is ATRS going up Or down Predict to see what others think or |
WFC | Mondelez Soars on Modest Earnings Beat | By Kim Khan
Investing com Sometimes doing good enough is more than enough for Wall Street
That proved true for international snack and drinks company Mondelez Thursday as it posted decent quarterly results and steady guidance but saw its stock shoot up in morning trading
Mondelez NASDAQ MDLZ shares rose 6
The maker of Oreos Toblerone and Tang reported a fourth quarter profit of 61 cents per share and sales of 6 91 billion
That compares with expectations for a profit of 60 cents per share and sales 6 84 billion according to forecasts compiled Investing com
Looking ahead Mondelez NASDAQ MDLZ Mondelez said is still sees organic net revenue growth of 3 plus and high single digit percent growth for adjusted EPS
Wells Fargo NYSE WFC said earlier this week cost savings can fund reinvestment while savings and operating leverage enable margin expansion
The stock had been treading water for the last six months down about 0 5 before today s bounce |
WFC | Wells Fargo Not Ready to Throw in the Towel | Wells Fargo NYSE WFC continues to be a perennial underperformer among the mega cap banks In a week that saw most of its major competitors beat their estimates Wells Fargo went the other way with disappointing results and the share price reacted accordingly falling about 5 in a single day Is it time for shareholders to throw in the towel or should they stay the course
Wells Fargo s earnings were bleak on almost every measure Revenue fell 1 4 year over year largely driven by an 11 drop in net interest income Profits fell by even more over 50 due to a 17 increase in noninterest expenses The main culprit was a 1 9 billion legal charge highlighting the fact that Wells Fargo continues to be hindered by its involvement in prior sales scandals More concerning was the lack of clarity around future litigation costs and other expenses over the next several quarters
Wells Fargo continues to lag behind its peers
Contrast these results with the other two megabanks that reported on the same day Both JPMorgan Chase and Citigroup surpassed analyst expectations and raised revenues by 9 and 7 respectively Earnings per share rose double digits 30 at JPMorgan and 31 at Citi while noninterest expense growth was limited to mid single digits No wonder then that JPMorgan s and Citi s share prices rose while Wells Fargo s fell
Under these circumstances an investor could be forgiven for selling the shares However the same investor should understand that Wells Fargo s fourth quarter results are by nature backward looking as they primarily reflect the efforts of prior management while new CEO Charles Scharf had only been on board for three months going into earnings It is also not unusual for new management to lower the bar on results so as to steepen the trajectory of improvement on their watch
But change will come with a new team at the helm
Moreover as disappointing as the company s results were there were signs of improvement Wells Fargo saw growth in both loans and deposits as well as a pickup in its various consumer segments such as auto loans mortgage originations and credit card volumes Its investment banking market share rose 0 5 and customer satisfaction noticeably picked up in the community banking business These trends highlight the company s competitive strengths which remain formidable despite what s happened over the past several years
With Scharf at the helm Wells Fargo should be able to coordinate more closely with regulators and work toward putting its compliance related issues behind it Scharf has also reinforced the ranks of senior management at the firm by bringing in key personnel such as William Daley who served as White House chief of staff under President Barack Obama and Scott Powell former head of Santander Consumer USA Although still a work in progress Wells Fargo is setting the stage for a recovery and an end to the extended period of share price underperformance
How long this process will take is anybody s guess But in the meantime investors who are interested in banks can find solace in a stock that is trading at a discount both relative to its historical range as well as its peers and sports a dividend yield in excess of 4 to boot Far from throwing in the towel the patient investor might want to add |
WFC | Wells Fargo Advantage Income Opportunities Fund declares 0 05936 dividend | Wells Fargo Advantage Income Opportunities Fund NYSEMKT EAD declares 0 05936 share monthly dividend 0 5 increase from prior dividend of 0 05911
Forward yield 8 45
Payable March 2 for shareholders of record Feb 14 ex div Feb 13
See EAD Dividend Scorecard Yield Chart Dividend Growth |
WFC | Wells Fargo Advantage Utilities High Income Fund declares 0 07988 dividend | Wells Fargo Advantage Utilities High Income Fund NYSEMKT ERH declares 0 07988 share monthly dividend 0 5 increase from prior dividend of 0 07949
Forward yield 6 45
Payable March 2 for shareholders of record Feb 14 ex div Feb 13
See ERH Dividend Scorecard Yield Chart Dividend Growth |
WFC | U S bank regulator sharpens teeth on Wells Fargo surprising critics | By Pete Schroeder and Chris Prentice WASHINGTON Reuters Long accused of being too soft a U S bank regulator has surprised its critics with tough treatment of scandal ridden lender Wells Fargo NYSE WFC culminating on Thursday in more than 58 million in fines against eight former executives at the bank Consumer groups had worried that the Trump administration s pick to lead the Office of the Comptroller of the Currency OCC Joseph Otting would do little to change its reputation for leniency A former chief executive of California s OneWest Bank Otting as comptroller has referred to lenders as his customers and pursued rule changes pushed for by bank lobbyists But when it comes to Wells Fargo s sales practices Otting has consistently been a harsh critic driving penalties against the bank which have broken new ground One person with knowledge of the matter said Wells Fargo s failure to swiftly fix systemic misconduct has angered Otting precisely because he spent decades as a banker and felt he was held to high standards You would get far more significant penalties from someone who has been in the business and is disappointed in what Wells Fargo has done said Thomas Vartanian a law professor at George Mason University and former OCC official On Thursday the OCC banned former Wells Fargo CEO John Stumpf from the banking industry and fined him 17 5 million to settle charges he failed to put a stop to sales misconduct the most it has ever secured from an individual Among other former executives charged was retail banking head Carrie Tolstedt who has not yet settled and is potentially facing a whopping 25 million penalty After watchdogs including the OCC failed to charge senior Wall Street executives for their role in the 2007 2009 financial crisis lawmakers have pressed them to hold more individuals responsible for corporate wrongdoing Proving personal culpability though is legally tough which makes Thursday s charges all the more striking The OCC actions are eye popping in terms of the number and seniority of the individuals charged said Erik Gerding a law professor at the University of Colorado adding there had not been such a high profile executive crackdown in recent memory Arthur Wilmarth a law professor at George Washington University said he was surprised the OCC had pursued such drastic charges It s fair to say they ve always been viewed as probably the most bank friendly regulator he added On Thursday Otting said in a statement that the charges reinforce the agency s expectations that management and employees provide fair access to financial services treat customers fairly and comply with applicable laws LOW BAR In addition to Thursday s charges the OCC fined Wells Fargo 500 million in 2018 for product mis selling only the second time it has dished out a penalty of that size That settlement requires the bank to make extensive fixes and to repay harmed customers an effort the OCC has been monitoring closely It also imposed novel restrictions on the bank by giving the OCC the right to remove current executives and to vet new ones Otting s frustration with Wells Fargo s slow progress on its remediation effort was laid bare in March last year Then CEO Tim Sloan had just finished telling Congress the bank was back on track when the OCC responded with a rare public rebuke saying it continued to be disappointed in the bank The comptroller s public loss of confidence in Sloan contributed to his abrupt departure later that month Reuters reported at the time Wells Fargo has said repeatedly it was making every effort to fix its problems On Thursday the bank s new CEO Charlie Scharf said in a statement Wells Fargo had made fundamental changes to its business model compensation programs leadership and governance By being strict with Wells Fargo the OCC may also be trying to shed its image as a soft touch said Wilmarth You hammer this one bank and its executives and when people accuse you of being bank friendly you say Look how tough we were on Wells Fargo he added The OCC was lambasted for missing signs of the brewing financial crisis and was again criticized for failing to catch Wells Fargo s problems in the first place An internal OCC review found its examiners failed to follow up on red flags including hundreds of whistleblower complaints While Otting is personally aggrieved by the bank s lapses he has also been under pressure from lawmakers to take a tough line The pressure has come particularly from progressive U S senator and Democratic presidential candidate Elizabeth Warren who has voiced sometimes stinging skepticism of the agency
No one has been tougher on Wells Fargo than myself Otting told Warren when defending his record before Congress in May At the OCC Warren replied That s a low bar |
WFC | Cramer s lightning round The right opportunity to buy Wells Fargo | It s that time again Mad Money host Jim Cramer rings the lightning round bell which means he s giving his answers to callers stock questions at rapid speed |
WFC | Wells Fargo gets upgrade by Baird | Wells Fargo NYSE WFC rises 1 1 in premarket trading after Baird analyst David George upgrades the bank to Neutral from Underperform
Sets price target at 50 implying 6 2 upside potential from Monday s closing price of 47 10
George s rating agrees with Quant rating of Neutral and Sell Side average rating of Neutral 1 Very Bullish 2 Bullish 19 Neutral 3 Bearish 4 Very Bearish
It contrasts with SA Authors average rating of Bullish 1 Very Bullish 4 Bullish 5 Neutral |
WFC | In post repo squeeze twist Fed may nudge up interest paid to banks | By Jonnelle Marte Reuters One potential side effect of the U S Federal Reserve s efforts to pump liquidity into the banking system and avoid further unwanted surges in short term borrowing rates The central bank may soon have to take measures to keep interest rates from getting too low Some economists and strategists expect the Fed to make a slight increase this week on the interest it pays on excess reserves held at the central bank or IOER The tweak would be viewed as a mechanical move aimed at lifting the effective federal funds rate currently near the bottom of the Fed s target range Raising the IOER could bring the effective funds rate closer to the middle of the Fed s target range of 1 5 to 1 75 said Zachary Griffiths a rate strategist for Wells Fargo NYSE WFC Securities Officials could bump up the IOER by 05 percentage points to 1 6 which would put it above the current effective funds rate of 1 55 Griffiths said Boosting the rate paid on reserves could encourage banks to demand higher rates when they lend money in the federal funds market Griffiths said But it would be viewed as a technical change that has no effect on monetary policy he said It doesn t have broader implications Griffiths said Policymakers discussed the possibility of tweaking the IOER during the December policy meeting minutes show Should conditions warrant this adjustment the IOER rate could move closer to the middle of the target range for the federal funds rate the Fed said in the minutes The increase would be a partial reversal from the Fed s most recent adjustments to the IOER which it has lowered four times since the middle of 2018 With those moves the Fed was working to lower the effective federal funds rate which was at the high end of the central bank s target range at the time said Lewis Alexander chief U S economist for Nomura Previously reserves were declining which put upward pressure on the effective funds rate Alexander said In contrast reserves have been increasing since the fall when the Fed began purchasing Treasury bills to boost liquidity and stabilize rates after a spike in short term borrowing costs There s a chance the Fed may hold off on making the adjustment We re still relatively close to the disruptions of the fall Alexander said
Some analysts say the effective funds rate may inch higher on its own Treasury bill issuance is expected to increase in February and March which could reduce the level of reserves and push up the effective funds rate according to a note by Jefferies distributed to clients last week |
WFC | Big volatility options trade points to mystery investor 50 Cent | By April Joyner NEW YORK Reuters Large options trades some people have attributed to the mysterious investor known as 50 Cent have become more profitable in recent days as fears of the economic impact of the coronavirus injected volatility back into stock markets Earlier this month at least one investor bought large blocks of February calls on the CBOE Volatility Index VIX at a price of around 50 cents each The calls which increase in value when the VIX rises would be redeemable should the VIX hit 22 by late February Known as Wall Street s fear gauge the index typically rises when markets grow turbulent The VIX ended Tuesday s session at 16 28 down 2 74 points from yesterday s three month high In total there were last about 331 000 contracts open on those calls most of which were purchased around the same price according to options analytics provider Trade Alert Pravit Chintawongvanich equity derivatives strategist at Wells Fargo NYSE WFC said the transaction resembles past moves by an enigmatic investor some market participants have dubbed 50 Cent known for purchasing large blocks of VIX options at prices near 50 cents A trader believed to be 50 Cent made similar big purchases last summer and in the months leading up to a market selloff in February 2018 According to Trade Alert the VIX calls traded as high as 1 15 on Monday so in total they could have generated some 21 million in profit if the calls were sold However there was no sign of liquidation Trade Alert founder Henry Schwartz wrote The calls were trading between 70 and 80 cents late Tuesday as U S stock markets rebounded They would basically need a much bigger market reaction to make any meaningful profit on those trades Chintawongvanich said The block trades are likely a portfolio hedge rather than a bet on a spike in volatility he added On Monday and Tuesday at least one investor bought large blocks of March VIX calls at 57 5 cents and 59 cents which would require the index to reach 28 before they could be redeemed Outside of those trades it was not evident that investors are loading up on downside protection at this point
When the VIX stays below 17 that s pretty sedate said Jim Carney CEO of hedge fund Parplus Partners |
WFC | Wells Fargo files for up to 66 billion mixed shelf offering | Reuters Wells Fargo Co N WFC filed a mixed shelf offering of as much as 66 billion with the U S Securities and Exchanges Commission on Wednesday and said it would use part of the proceeds to repurchase shares and pay down debt
The lender has been grappling with rising costs related to its fake account scandal that erupted more than three years ago
Earlier this month new boss Charles Scharf set aside an additional 1 5 billion for legal costs and said the bank s cost structure is simply too high
The company had total long term debt of 230 billion as of Dec 31
Its problems began to unfold in September 2016 when the bank revealed that employees had opened potentially millions of bogus accounts in customers names without their permission to hit sales targets set by management
Since then Wells Fargo has found other problematic practices that cost customers money or otherwise harmed their financial well being
The mixed shelf will include securities warrants debt securities and purchase contracts
Under a shelf registration a company may sell securities in one or more separate offerings with the size price and terms to be determined at the time of sale |
WFC | Bull Of The Day Signet Jewelers SIG | Signet Jewelers SIG is a leading retailer of diamond jewelry and watches and operates under the Zales Kay Jewelers Jared and other banners In the U S Signet operates more than 2 900 stores but its brands are found in the U K Canada Puerto Rico Ireland and the Channel Islands as well
Blowout Holiday Sales
Coming soon after a rating downgrade and price target cut from Wells Fargo WFC earlier this month Signet posted strong holiday sales numbers
For the nine weeks ended Jan 4 2020 total same store sales grew 1 6 thanks to the 2 increase in same store sales in North America Notably e commerce sales jumped 13 5 compared to brick and mortar sales decline of 0 2
Signet s management was confident enough in these numbers that they boosted its Q4 and fiscal 2020 guidance
Fiscal 2020 same store sales are expected to increase 0 1 up from prior guidance of 1 to 1 7 decline Total revenue for the year is forecasted at 6 1 billion compared to previous guidance range of 6 01 billion to 6 05 billion And new adjusted earnings per share guidance of 3 61 to 3 69 is up significantly from analysts consensus of 3 26 per share
CEO Virginia Drosos said in a press release that We delivered holiday same store sales growth ahead of our guidance as we continued to implement year two of our Path to Brilliance transformation Product newness investments in our digital capabilities and more targeted marketing campaigns drove both e commerce and brick and mortar growth in North America
SIG is on the Rise Shares of SIG are up over 62 in the last six months and the jewelry stock surged over 40 last week alone after it released its holiday sales numbers Comparatively the S P 500 has returned about 11 3 Earnings estimates have been rising too and Signet is a Zacks Rank 1 Strong Buy pick right now
For the current fiscal year two analysts have revised their bottom line estimate upwards in the last 60 days and the Zacks Consensus Estimate has moved up 30 cents from 3 09 to 3 41 2020 looks pretty strong too with earnings and revenue expected to continue positive year over year growth
SIG currently trades around 8 8X its forward full year earnings estimates slightly above the broader Retail Jewelry industry 17X
Last year Signet battled numerous obstacles from tariffs to tough year over year comparisons But its Path to Brilliance transformation initiative is successfully settling in and thanks to these great 2019 holiday results the jewelry retailer looks to continue capitalizing on its digital and product strengths If you re an investor searching for a broader retail stock to add to your portfolio make sure to keep SIG on your shortlist
7 Best Stocks for the Next 30 Days
Just released Experts distill 7 elite stocks from the current list of 220 Zacks Rank 1 Strong Buys They deem these tickers Most Likely for Early Price Pops
Since 1988 the full list has beaten the market more than 2X over with an average gain of 24 6 per year So be sure to give these hand picked 7 your immediate attention |
WFC | Mutual Fund Misfires Of The Market January 21 2020 | If your advisor has you invested in any of these Mutual Fund Misfires of the Market with high fees and low returns you need to rethink your advisor
High fees plus poor performance It s a pretty simple formula for a bad mutual fund Some are worse than others and some are so bad that they have earned a Strong Sell on the Zacks Rank the lowest ranking of the nearly 19 000 mutual funds we rank daily
First let s break down some of the funds currently part of our Mutual Fund Misfires of the Market If you happen to have put your money into any of these misfires we ll help assess some of our best Zacks Ranked mutual funds
3 Mutual Fund Misfires
Now let s take a look at three market misfires
Templeton Frontier Markets Adviser FFRZX Expense ratio 1 71 Management fee 1 4 After expenses the 5 year return is 3 05 meaning your fees are far higher than the fund s returns
Wells Fargo NYSE WFC Absolute Return C WARCX 2 28 expense ratio 0 72 WARCX is an Allocation Balanced mutual fund Allocation Balanced funds look to invest across asset types like stocks bonds and cash and including precious metals or commodities is not unusual these funds are mostly categorized by their respective asset allocation This fund has yearly returns of 1 9 over the most recent five years Another fund liable of having investors pay more in charges than what they receive in return
Oppenheimer SteelPath MLP Alph Plus I MLPNX This fund has an expense ratio of 2 55 and management fee of 1 25 MLPNX is a Sector Energy mutual fund which encompasses a wide range of vastly changing and vitally important industries throughout this massive global sector With an annual average return of 9 31 over the last five years the only thing absolute about this absolute return fund is that it absolutely deserves to be on our worst offender list
3 Top Ranked Mutual Funds
There you have it some prime examples of truly bad mutual funds In contrast here are a few funds that have achieved high Zacks Ranks and have low fees
Transamerica US Growth T TWMTX 0 82 expense ratio and 0 7 management fee TWMTX is a Large Cap Growth option these mutual funds purchase stakes in numerous large U S companies that are expected to develop and grow at a faster rate than other large cap stocks With an annual return of 11 91 over the last five years this fund is a winner
AQR Large Cap Defensive Style I AUEIX is a stand out fund AUEIX is a Large Cap Blend fund targeting companies with market caps of over 10 billion These funds offer investors a stability and are perfect for people with a buy and hold mindset With five year annualized performance of 13 39 and expense ratio of 0 38 this diversified fund is an attractive buy with a strong history of performance
MFS Mid Cap Growth Fund R2 MCPRX is an attractive fund with a five year annualized return of 13 39 and an expense ratio of just 1 34 MCPRX is a Mid Cap Growth mutual fund Mid Cap Growth funds pick stocks usually companies with a market cap between 2 billion and 10 billion that demonstrate extensive growth opportunities for investors compared to their peers
Bottom Line
Along these lines there you have it if your financial guide has you put your money into any of our Mutual Fund Misfires of the Market there is a strong likelihood that they are either dormant at the worst possible time inept or in all probability filling their pockets with high fee commissions at the cost of your financial objectives
Do You Know the Top 9 Retirement Investing Mistakes
Whether you re planning to retire early or not don t let investing mistakes derail your plans
If you have 500 000 or more to invest and want to learn more click the link to download our free report 9 Retirement Mistakes that will Ruin Your Retirement This report will help you steer clear of the most common mistakes like trying to time the market lack of diversification in your portfolio and many more Get Your FREE Guide Now |
TEVA | Event Driven Hedge Funds Rescued By Obamacare | In the first seven months of 2015 the healthcare market came to the rescue of the event driven strategy Reports indicate
The gains for event driven hedge funds in this period have been quite modest just 1 7
These funds lost ground in July with a bottom line of 0 6 in contrast to 0 7 for all strategies
Exposure to the commodity sector was the big problem
Healthcare has been the solution keeping this sector in the black YTD
The rippling effects of the Affordable Care Act of 2010 AKA Obamacare in the United States have a lot to do with the volatility of related markets and the subsequent events or special situations on which the strategy thrives
All of this raises the question why is a bill that was signed into law five years ago having such an impact just now
Three Challenges
In part its impact on the investment world has been mitigated until very recently by the protracted and complicated litigation that the new law immediately generated There was no clarity about how much of the law would survive the various challenges
Since then three big challenges to the law framed in different ways have gotten as far as the Supreme Court and the administration has won two of them In June 2012 SCOTUS upheld the constitutionality of the individual mandate
Two years later the court allowed closely held for profit corporations to opt out of the contraceptive mandate a regulation adopted by the Health and Human Services Department pursuant to the ACA Despite the furor this created in retrospect this looks like a detail in the operation of the law not a significant set back to the over all scheme Meanwhile in January 2014 most major provisions of the law had come into effect although some remain to be phased in
Finally in June 2015 the court decided King v Burwell a challenge that took the form of a dispute over the interpretation of the statute SCOTUS found that the law means what its sponsors thought it means thus upholding the use of federal subsidies to pay for health insurance in every state not merely in states that have set up state sponsored exchanges Any remaining hope that SCOTUS would restore something like status quo ante must by now have disappeared
With that hope gone and with implementation taking hold the law seems to have inspired a good deal of consolidation in the healthcare world in physicians practices in hospitals in medical devices and in pharmaceuticals
Looking at Pharmaceuticals
Thus Teva ARCA TEVA decides to buy Allergan NYSE AGN pa for 40 5 billion and hedge funds reap rewards for long positions in them both
Even leaving Obamacare aside there are two factors in the pharmaceutical business in particular that make it peculiarly susceptible to the urge to merge just now First the profits in the generics end of the business have been on a diet they ve been getting more slender over at least a decade That process seems to have reached a tipping point Second the drugs which were scheduled to go off patent have gone off patent What has been a loss for some the patent holders has been a boon for others Yet such boons are slowing and the companies that might once have pitched their planning around drugs held by other and proprietary manufacturers and that were nearing the end of their patent life now have to look elsewhere the M A market
Obamacare is giving us a new world and in the transition to that new world and whatever equilibrium it will entail there will be inefficiencies The typical event driven merger arb play is the easy way to make money on this situation There are other ways
For example do the sorts of closely held corporations referenced in Hobby Lobby get an advantage or a disadvantage by opting out of contraception coverage If they either get an advantage or suffer a disadvantage from their decision in comparison to say publicly owned competitors then it ought to be possible to bet on that outcome in one or the other direction Surely someone will figure it out and will do so ahead of the market at large before the logic of discounting and of equilibrium closes this window |
TEVA | Alexza Pharmaceuticals Regaining Adasuve Rights Amid Strategic Review | Regaining Adasuve rights amid strategic reviewAlexza O ALXA is in transition as it is undergoing a strategic review to either unlock value or fund R D programs such as AZ 007 The decision to reacquire US Adasuve rights from Teva N TEVA may facilitate this process as an outright sale or royalty agreement for its entire interest in Adasuve may be more straightforward once the US rights are regained After lowering our revenue and COGS assumptions our valuation on a standalone basis net of debt is 20 9m or 1 04 per share fully diluted
US Adasuve rights returning from Teva to AlexzaFollowing tepid US sales and corporate changes at Teva Alexza will reacquire the US Adasuve rights by year end 2015 Teva s existing 25m loan to Alexza would normally require repayment upon the partnership s dissolution but Alexza is seeking to restructure or extend payback terms However while we do not expect this to be the case should Teva demand near term repayment and or an equity for debt swap current shareholders could be subject to significant dilution
To Read the Entire Report Please Click on the pdf File Below |
XOM | UPDATE 9 Oil edges up in choppy trade posts weekly gain | Fitch downgrades of Spain Italy rattle markets
U S nonfarm payrolls data supportive to oil
Coming up API oil data 3 30 p m EDT Wednesday
Recasts updates prices to settlement
By Robert Gibbons
NEW YORK Oct 7 Reuters Oil prices edged higher in
volatile trading on Friday and posted a weekly gain as
supportive U S jobs data and a ratings downgrades of Spain and
Italy buffeted markets
Both Brent and U S crude futures recovered late after
retreating when Fitch cut Spain s credit ratings minutes after
downgrading Italy saying the intensification of the euro zone
debt crisis has hurt the entire region ID nL5E7L72KC
Some late price recovery came after the shock that Spain
was included in the downgrades wore off said Phil Flynn
analyst at PFGBest Research in Chicago
And there has been progress made with Europe moving to
implement their version of quantitative easing Flynn added
The Fitch move followed Moody s ratings cut for British
banks Lloyds and Royal Bank of Scotland that
pressured oil prices ahead of the U S jobs report
ID nL5E7L70H6
Both oil futures contracts rose on supportive U S jobs
figures though gains were limited because the return of
striking workers accounted for much of the improvement
Brent crude for November edged up 15 cents to
settle at 105 88 a barrel trading from 104 37 to 106 64
Brent ended 3 percent higher on the week the best
percentage weekly gain since the week to July 8
U S November crude rose 39 cents to settle at
82 98 a barrel having traded between 81 36 and 84
U S crude jumped 4 7 percent for the week the best weekly
percentage rise since the week to March 4
U S crude trading volumes were just 2 percent above the
30 day average while Brent volume was 9 percent under its
30 day average
JOBS GAINS SLIM BUT SUPPORTIVE
Nonfarm payrolls in the United States rose by 103 000 in
September versus forecasts for 60 000 and job gains for the
prior months were revised higher ID nOAT004877
But part of the strength of September s jobs number
reflected the return of 45 000 Verizon Communications workers
who had dropped off payrolls in August due to a strike
Excluding those workers payrolls increased by 58 000 just
missing expectations
Politics of European bank recapitalization ID nL5E7L54DY
European banks in graphics
Fed BOJ asset buying
U S nonfarm payrolls vs ADP
U S stocks fell after a choppy session also feeling
pressure from the downgrades of Italy and Spain after the
supportive jobs data N
The downgrades for Italy and Spain pulled the euro lower as
the anxiety about Europe s debt crisis persisted USD
The dollar index reversed and strengthened as the
euro s gains wilted helping limit any price gains for
dollar denominated oil prices
EUROPE REMAINS FOCUS
Both Brent and U S crude posted strong gains the previous
two sessions supported on Thursday by plans to shore up the
region s banks from the Bank of England and the European
Central Bank after Wednesday s sharp boost on news of falling
U S oil inventories
If you flood the market with liquidity that liquidity has
got to go somewhere said Michael Hewson an analyst at CMC
Markets The moves by the two central banks have made people
think it s only a matter of time before the Fed follows suit I
think they could be waiting a long time for that to happen
Germany and France were split ahead of crucial talks on
Sunday over how to strengthen shaky European banks and fight
financial market contagion ID nL5E7L714R
Before oil prices rebounded later in the week speculators
cut their net long position in U S crude oil and options
positions in the week to Tuesday the U S Commodity Futures
Trading Commission said on Friday ID nEMS16VQ77
Additional reporting by Gene Ramos in New York Claire
Milhench in London and Seng Li Peng in Singapore Editing by
David Gregorio and Marguerita Choy |
WFC | Wells Fargo names restaurant favorites | Wells Fargo keeps Overweight rated Cheesecake Factory CAKE 1 2 Jack in the Box JACK 0 3 McDonald s MCD 0 7 and Wingstop WING 0 1 lined up as its top restaurant sector picks for 2020 Our sentiment indicator suggests that investors are currently most constructive on largercap names while smaller cap and company owned restaurant stocks are out of favor with CAKE standing out as having the greatest NTM upside in our view Lastly in 2019 while we correctly predicted the outcomes of most industry and company specific debates stock performance from our Overweight rated stocks lagged their respective indices with the exception of WING writes analyst Jon Tower On a broader look at the industry Tower and team say they see menu items featuring plant based proteins proliferating across more brands in 2020 driven by consumer demand as well as the industry s desire to improve input cost management over the long term That sounds like a positive for Beyond Meat NASDAQ BYND and Impossible Foods IMPF |
WFC | Former Wells Fargo execs face almost 59M in fines | Five former Wells Fargo WFC 0 4 executives face 37 5M in civil penalties for their part in the bank s sales practice misconduct according to notice of charges issued by the Office of the Comptroller of the Currency
The regulator also announced settlements in which former Wells Fargo Chairman and CEO John Stumpf agreed to pay a 17 5M penalty former Chief Administrative Officer and director of corporate human resources Hope Hardison will pay 2 25M penalty and former Chief Risk Officer Michael Loughlin will pay 1 25M
Under the notice of charges OCC is seeking a 25M civil penalty from Carrie Tolstedt former head of Wells Fargo community bank a 5M penalty from Claudia Russ Anderson former community bank group risk officer a 5M penalty from former General Counsel James Strother 2M penalty from former Chief Auditor David Julian and 500K penalty from former Executive Audit Director Paul McLinko
Under the notices the OCC also seeks to prohibit Tolstedt and Russ Anderson from the banking industry and includes personal cease and desist orders against Strother Julian and McLinko
Also Stumpf s settlement includes a prohibition order and Hardison and Loughlin s include personal cease and desist orders |
WFC | Wells Fargo CEO says community bank model was flawed | The Office of the Comptroller of the Currency s actions taken against former Wells Fargo WFC 0 4 employees are consistent with my belief that we should hold ourselves and individuals accountable Wells Fargo CEO and President Charlie Scharf said in an internal memo
He said parts of the Community Bank s operating model were flawed and did not have in place the appropriate people structure processes controls or culture to prevent the inappropriate conduct
This was inexcusable Sharf wrote
The bank is reviewing the OCC s filings and will determine what if any further action by the Company is appropriate with respect to any named individuals
In addition the company won t make any remaining compensation payments that may be owed to them while it s reviewing the filings he said
Previously Former Wells Fargo execs face almost 59M in fines Jan 23 |
WFC | John Stumpf s Major Fall from Grace Massive Fine and Ban from Banking | Of the major U S banking CEOs Jamie Dimon of JPMorgan Chase Co NYSE JPM has by far the most visible and recognizable face among his peers He has been considered for many years with the exception of immediately after the so called London Whale trading scandal to also be the most respected of top banking CEOs in the country There was a brief period when John Stumpf the former CEO of Wells Fargo Co NYSE WFC was viewed as America s top banking CEO during the post Whale scandal period That was then and now is a rather different and very negative view of John Stumpf s career News was issued late on Thursday pertaining to final penalties and punishment tied back to Wells Fargo s fake accounts scandal that caused Stumpf s removal and still managed to cause the removal of his replacement The Office of the Comptroller of the Currency OCC sought a prohibition order and a 17 5 million civil money penalty was sought against John Stumpf The consent order showed that a total of approximately 70 million in equity related forfeitures and bonus and salary were sought Stumpf is also taking a lifetime ban in working for or with any insured banking group The OCC also announced today the issuance by consent orders a personal cease and desist order and a 2 25 million civil money penalty against the bank s former Chief Administrative Officer and Director of Corporate Human Resources Hope Hardison and a personal cease and desist order and assessment of a 1 25 million civil money penalty against its former Chief Risk Officer Michael Loughlin for their roles in the bank s sales practices misconduct div connatix margin bottom 1 5em div connatix img margin unset The OCC also charged five other former executives including Carrie Tolstedt who ran Wells Fargo s consumer bank group during the sales practices scandal Those cases are shown to be play out in administrative proceedings Those fines relief sought and penalties to other senior officials at Wells Fargo were laid out below
Carrie Tolstedt former head of the Community Bank Prohibition order and a 25 civil money penalty
Claudia Russ Anderson former Community Bank Group Risk Officer Prohibition order and a 5 million civil money penalty
James Strother the former General Counsel Personal Cease Desist order and a 5 million civil money penalty
David Julian the former Chief Auditor Personal Cease Desist order and a 2 million civil money penalty
Paul McLinko the former Executive Audit Director Personal Cease Desist order and a 500 000 civil money penalty
Charlie Scharf Wells Fargo s current CEO who recently took over issued a letter that was less than supportive of the disgraced former boss Scharf s letter said Today the Office of the Comptroller of the Currency announced a series of actions against former employees regarding their behavior around the historical Community Banking sales practices In addition the OCC provided a detailed account of business practices and management responses based on its extensive investigation
The OCC s actions are consistent with my belief that we should hold ourselves and individuals accountable They also are consistent with our belief that significant parts of the operating model of our Community Bank were flawed At the time of the sales practices issues the Company did not have in place the appropriate people structure processes controls or culture to prevent the inappropriate conduct
This was inexcusable Our customers and you all deserved more from the leadership of this Company
We are reviewing today s filings and will determine what if any further action by the Company is appropriate with respect to any of the named individuals Wells Fargo will not make any remaining compensation payments that may be owed to these individuals while we review the filings The move from the OCC has presented no impact on Wells Fargo s common stock now that the actions are old enough and now that Wells Fargo is already under an asset cap from the Federal Reserve until it can prove that its former practices and other issues are entirely behind it There was a time that John Stumpf would have been considered one of the greatest bankers of the modern era That is now history and Jamie Dimon will get to continue as the most respected current bank CEO of America s largest banks
By Jon C Ogg |
WFC | U S bank regulator charges ex Wells Fargo executives for role in sales scandal | By Chris Prentice and Imani Moise WASHINGTON Reuters Wells Fargo NYSE WFC Co s U S regulator on Thursday announced it had banned former Chief Executive John Stumpf from the banking industry and charged him and seven other former executives combined more than 58 million in civil penalties for their roles in the bank s multi year sales practices scandal The action by the Office of the Comptroller of the Currency OCC marks a rare example of senior executives being held personally accountable for failing to put a stop to misconduct at their bank It also broke new ground for the regulator which forced Stumpf to pay 17 5 million to settle the charges against him the largest ever penalty it has secured from an individual The OCC s probe is one of several into the San Francisco based lender with investigations by the Department of Justice and the Securities and Exchange Commission ongoing One person with knowledge of the OCC probe said it was far reaching and that more individuals could be charged We do not expect these penalties will end Wells Fargo s troubles in Washington Yet this is still a positive development for Wells Fargo as this was a hurdle that the bank was always going to have to clear said Jaret Seiberg an analyst at Cowen Washington Research Group in a note Some of the OCC s findings though contradict Wells Fargo s 2017 board report into the scandal which largely pinned the blame on a small number of executives in particular the bank s former retail banking head Carrie Tolstedt But on Thursday the OCC said many members of the bank s senior leadership were culpable a finding that is likely to spark further questions by lawmakers who may push for criminal convictions said Sieberg In addition to Stumpf former human resources head Hope Hardison and Michael Loughlin former chief risk officer settled the OCC s charges for 2 25 million and 1 25 million respectively the OCC said Stumpf who could not immediately be reached for comment also agreed to a lifetime ban on working for an OCC regulated bank He abruptly left the company in October 2016 after a nearly a decade at the helm Five other former executives refused to settle including Tolstedt who is facing a potential 25 million civil monetary penalty James Strother the former general counsel and Claudia Russ Anderson the former community bank group risk officer who both face 5 million fines They and two auditing executives may ultimately fight the charges before a judge under the OCC s administrative process Throughout her career Ms Tolstedt acted with the utmost integrity and concern for doing the right thing A full and fair examination of the facts will vindicate Carrie a lawyer for Tolstedt said in a statement In a statement Strother s lawyer said the former Wells Fargo executive acted with the utmost integrity and transparency and that the OCC s charges are false and unfounded Russ Anderson could not immediately be reached for comment In a memo to Wells Fargo employees CEO Charlie Scharf said the company was reviewing Thursday s filings and will determine what if any further action is appropriate in respect to any of the individuals who were named The memo added that the bank would not make any remaining compensation payments that may be owed to those individuals in the meantime INDIVIDUAL MISCONDUCT Wells Fargo the country s fourth largest U S lender has paid out more than 4 billion in fines and penalties since the 2016 revelation that the bank s sales practices encouraged employees to open potentially millions of unauthorized bank accounts in order to hit lofty sales targets Since then internal and external probes have uncovered issues in each of Wells Fargo s major business lines including wealth management and the commercial bank The fallout has also resulted in the Federal Reserve imposing an unprecedented growth restriction on Wells Fargo s balance sheet until it proves it has fixed its risk management and controls While Wells Fargo has inked multiple federal and private settlements for its sales practices the OCC action marks the first federal action against individuals for their roles in the scandal instead of just the institution In its complaint the OCC said that senior bank leadership must have been aware of rampant sales misconduct citing large numbers of employee complaints and years worth of other evidence For example an internal investigation conducted by the bank in 2004 found that instances in which staff gamed the sales system to meet targets climbed 979 from 2000 to 2004
The number of calls to the bank s internal ethics hotline steadily climbed from 2006 through 2014 the OCC said with nearly half of all cases investigated related to sales misconduct |
WFC | Remaining hurdles for scandal hit Wells Fargo | Reuters Wells Fargo Co N WFC and its officials have racked up well over 4 billion 3 billion pounds in penalties since a sales practices scandal erupted in 2016 and continues to face headwinds
Here are some of the remaining shoes that have yet to drop
Probes A number of federal agencies are examining the bank and its employees for potential wrongdoing The Department of Justice is looking into whether executives withheld details about fake accounts to the Wells Fargo board of directors and the Office of the Comptroller of the Currency the lead regulator for national banks Reuters has reported The U S Securities and Exchange Commission s Philadelphia office meanwhile has been investigating whether Wells Fargo misled investors by inflating performance metrics and whether the bank penalized whistleblowers Reuters also reported The Department of Labor is also examining whether the bank acted on staff whistleblower complaints
Consent orders Wells Fargo is currently operating under roughly 14 consent orders with various regulators including the OCC SEC and the Consumer Financial Protection Bureau Under the orders the bank will endure intense regulatory scrutiny until it proves it has fixed procedures that allowed employees to create potentially millions of unauthorized accounts and sell auto insurance and other add on products that customers did not want or need The orders also require Wells Fargo to repay customers for costs associated with its consumer abuses So far the bank has paid out at least tens of millions of dollars in remediation
Asset cap The most notable consent order looming over the bank is the U S Federal Reserve s asset cap which put an unprecedented growth restriction on the bank s balance sheet until it proves that it has overhauled its risk management and controls Since the asset cap was announced in early 2018 bank executives repeatedly extended the timeline for getting it removed and have since stopped giving any guidance on the issue On his first public call with the company earlier this month new Chief Executive Charlie Scarf did not set a new timeline
Community Reinvestment Act CRA rating Even if Wells Fargo s asset cap is lifted its growth could still be hampered by its CRA rating which assesses how well banks service poorer communities In 2017 federal regulators downgraded Wells Fargo two notches to Needs to Improve from Outstanding shortly after the scandal broke The rating which is typically only reviewed every five years curtails the bank s ability to make acquisitions and open branches and requires Wells Fargo to seek regulatory approval in financing decisions like issuing or prepaying debt A less than satisfactory rating also prevents the bank from courting certain government business that requires a higher CRA rating
More hearings The bank s executives have in the past been called to testify before Congress about the bank s wrongdoings and explain how the bank has changed New CEO Scharf has tried to place the scandal squarely in the past describing historical and legacy issues during his first call but lawmakers are likely to continue rehashing Wells Fargo s mistakes in public Congresswoman Maxine Waters House Financial Services Committee chair said she plans to call Wells Fargo board members to testify this year |
TEVA | Analysts Weigh In On Auspex Pharmaceuticals Following Teva Acquisition | Israeli bio tech company Teva Pharmaceutical ARCA TEVA announced on March 30th that it will acquire neurology drug company Auspex Pharmaceuticals NASDAQ ASPX for an equity value of 3 5 billion in an effort to expand its treatments for the central nervous system
Teva will purchase Auspex for 101 a share implying a 42 4 premium from where the stock closed at on Friday March 27th The acquisition comes after a year Teva refocused on reducing costs under its new CEO Erez Vigodman The decision to merge with Auspex came to be after Vigodman determined Teva was ready to start making more acquisitions Auspex s main product is called SD 809 and is meant to treat chorea abnormal involuntary movement associated with Huntington s disease tardive dyskinesia and Tourette syndrome SD 809 for Huntington s is slated to gain regulatory approval by the FDA and be launched in 2016 Michael Hayden Teva s chief scientific officer said Auspex s technology could represent a significant breakthrough for patients who often have no sustainable symptom relief from their disease Teva predicts that Auspex will rake in 2 billion in sales by 2020 A handful of analysts weighed in on Auspex Pharmaceuticals following Teva s acquisition announcement On March 31st Stifel Nicolaus analyst Stephen Willey downgraded his rating on Auspex Pharmaceuticals to hold with a 101 price target Overall he has a 69 success rate recommending stocks and a 36 1 average return per recommendation Similarly Robet W Baird analyst Christopher Raymond also downgraded his rating on Auspex Pharmaceutcals to Hold with a price target of 101 The analyst has an overall success rate of 83 recommending stocks and a 39 8 average return per recommendation On average the top analyst consensus for Auspex Pharmaceuticals on is Hold |
XOM | US STOCKS Wall St higher as housing employment data add lift | U S June pending home sales unexpectedly rise
U S weekly jobless claims fall below 400 000
Republican debt plan faces close vote in U S Congress
Stocks up Dow 0 3 pct S P 0 4 pct Nasdaq 0 7 pct
For up to the minute market news see STXNEWS US
Updates to open adds pending home sales data
By Angela Moon
NEW YORK July 28 Reuters U S stocks rose on Thursday
as better than expected data on home sales and employment lent
support to the market after equities suffered their worst day
in eight weeks in the previous session
But trading was volatile as investors awaited a key vote on
a bill to cut the U S deficit A gridlock in talks over the
country s debt ceiling and a possible downgrade of the United
States credit rating have weighed on global equities
The S P lost 2 6 percent for the week while the Dow fell
2 8 percent The Nasdaq was off 2 7 percent
After a 90 percent down day like yesterday and considering
how intense the selling was today s data is certainly lending
support said James Dailey portfolio manager of TEAM Asset
Strategy Fund in Harrisburg Pennsylvania
Part of the bounce today is also technical so any kind
of news from Washington could easily turn the market
The Dow Jones industrial average was up 32 02
points or 0 26 percent at 12 334 57 The Standard Poor s
500 Index was up 5 46 points or 0 42 percent at
1 310 35 The Nasdaq Composite Index was up 19 76
points or 0 71 percent at 2 784 55
Pending sales of existing U S homes unexpectedly rose 2 4
percent June from May and were up sharply from a year ago a
real estate trade group said on Thursday ID nN1E76R0HY
Further boosting optimism about the economy new U S
claims for jobless benefits fell more than expected last week
dropping below 400 000 for the first time since early April
ID nN1E76Q1FC and ID nLLASIE70L
Exxon Mobil Corp the world s largest publicly
traded oil company said higher oil prices contributed to a
rise in its second quarter profit but results fell short of
expectations The stock fell 1 3 percent to 82 02
ID nN1E76Q1J6
A bill to cut the U S deficit faced an extremely
nail bitingly close vote in Congress on Thursday as the top
Republican lawmaker sought to quell an internal revolt and push
his plan to avoid a ruinous default ID nN1E76R004
Approval of a plan by U S House of Representatives Speaker
John Boehner would break the inertia in Washington over a U S
debt crisis that has spooked markets and raised the prospect
that the government of the world s largest economy will run out
of money to pay its bills in less than a week
Editing by Padraic Cassidy |
XOM | US STOCKS Wall St flat to slightly up before debt vote | House debt vote due after market close
White House urges compromise to head off debt default
Green Mountain Coffee among Nasdaq s biggest gainers
Dow down 0 01 pct S P up 0 2 pct Nasdaq up 0 5 pct
For up to the minute market news see STXNEWS US
Updates to late afternoon changes byline
By Caroline Valetkevitch
NEW YORK July 28 Reuters U S stocks were little
changed and off the day s highs on Thursday with market
sentiment mixed before a key vote in Congress on a plan to
prevent a U S default
Stocks got an early lift from strong pending U S home
sales data and a dip in jobless claims a day after the S P 500
posted its biggest fall in eight weeks and its third day of
losses
Uncertainty over Washington s ability to agree on a plan to
reduce the U S budget deficit before an Aug 2 deadline has
kept investors nervous about the possibility of a debt default
or a U S credit ratings downgrade ID nN1E76O1XU
Some analysts expressed optimism that lawmakers may come to
a deal ahead of the deadline while others said they were less
hopeful
A vote on a bill to cut the U S deficit and raise the debt
limit is expected after the close of trading on Thursday U S
House of Representatives Speaker John Boehner is pushing to
pass a bill in the Republican majority House while the
Democratic controlled Senate is crafting a competing bill
ID nN1E76R004
The market doesn t want to move in a linear fashion said
Thomas Villalta portfolio manager for Jones Villalta Asset
Management in Austin Texas
He said that is partly because of the dissension among the
ranks of lawmakers making investors less certain that a deal
can happen
Still the CBOE Volatility Index was down 0 5
percent after three days of sharp gains
Volatility and volume are reflecting avoiding risk right
now and waiting on clarity said Marc Pado U S market
strategist at Cantor Fitzgerald Co in San Francisco It s
mainly just a watching and waiting kind of situation until the
vote
The Dow Jones industrial average was down 1 62
points or 0 01 percent at 12 300 93 The Standard Poor s
500 Index was up 1 97 points or 0 15 percent at
1 306 86 The Nasdaq Composite Index was up 12 92
points or 0 47 percent at 2 777 71
Among gainers Green Mountain Coffee Roasters
jumped 16 9 percent to 103 03 after the company said late
Wednesday its third quarter sales rose 18 percent Green
Mountain was among the top gainers on the Nasdaq
Exxon Mobil Corp the world s largest publicly
traded oil company however reported results that fell short
of expectations and its stock fell 2 1 percent to 81 58
ID nN1E76Q1J6
Pending sales of existing U S homes unexpectedly rose 2 4
percent in June from May up sharply from a year ago
ID nN1E76R0HY
New weekly claims for unemployment benefits fell below
400 000 for the first time since early April ID nN1E76Q1FC
ID nLLASIE70L
Additional reporting by Ashley Lau Editing by Kenneth
Barry |
XOM | US STOCKS Buyers exit market before House debt plan vote | House debt vote due after market close
White House urges compromise to head off debt default
Green Mountain Coffee Nasdaq s biggest gainer
Dow down 0 5 pct S P down 0 3 pct Nasdaq up 0 05 pct
For up to the minute market news see STXNEWS US
Updates close with latest volume VIX levels Starbucks
shares up after the bell
By Caroline Valetkevitch
NEW YORK July 28 Reuters U S stocks faded in the
afternoon on Thursday to end mostly lower with investors
skeptical a key vote by Congress would lead to a deal to avoid
a U S default
The S P 500 fell for a fourth straight day as buyers kept
to the sidelines while lawmakers tried to hash out an agreement
on the deficit
A vote on a Republican led bill to raise the debt limit was
expected in the U S House of Representatives after the close
of trading on Thursday The Democrat controlled Senate is
crafting a competing bill and Democratic leaders have said the
House bill if passed will be defeated in the Senate For
details see ID nN1E76R004
During the course of the day it became clear that even if
Republican House Speaker John Boehner does get the vote when
it s turned over to the Senate the Senate is going to reject
it That seems to be the reason for the selling into strength
said Quincy Krosby market strategist at Prudential Financial
in Newark New Jersey
Analysts said dissension among the ranks of lawmakers has
also made investors less certain that a deal can happen
The wrangling over the U S deficit has boosted volatility
as stocks have fallen The S P 500 is down 3 3 percent on the
week while the market s fear gauge the CBOE Volatility Index
rose to 23 74 the highest since mid June
The lack of leadership has optimism flying at a very low
altitude It s basically leaving investors very skittish
said Steve Goldman market strategist with Weeden Co in
Greenwich Connecticut
Stocks got an early lift from a dip in jobless claims and
strong pending U S home sales data a day after the S P 500
posted its biggest fall in eight weeks
Among gainers Green Mountain Coffee Roasters
jumped 16 4 percent to 102 57 after the company said late
Wednesday its third quarter sales rose 18 percent Green
Mountain was the top percentage gainer on the Nasdaq which
ended slightly higher
The Dow Jones industrial average ended down 62 44
points or 0 51 percent at 12 240 11 The Standard Poor s
500 Index was down 4 22 points or 0 32 percent at
1 300 67 The Nasdaq Composite Index finished up 1 46
points or 0 05 percent at 2 766 25
Exxon Mobil Corp the world s largest publicly
traded oil company however reported results that fell short
of expectations and its stock slid 2 2 percent to 81 46
ID nN1E76Q1J6
After the close shares of Starbucks rose 2 3
percent to 40 90 after it posted a profit that topped
analysts expectations ID nN1E76R1U9
During the session shares of Internet delivery company
Akamai Technologies dropped 19 1 percent to 23 84 a
day after it lowered its revenue growth target
Buoying the market early in the day pending sales of
existing U S homes unexpectedly rose 2 4 percent in June from
May and were up sharply from a year ago ID nN1E76R0HY
New weekly claims for unemployment benefits fell below
400 000 for the first time since early April ID nN1E76Q1FC
ID nLLASIE70L
Some 7 93 billion shares changed hands on the New York
Stock Exchange NYSE Amex and Nasdaq above the daily average
of 7 47 billion
Declines outweighed advances on the NYSE by about 3 to 2
while on Nasdaq losers were about even with winners
It s institutional selling It may be related to mutual
fund redemptions said Jack Ablin chief investment officer at
Harris Private Bank in Chicago
Additional reporting by Ashley Lau Editing by Kenneth Barry
and Dan Grebler |
XOM | Crude oil futures regain momentum in Asian trade | Investing com Crude oil futures surged in early Asian trade Monday rebounding from an earlier drop following the release of data showing weakness in U S manufacturing production On the New York Mercantile Exchange light sweet crude futures for October delivery traded at USD87 69 a barrel during early Asian trade advancing 2 3 after hitting a daily low of USD84 70 New York s Federal Reserve Bank reported Monday that its index of manufacturing conditions worsened in August falling 3 9 points to minus 7 7 following a minus 3 8 figure in July The Empire State manufacturing index which measures economic health in the manufacturing sector by surveying about 200 manufacturers in New York State was forecast to improve slightly from July to minus 0 4 But encouraging news from Japan helped to reverse losses in oil as the world s third largest economy reported its gross domestic product fell by 0 3 in the April to June quarter from minus 0 9 the previous quarter Although Japan s GDP remained in negative territory the quarterly figure was well below market expectations of a 0 6 fall The Japanese economy contracted by 3 6 in the January to March quarter the period during which the country was hit by a devastating earthquake and tsunamis Japan is the world s third largest energy consumer after the United States and China Meanwhile Royal Dutch Shell estimated that more than 54 000 gallons of oil had spilled into the North Sea from one of the company s oil rigs near Scotland s eastern coast Shell co owns the facility with Esso a subsidiary of U S oil company Exxon Mobil While Shell said it was unclear at what point last week the leak had begun the company said it was under control The British government said the mishap was limited in scope compared to the BP spill in the Gulf of Mexico last year which resulted in over 200 million gallons of oil being dumped into the ocean On the ICE Futures Exchange Brent oil futures for October delivery added 1 84 to trade at USD109 59 Global financial service provider Barclays earlier maintained its forecast that Brent oil will average USD110 a barrel in the third quarter of 2011 |
WFC | Here s How Much Warren Buffett Has Made on Wells Fargo | Warren Buffett s track record as an investor and CEO is unmatched In his 54 years running Berkshire Hathaway NYSE BRK A NYSE BRK B thousands of people have become millionaires by buying shares and then sitting on their hands while he turned the former textile manufacturer into one of the most profitable holding companies on Earth As of this writing Berkshire owns dozens of subsidiaries that earn tens of billions of dollars a year and has a market capitalization of nearly 560 billion
Yet Buffett is best known for his skill as a great stock picker and deservedly so A massive portion of Berkshire s market value is derived from its roughly 215 billion stock portfolio One of Berkshire s biggest holdings is Wells Fargo NYSE WFC The 378 million shares it owned at the end of last quarter is worth 19 8 billion at recent prices
So how much money has the Oracle of Omaha made for himself and Berkshire investors on Wells Fargo It depends on what you re measuring on a cost basis Berkshire s Wells Fargo stake has roughly doubled in value netting about 11 billion in unrealized gains However that doesn t tell the entire story including how much value Wells delivers to Berkshire s coffers in the form of its generous dividend
How much Buffett paid and what it s worth now
While we don t know from day to day how many shares of Wells Fargo Berkshire Hathaway owns we do get an update each quarter when it files its Form 13F with the SEC listing its stock holdings As of the end of September Berkshire owned 378 369 018 shares of Wells At recent prices of around 52 per share that stake is worth 19 8 billion
Getting to Berkshire s cost basis is a little bit trickier The company doesn t include the cost basis of its stock portfolio holdings in its quarterly filings and that data is not broken out in the 13F either However in Buffett s annual letter to shareholders a highly recommended read every year does include the cost basis for Wells along with that of Berkshire s other biggest holdings
Last year s letter the new one will arrive in the next couple of months showed a cost basis of 10 639 billion on Berkshire s stake in Wells Fargo However that value was on 449 349 102 Wells Fargo shares To keep its stake in Wells below 10 a regulatory requirement for investing in banks Berkshire sold off nearly 71 million Wells shares in 2019 to stay ahead of Wells own aggressive share repurchase policy
If we remove those 71 million shares at a cost basis of about 23 68 per share according to Buffett s letter from the equation then we arrive at a rough cost of 8 96 billion for Berkshire s current stake which is worth 19 8 billion So that s about 10 8 billion in unrealized gains on the investment as of the end of the third quarter
Here s how much Wells Fargo pays Berkshire in dividends
Considering all the turmoil Wells Fargo has gone through in recent years particularly the fake accounts scandal that still has the bank under SEC sanctions that limit its growth many investors have been surprised Buffett hasn t sold off Berkshire s stake in it and moved on
However that knee jerk reaction ignores the fact that Wells continues to generate substantial profits and strong returns as well as what may be the biggest reason Berkshire should hold on to the bank s stock long term its dividend
In 2019 Wells Fargo raised its quarterly payout to 0 51 per share That works out to 2 04 per year at the current rate Based on the 378 4 million shares it held at last count Wells Fargo will send Berkshire 771 9 million in dividends in 2020
Taking it a step further Wells track record of dividend growth has rewarded Berkshire and every other long term Wells Fargo shareholder quite well for just holding Since the beginning of 2014 Wells has increased its payout by 70 For Berkshire that means it has seen the dividends it earns on those 378 4 million shares grow from 454 million in 2013 to more than three quarters of a billion dollars this year
To put it another way that means Berkshire earns about 8 6 in yield on the 9 billion it paid for its stake in Wells just on from the dividend That s an incredibly high rate of return all by itself
An excellent case study in wealth creation
Buffett has long sung the praises of the buy high quality companies hold them for a very long time strategy and Wells Fargo proves that out quite well While plenty of investors may look at a stock in their portfolio that s doubled in value and sell to take money off the table Buffett continually demonstrates that the best businesses will continue helping investors build wealth if they simply hold on
Sure Buffett could sell and realize 11 billion in profits but he d lose almost 800 million in yearly cash flows by doing that not to mention creating a 2 3 billion federal tax bill on those gains
So before you sell your next stock just because it s made major share price gains consider the long term implications and whether you d be better off just sitting on your hands and letting that great business continue being great and growing your wealth Buffett is undoubtedly a master but some of his best secrets are simple actions any investor can replicate like not selling your best investments just because they ve gone up in value |
WFC | Flyers mascot Gritty under investigation for assault of teen | Gritty the Philadelphia Flyers fuzzy orange mascot is under investigation for an alleged physical assault of a 13 year old boy during a photo shoot at the team s stadium back in November multiple outlets reported Wednesday
Chris Greenwell the boy s father and a longtime season ticket holder wrote in a Facebook NASDAQ FB post Wednesday that his son Brandon was punched and injured by Gritty and that the organization tried to bribe me not to speak about it
Greenwell gave more detail in an interview with the Philadelphia Inquirer describing the Nov 19 incident which happened at Wells Fargo NYSE WFC Center during an event for season ticket holders
He told the Inquirer that after the photo was taken his son patted Gritty on the head and then walked away The mascot got up took a running start and punched my son as hard as he could Greenwell said per the Inquirer
The South Detectives Division of the police department is conducting an active and on going investigation
Greenwell told the Inquirer that the company that owns the Flyers Comcast NASDAQ CMCSA Spectacor said it looked into the incident but did not have video footage and did not find evidence of any such interaction after interviewing Gritty Gritty s handler and others
We took Mr Greenwell s allegations seriously and conducted a thorough investigation that found nothing to support this claim the Flyers said in a statement
Greenwell who says he won t renew his season tickets told the Inquirer that his son saw a chiropractor and was diagnosed with a back bruise
In his Facebook post Greenwell added that he sought an apology and payment for medical bills from the team After exchanging emails with the organization which he said offered various perks without a resolution he reported the incident to police
Gritty has become one of the NHL s most popular mascots since being introduced in September 2018 The NHL Players Association voted him as the league s best mascot in March 2019
Field Level Media |
WFC | Wells Fargo WFC Lags Q4 Earnings Estimates | Wells Fargo WFC came out with quarterly earnings of 0 93 per share missing the Zacks Consensus Estimate of 1 12 per share This compares to earnings of 1 21 per share a year ago These figures are adjusted for non recurring items
This quarterly report represents an earnings surprise of 16 96 A quarter ago it was expected that this biggest U S mortgage lender would post earnings of 1 15 per share when it actually produced earnings of 0 92 delivering a surprise of 20
Over the last four quarters the company has surpassed consensus EPS estimates two times
Wells Fargo which belongs to the Zacks Banks Major Regional industry posted revenues of 19 86 billion for the quarter ended December 2019 surpassing the Zacks Consensus Estimate by 0 26 This compares to year ago revenues of 20 98 billion The company has topped consensus revenue estimates four times over the last four quarters
The sustainability of the stock s immediate price movement based on the recently released numbers and future earnings expectations will mostly depend on management s commentary on the earnings call
Wells Fargo shares have lost about 3 1 since the beginning of the year versus the S P 500 s gain of 1 8
What s Next for Wells Fargo
While Wells Fargo has underperformed the market so far this year the question that comes to investors minds is what s next for the stock
There are no easy answers to this key question but one reliable measure that can help investors address this is the company s earnings outlook Not only does this include current consensus earnings expectations for the coming quarter s but also how these expectations have changed lately
Empirical research shows a strong correlation between near term stock movements and trends in earnings estimate revisions Investors can track such revisions by themselves or rely on a tried and tested rating tool like the Zacks Rank which has an impressive track record of harnessing the power of earnings estimate revisions
Ahead of this earnings release the estimate revisions trend for Wells Fargo was mixed While the magnitude and direction of estimate revisions could change following the company s just released earnings report the current status translates into a Zacks Rank 3 Hold for the stock So the shares are expected to perform in line with the market in the near future You can see the complete list of today s Zacks 1 Rank Strong Buy stocks here
It will be interesting to see how estimates for the coming quarters and current fiscal year change in the days ahead The current consensus EPS estimate is 0 98 on 19 45 billion in revenues for the coming quarter and 4 29 on 79 57 billion in revenues for the current fiscal year
Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well In terms of the Zacks Industry Rank Banks Major Regional is currently in the top 15 of the 250 plus Zacks industries Our research shows that the top 50 of the Zacks ranked industries outperform the bottom 50 by a factor of more than 2 to 1 |
TEVA | Alexza Pharmaceuticals | Awaiting inflection in Adasuve volumesAlexza s NASDAQ ALXA investment case continues to rest on the commercial prospects for Adasuve a rapid inhalation treatment for acute agitation in adult schizophrenia or bipolar disorder patients Adasuve offers speed and dosing reliability advantages in treating acute agitation Although we have lengthened the sales ramp up timeline given the 9m14 revenue pace our 20 peak market share assumption remains unchanged Given a slower sales ramp up than expected we expect Alexza will need to raise 20m in capital in H215 to fund operations Our new equity valuation of 3 67 share from 4 71 previously does not reflect this funding gap or requirement
Adasuve s rapid time to effect a key advantageAdasuve s rapid time to therapeutic effect 10 minutes vs intramuscular drugs 30 90 minutes or oral forms 60 minutes commonly used for acute agitation is a substantial advantage given the risk of physical injury or property damage with agitated patients in whom agitation is escalating Conventional treatment options are either slow to act or invasive and are often dosed in combination 9m14 sales signal a longer pathway to peak sales9m14 product sales were 1 6m and largely consisted of initial inventory stocking for its partners Teva Pharma Industries Ltd ARCA TEVA and Ferrer Alexza projected no Q414 inventory shipments but expects resumption in Q115 Part of the unevenness in order flow results from the administrative processes potentially taking several months needed for a hospital to start using Adasuve Hence we have pushed back our sales ramp forecasts but still believe that 2020 global sales can approach 400m worldwide Alexza advancing AZ 002 and Staccato ropiniroleAlexza started a Phase IIa trial in January 2015 for AZ 002 Staccato alprazolam in acute repetitive seizures in epilepsy patients Staccato ropinirole is also in preclinical stages for restless legs syndrome and Parkinson s hypomobility Valuation rNPV of 95 0m upside from new productsWe calculate an rNPV for Adasuve and AZ 002 at 95 0m vs 97 7m previously as we have scaled back our near to intermediate term Adasuve penetration forecasts Including 22 6m in net debt at Q414e gives a 3 67 per share overall valuation for the firm Given a slower sales ramp we expect Alexza to raise 20m in capital in H215 The successful development of preclinical Staccato product candidates eg ropinirole or AZ 002 could add upside to our valuation
To Read the Entire Report Please Click on the pdf File Below |
XOM | US STOCKS Wall Street climbs at open on April payrolls data | Number of US jobs created in April tops expectations
Oil pares early losses
Indexes up Dow S P 1 pct Nasdaq 0 9 pct
For up to the minute market news see STXNEWS US
Updates to open
By Chuck Mikolajczak
NEW YORK May 6 Reuters U S stocks jumped at the open
on Friday cutting weekly losses on the S P 500 in half after
an unexpectedly strong payrolls report eased fears about the
path of the economic recovery
U S nonfarm payrolls rose by 244 000 in April the most in
11 months the Labor Department said on Friday well above
economist expectations for an increase of 186 000 For details
see ID nOAT004799
Surprisingly good strong number here this reminds
everyone that we are still on the path of recovery said Jeff
Kleintop chief market strategist at LPL Financial in Boston
This might even put a bid back in commodities which have
suffered so tremendously this week on the fear that there is no
more need for an inflation hedge
U S crude oil futures which had slumped on
Thursday after a batch of soft economic data during the week
pared early losses and fell 0 4 percent to 99 44 a barrel ICE
Brent futures rose 0 2 percent to 111 01
ID nN06182340
Exxon Mobil Corp rose 0 9 percent to 83 39 and
Chevron Corp gained 0 7 percent to 103 36 The PHLX
Oil service sector index climbed 1 7 percent
The Dow Jones industrial average gained 127 49
points or 1 01 percent to 12 711 66 The Standard Poor s
500 Index rose 13 43 points or 1 01 percent to
1 348 53 The Nasdaq Composite Index climbed 25 82
points or 0 92 percent to 2 840 54
Friday marks the one year anniversary of the flash crash
on Wall Street when the Dow lost nearly 700 points in
minutes
The CBOE volatility index dropped 8 8 percent to
16 60 after closing at its highest level on Thursday since
March 28
Gaines were also seen in materials related stocks with the
S P Materials index up 2 percent led by a 3 1 percent
rise in mining company Freeport McMoRan Copper Gold
to 51 33
The benchmark S P 500 had fallen 2 1 percent this week
before Friday s advance culminating in a drop in commodity
prices on Thursday as concerns rose over deteriorating demand
Editing by Padraic Cassidy |
XOM | US STOCKS Jobs data fuels rally but stocks off their highs | US job creation in April tops expectations
Weakness in commodities seen as warning
Indexes up Dow S P 0 9 pct Nasdaq 1 2 pct
For up to the minute market news see STXNEWS US
Updates to afternoon trade
By Angela Moon
NEW YORK May 6 Reuters An unexpectedly strong report
on U S payrolls propelled stocks higher on Friday one day
after a sell off but investors were wary that the market s
months long rally may be near a peak
Commodity related stocks which have been weighing the
market for most of the week rebounded as oil prices recovered
Industrials stocks on the S P index were up 1 4
percent the biggest gainers on the index Energy stocks
were up 1 percent
All three major indexes rose more than 1 percent after U S
non farm payrolls increased by 244 000 in April the most in 11
months and well above economists expectations for an increase
of 186 000 For details see ID nOAT004799
This is the market typically responding to good news but I
would say the market is on the edge now a bit wary of the
market rally said Steve Claussen chief investment strategist
at online brokerage OptionsHouse com
But the trading volume in the options market was solid
without significant action in puts suggesting investors were
not pulling out the market Claussen said
The Dow Jones industrial average was up 114 93
points or 0 91 percent at 12 699 10 The Standard Poor s
500 Index was up 11 82 points or 0 89 percent at
1 346 92 The Nasdaq Composite Index was up 32 36
points or 1 15 percent at 2 847 08
James Dailey a portfolio manager at TEAM Asset Strategy
Fund in Harrisburg Pennsylvania said the S P 500 s next
technical level to the upside was 1 400 but we won t go there
until some sort of a correction
The benchmark S P 500 had fallen 2 1 percent this week
before Friday s advance On Thursday commodities led selloffs
in several markets on concerns over deteriorating demand
The iShares Silver Trust suffered outflows of more
than 1 billion in the week ended Wednesday its worst one week
outflow ever plus heavy losses due to the slump in the price
of silver
U S crude oil futures which had slumped on
Thursday after a batch of soft economic data during the week
pared early losses but were down 0 4 percent at 99 45 a
barrel
Dailey said that while the broader market could see a 5 10
percent correction emerging markets and sectors leveraged to
commodities could see a decline of up to 20 percent
Exxon Mobil Corp rose 0 3 percent to 82 85 and
Chevron Corp gained 0 5 percent to 103 05 The PHLX
Oil service sector index rose 0 4 percent
Friday marks the one year anniversary of the flash crash
on Wall Street when the Dow lost nearly 700 points in minutes
The CBOE volatility index dropped 0 4 percent to
18 12 after closing at its highest level on Thursday since
March 28
Gains were also seen in materials related stocks with the
S P materials index up 1 1 percent led by a 0 9
percent rise in mining company Freeport McMoRan Copper Gold
to 50 30
Reporting by Angela Moon Editing by Chizu Nomiyama |
XOM | NYMEX Crude edges up on weaker dollar trade seen slim | TOKYO July 4 Reuters U S crude futures edged up on
Monday in electronic trading helped by the dollar s weakness
but trade was expected to be slim due to the closing of floor
trading to mark the U S Independence day holiday
FUNDAMENTALS
NYMEX crude for August delivery was up 18 cents at
95 12 a barrel by 2253 GMT after settling down 48 cents at
94 94 on Friday
U S crude closed last week higher bouncing up from
four month lows hit after a surprise move by the 28 nation
International Energy Agency to release 60 million barrels of oil
reserves
London Brent crude for August delivery was up 12
cents at 111 89 a barrel after settling down 71 cents on
Friday
Oil exports from Iraq s southern Basra terminal rose on
Sunday to 1 68 million barrels per day bpd after a two day
slowdown due to dust storms and high winds a shipping source
said
Iran will not cut oil supplies to India despite warning
refiners it could do so if months of unpaid bills are not
settled soon the Iranian Oil Ministry s news website SHANA said
on Sunday
Yemen will repair a damaged oil pipeline in the coming
days the country s acting president was quoted as saying by the
state news agency on Sunday
A pipeline operated by Exxon Mobil Corp leaked as
many as 1 000 barrels of crude oil into the Yellowstone River in
Montana and has been shut down
The oil company said it had slowed processing rates at its
Billings refinery following the leak but did not expect supply
disruptions in the area
Crude oil prices will likely stay between 90 and 100
until the end of 2011 due to the International Energy Agency s
IEA emergency stock releases a member of Kuwait s Supreme
Petroleum Council SPC was quoted as saying on Sunday
Oil prices will likely reach 150 per barrel by next
spring with spikes as high as 170 and gasoline prices of 4 50
a gallon the norm Barron s said in its latest issue
Hedge funds and other large speculators cut their net long
U S crude futures and options positions in New York and London
last week to the lowest level since November as prices slid the
U S Commodity Futures Trading Commission said on Friday after
the market close
MARKETS NEWS
U S stocks started July with a bang on Friday with Wall
Street scoring its best week in two years on strong
manufacturing data that eased concerns about slowing growth
The euro was trading near a three week high as Greece
avoided a near term default
DATA EVENTS
The following data is expected on Monday Time in GMT
0830 Euro Zone Sentix index July
0900 Euro Zone Producer prices May
US Market holiday
Reporting by Osamu Tsukimori Editing by Michael Watson |
XOM | NYMEX Crude edges up ahead of economy data | TOKYO July 5 Reuters U S crude futures edged up on
Tuesday to remain above 95 a barrel ahead of data gauging the
strength of the world s top oil consumer
FUNDAMENTALS
NYMEX crude for August delivery was up 20 cents at
95 14 a barrel by 2334 GMT There was no settlement on Monday
because of the July 4 holiday
London Brent crude for August delivery has not yet
traded
The market was waiting for data on U S factory orders due
out later in the day
U S oil inventory data from industry group the American
Petroleum Institute and the government s Department of Energy
will be delayed by a day to Wednesday and Thursday respectively
due to the Independence Day holiday
U S Montana Governor Brian Schweitzer on Monday said
authorities will review the safety of all oil and gas pipelines
which cross waterways in the state and close those that do not
meet standards
Schweitzer said he made the move after a spill early
Saturday from an Exxon Mobil pipeline released into the
rain swollen Yellowstone River near Billings up to 1 000 barrels
of oil or 42 000 gallons
Petrobras said on Monday it had made two
additional discoveries of oil and gas in a concession it partly
owns off the coast of Brazil s Espirito Santo state
The discoveries were made 115 kilometers from the coast in
the BM ES 23 concession in block ES M 525 and at a water depth
of 1 900 meters No estimate of the size of the find was given
MARKETS NEWS
European shares rose on expectations that U S economic
recovery remained on track although banks fell on Standard
Poor s negative view on the private sector involvement in a
second Greek bailout package
The euro remained off a one month high
DATA EVENTS
The following data is expected on Tuesday Time in GMT
0430 Australia RBA cash rae Jul
0758 EZ Markit Services PMI Jun
1400 U S Factory orders May
1400 U S Durable goods May R
1500 U S USDA export inspections Weekly
2000 U S USDA crop progress Weekly
Reporting by Osamu Tsukimori Editing by Joseph Radford |
WFC | Why This Analyst Fears Wells Fargo Stock Could Fall 15 More | The raging bull market in stocks has been no secret The major indexes are up exponentially from the panic induced lows of the Great Recession and 2019 saw nearly a 29 gain in the S P 500 The problem of addressing the stock market as a whole is that it s really a market of stocks and many stocks perform quite poorly even in the strongest of bull markets Wells Fargo Co NYSE WFC has seen its reputation and its business practices damaged and its shares have suffered The bad news for Wells Fargo stockholders may not be totally over Just a day after Piper Sandler downgraded Wells Fargo to Neutral from Overweight on the heels of its earnings report RBC Capital Markets has issued a more ominous downgrade RBC dropped Wells Fargo to Underperform from Market Perform effectively telling clients to Sell rather than hold The big rub here is that the firm s price target was lowered to 42 from 48 in this call That did not prevent shares from rising up about 1 on last look but that implies that Wells Fargo shares would have about 13 downside from Wednesday s closing price of 48 32 Despite having a new CEO running Wells Fargo a decline after earnings on Tuesday and a follow on retreat on Wednesday had the shares down close to 10 year to date That is much worse performance against some of the other key banks and RBC s 42 target now matches the lowest analyst target from all the Wall Street sell side analyst community It is also 10 lower than after Piper Sandler downgraded it div connatix margin bottom 1 5em div connatix img margin unset Wells Fargo remains under restrictions with the Federal Reserve and the bank was given a mandate not to grow its assets until the bank is able to resolve its internal governance issues It replaced multiple board members has gone through a long and painful CEO transition and is more or less capped at maintaining a balance sheet at 1 95 trillion until the Federal Reserve clears its operations Until it can grow its assets again and with a cloud still over its investment and management functions it is just difficult to see how Wells Fargo can grow its earnings and revenues very much At the start of 2020 Wells Fargo had a mere 51 79 consensus target price from Refinitiv less than the 2019 closing price of 53 80 and implying a mere 0 1 total return after lumping in its 3 8 yield The latest consensus target was only a tad lower but with downgrades like this and other price target cuts after earnings the consensus figure will be closer to 50 Wells Fargo s recently reported earnings of 0 60 per share and 19 9 billion in revenue down handily from the 1 21 per share and 20 98 billion posted in the fourth quarter of 2018 While the consensus estimates had called for 1 12 per share in earnings and revenue of 20 14 billion Wells Fargo noted that the earnings this past quarter were negatively affected by litigation accruals to the tune of 0 33 per share During the latest quarter average loans were 956 5 billion up by 10 2 billion from the third quarter Total average deposits for the quarter were 1 3 trillion 53 0 billion higher than in the prior quarter which Wells Fargo attributed primarily due to growth in both commercial and consumer deposits Most banks are still seeing their book value per share metrics rise but Wells Fargo s book value per common share was 40 31 after having been 40 48 per share in the third quarter Wells Fargo s segments are also showing some pressure at the core Its community banking revenues were down 8 2 year over year at 10 52 billion and even its wholesale banking revenues decreased by 3 7 to 6 67 billion The firm s wealth and investment management revenues increased by just 2 9 to 4 07 billion despite such positive performance in the financial markets One core metric the net interest margin fell by another 13 basis points from the third quarter to the fourth quarter after having fallen by 16 basis points the prior quarter The bank s net interest income was down 3 7 from the third quarter and down 5 5 from a year earlier While RBC s target would imply about 15 downside from the current price a recent target cut from Credit Suisse came with a so called Grey Sky Scenario a more bearish case if things do not improve that went from an already dismal 40 down to 39 That downside case involves further erosion to book value and lower earnings coming from a combination of slower economic growth market value declines and higher credit costs making its share price get more in line with book value per share rather than the premium Wells Fargo shares were up about 1 7 at 49 14 in the noon hour on Thursday and the 52 week trading range is 43 34 to 54 75 It remains unclear if the newly instated CEO Charlie Scharf will be able to get the bank s operational restrictions removed or reduced sooner rather than later Most analysts do not expect that to suddenly vanish Perhaps he should be asking Warren Buffett and his near 9 stake via Berkshire Hathaway to start talking about how excited he is with the new leadership at the helm
By Jon C Ogg |
XOM | Exxon profit seen rising 59 pct on oil refining | Q1 EPS Street view 2 07
Output pegged higher
E P chemical refining all seen up
News may be priced into stock
By Anna Driver
HOUSTON April 28 Reuters Exxon Mobil Corp s
first quarter earnings are expected to surge almost 60 percent
on higher crude oil prices and increased refining and chemicals
profits
The world s largest publicly traded oil company s stock rose
15 percent in the quarter outperforming a 6 percent increase in
the Dow Jones industrial average So the benefits of
triple digit crude oil prices are likely already priced into the
stock analysts and investors said
Any rally in the stock may need more of a catalyst than a
run of the mill earnings beat
I would expect to see improvement in all of their
businesses Allen Good oil analyst with Morningstar said
But a lot of the factors driving earnings have been
telegraphed throughout the quarter You watched the price of oil
going up so I think it would be hard to shock the market
Still big profits may spur the Irving Texas based company
to increase its share buybacks in the current quarter Good
said
Unrest in the Middle East and North Africa and improving
global demand have fueled a rally in crude oil with current
prices over 100 per barrel An improving global economy has
also increased demand for crude
In the first quarter the average benchmark U S oil price
was 95 per barrel 20 percent higher than a year
earlier The average price of Brent futures in London which
have maintained a premium to U S oil prices was 5 above the
U S equivalent
Gains in crude oil are expected to boost Exxon s earnings
more than 59 percent to 10 billion or 2 07 per share
according to estimates from Thomson Reuters I B E S
Exxon s production is expected to rise sharply boosted by
its acquisition of North American natural gas exploration and
production company XTO Energy Inc in June 2010
Wall Street analysts are estimating Exxon s first quarter
production around 4 8 million to 4 9 million barrels oil
equivalent BOE per day compared with output of 4 36 million
BOE per day a year earlier
Analysts at Barclays Capital expect Exxon s chemicals
business to report a first quarter profit of 1 3 billion an
increase of more than 6 percent from the 2010 quarter
Barclays expects Exxon s first quarter refining profits to
rise to more than 1 billion from 37 million a year earlier as
the company sees higher refining margins and exports from the
Gulf of Mexico
Reporting by Anna Driver in Houston Editing by Derek Caney |
XOM | US STOCKS Futures higher before key payrolls data | U S payrolls data on tap
Oil remains under pressure
Futures up Dow 15 pts S P 1 6 pts Nasdaq 6 75 pts
For up to the minute market news see STXNEWS US
Adds quote
By Chuck Mikolajczak
NEW YORK May 6 Reuters U S stock index futures
advanced on Friday after four consecutive days of losses with
investors awaiting Friday s key U S payroll report while
digesting the impact of the tumble in commodity prices
U S crude futures shed 2 5 percent to 97 27 and
ICE Brent futures lost 2 percent to 108 56 extending
a 10 percent crash on Friday while silver earlier touched
34 23 its lowest level since March 18 For details see
ID nLDE7440RL ID nLDE7450MX
Exxon Mobil Corp dipped 0 5 percent to 82 23 in
light premarket trade
It s not completely clear that lower oil prices isn t just
good for most stocks and it s possible that you could see a
separation between what is happening in commodities at least
for a while and some continued strength in equity prices
What you will end up with if this continues is a shift in
leadership said Rick Meckler president of LibertyView
Capital Management in New York
Wall Street stock indexes fell for a fourth straight day on
Thursday as a massive sell off in commodities spilled over into
other markets forcing investors out of higher risk assets and
rattling equities markets before Friday s U S payrolls data
U S nonfarm payrolls due at 8 30 a m 1230 GMT are
expected to have risen by 186 000 last month according to a
Reuters survey of economists In March payrolls rose by 216 000
which was the biggest increase in 10 months For details see
nLDE74502M
The benchmark S P 500 has fallen 2 1 percent this week on a
string of soft economic data culminating in a drop in
commodity prices on Thursday as concerns over demand
deterioration increased
You d like to see a good trend and anything that starts to
interrupt that trend is going to cause some concern When the
trend starts to move the other way you could see a much bigger
correction in stocks than you are seeing here said Meckler
Commodity based stocks led the S P to a 4 5 percent gain at
the start of the week after the benchmark index tested the
technical support level of 1 300 on April 18
S P 500 futures gained 1 6 points and were above
fair value a formula that evaluates pricing by taking into
account interest rates dividends and time to expiration on the
contract Dow Jones industrial average futures added 15
points and Nasdaq 100 futures rose 6 75 points
Companies that have posted results on Friday include
Constellation Energy Group Northeast Utilities
Pepco Holdings with The Washington Post Company
still expected to report ID nASA0238Z ID nASA02360
ID nWNAB7154
Through Thursday with 421 of the S P 500 companies having
reported quarterly earnings 68 percent had profits that beat
Wall Street expectations according to Thomson Reuters data
European shares dipped as caution prevailed ahead of the
U S payrolls report which could point to a slowing of momentum
in the world s largest economy EU
Asian equities clawed back up from the day s lows as market
players squared positions before U S payrolls
data ID nLDE74505S
Reporting by Chuck Mikolajczak Editing by Chizu
Nomiyama |
WFC | Wells Fargo Co WFC Q4 2019 Earnings Call Transcript | Wells Fargo Co NYSE WFC Q4 2019 Earnings CallJan 14 2020 10 00 a m ETContents
Prepared Remarks
Questions and Answers
Call Participants
Prepared Remarks
OperatorGood morning My name is Regina and I will be your conference operator today At this time I would like to welcome everyone to the Wells Fargo Fourth Quarter Earnings Conference Call All lines have been placed on mute to prevent any background noise After the speakers remarks there will be a question and answer session Operator Instructions I would now like to turn the call over to John Campbell Director of Investor Relations Sir you may begin the conference John M Campbell Director of Investor RelationsThank you Regina Good morning everyone Thank you for joining our call today where our CEO and President Charlie Scharf and our CFO John Shrewsberry will discuss fourth quarter results and answer your questions This call is being recorded Before we get started I would like to remind you that our fourth quarter earnings release and quarterly supplement are available on our website at wellsfargo com I d also like to caution you that we may make forward looking statements during today s call that are subject to risks and uncertainties Factors that may cause actual results to differ materially from expectations are detailed in our SEC filings including the Form 8 K filed today containing our earnings release and quarterly supplement Information about any non GAAP financial measures referenced including a reconciliation of those measures to GAAP measures can also be found in our SEC filings in the earnings release and in the quarterly supplement available on our website I will now turn the call over to Charlie Scharf Charles W Scharf Chief Executive Officer and PresidentThank you John and good morning everyone It s good to be with you on my first earnings call As I go through my remarks I d ask that you remember that I just joined Wells Fargo less than three months ago It s been a busy time as I ve been working to get to know the Company our opportunities and challenges and I ve learned a lot but as I discussed my observations please recognize that it s still early days I don t have all the answers yet but I will share more as I learn more and as the year progresses John is going to cover the quarter in detail in a few minutes and we ll answer your questions You can see that a series of legacy issues meaningfully impacted our results in the quarter Even excluding these significant items our results are not a strong as we aspire too but the strength of the franchise is still evident There are certainly some areas of success but the opportunity to improve our results is significant and attainable Let me first share some of my observations and thoughts before turning it over to John First I was honored to be chosen to lead Wells Fargo because I believe this is an extraordinary company that plays an important role in this country We came out of the financial crisis as the most valuable and most respected bank in the US but as you know we made some terrible mistakes and have not effectively addressed our shortcomings These circumstances have led to financial underperformance but we have one of the most enviable financial services franchises in the world and employees that want to do what s necessary to again be one of the most respected and successful banks in the US To fully capture this opportunity we must have a strong foundation and move with an extreme sense of urgency to remediate our historical issues We still have much more work to do to put these issues behind us and our future depends on us doing this successfully so we can regain trust with all stakeholders including our clients regulators lawmakers as well as the broader American population Ultimately our actions will dictate when that trust is completely regained not our words Given the importance of these issues I want to say a few more words about our situation particularly about the challenges that stand in the way of our success and importantly the different approach we re taking to address these issues Providing an honest assessment and clear priorities is critical And I ve given a clear message inside the Company that we have not yet met our own expectations or the expectations of others We must do what s necessary to put these issues behind us Our ability to maximize the value of this great franchise is dependent on us running the Company with the highest standards of operational excellence and integrity beyond what we ve done to date We are appropriately a highly regulated institution And while we need to fulfill regulatory expectations we recognize that what we want and what regulators want are not different We are responsible for our actions and they re responsible for ensuring our actions are consistent with clearly defined standards It s our job to run the Company such that we fulfill their expectations and those of the American public and other countries where we operate Respect was earned in the past and we will earn it again As such since joining I ve been spending almost all of my time on these issues I will say this several times but you should note there is still much work to do Many have focused on the Fed consent order but remember we have 12 public enforcement actions that require significant resource commitment While I certainly wish more of this work was behind us what s required of us is clear and we will get it done It s worked that other banks have done already so there is a clear roadmap for what we need to achieve We are making significant changes to our management structure and processes to accomplish our work changes that will make us more effective Like any other problem recognition of the importance in severity is a necessary first step but this by itself is inadequate We will take whatever actions are necessary Our future success depends on resolving these issues so we will act accordingly The management team will be judged and held accountable for resolving these issues To set us up for success we will ensure we have the right people in place to both resolve these issues and be the stewards of this great company Importantly I want to acknowledge that we have so many wonderful people at Wells Fargo that have done an amazing jobs serving our clients and customers in the face of adversity for several years now They ve been through so much and have helped us sustain such a great franchise So I do want to say thank you to them for all they ve done the warmth and support I ve been greeted with as I ve discussed our shortcomings and work in front of us tells a great deal about the character of many at the Company They understand our lack of progress makes their jobs far more difficult and they re looking to management to do more to move the Company forward To get the work done we must ensure that we have the right team To that end we ve made some important changes to the senior team to complement the talent that s here at Wells Scott Powell joined us as Chief Operating Officer When I arrived at the Company many on the senior management team made clear to me that they believed we needed stronger execution skills After just several weeks at the Company I came to quickly agree Scott will lead a transformation across the Company where high quality execution clear accountability and operational excellence becomes part of our culture Bill Daley joined us Head of Public Affairs He has a strong and experienced voice and brings perspectives from the public sector that we in business do not generally have but are critical for us as we make decisions Allen Parker who served both as General Counsel and Interim CEO announced he will be leaving Wells in March We are well into a search for the new General Counsel and excited about the quality of the candidates we ve met Avid Modjtabai has announced that she will be retiring after 26 years at Wells Fargo in March We will be announcing a new organizational structure for these activities shortly Ray Fischer has also joined us to run our Card and Merchant Services businesses Our card business is important to our franchise and we have an opportunity to make it even more significant Ray has an experienced Card and Merchant Services executive who brings deep knowledge and a fresh perspective to our business These changes are in addition to many other senior people who have joined the Company over the past few years in important roles such as heads of risk HR internal audit and technology These new additions complement the strong talent at the Company And I will continue to look at the structure and roles to ensure we are best positioned for success We need and will have the best talent and strong leadership at the Company We re also introducing a new set of disciplines in how we run the Company which I m confident will improve our performance These changes are not only structural and procedural but also cultural To that point parts of our culture are wonderful and will take decades to recreate People who work here love it It really is like a second family We focus on teamwork not on the individual People want to be successful and do what s right though we recognized we fallen short of this call But our lack of progress and underperformance point to shortcomings Going forward we will operate as one company not a series of decentralized businesses We will continue to foster a culture of partnership but we will move past the need for consensus and have open and direct fact based discussions where we emerged with decisions We will have a different level of management discipline than we ve had in the past and we will value and expect high quality execution There will be clear responsibility and accountability We will judge ourselves based upon our outcomes not our words And we will ultimately judge ourselves versus the best as we believe that we should be the best As we ve begun to implement this new culture the response has been overwhelmingly supportive but I understand it s different and is a significant change for many We will be respectful of our past and of those who have built this great franchise which includes so many still at the Company today but we must move forward I m confident these changes will be highly impactful And though I understand you would like time frames around resolution I cannot provide that today Our job is to do the work that s necessary Regulators and other stakeholders will determine when it s done to their satisfaction My experience is that our regulators are clear direct tough but fair The work is on us at this point Let me now turn to our medium and longer term opportunities Our franchises are world class and are in the sweet spot of providing necessary financial services for consumers small businesses and middle market and large corporate companies And importantly we play an important role in helping our customers and clients prosper as well as being an important enabler for US economic growth While I ve just spoken at length of our mistakes and our commitments to fix them the underlying franchise itself is as valuable as ever and our opportunities are greater than ever The success of our business model is proven assuming we run the Company with the appropriate controls and work as one company with the goal of delivering for all stakeholders All of our business segments Community Banking Wealth and Investment Management and Wholesale have the breadth and scale that gives us significant competitive advantage and allow us to deliver truly differentiated products and experiences for our customers and clients Our opportunity to use technology to drive both automation and new solutions will only grow in importance Our franchises both individual and collectively are the envy of many so while our resources and attention today are appropriately preoccupied with historical issues As we move forward we will be in a position to leverage our unique franchise and generate stronger financial results And just to be clear we are well aware that our expense levels are significantly too high Part of this is driven by significant project expense related to historical issues part is due to the necessary investments in technology part is due to significant inefficiencies that exist across the organization but there is no reason why we shouldn t have best in class efficiency with these businesses at this scale and that ultimately will be our goal And though we ve had pockets of strong performance we re also well aware that our rate of customer and revenue growth is too low Given what we ve been though this isn t surprising There is certainly an opportunity cost due to the asset cap Management time and resources have not been as focused on growth as they otherwise would have been and we have an opportunity think differently with different level of rigor about how to grow the franchise All of this points to great opportunity So again I know you will want to know time frames and targets but please understand that it s too early after less than three months at the company That said we have just begun the process to rethink our plans for 2020 and beyond in a different level of detail While the opportunities for improvement are clear at the macro level we need business by business plans Accordingly we have just begun conducting what are really both budget and broader business reviews where we look in detail at our plans We will be reviewing over 10 businesses in detail as well as all of our enterprise functions As you can imagine technology is an important theme This isn t merely a review of the numbers but one where we use the facts to form a basis to discuss strategy and potential actions We were asking each business leader to show us what best in class efficiency looks like and what our path to achieve it is We re reviewing revenue and return performance as well and what a path to best class looks like here as well We re discussing our competitors large and small and we re thinking through our unique options given our special franchise These are analytical and strategic discussions that I don t think if occurred consistently across the company in some time given what s occurred The output of this work will provide us road maps to not only improve our performance within each business but also position us to understand our opportunities across the company and prioritize accordingly First and foremost this includes clarity around ensuring we re spending appropriately on historical issues It s still very early in our process but I will say that every session thus far has reinforced that our opportunities are meaningful We intend to be detailed thoughtful and complete to do this properly and given our priorities it will take time much of this year to complete our work But in the interim we will devote all necessary resources to risk and control and spend what s necessary We will be as diligent as ever to drive efficiencies and control expenses and we will begin to work through the business opportunities we have in front of us I m confident in our ability to realize our potential one that again puts us at the top of the respected financial institutionalist with the far more efficient organization and higher revenue growth than you see today While there is much to do and I know the path to success will be bumpy I m optimistic about our future and excited to be at a place with so many great people and such strong franchises doing incredibly important work John over to you John R Shrewsberry Senior Executive Vice President and Chief Financial OfficerThanks Charlie Good morning everyone We had a number of significant items in the fourth quarter that impacted our results which we highlight on Page 2 of our supplement We had 1 9 billion of operating losses including 1 5 billion of litigation accruals for a variety of matters including previously disclosed retail sales practice matters The litigation accruals reduced EPS by 0 33 and the majority of them were not tax deductible We had a 362 million gain from the sale of our commercial real estate brokerage business Eastdil Secured We had 166 million of expenses related to the strategic reassessment of technology projects in Wealth and Investment Management We had a 153 million linked quarter decrease in low income housing tax credit investment income reflecting a timing change of expected tax benefit recognition We had a 134 million gain on loan sales predominantly junior lien mortgages and we had a 125 million loan loss reserve release While our financial results in the fourth quarter were impacted by these items as we show on Page 3 we continue to have positive business momentum with strong customer activity which I ll highlight throughout the call On Page 4 we summarize the full year results Compared with 2018 revenue declined as 4 growth in non interest income was more than offset by a 6 decline in net interest income driven by lower interest rates Our expenses remain too high and increased 4 from a year ago driven by higher personnel expense which included 981 million of higher deferred comp expense which is P L neutral and higher operating losses Loans grew 1 and deposits increased 3 from a year ago Our net charge off rate remain near historic lows and we returned a total of 30 billion to shareholders in 2019 through common stock dividends and net share repurchases reducing common shares outstanding by 10 I ll be highlighting most of the balance sheet drivers on Page 5 throughout the call but I will note here that we were 20 billion below the asset cap at the end of the fourth quarter Turning to Page 6 I ll be covering the income statement drivers throughout the call but I want to highlight that our effective income tax rate was 19 1 in the fourth quarter which included a net discrete income tax expense of 303 million predominantly related to the non tax deductible treatment of certain litigation accruals Turning to Page 7 average loans increased linked quarter and year over year with growth in both consumer and commercial loans Period end loans increased 9 2 billion from a year ago even as we sold or moved to held for sale a total of 5 8 billion of consumer loans over the past year I ll highlight the drivers of the linked quarter growth in loans starting on Page 9 Commercial loans increased 3 4 billion from the third quarter driven by broad based C I growth in Corporate Investment Banking As we show on Page 10 consumer loans grew 4 billion from the third quarter The first mortgage loan portfolio increased 3 2 billion from the prior quarter driven by 17 8 billion of held for investment mortgage loan originations and the purchase of 2 3 billion of loans as a result of exercising servicer cleanup calls We re now substantially done with our cleanup call program for pre 2008 securitizations Junior lien mortgage loans were down 1 3 billion from the third quarter as paydowns continued to outpace new originations Credit card loans increased 1 4 billion primarily due to seasonality Our auto portfolio continued to grow with balances up 1 1 billion from the third quarter Originations were down 1 linked quarter on seasonality but increased 45 from a year ago reflecting a renewed emphasis on growing auto loans following the restructuring of the business Turning to deposits on Page 11 Average deposit costs increased 2 from the third quarter and 4 from a year ago Our average deposit cost of 62 basis points increased 7 basis points from a year ago reflecting promotional pricing in retail banking for new deposits earlier in the year and the mix shift to higher cost deposit higher cost products across our consumer and commercial businesses Our average deposit cost declined 9 basis points from the third quarter reflecting lower rates in Wholesale Banking and WIM We did not run any broad based retail banking marketing promotions for deposits during the fourth quarter However retail banking deposits increased 2 basis points due to continued impact from previous promotional campaigns and deposit gathering strategies over the past year when interest rates were higher While we continue to offer our customers competitive promotional savings and CD rates within our branches retail banking deposit costs are expected to start to decline in the first quarter as higher promotional rates expire On Page 12 we provide details on period end deposits which grew 3 from a year ago and 1 from the third quarter Wholesale Banking deposits were up 15 9 billion from the third quarter driven by seasonality and growth in existing and new customer balances Consumer and Small Business Banking deposits increased 16 billion from the third quarter driven by higher retail banking deposits including growth and high yield savings and interest bearing checking Wealth and Investment Management deposits grew as brokerage clients reallocation of cash into higher yielding liquid alternatives moderated during the quarter These increases were partially offset by lower corporate treasury and mortgage escrow deposits Net interest income declined 425 million from the third quarter primarily due to balance sheet repricing driven by the impact of the lower interest rate environment 104 million of lower hedge ineffectiveness accounting results as well as 74 million of higher MBS premium amortization costs due to higher prepayment rates We had 445 million of MBS premium amortization in the fourth quarter and based on the current interest rate environment we expect MBS premium amortization to be relatively stable in the first quarter and then start to decline Although we expect it to be higher in full year 2020 compared with full year 2019 As expected net interest income was down 6 in 2019 compared with 2018 Now we continue to expect net interest income to decline in the low to mid single digits in 2020 However as always net interest income will be influenced by a number of factors including loan and deposit growth rates pricing spreads the level of interest rates and the shape of the yield curve Turning to Page 14 non interest income declined 1 7 billion from the third quarter which included a 1 1 billion gain from the sale of our Institutional Retirement and Trust business Let me highlight a few of the other linked quarter trends We completed the sale Eastdil Secured on October 1 resulting in a 362 million gain that was reflected in other non interest income This sale reduced commercial real estate brokerage commissions by 168 million from the third quarter We provide a breakout of the revenue and direct expense related to this business on Page 27 in the appendix We re assessing all of our businesses as part of the reviews we re having since Charlie joined Wells Fargo and there may be additional pruning going forward as we assess our strategic priorities Mortgage banking revenue increased 317 million from the third quarter servicing income was up 165 million due to a negative MSR valuation adjustment in the third quarter reflecting higher prepayment rates Net gains on mortgage originations increased 152 million due to a 4 billion increase in residential held for sale mortgage loan originations while the production margin was flat at 121 basis points Net gains on mortgage loan originations also increased from higher gains associated with exercising servicer cleanup calls in the fourth quarter We expect mortgage originations to be lower in the first quarter due to normal seasonality Net gains from equity securities were down 505 million from the third quarter as lower gains from our affiliated venture capital and private equity partnerships were partially offset by a 240 million increase in deferred comp plan investment results which again are largely P L neutral Turning to expenses on Page 15 Our expenses were too high and becoming more efficient remains a top priority I will explain the drivers of the linked quarter and year over year increases in more detail starting on Page 16 Expenses increased 415 million from the third quarter driven by higher personnel and equipment expense The 320 million increase in compensation and benefits was driven by 258 million of higher deferred comp plan expense We also had higher salaries expense primarily due to changes in staffing mix which was partially offset by lower FTE As a reminder we will have seasonally higher personnel expenses in the first quarter reflecting incentive compensation and employee benefits expense Infrastructure expense increased due to higher equipment expense driven by the strategic reassessment of technology projects and WIM Our operating losses remained elevated but we re stable linked quarter As we show on Page 17 expenses increased 2 3 billion from a year ago driven by higher personnel expense and operating losses Comp and benefits expense increased 1 1 billion which included 691 million of higher deferred comp expense as well as higher salaries expense primarily due to staffing mix changes and annual salary increase Running the business non discretionary expense increased by 1 5 billion of higher operating losses partially offset by lower core deposit and other intangibles amortization expense On the earnings call last quarter we said we expected our 2019 expenses to be approximately 53 billion which was at the high end of our 52 billion to 53 billion target range As we showed on Page 18 we came in above that as fourth quarter expenses were higher than expected primarily in three areas First we had higher than forecasted outside professional services expense These expenses were primarily related to legal technology and risk management Second we had higher impairments and other writedowns including the strategic reassessment of technology projects in WIM that I previously mentioned as well as impairments on railcars Finally we had higher personnel related accruals including severance Turning to our business segments starting on Page 19 Community Banking earnings declined 570 million from the third quarter primarily driven by lower net interest income and lower net gains from equity securities On Page 20 we provide our Community Banking metrics We had 30 3 million digital active customers in the fourth quarter up 4 from a year ago including 7 growth in mobile active customers from a year ago Primary consuming checking customers consumer checking customers grew 2 from a year ago the nineth consecutive quarter of year over year growth Branch customer experience survey scores in December increased from a year ago reflecting the fundamental changes we ve made to improve the customer experience The decline in branch customer experience survey scores from the third quarter was most likely due to changes in branch staffing levels We re pleased with the progress we ve been making to improve customer satisfaction was reflected in the J D Power 2019 National Banking Satisfaction Study released in December Our customer satisfaction scores improved by 9 points from last year study the largest increase among our large bank peers Improving the customer experience across Wells Fargo remains a priority and as part of this focus we are implementing the net promoter system to allow even more dynamic customer feedback and benchmarking As a result of this implementation we ll no longer be reporting branch customer experience survey scores However we will continue to share key business drivers that reflect the progress we re making to improve the customer experience and to drive loyalty Turning to Page 21 Teller and ATM transactions declined 6 from a year ago As a result of our customers continuing to migrate to digital channels we consolidated 174 branches in 2019 We had 5 352 branches at the end of 2019 down 12 over the past three years We also continue to have strong card usage with linked quarter and year over year growth in both credit and debit card purchase volume Turning to Page 22 Wholesale Banking earnings declined 151 million from the third quarter driven by lower revenue We are an industry leader in businesses that support low income housing and renewable energy investments with which both generate income tax credits These income tax benefits do not get included in revenue So as you can see in the table on this page we re reporting both our consistent wholesale efficiency ratio and we re also providing our efficiency ratio adjusted for income tax credits in order to make this ratio more reflective of how we evaluate the business Wealth and Investment Management earnings declined 1 billion from the third quarter which included a 1 1 billion pre tax gain from the sale of our Institutional Retirement and Trust business For the first time since the first quarter of 2017 WIM had linked quarter growth in average deposits up 2 from the third quarter And total client assets increased 10 from a year ago on higher market valuations including 18 growth in retail brokerage advisory assets Closed referred investment assets resulting from the partnership between WIM and Community Banking were up 18 in the fourth quarter compared with a year ago with December having over 1 billion in closed referrals our strongest month since June of 2017 Turning to Page 24 we continue to have strong credit results with 32 basis points of net charge offs in the fourth quarter Commercial losses were 16 basis points up 5 basis points from the third quarter driven by lower recoveries and higher losses in lease financing primarily related to railcars Overall credit quality indicators in our commercial portfolio remains strong with our fourth quarter internal credit grades at their strongest levels in two years Consumer losses were 51 basis points also up 5 basis points from the third quarter Both of our consumer real estate portfolios were in a net recovery position in the fourth quarter Our other consumer portfolios had slight increases in losses from the third quarter primarily driven by seasonality Both our credit card and auto portfolios had lower loss rates than a year ago Non accrual loans declined 199 million from the third quarter with lower non accruals in both the commercial and consumer portfolios Non accrual loans were 56 basis points of total loans in the fourth quarter their lowest level in over 10 years We adopted CECL on January 1 of this year and expect to recognize a 1 3 billion reduction in our allowance and a corresponding increase in retained earnings This reduction predominantly reflects an expected 2 9 billion reduction in the allowance for commercial credit losses under CECL reflecting shorter contractual maturities and the benign credit environment While the allowance for consumer credit losses is expected to be 1 5 billion higher under CECL reflecting longer or indeterminate maturities that is recoveries in collateral value predominantly related to residential mortgage loans which had been written down significantly below current recovery value during the last credit cycle As we ve noted in prior quarters we anticipate more volatility under CECL due to economically sensitive forecast and the impact of changes in the credit cycle Turning to capital on Page 25 Our CET1 ratio decreased to 11 1 driven by returning 9 billion to shareholders through common stock dividends and net share repurchases in the fourth quarter Our ratio was still well above both the regulatory minimum of 9 in our current internal target of 10 As a reminder we used approximately 65 of the gross repurchase capacity under our most recent capital plan in the second half of 2019 so repurchases will be lower during the first two quarters of 2020 In summary while we had a number of significant items that impacted our fourth quarter financial results and our expenses remained too high we continue to have positive underlying business fundamentals including growth in loans and deposits increased customer activity and strong credit performance We also had high capital returns I m excited about the opportunities ahead as we continue to do the work necessary to transform Wells Fargo And Charlie and I will now take your questions Questions and Answers Operator Operator Instructions Our first question will come from the line of John McDonald with Autonomous Research John McDonald Autonomous Research AnalystHi Good morning Charles W Scharf Chief Executive Officer and PresidentGood morning John John McDonald Autonomous Research AnalystCharlie I wanted to ask you maybe for some high level takeaways on Wells Fargo s technology Where do you see it being up to par invest in class and what areas do you see the technology is behind and needing more investment Charles W Scharf Chief Executive Officer and PresidentThanks John It s a great question Again I I m certainly not in a position to be definitive across the board given how we ve been spending my time I will say that in the time that I spent with Saul Van Beurden who is our Head of Technology at the company We have a really clear list of the work that we have to do to both improve the underlying infrastructure of the institution which will benefit our ability to grow at some point because it really contributes to our ability to servicing all of our clients across all of our different segments as well as we possibly can And so it s a robust list There is a lot to do on it and Saul clearly is working through with his team all the right prioritization and putting time frames around it At the same time it s clear when I spend time with all of our folks that we are thinking about where we go next and how we use technology to create different experiences and we see it in terms of some of the things that we ve done in the digital space on the consumer side And so again I m not I m not in a position to be extremely specific business by business of exactly where we re positioned and how we think about it other than it s really clear that it s a that it has been a top priority inside the company and certainly all of the business leaders understand the importance that technology will play going forward Hope it s helpful John McDonald Autonomous Research AnalystOkay And then wanted to ask John Shrewsberry in terms of expenses totally getting Charlie s point about being too early to talk about expense improvement But when we think about the jumping off point as we put our models for 2020 expenses John Should we think about this 53 7 billion adjusted expenses that you did for 19 is that a good starting point to think about 2020 expenses The last you kind of said you d try to be flat in 2020 Is that the right ballpark we should be thinking about for the adjusted number John R Shrewsberry Senior Executive Vice President and Chief Financial OfficerYeah So early on here while we re still going through this planning process I wouldn t expect that much to change other than the some of the adjustments that we all make for deferred comp for excess operating losses etc And then we will as this process ensues we will come back with some more detail John McDonald Autonomous Research AnalystFor now we re kind of thinking flattish to that number or that s the right ballpark to start off with Charles W Scharf Chief Executive Officer and PresidentI would just take it period by period not that much is going to change between Q4 and Q1 the same because of the shortness of the time frame And as we get more clarity as a result of our process we will provide more clarity John McDonald Autonomous Research AnalystOkay And just one just quick follow up on that in terms of the 600 million of operating losses that you talked about it really hasn t been that in many years It s really average It seems like more like 2 billion a year I know it s hard to predict but I do worry about as anchoring too low on that 600 million should we kind of budget something higher than that just as a go forward Charles W Scharf Chief Executive Officer and PresidentThat s a good point so that we originally talked about the 600 million It reflected the 150 million per quarter of fraud related losses and other run rate operating losses without regard for what s been elevated over the last couple of years I do think the 600 million has probably grown to be something a little bit more like it could be 700 million or 800 million probably we ll try and give better guidance to that but the higher run rate or the higher realized rate that we ve had over the last two years reflects more of a combination of episodic things that are anticipated to be to recur at the same level And let me give you just on your first question a little bit more clarity because I reminded that the first quarter is the first quarter I said this in my remarks but there are seasonally elevated expenses in the first quarter that caused that stand out year after year as FICO resets as retirement eligibility sets and a few other things that will cause that to stand out in any year John McDonald Autonomous Research AnalystGot you Okay Thank you OperatorYour next question comes from the line of Ken Usdin with Jefferies Ken Usdin Jefferies AnalystHi thanks Good morning Thanks for taking the question Charlie on your points about just going after all the things to put the Company on the right foot forward how do we how do you start to assess just if the right things are happening underneath and coming back to the point just on related expenses you ve obviously had this build over time of compliance and risk and those functions Are we even at the point yet where the hiring is done in that regard but where you re actually just you ve got the people in place and it s more just about execution How do you give us a sense of just kind of where you think you are on that story arc Thanks Charles W Scharf Chief Executive Officer and PresidentSure So on the first question listen I think when you re on the inside of the company and we re managing the work that has to get done the way that we are We have clear reporting we have clear goals item by item by item And so it s very very easy for us to understand whether we re tracking to milestones and having reviewed the entire plan believe that those milestones will get us to eventual closure on issues Quite honestly from the outside you obviously don t have the ability to do that that s not something that we can provide to you So ultimately what you re going to have to look for are closure of these issues And you know as time goes on that is what we hope to accomplish and that ultimately will be success as well On your second question about where are we I guess in terms of the build of expenses necessary to accomplish the work Again I would say on that one where it s we can t sit here today and say I can t sit here today and say that the amount that we re spending and the people that we have is totally appropriate And by the way don t take that to mean it s too high it s area by area We ve added a lot of resources We need to understand whether we ve added the right resources whether we have people working together as well as we possibly can Understanding things that we ve built manually to understand where we can go to automate those items which will make us not only just far more efficient but far more effective And so again when I say it s really too early to be definitive about where we think about the level of expenses and what s appropriate I put this into the same bucket But again I just want to be really clear about this we don t sit here and believe that we have card Phonetic launched to spend whatever we possibly want on any issue We are going to spend what s necessary on these historical issues And you should assume that we will be extremely vigilant about ensuring that we re not only thinking about our future but thinking about our shareholders in terms of where it all nets out ultimately Ken Usdin Jefferies AnalystUnderstood Charlie And just one follow up on your point that couple of months in you said you got to look at like 10 business lines and just see where you should think about things from a bottom up From what you at least see now is the company what it needs to look like going forward the company has been trimming out of some areas over the course of time Do you think that all the businesses the company has today deserve to be inside the company from a go forward basis Thanks Charles W Scharf Chief Executive Officer and PresidentYeah Sure I would say as far as the big pieces of the company absolutely When we look at the benefits that our clients get from having the combination of consumer businesses wealth businesses and wholesale businesses under one roof are significant today And as we look to the future we believe they should be even more significant And so at that level I would say absolutely As John did mention in his remarks we have been pruning and as we go through these reviews and talk about some of the smaller things that we do it is a good opportunity to ask do we need to continue to do all of these things will they make a difference first to our clients and ultimately to us And so I would expect to have some things come out of that but I put them in the category of pruning at this point Ken Usdin Jefferies AnalystGot it Thanks Charlie Charles W Scharf Chief Executive Officer and PresidentSure OperatorYour next question comes from the line of Erika Najarian with Bank of America Erika Najarian Bank of America AnalystGood morning I wanted to follow up on the line of questioning that Ken just had Charlie So it sounds like as we think about what you mentioned during your prepared remarks as you focus on remediation and investment It sounds like you re also there is also room to focus on inefficiencies at the same time In particular a lot of your investors have pointed out that your headcount hasn t moved much over the past 10 years and your headcount is similar to another peer that is producing about 40 billion more in revenue than you So I just wanted I know that sounded more like a statement but the question really is there s a room to also address some of the efficiencies as you think about remediation and investment Charles W Scharf Chief Executive Officer and PresidentYeah I think again what I want to make sure that I m at least being clear about is that I think that we have we want to be able to think with this clean sheet as possible about how we should be spending our money And so that goes to asking the question are we spending appropriately on the historical issues and that number will be whatever we think it should be Absolutely we will focus on efficiency And I want to give just I haven t said this in my remarks but it is important It s not as if it s not something the Company is focused on And so when we look at all the additional resources that have been added to support these activities it s very difficult for you all to see what we have gained in terms of efficiency because you should just assume that our expenses would be substantially higher if we hadn t been generating efficiencies in the rest of the Company over the last several years But having said that with fresh eyes I got to show up and take a look and ask a whole series of questions as do some of the other new folks that have come in and there are still big parts of the company where we are extraordinarily inefficient And to be fair it s not just my eyes and the new folks eyes but it s what the existing management team talked about as well So we do believe there s significant opportunities and while the first priority is fixing the issues of the past we should be able to continue to work toward both And I do want to throw on the last category which is important which is we are thinking about the future And while time and conscious are weighted more times the past are weighted more toward the past we re not ignoring the future And so if we do see there are opportunities which are meaningful we want to have the latitude to think about how we can spend wisely on that And so that s why we re just being very very careful about leading you to a specific number because we re not sure where that all nets itself out And we want the time to be thoughtful about how to put it all together in a way that we certainly believe is the right long term thing for the company Again very conscious of the fact that we re stewards of the company and their owners out there and other stakeholders that we have to answer to Erika Najarian Bank of America AnalystUnderstood And my second question as you mentioned that you will be announcing a new org structure shortly Does that include the hires that you highlighted during your prepared remarks or could we anticipate more changes to the operating committee from here Charles W Scharf Chief Executive Officer and PresidentI think what I said is what I said which is Avid s retiring She is responsible for a whole series of things from deposits to treasury services to card to innovation digital marketing a very very wide range of things and we re actively working through what the right way to structure the company is with her retirement And when we ve completed that we will certainly make sure that you all know about what it looks like Erika Najarian Bank of America AnalystGot it And just if I could squeeze in a third question I hear you loud and clear that the closure of the issues is one way your investors and other stakeholders could measure progress at the company As we think about the end of the year what other measures of progress would you suggest your current and prospective shareholders could use to measure progress Or is one year simply too short of a time given the transformation that you believe the company will go through Charles W Scharf Chief Executive Officer and PresidentYeah I guess let me say a couple of words and John could add anything that he d like Again I think it s important we have a lot going on and I ve been here for a short time And so we feel extremely optimistic about that medium and long term but we have a lot to figure out And as I pointed out some of it takes months and some of it will take a little bit longer than that So I think answering the question of what that all looks like by the end of the year at this point is even premature but just know that we re focused on outcomes here John R Shrewsberry Senior Executive Vice President and Chief Financial OfficerGreat I think we ll be talking about realized results and what drove them over the course of the year including closure of issues To the extent that those are those are public items and then how we set ourselves up in our stakeholders up for what comes next So as this process goes on and concludes and we have a better line of sight on what happens end of the year next year etc then we ll begin to share that that will be progress Charles W Scharf Chief Executive Officer and PresidentAnd I just I don t want to dwell on it I just want to be clear I m not suggesting here that any of these public issues will be closed this year What I m suggesting is that we re going to do all the work that s required The time frames will be driven by when we accomplish that work and when the regulators are satisfied or satisfied by it There is as I said there s a great deal of it Some have a certain level of complexity to them and we re focused on the work at this point Erika Najarian Bank of America AnalystThank you OperatorYour next question comes from the line of Brian Kleinhanzl with KBW Brian Kleinhanzl KBW AnalystHi Good morning Still another question on the regulatory side I think one of the things regulators always had said is they wanted to see a change in the culture at the bank as a sign that things are improving I mean is that still an outstanding item that needs to be addressed or have been addressed already Charles W Scharf Chief Executive Officer and PresidentWell listen I think I addressed some of this in my remarks that we re prepared And I think again as the as an outsider coming in I do have the opportunity to just make some observations of some of the things that we do versus some of the things that I ve seen that could help make a company successful going through issues that are somewhat like this And so I do think that these changes that I spoke about are important to helping us be more successful at closing these issues in a way that has alluded us to at this point Brian Kleinhanzl KBW AnalystOkay And then the second question is on the numbers themselves I mean if you look at John maybe on the commercial loans you ve seen decent growth now or see some growth year over year and that portfolio looks like but pieces of it are coming from the non US also coming from this credit investment portfolio Can you guys give us an update on the C I lending side of it What s this growth in the non US Where is that coming from and then how do you see these loan CLOs Is that and what s the total CLO exposure at this time John R Shrewsberry Senior Executive Vice President and Chief Financial OfficerSure So on the second part first the total CLO exposure is about 38 billion I think at this point which hasn t changed much This approach of investing in them in loan form is really just some more accounting friendly approach it s the same risk reward otherwise and so we ve made the shift for part of our incremental investment Still an asset class that we feel comfortable with the risk reward and in spite of where we are in the cycle and for other reasons The bulk of the C I loan growth overall did come from commercial or corporate investment banking related activity So some of it s in the asset backed finance area things like CLO s And then also with major corporate customers but on probably not permanent funding things will funded activity strategic activity that ultimately would likely taken out in the capital markets subsequently So it s not so much coming from the funded term loan segment of Commercial Banking for example And I wouldn t agree too much of the growth in non US loans that s that will ebb and flow a little bit but it s not likely to be a big driver of loan growth one way or the other in the foreseeable future Brian Kleinhanzl KBW AnalystOkay Thank you Phonetic OperatorYour next question comes from the line of Marty Mosby with Vining Sparks Marty Mosby Vining Sparks AnalystThanks John I wanted to ask you first this 1 5 billion is a big number for this particular quarter You ve been addressing these issues you can t talk specifically but generic generally was there some event what was the catalyst for all of sudden recognizing another significant or meaningful slug of one time extraordinary costs John R Shrewsberry Senior Executive Vice President and Chief Financial OfficerSure I mean I can t talk too much about specific active litigation but in general these amounts get recorded when the items become both probable and estimable So we had elevated cost in this area for the last two quarters with as a result of greater estimability of what the outcomes might be Marty Mosby Vining Sparks AnalystAnd then Charlie when you re coming over now and your statement that you went through initially kind of affordably said we haven t addressed or Wells Fargo hasn t addressed these issues at the pace or in the way that they should have in order to make the progress Kind of how do you look at assessing where some of these things went wrong I mean again just generally and maybe not specifically but you got a thought over these years there would have been a lot of attention and a lot of progress and it just doesn t seem like that s been the case So your assessment of it seems pretty critical So I was just trying to figure out how to put some context around that Charles W Scharf Chief Executive Officer and PresidentYeah I guess it s in the way I would and the way I would the way I think about it is that I ve when I have the opportunity to come in and look at where we are my judgments are based upon where we actually are I haven t I don t think there is a whole lot of value in terms of when I have to figure out how to spend my time in going back and figuring out If I was here what I might have done differently I m not sure I would have done anything necessarily differently I wasn t in the seat I don t know what the priorities were I don t know what else was going on that is a very very difficult thing to do And generally something that s very very unfair to do So again I think what s relevant is that I ve been able to come in with this fresh set of eyes believe that we have an opportunity to manage these blocks of work differently with both a different set of processes some different people and a great deal of my time and attention as well as the rest of the senior management team And based upon the experience that I ve had and executing operational things as well as the other members of the team that we have in place now and understanding that the work that we have to do I do feel confident that we can get it done and that s been my focus Marty Mosby Vining Sparks AnalystI guess maybe a different way to think about it is we ve seen these things happen in the past would you couch it as that maybe there is a new standard in which Wells Fargo is going to be held accountable to kind of develop toward in order to set the new standard for the industry So in other words when the regulators get in on a bank they then really begin to kind of figure out where they want everybody else to kind of hit too so it s not like you just catching up with everybody else maybe there is surpassing and creating a more forward kind of model that they are wanting to get to so I didn t know was there that part of it as well or is this just still catching up with everybody else Charles W Scharf Chief Executive Officer and PresidentListen I think I ve got a lot to do to speak on behalf of Wells Fargo And so it certainly wouldn t be right of me to speak for regulators but I do think that we have the opportunity to raise the standard by which we view the importance of the work the manner in which we go about doing it and the way we hold each other accountable for getting it done And so again that is my focus Marty Mosby Vining Sparks AnalystThanks OperatorYour next question comes from the line of Saul Martinez with UBS Saul Martinez UBS AnalystHey Good morning guys Speaking of things you need to do to get closure on some of these issues I think in the past you ve talked about close to 10 000 processes I think John you mentioned high single digit thousands of processes where you re identifying individual risk controls and where needed remediating those risk and control functions Can you just give us a sense of where you are in that process what kind of progress you ve made more recently and I guess importantly how is your relationship with your regulators evolving as you kind of go through this and work through a lot of these individual processes Charles W Scharf Chief Executive Officer and PresidentYeah On the first part so not all 9 000 plus processes are created equally their risk score and the importance of score for their impact and we re ahead of where we anticipated being by the end of the year I don t have the exact number in front of me but the of those that are most impactful they will have been as we ve described mapped risk ID control ID controls developed where controls didn t previously exist testing over those controls put in place in the first half by the end of the first half of this year That s how that works right now And I think it s to the satisfaction of people who are watching us do it Saul Martinez UBS AnalystOkay So OK That s helpful So it feels like you re making good progress on the major on the more significant processes So just changing gears a little bit you took I think 166 million charge for reassessing technology projects in Wealth and Investment Management Can you just give a sense of what drove that decision and whether we should be thinking that there could be other IT projects with that you re looking at reassessing and cutting going forward Charles W Scharf Chief Executive Officer and PresidentSure So Jon Weiss has substantially reconstituted the leadership team in WIM And they ve set their strategic priorities and direction and they are different than what had been under development in terms of the technology to support different parts of the business over the past few years which is what resulted in the impairment to the capitalize software development costs I wouldn t anticipate seeing a lot more of that And to be honest we don t have an extraordinary amount of capitalized software development costs so that the risk isn t that great from an accounting perspective Saul Martinez UBS AnalystOkay Got it I could just squeeze one more quick one in John Just on fees the core fee lines time deposit trust card mortgages In general it seems like the momentum has improved a bit in recent quarters and but can you just give us a sense of and I m not asking for specific guidance but can you just talk directionally about whether there is any reason to think you can t grow from fourth quarter levels Obviously recognizing there seasonality in a lot of these businesses but is this are these like good core run rates to use and do you feel good about your ability to grow some of these line items John R Shrewsberry Senior Executive Vice President and Chief Financial OfficerThe trust and investment fees should step off at a high level because they price off of the opening deck which for the S P it looks good for the coming quarter that leverage it creates cyclicality that works for us and against us Mortgage as we said is probably going to be a lighter quarter in the first quarter just because of seasonality It was stronger in the fourth quarter than it would have seasonally been expect it to be but the pipeline suggest that it will be somewhat smaller on the origination side in the first quarter Card fees tick up because there s more consumer spending going on in the fourth quarter So I d expect that to be more seasonally appropriate in the first quarter And then it s hard to forecast trading activity it certainly was stronger year over year in the fourth quarter because of the blood bath in the fourth quarter of 2018 but it was weaker third quarter to fourth quarter in 2019 And historically the first quarter is a stronger quarter as a result of asset managers reallocating and people getting invested in the first quarter So we ll see what happens there and that is tougher to predict but those are the types of things that are likely to implement things that are a little bit more ratable like deposit service charges or loan fees etc I don t think it would be much change from quarter to quarter Saul Martinez UBS AnalystGot it Okay that s helpful Thank you OperatorYour next question comes from the line of Gerard Cassidy with RBC Gerard Cassidy RBC AnalystThank you and good morning John can you share with us I think you mentioned in your prepared remarks that you expected the net interest income to be down low to mid single digits for 2020 over 2019 Can you compare for us what s the driver of that vis a vis what drove the decline in 2019 Is it more having less higher yielding assets like to Pick a Pay loans on the books in 2020 or is it a margin compression issue can you give us some color there Charles W Scharf Chief Executive Officer and PresidentYeah So it s a handful of things There was a bigger drop in 2019 because of I would say that the original uptick in the premium amortization on the MBS portfolio that in I m not giving this to you in order of priority but just in terms of inputs The big leg down in LIBOR obviously had a big impact in 2019 that s expected to be a little flatter at this point as we re looking into 2020 We talked about retail deposits pardon me retail deposit pricing and how as rates were increasing we had put in place some promotions that have a little bit of a tail to them that tail was fully in place during 2019 and will abate during 2020 all of those things And it s but it s rates right It s they dropped in 2019 at least at the front end expect it to be relatively flattish in 2020 Gerard Cassidy RBC AnalystI see And I think Charles W Scharf Chief Executive Officer and PresidentJust one quick the number of variables and the range of potential outcomes around those variables that goes into giving the low to mid single digits is a lot can move as we ve talked about We were I think we were quite close on our estimation for 2019 but we ll keep you updated as we roll along in 2020 what is looking like based on what changes You mentioned Pick a Pay I guess I should also point out that that was on a full year basis it s probably 400 million worth of interest income coming off of the sold Pick a Pay loans that s worthy of mentioned that we don t have this year Gerard Cassidy RBC AnalystGreat Could you also share with us you pointed out that you grew the primary consumer checking account deposits 2 year over year what s what are you using as the hook to get customers to come in Is there some incentives whether it s a higher upfront cash deposit or that you give them or is there gifts or how are you guys driving that growth John R Shrewsberry Senior Executive Vice President and Chief Financial OfficerYeah So that metric is the number of accounts not the deposits associated with the accounts which we ve talked about separately Gerard Cassidy RBC AnalystYes John R Shrewsberry Senior Executive Vice President and Chief Financial OfficerIt s the branch network it s the digital acquisition the combination of those two things I wouldn t say that it s specifically there s nothing that s compelling people the offers that we use are more around dollars for additional capturing additional deposits from customers But these account openings reflect the sort of everyday business model of Community Banking both in the branches and through digital activity Gerard Cassidy RBC AnalystOkay And then just real quickly you mentioned lower gains in the quarter from your venture capital private equity area What s left in unrealized gains in those two categories for you folks John R Shrewsberry Senior Executive Vice President and Chief Financial OfficerYeah So unrealized gains are harder to come by these days because we tend to realize them on a faster basis since the accounting change I guess now a year and a half ago but it used to be the case that we d have to actually realize something to recognize the benefit something have to be sold or go public in order for us to take a gain and these days even with private companies doing subsequent private capital raises If I set a higher level of valuation we recognize the gain from that as it goes along and so when the ultimate realization occurs that there is less of a pop because we ve ratcheted up we ve taken gains along the way So that s led to more of a call it front end loading over the last several quarters of benefit from that portfolio and it will increase the volatility if people have down capital raise rounds or things don t go as well when companies are actually sold or taken public So it s been a great business the returns are solid But the accounting change has caused being revenue recognition to be a little bit more choppy Although in the early quarters it s actually been very strong Gerard Cassidy RBC AnalystThank you I appreciate the insights OperatorYour next question comes from the line of Scott Siefers with Piper Sandler Scott Siefers Piper Sandler AnalystGood morning guys Thanks for taking the question I was hoping to try to drill down into the cost side once again I guess if you re looking at an uptick in core expenses in the first quarter it implies a pretty substantial downdraft through the remainder of the year just to keep us in the ballpark of this year s adjusted 53 7 billion I mean did the plan indeed call for such an absolute improvement in costs and what sort of the path to get there especially at a time when there is so much discussion on investments Just curious to your thoughts there John R Shrewsberry Senior Executive Vice President and Chief Financial OfficerAll right So we re not going to be that specific about the year as a whole My comment earlier about the first quarter is like every first quarter it tends to be the high tech for expenses because of the way of personnel costs have a first quarter uptick And so like any other year on an adjusted basis you d expect them to be higher in the first quarter and gravitate down over the course of the year but we re as Charlie mentioned we re going through a second look at our planning process for the year And so there is no fixed number at this point to point to Since we are in the first quarter it s since this happens every first quarter I m calling out the fact that those personnel costs will be higher but we there won t be much more specificity around that until we ve completed this process and made some conclusions made some choices and come back and update people later in the year Scott Siefers Piper Sandler AnalystOkay all right So then rather than so even though the I guess the 53 7 billion is a sort of place to start it s not we shouldn t anticipate any sort of a flat trend or anything It s basically TBD completely on what the expectations for the full year is that correct John R Shrewsberry Senior Executive Vice President and Chief Financial OfficerI think that s appropriate so that we don t mislead you Yes Scott Siefers Piper Sandler AnalystYeah Okay All right Perfect Thank you very much You re welcome OperatorYour next question comes from the line of Betsy Graseck with Morgan Stanley Betsy Graseck Morgan Stanley AnalystBetsy Hi good morning Just wanted to understand on the planning process that Charlie announced at the beginning I know Charlie you re not talking about time frames but you ve seen a lot of different types of institutions and a lot of different types of scenarios and I m wondering is this something that we should consider is I get to best in class on a three to five year time frame or is this more of a one to three just trying to understand broad strokes your thought process there Charles W Scharf Chief Executive Officer and PresidentListen I wish I could answer the question at this point but for all the reasons that I ve spoken about I just I m not in a position to do that I think we I don t want to be repetitive so I apologize but we ve got to do the work to understand whether we re appropriately resourced against the historical activities And then honestly as we go through these discussions in terms of how you get to best in class I m sure business by business will be very very different in terms of what the time frame is Some of them will be structural Some of them will require some significant technology investment Others could be burdened by just inefficiencies that we can get to quicker So I m not trying to be evasive I just I can see there being several different answers when we look at different parts of the Company It s what it will actually look like when we re done with the work Betsy Graseck Morgan Stanley AnalystAnd does the work potentially have a result of exiting some of the businesses or do you think that that s really not on the table at this stage Charles W Scharf Chief Executive Officer and PresidentWell I think I ll repeat what I said before Betsy I think that from when you look at our big business segments there is tremendous sense because of the benefits our customers and clients get from them being under one roof But like any other company we should sit and ask the question do we need to be doing absolutely everything and we have been pruning along the way And there s probably still some more pruning that we should probably do Betsy Graseck Morgan Stanley AnalystOkay All right now Thank you very much Charles W Scharf Chief Executive Officer and PresidentSure Thank you OperatorYour next question comes from the line of Steven Chubak with Wolfe Research Steven Chubak Wolfe Research AnalystHi Good morning Charles W Scharf Chief Executive Officer and PresidentGood morning Steven Chubak Wolfe Research AnalystSo John I was hoping to drill into some of the fee trends that you had spoken to in response to an earlier question certainly appreciate the detail you guys gave in Slide 27 helping us isolate some of the impacts from gains and other related sale impacts As we think about trying to evaluate the core fee income generation power just of the franchise today after adjusting for some of these sales If I look at that 8 7 billion you guys produced this quarter I adjust for about 600 million that you guys cited in the slide And then on top of that adjust for deferred comp other investment income adjustments we get to a run rate of roughly 8 billion a quarter in core fee income generation I know you re going to have equity market tailwinds just from what happened in the fourth quarter as we enter the year in 2020 but I m just hoping if you could frame whether that 32 billion annualized run rate is a reasonable jumping off point after adjusting for some of those factors or anything else that you would cite for that matter John R Shrewsberry Senior Executive Vice President and Chief Financial OfficerWell so it s not unreasonable in the sense that it captures the seasonal volatility of some of these things that tend to ebb and flow throughout the course of the year and we ve if we ve adjusted out things that we ve sold in both from a gain perspective as well as the run rate perspective and it captures that where we do have elements as you ll note that ebb and flow relatively meaningfully from not just from quarter to quarter but from year to year And so we have had equity market tailwinds as you mentioned that we might continue to but that will come and go I think sort of tend to look at a slightly longer time horizon on some of those line items and think about what the average has been over five quarters or so since we reported in five quarters it s easy enough to There s nothing unreasonable about that approach There are some of these that we believe that even while we re doing our work we should be driving and growing and then some that will reflect the cycle of the market that we re in mortgage comes to mind in terms of where we are in the rate cycle and things like that Steven Chubak Wolfe Research AnalystGotcha No Thanks for that color John And just one more follow up for me I just wanted to clarify some of your capital guidance So I know that the last update that I can recall and I m sorry if this is wrong or misguided you alluded to attending 10 25 to 10 5 CET1 target that you guys were managing to that always felt quite conservative And in the earnings release you actually referred to an internal target of 10 I m just wondering as we think about future buybacks in capital return plans Has there been any change in the firm s internal capital targets that you guys are ultimately managing to or how are you guys trying to think about that as you start to implement some of these changes that Charlie was speaking to earlier John R Shrewsberry Senior Executive Vice President and Chief Financial OfficerYeah That s a good question We re what we ve been waiting for specifically our internal guideline is 10 and that includes the buffer on top of the 9 regulatory requirement We ve been talking about something that could be 10 25 to 10 5 waiting for what to know what CECL looks like in stress and what the stress capital buffer guidelines actually look like once they are implemented and it s a belief certainly because we are getting more CCAR clarity over the coming weeks that will start to know whether we re going to know the hit through to that this year And then it s likely that the combination of those two things leads us to a slightly higher level could be conservative but we ll know for sure once we are operating in the stress capital buffer world Steven Chubak Wolfe Research AnalystGreat Helpful color John Thanks for taking my questions John R Shrewsberry Senior Executive Vice President and Chief Financial OfficerYeah You bet OperatorYour next question comes from the line of Matt O Connor with Deutsche Bank Matt O Connor Deutsche Bank AnalystGood morning I m sure you re a little tired of all the expense question kind of near term I do want to ask though longer term on costs Charlie you said about being best in class efficiency and I guess just how do you define that and I think a lot of investors and analysts think of your direct peers is being like Bank of America JPMorgan maybe U S Bank as well but are you kind of being literal like your efficiency ratio it should be in the ballpark or better than theirs And if it is it s just a it s a bold comment given where you are coming from and obviously reflects I assume optimism on both cost and revenue but maybe you could just elaborate on some of those themes Thank you John R Shrewsberry Senior Executive Vice President and Chief Financial OfficerSure We re going we re going business by business and selecting the peer group that best represents the either the products or the segments that had established what best in class looks like So it could be the component pieces of our larger peers It could be the component pieces of regional banks and it could be the component on what the business is And then for the Company as a whole the weighted average the mix adjusted average of what those inputs are results in the outcome That s part of this review process that Charlie had alluded to earlier and it s definitely aspirational as we sit here today but that is the direction that we are setting for ourselves as Charlie mentioned for every business that we re likely to be in over the long term We ve got all of the benefits of scale working for us It s very mature in most of them and we should there may be specific reasons and we will address them if we find them why we can t compete effectively with the most efficient but that s what we re setting our sights for Matt O Connor Deutsche Bank AnalystOkay and then without putting any specific numbers around it like as you think about improving efficiency there are comments as it could be both kind of revenue and expenses should we think about it being somewhat balanced or the vast majority coming from expenses or too early to know right now John R Shrewsberry Senior Executive Vice President and Chief Financial OfficerToo early to know We know there s work to do on expenses but it s too early to start attributing percentage driver for example Matt O Connor Deutsche Bank AnalystOkay And I guess lastly Charles W Scharf Chief Executive Officer and PresidentMatt it s Charlie Let me just add one thing because I do think it s important This isn t something that I would say that John and I sit here in a room and believe and then we get in a room with others and they argue with us There is a clear understanding from our business leaders that this opportunity exists And I would say quite frankly there is very little conversation internally about the need to use revenue to improve the efficiency rate because we do understand that there are series of things that we do that are highly inefficient That s not to say to get the best in class that we won t need some revenue growth to get there but I just find it very encouraging the way people internally are thinking about it and what they re talking about as the types of things that ll be in the line of sight Matt O Connor Deutsche Bank AnalystOkay All right Thank you for that Charles W Scharf Chief Executive Officer and PresidentSure OperatorYour final question will come from the line of John Pancari with Evercore John Pancari Evercore AnalystGood morning John R Shrewsberry Senior Executive Vice President and Chief Financial OfficerGood morning John Charles W Scharf Chief Executive Officer and PresidentGood morning John Pancari Evercore AnalystOn the spread income guidance of down low to mid single digits I know you reiterated that but you also indicated that you are still pruning Does that guidance factor in the pruning and accordingly any additional adjustments to your business base would not be all that meaningful to impact that guidance or would that guidance change if you did continue to prune John R Shrewsberry Senior Executive Vice President and Chief Financial OfficerIf we continue to prune in ways that caused us to shed either loans or deposits then we would adjust the guidance It contemplates the company as it exists today John Pancari Evercore AnalystOkay All right Just wanted to verify And then in terms of CECL day two impact I just want to get your thoughts on the appetite to lend in certain longer duration consumer areas Has that been impacted at all by the implications of the new methodology John R Shrewsberry Senior Executive Vice President and Chief Financial OfficerThat s a good question We ve done the work product by product to consider what the return characteristics are And at this point it s not likely that we change our appetite for longer duration consumer loans it definitely it s depending on where you are in the cycle it can cause you to think differently about what your returns are but it hasn t closed anything to drop below a hurdle level that says to us we need to either meaningfully reprice it or where we think whether we re there in the business John Pancari Evercore AnalystOkay And then lastly just back to the expense expectations Again I know it s too early to give a more accurate expense expectation but I know you re going through your planning process so what s the timing when should we think we will get a more precise expectation when it comes to full year expenses Charlie Charles W Scharf Chief Executive Officer and PresidentYeah I guess there is nothing more that I can say that I haven t already said I think what I ve said is that we ve got this process to go through There is a lot to do and when we know something we ll tell you I wish I could be more specific I really do but we have a lot to do to get to but we think the right answer should be John Pancari Evercore AnalystGot it Okay Thanks Charles W Scharf Chief Executive Officer and PresidentAll right Listen thank you very much for your patience and joining us this morning I do hope that you just walk away with just a couple of important thoughts We have work to do It s clear what we have to do We re committed to getting it done and we will get it done The quality of the franchise is still extraordinary We have thousands and thousands of dedicated people across the Company that can come in every day to serve their clients They are doing an extraordinary job and we re going to do our part to help them do their job even better as time goes on and we think our future is very bright And so we appreciate again the patients that you have and look forward to have more conversations in the future Operator Operator Closing Comments Duration 82 minutesCall participants John M Campbell Director of Investor RelationsCharles W Scharf Chief Executive Officer and PresidentJohn R Shrewsberry Senior Executive Vice President and Chief Financial OfficerJohn McDonald Autonomous Research AnalystKen Usdin Jefferies AnalystErika Najarian Bank of America AnalystBrian Kleinhanzl KBW AnalystMarty Mosby Vining Sparks AnalystSaul Martinez UBS AnalystGerard Cassidy RBC AnalystScott Siefers Piper Sandler AnalystBetsy Graseck Morgan Stanley AnalystSteven Chubak Wolfe Research AnalystMatt O Connor Deutsche Bank AnalystJohn Pancari Evercore Analyst
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MU | What Will It Take for Micron Stock Gains to Continue | Last year was a good one for semiconductor stocks Stock prices of six of the country s largest chipmakers performed better than the S P 500 s gain of 29 Among those top performers shares of Micron Technology Inc NASDAQ MU rose by 67 in 2019 That was just behind Nvidia Corp NASDAQ NVDA which gained nearly 75 Both trailed a block busting 155 gain in Advanced Micro Devices Inc NASDAQ AMD Even the chip industry s biggest company Intel Corp NASDAQ INTC rose more than the S P 500 up about 30 5 for the year Texas Instruments Inc NASDAQ TXN added 41 5 in 2019 and Qualcomm Inc NASDAQ QCOM rose just shy of 60 The benchmark Philadelphia Stock Exchange PHLX Semiconductor Index rose 60 last year A very good year indeed But what about 2020 div connatix margin bottom 1 5em div connatix img margin unset This year has some positives and some negatives The good news is that demand will continue to be driven by manufacturers focused on putting intelligence into every imaginable device Artificial intelligence AI machine learning and self driving vehicles remain hot areas for development All require processing power and memory chips That last is where Micron enters the picture The less good news is revenues and profits were constrained last year and it s not clear that the situation will improve this year For Micron its DRAM and NAND flash memory products DRAM dynamic random access memory chips are used in varying amounts in virtually every desktop PC laptop and server NAND flash memory is used in smaller devices like thumb drives cameras and smartphones where its large storage capacity and ability to write and erase data quickly is a significant benefit Solid state drives are also big consumers of NAND flash What Micron DoesIn the high tech world memory chips are about as close as you can get to a commodity There s essentially no difference among memory chips built by Samsung SK Hynix and Micron Availability and price drive the business While DRAM memory lasts only as long as a device is powered on NAND flash retains data in the same way that a hard drive does Flash is cheap and reasonably fast while DRAM is too expensive to use as a replacement for hard drive storage In 2015 a joint venture between Micron and Intel introduced a new type of flash memory called 3D XPoint The companies claim it is about 1 000 times faster than the flash memory that underpinned the iPhone and could store about 10 times more data than the DRAM memory in PCs laptops and servers at a lower price than either The companies marketed the chips under the Optane brand For cloud server providers like Google Amazon and Microsoft these storage devices are almost guaranteed to be a big hit Micron bought out Intel s share of the joint venture early last year and introduced its own solid state drive the X100 SSD in October Like Intel s Optane devices these chips are aimed at the server market
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Even though memory demand is high supply has been able to more than keep up and that resulted in a decline in memory prices especially for DRAM chips in the second half of 2018 and the first half of 2019 DRAM pricing began to recover in December but it is expected to remain oversupplied until mid 2020 Micron has guided current quarter selling prices down by a high single digit percentage Is a Turnaround Due in Micron Stock CEO Sanjay Mehrotra attributes the decline to seasonal weakness and has said that pricing will improve this year because supply growth has declined as chipmakers have cut capital spending on new equipment while demand remains strong Mehrotra went so far as to say the supply demand balance for this will be a tailwind for makers of memory chips Although the final numbers aren t in yet the Semiconductor Industry Association in December estimated that semiconductor sales would fall by around 12 5 last year In 2018 buyers were worried about the effect of tariffs on the availability of memory chips That drove demand and prices higher As the effects became clearer demand slowed and prices fell Now inventories have cleared up most of the overhang and buying is expected to return pushed further ahead due to demand from AI machine learning and autonomous vehicles A Longer Term Outlook for MicronMicron s fiscal second quarter ends this month and expectations are low due both to seasonality and to remaining supply overhang The consensus estimate calls for earnings per share EPS of 0 37 on sales of 4 71 billion For the full fiscal year ending in August Wall Street is looking for EPS of 2 27 and sales of 20 48 billion Both estimates are lower than fiscal 2019 EPS of 6 35 and sales of 23 41 billion Since the beginning of the year nine analyst firms have reiterated their Buy ratings on Micron Technology stock raised their price targets or done both The consensus price target on the stock is 66 64 At last Friday s closing price of 53 09 the implied upside on the stock is just over 25 Micron was one of 10 stocks that scored major analyst upgrades early this year Looking out to the 2021 fiscal year analysts expect EPS to double to around 5 50 and to rise in 2022 to about 7 70 What all this indicates is that even given intense competition from two larger competitors Micron can hold its own in the memory market even though gross margins have dipped from nearly 60 in November 2018 to 36 this past November There are few naysayers as short interest in the stock is a mere 2 4 of the float
By Paul Ausick |
MU | Top Analyst Upgrades and Downgrades Akamai Alibaba Boeing Goodyear Lyft Micron Nvidia T Mobile Under Armour Wynn XPO and More | Stocks were up again on Tuesday for the indexes to challenge new highs and Wednesday morning was looking like another strong open as the market has almost entirely discounted the long term impact of the coronavirus into a short term blip even as the death toll has risen Many investors have yet to make any major changes to their holdings after the incredible gains from 2019 This is an election year with much at stake and strategists are largely calling for single digit percentage gains in 2020 24 7 Wall St reviews dozens of analyst research reports each day of the week our goal is to try to find new ideas for traders and long term investors alike Some of the daily analyst calls cover stocks to buy while some calls cover stocks to sell or to avoid div connatix margin bottom 1 5em div connatix img margin unset We have provided these analyst calls in a quick hit summary for easy reading and additional comments and trading data have been added on many of the calls The consensus analyst price targets and other valuation metrics are from the Refinitiv sell side research service These are the top analyst upgrades downgrades and initiations from Wednesday February 12 2020 Activision Blizzard Inc NASDAQ ATVI was reiterated with a Buy rating and its target price was raised to 68 from 61 versus a 61 19 prior close at SunTrust Robinson Humphrey The previous consensus target price was 66 03 and the 52 week high is 62 84 Akamai Technologies Inc NASDAQ AKAM was reiterated as Buy and its target price was raised to 112 from 102 versus a 96 37 close at Needham It had a 97 53 prior consensus target price and the prior 52 week high was 97 97 The stock was indicated up 4 4 at 100 60 after earnings Alibaba Group Holdings Ltd NYSE BABA was named as the Bull of the Day at Zacks which said that the e commerce giant looks ready to continue its expansion in the post Jack Ma era Shares most recently closed at 217 21 with a consensus price target of 241 91 Ardelyx Inc NASDAQ ARDX was started with a Buy rating and a 13 target price at Citigroup Shares closed up 1 3 at 7 43 ahead of the call with a 495 million market cap and a 13 40 prior consensus target price Bed Bath Beyond Inc NASDAQ BBBY was reiterated as Outperform and with an 18 target price at Wedbush Securities with the call saying that the decline after its update showed even weaker margins represents a buying opportunity to reconsider this turnaround story as the company looks for asset sales and embarks on the new CEO s transformation plan Raymond James maintained its Strong Buy rating but trimmed its target price to 14 from 17 The stock had a 14 85 prior close but shares were last seen down 25 at 11 05 on Wednesday morning Boeing Co NYSE BA was maintained with a Neutral rating at Credit Suisse but the firm did lift its target price back up to 367 from 321 The firm noted that the cash costs appear to be loaded upfront with more positive views after a sell side meeting on Tuesday Boeing closed down less than 0 1 at 344 42 ahead of the call after showing new plane orders fell off a cliff and the stock was indicated up almost 1 00 ahead of the opening bell on Wednesday Cardinal Health Inc NYSE CAH was raised to Equal Weight from Underweight at Morgan Stanley Its shares closed up almost 0 4 at 59 41 ahead of the call and were indicated up 1 5 at 60 25 afterward with a prior consensus target price of 57 29 and against a 52 week high of 60 48 Goodyear Tire Rubber Co NYSE GT was down 12 3 at 11 56 on Tuesday s post earnings decline JPMorgan downgraded it to Neutral from Overweight and lowered its target price to 14 from 20 Insperity Inc NYSE NSP was maintained with a Buy rating but its target was lowered to 112 from 128 versus an 89 08 close at SunTrust Robinson Humphrey The stock was up 3 at 89 08 ahead of earnings but was indicated down 21 at 70 50 afterward Lyft Inc NASDAQ LYFT was up 0 4 at 53 94 on Tuesday ahead of earnings but it was indicated down 4 6 early Wednesday at 51 50 despite beating sales expectations and showing a 23 jump in active riders SunTrust Robinson Humphrey maintained it as Buy and cut its target to 74 from 75 and Stifel maintained its Buy rating but trimmed its target price to 56 from 60 Wells Fargo reiterated an Overweight rating and raised its target to 70 from 60 and RBC Capital Markets maintained its Outperform rating while cutting its target to 75 from 82 Goldman Sachs reiterated its Buy rating and raised its target to 64 from 58 |
MU | Stocks making the biggest moves midday Shopify Lyft Bed Bath Beyond Micron more | Check out the companies making headlines in midday trading Lyft Lyft shares dropped 10 after the ride sharing company failed to update its timeline on when it would become profitable This overshadowed stronger than expected results for the fourth quarter Bed Bath Beyond Shares of the home goods store chain plummeted more than 20 on disappointing sales Bed Bath Beyond said its same store sales for December and January dropped by 5 4 Analysts polled by Refinitiv expected a decline of 3 97 We are experiencing short term pain in our efforts to stabilize the business CEO Mark Tritton said in a statement Shopify Shares of Shopify soared more than 7 after the company reported better than expected fourth quarter results and gave upbeat guidance for the full year 2020 Shopify reported earnings of 43 cents per share exceeding consensus estimates of 24 cents per share according to Refinitiv Shopify makes software for companies to sell products online Micron Technology Micron climbed more than 3 after an analyst at UBS upgraded the chipmaker to buy from neutral As cyclical concerns evaporate structural dynamics should carry the day the analyst said in a note Western Union Shares of Western Union plunged more than 7 after the payment processing company posted a quarterly earnings miss The company reported adjusted quarterly earnings of 38 cents per share 5 cents below estimates Western Union gave an upbeat outlook for 2020 however and announced a 13 percent increase in its quarterly dividend Whiting Petroleum Shares of Whiting Petroleum tanked more than 22 after reports said the energy company is considering hiring advisors to review its capital structure Teva Pharmaceutical Shares of Teva Pharmaceutical soared 9 after the world s largest generic drug maker reported better than expected results Teva beat estimates by a penny with adjusted quarterly profit of 62 cents per share while revenue also beat forecasts according to Refinitiv CyberArk Software Shares of CyberArk Software tanked more than 13 after the cybersecurity company gave a disappointing outlook CyberArk gave a full year adjusted EPS guidance of 2 26 to 2 38 below the consensus Refinitiv estimate of 2 79 The company beat earnings and revenue expectations however Carnival Shares of Carnival rose more than 2 despite the cruise line saying the coronavirus could dent earnings this year by as much as 65 cents per share if the cruise line is forced to suspend its operations in Asia Shares rose as investors have been anticipating a material impact to earnings because of the virus The shares are down for the year Wynn Resorts Las Vegas Sands Shares of Wynn Resorts and Las Vegas Sands rose 3 5 and 3 3 respectively after Bank of America upgraded both casinos to buy from neutral The bank said investor and stock reaction has been muted since the coronavirus crisis began and the threat may be passing Hess Shares of the oil company gained 4 6 as energy stocks led the S P higher on Wednesday on the back of surging crude prices U S West Texas Intermediate crude gained 3 5 at its session high as traders eye potentially deeper production cuts from OPEC ConocoPhillips Marathon Petroleum and Devon Energy were among the other names in the green all posting a gain of more than 2 CNBC s Fred Imbert Maggie Fitzgerald and Pippa Stevens contributed reporting |
MU | Wall Street sets record closing highs as coronavirus fears subside | By Stephen Culp NEW YORK Reuters Wall Street closed at record highs on Wednesday as news that the coronavirus outbreak could be running out of steam kept buyers in the ring Technology shares led the broad based rally which pushed all three major U S stock averages to fresh highs The S P 500 and the Nasdaq have now set closing highs for three consecutive sessions The Dow reached its most recent closing record on Feb 6 China reported its lowest number of new coronavirus cases in two weeks the day after Beijing s senior Chinese medical adviser said the epidemic could be over by April Obviously the market is relieved over the fact that it appears that new cases of the coronavirus seem to be dwindling said Peter Cardillo chief market economist at Spartan Capital Securities in New York The outbreak has spooked investors amid quarantines supply chain disruptions and factory shutdowns and the World Health Organization WHO warned that the apparent slowdown in the epidemic s spread should be viewed with extreme caution Market participants paid heed to U S Federal Reserve Chair Jerome Powell as he wrapped up his semiannual economic report before Congress during which he said the central bank was closely monitoring the coronavirus and other threats Chairman Powell stuck to his script and that was also good news for the market Cardillo added He reassured the market that the Fed is there willing and ready if need be to stimulate the economy Indeed Powell reiterated his confidence in the sustainability of the current U S economic expansion now in its 11th year The Dow Jones Industrial Average DJI rose 274 46 points or 0 94 to 29 550 8 the S P 500 SPX gained 21 63 points or 0 64 to 3 379 38 and the Nasdaq Composite IXIC added 87 02 points or 0 9 to 9 725 96 Of the 11 major sectors in the S P 500 all but consumer staples SPLRCS ended the session in the black with energy SPNY technology SPLRCT and consumer discretionary SPLRCD posting the largest percentage gains Fourth quarter reporting season is over the hump with 351 companies in the S P 500 having posted results Of those 70 9 have surprised analyst expectations to the upside according to Refinitiv data Aggregate fourth quarter earnings are now seen growing at an annual rate of 2 4 a turnaround from the 0 3 year on year decrease forecast on Jan 1 Lyft Inc O LYFT lost 10 2 after the ride hailing company forecast slower revenue growth in 2020 Micron Technology Inc O MU advanced 3 5 after UBS upgraded the chipmaker s shares to buy The broader Philadelphia SE Semiconductor index SOX gained 1 4 Advancing issues outnumbered declining ones on the NYSE by a 1 69 to 1 ratio on Nasdaq a 1 67 to 1 ratio favored advancers The S P 500 posted 71 new 52 week highs and two new lows the Nasdaq Composite recorded 137 new highs and 50 new lows
Volume on U S exchanges was 7 40 billion shares compared with the 7 66 billion share average over the last 20 trading days |
WFC | Wells Fargo s new chief pledges more cost cuts as profit slumps | By Imani Moise and Noor Zainab Hussain Reuters Wells Fargo Co s N WFC profit slumped 55 in the fourth quarter as new boss Charles Scharf set aside another 1 5 billion for legal costs related to the bank s sales scandal and promised fundamental changes The bank racked up operational losses of 1 9 billion in the final quarter of the year partly for reserves to cover pending litigation related to its fake account scandal that erupted more than three years ago Wells Fargo the fourth largest U S lender by assets has leaned on cost cuts to stabilize its bottom line while its revenue growth has been sluggish However a raft of fines and costs relating to sales abuses first uncovered in 2016 have been hard to control Scharf said the bank s cost structure is simply too high and pledged to improve performance once he gets through regulatory issues that need attention There is no reason why we shouldn t have best in class efficiency with these businesses at this scale and that ultimately will be our goal the new chief executive said on a call with analysts He declined to give specific targets or a time frame for reaching them Wells Fargo shares fell about 4 to 50 01 Cost cutting was also a cornerstone of former CEO Tim Sloan s recovery plan but the bank acknowledged last year that technology and compliance costs would remain high as it tried to satisfy regulators Wells Fargo s non interest expenses jumped 17 in the fourth quarter compared with the year earlier period due to the litigation costs as well as higher compensation expenses It spent 78 6 cents for every dollar of revenue it generated up from 63 6 cents a year earlier and far above Sloan s targeted range of 55 59 cents per dollar or rival JPMorgan Chase Co s N JPM 55 9 cents Investors watch that ratio closely to determine how well a company manages expenses Wells is operating under heavy scrutiny as it tries to rebuild its reputation including an unprecedented cap on its balance sheet by the Federal Reserve and frequent criticism from prominent U S politicians Its problems began to unfold in September 2016 when the bank revealed that employees had opened potentially millions of bogus accounts in customers names without their permission to hit sales targets set by management Since then Wells Fargo has found other problematic practices that cost customers money or otherwise harmed their financial well being Scharf is the fourth CEO in place since that time and investors are hopeful he can finally get his arms around the problems Although the bank has reached settlements with some regulators and private parties there are still outstanding probes by U S authorities including the Department of Justice and the Securities and Exchange Commission It also operates under consent orders with regulators as well as the Fed s asset cap Scharf would not provide guidance on when Wells Fargo might resolve its regulatory issues Wells Fargo s profit fell to 2 55 billion or 60 cents per share in the fourth quarter from 5 71 billion or 1 21 per share a year earlier Its adjusted earnings of 93 cents per share compared with analyst estimates of 1 12 on average according to Refinitiv Revenue of 19 86 billion came in below expectations of 20 12 billion The bank s net interest income fell 11 as the Fed lowered interest rates three times last year to support the economy However its mortgage business benefited from lower rates with income rising to 783 million from 467 million
Wells Fargo also continued to add deposits in the most recent quarter with interest expense linked to deposits jumping 17 |
WFC | Why Shares of Wells Fargo Are Down Today | What happened
Shares of Wells Fargo Co NYSE WFC traded down nearly 5 on Tuesday after the banking giant reported fourth quarter results that came in below expectations The company has spent the last few years trying to dig out from a mess caused by a fake accounts scandal and a number of other regulatory and legal issues and its new CEO made it clear Tuesday that Wells Fargo still has significant work ahead of it
So what
Before markets opened today Wells Fargo reported fourth quarter adjusted earnings of 0 93 per share on revenue of 19 86 billion missing consensus estimates for 1 12 per share in earnings on revenue of 20 1 billion In a statement CEO Charlie Scharf who took the top job at the bank in October laid out his agenda for what he says needs to happen to transform the company
Wells Fargo is a wonderful and important franchise that has made some serious mistakes and my mandate is to make the fundamental changes necessary to regain the full trust and respect of all stakeholders Scharf said During my first three months at Wells Fargo my primary focus has been on advancing our required regulatory work with a different sense of urgency and resolve while beginning to develop a path to improve our financial results
Scharf specifically pointed to Wells Fargo s cost structure The bank s efficiency ratio a measure of noninterest expense divided by revenue was 78 6 for the quarter and 68 4 for the year compared to 69 1 in the quarter ending Sept 30 and 65 in all of 2018
Now what
For all of its troubles Wells Fargo is hardly a dying institution The company s average deposits grew 4 year over year to 1 3 trillion and its number of digital active customers was up by a similar percentage
Wells Fargo trades at about 10 times earnings well below the 13 times multiples of better performing financial institutions including J P Morgan Chase and Bank of America There is great potential here for value investors if Scharf is able to right the ship and get the bank s problems behind it But if nothing else investors got a reminder on Tuesday that the turnaround is going to take a while to play out |
WFC | Wells Fargo Needs Tech Upgrade Time to Partner With Ripple | Wells Fargo customers are not satisfied with the bank s old technologies and systems and call for an upgrade Is it time to adopt blockchain based solutions or distributed ledger systems like Ripple While this might be the story of other US banks Wells Fargo s struggle is quite representative From Innovative to PrimitiveBack in the 90s Wells Fargo was the first American bank to offer online banking However the lender is falling short of clients expectations in terms of innovations according to current and former employees Recently the Wall Street Journal WSJ reported on the bank s archaic systems While Wells Fargo has enhanced its tech offerings including contactless debit cards online mortgage applications and card free ATMs the bank is still struggling with problems across tech operations What s worrying is that the top management often doesn t seem to care For example the lender s division monitoring initiatives like Apple Pay had missing documents on a regular basis as their creation and verification was mostly done manually Mark McAllister a project manager in the unit from 2014 to 2019 raised concerns about the issues especially because regulatory compliance was at stake However he was fired shortly after apparently because of bothering senior executives It is not the first time when the WSJ reports on Wells Fargo s tech problems By June 2018 the bank had faced issues like software vulnerabilities risk management problems and cybersecurity concerns among others Last year the bank s online and banking systems shut down for hours Its servers in a Minnesota data center went off after an incident Add to this the fake account scandal in 2016 and you can understand that the lender is almost dealing with a tech crisis After the scandal the old systems have made it challenging for Wells Fargo to meet regulatory requirements This is the conclusion of more than a dozen of current and former workers The company has found difficulties with basic tasks such as supervising workers pay and creating a new platform for financial advisers Can Blockchain Save Wells Fargo In October of last year the new CEO Charles Scharf said in his first meeting with employees We need to be a technology company The bank s tech boss Saul Van Beurden told the media that his top priorities revolved around fixing regulators complaints attracting talent and making sure servers don t go offline again Big banks spend billions on digital systems and employ tens of thousands of people to ensure the smooth upgrade to innovation Given that Wells Fargo requires an urgent update it has the chance to adopt the latest technologies and blockchain would be the first option The distributed ledger technology DLT can ensure the security of data and prevent systems from going offline It can also bring in transparency and speed up processes In fact the bank is already working on its own stablecoin that is due to launch this year Payments with the USD backed coin will work with a dedicated platform Ironically Wells Fargo is not supportive of cryptocurrencies like Bitcoin the first use case of blockchain The bank doesn t let its customers buy Bitcoin What About Partnering with Ripple If the oldest cryptocurrency doesn t have its place at Wells Fargo another mainstream coin could be welcomed by the bank Ripple is a global blockchain network operated by a company that claims to maintain the decentralized aspect of the system Major banks including MUFG Bank Standard Chartered Banco Santander SBI and American Express have already partnered with Ripple to use its payment system The chances are that Wells Fargo will be the next big name to adopt Ripple s technology which could be another step for the bank s upgrade Last year Ripple CEO Brad Garlinghouse said that half of the world s largest banks would be using XRP by the end of 2020 On a side note Wells is the 13th largest bank We Need to Be a Technology Company Wells Fargo Struggles With Aging Systems Brad Garlinghouse had said it earlier in 2019 that by the end of 2020 half of the worlds largest banks will be using XRP Wells Fargo is the 13th largest bank XRP xrparmyhttps XRP Enabled XRPEnabled January 12 2020Some internet onlookers suggested that Wells Fargo and Bank of America another large US bank were having discussions with Ripple regarding potential partnership though this information couldn t be confirmed as of today Nevertheless while Ripple can provide several benefits to Wells Fargo especially in terms of speed and transaction security it is hardly likely that the bank will use XRP amid the ongoing Ripple lawsuit All in all much depends on the US Securities and Exchange Commission s decision on XRP s status Do you think Ripple will help Wells Fargo update its system Share your thoughts in the comments section Image via Shutterstock Twitter XRPEnabledThe Rundown From Innovative to PrimitiveCan Blockchain Save Wells Fargo What About Partnering with Ripple |
WFC | Are You Invested In These 3 Mutual Fund Misfires January 06 2020 | You may need to start looking for a new financial advisor if your current one has put any of these high fee low return Mutual Fund Misfires of the Market into your portfolio
High fees coupled with poor results It s a straightforward equation for an awful mutual fund Some are more regrettable than others and some are bad to the point that they have got a Strong Sell from our Zacks Rank the lowest positioning of the almost 19 000 mutual funds we rank every day
First let s break down some of the funds currently part of our Mutual Fund Misfires of the Market If you happen to have put your money into any of these misfires we ll help assess some of our best Zacks Ranked mutual funds
3 Mutual Fund Misfires
Now let s take a look at three market misfires
Fidelity Advisor Event Driven Opportunities C FATJX Expense ratio 2 28 Management fee 0 8 After expenses the 5 year return is 1 72 meaning your fees are far higher than the fund s returns
Invesco Global Mkt Neutral Fd Cl A MKNAX Expense ratio 1 49 Management fee 0 8 Over the last 5 years this fund has generated annual returns of 4 93
Wells Fargo NYSE WFC Asset Allocation C EACFX 2 06 expense ratio 0 27 management fee This fund has yielded yearly returns of 1 88 in the course of the last five years Too bad
3 Top Ranked Mutual Funds
Since you ve seen the most noticeably lowest Zacks Ranked mutual funds how about we take a look at some of the top ranked mutual funds with the least fees
AB Discovery Growth K CHCKX is a fund that has an expense ratio of 1 08 and a management fee of 0 61 CHCKX is a Mid Cap Growth mutual fund These funds aim to target companies with a market capitalization between 2 billion and 10 billion that are also expected to exhibit more extensive growth opportunities for investors than their peers With yearly returns of 10 05 over the last five years this fund clearly wins
MFS Growth Fund R2 MEGRX is a stand out fund MEGRX is a Large Cap Growth option these mutual funds purchase stakes in numerous large U S companies that are expected to develop and grow at a faster rate than other large cap stocks With five year annualized performance of 13 93 and expense ratio of 1 16 this diversified fund is an attractive buy with a strong history of performance
Cohen Steers Realty Shares Institutional CSRIX has an expense ratio of 0 75 and management fee of 0 75 CSRIX is categorized as a Sector Real Estate mutual fund which typically invests in various real estate investment trusts REIT due to their taxation rules With yearly returns of 11 61 over the last five years this fund is well diversified with a long reputation of salutary performance
Bottom Line
Along these lines there you have it if your financial guide has you put your money into any of our Mutual Fund Misfires of the Market there is a strong likelihood that they are either dormant at the worst possible time inept or in all probability filling their pockets with high fee commissions at the cost of your financial objectives
Do You Know the Top 9 Retirement Investing Mistakes
Whether you re planning to retire early or not don t let investing mistakes derail your plans
If you have 500 000 or more to invest and want to learn more click the link to download our free report 9 Retirement Mistakes that will Ruin Your Retirement This report will help you steer clear of the most common mistakes like trying to time the market lack of diversification in your portfolio and many more Get Your FREE Guide Now |
WFC | 3 Gold Mutual Funds To Buy As Middle East Tensions Flare Up | Fresh tensions erupted between the United States and Iran last week after the former killed the latter s military leader in a targeted airstrike at Baghdad s international airport The assassination gave rise to fresh animosities and these hostilities are likely to escalate as Tehran prepares to retaliate and Washington s defensive action could led to more steps to shield its embassies diplomats and service members etc In such a geopolitical scenario it is best to stick to safe haven investments Mutual fund investors could thus consider investing in gold Iranian Military Leader Killed in U S Drone StrikeQassem Soleimani leader of the foreign wing of Iran s Islamic Revolutionary Guard Corps was assassinated on Jan 3 in a U S airstrike authorized by President Donald Trump Soleimani was considered one of the top notch most revered military leaders in Iran A statement issued by the U S Department of Defense confirmed President Trump s authorization of the same The move was termed decisive defensive actionto protect U S personnel abroad by killing by the defense department The Washington Tehran relation has been rather shaky for quite some time owing to tensions over a 2015 nuclear deal United States economic sanctions on the Islamic Republic and Iran s shooting down of an American drone over the Strait of Hormuz in June 2019 But now Soleimani s assassination has led to further hostility between the two countries The Islamic Republic s Supreme Leader Ayatollah Ali Khamenei declared three days of mourning on Jan 3 On Saturday Trump threatened to hit 52 Iranian sites very hard if Iran attacks U S citizens or assets Soleimani s body was returned to Iran on Sunday The very same day Tehran said that the country would no more stand by its 2015 nuclear deal with global powers President Trump had pulled U S out of the agreement in 2018 Gold Hovers Close to Six Year HighGold being a safe haven asset witnessed a spike as investors flocked to buy the precious metal as they anticipated volatility in equity markets ahead Gold bullion rose 1 5 on the morning of Jan 3 nearing a six year high Gold s uptick was a result of the assassination of Soleimani Gold prices increased as high as 1 551 30 per ounce less than a 1 gain away from its highest price since April 2013 Given that U S Iran relationship is on rocky ground and the possibility of a full fledged war between the two countries is on the rise one may anticipate gold prices to move higher ahead 3 Gold Funds to Set Eyes OnWe have therefore selected three mutual funds that carry a Zacks Mutual Fund Rank 1 Strong Buy and invest in companies that are engaged in various activities in the gold and precious metals industry In addition the minimum initial investment is within 5 000 We expect these funds to outperform their peers in the future Remember the goal of the Zacks Mutual Fund Rank is to guide investors to identify potential winners and losers Unlike most of the fund rating systems the Zacks Mutual Fund Rank is not just focused on past performance but also on the likely future success of the fund The question here is why should investors consider mutual funds Reduced transaction costs and diversification of portfolio without several commission charges that are associated with stock purchases are primarily why one should be parking money in mutual funds read more American Century Global Gold Fund A Class aims for total return which comprises capital appreciation and dividends The fund invests the majority of its assets in securities of companies that partake in mining processing fabricating or distributing gold ACGGX is a non diversified fund This Zacks sector Precious product has a history of positive total returns for more than 10 years To see how this fund performed compared to its category and other 1 and 2 Ranked Mutual Funds ACGGX has an annual expense ratio of 0 93 which is below the category average of 1 39 It has returned 39 3 over the period of a year ACGGX has a minimum initial investment of 2500 Wells Fargo NYSE WFC Precious Metals Fund Class A invests a majority of its assets in investments related to previous metals The non diversified fund may invest in U S and non U S issuers alike EKWAX seeks long term capital appreciation This Zacks sector Precious product has a history of positive total returns for more than 10 years To see how this fund performed compared to its category and other 1 and 2 Ranked Mutual Funds EKWAX has an annual expense ratio of 1 09 which is below the category average of 1 39 It has returned 46 1 over the period of a year EKWAX has a minimum initial investment of 1000 Franklin Gold and Precious Metals Fund Class A seeks capital growth The non diversified fund invests the majority of its assets in securities of companies engaged in operations of gold and precious metals The fund may also invest extensively in securities of small and medium capitalization companies This Zacks sector Precious product has a history of positive total returns for more than 10 years To see how this fund performed compared to its category and other 1 and 2 Ranked Mutual Funds FKRCX has an annual expense ratio of 0 98 which is below the category average of 1 39 It has returned 50 over the period of a year FKRCX has a minimum initial investment of 1000 Want key mutual fund info delivered straight to your inbox Zacks free Fund Newsletter will brief you on top news and analysis as well as top performing mutual funds each week |
WFC | 3 Mutual Fund Misfires To Avoid January 07 2020 | If your advisor has you invested in any of these Mutual Fund Misfires of the Market with high fees and low returns you need to rethink your advisor
The easiest way to judge a mutual fund s quality over time is by analyzing its performance and fees Our Zacks Rank of over 19 000 mutual funds has identified some of the worst of the worst mutual funds you should avoid the funds with the highest fees and poorest long term performance
Below you ll read about some of the funds included in our current list of Mutual Fund Misfires of the Market And if by chance you re invested in any of these misfires we ll help and review some of our highest Zacks Ranked mutual funds
3 Mutual Fund Misfires
Now let s take a look at three market misfires
Wells Fargo NYSE WFC Absolute Return A WARAX Expense ratio 1 53 Management fee 0 72 After expenses the 5 year return is 0 07 meaning your fees are far higher than the fund s returns
Commonwealth Africa Fund CAFRX 1 75 expense ratio 0 75 CAFRX is a Non US Equity option focusing their investments acoss emerging and developed markets and can often extend across cap levels too This fund has yearly returns of 4 62 over the most recent five years Another fund liable of having investors pay more in charges than what they receive in return
Templeton Global Balanced Fund C FCGBX 1 95 expense ratio 0 73 management fee FCGBX is a Global Equity mutual fund which invests their assets in large markets leveraging the global economy FCGBX has generated annual returns of 0 32 over the last five years Ouch
3 Top Ranked Mutual Funds
Since you ve seen the most noticeably lowest Zacks Ranked mutual funds how about we take a look at some of the top ranked mutual funds with the least fees
MFS Mid Cap Growth Fund R4 OTCJX 0 83 expense ratio and 0 71 management fee OTCJX is a Mid Cap Growth mutual fund Mid Cap Growth funds pick stocks usually companies with a market cap between 2 billion and 10 billion that demonstrate extensive growth opportunities for investors compared to their peers With an annual return of 13 81 over the last five years this fund is a winner
Mar Vista Strategic Growth Institutional MVSGX Expense ratio 0 7 Management fee 0 6 MVSGX is a part of the Large Cap Growth mutual fund category which invest in many large U S companies that are expected to grow much faster compared to other large cap stocks MVSGX has managed to produce a robust 11 23 over the last five years
Fidelity Advisor Small Cap Growth I FCIGX has an expense ratio of 1 06 and management fee of 0 84 FCIGX is a Small Cap Growth mutual fund and tends to feature small companies in up and coming industries and markets With annual returns of 14 27 over the last five years this fund is a well diversified fund with a long track record of success
Bottom Line
Along these lines there you have it if your financial guide has you put your money into any of our Mutual Fund Misfires of the Market there is a strong likelihood that they are either dormant at the worst possible time inept or in all probability filling their pockets with high fee commissions at the cost of your financial objectives
Do You Know the Top 9 Retirement Investing Mistakes
Whether you re planning to retire early or not don t let investing mistakes derail your plans
If you have 500 000 or more to invest and want to learn more click the link to download our free report 9 Retirement Mistakes that will Ruin Your Retirement This report will help you steer clear of the most common mistakes like trying to time the market lack of diversification in your portfolio and many more Get Your FREE Guide Now |
WFC | Earnings Preview Wells Fargo WFC Q4 Earnings Expected To Decline | Wall Street expects a year over year decline in earnings on lower revenues when Wells Fargo WFC reports results for the quarter ended December 2019 While this widely known consensus outlook is important in gauging the company s earnings picture a powerful factor that could impact its near term stock price is how the actual results compare to these estimates
The earnings report which is expected to be released on January 14 2020 might help the stock move higher if these key numbers are better than expectations On the other hand if they miss the stock may move lower
While the sustainability of the immediate price change and future earnings expectations will mostly depend on management s discussion of business conditions on the earnings call it s worth handicapping the probability of a positive EPS surprise
Zacks Consensus Estimate
This biggest U S mortgage lender is expected to post quarterly earnings of 1 11 per share in its upcoming report which represents a year over year change of 8 3
Revenues are expected to be 19 88 billion down 5 3 from the year ago quarter
Estimate Revisions Trend
The consensus EPS estimate for the quarter has been revised 1 43 higher over the last 30 days to the current level This is essentially a reflection of how the covering analysts have collectively reassessed their initial estimates over this period
Investors should keep in mind that the direction of estimate revisions by each of the covering analysts may not always get reflected in the aggregate change
Price Consensus and EPS Surprise
Earnings Whisper
Estimate revisions ahead of a company s earnings release offer clues to the business conditions for the period whose results are coming out This insight is at the core of our proprietary surprise prediction model the Zacks Earnings ESP Expected Surprise Prediction
The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate for the quarter the Most Accurate Estimate is a more recent version of the Zacks Consensus EPS estimate The idea here is that analysts revising their estimates right before an earnings release have the latest information which could potentially be more accurate than what they and others contributing to the consensus had predicted earlier
Thus a positive or negative Earnings ESP reading theoretically indicates the likely deviation of the actual earnings from the consensus estimate However the model s predictive power is significant for positive ESP readings only
A positive Earnings ESP is a strong predictor of an earnings beat particularly when combined with a Zacks Rank 1 Strong Buy 2 Buy or 3 Hold Our research shows that stocks with this combination produce a positive surprise nearly 70 of the time and a solid Zacks Rank actually increases the predictive power of Earnings ESP
Please note that a negative Earnings ESP reading is not indicative of an earnings miss Our research shows that it is difficult to predict an earnings beat with any degree of confidence for stocks with negative Earnings ESP readings and or Zacks Rank of 4 Sell or 5 Strong Sell
How Have the Numbers Shaped Up for Wells Fargo
For Wells Fargo the Most Accurate Estimate is lower than the Zacks Consensus Estimate suggesting that analysts have recently become bearish on the company s earnings prospects This has resulted in an Earnings ESP of 0 04
On the other hand the stock currently carries a Zacks Rank of 3
So this combination makes it difficult to conclusively predict that Wells Fargo will beat the consensus EPS estimate
Does Earnings Surprise History Hold Any Clue
While calculating estimates for a company s future earnings analysts often consider to what extent it has been able to match past consensus estimates So it s worth taking a look at the surprise history for gauging its influence on the upcoming number
For the last reported quarter it was expected that Wells Fargo would post earnings of 1 15 per share when it actually produced earnings of 0 92 delivering a surprise of 20
Over the last four quarters the company has beaten consensus EPS estimates three times
Bottom Line
An earnings beat or miss may not be the sole basis for a stock moving higher or lower Many stocks end up losing ground despite an earnings beat due to other factors that disappoint investors Similarly unforeseen catalysts help a number of stocks gain despite an earnings miss
That said betting on stocks that are expected to beat earnings expectations does increase the odds of success This is why it s worth checking a company s Earnings ESP and Zacks Rank ahead of its quarterly release Make sure to utilize our Earnings ESP Filter to uncover the best stocks to buy or sell before they ve reported
Wells Fargo doesn t appear a compelling earnings beat candidate However investors should pay attention to other factors too for betting on this stock or staying away from it ahead of its earnings release |
WFC | 3 Mutual Fund Misfires To Avoid January 09 2020 | You may need to start looking for a new financial advisor if your current one has put any of these high fee low return Mutual Fund Misfires of the Market into your portfolio
High fees coupled with poor results It s a straightforward equation for an awful mutual fund Some are more regrettable than others and some are bad to the point that they have got a Strong Sell from our Zacks Rank the lowest positioning of the almost 19 000 mutual funds we rank every day
Below you ll read about some of the funds included in our current list of Mutual Fund Misfires of the Market And if by chance you re invested in any of these misfires we ll help and review some of our highest Zacks Ranked mutual funds
3 Mutual Fund Misfires
Now let s take a look at three market misfires
Wells Fargo NYSE WFC International Equity A WFEAX 1 4 expense ratio and 0 85 management fee WFEAX is a Non US Equity option focusing their investments acoss emerging and developed markets and can often extend across cap levels too With a five year after costs return of 1 34 you re for the most part paying more in charges than returns
First Eagle Fund of America A FEFAX FEFAX is categorized as an All Cap Value fund and like the name suggests invests across the cap spectrum in small cap mid cap and large cap companies FEFAX offers an expense ratio of 1 4 and annual returns of 1 14 over the last five years Even if this fund can be positioned as a hedge during the recent bull market paying more in fees than returns over the long term should never be an acceptable result
Victory INCORE Low Duration Bond C RLDCX 1 62 expense ratio 0 45 management fee RLDCX is an Investment Grade Bond Short fund that targets the short end of the curve by focusing on bonds that mature in less than two years RLDCX has generated annual returns of 0 69 over the last five years Ouch
3 Top Ranked Mutual Funds
Since you ve seen the most noticeably lowest Zacks Ranked mutual funds how about we take a look at some of the top ranked mutual funds with the least fees
Hartford Core Equity A HAIAX is a fund that has an expense ratio of 0 73 and a management fee of 0 35 HAIAX is a Large Cap Blend fund targeting companies with market caps of over 10 billion These funds offer investors a stability and are perfect for people with a buy and hold mindset With yearly returns of 10 78 over the last five years this fund clearly wins
Eagle Mid Cap Growth A HAGAX has an expense ratio of 1 05 and management fee of 0 52 HAGAX is a Mid Cap Growth mutual fund These mutual funds choose companies with a stock market valuation between 2 billion and 10 billion With annual returns of 10 41 over the last five years this is a well diversified fund with a long track record of success
Brown Advisory Growth Equity Investor BIAGX Expense ratio 0 85 Management fee 0 59 BIAGX is a Large Cap Growth option these mutual funds purchase stakes in numerous large U S companies that are expected to develop and grow at a faster rate than other large cap stocks BIAGX has produced a 13 98 over the last five years
Bottom Line
We hope that your investment advisor if you use one has you invested in one or all of the top ranked mutual funds we ve reviewed But if that is not the case and your advisor has you invested in any of the funds on our worst offender list it might be time to have a conversation or reconsider this vitally important relationship
Do You Know the Top 9 Retirement Investing Mistakes
Whether you re planning to retire early or not don t let investing mistakes derail your plans
If you have 500 000 or more to invest and want to learn more click the link to download our free report 9 Retirement Mistakes that will Ruin Your Retirement This report will help you steer clear of the most common mistakes like trying to time the market lack of diversification in your portfolio and many more Get Your FREE Guide Now |
MU | Could Micron Become a Millionaire Maker Stock | Micron Technology NASDAQ MU is one of the most volatile tech stocks in the market But could this very volatility be what helps turn it into a millionaire maker investment for shareholders over the long term
There are many cases of leading tech companies delivering results that would have made buy and hold investors huge fortunes from small initial investments However it would be natural to doubt that an established commodity like stock such as Micron which sells basic storage and memory components could ever compound capital in the way that a software or tech platform company can
Nevertheless I can see a scenario in which Micron would do just that
Micron s comprehensive portfolio
Broadly speaking Micron has just about the most attractive product mix in the memory and storage space It s one of only three major producers of dynamic random access memory DRAM one of six NAND flash storage producers and one of only two companies making a new type of memory called 3D Xpoint which is only just being commercialized The only major gap in its storage technology portfolio is that it doesn t make hard disk drives but those are an older albeit cheaper bulk storage solution and NAND flash is displacing them in many applications
As a business manufacturing memory and storage products has both favorable and unfavorable characteristics On the plus side memory and storage components are vital to next generation applications in artificial intelligence the Internet of Things gaming and 5G communications AI deep learning processes require massive amounts of data which needs to be quickly accessible At the same time achieving faster and faster data transmission speeds also requires more memory So storage and memory will be essential components of the coming wave of tech innovations
At the same time however storage and memory products are very much commoditized which means the prices at which Micron and its competitors can sell their products fluctuate significantly based on supply and demand Since mid 2018 a combination of large capacity additions and the destruction of demand due to the U S China trade war has created a heavy oversupply that sent memory prices plunging
That 2018 2019 memory price crash hearkened back to the troughs of prior cycles many of which caused Micron s bottom line to go negative
However as the chart above also shows Micron has been able to remain more profitable this time around than it was in prior oversupply periods Though analysts expect earnings will plunge to 2 28 per share in the fiscal year that ends in August that would nearly equate to the prior cycle s 2014 2015 peak
It should also mark the bottom in both memory pricing and Micron s EPS On December s conference call with analysts management forecast EPS of 0 35 for the current quarter plus or minus 0 06 while CEO Sanjay Mehrotra added Recent trends in our business give us optimism that our fiscal second quarter will mark the bottom for our financial performance which we expect to start improving in our fiscal third quarter with continued recovery in the second half of calendar 2020
Yet the current stock price around 56 is still just 24 5 times this year s earnings estimates which should be the trough Meanwhile its valuation is less than five times the earnings from its peak year of 2018 Clearly the market is not willing to value Micron at the same type of multiple it gives to other technology and non memory chip stocks or it doesn t think the company can reach its 2018 peaks again
How Micron could rerate much higher
In order for Micron to become a millionaire maker stock then it would have to eventually be rerated higher by investors relative to its past This would either entail Micron growing EPS a lot or providing steadier more predictable results which could lead investors to assign it a higher multiple to its earnings Fortunately I think there are several ways the company can do both going forward
Tailwind No 1 Industry consolidation
It s important to understand why Micron has been more profitable throughout the current cycle and why it may continue to improve in future cycles First demand for memory and storage products has grown a lot and diversified from just PCs and phones to cloud data centers automated cars and other big data applications
But demand won t mean much if memory producers continue to oversupply the market Fortunately Micron has benefited greatly from and participated in industry consolidation in the past five years or so buying up distressed competitors Elpida Memory in 2013 and then Inotera Memory in 2016 These moves consolidated the DRAM market where Micron gets 67 of its revenues down to just three players and also gave Micron greater scale to improve its margins
This is important because now instead of a situation in which many competitors are fighting for market share in tough times the three major DRAM players have the incentive to balance their supply with demand rather than fighting for scraps and survival Their behavior has reflected that during this cycle Both of Micron s Korean competitors Samsung OTC SSNLF and SK Hynix OTC HXSCL have cut back on capital expenditures significantly along with Micron shortening the duration of the cyclical trough and enabling all three to remain profitable during it
Tailwind No 2 New chip capacity is becoming more expensive to bring online
While consolidation may help ease oversupply situations technology constraints are also making it harder for memory companies to produce more chips even if they want to The costs to increase bit production by 20 have just about doubled from a few years ago
Some might say that this will drive heftier capital expenditures in the years ahead for Micron and its peers as they grow their operations which may be true However it also means it will be more difficult to bring supply online after cutbacks which could make any price drop relatively shorter And if demand surges there could very well be shortages as there were in 2018
Tailwind No 3 Micron is improving relative to competitors
In addition to the fact that it is operating in a more favorable competitive environment Micron has also gone from being a cost laggard in the industry to parity with the cost per bit levels of competitors Samsung and SK Hynix
Not only has Micron caught up but it may have actually surpassed Korean competitors on some fronts In August Micron became the first memory company to mass produce DRAM chips using its 1z nanometer process which offers the smallest feature size DRAM node in the industry
These improvements occurred under former management and more recently under current CEO Sanjay Mehrotra Micron s structurally lower costs mean that the company should achieve higher profitability in downturns than in years past when competitors could undercut it on price Once investors grasp this the market could rerate Micron shares even higher
Tailwind No 4 A massively better balance sheet and share buybacks
Finally Micron s earnings per share are not the only thing that s improving The massive boom of fiscal 2018 enabled Micron to drastically improve its balance sheet while also initiating a 10 billion stock repurchasing program Since the second quarter of fiscal 2017 Micron has gone from 7 8 billion in net debt to a stunning 2 7 billion in net cash Not only that but it also bought back 2 7 billion of stock in the fiscal year that ended in August retiring some 7 of outstanding shares
If Micron can continue to generate sustainable cash flows and its valuation remains relatively low as a multiple of earnings the company could retire a very significant number of shares in the meantime further increasing EPS
A millionaire maker in the making
If the company and the industry can continue to smooth out future memory cycles generate sustainable profits and buy back a significant amount of shares I can definitely see a scenario in which Micron s shareholders become very wealthy over the long term
As is usually the case however the outlook for storage and memory pricing in any given year is hard to predict and sales of these components are also quite sensitive to broader economic conditions Nevertheless Micron s share price is still below its all time highs set back in mid 2018 and you would be hard pressed to find a technology stock with a valuation this cheap currently Those willing to brave the significant volatility and risk could be rewarded handsomely |
XOM | US STOCKS Futures rise with GDP numbers on tap | GDP jobless claims reports on tap
Earnings reports include Exxon Mobil Kellogg
Futures up S P 5 4 pts Dow 32 pts Nasdaq 5 5 pts
NEW YORK Oct 29 Reuters U S stock index futures rose
on Thursday ahead of data expected to show the economy grew in
the third quarter while jobless numbers and a round of
corporate earnings were also on tap
Futures were also boosted after big consumer products
maker Procter Gamble Co reported quarterly profits and sales
that beat estimates
The government will release its first estimate of
third quarter gross domestic product at 8 30 a m EDT GDP a
gauge of all goods and services produced within U S borders
is expected to have grown at an annual rate of 3 3 percent in
the quarter according to 77 analysts polled by Reuters
On Wednesday Goldman Sachs cut its GDP forecast to 2 7
percent from 3 0 percent
Investors will also take in weekly initial jobless claims
at 8 30 a m The earnings calendar includes results from Exxon
Mobil Corp and Kellogg Co
Overseas oil majors Royal Dutch Shell Plc and Eni SpA
warned of a slow recovery on weak energy demand and operational
challenges as their profits slumped Shell will cut 5 000 jobs
to tackle the tough economic environment
After the bell on Wednesday shares of software maker
Symantec Corp rose 6 7 percent after its profit beat estimates
on growth in its consumer anti virus business
Health insurer Aetna Inc reported higher net income
Thursday morning but projected that full year profit would
come in at the low end of its previous view
S P 500 futures rose 5 4 points and were above fair
value a formula that evaluates pricing by taking into account
interest rates dividends and time to expiration on the
contract Dow Jones industrial average futures gained 32
points while Nasdaq futures added 5 5 points
Stocks sold off broadly on Wednesday sending the
benchmark S P 500 lower for a fourth straight day after weak
data on new home sales
As of Wednesday s close it has dropped 5 04 percent from
its post March closing peak reached on Oct 19 The broad index
wiped out its gains for October and is now on the verge of
snapping a string of seven months of gains
To date the S P 500 has jumped 54 1 percent from a
12 year closing low on March 9 |
XOM | Exxon Mobil profits drop 23 in fourth quarter | U S oil giant Exxon Mobil Corp on Monday reported a 23 drop in its fourth quarter profits but the result was better than many analysts had expected Exxon the world s biggest non governmental oil company reported a profit of 6 05 billion or 1 27 a share down from 7 82 billion or 1 54 a share a year earlier During the quarter weak demand for oil products like gasoline and diesel in the global economic slowdown hurt Exxon s refining business Nonetheless analysts had expected a profit of 1 19 a share in the fourth quarter and in the wake of the earnings report the corporation s shares rose 1 74 in premarket trading Exxon s revenue increased 6 1 to 89 84 billion as production rose nearly 2 Meanwhile the outlook for U S markets was rosy as Dow Jones Industrial Average futures indicated a rise of 0 47 S P 500 futures pointed to an increase of 0 49 and Nasdaq 100 futures indicated a rise of 0 23 |
XOM | U S markets rally on Exxon earnings manufacturing data | U S stock markets rallied on Monday after oil giant Exxon Mobil Corp reported better than expected earnings and the release of positive data on the manufacturing sector of the world s largest economy The Nasdaq Composite Index was up 0 62 the Dow Jones Industrial Average Index rose 0 88 and the S P 500 Index climbed 1 05 Earlier Monday Exxon reported fourth quarter earnings of 1 27 per share which topped analysts estimate of 1 19 per share The corporation s shares subsequently surged 2 3 Also Monday the Institute for Supply Management said U S manufacturing activity had expanded in January for the sixth straight month to the highest level in five and a half years ISM s manufacturing index rose to a 58 4 reading from a 54 9 reading in December coming in above markets expectations of 55 6 The previous reported estimate of 55 9 was also revised to 54 9 |
WFC | Why Wells Fargo Underwhelmed in Q4 | When Wells Fargo Co NYSE WFC released its fourth quarter earnings report before the opening bell on Tuesday the megabank said that it had 0 60 in earnings per share EPS and 19 9 billion in revenue The consensus estimates had called for 1 12 in EPS and revenue of 20 14 billion In the same period of last year Wells Fargo said it had EPS of 1 21 and 20 98 billion in revenue Note that the EPS miss this quarter was negatively impacted by litigation accruals to the tune of 0 33 per share During the latest quarter average loans were 956 5 billion up 10 2 billion from the third quarter Period end loan balances were 962 3 billion div connatix margin bottom 1 5em div connatix img margin unset Total average deposits for the quarter were 1 3 trillion up 53 0 billion from the prior quarter primarily due to growth in both commercial and consumer deposits Book value per common share was 40 31 down from 40 48 in the third quarter and 38 06 in the same period from last year In terms of its segments Wells Fargo reported as follows
Community Banking revenues were down 8 2 year over year at 10 52 billion
Wholesale Banking revenues decreased by 3 7 to 6 67 billion
Wealth and Investment Management revenues increased 2 9 to 4 07 billion
Chief Financial Officer John Shrewsberry commented Wells Fargo reported 2 9 billion of net income in the fourth quarter and diluted earnings per share of 0 60 which included the impact of 1 5 billion or 0 33 per share of litigation accruals for a variety of matters including previously disclosed retail sales practices matters Our net interest income declined in the fourth quarter driven predominantly by the impact of the lower interest rate environment In addition while we are spending what is necessary in order to improve risk management our other expenses were too high and becoming more efficient remains a top priority Shares of Wells Fargo traded early Tuesday at 50 25 in a 52 week range of 43 34 to 54 75 The consensus price target is 53 33
ALSO READ Jefferies Out With Top Software Picks for 2020 4 Large Cap Leaders to Buy Now
By Chris Lange |
WFC | Wells Fargo Earnings How Did the Bank Do With a New CEO | Wells Fargo NYSE WFC has dramatically underperformed the financial sector in recent years Over the past year the bank s stock rose by just 5 compared with 26 for the sector as a whole and over the past three years the underperformance is more than 40 percentage points
This is certainly understandable given the bank s massive fake accounts scandal and numerous other regulatory and legal issues that have taken place Plus the bank s third quarter and other recent results left much to be desired
However a new CEO was finally brought in this past October a move that many experts said was necessary for the bank to truly move forward Now Wells Fargo just released its fourth quarter results the first numbers since Charles Scharf took the helm at the bank Here s what investors need to know
The headline numbers were a disappointment
The top line revenue and bottom line earnings figures rarely tell the full story of how any company is doing but it s certainly a discouraging sign when these numbers are disappointing And that appears to be the case with Wells Fargo in the fourth quarter
In a nutshell the bank missed expectations on both the top and bottom lines Fourth quarter earnings of 0 93 per share came in 0 19 shy of expectations and were down significantly from 1 21 per share in 2018 s fourth quarter Revenue of 19 86 billion failed to live up to estimates as well and was a significant decline from 21 billion in the same quarter a year ago
What s more this is the adjusted earnings figure if you include the bank s litigation expenses EPS drops to just 0 60
For the full year 2019 Wells Fargo generated 4 05 in earnings per share a decline of 5 4 from 2018
Important things to know
Digging a little deeper here are some of the highlights that investors should know
For the year Wells Fargo generated a 10 2 return on equity ROE and 1 02 return on assets ROA While these numbers are above the generally accepted industry benchmarks of 10 and 1 respectively they are significantly lower than the 11 5 ROE and 1 19 ROA the bank generated in 2018
Thanks to the lower profitability Wells Fargo s efficiency ratio has worsened by 3 4 percentage points to 68 4 It s still early in earnings season but this is likely to be among the worst in the sector
Net interest margin declined to 2 53 in the fourth quarter from 2 94 a year ago To be clear this was largely expected given the declining interest rate environment and is likely a big driver of Wells Fargo s lower profitability
On a positive note Wells Fargo s deposit base grew by 4 year over year the best growth in some time
Wells Fargo repurchased 141 1 million shares of stock during the fourth quarter This is roughly 3 4 of the bank s total outstanding shares and represents an annualized pace of 13 6 a very aggressive rate of buybacks presumably to take advantage of the underperforming stock price Combined with the bank s 3 9 dividend yield it s fair to say that Wells Fargo is returning lots of capital to shareholders
Should investors be concerned
Take these numbers with a big grain of salt The Federal Reserve s penalty limiting the bank s growth efforts is still in effect for the time being so it s not an apples to apples comparison with other bank stocks that can largely grow unrestricted
Plus keep in mind that it s still very early in Scharf s tenure so the impact of the leadership change may not be reflected in the bank s numbers just yet If Scharf succeeds in turning the bank around the current valuation of just 12 5 times trailing 12 month earnings could end up looking very cheap |
WFC | Wells Fargo turns negative on Trinity Industries | Trinity Industries TRN 1 3 slips after Wells Fargo lowers the rail supplier to an Underweight rating from Overweight in a two notch move The negative outlook by WF on Trinity follows a drop in EPS estimates for 2020 and 2021 The firm assigns a price target of 22 to Trinity vs the average sell side PT of 23 20 |
WFC | Stock Market News Bank Earnings Send Wells Fargo Lower Citi Higher | Earnings season is here again and market participants have eagerly waited for signs of how corporate America performed during the key holiday quarter Even with international geopolitical issues hanging over the market investors want to see whether their generally favorable picture of how things are going with the U S economy matches up with reality for the companies on the front lines As of 11 a m EST the Dow Jones Industrial Average DJINDICES DJI climbed 46 points to 28 953 However the S P 500 SNPINDEX GSPC lost 5 points to 3 283 and the Nasdaq Composite NASDAQINDEX IXIC fell 26 points to 9 247
Financial institutions typically lead off earnings season every quarter and two banks gave different readings on the current state of the industry Wells Fargo NYSE WFC continued to struggle after years of controversy but Citigroup NYSE C was able to deliver stronger results that made shareholders more confident about its future
All s not well at Wells
Shares of Wells Fargo were down 4 after the San Francisco based banking giant released its fourth quarter financial results For those hoping for a long awaited turnaround Wells Fargo s report was just the latest in a series of disappointments
Wells saw its total revenue decline more than 5 to 19 9 billion capping a year in which the bank s top line eased lower from 2018 levels Net income took an even bigger hit falling by more than half to 2 9 billion and working out to 0 60 per share Once again legal issues weighed on performance as Wells had to take 1 5 billion in litigation accruals on a variety of different matters
CEO Charlie Scharf tried to maintain a positive attitude noting his confidence that he ll be able to restore the bank s regulatory reputation through more urgent compliance efforts Yet Scharf also noted that Wells cost structure is currently too expensive and he sees further work needed in order to boost growth Moreover the CEO was reluctant to suggest a time frame for a full turnaround
Wells Fargo has largely gotten left behind in the recent run up for the banking sector as investors continue to worry about the permanent damage its reputation has suffered because of multiple controversies in past years Unfortunately Wells still has more work to do before it can reassure shareholders that its problems are all in the past
Citi gets a boost
Meanwhile shares of Citigroup were higher by 2 The New York based bank fared better than Wells in its fourth quarter financial report seeing superior signs of growth and having more promising prospects ahead
Citi reported 7 revenue growth for the quarter compared to the previous year s Q4 resulting in double digit percentage gains in net income Earnings per share soared 31 with a rising bottom line combining with a dramatic drop in outstanding shares to boost the per share metric Citi also benefited from a one time tax issue that sent earnings higher
Citi saw strength in most of its business with year over year sales increases in consumer banking and institutional clients In particular the company pointed to digital deposit growth strength in branded credit cards and rising market share in investment banking as contributing factors to its performance Geographically Latin America and Asia led revenue growth but performance was solid worldwide
Investors have watched the banking sector carefully in recent quarters to see what it s signaling for the future Although reports from these two banks were mixed there are positive signs in the industry that could help support further gains for the stock market in 2020 |
WFC | 3 Mutual Fund Misfires To Avoid In Your Retirement Portfolio December 18 2019 | Does your current advisor have your money invested in these Mutual Fund Misfires of the Market that charge high fees for low returns If so it may be time for a new advisor
The easiest way to judge a mutual fund s quality over time is by analyzing its performance and fees Our Zacks Rank of over 19 000 mutual funds has identified some of the worst of the worst mutual funds you should avoid the funds with the highest fees and poorest long term performance
First let s break down some of the funds currently part of our Mutual Fund Misfires of the Market If you happen to have put your money into any of these misfires we ll help assess some of our best Zacks Ranked mutual funds
3 Mutual Fund Misfires
Now let s take a look at three market misfires
Catalyst Hedged Futures Strategy A HFXAX This fund has an expense ratio of 2 33 and a management fee of 1 75 Without even doing any in depth analysis just the fact that you are paying more in fees than you re earning in returns is reason enough not to invest HFXAX is a Long Short Equity fund and these funds aim to minimize exposure to the broader market taking long positions in equities that are expected to appreciate and short positions in equities that are projected to decline The fund has lagged performance wise so perhaps a simpler index future investing strategy might be more effective
Wells Fargo NYSE WFC International Equity A WFEAX WFEAX is a Non US Equity option focusing their investments acoss emerging and developed markets and can often extend across cap levels too WFEAX offers an expense ratio of 1 4 and annual returns of 1 34 over the last five years Even if this fund can be positioned as a hedge during the recent bull market paying more in fees than returns over the long term should never be an acceptable result
Brookfield Global Listed Infrastructure A BGLAX 1 35 expense ratio 0 85 management fee This fund has yielded yearly returns of 0 13 in the course of the last five years Too bad
3 Top Ranked Mutual Funds
Now that we ve covered our worst offender list let s take a look at some of Zacks highest ranked mutual funds with some of the lowest fees you may want to consider
Vanguard Global Minimum Volatility Fund Admiral VMNVX 0 15 expense ratio and 0 13 management fee VMNVX is a Global Equity mutual fund investing in bigger markets like the U S Europe and Japan these kinds of funds aren t limited by geography With an annual return of 10 54 over the last five years this fund is a winner
Principal Blue Chip Fund A PBLAX has an expense ratio of 1 and management fee of 0 66 PBLAX is a Large Cap Growth mutual fund and these funds invest in many large U S firms that are projected to grow at a faster rate than their large cap peers Thanks to yearly returns of 13 62 over the last five years PBLAX is an effectively diversified fund with a long reputation of solidly positive performance
T Rowe Price Small Cap Stock Adviser PASSX has an expense ratio of 1 14 and management fee of 0 74 PASSX is a Small Cap Blend mutual fund and usually targets stocks with market caps of less than 2 billion letting investors diversify their funds among other kinds of small cap equities With annual returns of 11 38 over the last five years this fund is a well diversified fund with a long track record of success
Bottom Line
These examples underscore the huge range in quality of mutual funds from the really bad to the astonishingly good There is no reason for your advisor to keep your money in any fund that charges more than you get in return unless they re getting something out of it like a high commission
Do You Know the Top 9 Retirement Investing Mistakes
Whether you re planning to retire early or not don t let investing mistakes derail your plans
If you have 500 000 or more to invest and want to learn more click the link to download our free report 9 Retirement Mistakes that will Ruin Your Retirement This report will help you steer clear of the most common mistakes like trying to time the market lack of diversification in your portfolio and many more Get Your FREE Guide Now |
WFC | 3 Mutual Fund Misfires To Avoid In Your Retirement Portfolio December 19 2019 | If your advisor has you invested in any of these Mutual Fund Misfires of the Market with high fees and low returns you need to rethink your advisor
The easiest way to judge a mutual fund s quality over time is by analyzing its performance and fees Our Zacks Rank of over 19 000 mutual funds has identified some of the worst of the worst mutual funds you should avoid the funds with the highest fees and poorest long term performance
Below you ll read about some of the funds included in our current list of Mutual Fund Misfires of the Market And if by chance you re invested in any of these misfires we ll help and review some of our highest Zacks Ranked mutual funds
3 Mutual Fund Misfires
Now let s take a look at three market misfires
Transamerica Emerging Markets Equity I IEMTX Expense ratio 1 08 Management fee 0 92 After expenses the 5 year return is 0 21 meaning your fees are far higher than the fund s returns
Wells Fargo NYSE WFC Absolute Return A WARAX WARAX is an Allocation Balanced mutual fund Allocation Balanced funds look to invest across asset types like stocks bonds and cash and including precious metals or commodities is not unusual these funds are mostly categorized by their respective asset allocation WARAX offers an expense ratio of 1 53 and annual returns of 0 07 over the last five years Even if this fund can be positioned as a hedge during the recent bull market paying more in fees than returns over the long term should never be an acceptable result
First Investor International Opportunities Bond A FIOBX 1 44 expense ratio 0 75 management fee FIOBX is an International Bond Developed fund and these funds funds focus on fixed income securities from developed nations apart from the United States This usually results in countries like Japan Germany the UK France and Australia dominating the list of top holdings FIOBX has generated annual returns of 1 41 over the last five years Ouch
3 Top Ranked Mutual Funds
Now that you ve seen the worst Zacks Ranked mutual funds let s have a look at some of the highest ranked funds with the lowest fees
AQR Large Cap Defensive Style N AUENX 0 65 expense ratio and 0 25 management fee AUENX is part of the Large Cap Blend section and these mutual funds most often invest in firms with a market capitalization of 10 billion or more By investing in bigger companies these funds offer more stability and are often well suited for investors with a buy and hold mindset With an annual return of 13 62 over the last five years this fund is a winner
MFS Growth R6 MFEKX Expense ratio 0 57 Management fee 0 55 MFEKX is a Large Cap Growth mutual fund and these funds invest in many large U S firms that are projected to grow at a faster rate than their large cap peers MFEKX has managed to produce a robust 14 61 over the last five years
Principal Mid Cap J PMBJX Expense ratio 0 83 Management fee 0 58 PMBJX is a Mid Cap Growth mutual fund These mutual funds choose companies with a stock market valuation between 2 billion and 10 billion PMBJX has produced a 13 31 over the last five years
Bottom Line
So there you have it if your advisor has you invested in any of our Mutual Fund Misfires of the Market there is a good probability that they are either asleep at the wheel incompetent or most likely lining their pockets with high fee commissions at your financial expense
Do You Know the Top 9 Retirement Investing Mistakes
Whether you re planning to retire early or not don t let investing mistakes derail your plans
If you have 500 000 or more to invest and want to learn more click the link to download our free report 9 Retirement Mistakes that will Ruin Your Retirement This report will help you steer clear of the most common mistakes like trying to time the market lack of diversification in your portfolio and many more Get Your FREE Guide Now |
WFC | Mutual Fund Misfires Of The Market December 26 2019 | If your advisor has you invested in any of these Mutual Fund Misfires of the Market with high fees and low returns you need to rethink your advisor
High fees plus poor performance It s a pretty simple formula for a bad mutual fund Some are worse than others and some are so bad that they have earned a Strong Sell on the Zacks Rank the lowest ranking of the nearly 19 000 mutual funds we rank daily
Below you ll read about some of the funds included in our current list of Mutual Fund Misfires of the Market And if by chance you re invested in any of these misfires we ll help and review some of our highest Zacks Ranked mutual funds
3 Mutual Fund Misfires
Now let s take a look at three market misfires
Brandes International Small Cap Equity I BISMX 1 15 expense ratio and 0 95 management fee BISMX is a part of the Non US Equity fund category many of which will focus across all cap levels and will typically allocate their investments between emerging and developed markets With a five year after costs return of 0 65 you re for the most part paying more in charges than returns
Ashmore Emerge Markets Local Current Bond I ELBIX 0 97 expense ratio 0 95 ELBIX is part of the International Bond Emerging section International Bond Emerging funds offer a unique type of geographic diversification by focusing on fixed income securities from emerging nations around the globe This fund has yearly returns of 0 46 over the most recent five years Another fund liable of having investors pay more in charges than what they receive in return
Wells Fargo NYSE WFC Absolute Return C WARCX 2 28 expense ratio 0 72 management fee WARCX is a part of the Allocation Balanced fund category these funds like to invest in a variety of asset types finding a balance between stocks bonds cash and sometimes even precious metals and commodities they are mostly categorized by their respective asset allocation WARCX has generated annual returns of 0 7 over the last five years Ouch
3 Top Ranked Mutual Funds
Now that you ve seen the worst Zacks Ranked mutual funds let s have a look at some of the highest ranked funds with the lowest fees
Transamerica US Growth T TWMTX is a fund that has an expense ratio of 0 82 and a management fee of 0 7 TWMTX is a Large Cap Growth option these mutual funds purchase stakes in numerous large U S companies that are expected to develop and grow at a faster rate than other large cap stocks With yearly returns of 10 67 over the last five years this fund clearly wins
Victory Sycamore Small Company Opportunity Y VSOYX has an expense ratio of 1 09 and management fee of 0 76 VSOYX is a Small Cap Value mutual fund option which typically invest in companies with market caps under 2 billion With annual returns of 11 15 over the last five years this is a well diversified fund with a long track record of success
Diamond Hill Large Cap Fund Y DHLYX is an attractive fund with a five year annualized return of 11 05 and an expense ratio of just 0 55 DHLYX is part of the Large Cap Blend section and these mutual funds most often invest in firms with a market capitalization of 10 billion or more By investing in bigger companies these funds offer more stability and are often well suited for investors with a buy and hold mindset
Bottom Line
We hope that your investment advisor if you use one has you invested in one or all of the top ranked mutual funds we ve reviewed But if that is not the case and your advisor has you invested in any of the funds on our worst offender list it might be time to have a conversation or reconsider this vitally important relationship
Do You Know the Top 9 Retirement Investing Mistakes
Whether you re planning to retire early or not don t let investing mistakes derail your plans
If you have 500 000 or more to invest and want to learn more click the link to download our free report 9 Retirement Mistakes that will Ruin Your Retirement This report will help you steer clear of the most common mistakes like trying to time the market lack of diversification in your portfolio and many more Get Your FREE Guide Now |
WFC | Wells Fargo takes 1 5B litigation accrual in Q4 | Wells Fargo NYSE WFC slides 2 9 in premarket trading after Q4 EPS excluding litigation accruals of 93 cents trails the average analyst estimate of 1 10
Compares with EPS of 92 cents in Q3 and 1 21 in the year ago quarter
Q4 operating loss of 1 9B includes 1 5B or 33 cents per share of litigation accruals
CEO and President Charlie Scharf who started the job three months ago points to the challenges and the opportunities he sees at Wells Fargo
Our cost structure is too high and I believe there are many areas where we will be able to increase our rate of growth he said
Efficiency ratio of 78 6 worsened from 69 1 in Q3 and 63 6 a year earlier
Q4 net interest income of 11 2B down 425M from Q3 2019 due to lower interest rates unfavorable hedge ineffectiveness accounting results and higher mortgage backed securities premium amortization partly offset by balance sheet growth
Net interest margin of 2 53 fell 13 basis points from Q3
Q4 average loans of 956 5B up 6 8B from Q3 total average deposits of 1 3T up 30 5B from prior quarter
Q4 net loan charge off rate of 0 32 annualized up from 0 27 in Q3 and 0 30 in the year ago quarter
Conference call at 1 00 PM ET
Previously Wells Fargo EPS misses by 0 17 misses on revenue Jan 14 |
WFC | Wells Fargo Q4 disappoints CEO says costs are too high | Wells Fargo NYSE WFC slides 2 9 in premarket trading after Q4 EPS excluding litigation accruals of 93 cents trails the average analyst estimate of 1 10
Compares with EPS of 92 cents in Q3 and 1 21 in the year ago quarter
Q4 operating loss of 1 9B includes 1 5B or 33 cents per share of litigation accruals
CEO and President Charlie Scharf who started the job three months ago points to the challenges and the opportunities he sees at Wells Fargo
Our cost structure is too high and I believe there are many areas where we will be able to increase our rate of growth he said
Efficiency ratio of 78 6 worsened from 69 1 in Q3 and 63 6 a year earlier
Q4 net interest income of 11 2B down 425M from Q3 2019 due to lower interest rates unfavorable hedge ineffectiveness accounting results and higher mortgage backed securities premium amortization partly offset by balance sheet growth
Net interest margin of 2 53 fell 13 basis points from Q3
Q4 average loans of 956 5B up 6 8B from Q3 total average deposits of 1 3T up 30 5B from prior quarter
Q4 net loan charge off rate of 0 32 annualized up from 0 27 in Q3 and 0 30 in the year ago quarter
Conference call at 1 00 PM ET
Previously Wells Fargo EPS misses by 0 17 misses on revenue Jan 14 |
WFC | Investors Run From Stocks At Record Pace | BIGGEST WITHDRAWALS ON RECORD
There is a lot of relevant information in the text below from a Wall Street Journal article dated December 8 2019
Investors have pulled 135 5 billion from U S stock focused mutual funds and exchange traded funds so far this year the biggest withdrawals on record according to data provider Refinitiv Lipper which tracked the data going back to 1992 DOES 2019 LOOK ANYTHING LIKE THE MAJOR PEAK IN 2000
Given we know extreme sentiment can be a powerful contrary indicator we would expect exuberant investors to rush into stock based investments near a major stock market peak which is exactly what happened in the year 2000 From a Federal Reserve Bulletin dated December 2000
Mutual fund investors returned vigorously to equity funds increasing the pace of net new cash flows into those funds to a record level over the first eight months of 2000
Keep in mind the S P 500 peaked in March 2000 and investors were still adding to stock based funds at a record pace through the end of August 2000 which looks nothing like what we have seen in 2019
HOW DOES 2019 COMPARE TO OTHER PERIODS
As shown on December 2 when investors made a mad dash for the equity fund exits it occurred near major stock market lows in 2002 2009 2011 and 2016
We just experienced heavy equity fund outflows in 2019 similar to the periods shown in the graph above How did the S P 500 perform walking forward from December 2002 March 2009 December 2011 and July 2016 The answer is in a manner that looks nothing like a major stock market top
TEN NEW STOCK MARKET SIGNALS
DAY BY DAY
The market still has trade related hurdles to contend with between now and December 15 reminding us to walk forward with a flexible unbiased and open mind The fund flows data above simply helps us with historical perspective on what has taken place in 2019 From The Wall Street Journal
There s not a lot of faith in this market said Scott Wren a senior global equity strategist at Wells Fargo NYSE WFC Investment Institute There s no chasing going on Usually before you hit the top in a cycle there s a lot of chasing and fund flows are higher |
XOM | UPDATE 2 Exxon Mobil to buy Ghanaian field stake sources | Price of stake not disclosed
Field seen worth 4 bln to over 10 bln
Adds background details no comments
By Tom Bergin
LONDON Oct 6 Reuters Exxon Mobil has agreed to buy a
stake in Ghana s Jubilee field three sources close to the
matter said on Tuesday highlighting how a series of oil finds
have brought West Africa to the centre of the global oil stage
The world s largest non government controlled oil company by
market capitalisation beat off competition from western and
Asian oil companies to purchase the interest in the
multi billion barrel field from private equity backed Kosmos
Energy the sources said
Shares in Kosmos s partners in the field UK based oil
explorer Tullow Oil and Houston based Anadarko Petroleum jumped
on the news on hopes the sale price which was not disclosed by
the sources would imply higher valuations for the field than
the market had so far ascribed
The field could be worth 6 share to Anadarko That s not
reflected in the share price one hedge fund manager said
Anadarko shares traded up 4 8 percent at 64 62 at 1418 GMT
while Tullow shares traded up 7 7 percent at pence at 1 201
pence
The sale will likely yield a big payday for private equity
groups Blackstone Group and Warburg Pincus Kosmos s backers
Blackstone shares traded up 4 5 percent at 14 29
Blackstone invested 220 1 million in Kosmos in March 2004
from its fourth buyout fund BCP IV according to an investor
letter previously seen by Reuters It valued that investment at
602 million at the end of 2008
NEW OIL PROVINCE
The Jubilee field is one of the biggest oil discoveries in
recent years and a discovery by Tullow and Anadarko offshore
Sierra Leone last month prompted hopes of a series of major
fields running across Ghana Ivory Coast and Liberia
Kosmos put its 30 875 percent stake in the West Cape Three
Points block and an 18 percent interest in the Deepwater Tano
block offshore Ghana in which Jubilee is located on the market
earlier this year industry sources previously said
The auction attracted bidding interest from Western oil
majors and state owned Asian energy giants those sources said
Termination notices have been sent to the losing bidders
one of the sources close to the matter said on Tuesday
Analysts have put widely varying valuations on the field
While some said it could be worth over 10 billion one industry
source said on Tuesday that a figure of 4 billion was more
likely
Exxon Anadarko Kosmos and Tullow declined comment
Additional reporting by Matt Daily and Megan Davies in New
York
Reporting by Tom Bergin Editing by Rupert Winchester and
Elaine Hardcastle |
XOM | UPDATE 2 Iraq studying new Exxon Lukoil West Qurna bids | Iraq mulling new bids for oilfield deals offered in June
Offers expected from Exxon Lukoil Total ENI
Decision expected on bids next month
Adds background details
By Ahmed Rasheed
BAGHDAD Oct 11 Reuters Iraq s Oil Ministry is
considering revised offers from Exxon Mobil and Lukoil for West
Qurna one of several oilfields for which Iraq failed to secure
a developer in a June auction
The auction was the centrepiece of Iraq s efforts to revive
its lucrative but crumbling oil sector battered by years of war
and sanctions Of eight fields offered only one deal was signed
after firms balked at the Oil Ministry s stiff payment terms
The Iraqi Oil Ministry is studying new offers from Exxon
Mobil and Lukoil for West Qurna phase 1 Abdul Mahdy al Ameedi
deputy director of the ministry s contracts and licensing
directorate told Reuters on Sunday
Iraq also expects an offer from France s Total for West
Qurna and says it has received another bid from Italy s ENI for
Zubair which also went unawarded in June
West Qurna phase 1 has reserves of 8 7 billion barrels while
Zubair s reserves are estimated at 4 billion barrels
For a Factbox on the oil and gas fields offered in the June
auction click
We have had talks with ENI on Zubair and ENI has
submitted a new offer he said
It was unclear whether Iraq had sweetened the original
contracts to lure back bidders The country relies on oil sales
for almost all its income and desperately needs to boost
revenues to rebuild its dilapidated infrastructure
The only long term service contract awarded in June went to
Britain s BP and China s CNPC who agreed to a remuneration fee
of 2 per barrel to develop super giant field Rumaila For
further details of the Rumaila contract click
IRAQ TO REAP 100 BLN
Ameedi said that Exxon and Lukoil had agreed to a
remuneration fee of 1 90 per barrel for West Qurna but that
negotiations over other terms were ongoing
Iraq aims to offer another 10 oilfields to oil majors in
December and has said the signature fee for those contracts
a payment to secure the right to develop the block would be
less than the 500 million charged for Rumaila although unlike
the Rumaila terms the money would not be returned
Iraq expects to make a final decision on the revised West
Qurna and Zubair bids next month Ameedi said
Exxon is also expected to make a new offer for Zubair he
said but would first wait to see the results of its Qurna bid
Investment in Iraq s oil sector has been dogged by a lack of
updated hydrocarbon laws whose passage has been hampered by a
spat between Baghdad and Iraq s semiautonomous Kurdish region
over the right to sign oil deals and a host of other issues
The row is seen as more likely to scare off smaller firms
from investing in Iraq rather than the oil majors the government
has invited to bid in its contract auctions
Oil Minister Hussain al Shahristani said that foreign firms
investment in West Qurna phase 1 Zubair and Rumaila would bring
Iraq 100 billion according to an Oil Ministry spokesman
The minister also forecast that three fields combined
output would reach 7 million barrels a day in six years the
spokesman said
Writing by Mohammed Abbas and Missy Ryan Editing by Jack
Kimball and Simon Jessop |
XOM | UPDATE 2 Iraq s 2nd round of oil deals set for Dec 11 12 | 2nd round could add millions more barrels to Iraq output
Contract terms similar to first round
Officials to meet Eni in coming days may meet Shell soon
adds other deals details byline
By Simon Webb
ISTANBUL Oct 18 Reuters Iraq will hold a second auction
of contracts to develop some its prized oilfields on Dec 11 12
and plans to meet oil majors in coming weeks to seal deals
rapidly renegotiated after a lacklustre first bidding round
If finalised the three revised deals would catapult Iraq to
number three among world oil producers from its current 11th
spot The second bid round in December would offer more deals on
untapped oilfields with potential to produce millions of
barrels more that could take Iraqi production higher still
The second bid round will take place in Baghdad on Dec
11 12 Abdul Mahdy al Ameedi deputy director of Iraq s
Petroleum and Licensing Directorate told reporters on the
sidelines of a meeting with the world s largest energy firms to
discuss contracts for the second round
Competition for the contracts is likely to be fierce
executives from the 44 oil firms attending the meeting said
Risks that dogged the first bidding round were now seen as
less of a problem they added
After the deals from the first round the uncertainty is
less said one oil executive Now everybody needs to get
involved This is historic there is going to be oil industry
development like you ve never seen anywhere else on earth even
before any awards in the second bid round
Foreign capital and expertise is viewed as essential if
Iraq s dilapidated oil infrastructure is to recover from decades
of war sanctions and underinvestment allowing it to raise the
billions of dollars it needs to rebuild
Ameedi said contract terms for the second round would be
similar to those in the first Iraq lowered taxes on fields
offered in the first round to get oil firms back to the table to
renegotiate The lower taxes would stand in the second round
Another change to the contracts in the second round was to
include clauses on developing oil reservoirs that oil firms may
discover as they work on existing oilfields he said Fees for
newly discovered reservoirs would be agreed on a case by case
basis he said
Iraq has yet to fix the maximum fee per barrel it would pay
for the 10 oilfields on offer in the second round Ameedi said
DEALS
Iraq is close to sealing deals on two oilfields it failed to
award in the first round including the Zubair field which has
reserves of about 4 billion barrels
Iraqi officials plan to meet Eni representatives in the next
two days to discuss its bid for the 10 billion Zubair project
Iraq hopes to initial a contract next week
We will not change anything on that contract Ameedi said
We will initial it and then send it on to the cabinet for
approval and then we ll sign it
Consortiums headed by Exxon Mobil and Russia s LUKOIL are
competing for the 8 7 billion barrel West Qurna field Lukoil
submitted a revised bid for that on Saturday an industry source
said earlier
Yet another deal may be resurrected from the first round
Iraqi officials might meet Royal Dutch Shell executives before
the end of the month to discuss its possible involvement in
operating Iraq s Kirkuk oilfield Ameedi said
China s Sinopec would be banned from partnering Shell in
Kirkuk due to its involvement with Iraq s Kurdish region he
added Baghdad deems oil deals signed by the Kurdistan Regional
Government to be illegal
Separate to the tenders Iraq is pursuing a development deal
for the Nassiriya oilfield and Iraqi officials are expected to
meet Nippon Oil Corp in late October or early November Ameedi
said Iraq officials had no plans to meet Eni on that field he
said Eni had competed for the contract before it got close to
sealing the deal for Zubair
Some 45 firms are qualified to bid for the second round
fields which hold reserves estimated at 41 3 billion barrels
Sinopec was excluded from the Istanbul meeting for its Kurdish
involvement
Editing by Will Waterman |
WFC | Wells Fargo to report earnings before the bell with new CEO Scharf at the helm | Quarterly profit at the bank was 2 87 billion compared with 6 06 billion a year earlier a decline of more than 50 New CEO Charles Scharf said My mandate is to make the fundamental changes necessary to regain the full trust and respect of all stakeholders Chief Financial Officer John Shrewsberry blamed low interest rates for a decline in the bank s net interest income a main engine of bank profits |
WFC | Wells Fargo cautiously optimistic on container packaging sector | Wells Fargo delivers its 2020 outlook on the containers and packaging sector with a sharp focus on demand trends and balance sheets Overall we are neutral to positive on the Containers Packaging sector for 2020 We are pivoting to a cautiously optimistic stance toward the paper packaging sub sector and maintain a constructive yet selective view on traditional containers companies Our more constructive tone in Paper Packaging stems from potential for a demand rebound as well as a view that more permanent reductions in domestic containerboard capacity could be forthcoming Consistent with the prior year we believe selectivity will remain vital as valuation expressed in relative FCF yield terms is bifurcated yet compelling for several names with moderate cyclical exposure Our coverage universe is also split from a balance sheet perspective with some companies firmly below 2 0x leverage ATR PKG and SON and many entities in a de leveraging phase ARD BERY CCK GEF and OI Wells Fargo says it remains constructive on Overweight rated WestRock NYSE WRK and Greif NYSE GEF Related stocks AptarGroup Inc NYSE ATR Ardagh Group NYSE ARD Ball Corporation NYSE BLL Berry Global Group NYSE BERY Crown Holdings NYSE CCK International Paper Company NYSE IP Owens Illinois NYSE OI Packaging Corporation of America NYSE PKG Sealed Air Corporation NYSE SEE Silgan Holdings NASDAQ SLGN and Sonoco Products Company NYSE SON |
WFC | Wells Fargo EPS misses by 0 17 misses on revenue | Wells Fargo NYSE WFC Q4 Non GAAP EPS of 0 93 misses by 0 17 GAAP EPS of 0 60 misses by 0 52
Revenue of 19 86B 5 3 Y Y misses by 250M
Shares 2 PM
Press Release |
WFC | Are You Invested In These 3 Mutual Fund Misfires December 02 2019 | You may need to start looking for a new financial advisor if your current one has put any of these high fee low return Mutual Fund Misfires of the Market into your portfolio
High fees plus poor performance It s a pretty simple formula for a bad mutual fund Some are worse than others and some are so bad that they have earned a Strong Sell on the Zacks Rank the lowest ranking of the nearly 19 000 mutual funds we rank daily
First let s break down some of the funds currently part of our Mutual Fund Misfires of the Market If you happen to have put your money into any of these misfires we ll help assess some of our best Zacks Ranked mutual funds
3 Mutual Fund Misfires
Now let s take a look at three market misfires
Franklin Real Return R6 FRRRX This fund has an expense ratio of 0 48 and a management fee of 0 63 Without even doing any in depth analysis just the fact that you are paying more in fees than you re earning in returns is reason enough not to invest FRRRX is a Government Bonds option and holds securities issued by the U S federal government in their portfolios these funds focus across the curve meaning the yields and interest rate sensitivity will vary The fund has lagged performance wise so perhaps a simpler index future investing strategy might be more effective
Wells Fargo NYSE WFC Absolute Return A WARAX 1 53 expense ratio 0 72 WARAX is classified as an Allocation Balanced fund which seeks to invest in a balance of asset types like stocks bonds and cash and including precious metals or commodities is not unusual This fund has yearly returns of 0 07 over the most recent five years Another fund liable of having investors pay more in charges than what they receive in return
Alger International Growth C ALGCX 2 21 expense ratio 0 71 management fee This fund has yielded yearly returns of 0 32 in the course of the last five years Too bad
3 Top Ranked Mutual Funds
Since you ve seen the most noticeably lowest Zacks Ranked mutual funds how about we take a look at some of the top ranked mutual funds with the least fees
T Rowe Price Science Technology Adviser PASTX 1 06 expense ratio and 0 64 management fee PASTX is a Sector Tech mutual fund allowing investors to own a stake in a notoriously volatile sector with a much more diversified approach With an annual return of 15 53 over the last five years this fund is a winner
MFS Research R5 MFRKX is a stand out fund MFRKX is a Large Cap Growth option these mutual funds purchase stakes in numerous large U S companies that are expected to develop and grow at a faster rate than other large cap stocks With five year annualized performance of 11 1 and expense ratio of 0 48 this diversified fund is an attractive buy with a strong history of performance
Janus Henderson Enterprise S JGRTX has an expense ratio of 1 16 and management fee of 0 64 JGRTX is a Mid Cap Growth mutual fund These mutual funds choose companies with a stock market valuation between 2 billion and 10 billion With yearly returns of 14 41 over the last five years this fund is well diversified with a long reputation of salutary performance
Bottom Line
Along these lines there you have it if your financial guide has you put your money into any of our Mutual Fund Misfires of the Market there is a strong likelihood that they are either dormant at the worst possible time inept or in all probability filling their pockets with high fee commissions at the cost of your financial objectives
Do You Know the Top 9 Retirement Investing Mistakes
Whether you re planning to retire early or not don t let investing mistakes derail your plans
If you have 500 000 or more to invest and want to learn more click the link to download our free report 9 Retirement Mistakes that will Ruin Your Retirement This report will help you steer clear of the most common mistakes like trying to time the market lack of diversification in your portfolio and many more Get Your FREE Guide Now |
WFC | 3 Mutual Fund Misfires To Avoid December 05 2019 | If your financial advisor made you buy any of these Mutual Fund Misfires of the Market with high expenses and low returns you need to reassess your advisor
The easiest way to judge a mutual fund s quality over time is by analyzing its performance and fees Our Zacks Rank of over 19 000 mutual funds has identified some of the worst of the worst mutual funds you should avoid the funds with the highest fees and poorest long term performance
First let s break down some of the funds currently part of our Mutual Fund Misfires of the Market If you happen to have put your money into any of these misfires we ll help assess some of our best Zacks Ranked mutual funds
3 Mutual Fund Misfires
Now let s take a look at three market misfires
Janus Henderson Emerging Markets C HEMCX This fund has an expense ratio of 2 16 and a management fee of 1 Without even doing any in depth analysis just the fact that you are paying more in fees than you re earning in returns is reason enough not to invest HEMCX is a Non US Equity fund Many of these funds like to allocate across emerging and developed markets and will often focus on all cap levels The fund has lagged performance wise so perhaps a simpler index future investing strategy might be more effective
Hartford Global Real Asset R4 HRLSX 1 2 expense ratio 0 85 HRLSX is a Global Equity mutual fund investing in bigger markets like the U S Europe and Japan these kinds of funds aren t limited by geography This fund has yearly returns of 1 82 over the most recent five years Another fund liable of having investors pay more in charges than what they receive in return
Wells Fargo NYSE WFC Absolute Return C WARCX 2 28 expense ratio 0 72 management fee This fund has yielded yearly returns of 0 7 in the course of the last five years Too bad
3 Top Ranked Mutual Funds
Since you ve seen the most noticeably lowest Zacks Ranked mutual funds how about we take a look at some of the top ranked mutual funds with the least fees
AQR Large Cap Defensive Style R6 QUERX 0 3 expense ratio and 0 25 management fee QUERX is a Large Cap Blend fund targeting companies with market caps of over 10 billion These funds offer investors a stability and are perfect for people with a buy and hold mindset With an annual return of 14 03 over the last five years this fund is a winner
Brown Advisory Growth Equity Institutional BAFGX has an expense ratio of 0 7 and management fee of 0 59 BAFGX is a Large Cap Growth option these mutual funds purchase stakes in numerous large U S companies that are expected to develop and grow at a faster rate than other large cap stocks Thanks to yearly returns of 14 14 over the last five years BAFGX is an effectively diversified fund with a long reputation of solidly positive performance
Victory Sycamore Established Value R6 VEVRX Expense ratio 0 58 Management fee 0 45 VEVRX an All Cap Value option is a type of mutual fund that buys stakes in companies in all three valuation categories VEVRX has produced a 10 57 over the last five years
Bottom Line
Along these lines there you have it if your financial guide has you put your money into any of our Mutual Fund Misfires of the Market there is a strong likelihood that they are either dormant at the worst possible time inept or in all probability filling their pockets with high fee commissions at the cost of your financial objectives
Do You Know the Top 9 Retirement Investing Mistakes
Whether you re planning to retire early or not don t let investing mistakes derail your plans
If you have 500 000 or more to invest and want to learn more click the link to download our free report 9 Retirement Mistakes that will Ruin Your Retirement This report will help you steer clear of the most common mistakes like trying to time the market lack of diversification in your portfolio and many more Get Your FREE Guide Now |
WFC | Avoid These 3 Mutual Fund Misfires December 05 2019 | If your financial advisor made you buy any of these Mutual Fund Misfires of the Market with high expenses and low returns you need to reassess your advisor
The easiest way to judge a mutual fund s quality over time is by analyzing its performance and fees Our Zacks Rank of over 19 000 mutual funds has identified some of the worst of the worst mutual funds you should avoid the funds with the highest fees and poorest long term performance
First let s break down some of the funds currently part of our Mutual Fund Misfires of the Market If you happen to have put your money into any of these misfires we ll help assess some of our best Zacks Ranked mutual funds
3 Mutual Fund Misfires
Now let s take a look at three market misfires
Wells Fargo NYSE WFC Absolute Return Admiral WARDX 1 45 expense ratio and 0 72 management fee WARDX is an Allocation Balanced mutual fund Allocation Balanced funds look to invest across asset types like stocks bonds and cash and including precious metals or commodities is not unusual these funds are mostly categorized by their respective asset allocation With a five year after expenses return of 1 31 you re mostly paying more in fees than returns
Janus Henderson Emerging Markets I HEMIX Expense ratio 1 15 Management fee 0 72 Over the last 5 years this fund has generated annual returns of 0 64
Gabelli Focus Five Fund C GWSCX 2 46 expense ratio 1 management fee This fund has yielded yearly returns of 1 93 in the course of the last five years Too bad
3 Top Ranked Mutual Funds
Since you ve seen the most noticeably lowest Zacks Ranked mutual funds how about we take a look at some of the top ranked mutual funds with the least fees
Conestoga Small Cap Institutional CCALX is a winner with an expense ratio of just 0 9 and a five year annualized return track record of 15 54
Fidelity Series Growth Company FCGSX Expense ratio 0 01 Management fee 0 FCGSX is a Large Cap Growth option these mutual funds purchase stakes in numerous large U S companies that are expected to develop and grow at a faster rate than other large cap stocks FCGSX has managed to produce a robust 14 42 over the last five years
Victory Sycamore Established Value Y VEVYX is an attractive fund with a five year annualized return of 10 46 and an expense ratio of just 0 62 VEVYX an All Cap Value option is a type of mutual fund that buys stakes in companies in all three valuation categories
Bottom Line
Along these lines there you have it if your financial guide has you put your money into any of our Mutual Fund Misfires of the Market there is a strong likelihood that they are either dormant at the worst possible time inept or in all probability filling their pockets with high fee commissions at the cost of your financial objectives
Do You Know the Top 9 Retirement Investing Mistakes
Whether you re planning to retire early or not don t let investing mistakes derail your plans
If you have 500 000 or more to invest and want to learn more click the link to download our free report 9 Retirement Mistakes that will Ruin Your Retirement This report will help you steer clear of the most common mistakes like trying to time the market lack of diversification in your portfolio and many more Get Your FREE Guide Now |
XOM | US STOCKS Wall St rises for 3rd day on economic optimism | Industrial output rises 2nd straight month
Weaker dollar boosts stocks
Indexes up Dow by 1 1 pct S P 1 5 pct Nasdaq 1 5 pct
Updates to close
By Caroline Valetkevitch
NEW YORK Sept 16 Reuters U S stocks rose for a third
day on Wednesday hitting fresh 2009 highs in a broad based
rally following economic data that suggested a
stronger than anticipated global recovery
Energy and manufacturing companies were among the
strongest benefiting from data indicating improved industrial
demand and a falling dollar which makes American exports more
competitive in world markets
Shares of multinational companies gained including General
Electric Co up 6 3 percent at 17 while shares of Exxon Mobil
Corp rose 1 2 percent to 70 34 Financial companies also were
top gainers with the S P financial index up 3 4 percent
U S industrial output advanced for a second consecutive
month in August while a government report showed a
bigger than expected drop in crude inventories last week
indicating higher demand
The economic data added to optimism about a recovery a day
after Federal Reserve Chairman Ben Bernanke said the recession
was very likely over
This is a shot in the arm for recovery This is what we re
looking for Jack Ablin chief investment officer at Harris
Private bank in Chicago said
The Dow Jones industrial average was up 108 30 points or
1 12 percent at 9 791 71 The Standard Poor s 500 Index was
up 16 13 points or 1 53 percent at 1 068 76 The Nasdaq
Composite Index was up 30 51 points or 1 45 percent at
2 133 15
The benchmark S P index is now up 58 percent since hitting
12 year lows in early March and is up 18 percent since the
start of the year The dollar meanwhile fell near one year
lows against a basket of currencies
The dollar continues to get pounded That translates into
higher commodity stocks and industrials continue to be a
beneficiary of the dollar s weakness said Michael James
senior trader at regional investment bank Wedbush Morgan in Los
Angeles
Adding to the positive tone was the latest sign that merger
and acquisition activity was picking up Adobe Systems Inc said
it plans to pay 1 8 billion for Omniture Inc whose software
analyzes Web traffic Adobe the maker of Photoshop and Acrobat
software is looking to turn around declining sales
Adobe was down 6 4 percent at 33 35 while Omniture
advanced 26 3 percent to 21 88
Shares of healthcare companies advanced after Democrat
Senator Max Baucus said his healthcare overhaul plan can pass
the Senate A healthcare company index was up 2 2 percent
On the New York Mercantile Exchange oil futures rose 2 2
percent to 72 51 a barrel December gold in New York hit
18 month highs finishing at 1 020 20 an ounce on the COMEX
division of the New York Mercantile Exchange Mining company
Freeport McMoran Copper Gold Inc gained 1 2 percent to
72 15
Volume was above average on the New York Stock Exchange
with 1 58 billion shares changing hands above last year s
estimated daily average of 1 49 billion while on the Nasdaq
about 2 76 billion shares traded higher than last year s daily
average of 2 28 billion
Advancing stocks outnumbered declining ones on the NYSE by
a ratio of 5 to 1 while advancing stocks beat decliners on the
Nasdaq by about 9 to 4
Additional reporting by Edward Krudy Editing by Kenneth
Barry |
WFC | Does Your Retirement Portfolio Hold These 3 Mutual Fund Misfires November 08 2019 | If your financial advisor made you buy any of these Mutual Fund Misfires of the Market with high expenses and low returns you need to reassess your advisor
The easiest way to judge a mutual fund s quality over time is by analyzing its performance and fees Our Zacks Rank of over 19 000 mutual funds has identified some of the worst of the worst mutual funds you should avoid the funds with the highest fees and poorest long term performance
Below you ll read about some of the funds included in our current list of Mutual Fund Misfires of the Market And if by chance you re invested in any of these misfires we ll help and review some of our highest Zacks Ranked mutual funds
3 Mutual Fund Misfires
Now let s take a look at three market misfires
Catalyst Hedged Futures Strategy I HFXIX This fund has an expense ratio of 2 08 and a management fee of 1 75 Without even doing any in depth analysis just the fact that you are paying more in fees than you re earning in returns is reason enough not to invest HFXIX is a Long Short Equity option These funds investment strategy consists of minimizing overall market exposure while at the same time taking long positions in equities that are expected to appreciate and short positions in equities that are projected to decline The fund has lagged performance wise so perhaps a simpler index future investing strategy might be more effective
Thomas White International Fund TWWDX 1 24 expense ratio 0 85 TWWDX is a Non US Equity option focusing their investments acoss emerging and developed markets and can often extend across cap levels too This fund has yearly returns of 1 01 over the most recent five years Another fund liable of having investors pay more in charges than what they receive in return
Wells Fargo NYSE WFC Short Duration Government C MSDCX 1 55 expense ratio 0 35 management fee MSDCX is a Government Bond Short fund and these funds hold securities issued by the U S federal government This category focuses on the short end of the curve and are seen as extremely low risk securities from a default perspective MSDCX has generated annual returns of 0 28 over the last five years Ouch
3 Top Ranked Mutual Funds
Since you ve seen the most noticeably lowest Zacks Ranked mutual funds how about we take a look at some of the top ranked mutual funds with the least fees
Hartford Core Equity Y HGIYX is a fund that has an expense ratio of 0 42 and a management fee of 0 35 HGIYX is part of the Large Cap Blend section and these mutual funds most often invest in firms with a market capitalization of 10 billion or more By investing in bigger companies these funds offer more stability and are often well suited for investors with a buy and hold mindset With yearly returns of 12 33 over the last five years this fund clearly wins
Principal Blue Chip Fund I PBCKX Expense ratio 0 66 Management fee 0 66 PBCKX is a Large Cap Growth mutual fund and these funds invest in many large U S firms that are projected to grow at a faster rate than their large cap peers PBCKX has managed to produce a robust 15 39 over the last five years
MFS Growth Fund I MFEIX has an expense ratio of 0 66 and management fee of 0 55 MFEIX is an All Cap Growth mutual fund investing in a wide variety of equities no matter the size of the company and as long as the firm exhibits growth characteristics With annual returns of 14 5 over the last five years this fund is a well diversified fund with a long track record of success
Bottom Line
We hope that your investment advisor if you use one has you invested in one or all of the top ranked mutual funds we ve reviewed But if that is not the case and your advisor has you invested in any of the funds on our worst offender list it might be time to have a conversation or reconsider this vitally important relationship
Do You Know the Top 9 Retirement Investing Mistakes
Whether you re planning to retire early or not don t let investing mistakes derail your plans
If you have 500 000 or more to invest and want to learn more click the link to download our free report 9 Retirement Mistakes that will Ruin Your Retirement This report will help you steer clear of the most common mistakes like trying to time the market lack of diversification in your portfolio and many more Get Your FREE Guide Now |
WFC | 3 Mutual Fund Misfires To Avoid November 08 2019 | Does your current advisor have your money invested in these Mutual Fund Misfires of the Market that charge high fees for low returns If so it may be time for a new advisor
High fees coupled with poor results It s a straightforward equation for an awful mutual fund Some are more regrettable than others and some are bad to the point that they have got a Strong Sell from our Zacks Rank the lowest positioning of the almost 19 000 mutual funds we rank every day
Below you ll read about some of the funds included in our current list of Mutual Fund Misfires of the Market And if by chance you re invested in any of these misfires we ll help and review some of our highest Zacks Ranked mutual funds
3 Mutual Fund Misfires
Now let s take a look at three market misfires
Wells Fargo NYSE WFC Short Duration Government A MSDAX This fund has an expense ratio of 0 8 and a management fee of 0 35 Without even doing any in depth analysis just the fact that you are paying more in fees than you re earning in returns is reason enough not to invest MSDAX is a Government Bond Short fund and these funds hold securities issued by the U S federal government This category focuses on the short end of the curve and are seen as extremely low risk securities from a default perspective The fund has lagged performance wise so perhaps a simpler index future investing strategy might be more effective
Acadian Emerging Markets Institutional AEMGX 1 38 expense ratio 1 AEMGX is a Non US Equity option focusing their investments acoss emerging and developed markets and can often extend across cap levels too This fund has yearly returns of 1 28 over the most recent five years Another fund liable of having investors pay more in charges than what they receive in return
Ivy Cundill Global Value Y ICDYX 1 36 expense ratio 1 management fee This fund has yielded yearly returns of 0 66 in the course of the last five years Too bad
3 Top Ranked Mutual Funds
Now that we ve covered our worst offender list let s take a look at some of Zacks highest ranked mutual funds with some of the lowest fees you may want to consider
Principal Real Estate Security R5 PREPX is a fund that has an expense ratio of 1 07 and a management fee of 0 81 PREPX is categorized as a Sector Real Estate mutual fund which typically invests in various real estate investment trusts REIT due to their taxation rules With yearly returns of 11 48 over the last five years this fund clearly wins
Fidelity Advisor Growth Opportunit FAOFX has an expense ratio of 0 01 and management fee of 0 FAOFX is a Large Cap Growth option these mutual funds purchase stakes in numerous large U S companies that are expected to develop and grow at a faster rate than other large cap stocks With annual returns of 16 82 over the last five years this is a well diversified fund with a long track record of success
MFS Mid Cap Growth Fund I OTCIX Expense ratio 0 87 Management fee 0 71 OTCIX is a Mid Cap Growth mutual fund These mutual funds choose companies with a stock market valuation between 2 billion and 10 billion OTCIX has produced a 13 82 over the last five years
Bottom Line
We hope that your investment advisor if you use one has you invested in one or all of the top ranked mutual funds we ve reviewed But if that is not the case and your advisor has you invested in any of the funds on our worst offender list it might be time to have a conversation or reconsider this vitally important relationship
Do You Know the Top 9 Retirement Investing Mistakes
Whether you re planning to retire early or not don t let investing mistakes derail your plans
If you have 500 000 or more to invest and want to learn more click the link to download our free report 9 Retirement Mistakes that will Ruin Your Retirement This report will help you steer clear of the most common mistakes like trying to time the market lack of diversification in your portfolio and many more Get Your FREE Guide Now |
WFC | 3 Mutual Fund Misfires To Avoid In Your Retirement Portfolio November 11 2019 | If your advisor has you invested in any of these Mutual Fund Misfires of the Market with high fees and low returns you need to rethink your advisor
How can you tell a good mutual fund from a bad one It s pretty basic If the fund has high fees and performs poorly it s not good Of course there s a range but when a mutual fund earns a Zacks Rank of 5 Strong Sell that means it s among the worst of roughly 19 000 funds we rate each day
First let s break down some of the funds currently part of our Mutual Fund Misfires of the Market If you happen to have put your money into any of these misfires we ll help assess some of our best Zacks Ranked mutual funds
3 Mutual Fund Misfires
Now let s take a look at three market misfires
Wells Fargo NYSE WFC International Equity C WFEFX 2 15 expense ratio and 0 85 management fee WFEFX is a Non US Equity option focusing their investments acoss emerging and developed markets and can often extend across cap levels too With a five year after expenses return of 1 71 you re mostly paying more in fees than returns
Touchstone Ultra Short Duration Fixed Income A TSDAX 0 69 expense ratio 0 25 management fee TSDAX is a Government Bond Short fund and these funds hold securities issued by the U S federal government This category focuses on the short end of the curve and are seen as extremely low risk securities from a default perspective This fund has an annual returns of 0 65 over the last five years Another fund guilty of having investors pay more in fees than returns
ProFunds Telecom UltraSector Investor TCPIX 1 83 expense ratio 0 75 management fee This fund has yielded yearly returns of 1 3 in the course of the last five years Too bad
3 Top Ranked Mutual Funds
There you have it some prime examples of truly bad mutual funds In contrast here are a few funds that have achieved high Zacks Ranks and have low fees
MFS Research R5 MFRKX 0 48 expense ratio and 0 43 management fee MFRKX is a part of the Large Cap Growth mutual fund category which invest in many large U S companies that are expected to grow much faster compared to other large cap stocks With an annual return of 11 1 over the last five years this fund is a winner
TIAA CREF Real Estate Security Retail TCREX is a stand out fund TCREX is a Sector Real Estate fund and these kinds of mutual funds typically invest in eeal estate investment trusts REITs due to their taxation rules With five year annualized performance of 11 53 and expense ratio of 0 81 this diversified fund is an attractive buy with a strong history of performance
Janus Henderson Enterprise N JDMNX is an attractive fund with a five year annualized return of 14 98 and an expense ratio of just 0 66 JDMNX is a Mid Cap Growth mutual fund These mutual funds choose companies with a stock market valuation between 2 billion and 10 billion
Bottom Line
Along these lines there you have it if your financial guide has you put your money into any of our Mutual Fund Misfires of the Market there is a strong likelihood that they are either dormant at the worst possible time inept or in all probability filling their pockets with high fee commissions at the cost of your financial objectives
Do You Know the Top 9 Retirement Investing Mistakes
Whether you re planning to retire early or not don t let investing mistakes derail your plans
If you have 500 000 or more to invest and want to learn more click the link to download our free report 9 Retirement Mistakes that will Ruin Your Retirement This report will help you steer clear of the most common mistakes like trying to time the market lack of diversification in your portfolio and many more Get Your FREE Guide Now |
WFC | 3 Wells Fargo Advantage Mutual Funds To Snap Up Today | Wells Fargo NYSE WFC the owner of Wells Fargo Advantage Funds brand is one of the four largest banks in the United States with a legacy spanning 150 years in the financial services sector Wells Fargo had over 503 billion in assets as of Sep 30 2019 which includes 91 5 billion from Galliard Capital Management Wells Fargo Advantage Funds diversifies its assets across a wide range of mutual fund categories These include both domestic and foreign funds asset allocation funds and fixed income funds In 2010 the boards of trustees of Wells Fargo Advantage Funds and Evergreen Funds had approved the merger of the fund families to create a new fund line up under the brand name Wells Fargo Advantage Funds The Wells Fargo fund family claims that each fund is guided by a premier investment team chosen for its focused attention to a particular investment style There s a fund to meet the investment goals and risk tolerance of almost any investment portfolio Below we share with you three top ranked Wells Fargo Advantage Funds Each has earned a Strong Buy and is expected to outperform its peers in the future Investors can Wells Fargo CoreBuilder Shares Series M seeks maximization of returns through growth of income and capital WFCMX invests more than 60 of its assets in municipal securities which offer federal income tax exempted interest Wells Fargo CoreBuilder Shares Series M has returned 7 7 on a year to date basis As of September 2019 WFCMX held 391 issues with 1 81 of its assets invested in IOWA FIN AUTH MIDWESTERN DISASTER AREA ECONOMIC DEV REV 1 97 Wells Fargo Discovery Fund Class R6 seeks long term capital appreciation The fund invests the majority of its assets in equity securities of small and medium capitalization companies The fund may also invest a quarter of its total assets in equity securities of foreign issuers through American Depository Receipts and other such investments WFDRX has returned 29 7 on a year to date basis Michael T Smith has been one of the fund managers of WFDRX since 2011 Wells Fargo Special Mid Cap Value Fund Class R6 aims for capital growth The fund invests the majority of its assets in equity securities of medium capitalization companies These companies usually have market capitalizations similar to those on the Russell Midcap Index at the time of purchase WFPRX has returned 27 5 on a year to date basis WFPRX has an expense ratio of 0 73 compared with the category average of 1 10 To view the Zacks Rank and past performance of all Wells Fargo Advantage Funds investors can Want key mutual fund info delivered straight to your inbox Zacks free Fund Newsletter will brief you on top news and analysis as well as top performing mutual funds each week |
WFC | Why Is Wells Fargo WFC Up 7 5 Since Last Earnings Report | It has been about a month since the last earnings report for Wells Fargo WFC Shares have added about 7 5 in that time frame outperforming the S P 500
Will the recent positive trend continue leading up to its next earnings release or is Wells Fargo due for a pullback Before we dive into how investors and analysts have reacted as of late let s take a quick look at the most recent earnings report in order to get a better handle on the important drivers Wells Fargo s Q3 Earnings Disappoint NII DownWells Fargo s third quarter 2019 earnings of 92 cents per share lagged the Zacks Consensus Estimate of 1 15 on lower net interest income The figure also comes in lower than the prior year quarter earnings of 1 13 per share Results include discrete litigation accrual not tax deductible worth 35 cents per share and gain from the sale of Institutional Retirement and Trust IRT business worth 20 cents Also the partial redemption of Series K Preferred Stock decreased earnings by 5 cents Higher fee income driven by improved trading activities partly offset by lower mortgage banking revenues aided the company s performance Further escalation in loans and deposits acted as tailwinds However reduced net interest income and rise in expenses were undermining factors Moreover provisions soared Net income came in at 4 6 billion compared with the 6 billion recorded in the prior year quarter The quarter s total revenues came in at 22 billion outpacing the Zacks Consensus Estimate of 21 1 billion The reported figure also comes in higher than the prior year quarter s tally of 21 9 billion Furthermore on a year over year basis quarterly revenue generation at the business segments was mixed The Community Banking segment s total quarterly revenues slipped 5 1 and Wholesale Banking revenues were down around 5 5 Yet revenues in the Wealth and Investment Management unit were up 21 4 Net Interest Income Falls Costs Up Fee Income ImprovesWells Fargo s net interest income in the quarter came in at 11 6 billion down 8 year over year Higher interest expense and lower interest income from loans held for sale equity securities and loans led to this downside partly offset by increased interest income from debt securities mortgage loans held for sale along with higher other interest income Furthermore net interest margin shrunk 28 basis points bps year over year to 2 66 Non interest income at Wells Fargo came in at around 10 4 billion up 11 year over year primarily owing to rise in service charges on deposit accounts card fees net gains from trading activities and equity securities along with elevated other income These increases were mainly muted by lower mortgage banking revenues and reduced net gains on debt securities As of Sep 30 2019 total loans were 954 9 billion slightly up sequentially Higher consumer as well as commercial loan portfolio was recorded Total deposits came in at 1 31 trillion up 2 from the prior quarter Non interest expense at Wells Fargo was around 15 2 billion up 10 from the year earlier quarter This rise in expenses primarily resulted from elevated salaries and commission and incentive compensation equipment costs and other expenses These were partly offset by lower employee benefits core deposit and other intangibles along with FDIC and other deposit assessments The company s efficiency ratio of 69 1 came in above the 62 recorded in the year ago quarter A rise in efficiency ratio indicates a fall in profitability Credit Quality A Mixed BagWells Fargo s credit quality metrics was a mixed bag in the September end quarter Allowance for credit losses including the allowance for unfunded commitments totaled 10 6 billion as of Sep 30 2019 down 3 6 year over year Net charge offs were 645 million or 0 27 of average loans in the reported quarter down 5 1 from the year ago quarter s net charge offs of 680 million 0 29 Non performing assets slipped 16 7 to 6 billion in the third quarter from 7 2 billion reported in the prior year quarter Notably provision for credit losses was 695 million 20 higher Strong Capital PositionWells Fargo has maintained a sturdy capital position During the July September quarter the company returned 9 billion to shareholders through common stock dividends and net share repurchases Wells Fargo s Tier 1 common equity under Basel III fully phased in decreased to 144 7 billion from 148 9 billion recorded in the prior year quarter The Tier 1 common equity to total risk weighted assets ratio was estimated at 11 6 under Basel III fully phased in as of Sep 30 2019 down from 11 9 in the year earlier quarter Book value per share advanced to 40 48 from 37 55 recorded in the comparable period last year Return on assets was 0 95 down from 1 27 in the prior year quarter Return on equity was 9 down from 12 04 in the comparable prior year quarter OutlookWells Fargo partially redeemed Series K Preferred Stock which reduced earnings by 5 cents per share due to the elimination of purchase accounting discount recorded on these shares during the Wachovia acquisition This partial redemption will reduce the amount of the company s quarterly preferred stock dividends by about 23 million starting in the fourth quarter Fourth Quarter 2019Management currently expects MBS premium amortization to continue to increase in the fourth quarter but at a slower pace Mortgage originations for the quarter are expected to remain at a level similar to third quarter Notably originations increased sequentially due to higher refinance volumes from lower interest rates with refinancing increasing to 40 of originations in the third quarter The company expects effective income tax rate to be about 17 5 excluding the impact of any unanticipated discrete items Full Year 2019Management expects NII to be down 6 compared with 2018 influenced by a number of factors including loan growth pricing spreads the level of rates and the slope of the yield curve The company expects 2019 expenses to be around 53 billion which is at the top end of 52 to 53 billion target range This excludes annual operating losses in excess of 600 million and also excludes deferred compensation expense For 2020 expenses are expected in 50 51 billion range Near TermPer management the bank s strategic and financial targets beyond 2019 will be established once a permanent CEO comes in place Therefore currently the bank focuses on cost saving initiatives Moreover ROE is anticipated to be 12 15 over the next two years ended 2020 while ROTCE is expected to be 14 17
How Have Estimates Been Moving Since Then
It turns out estimates revision have trended upward during the past month
VGM Scores
At this time Wells Fargo has a poor Growth Score of F however its Momentum Score is doing a bit better with a D However the stock was allocated a grade of B on the value side putting it in the second quintile for this investment strategy
Overall the stock has an aggregate VGM Score of D If you aren t focused on one strategy this score is the one you should be interested in
Outlook
Estimates have been broadly trending upward for the stock and the magnitude of these revisions looks promising Notably Wells Fargo has a Zacks Rank 3 Hold We expect an in line return from the stock in the next few months |
XOM | US STOCKS Futures flat as investors look to jobs orders data | ADP private labor market report on tap
BP in giant oil find in Gulf of Mexico
Futures Dow down 3 pts S P down 0 5 Nasdaq off 2 50
For up to the minute market news click STXNEWS US
Updates with Challenger data
By Edward Krudy
NEW YORK Sept 2 Reuters U S stock index futures were
flat on Wednesday ahead of private labor market data seen as a
precursor to a key government monthly jobs report later in the
week which investors will keenly await after a three day slide
in stocks
Economists polled by Reuters are looking for a loss of
250 000 jobs in August compared with a 371 000 loss in July
when the ADP jobs report is released at 8 30 a m 12 30 GMT
A separate earlier report showed planned layoffs by U S firms
fell 21 percent in August
BP Plc rose 4 percent to 52 49 in premarket New
York trading after the company said it had made a giant oil
discovery in an area that has assumed increasing importance for
Western oil majors For details see ID nL2530648
Shares on ConocoPhillips which has an 18 percent
working interest in BP s Tiber Prospect rose 1 2 percent in
premarket trade Exxon Mobil Corp rose 0 6 percent
We will be looking at the ADP number which tends to
be a precursor to the change in the nonfarm payroll number at
the end of the week said Art Hogan chief market analyst at
Jefferies Co in New York
British Petroleum has made a discovery in the Gulf of
Mexico and they actually define that as being great so I
think that is going to catch some headlines as we work our way
through the day
S P 500 futures fell 0 5 points and were below fair
value a formula that evaluates pricing by taking into account
interest rates dividends and time to expiration on the
contract Dow Jones industrial average futures were down
3 points and Nasdaq 100 futures dropped 2 50 points
U S indexes fell 2 percent on Tuesday on uncertainty over
the health of banks Some investors fear the market rally of 50
percent since March has run ahead of economic realities and are
predicting a pullback in prices September is also a
traditionally weak month for stocks
Indexes mostly fell in Europe and Asia on Wednesday but
China s key stock index closed 1 2 percent higher led
by the banking sector In Europe the FTSE Eurofirst 300
fell 0 6 percent
There will be a number of releases throughout the day
culminating with the Federal Open Market Committee meeting
minutes at 2 p m which are closely followed for an insight
into the Federal Reserve s thinking on the economy
The U S Labor Department releases revised Q2 productivity
and unit labor costs at 8 30 a m Economists in a Reuters
survey forecast a rise of 6 4 percent in productivity and a 5 8
percent fall in unit labor costs unchanged from the previous
month
Following that the Commerce Department releases July
factory orders at 10 a m Economists in a Reuters survey expect
an increase of 2 2 percent compared with a 0 4 percent rise in
June
Reporting by Edward Krudy Editing by Padraic Cassidy |
XOM | US STOCKS Indexes rise 1 pct on weaker dollar data | CPI industrial output top estimates
Weaker dollar boosts stocks
Indexes up Dow by 1 pct S P 1 3 pct Nasdaq 1 2 pct
Updates to early afternoon changes byline
By Caroline Valetkevitch
NEW YORK Sept 16 Reuters U S stocks rose 1 percent on
Wednesday helped by weakness in the dollar and data showing a
rise in industrial output
Shares of industrial companies with heavy overseas business
that benefit from a weaker dollar gained including General
Electric Co up 6 1 percent at 16 98
The dollar s decline also boosted commodities prices which
in turn lifted shares of natural resource companies
The dollar continues to get pounded That translates into
higher commodity stocks and industrials continue to be a
beneficiary of the dollar s weakness said Michael James
senior trader at regional investment bank Wedbush Morgan in Los
Angeles
The Dow Jones industrial average was up 100 51 points or
1 04 percent at 9 783 92 The Standard Poor s 500 Index rose
14 15 points or 1 34 percent at 1 066 78 The Nasdaq
Composite Index jumped 25 83 points or 1 23 percent at
2 128 47
The dollar dropped to near one year lows against the euro
and a basket of currencies
U S industrial output advanced for a second consecutive
month in August while higher gasoline costs pushed up consumer
prices although economists said the risk of inflation remained
low
Adding to the positive tone was the latest sign that merger
and acquisition activity was picking up Adobe Systems Inc said
it plans to pay 1 8 billion for Omniture Inc whose software
analyzes Web traffic Adobe the maker of Photoshop and Acrobat
software is looking to turn around declining sales
Adobe was down 6 3 percent at 33 38 while Omniture
advanced 26 7 percent to 21 95
HMO shares advanced after Democrat Senator Max Baucus said
his health care overhaul can pass the Senate A health care
stock index was up 1 3 percent
Shares of Exxon Mobil Corp gained 1 1 percent to 70 24 as
oil futures rose 2 percent |
XOM | US STOCKS Wall St gains on weaker dollar data | Industrial output tops estimates
Weaker dollar boosts stocks
Indexes up Dow by 1 pct S P 1 3 pct Nasdaq 1 3 pct
Updates to late afternoon
By Caroline Valetkevitch
NEW YORK Sept 16 Reuters U S stocks rose for a third
straight day on Wednesday as weakness in the dollar lifted
commodity and industrial shares while data underscored optimism
that the economy was improving
Shares of industrial companies that benefit from a weaker
dollar gained including General Electric Co up 5 9
percent at 16 94 The dollar s decline also boosted
commodities prices which in turn lifted shares of natural
resource companies
The dollar continues to get pounded That translates into
higher commodity stocks and industrials continue to be a
beneficiary of the dollar s weakness said Michael James
senior trader at regional investment bank Wedbush Morgan in Los
Angeles
U S industrial output advanced for a second consecutive
month in August while higher gasoline costs pushed up consumer
prices although economists said the risk of inflation remained
low For details see ID nN16118540
That added to optimism that the economy was getting better
a day after Federal Reserve Chairman Ben Bernanke said the
recession was very likely over
Financial companies also were top gainers with the S P
financial index up 2 5 percent
The Dow Jones industrial average was up 98 55
points or 1 02 percent at 9 781 96 The Standard Poor s 500
Index was up 14 08 points or 1 34 percent at 1 066 71
The Nasdaq Composite Index was up 26 92 points or 1 28
percent at 2 129 56
The S P hit a high for the year shortly after the open
and is now up about 56 percent from the March 9 low The
dollar meanwhile dropped to near one year lows against the
euro and a basket of currencies
Adding to the positive tone was the latest sign that merger
and acquisition activity was picking up Adobe Systems Inc
said it plans to pay 1 8 billion for Omniture Inc
whose software analyzes Web traffic Adobe the maker
of Photoshop and Acrobat software is looking to turn around
declining sales ID nN15465772
Adobe was down 6 6 percent at 33 28 while Omniture
advanced 26 7 percent to 21 95
HMO shares advanced after Democrat Senator Max Baucus said
his health care overhaul can pass the Senate A health care
stock index was up 1 7 percent
Shares of Exxon Mobil Corp gained 1 1 percent to
70 24 as oil futures rose 2 percent Oil at one
point rose above 72 a barrel on Wednesday
Gold prices hit 18 month highs Freeport McMoran Copper
Gold Inc up 1 4 percent to 72 35
Reporting by Caroline Valetkevitch Editing by Kenneth
Barry |
WFC | 3 Major Bank Earnings to Watch Tuesday Morning | A few major banks are reporting their most recent financial results on Tuesday morning Most of these banks normally report on Friday but this quarter they are changing it up In general financial stocks have performed in line with the markets with bank stocks outperforming the S P 500 over the past quarter While the Federal Reserve was proven to be more hawkish last year it seems to be taking a fairly neutral stance in 2020 24 7 Wall St has put together a preview of some of the major financial companies kicking off the new earnings reporting season Markets have risen to record highs and results from these major banks can set the tone for earnings going forward Look for other major banks to report later this week as well as a few Dow stocks div connatix margin bottom 1 5em div connatix img margin unset Citigroup Inc NYSE C is scheduled to reveal its third quarter results on Tuesday before the open The consensus estimates call for 1 84 in earnings per share EPS as well as 17 89 billion in revenue Shares were trading above 79 on Monday The consensus price target is 89 10 The stock has a 52 week trading range of 55 70 to 81 26 For Wells Fargo Co NYSE WFC the consensus analyst estimates call for 1 12 in EPS and revenue of 20 12 billion Shares of Wells Fargo were trading near 52 also near the consensus price target of 53 04 The 52 week trading range is 43 34 to 54 75 The analysts consensus estimates for JPMorgan Chase Co NYSE JPM are EPS of 2 35 and 27 96 billion in revenue Shares were changing hands around 136 Monday morning The consensus price target is 135 33 and the stock has a 52 week range of 98 09 to 141 10
By Chris Lange |
WFC | Are You Invested In These 3 Mutual Fund Misfires October 29 2019 | Does your current advisor have your money invested in these Mutual Fund Misfires of the Market that charge high fees for low returns If so it may be time for a new advisor
High fees plus poor performance It s a pretty simple formula for a bad mutual fund Some are worse than others and some are so bad that they have earned a Strong Sell on the Zacks Rank the lowest ranking of the nearly 19 000 mutual funds we rank daily
First let s break down some of the funds currently part of our Mutual Fund Misfires of the Market If you happen to have put your money into any of these misfires we ll help assess some of our best Zacks Ranked mutual funds
3 Mutual Fund Misfires
Now let s take a look at three market misfires
Leader Short Term Bond Fund C LCMCX This fund has an expense ratio of 2 16 and a management fee of 0 75 Without even doing any in depth analysis just the fact that you are paying more in fees than you re earning in returns is reason enough not to invest LCMCX is an Investment Grade Bond Short fund By investing in bonds that mature in less than two years Investment Grade Bond Short funds are focused on the short end of the curve The fund has lagged performance wise so perhaps a simpler index future investing strategy might be more effective
Wells Fargo NYSE WFC Absolute Return A WARAX 1 53 expense ratio 0 72 management fee WARAX is classified as an Allocation Balanced fund which seeks to invest in a balance of asset types like stocks bonds and cash and including precious metals or commodities is not unusual This fund has an annual returns of 0 07 over the last five years Another fund guilty of having investors pay more in fees than returns
Templeton Global Balanced Fund A TAGBX 1 2 expense ratio 0 73 management fee This fund has yielded yearly returns of 0 in the course of the last five years Too bad
3 Top Ranked Mutual Funds
Now that you ve seen the worst Zacks Ranked mutual funds let s have a look at some of the highest ranked funds with the lowest fees
T Rowe Price Science Technology Adviser PASTX Expense ratio 1 06 Management fee 0 64 PASTX is a Sector Tech mutual fund allowing investors to own a stake in a notoriously volatile sector with a much more diversified approach This fund has achieved five year annual returns of an astounding 15 53
Wells Fargo Endeavor Select A STAEX is a stand out fund STAEX is a Large Cap Growth option these mutual funds purchase stakes in numerous large U S companies that are expected to develop and grow at a faster rate than other large cap stocks With five year annualized performance of 12 52 and expense ratio of 1 26 this diversified fund is an attractive buy with a strong history of performance
Principal Mid Cap R5 PMBPX has an expense ratio of 0 85 and management fee of 0 58 PMBPX is a Mid Cap Growth mutual fund These mutual funds choose companies with a stock market valuation between 2 billion and 10 billion With yearly returns of 13 3 over the last five years this fund is well diversified with a long reputation of salutary performance
Bottom Line
Along these lines there you have it if your financial guide has you put your money into any of our Mutual Fund Misfires of the Market there is a strong likelihood that they are either dormant at the worst possible time inept or in all probability filling their pockets with high fee commissions at the cost of your financial objectives
If you have concerns or any doubts about your investment advisor read our just released report
4 Warning Signs That Your Advisor Might be Sabotaging Your Financial FutureThis report can help you avoid the costly mistake of picking or sticking with the wrong investment advisor Click here for free report |
WFC | Does Your Retirement Portfolio Hold These 3 Mutual Fund Misfires October 31 2019 | You may need to start looking for a new financial advisor if your current one has put any of these high fee low return Mutual Fund Misfires of the Market into your portfolio
High fees plus poor performance It s a pretty simple formula for a bad mutual fund Some are worse than others and some are so bad that they have earned a Strong Sell on the Zacks Rank the lowest ranking of the nearly 19 000 mutual funds we rank daily
First let s break down some of the funds currently part of our Mutual Fund Misfires of the Market If you happen to have put your money into any of these misfires we ll help assess some of our best Zacks Ranked mutual funds
3 Mutual Fund Misfires
Now let s take a look at three market misfires
Highland Energy MLP Fund Y HEFYX Expense ratio 0 01 Management fee 1 After expenses the 5 year return is 18 09 meaning your fees are far higher than the fund s returns
Wells Fargo NYSE WFC Absolute Return Admiral WARDX Expense ratio 1 45 Management fee 1 Over the last 5 years this fund has generated annual returns of 1 31
Legg Mason BW Absolute Return Opportunity FI LBAFX Expense ratio 1 2 Management fee 0 64 LBAFX is part of the Investment Grade Bond Intermediate fund group These mutual funds focus on the middle part of the curve generally with bonds that usually mature in more than three years but less than 15 years With annual returns of just 0 44 it s no surprise this fund has received Zacks Strong Sell ranking
3 Top Ranked Mutual Funds
Now that you ve seen the worst Zacks Ranked mutual funds let s have a look at some of the highest ranked funds with the lowest fees
AQR Large Cap Defensive Style R6 QUERX 0 3 expense ratio and 0 25 management fee QUERX is part of the Large Cap Blend section and these mutual funds most often invest in firms with a market capitalization of 10 billion or more By investing in bigger companies these funds offer more stability and are often well suited for investors with a buy and hold mindset With an annual return of 14 03 over the last five years this fund is a winner
Victory Sycamore Small Company Opportunity Y VSOYX has an expense ratio of 1 09 and management fee of 0 76 VSOYX is a Small Cap Value fund and these funds are known for investing in companies with market caps under 2 billion With annual returns of 11 15 over the last five years this is a well diversified fund with a long track record of success
MFS Mid Cap Growth R6 OTCKX is an attractive fund with a five year annualized return of 13 94 and an expense ratio of just 0 77 OTCKX is a Mid Cap Growth mutual fund These funds aim to target companies with a market capitalization between 2 billion and 10 billion that are also expected to exhibit more extensive growth opportunities for investors than their peers
Bottom Line
So there you have it if your advisor has you invested in any of our Mutual Fund Misfires of the Market there is a good probability that they are either asleep at the wheel incompetent or most likely lining their pockets with high fee commissions at your financial expense
If you have concerns or any doubts about your investment advisor read our just released report
4 Warning Signs That Your Advisor Might be Sabotaging Your Financial FutureThis report can help you avoid the costly mistake of picking or sticking with the wrong investment advisor Click here for free report |
WFC | Wells Fargo told to pay 102M in patent judgment | Wells Fargo NYSE WFC says it may appeal a federal jury s verdict that it pay 102 8M to United Services Automobile Association for patent infringement of a mobile deposit system
Combined with a November jury verdict that said WFC should pay USAA 200M for infringing two other patents the bank would owe 303M
USAA says it has pioneered systems to allow its members to deposit checks from nearly anywhere because it does not operate traditional bricks and mortar banks and its military customers are all over the world
WFC says it and other financial institutions license technology from Mitek Systems NASDAQ MITK which is seeking its own court ruling that its technology did not infringe USAA patents |
WFC | Avoid These 3 Mutual Fund Misfires October 23 2019 | Does your current advisor have your money invested in these Mutual Fund Misfires of the Market that charge high fees for low returns If so it may be time for a new advisor
The easiest way to judge a mutual fund s quality over time is by analyzing its performance and fees Our Zacks Rank of over 19 000 mutual funds has identified some of the worst of the worst mutual funds you should avoid the funds with the highest fees and poorest long term performance
First let s break down some of the funds currently part of our Mutual Fund Misfires of the Market If you happen to have put your money into any of these misfires we ll help assess some of our best Zacks Ranked mutual funds
3 Mutual Fund Misfires
Now let s take a look at three market misfires
Invesco Gold Precious Metals C IGDCX Expense ratio 2 22 Management fee 0 75 After expenses the 5 year return is 0 47 meaning your fees are far higher than the fund s returns
Wells Fargo NYSE WFC International Equity C WFEFX 2 15 expense ratio 0 85 management fee WFEFX is a Non US Equity option focusing their investments acoss emerging and developed markets and can often extend across cap levels too This fund has an annual returns of 1 71 over the last five years Another fund guilty of having investors pay more in fees than returns
ProFunds Biotech Ultra Sector Investor BIPIX 1 45 expense ratio 0 75 management fee This fund has yielded yearly returns of 0 03 in the course of the last five years Too bad
3 Top Ranked Mutual Funds
Now that we ve covered our worst offender list let s take a look at some of Zacks highest ranked mutual funds with some of the lowest fees you may want to consider
T Rowe Price Institutional Mid Cap Equity Growth PMEGX Expense ratio 0 61 Management fee 0 6 PMEGX is a Mid Cap Growth mutual fund Mid Cap Growth funds pick stocks usually companies with a market cap between 2 billion and 10 billion that demonstrate extensive growth opportunities for investors compared to their peers This fund has achieved five year annual returns of an astounding 13 83
MFS Mass Investors Growth Stock I MGTIX has an expense ratio of 0 48 and management fee of 0 33 MGTIX is a Large Cap Growth option these mutual funds purchase stakes in numerous large U S companies that are expected to develop and grow at a faster rate than other large cap stocks Thanks to yearly returns of 13 9 over the last five years MGTIX is an effectively diversified fund with a long reputation of solidly positive performance
Principal Real Estate Security R5 PREPX Expense ratio 1 07 Management fee 0 81 PREPX is categorized as a Sector Real Estate mutual fund which typically invests in various real estate investment trusts REIT due to their taxation rules PREPX has produced a 11 48 over the last five years
Bottom Line
Along these lines there you have it if your financial guide has you put your money into any of our Mutual Fund Misfires of the Market there is a strong likelihood that they are either dormant at the worst possible time inept or in all probability filling their pockets with high fee commissions at the cost of your financial objectives
If you have concerns or any doubts about your investment advisor read our just released report
4 Warning Signs That Your Advisor Might be Sabotaging Your Financial FutureThis report can help you avoid the costly mistake of picking or sticking with the wrong investment advisor Click here for free report |
WFC | Does Your Retirement Portfolio Hold These 3 Mutual Fund Misfires October 23 2019 | Does your current advisor have your money invested in these Mutual Fund Misfires of the Market that charge high fees for low returns If so it may be time for a new advisor
How can you tell a good mutual fund from a bad one It s pretty basic If the fund has high fees and performs poorly it s not good Of course there s a range but when a mutual fund earns a Zacks Rank of 5 Strong Sell that means it s among the worst of roughly 19 000 funds we rate each day
Below you ll read about some of the funds included in our current list of Mutual Fund Misfires of the Market And if by chance you re invested in any of these misfires we ll help and review some of our highest Zacks Ranked mutual funds
3 Mutual Fund Misfires
Now let s take a look at three market misfires
Hussman Strategic Growth Fund HSGFX This fund has an expense ratio of 1 14 and a management fee of 0 9 Without even doing any in depth analysis just the fact that you are paying more in fees than you re earning in returns is reason enough not to invest HSGFX is a Long Short Equity mutual fund which look at taking long positions in equities that are expected to appreciate and short positions in equities that are projected to decline but overall hope to minimize their market exposure The fund has lagged performance wise so perhaps a simpler index future investing strategy might be more effective
Wells Fargo NYSE WFC Short Duration Government A MSDAX 0 8 expense ratio 0 35 MSDAX is part of the Government Bond Short fund category Often seen as risk free assets these funds hold securities issued by the U S federal government and they focus on the short end of the curve This fund has yearly returns of 0 64 over the most recent five years Another fund liable of having investors pay more in charges than what they receive in return
Aberdeen International Equity A GIGAX 1 53 expense ratio 0 8 management fee GIGAX is a Non US Equity option focusing their investments acoss emerging and developed markets and can often extend across cap levels too GIGAX has generated annual returns of 1 06 over the last five years Ouch
3 Top Ranked Mutual Funds
There you have it some prime examples of truly bad mutual funds In contrast here are a few funds that have achieved high Zacks Ranks and have low fees
Janus Henderson Growth Income S JADGX Expense ratio 1 13 Management fee 0 6 JADGX is a Large Cap Blend fund targeting companies with market caps of over 10 billion These funds offer investors a stability and are perfect for people with a buy and hold mindset This fund has achieved five year annual returns of an astounding 11 18
Principal Large Cap Growth I R3 PPUMX is a stand out fund PPUMX is a part of the Large Cap Growth mutual fund category which invest in many large U S companies that are expected to grow much faster compared to other large cap stocks With five year annualized performance of 10 91 and expense ratio of 1 16 this diversified fund is an attractive buy with a strong history of performance
MFS Mid Cap Growth Fund I OTCIX is an attractive fund with a five year annualized return of 13 82 and an expense ratio of just 0 87 OTCIX is a Mid Cap Growth mutual fund Mid Cap Growth funds pick stocks usually companies with a market cap between 2 billion and 10 billion that demonstrate extensive growth opportunities for investors compared to their peers
Bottom Line
Along these lines there you have it if your financial guide has you put your money into any of our Mutual Fund Misfires of the Market there is a strong likelihood that they are either dormant at the worst possible time inept or in all probability filling their pockets with high fee commissions at the cost of your financial objectives
If you have concerns or any doubts about your investment advisor read our just released report
4 Warning Signs That Your Advisor Might be Sabotaging Your Financial FutureThis report can help you avoid the costly mistake of picking or sticking with the wrong investment advisor Click here for free report |
WFC | Mutual Fund Misfires Of The Market October 25 2019 | You may need to start looking for a new financial advisor if your current one has put any of these high fee low return Mutual Fund Misfires of the Market into your portfolio
How can you tell a good mutual fund from a bad one It s pretty basic If the fund has high fees and performs poorly it s not good Of course there s a range but when a mutual fund earns a Zacks Rank of 5 Strong Sell that means it s among the worst of roughly 19 000 funds we rate each day
First let s break down some of the funds currently part of our Mutual Fund Misfires of the Market If you happen to have put your money into any of these misfires we ll help assess some of our best Zacks Ranked mutual funds
3 Mutual Fund Misfires
Now let s take a look at three market misfires
Tanaka Growth Fund TGFRX Expense ratio 2 45 Management fee 1 After expenses the 5 year return is 0 16 meaning your fees are far higher than the fund s returns
PACE International Emerging Markets Equity Y PWEYX PWEYX is a Non US Equity option focusing their investments acoss emerging and developed markets and can often extend across cap levels too PWEYX offers an expense ratio of 1 45 and annual returns of 0 68 over the last five years Even if this fund can be positioned as a hedge during the recent bull market paying more in fees than returns over the long term should never be an acceptable result
American Funds ST Bond Fund of America 529E CEAMX 0 96 expense ratio 0 28 management fee CEAMX is a Government Bond Short fund and these funds hold securities issued by the U S federal government This category focuses on the short end of the curve and are seen as extremely low risk securities from a default perspective CEAMX has generated annual returns of 0 77 over the last five years Ouch
3 Top Ranked Mutual Funds
Now that you ve seen the worst Zacks Ranked mutual funds let s have a look at some of the highest ranked funds with the lowest fees
Principal Real Estate Security Institutional PIREX is a fund that has an expense ratio of 0 91 and a management fee of 0 81 PIREX is a Sector Real Estate fund and these kinds of mutual funds typically invest in eeal estate investment trusts REITs due to their taxation rules With yearly returns of 11 68 over the last five years this fund clearly wins
Wells Fargo NYSE WFC Endeavor Select Admiral WECDX has an expense ratio of 1 18 and management fee of 0 7 WECDX is a part of the Large Cap Growth mutual fund category which invest in many large U S companies that are expected to grow much faster compared to other large cap stocks With annual returns of 14 05 over the last five years this is a well diversified fund with a long track record of success
MSIF Global Franchise I MSFAX has an expense ratio of 0 91 and management fee of 0 76 MSFAX is a Global Equity mutual fund These funds invest in large markets like the U S Europe and Japan and operate with very few geographical limitations With annual returns of 11 24 over the last five years this fund is a well diversified fund with a long track record of success
Bottom Line
These examples underscore the huge range in quality of mutual funds from the really bad to the astonishingly good There is no reason for your advisor to keep your money in any fund that charges more than you get in return unless they re getting something out of it like a high commission
If you have concerns or any doubts about your investment advisor read our just released report
4 Warning Signs That Your Advisor Might be Sabotaging Your Financial FutureThis report can help you avoid the costly mistake of picking or sticking with the wrong investment advisor Click here for free report |
XOM | Global Wrap U S Markets Close Mixed | A Forex Trader Portal
Global Wrap
U S Markets Close Mixed
Current Futures Dow 4 00 S P 0 70 NASDAQ 1 50
The U S stock markets closed out the session with either minimal gains or minimal losses after a four day rally The dow was up 3 32 points while the S P 500 was trading lower by 0 57 points and the Nasdaq lost 2 92 points The sectors were split between gains and losses with energy showing an increase of 0 54 percent while financial stocks declined 0 39 percent Exxon Mobil increased 1 97 percent while Fannie Mae saw an increase of 41 percent and Freddie Mac saw an increase of 18 5 percent
The economic calendar is light during the beginning of the week with no major reports out during the day Investors are likely sitting on their hands today while waiting for these reports to be released stated TheLFB Forex com Trade Team Members The upcoming consumer confidence housing reports and preliminary GDP will all give indications of whether or not the economy has found a place to rebound from
The Dow Jones Index gained 3 32 points 0 03 to 9 509 28 while the S P 500 index declined 0 56 points 0 05 to 1 025 57
Crude oil for August delivery was recently trading at 74 05 per barrel higher by 0 15
Gold for August delivery was recently trading lower by 12 20 to 942 50
Treasuries rose on the day as the two year note yields falling the most in the past month Yield on the 10 year note declined 9 basis points to 3 48
provides forex related market analysis and trade signals |
WFC | Wells Fargo downgrades Cincinnati Bell | Cincinnati Bell NYSE CBB is 0 6 lower after hours as Wells Fargo downgrades it to Equal Weight from Overweight The firm set its price target to 10 50 vs today s closing price of 10 39 Overall the Street is Bullish on the stock and Seeking Alpha authors are Bullish as well it has a Quant Rating of Neutral |
WFC | Wells Fargo weighs on insurance | Wells Fargo analyst Elyse Greenspan downgrades Axis Capital Holdings AXS 0 7 to underweight with PT of 60 on not much progress on margin initiative and does not expect uptick in margin in 2020
Wells Fargo analyst Elyse Greenspan downgrades The Travelers Companies TRV 0 1 to underweight with PT of 137 on concern of missing its 2020 margin targets with the potential for rising social inflation
Citing a substantial rate increase in Florida at 6 1 renewals Wells Fargo analyst Elyse Greenspan downgrades United Insurance Holdings UIHC 3 7 to underweight and set PT of 12 5
Wells Fargo analyst Elyse Greenspan downgrades Brighthouse Financial BHF 2 8 to underweight with PT of 40 as it is one of the most interest rate sensitive life insurers and is more exposed to the new FASB accounting standards |
WFC | Nexstar 5 5 as Wells Fargo upgrades to Overweight | Nexstar Media Group NASDAQ NXST is up 5 5 after a boost to Overweight at Wells Fargo from Equal Weight The firm s Steven Cahall is banking on a positive take for political ad spending to lift the company in 2020 He s raised his price target to 149 from 113 now implying 22 upside Sell side analysts are Very Bullish overall while Seeking Alpha authors are Neutral The stock has a Quant Rating of Neutral as well |
WFC | Oil price spike clouds U S corporate profit outlook puts investors on edge | By David Randall NEW YORK Reuters Investors are worrying that rising energy costs due to an escalating conflict between the United States and Iran that has caused a spike in oil prices will hurt U S corporate earnings Oil prices briefly jumped to four month highs overnight after Iran launched missiles at U S led forces in Iraq but retreated after signs that further military action may been limited O R Despite that pullback oil prices remain nearly 25 higher over the last 12 months due in part to rising tensions in the Middle East While the energy sector would benefit from higher oil prices profit margins in other sectors ranging from shipping to manufacturing to restaurants would narrow as gasoline prices rise Some investors said they were acting more defensively against this backdrop Oil is still not prohibitively expensive but it s significantly more expensive than it was when companies were making their budgets a year ago said John LaForge head of real asset strategy for Wells Fargo NYSE WFC Investment Institute They might have the ability to pass it on or they might not but overall there is going to be a hit to margins At 67 a barrel LCOc1 the price of oil remains far below the level that would send the United States into an immediate recession Yet higher energy costs at a time of heightened geopolitical risks are likely to leave investors and companies skittish fund managers and analysts said The conflict between the United States and Iran escalated early on Wednesday with a retaliatory Iranian missile attack on U S led forces in Iraq for the U S killing of an Iranian general days earlier nL1N29D006 Yet oil futures fell after tweets by U S President Donald Trump and Iran s foreign minister seemed to signal that further military action was not forthcoming Trump had ordered a drone strike on Friday that killed Iranian General Qassem Soleimani The benchmark S P 500 index SPX posted modest gains in midday trading on Wednesday First quarter earnings of companies in the S P 500 are expected to rise 6 2 from a year earlier according to estimates from Refinitiv made before the recent jump in oil prices Those estimates were largely based on assumptions that economic growth will rebound in 2020 though corporate earnings are expected to have fallen by 0 6 in the fourth quarter of 2019 Companies will begin reporting results next week WAKE UP CALL The likelihood that oil stays near current levels or moves higher will push more investors into a defensive crouch until it becomes clearer how companies are responding said Barry James a portfolio manager at James Investment Research Stocks are not cheap and we ve had this huge run up and sentiment had gotten dangerously bullish he said I would want to have at least a moderate position in energy if I didn t have any and some gold in my portfolio The attacks should serve as a wake up call to investors who piled into stocks during the S P 500 s months long rally said Christopher Stanton chief investment officer at San Diego based Sunrise Capital LLC We ve had three months of asymmetric upward moves in the equity markets he said Things have become increasingly overbought If you re an investor don t you want to take it easy here and back off a bit Still oversupply in the global oil market and the emergence of the United States as the world s top oil producer will likely keep oil below 75 a barrel That is as long as the conflict between the United States and Iran does not escalate to the point where Iran attempts to close the Strait of Hormuz a chokepoint through which about a fifth of the world s oil supply flows LaForge said as he put the price of oil in perspective
This is still a small move historically speaking he said |
WFC | 3 Mutual Fund Misfires To Avoid In Your Retirement Portfolio October 18 2019 | You may need to start looking for a new financial advisor if your current one has put any of these high fee low return Mutual Fund Misfires of the Market into your portfolio
High fees plus poor performance It s a pretty simple formula for a bad mutual fund Some are worse than others and some are so bad that they have earned a Strong Sell on the Zacks Rank the lowest ranking of the nearly 19 000 mutual funds we rank daily
First let s break down some of the funds currently part of our Mutual Fund Misfires of the Market If you happen to have put your money into any of these misfires we ll help assess some of our best Zacks Ranked mutual funds
3 Mutual Fund Misfires
Now let s take a look at three market misfires
Victory INCORE Low Duration Bond C RLDCX 1 62 expense ratio and 0 45 management fee RLDCX is an Investment Grade Bond Short option these funds focus on the short end of the curve generally with bonds that mature in less than two years With a five year after expenses return of 0 69 you re mostly paying more in fees than returns
Wells Fargo NYSE WFC International Value A WFFAX WFFAX is a Non US Equity fund Many of these funds like to allocate across emerging and developed markets and will often focus on all cap levels WFFAX offers an expense ratio of 1 35 and annual returns of 0 05 over the last five years Even if this fund can be positioned as a hedge during the recent bull market paying more in fees than returns over the long term should never be an acceptable result
Saratoga Energy Basic Materials I SEPIX 3 expense ratio 1 25 management fee This fund has yielded yearly returns of 8 89 in the course of the last five years Too bad
3 Top Ranked Mutual Funds
There you have it some prime examples of truly bad mutual funds In contrast here are a few funds that have achieved high Zacks Ranks and have low fees
VY T Rowe Price Cap Appreciation I ITRIX 0 64 expense ratio and 0 64 management fee ITRIX is categorized as an All Cap Value fund and like the name suggests invests across the cap spectrum in small cap mid cap and large cap companies With an annual return of 10 48 over the last five years this fund is a winner
Putnam Small Cap Growth R PSGRX has an expense ratio of 1 46 and management fee of 0 57 PSGRX is a Small Cap Growth mutual fund and tends to feature small companies in up and coming industries and markets With annual returns of 11 06 over the last five years this is a well diversified fund with a long track record of success
T Rowe Price Institutional Small Cap Stock TRSSX Expense ratio 0 66 Management fee 0 65 TRSSX is a Small Cap Blend mutual fund allowing investors a way to diversify their funds among various types of small cap stocks TRSSX has produced a 11 99 over the last five years
Bottom Line
So there you have it if your advisor has you invested in any of our Mutual Fund Misfires of the Market there is a good probability that they are either asleep at the wheel incompetent or most likely lining their pockets with high fee commissions at your financial expense
If you have concerns or any doubts about your investment advisor read our just released report
4 Warning Signs That Your Advisor Might be Sabotaging Your Financial FutureThis report can help you avoid the costly mistake of picking or sticking with the wrong investment advisor Click here for free report |
WFC | Avoid These 3 Mutual Fund Misfires October 21 2019 | If your financial advisor made you buy any of these Mutual Fund Misfires of the Market with high expenses and low returns you need to reassess your advisor
How can you tell a good mutual fund from a bad one It s pretty basic If the fund has high fees and performs poorly it s not good Of course there s a range but when a mutual fund earns a Zacks Rank of 5 Strong Sell that means it s among the worst of roughly 19 000 funds we rate each day
Below you ll read about some of the funds included in our current list of Mutual Fund Misfires of the Market And if by chance you re invested in any of these misfires we ll help and review some of our highest Zacks Ranked mutual funds
3 Mutual Fund Misfires
Now let s take a look at three market misfires
Ivy Natural Resources R IGNRX 1 67 expense ratio and 0 85 management fee IGNRX is classified as a Sector Energy mutual fund Throughout the massive global energy sector these funds hold a wide range of quickly changing and vitally important industries With a five year after expenses return of 8 66 you re mostly paying more in fees than returns
AB Unconstrained Bond R AGSRX Expense ratio 1 15 Management fee 0 85 Over the last 5 years this fund has generated annual returns of 0 22
Wells Fargo NYSE WFC International Value C WFVCX 2 1 expense ratio 0 83 management fee WFVCX is a part of the Non US Equity fund category many of which will focus across all cap levels and will typically allocate their investments between emerging and developed markets WFVCX has generated annual returns of 0 41 over the last five years Ouch
3 Top Ranked Mutual Funds
Since you ve seen the most noticeably lowest Zacks Ranked mutual funds how about we take a look at some of the top ranked mutual funds with the least fees
MFS Growth R6 MFEKX is a winner with an expense ratio of just 0 57 and a five year annualized return track record of 14 61
Fidelity Small Cap Growth FCPGX has an expense ratio of 1 04 and management fee of 0 81 FCPGX is one of many Small Cap Growth mutual funds these funds tend to create their portfolios around stocks with market capitalization of less than 2 billion With annual returns of 14 27 over the last five years this is a well diversified fund with a long track record of success
Baron Fifth Avenue Growth Retail BFTHX has an expense ratio of 1 and management fee of 0 7 BFTHX is a Large Cap Growth mutual fund and these funds invest in many large U S firms that are projected to grow at a faster rate than their large cap peers With yearly returns of 13 78 over the last five years this fund is well diversified with a long reputation of salutary performance
Bottom Line
So there you have it if your advisor has you invested in any of our Mutual Fund Misfires of the Market there is a good probability that they are either asleep at the wheel incompetent or most likely lining their pockets with high fee commissions at your financial expense
If you have concerns or any doubts about your investment advisor read our just released report
4 Warning Signs That Your Advisor Might be Sabotaging Your Financial FutureThis report can help you avoid the costly mistake of picking or sticking with the wrong investment advisor Click here for free report |
XOM | US STOCKS Dow S P 500 slip but Nasdaq up with biotechs | Consumer confidence slips oil prices hit energy shares
Amgen beats Wall St estimates boosts biotech shares
Dow off 0 1 pct S P off 0 3 pct but Nasdaq up 0 4 pct
Updates to close
By Rodrigo Campos
NEW YORK July 28 Reuters The Dow and the S P 500
dipped on Tuesday recovering from earlier declines as
investors shrugged off weak consumer confidence data and
focused on positive earnings reports
Stocks in the healthcare sector led the market s afternoon
rebound with biotech shares up a day after Amgen s strong
quarterly earnings report
The health insurance sector also rose after Coventry
Health Care s earnings topped Wall Street s estimates
The U S consumer confidence index declined more than
expected in July a second consecutive monthly fall as a
sluggish labor market continued to worry consumers the
Conference Board said
Strong earnings have given a second wind to a stock market
rally that wilted in June after a 40 percent gain in the S P
500 from its 12 year closing low in March
We ve seen an 11 percent rally in 2 weeks said Tim
Smalls head of U S stock trading at Execution LLC in
Greenwich Connecticut
He said that with the markets technically overbought and
looking for a reason to take a breather the stock market s
slight decline is a good performance
Smalls added that a lot of the afternoon recovery was
linked to a poor U S Treasury auction as money shifted from
bonds into the stock market
Shorter dated U S Treasury debt fell after weak results
in an auction of a record 42 billion of two year notes had
some analysts wondering if the global appetite for U S
government debt might be waning
The Dow Jones industrial average shed 11 79 points or
0 13 percent to 9 096 72 The Standard Poor s 500 Index
dropped 2 56 points or 0 26 percent to 979 62
But the Nasdaq Composite Index gained 7 62 points or 0 39
percent to 1 975 51
Amgen s stock rose 2 7 percent to 62 42 on Nasdaq
following the company s release of much better than expected
second quarter earnings after Monday s closing bell The Dow
Jones biotechnology index gained 1 8 percent
Coventry Health Care shares rose 12 7 percent to 22 59 on
the New York Stock Exchange after the company s earnings
topped Wall Street s estimates and it lifted its full year
earnings forecast
Aetna jumped 12 6 percent to 28 96 after at least three
brokerages said the insurer s recently slashed 2009 earnings
forecast is achievable Aetna and Coventry pushed the Morgan
Stanley Healthcare Payors index up 6 5 percent
But the energy sector s shares weighed on the broader
market as the weak consumer confidence data took a toll on oil
prices which had risen on optimism about the economic
recovery U S front month crude futures dropped 1 15 or 1 7
percent to settle at 67 23 a barrel The S P energy index
slid 1 5 percent
Exxon Mobil Corp down 1 2 percent at 71 89 was the top
drag on the Dow industrials
Office Depot the No 2 U S office supply retailer
reported a bigger than expected quarterly loss as the
recession bit into demand from corporate customers The stock
tumbled 18 1 percent to 4 38
U S Steel Corp shares fell 2 2 percent to 40 35 after
the company reported a quarterly loss and said it expected all
of its business sectors to operate in the red in the third
quarter
Earlier on Tuesday Standard Poor s Case Schiller
released data that showed U S single family home prices rose
in May from April the first monthly increase in three years
Editing by Jan Paschal |
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