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WFC | New Residential s 12 5 Yield A Deeper Dive | As a follow up to our article on at the beginning of this week this article takes a deep dive into a variety of big risks as well as reasons to be optimistic and we re not only talking about the big dividend yield
New Residential NYSE NRZ is a real estate investment trust REIT Its big 12 5 dividend yield is viewed as a red flag by some investors and as an attractive opportunity by others After reviewing the evolving real estate investment industry and NRZ s opportunistic business model this article describes a variety of big risks facing the company and then shares multiple reasons to be optimistic And we conclude by sharing our views on why New Residential is absolutely worth considering for an allocation within your income focused investment portfolio
The Industry and New Residential Are Evolving
For starters here is a look at the breakdown of NRZ s investment portfolio now 3 31 17 followed by NRZ s investment portfolio just 15 months earlier 12 31 15
A few things stand out First the amount of Excess Mortgage Servicing Rights Excess MSRs has dramatically declined Excess MSRs are basically the right to service a pool of mortgages that the primary mortgage servicer cannot handle they re overflow and as you can see in the table they have very high expected returns 12 20 for NRZ And especially important MSRs and Excess MSRs tend to rise in value as interest rates rise our current market environment because mortgage prepayment speeds slow people don t want to refinance at higher rates and this a good thing for NRZ
However even though Excess MSRs are lucrative for NRZ the company is doing less of them because the industry is evolving The Excess MSR concept took off during and following the housing crisis because the industry became increasingly complex and NRZ was there to profit handsomely from the opportunity However as the housing crisis moves further into the rear view mirror the opportunity for Excess MSR investments has slowed less mortgages require distressed servicing and as a result NRZ has opportunistically entered the MSR business
In August 2016 NRZ made its inaugural full MSR purchase and continued its momentum of investing in MSRs from multiple sellers throughout the remainder of that year as shown in the following table
This is an example of NRZ opportunistically taking advantage of the changing residential mortgage environment to deliver more high returns to its investors 12 20 net yields
Other noticeable changes are NRZ s dramatically reduced investments in servicer advances per our earlier pie chart This is important because there is increasing counterparty risk with some of NRZ s counterparties and NRZ has proactively reduced exposure
Further still NRZ dramatically increased its exposure to residential securities and call rights This reason is because the company needed to do something with all the cash it generates and they have expertise in this area As we ll cover more later there are also significant risks to these types of investments
Again as we mentioned earlier the industry is changing as there is less distress as the housing crisis moves further into the rear view mirror This means less lawsuits and more visibility into the future for NRZs service providers and new opportunities with MSRs instead of only Excess MSRs and residential securities trading And in many regards all of this is good for NRZ as we will discuss more later
Before getting into all of the good things about NRZ it s prudent to consider the risks We have highlighted eight big risks that we believe NRZ investors should be aware of and monitoring Here is the list
NRZ s Big Risks
1 NRZ is in big trouble if its mortgage servicers go bankruptAccording to NRZ s annual report We rely heavily on mortgage servicers to achieve our investment objective and It is expected that any termination of a servicer by mortgage owners or bondholders would take effect across all mortgages of such mortgage owners or bondholders Therefore it is expected that all investments with a given servicer would lose all their value in the event mortgage owners or bondholders terminate such servicer Nationstar Ocwen and Ditech Financial LLC Ditech are the servicers of most of the loans underlying our investments in MSRs and Servicer Advances and Nationstar and Ocwen are the servicer or master servicer of the vast majority of the loans underlying our Non Agency RMBS to date
And what makes this risk particularly concerning is that NRZ s servicers are distressed particularly Ocwen NYSE OCN and Ditech more on this later
2 NRZ has no servicing platformBecause NRZ has no servicing platform they rely on outside servicers in which they have very little influence In some regards this has been a good thing because it has protected NRZ from some of the lawsuits and regulator scorn that have plagued the servicers However it s also been a negative because NRZ is not an attractive buyer for sellers of MSRs that prefer to sell MSRs and their servicing platform in a single transaction The separation of MSR owners and their servicing platform adds significant complexity and makes operations more challenging for NRZ
3 Ocwen is in big troubleOne of NRZ s biggest service providers Ocwen is in big trouble Specifically its net income is consistently negative its debt is getting close to 100 of its assets its credit rating has been downgraded and is low it continues to deal with regulators and lawsuits and its stock price is down about 95 since 2013
Recognizing the dangers to NRZ if OCN goes out of business NRZ management has recently proposed a transaction whereby they ll paying OCN a proposed 425 million in exchange for rights and newly issued OCN shares as described in the following graphic
When asked about the transaction NRZ s Michael Nierenberg explained
Quite frankly we will continue to work with Ocwen any which way we can but being mindful that we need to protect our shareholders
Basically Michael is acknowledging the risk that if OCN goes bankrupt then NRZ is in big trouble because a lot of their rights become worthless as described in risk 1 above But at the same time NRZ wants to be carefully not to expose its shareholders to the legal and regulatory risks that Ocwen continues to face It s a tricky situation
Nierenberg went on to explain We believe this transaction is the best for us the best for Ocwen and the best for the entire system And if you think about it there is a number of winners in this transaction First and foremost the mortgage loans do not get moved from one servicer to another So we think from a consumer perspective that s a great thing That s one Two is from a liquidity perspective this gets Ocwen on the right track
If Ocwen doesn t get back on the right track NRZ is in big trouble And this is both an opportunity for NRZ to opportunistically increase its investments by purchasing things from Ocwen at fire sale prices and a big risk if OCN doesn t survive that NRZ investors should be aware of
4 Walter Investment Management WAC is in big trouble Walter Investment Management NYSE WAC the owner of Ditech another one of NRZ s largest servicers is also in distress and this is a big risk for NRZ investors Similar to OCN WAC is consistently delivering negative net income its share price has declined dramatically and the company continues to deal with lawsuits and regulator scorn
Further NRZ has recently acquired investment from WAC see our earlier MSR Overview graphic for recent WAC acquisitions as both an opportunistic investment opportunity and as a way to support WAC because NRZ doesn t want WAC to go bankrupt this would be very bad for NRZ and bad for the whole system Worth noting NRZ does less business with WAC than it does with OCN and therefore WAC poses a less risk to NRZ than does OCN but it is still significant
5 Changing Prepayment SpeedsAnother risk to NRZ is if prepayment speeds accelerate As mentioned previously rising interest rates help NRZ s MSR portfolio because less people refinance their mortgage when interest rates have gone up and this means NRZ get to make money for a longer period of time for owning MSRs and Excess MSRs However any significant change to prepayment speeds caused by lower interest rates new regulation or simply more defaults could have a significantly negative impact on NRZ
6 Overconfident Securities Trading and LeverageAnother growing risk for NRZ is simply overconfidence in trading residential securities As noted previously the residential securities holdings of NRZ have increased dramatically in recent years and this increases some risks
For example according to NRZ s quarterly report We leverage certain of our assets through a variety of borrowings Leverage can make magnify returns in the good times but also magnify losses in the bad times
According to NRZ s quarterly report our determination of how much leverage to apply to our investments may adversely affect our return on our investments and may reduce cash available for distribution Further
Our investment guidelines do not limit the amount of leverage we may incur with respect to any specific asset or pool of assets The return we are able to earn on our investments and cash available for distribution to our stockholders may be significantly reduced due to changes in market conditions which may cause the cost of our financing to increase relative to the income that can be derived from our assets
Simply the growing size of NRZ s residential securities portfolio combined with its use of leverage creates very significant and growing risks for shareholders
7 Wells Fargo NYSE WFC Recently Withheld MoneyAnother risk was recently introduced when three weeks ago Wells Fargo surprised investors by holding back over 90 million from buyers of pre financial crisis residential mortgage backed securities The funds were withheld after NRZ exercised a clean up call on the debt Basically Wells Fargo has been named as a defendant in some lawsuits and is holding back funds for legal expenses This is a new risk for NRZ and according to some experts expect Wells to withhold more money as NRZ exercises more clean up call rights
8 External Management TeamAnother risk for investors to keep in mind is that New Residential is externally managed by an affiliate of Fortress Investment Group Fortress is also the majority shareholder in Nationstar Mortgage one of New Residential s largest servicers This is important because there are conflicts of interest For example according to New Residentials s annual report Our Management Agreement with our Manager was not negotiated between unaffiliated parties and its terms including fees payable may not be as favorable to us as if they had been negotiated with an unaffiliated third party Further still in February Fortress announced it will become a wholly owned subsidiary of a SoftBank affiliate All of these items are important because it can be a distraction to management and it can create conflicts of interest in the way the companies are operated
Reasons to be Optimistic
1 Housing crisis impacts continue to shrinkDespite the big risks facing NRZ as described above there are also a variety of reasons to be optimistic For example the housing crisis is further in the rear view mirror This means less distress across the industry for both MSR owners and servicers And this means less volatility and less risk
2 Improved ServicersAnother reason to be positive is because servicers e g Ocwen WAC have significantly cleaned up their act in recent years For example conditions at these servicers have improved after many lawsuits and regulatory requirements Even though the prices are way down there is good reason to believe there will be far less distress going forward than in recent history
3 Industry CooperationAnother reason to be positive is that NRZ is helping its servicers and we ll probably learn of more examples in the near future For example we described earlier how NRZ provided liquidity for Ocwen and WAC by acquiring investments This was good for the servicers they need the support good for NRZ the prices were very attractive and good for the system it s mutually beneficial for NRZ to work with its servicers because they need each other to survive Further still it s good for mortgage owners because they don t need the headaches of a servicer bankruptcy either
Worth noting the details have been light since last quarter s announcement that NRZ was working on a deal to support Ocwen NRZ announces earnings again on July 31st and we expect to receive more details Further we won t be surprised to learn that NRZ may have expanded the deal significantly to provide more support to Ocwen This could be good for all parties involved
4 Opportunities for Good DealsYet another reason to be optimistic about NRZ is that to some extent it is in a position of power relative to its servicers and this will help enable NRZ to make some really good deals whereby they have the upper hand For example if NRZ continues to purchase investments from Ocwen and Ditech they ll be doing so at discounted prices As 18th century British nobleman Baron Rothschild is purported to have said buy when there is blood in the streets
5 Investors are afraidSticking with the theme of buy when there is blood in the streets another reason to be optimistic is that a lot of fear has already been baked into NRZ s price The shares fell significantly in June and they ve not yet fully recovered as investor fear remains high
6 The Dividend is StrongNRZ s dividend also remains high and it is well covered For example last quarter NRZ s core earnings of 155 million or 0 54 per diluted share exceeded the first quarter dividend of 0 48 per common share Further still NRZ has increased its dividend two quarters in a row in a sign of confidence to investors it s currently 0 50 per share
Conclusion
NRZ management won t just buy its service providers outright if they can avoid it because they want to protect NRZ shareholders from all the legacy and potentially new risks regulatory and legal risks but they probably will buy them if they have too because NRZ is in big trouble if mortgage holders and bond holders fire the servicers because then NRZ s MSRs have no value Plus this situation would be bad for mortgage owners because they don t necessarily want to go through the added headache of dealing with a new servicer
We can speculate that we ll get a lot of big news within the next few weeks earnings season about new deals that will be good for NRZ because they ll reduce the chance of service provider bankruptcies and NRZ will probably be getting some good fire sale prices on investments acquired The big question though is will it be enough to keep the service providers out of bankruptcy without acquiring pieces of business that put NRZ shareholders at risk i e NRZ doesn t want to acquire the legacy liabilities of wrongdoings by service providers
Overall we take a positive view of the situation because the industry has been cleaned up a lot since the financial crisis less lawsuits and regulatory risks and because it s in the system s best interest to not create new turmoil for mortgage holders and bondholders We ve owned shares of NRZ within our prudently diversified since May 2016 The dividend yield on our initial purchase price is now 15 7 |
WFC | Asset Rollback Top Priority Of Fed ETFs In Focus | As widely expected the Fed stayed put on its rate hike agenda in its July meeting but called asset curtailment its top priority Though the job market remained steady weaker inflation kept the Fed from being too aggressive on the rate hike issue read
However the Fed indicated that it plans to start normalization of its 4 5 trillion balance sheet The Fed had pursued three rounds of quantitative easing or QE since recession in 2008 As a result the balance sheet ballooned over the years thanks to the buying of Treasuries and mortgage related debt
The move was aimed at goading economic activity Now the Fed is planning to end reinvestment of the proceeds from these bonds Market watchers now expect the asset rollback policy to be announced in read
Traders in the Fed funds futures market now believe that there is a chance of the Fed enacting one more rate hike by the end of the year Subdued inflation is primarily behind this dovish assumption The core personal consumption expenditures index has declined from the central bank s 2 target for four successive months read
Yields of the benchmark 10 year U S Treasury notes slipped to 2 29 on July 26 from 2 33 recorded the day before Long term bond ETF Vanguard Extended Duration Treasury ETF TO EDV added over 20 2 post Fed comments on July 26 U S dollar fund PowerShares DB US Dollar Bullish ETF NYSE UUP dropped about 0 6 on the day
However we would like to foresee what could happen in the ETF world if the Fed announces unwinding of stimulus or reverse QE in the next meeting in September
Impact of Reverse QE
If everything remains sound on the global economic front and no geopolitical crisis crops up causing a safe haven rally long term interest rates should rise from a reverse QE In fact mortgage and other rates are expected to rise faster than investors expectations
On the other hand the Fed may stay away from a steeper short term rate hike trajectory if it starts unwinding bond holdings alongside This scenario would result in steepening of the yield curve
Given this investors must be interested in finding out all possible strategies to weather a sudden jump in interest rates For them below we highlighted a few ETF investing options that could bring gains in a rising rate environment
Highland iBoxx Senior Loan ETF SI SNLN
There is an option to tap bank loan ETFs like SNLN Senior loans also known as leveraged loans are private debt instruments issued by a bank and syndicated by a group of banks or institutional investors It yields about 4 59 annually
iShares 0 5 Year High Yield Corporate Bond ETF
The fund offers exposure to liquid high yield corporate bonds maturing between zero and five years It carries relatively less interest rate risk while at the same time offers 5 55 yields annually
ProShares Investment Grade Interest Rate Hedged ETF
The fund holds investment grade bonds in its portfolio and looks to alleviate rising rate worries through an interest rate hedge approach using U S Treasury futures Since the fund targets a duration of zero this could be an intriguing play right now It yields about 3 27 annually
Barclays LON BARC Inverse US Treasury Aggregate ETN CM TAPR
Last but not the least who can forget inverse bond ETFs in such a scenario The product TAPR looks to track the sum of the returns of periodically rebalanced short positions in equal face values of each of the Treasury futures contracts see here
Bottom Line
Having said this we would like to note that any disruption in the fixed income market would be short term in nature if the Fed pulls out the crisis era stimulus As per The Fed s current exposure to the fixed income market is not as high as it was in early 2000
The source elucidated that the U S central bank now has about 2 46 trillion of Treasuries more than thrice it had in the crisis stricken 2007 and around five times more than it had in the dot com bubble era of 2000 The Fed today has about 23 1 of all outstanding Treasury notes and bonds which is lower than 24 7 in 2007 23 6 in 2000 and 29 in 2002 Higher bond issuances created this situation
As per net bond issuance in 2018 alone comprising all interest bearing securities will rise to just under 800bn If the U S Treasury market can stay steady with such huge bond amounts the Fed s gradual shrinking should not upset the momentum too severely
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WFC | Life Comes At You Fast U S Market Grows While Politicians Retreat | DOW 33 21 830SPX 3 2472NAS 7 6374RUT 4 142910 Y 02 2 29 OIL 63 49 67GOLD 10 50 1270 10BITCOIN 2 16 2744 59 USDETHEREUM 2 92 187 70
The Dow Industrial average closed at another record high
Real gross domestic product increased at an annual rate of 2 6 percent in the second quarter of 2017 that s up from a revised 1 2 percent rate in the first quarter but short of expectations In recent years the U S economy has often started off slowly improved in the middle of the year only to sag again toward the end
The economy grew 3 5 percent in the third quarter of 2016 before slowing down It grew at 5 percent in the third quarter of 2014 before sputtering out The result each year has been a return to what some economists call the new normal of plodding annual growth of about 2 percent Today was the first estimate of second quarter GDP growth other estimates will follow and it is typical to see downward revision
You should never read too much into any one quarter s GDP data especially the first estimate The GDP report showed balanced economic growth with increases in personal consumption nonresidential fixed investment exports and federal government spending
These were offset by negative contributions from private residential fixed investment private inventory investment and state and local government spending
Imports which subtract from GDP also increased
You have probably heard that It happened late last night Three GOP senators Susan Collins of Maine Lisa Murkowski of Alaska and John McCain of Arizona voted against the skinny repeal and the final vote was 49 51 against
Senator Lindsey Graham of South Carolina called the skinny repeal a fraud but he voted for it anyway McCain argued in a statement today that the bill would not lower costs increase competition or improve care for Americans
So repeal and replace failed Repeal only failed And last night skinny repeal failed So the fight is over Not so fast Trump responded with a tweet Let Obamacare implode Then deal Meaning the administration should continue undermining the law to force Democrats to the table to well it s not clear what he wants from them
There is no actual Trumpcare plan just anti Obamacare rhetoric There are plenty of tools that the administration can employ to keep sabotaging the individual markets and the ACA The administration can do too little to promote enrollment or scale back enforcement of the mandate or give states more leeway to experiment with Medicaid in destructive ways
The administration can continue to refuse to guarantee cost sharing reductions which has already caused insurers to exit the markets and hike premiums something that could continue or get worse leaving many more people without coverage options Insurers are already warning of such an outcome
The ACA exchanges for all their problems have helped extend coverage to millions more particularly people with preexisting conditions While premiums are up and insurer choice is down in several states the vast majority of Americans will be able to pick between multiple insurers on the individual market next year
The idea of repeal was widely hated just 17 approval for any type of repeal Congress will not repeal The ACA is not in a death spiral unless it is sabotaged If the ACA implodes now it will be Trump s doing But honestly the debate is over
The American people want health care and they don t think they should die just because they weren t lucky enough to get insurance through work or just because their money ran out before the cancer was cured Every other developed country in the world has this figured out and given enough time so will the United States after having exhausted all the other possibilities
President Trump has replaced his White House chief of staff installing retired General John Kelly in his place in a major shakeup of his top team Trump announced the move in a tweet a day after his new communications director Anthony Scaramucci accused Priebus of leaking information to reporters in a profanity laced tirade
Now you might think Scaramucci would be having a great day watching Priebus walk out the door but he just got word that his wife of 3 years filed for divorce today Hey life comes at you fast Mooch John Kelly is a retired 4 star General and a Marine and had been running the Department of Homeland Security so he should be able to bring some order to the White House but he does not have legislative experience and the next issue on the table is tax reform
Trump has yet to advance a specific Whatever the plan it will have to be much more transparent than his health care plans or lack thereof House Speaker Paul Ryan struck an optimistic tone on Republicans ability to reach a tax reform deal Ryan s comments came a day after the Republican leaders working on tax reform released a joint statement saying they will abandon the controversial border adjustment provision and outlining the broad goals for tax reform
Ryan Senate Majority Leader Mitch McConnell Treasury Secretary Steven Mnuchin National Economic Council Director Gary Cohn House Ways and Means Committee Chairman Kevin Brady and Senate Finance Committee Chairman Orrin Hatch have been meeting regularly to strike a plan that the GOP wants to push through Congress this year But many unknowns remain
The joint statement released Thursday by the six leaders did not offer new details on possible corporate or income tax rates revenue neutrality or other specifics that could be included in the tax plan
Crude oil prices tacked on about 4 a barrel this week or 8 6 Saudi Arabia s vow on Monday to cut exports in August helped kicked off the rally while a sharp drop in U S crude and fuel stockpiles kept the rebound going
Royal Dutch Shell LON RDSa laid out a pessimistic vision for the future of oil on Thursday even as the company reported success in generating cash during a prolonged downturn Shell Chief Executive Ben van Beurden said the company has a mind set that oil prices would remain lower forever a riff on the lower for longer mantra the industry adopted for a price slump that proved unexpectedly lasting
He sees the demand for oil topping out sometime in the early 2030s as consumers make the same switch to electric vehicles something Van Beurden plans to do in the next couple of months When the boss of Europe s biggest listed oil company says his next car will be electric it says a lot about the future of fossil fuels
Airline seats are shrinking Over the past couple of decades the pitch or distance from your seat to the same position of the seat in front of you so this is the legroom the pitch has declined from 35 inches to 31 inches or less The width of the seat has shrunk from 18 inches to 15 inches So if you think it s difficult to squeeze into the seat it might also mean it is tough to get out of the seat in the event of an emergency
Aviation authorities were ordered back to the drawing board to solve what a federal appeals judge called The Case of the Incredible Shrinking Airline Seat Judge Patricia Millett told the Federal Aviation Administration to take another look at an advocacy group s assertion that shrinking airline seats are imperiling passenger safety
The judge rejected the FAA s argument that seat size was unimportant to getting off the plane in an emergency
And now it s time for another edition of Today s edition features Wells Fargo NYSE WFC this is a bank that is already in the Hall of Infamy Fraudulent bank accounts bogus credit cards compromised customer data and now unwanted car insurance
A 2016 internal review of the bank s auto lending found more than 500 000 clients may have been improperly charged for protection against vehicle loss or damage while making monthly loan payments even though many drivers already had their own policies
Wells Fargo may pay as much as 80 million to affected clients with extra money for as many as 20 000 who lost cars Wells Fargo shut down the program in September and was in regular conversations with regulators while it worked on a remediation plan So why did they wait so long to make this information public Well that s a good question |
CMCSA | Comcast set to unveil details on Peacock streaming | Trading in Comcast CMCSA 0 3 shares has evened out ahead of a key afternoon reveal of details on its Peacock streaming service The company is set with a 4 p m event at which eyes will be on planned pricing and service tiers for the service its high profile entry into the media streaming wars It will become the latest with a challenge to Netflix NFLX 0 2 the now giant incumbent in the space and joins in after high profile entries from Amazon com AMZN 0 4 Apple AAPL 0 5 and Disney DIS 0 3 now in control of Disney Plus and Hulu HBO Max T 0 4 will mark the last of the big entrants later this year Peacock should be able to hold its own says Wells Fargo s Jennifer Fritzsche Overweight on Comcast who has bumped her price target to 51 10 upside implied And it could be an important lever to deepen the company s relationship with subscribers the stock isn t reflecting incremental upside from 2020 catalysts including the Olympics and the election |
CMCSA | Comcast s Peacock Wants to Be Both Streaming and Cable | NBCUniversal a division of Comcast NASDAQ CMCSA provided details about Peacock its upcoming streaming service at an investors day presentation on Thursday Peacock will launch on April 15 for customers of Comcast s Xfinity X1 and Flex and will debut to the rest of the country on July 15 Combined with a distribution deal struck with privately held Cox Cable the service will initially be available to more than 24 million cable subscribers before debuting nationwide
Peacock will be a free ad supported streaming service but will also have a premium tier with more content that will be available free to the company s cable customers or for a monthly subscription fee of 4 99 to those who are not cable customers Both tiers will have commercials but ads will be limited to five minutes per viewing hour Viewers can also elect to pay an additional 5 9 95 total per month for an ad free version
Something for everyone
The first tier of the service Peacock Free will offer more than 7 500 hours of programming that includes 600 movies and 400 series from both Universal Studios and NBC TV Peacock Free also includes next day access to current seasons of freshman broadcast series a host of the network s classic shows and popular movies
To set itself apart from other streaming services Peacock will feature curated daily news and sports programming including the 2020 Olympic Games Viewers will have access to Spanish language content as well as select episodes of headline Peacock original shows and series The service will also offer curated streaming channels like SNL Saturday Night Live Vault Family Movie Night and Olympic Profiles
The second tier Peacock Premium will be bundled at no cost to Comcast and Cox cable subscribers with potentially more deals in the works and will cost 4 99 per month for those who are not cable customers The tier will provide more than 15 000 hours of content which includes all of the above as well as access to full seasons of Peacock originals next day access to current seasons of returning broadcast series and additional sports The premium tier will also provide a feature dubbed Late Night Early with early access to late night talk shows including The Tonight Show Starring Jimmy Fallon and Late Night with Seth Meyers both available at 9 p m Eastern time
Big content announcements
In addition to the programming that was revealed back in September Peacock announced on Thursday that it would stream a host of popular Dick Wolf dramas including Law and Order Law and Order SVU Law and Order Criminal Intent Chicago Fire Chicago P D and Chicago Med
Peacock also announced it had signed a multiyear deal with Kevin Hart s Laugh Out Loud Network which includes an equity investment in the company a first look deal and streaming all of LOL s catalog on Peacock Hart will also produce a stand up comedy special an original interview series and short form content
Tina Fey of Saturday Night Live and 30 Rock fame will also join the fray producing the original series Girls5Eva about a one hit wonder girl group from the 90s that reunites to give their pop star dreams one more shot
Previously announced programs include a host of NBCs back catalog shows including The Office as well as 30 Rock Married With Children Monk Keeping Up With the Kardashians Parks and Recreation Saturday Night Live Battlestar Galactica and Will and Grace among others
Peacock will also provide a wide variety of films including Jurassic World 3 American Pie Bridesmaids A Beautiful Mind Field of Dreams Back to the Future The Breakfast Club Erin Brockovich and E T The Extra Terrestrial The service will also feature a number of films from the Bourne Despicable Me and Fast Furious franchises
Investor corner
During the investor presentation Comcast provided its domestic financial outlook for the upcoming streaming service The platform is built on the back of technology developed by Sky which it acquired in late 2018 The company plans to spend about 2 billion for content over the coming two years and to attract between 30 million and 35 million active accounts by 2024
If all goes as planned the new service will produce between 6 and 7 monthly in average revenue per user ARPU generating revenue of 2 5 billion or more annually by 2024 and achieving breakeven within five years Once it reaches those metrics it believes the revenue from additional subscribers will drop to the bottom line
Some analysts are already weighing in saying Peacock is being too conservative with its subscriber goals Wedbush analyst Daniel Ives said We believe given the massive content library sports properties and distribution footprint that these sub numbers are conservative as we believe 20 million subs over the next 12 to 18 months is a realistic goal
With its hybrid ad subscriber approach and strong library of content Peacock might have just hit the sweet spot in ad supported streaming |
CMCSA | Comcast s Peacock Is a Big Bet With Modest Expectations | Comcast NASDAQ CMCSA finally took the wraps off its forthcoming Peacock streaming service During its two hour presentation on Thursday Comcast and NBCUniversal management stressed the importance of Peacock to the company s future
The cable giant will invest 2 billion in the streaming service over the next two years as it tries to take on new competitors like Disney NYSE DIS and AT T NYSE T as well as old cord cutting instigators like Netflix NASDAQ NFLX
And Comcast is offering consumers an extremely competitive price point free with ads
Well it s not exactly free
If you want access to the best Peacock has to offer you ll have to subscribe to Peacock Premium which still has advertisements which will either cost 5 per month or require a subscription to Comcast s video or broadband service Comcast also has a partnership with Cox to offer Peacock Premium free to its pay TV subscribers and it s working on deals with other distributors An ad free Premium version will be offered for 9 99 a month
Despite Comcast s management touting how much consumer demand there is for free ad supported streaming it has fairly modest expectations for Peacock
Half the viewers of its competitors
The first number to consider in Comcast s outlook for Peacock is total active accounts Management expects to reach just 30 million to 35 million U S viewers by 2024
Disney and HBO Max have much bigger expectations for their streaming services
Disney expects to reach 60 million to 90 million total subscribers by 2024 That said it anticipated just one third of those subscribers would come from the U S On the other hand Disney appears to have severely underestimated demand for the service Moreover Disney s Hulu which still contains a lot of the content that will soon be on Peacock ended fiscal 2019 with 29 million subscribers after moving to a subscription only model in 2016
Meanwhile AT T expects HBO Max to reach 50 million domestic subscribers by 2024 It thinks it can add another 25 million to 40 million subscribers in the rest of the world HBO Max enters the market at the high end with a price of 15 per month but AT T plans to add a less expensive ad supported version of the service next year to help boost subscriber count
AT T is sure to get a head start The 10 million customers that already pay for standard HBO through one of AT T s services will get their account upgraded to HBO Max in May It s working with other distributors to get the other 24 million HBO subscribers the same deal
That s a comparable strategy to Comcast s which says 24 million consumers will have free access to Peacock Premium at launch through their cable provider Comcast or Cox Management said it s actively working with other pay TV providers to offer Peacock Premium for free Management seems intent to offer the service free to distributors but it could be using it as leverage in negotiations for affiliate fees on its cable networks AT T likewise appears to be using HBO Max to increase the price of HBO for distributors without increasing the price for consumers
Still Comcast is starting with 24 million potential subscribers and it expects to add just six million to 11 million over the next five years
Half the ad revenue too
Another number that stood out from Comcast s presentation is its expected revenue per user By 2024 it expects the average viewer to generate between 6 and 7 per month That number implies that management expects practically all of its viewers to get the service for free
But that relatively low ad revenue also suggests relatively low engagement Management pointed out analysts estimate Hulu generates around 10 per month per subscriber in ad revenue There s reason to expect that number to climb even higher over the next few years And while Peacock will have a lower ad load compared to Hulu it s not cutting Hulu s ad load in half
So Comcast s either expecting lower average ad prices lower engagement or both If it s the former Comcast wouldn t have put such an emphasis on the advertising aspect of Peacock Instead it seems management expects Peacock to be a secondary service used sparingly by relatively few video on demand streamers The financial outlook doesn t line up with what management is saying about consumer demand for ad supported streaming
Intentionally handicapping itself
Peacock is a way for Comcast to test the streaming waters It still has deals in place with other distributors including Netflix HBO Hulu and FX also owned by Disney four companies it s going to compete against in just a few months And management said it ll explore taking back more of its content rights over time particularly if it deems Peacock a success
But Comcast is certainly being cautious to protect its legacy pay TV businesses Both its distribution and cable network businesses are threatened by the growth of streaming Offering Peacock as an incentive to keep the big cable bundle where Comcast still makes most of its money forces management to balance the quality of the content and limit access
But if Disney Hulu HBO Max Netflix and dozens of other smaller competitors see substantial growth over the next five years as those companies expect Peacock might not be enough to prevent further cord cutting |
CMCSA | This Is The Smartest Thing About Comcast s New Peacock Streaming Service | NBC parent Comcast NASDAQ CMCSA finally jumped into the streaming fray this past week with the launch of its new streaming service Peacock
The new service will launch on April 15 for Comcast customers and July 15 for everyone else and will offer a broad range of NBC staples including scripted TV talk and variety shows and news and sports programming that make up the network s typical fare
What s unique about the service is that it will be available in both free and paid tiers
Peacock Free will be an ad supported service including next day episodes of new broadcast series complete classic series around 600 movies and 400 TV series sports programming including the Summer Olympics select original programming and curated channels like SNL Vault
Peacock Premium which is also ad supported or 5 per month extra for an ad free version will be free for Comcast and Cox subscribers and 5 per month for other subscribers That version will have next day access to current seasons of returning series full season Peacock originals early access to late night talk shows and additional sports such as the Premier League
NBC is targeting 30 million to 35 million active Peacock accounts by 2024 less than the 60 million to 90 million Disney is aiming for but Peacock will only be a domestic service for now while Disney is launching globally
Finding the empty lane
What distinguishes Peacock from an increasingly crowded streaming field that includes Netflix Disney Hulu Amazon Apple the upcoming HBOMax and others is that it offers a completely free version with no strings attached
By designing a streaming service that seems intended to be ad supported Peacock is meeting the needs of two underserved markets viewers looking for free web based content a la YouTube and advertisers a huge constituency that has been mostly left out in the cold by the streaming boom
Launching Peacock will allow NBC to keep the ad revenue from reviews of segments of shows like Saturday Night Live and The Tonight Show that had traditionally been found on YouTube However tapping into the streaming ad market is the bigger side of the deal here
NBC already has strong relationships with advertisers as NBCUniversal Chairman Steve Burke said the company had the strongest ad sales track record in the business
Among the advertisers signed up for launch include Eli Lilly State Farm Target and Unilever and additional sponsors will be named soon Peacock will have the lowest ad load in the industry at a maximum of five minutes per hour
However the streaming service will offer advertisers customizable and interactive products including things like Shoppable TV allowing viewers to buy things within the environment of a TV show using their smartphone to scan a QR code Such high value and innovative ads have the potential to bring in more revenue for Comcast
Advertising brings in more than 2 billion in annual revenue at Comcast and if Peacock reaches its goal of 30 to 35 million active accounts over the next five years it could drive significant growth in that business
There s more to cluck about
Launching a free ad supported tier also borrows from the popular freemium model and gives viewers an opportunity to familiarize themselves with Peacock before deciding if they want to pay for the premium version
Unlike other streaming services Peacock will also have virtual channels that will stream automatically when they re pulled up like linear TV helping to eliminate some of the decision fatigue that comes from having to choose what to watch on services like Netflix Such a format of auto playing has helped fuel the rise of TikTok as well
Given its library of popular series like The Office which will arrive in 2022 Parks and Recreation and Friday Night Lights as well as news talk sports and kids programming Peacock is putting a strong foot forward in the streaming race Since it s offering a free tier I think the company is probably lowballing its estimate when it says it s targeting 30 to 35 million viewers in five years
Comcast doesn t expect to make money on Peacock over the next five years similar to Disney and the cable giant is plowing 2 billion into it over the next two years
Despite those upfront costs the company is making the right move with Peacock as it will ease the pain from cord cutting by giving the company a new growth outlet and incentivizing current Comcast cable customers to stick with the service Over time Peacock will strengthen relationships with advertisers and eventually tackle global expansion
Comcast shares gained 1 3 on the announcement much less than the bump Disney got from the Disney reveal but the stock could see gains later this year if the Peacock outperforms expectations in its first months |
WFC | Win win Energizer and Spectrum both rally after asset deal | Energizer Holdings ENR 14 8 soars to a new all time high after striking a deal for Spectrum Brands battery and lighting business Shares of Spectrum Brands SPB 3 7 are also getting a nice bounce off what Wells Fargo NYSE WFC calls an attractive transaction price Analyst Sam Reid says Spectrum management showed strong deal acumen and observes that SPB can shrewdly negotiate accretive transactions both as a buyer and a seller Sources CNBC and BloombergPreviously Spectrum Brands to sell Global Battery and Lighting business to Energizer Holdings Inc Jan 16 Previously Spectrum Brands to explore strategic options for two business lines Jan 3 Now read |
WFC | Wells Fargo loses bid to end Philadelphia predatory lending lawsuit | By Jonathan Stempel Reuters A federal judge in Philadelphia on Tuesday rejected Wells Fargo NYSE WFC Co s bid to dismiss that city s lawsuit accusing the largest U S mortgage lender of predatory lending targeting black and Hispanic borrowers U S District Judge Anita Brody said Philadelphia may pursue claims that the bank s alleged reverse redlining violated the federal Fair Housing Act though she had serious concerns about whether claims of economic harm could survive Wells Fargo spokesman Tom Goyda said in an email that the decision while disappointing in no way suggests that the claims ultimately will prevail Wells Fargo has been a part of the Philadelphia community for more than 140 years and we are prepared to defend our record as a fair and responsible lender Mike Dunn a spokesman for Philadelphia said the city looks forward to developing further evidence of Wells Fargo s alleged discriminatory practices The lawsuit is one of several against big lenders by major U S cities claiming that mortgage lending discrimination causes more defaults by minority borrowers lower property tax revenue and higher costs to combat crime and blight It is separate from the scandal over the creation by San Francisco based Wells Fargo of unauthorized customer accounts The third largest U S bank by assets on Friday said it set aside 3 25 billion last quarter to cover litigation for those accounts and other issues Philadelphia accused Wells Fargo of having since 2004 steered minority borrowers into higher cost higher risk loans than white borrowers even if they qualified for safer loans It also said black and Hispanic borrowers were respectively 4 1 times and 2 6 times more likely to go into foreclosure on those costlier riskier loans Wells Fargo countered that Philadelphia could not show that bank policies had a disparate impact on minority borrowers and that the city s claims could not be substantiated were too remote from any improper conduct or were brought too late Brody found some direct relation between discriminatory lending and the harms to the city s goals of fair housing and an integrated community such as reduced minority homeownership or greater impediments for minorities to buy homes The judge expressed serious concerns about the viability of the economic injury aspect of the city s claim with regard to proximate cause but said Wells Fargo did not show why the entire FHA claim should be dismissed Philadelphia had 1 57 million residents in 2016 ranking sixth among U S cities The 2010 census said roughly 43 percent of Philadelphians were black and 12 percent were Hispanic
The case is City of Philadelphia v Wells Fargo Co et al U S District Court Eastern District of Pennsylvania No 17 02203 |
WFC | CB Leading Economic Index Continued Growth In June | The Latest LEI for June increased to 127 8 from 127 0 in May and is currently at an all time high The 0 6 percent month over month gain was better than the 0 4 increase forecast by Briefing com
The Conference Board LEI for the U S increased again in June driven by positive contributions from the majority of its components especially building permits which finally improved after several months of weakness In the first half of this year the leading economic index increased 2 5 percent about a 5 0 percent annual rate faster than the growth of 1 5 percent about a 3 0 percent annual rate during the second half of 2016 In addition the strengths among the leading indicators have remained widespread in PDF
Here is a log scale chart of the LEI series with documented recessions as identified by the The use of a log scale gives us a better sense of the relative sizes of peaks and troughs than a more conventional linear scale
For additional perspective on this indicator see the latest which includes this overview
The U S LEI rose sharply in June pointing to continued growth in the U S economy and perhaps even a moderate improvement in GDP growth in the second half of the year said Ataman Ozyildirim Director of Business Cycles and Growth Research at The Conference Board The broad based gain in the U S LEI was led by a large contribution from housing permits which improved after several months of weakness
For a better understanding of the relationship between the LEI and recessions the next chart shows the percentage off the previous peak for the index and the number of months between the previous peak and official recessions
LEI and Its Six Month Smoothed Rate of Change
Based on suggestions from Neile Wolfe of LLC and Dwaine Van Vuuren of we can tighten the recession lead times for this indicator by plotting a smoothed six month rate of change to further enhance our use of the Conference Board s LEI as a gauge of recession risk
As we can see the LEI has historically dropped below its six month moving average anywhere between 2 to 15 months before a recession The latest reading of this smoothed rate of change suggests no near term recession risk Here is a twelve month smoothed out version which further eliminates the whipsaws |
CMCSA | ViacomCBS Comcast renew content carriage deal for some CBS channels | Reuters ViacomCBS Inc and Comcast Corp NASDAQ CMCSA renewed their content carriage deal on Wednesday which would allow Comcast to continue retransmission of 23 CBS owned television channels
The deal will also include distribution of channels such as Showtime and CBS Sports Network to users of Comcast s internet service Xfinity
CBS s on demand video service CBS All Access will be available on Comcast s Xfinity X1 and Flex platforms later in the year the statement said |
CMCSA | Comcast Is Ready to Flex Its Muscle | Some investors believe that traditional cable companies could be big losers as linear television gives way to streaming video Comcast NASDAQ CMCSA wants to challenge this notion and it s innovating to take on streaming and the wireless market at the same time
In fact Comcast s Xfinity Flex is a secret weapon that should have other streaming devices shaking in their circuits The introduction of the Flex should accomplish two goals One to protect its profitable Internet subscribers from leaving for other services Two to make sure that Comcast is the gateway to streaming services instead of its rival Roku
Along with the Flex Xfinity Mobile might be the ultimate added bonus for Xfinity Internet subscribers The wireless service may offer a better price for subscribers than they currently receive from larger carriers Much like the Flex Xfinity Mobile is also a retention tool for those all important Internet subscribers
When you combine these two growth drivers along with a reasonably priced stock growth and income investors should have Comcast near the top of their buy list
Flex on em
According to Grand View Research the global video streaming market is expected to exceed 124 billion by 2025 As a quick comparison Comcast generated an annualized 22 billion from video revenue in the last quarter With video revenue down 1 annually and customers declining by 3 Comcast can t afford to sit still
While Comcast tries to figure out how to get back in the game one of the main beneficiaries of this shift toward streaming video is Roku In the company s last quarter active accounts increased by 36 annually to more than 32 million In addition streaming hours increased by nearly 70 year over year
From a competitive standpoint Comcast s potential to address the streaming market is limited by its geographic coverage Roku on the other hand has a shot at selling a device or Roku TV to anyone who wants to stream video Another key difference between the two is that while Comcast wants to sell customers its Internet service Roku wants to sell advertising by pushing its operating system into more homes
The good news for Comcast is that it has a product that seems to be getting little press yet poses a serious threat to Roku and others It s time for Comcast customers to get ready to Flex
Roku is willing to sacrifice some profits to sell its players and integrate into smart TVs However Comcast is willing to give Internet only users their first streaming box for free Subscribers who want an additional box would pay 5 per month The company doesn t seem to have plans for the Flex as a stand alone service instead it wants to use this streaming box as a retention tool Looking at the hardware according to PCMag the top rated Roku device is the Premier priced at 44 A quick comparison to the Flex suggests Roku should be concerned
Data source PC Mag Roku Premier and Digital Trends for Xfinity Flex
The short version is that Flex offers the same features as Roku but at no cost
While Roku already offers pretty much every streaming service you can think of plus its own Roku channel Flex is busy building its catalog Some of the most popular services are on board from Netflix to Amazon Prime Video to HBO The service will be the home of NBCUniversal s Peacock service when it launches and Hulu is expected soon In the short term customers may miss options like Disney or Spotify However these missing pieces are likely more related to getting the right deal in place rather than attempting to squeeze out a competitor With 21 of Comcast s revenue coming from video and billions of potential revenue expected from streaming this is a war the company can t afford to lose
Challenging the unlimited plan promise
Streaming isn t the only way Comcast is hoping to bring value to investors The company s Xfinity Mobile service is a growth opportunity and a retention tool rolled into one
The wireless industry seems to have an unwritten rule everyone needs unlimited data However some cellphone users are beginning to realize that unlimited isn t the only option One study found that over half of Americans on unlimited plans consume less than 10 GB of data monthly In addition 42 of respondents on a capped data plan were using just over 5 GB of data per month Consumer Reports found that more than half of those who switched providers in the previous two years said they saw a big drop in their monthly bill
For subscribers considering switching to Xfinity Mobile one of the first questions is likely about coverage The great thing for subscribers is that Xfinity Mobile runs on the Verizon wireless network The same network that Verizon constantly touts as being one of the best in the country is what you are getting
When it comes to service plans on the surface Xfinity Mobile s unlimited plan is challenging to recommend The Verizon Play More Unlimited plan gives subscribers unlimited data and Apple Music for 45 per line per month Xfinity Mobile s unlimited plan costs 45 per month The good news for Comcast investors is unlimited pricing isn t the company s primary competitive advantage
For customers who aren t using tons of data each month Xfinity Mobile s pricing is quite aggressive with 1 GB of shared data for just 12 per month This strategy seems to be working as wireless lines climbed to nearly 1 8 million last quarter a more than 77 annual increase Verizon s much larger base of more than 114 million subscribers increased by just over 2 annually by comparison
At just 12 for 1 GB 30 for 3 GB or 60 for 10 GB Comcast is challenging the unlimited for everyone mantra As a quick example if two people are using around 5 GB of data per person each month they could spend 60 a month with Xfinity Mobile This same couple on Verizon would pay at least 70 If you have one power user and one light user the comparison favors Xfinity even more For two light users the numbers are almost comical As a real life example my parents use less than 2 GB of data per month between them so Xfinity Mobile means 24 for the entire month
It s true that subscribers must also be with Xfinity Internet but as I noted above nearly 26 million already are With fewer than 7 of Comcast Internet users also signed up for mobile service the runway for growth is long indeed
A rose by any other name
With the Flex offering a way for Comcast to gain ground in streaming and Xfinity Mobile potentially poaching customers from bigger wireless carriers the company has multiple ways to boost its revenue and earnings in the future
Given the choice between Comcast and Verizon the meter clearly tilts in Comcast s favor Both stocks carry a forward price to earnings ratio around 12 to 14 Meanwhile Verizon s dividend yield sits 2 percentage points higher than that of its peer However Comcast is expected to grow earnings per share by nearly 9 over the next five years compared to just 2 from Verizon
Investors looking for growth and income should gain some Flex ability by adding Comcast to their portfolio |
WFC | Wells Fargo sees no end yet to sales scandal costs gets tax boost | By Meredith Mazzilli NEW YORK Reuters Wells Fargo Co N WFC is not certain it has fully uncovered and fixed all problems related to a long running sales scandal that has hurt the bank s reputation and sideswiped its efforts to cut costs Chief Executive Tim Sloan said on Friday The third largest U S bank by assets set aside a 3 25 billion reserve to cover litigation related to fake accounts and other customer issues in its fourth quarter earnings on Friday The San Francisco based company has been working to get to the bottom of its problems for more than a year after reaching a 190 million settlement with regulators in September 2016 for employees creating phony bank and credit card accounts in customers names without their permission Since then it has discovered other problems in businesses ranging from mortgages to foreign exchange trading while the number of possibly made up accounts swelled to 3 5 million Wells Fargo has tried to rectify the situation by changing how employees get paid improving corporate reporting structures and ousting several executives including Sloan s predecessor as CEO John Stumpf However the bank is still scouring businesses for evidence of bad behavior a process that will continue indefinitely Sloan said on a conference call in response to an analyst who asked repeatedly why management could not give assurances that problems were resolved I d love to live in a world where I could give you an absolute guarantee and certainty but it s not just the world we live in Sloan said He later added We re never going to declare victory Shares of the bank on Friday were flat Despite that uncertainty a new target management unveiled signaled that Wells Fargo s effort to control costs are gaining traction The bank expects to spend up to 54 5 billion this year in line with what analysts had generally expected However the 58 5 billion in expenses it reported for 2017 were well above the 54 62 billion non interest expense analysts had predicted on average Wall Street Wells Fargo to offer more detail on costs which topped 60 cents per dollar of revenue in the aftermath of the sales scandal a level Sloan has called unacceptable That figure known as an efficiency ratio is closely watched by Wall Street as a sign of how well a bank can manage extraneous costs Elevated operating losses drove that ratio to 76 cents on the dollar for the fourth quarter well above the 61 cents per dollar the bank had earlier predicted For all of 2017 the figure was 66 2 cents in costs per dollar of revenue also higher than Wells Fargo s target range of 55 to 59 cents Wells Fargo will provide more details at its investor day event in May Chief Financial Officer John Shrewsberry said The bank has already vowed to slash 4 billion in costs by 2019 through branch closures and other measures Half of that will be reinvested into businesses ONE TIME TAX BOOST Overall Wells Fargo s fourth quarter profit rose to 5 74 billion or 1 16 per share up from 4 87 billion or 96 cents per share in the year earlier period The quarter included a 3 35 billion one time boost from writing down its deferred tax liabilities to reflect new U S corporate tax rates While other banks will likely report one time charges related to the tax law passed in December Wells Fargo gets a boost to its bottom line because it will owe less tax in the future on income from a set of businesses including mortgage servicing where revenues are recognized at different times
Additionally the 14 percentage point corporate tax cut will apply to income earned in the United States and unlike lenders with a larger global footprint Wells Fargo does very little business outside the U S |
WFC | The Energy Report Oil Cracks | Oil Cracks
Oil prices are trying to recover on a weak dollar after selling off yesterday on the August oil future contract expiration Also on a prediction by the Energy Information Administration EIA that US oil production would rise by 113 000 barrels a day to 5 585 million barrels a day in August from July even as they overestimated Junes production by a wide margin
There is also a report that tiny OPEC producer Ecuador is going to raise oil output as it desperately needs some money This comes as the market should be preparing for another big drop in US crude supply and we ll keep an eye on the Atlantic where Tropical Storm Don has formed that will impact crude shipments going into and out of the Gulf of Mexico
Let s talk shale output first The EIA says that it will increase by 64 000 barrels in August but they are probably overestimating that number again as it is not considering the rising amount of non completed wells Also we are seeing the increase in oil rigs already start to slow as many independent operators have started putting on the breaks as capital dries up Previous wells that were drilled in the beginning of the shale resurgence are already facing steep production decline rates so more rigs and more rig completions are going to be needed to keep shale production on this upward trajectory
The challenges in the sector also caused a major failure of a private equity fund The Wall Street Journal Reported yesterday that
EnerVest Ltd a Houston private equity firm that focuses on energy investments manages the fund The firm raised and started investing money in 2013 when oil was trading at more than double the current price of about 45 a barrel But the fund added 1 3 billion of borrowed money to boost its buying power That later caused it trouble when oil prices tumbled Now the fund s lenders led by Wells Fargo NYSE WFC are negotiating to take control of the fund s assets to satisfy its debt according to people familiar with the matter The outcome will leave investors in the 2013 fund with at most pennies for every dollar they invested the people said At least one investor the Orange County Employees Retirement System already has marked its investment down to zero according to a pension document
The point is that capital for energy projects is going to be harder to find until we see oil break back up into the 50 s Even at that point the process of adding rigs and adding production is going to take time Therefore I predict that the EIA is overestimating production increases once again
Of course that begs the question whether OPEC can keep their production cut agreement together While the cartel looks to put a production celling quota on Libya and Nigeria word comes that Ecuador wants to raise production They have complied to their 26 000 barrel a day cut and said they had a deal with OPEC to be allowed to raise output if things got desperate Looks like things are desperate but this should not really matter or upset the larger OPEC deal
The healthcare bill is going nowhere and the dollar index took that as a negative For commodities that is bullish and we are seeing the most increase from precious metals to grains and even oil Probably overdue and our gold report is looking golden
The API is out tonight Last week U S crude inventories fell 7 6 million barrels last week its biggest weekly fall in 10 months according to the U S Energy Information Administration EIA
Tropical storm Don has formed in the Atlantic Weather Underground reports that Don will continue to move west to west northwest at 15 20 mph through Wednesday which will bring the core of the storm over the southern Lesser Antilles Islands on Tuesday evening through Wednesday morning Dry air will continue to interfere with development and the 18Z Monday run of the SHIPS model predicted that relative humidity at mid levels of the atmosphere would drop to 55 60 by Wednesday
With wind shear expected to remain low to moderate through Wednesday there is the potential that Don could strengthen to have top winds in the 55 60 mph range as it moves through the Lesser Antilles On Thursday when Don will be in the Eastern Caribbean wind shear will rise to a high 25 knots and the 70 members of the 12Z Monday European and GFS model forecasts predict that Don will weaken and meet its demise by Friday However Don could potentially affect the ABC Islands and make landfall in northwestern Venezuela late in the week before dying |
VALE | Can Value Investors Consider Vale VALE Stock Right Now | Value investing is easily one of the most popular ways to find great stocks in any market environment After all who wouldn t want to find stocks that are either flying under the radar and are compelling buys or offer up tantalizing discounts when compared to fair value One way to find these companies is by looking at several key metrics and financial ratios many of which are crucial in the value stock selection process Let s put Vale S A NYSE VALE stock into this equation and find out if it is a good choice for value oriented investors right now or if investors subscribing to this methodology should look elsewhere for top picks PE RatioA key metric that value investors always look at is the Price to Earnings Ratio or PE for short This shows us how much investors are willing to pay for each dollar of earnings in a given stock and is easily one of the most popular financial ratios in the world The best use of the PE ratio is to compare the stock s current PE ratio with a where this ratio has been in the past b how it compares to the average for the industry sector and c how it compares to the market as a whole On this front Vale has a trailing twelve months PE ratio of 6 97 as you can see in the chart below This level actually compares pretty favorably with the market at large as the PE for the S P 500 stands at about 20 63 If we focus on the long term PE trend Vale s current PE level puts it below its midpoint of 7 15 the past five years Moreover the current level stands well below the highs for the stock suggesting that it can be a solid entry point Further the stock s PE also compares favorably with the Zacks Basic Materials sector s trailing twelve months PE ratio which stands at 16 13 At the very least this indicates that the stock is relatively undervalued right now compared to its peers We should also point out that Vale has a forward PE ratio price relative to this year s earnings of just 7 37 which is higher than the current level So it is fair to expect an increase in the company s share price in the near term P S RatioAnother key metric to note is the Price Sales ratio This approach compares a given stock s price to its total sales where a lower reading is generally considered better Some people like this metric more than other value focused ones because it looks at sales something that is far harder to manipulate with accounting tricks than earnings Right now Vale has a P S ratio of about 1 65 This is a bit lower than the S P 500 average which comes in at 4 01x right now Also as we can see in the chart below this is well below the highs for this stock in particular over the past few years If anything this suggests some level of undervalued trading at least compared to historical norms Broad Value OutlookIn aggregate Vale currently has a Value Score of A putting it into the top 20 of all stocks we cover from this look This makes Vale a solid choice for value investors and some of its other key metrics make this pretty clear too For example the P CF ratio another great indicator of value comes in at 4 66 which is far better than the industry average of 5 44 Clearly VALE is a solid choice on the value front from multiple angles What About the Stock Overall Though Vale might be a good choice for value investors there are plenty of other factors to consider before investing in this name In particular it is worth noting that the company has a Growth Score of C and a Momentum Score of A This gives VALE a Zacks VGM score or its overarching fundamental grade of A You can read more about the Zacks Style Scores Meanwhile the company s recent earnings estimates have been robust at best The current quarter has seen one estimates go higher in the past sixty days compared to none lower while the full year estimate has seen one up and none down in the same time period This has had just a positive impact on the consensus estimate though as the current quarter consensus estimate has risen by 2 7 in the past two months while the full year estimate has inched higher by 0 8 You can see the consensus estimate trend and recent price action for the stock in the chart below VALE S A Price and Consensus Apart from this somewhat solid trend the stock has just a Zacks Rank 3 Hold which is why we are looking for in line performance from the company in the near term Bottom LineVale is an inspired choice for value investors as it is hard to beat its incredible lineup of statistics on this front Further a strong industry rank among Top 44 of more than 250 industries instills our confidence However over the past two years the Zacks Mining Iron industry has clearly underperformed the broader market as you can see below So value investors might want to wait for analyst sentiment to turn around in this name first but once that happens this stock could be a compelling pick Today s Best Stocks from Zacks Would you like to see the updated picks from our best market beating strategies From 2017 through 2019 while the S P 500 gained and impressive 53 6 five of our strategies returned 65 8 97 1 118 0 175 7 and even 186 7 This outperformance has not just been a recent phenomenon From 2000 2019 while the S P averaged 6 0 per year our top strategies averaged up to 54 7 per year |
VALE | Vale s 2019 Iron Output Drops 22 Due To Brumadinho Disaster | Vale S A s NYSE VALE latest report reveals that production declined for all metals barring gold While the Brumadinho disaster and its aftermath impacted iron ore production for the company weather and maintenance at the Uricum mine put pressure on the manganese production Nickel production was lower owing to maintenance shutdowns while lower production hurt copper production 2019 iron ore production plunged 21 5 on a year over year basis to 302 Mt primarily due to the operational disruption This was preceded by the Brumadinho disaster and stronger than usual weather related seasonality in the first half of 2019 Sales volumes of iron ore fines and pellets were 312 5 Mt in 2019 in line with the company s guidance of 307 312 Mt In the fourth quarter Vale s iron ore fines production came in at 78 3 Mt in the fourth quarter 9 6 lower than the prior quarter primarily due to unscheduled maintenance stoppages carried out at Northern range s crushers and beneficiation plant Further suspension of tailings disposal at the Itabiru u and Laranjeiras dams sourced by the Concei o and Brucutu plants respectively while the dams geotechnical characteristics were being assessed led to the downfall Vale s iron ore fines and pellets sales amounted to 88 9 Mt in the fourth quarter 4 4 higher sequentially Nickel Manganese Copper Production Down in 2019Finished nickel production totaled 208 kt in 2019 down 15 from 2018 mainly due to reduced feed from third parties lower source ore from Thompson and VNC Operations had also been impacted due to maintenance shutdowns at the refineries These operations have been resumed and are now operating at regular rates Nickel sales were at 205 7 kt down 13 year over year due to lower production levels In the fourth quarter nickel production reached 56 7 kt in 4Q19 10 3 higher sequentially primarily due to resumption of regular production at On a Puma and the ramp up in production at the Copper Cliff and Clydach refineries after maintenance activities In the fourth quarter nickel sales came in at 47 kt down 7 7 sequentially owing to management s decision to retain inventory awaiting better market conditions Copper production was at 90 3Kt in the fourth quarter 8 5 lower than the third quarter primarily owing to the unscheduled maintenance shutdown at the processing plant in Sossego The site is now in operation Sales volumes of copper reached 87 8 kt in the quarter down 4 6 on a sequential basis mainly blamed on lower South Atlantic production volumes This was partly offset by the timing of customer deliveries and higher production in Canadian operations in the quarter In 2019 copper production was 381 1 kt down 3 6 from 2018 mainly due to lower production from Sossego which was partly offset by the all time record production of copper concentrate from Sudbury Copper sales for the year fell 3 6 year over year to 365 2 kt due to lower production levels Cobalt production reached 1 140 metric tons in the October December period up 13 sequentially In 2019 Vale produced 4 376 metric tons of cobalt 14 1 lower than the prior year In the fourth quarter manganese ore production totaled 450 kt 1 7 higher than the prior quarter Manganese ore sales volumes were 570 kt 280 higher sequentially The drop in the numbers were due to operational improvements and maintenance conducted at the Urucum mine in the second quarter and unusual weather related conditions in the first half of 2019 In 2019 manganese production declined 14 year over year to 1 576 kt while sales dipped 32 4 to 1 063 kt Coal production came in at 1 9 Mt in the fourth quarter down 19 sequentially In 2019 production was down 24 to 8 8 Mt from 2018 thanks to lower productivity at the processing plants throughout the year Vale has thus reviewed business plan in 2019 and implemented two initiatives a new mining plan and a new operational strategy for the processing plants These are expected to produce sustainable results Gold production was up 0 6 in 2019 and up 8 2 sequentially in the fourth quarter Guidance for 2020Vale s iron ore fines production guidance for 2020 is at 340 355 Mt The company has halted capacity of 40 million tons annually and plans to start 15 million tons of annual capacity in 2020 followed by 25 million tons in 2021 The annual guidance for pellets production is at 44 million tons The company expects to produce nickel between 200 and 210 kt in 2020 The company expects to resume normal production levels for manganese in 2020 Following the implementation of the new mining plan Vale expects to produce coal between 8 Mt and 10 Mt in 2020 Coming to the price performance shares of the company have fallen 0 7 in a year compared with the s decline of 0 8 Zacks Rank Stocks to ConsiderVale currently sports a Zacks Rank 3 Hold Some better ranked stocks in the basic materials space are Daqo New Energy Corp NYSE DQ Agnico Eagles Mines Limited NYSE AEM and Impala Platinum Holdings Limited OTC IMPUY each currently sporting a Zacks Rank 1 Strong Buy You can see Daqo New Energy has a projected earnings growth rate of 326 3 for the current year The company s shares have surged 95 over the past year Agnico Eagles Mines has an estimated earnings growth rate of 99 8 for fiscal 2020 Its shares have rallied 43 in the past year Impala Platinum has an expected earnings growth rate of 465 5 for fiscal 2020 The company s shares have soared 205 1 in a year s time Today s Best Stocks from ZacksWould you like to see the updated picks from our best market beating strategies From 2017 through 2019 while the S P 500 gained and impressive 53 6 five of our strategies returned 65 8 97 1 118 0 175 7 and even 186 7 This outperformance has not just been a recent phenomenon From 2000 2019 while the S P averaged 6 0 per year our top strategies averaged up to 54 7 per year |
CMCSA | Italy s TIM agrees deal with DAZN to stream sports | MILAN Reuters Telecom Italia MI TLIT TIM said on Monday it agreed a deal with digital global sports provider DAZN Group that will enable Italy s biggest phone company to broadcast a wide range of sport events on its own video streaming platform TIM Vision
The tie up follows similar moves by a growing number of telecoms firms hoping to retain clients by giving them a broader choice of video content
Earlier this year TIM sealed a deal to bring Comcast Corp NASDAQ CMCSA unit Sky Italia s offer onto its platform including seven out of 10 matches of Serie A and UEFA Champions League tournament
Starting on Tuesday TIM s fixed line customers who use its TIM box for streaming apps will also gain access to DAZN which in Italy offers three top level Serie A football matches per week
TIM will offer its customers access to Sky and DAZN streaming content in a bundle package for 29 99 euros 33 05 per month the phone group said |
CMCSA | IMAX s Q3 Earnings Surpass Estimates Revenues Rise Y Y | IMAX Corporation NYSE IMAX reported third quarter 2019 adjusted earnings of 21 cents per share that beat the Zacks Consensus Estimate by 2 cents and increased 50 year over year Total revenues of 86 4 million increased 5 2 from the year ago quarter However the figure missed the Zacks Consensus Estimate of 87 million The year over year revenue growth was driven by an upside in the network business segment Category wise services and rentals revenues were up 12 and 21 8 year over year to 44 2 million and 17 6 million respectively However equipment and product sales decreased 14 1 from the year ago quarter to 21 7 million Finance income decreased 1 5 year over year to 2 8 million IMAX Corporation Price Consensus and EPS Surprise Segment DetailsNetwork BusinessIMAX network business revenues were 43 2 million up 17 8 year over year due to an increase in both IMAX DMR revenues and contingent rent received from joint revenue sharing arrangements due to the success of The Lion King The IMAX Experience Spider Man Far From Home The IMAX Experience Hobbs Shaw The IMAX Experience and local language blockbuster Ne Zha The IMAX Experience in China Within the segment IMAX DMR revenues were up 19 2 to 26 7 million Gross box office from IMAX DMR films increased 19 2 year over year to 246 1 million in the reported quarter The increase was primarily due to 39 8 increase in international gross box office excluding China and 23 3 year over year increase in domestic gross box office Notably Greater China is currently IMAX s largest market measured by revenues and has accounted for roughly 31 6 of total revenues on a year to date basis IMAX s largest single international partnership is in China with Wanda Film Wanda s total commitment is for 359 theater systems in Greater China of which 344 theater systems are under the parties joint revenue sharing arrangement Notably IMAX released 26 films 20 new and 6 carryovers compared with 29 films 24 new and 5 carryovers in the year ago quarter Joint revenue sharing arrangements contingent rent was 16 5 million up 15 5 year over year Theater BusinessIMAX theater business generated revenues of 37 7 million which decreased 7 4 year over year driven by one lesser system installation under sales and sales type lease arrangement in the quarter Within this segment IMAX systems revenues decreased 10 2 from the year ago quarter to 21 million Theater system maintenance revenues were 13 7 million up 10 However Joint revenue sharing arrangements fixed fees was 1 44 million down 48 6 year over year Other theater revenues declined 24 9 to 1 56 million in the reported quarter New Business OthersNew Business generated revenues of 0 54 million and other revenues were 0 77 million in third quarter 2019 Network Growth StatisticsAs on Sep 30 2019 71 of IMAX theater systems in operation were located within international markets defined as all countries other than the United States and Canada up from 68 8 as on Sep 30 2018 There were 1 568 IMAX theater systems 1 473 commercial multiplexes 14 commercial destinations 81 institutional operating in 81 countries as on Sep 30 2019 In third quarter 2019 IMAX installed 30 new IMAX theater systems and upgraded 9 systems New installs consisted of 14 sales type 12 JVs and 4 hybrids Notably total signings were 30 in the third quarter There were 607 theaters in backlog as of Sep 30 2019 compared with 635 in the corresponding period of 2018 In the third quarter the company signed deals across regions Saudi Arabia 12 new systems China 6 new systems Austria 2 system upgrades India 2 new systems and more The company s large deals include CGV in China for 40 theaters and Cineworld Regal for 15 U S theaters Operating DetailsGross margin expanded 320 basis points bps on a year over year basis to 54 5 in the reported quarter Network business gross margin expanded 200 bps on a year over year basis to 63 4 driven principally by higher box office partially offset by 11 8 increase in cost of goods sold Theater gross margin was 48 9 in third quarter 2019 down from 49 6 in the year ago period due to fewer systems installed in the quarter Adjusted EBITDA was 32 4 million in the reported quarter compared with 25 8 million in the year ago period Adjusted EBITDA margin expanded 610 basis points to 37 5 Selling general administrative SG A expenses increased 10 6 year over year to 29 5 million Research development R D expenses decreased 66 3 on a year over year basis to 1 4 million primarily due to decreased spending on the company s updated laser based digital projection system compared to the year ago quarter Operating income margin expanded 500 bps year over year to 16 7 in the reported quarter Balance Sheet Cash FlowAs of Sep 30 2019 IMAX had cash and cash equivalents of 102 5 million compared with 106 5 million in the prior quarter Cash flow from operating activities was 67 3 million compared with 49 2 million in the prior quarter Free cash flow was 7 77 million compared with 34 1 million in the prior quarter 2019 GuidanceBox office is expected to grow in low double digits compared with the earlier guidance of mid to high single digit range IMAX is anticipated to install 185 190 theater systems The company expects to upgrade 45 screens to IMAX laser Total theaters equipped with IMAX with Laser are now expected to be slightly below the previous guidance of approximately 140 systems Additionally adjusted EBITDA margin is anticipated to increase in the range of 41 to 42 indicating an increase from 39 6 in 2018 The company anticipates its box office performance to be strong in 2019 owing to popular releases like Avengers Endgame Spider Man Far From Home and Lion King IMAX stated that films including Bond 25 will use IMAX cameras in 2020 Notably Comcast s NASDAQ CMCSA Universal Pictures is one of the producers of the film Zacks Rank Stocks to ConsiderIMAX currently has a Zacks Rank 4 Sell Twin River Worldwide Holdings Inc NYSE TRWH and Liberty Broadband Corporation NASDAQ LBRDK have a Zacks Rank 2 Buy are couple of better ranked stocks in the broader consumer discretionary sector You can see Twin River Worldwide and Liberty Broadband are set to report their quarterly earnings on Nov 11 7 Best Stocks for the Next 30 DaysJust 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 5 per year So be sure to give these hand picked 7 your immediate attention |
WFC | China s Rethink on Treasuries Has Echo in Premier s 2009 Worries | Bloomberg China s showing once again that it s not afraid to wield the clout of its hoard of Treasuries to catch the attention of U S officials and the world s biggest debt market But as in a previous episode in 2009 such warnings may prove hollow
The news that senior Chinese government officials have recommended slowing or halting purchases of Treasuries in part given trade tensions with the U S wound up having little lasting impact on Wednesday s trading Yields ended little changed after spiking to the highest since March luring buyers
Almost nine years ago at a time when yields were already heading higher and the U S was issuing a record amount of debt to finance stimulus measures then Premier Wen Jiabao added fuel to the selloff by saying he was worried about the safety of the securities Weeks later China s top foreign exchange official said the nation would keep buying Treasuries
Then as now analysts say that while America s biggest foreign creditor has the power to jolt U S bond markets wide scale selling by China is unlikely given that it has few alternatives to invest its 3 1 trillion in foreign currency reserves the world s largest stash
One thing that has been really important to China is that the Treasury market is so deep and so liquid said Amar Reganti a fixed income strategist at GMO s asset allocation group and former deputy director of the Treasury s Office of Debt Management It s challenging to find any real substantial alternatives with China earning dollars given the U S current account deficit
Brief Jolt
Yields on 10 year Treasuries ended Wednesday little changed at about 2 56 percent pulling back from close to the highest levels since 2014 As in 2009 the latest news fanning concern about China s appetite for U S borrowings comes at an inopportune time with Treasury set to ramp up issuance as the Federal Reserve is shrinking its balance sheet
China owns almost 1 2 trillion of U S government debt more than double the level from a decade ago with most of the buildup coming as the nation boosted foreign exchange reserves to help offset a strengthening yuan The increase came as the size of the U S debt market more than tripled to 14 5 trillion
China s showing that they have power in the relationship as anyone who s a buyer of U S Treasuries does said Eric Stein co director of global fixed income at Eaton Vance in Boston It s been this symbiotic relationship for the past 15 years or so I don t think that s worked out so poorly for the US
For China the market for U S government bonds is becoming less attractive relative to other assets and trade tensions with the U S may provide a reason to slow or stop buying American debt said people familiar with the matter who asked not to be named as they aren t allowed to discuss the matter publicly China regularly assesses its strategy for investing reserves and it isn t clear whether the officials recommendations have been adopted
2009 Episode
Days after Wen s comments in March 2009 President Barack Obama assured America s creditors that U S government debt was safe and the nation s finances were sound
Later that month Hu Xiaolian director of the State Administration of Foreign Exchange said Treasuries form an important element of China s investment strategy for its foreign currency reserves
In the end China lifted its Treasuries holdings by 167 billion in 2009 or 23 percent U S data show
The stakes may be higher now as tensions with the U S have been building since the election of President Donald Trump who s been critical of the American trade deficit with China and other countries Meanwhile China has been gradually moving to a more flexible foreign exchange regime that would allow it to intervene less in the market
There are signs that the adjustment the Chinese officials recommended may already be happening according to Jefferies The amount of Treasuries that foreign central banks hold in custody with the Fed and the movement of the yuan point in that direction in the bank s view The Fed holds 3 015 trillion of Treasuries for other central banks down from 3 052 trillion in September
In the eyes of some analysts Chinese officials may be trying to send a message that they have leverage with President Trump talking tough on trade
Veiled Threat
The markets interpreted this as a veiled threat from China said David Bloom global head of currency strategy in London at HSBC Holdings Plc LON HSBA That doesn t mean that it is But people are nervous about the Treasury market at the moment with a global pickup in growth
Bloom agrees that China has few places to shift its reserves If it were to dump Treasuries German bunds could be a destination though yields there are rising too he said
Coming into this year strategists at Wells Fargo NYSE WFC and some other banks were expecting China s Treasuries buying to ebb as they predicted stability in the yuan after a 2017 rally The consensus among analysts surveyed by Bloomberg is for little change in the yuan by the end of 2018 from its current level of around 6 50 per dollar A steady exchange rate suggests limited pressure on Chinese authorities to add Treasuries as part of intervening in currency markets
For China and its Treasuries holdings things are more or less as they always have been said Seth Carpenter chief U S economist at UBS Securities LLC in New York and a former Fed and Treasury official
Their holdings have moved up and down through time he said And when it comes to the heightened political interaction between China and the U S there has always been this tension |
WFC | Wells Fargo Shares Move Lower After Q4 Earnings | Investing com Shares in Wells Fargo NYSE WFC registered losses in pre market trade on Friday after reporting fourth quarter earnings
The third biggest U S bank by assets reported net income of 6 2 billion with diluted earnings per share EPS of 1 16 in the three months ended December 31
Analysts forecast pointed to earnings of 1 06 a share
Wells Fargo noted in the report that there was a 3 35 billion after tax benefit or 0 67 per share from the recent U S tax overhaul
Meanwhile the company s revenue increased 2 4 to 22 1 billion compared to the forecast for 22 35 billion
Traders will now turn their attention to the firm s conference call due to start at 10 00AM ET 15 00GMT
Following the release of the report shares fell 1 03 in pre market trade to 62 35 from Thursday s closing price of 63 01 |
CMCSA | StockBeat Roku Gets Price Upgrade Ahead of Earnings | Investing com Roku has been given a vote of confidence a day ahead of its earnings as Rosenblatt on Tuesday raised its price target on the streaming device company betting that its quarterly results will impress
Rosenblatt raised its price target on Roku to 159 from 134 estimating that the third quarter earnings and guidance are set to outperform expectations Roku NASDAQ ROKU bounced off session lows to trade roughly flat
Rosenblatt estimates that the company managed to grow its active accounts by 31 during the quarter
But leading up to the quarterly earnings print not everyone is convinced that Roku deserves a spot on the list of fashionable investing
Just last month Pivotal Research slapped a sell rating on Roku warning that its valuation was running too hot at a time when competition is heating up
Comcast NASDAQ CMCSA has rolled out its Xfinity Flex streaming box and Facebook NASDAQ NASDAQ FB launched its Portal TV streaming device
We see dramatically more competition emerging that will likely drive the cost of OTT over the top devices to zero and put material pressure on advertising revenue Pivotal said
Looking ahead many expect that the company will find it hard to turn a profit for several years as it funds its international expansion and competes for TV licensing contracts
Roku is up 356 for the year and has an average price target of 135 according to consensus estimates from Investing com |
CMCSA | Comcast Falls 3 | Investing com Comcast NASDAQ CMCSA fell by 3 01 to trade at 43 45 by 11 50 16 50 GMT on Monday on the NASDAQ exchange
The volume of Comcast shares traded since the start of the session was 7 55M Comcast has traded in a range of 43 44 to 44 90 on the day
The stock has traded at 45 6700 at its highest and 43 4400 at its lowest during the past seven days |
CMCSA | Comcast CMCSA Q3 Earnings Surpass Estimates | Comcast CMCSA came out with quarterly earnings of 0 79 per share beating the Zacks Consensus Estimate of 0 75 per share This compares to earnings of 0 65 per share a year ago These figures are adjusted for non recurring items
This quarterly report represents an earnings surprise of 5 33 A quarter ago it was expected that this cable provider would post earnings of 0 75 per share when it actually produced earnings of 0 78 delivering a surprise of 4
Over the last four quarters the company has surpassed consensus EPS estimates four times
Comcast which belongs to the Zacks Cable Television industry posted revenues of 26 83 billion for the quarter ended September 2019 missing the Zacks Consensus Estimate by 0 14 This compares to year ago revenues of 22 14 billion The company has topped consensus revenue estimates just once 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
Comcast shares have added about 34 3 since the beginning of the year versus the S P 500 s gain of 19 9
What s Next for Comcast
While Comcast has outperformed 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 Comcast 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 76 on 28 42 billion in revenues for the coming quarter and 3 06 on 109 01 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 Cable Television is currently in the top 34 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 |
WFC | U S import prices barely rise wholesale inventories rebound | By Lucia Mutikani WASHINGTON Reuters U S import prices recorded their smallest increase in five months in December and underlying imported price pressures were muted amid declining costs for food and consumer goods The slowdown in import price growth came despite a weak dollar which could temper expectations that inflation will pick up this year and keep the Federal Reserve on a path of gradual interest rate increases Fed officials are desperate for more inflation and will take it from any quarter said Chris Rupkey chief economist at MUFG in New York Today s import price data will worry the Fed doves even more about too low inflation The Labor Department said on Wednesday import prices edged up 0 1 percent last month after accelerating 0 8 percent in November That was the smallest gain since July and was well below economists expectations for a 0 5 percent increase In the 12 months through December prices increased 3 0 percent slowing from November s 3 3 percent jump The dollar lost 7 percent of its value against the currencies of the United States main trading partners last year Producer and consumer price reports on Thursday and Friday could offer fresh clues on the near term inflation outlook The Fed s preferred inflation measure the personal consumption expenditures PCE price index excluding food and energy has undershot the U S central bank s 2 percent target since May 2012 The Fed raised interest rates three times in 2017 and has forecast three rate hikes this year U S financial markets were little moved by the data as investors digested a report from Bloomberg News that Chinese officials have recommended the country slow down or halt its purchases of U S securities China is the largest foreign holder of U S government debt The yield on the benchmark 10 year U S Treasury note jumped to a 10 month high while the dollar fell against a basket of currencies Stocks on Wall Street were trading lower Last month prices for imported petroleum rose 2 0 percent after surging 8 1 percent in November Import prices excluding petroleum fell 0 2 percent reversing a 0 2 percent gain in November Import prices excluding petroleum rose 1 3 percent in the 12 months through December Our expectation for the dollar to decline further along with another year of decent global growth should lead non fuel import prices to press higher this year said Sarah House an economist at Wells Fargo NYSE WFC Securities in Charlotte North Carolina That said with goods accounting for only a quarter of core CPI the lift to more closely watched measures of consumer price inflation should be modest WHOLESALE INVENTORIES REBOUND Imported capital goods prices were unchanged in December while the cost of food declined 0 7 percent The price of goods imported from China fell 0 1 percent in December after advancing 0 3 percent the prior month Prices for imports from China dropped 0 2 percent in 2017 and have not recorded a calendar year increase since 2011 The cost of goods imported from Canada and Mexico was unchanged in December after rising 2 3 percent and 0 1 percent respectively in November The Labor Department also reported that export prices slipped 0 1 percent in December declining for the first time since June as agricultural prices fell for a second straight month Export prices rose 0 5 percent in November They increased 2 6 percent year on year after rising 3 1 percent in November In a separate report on Wednesday the Commerce Department said wholesale inventories rebounded 0 8 percent in November instead of 0 7 percent as estimated last month That followed a 0 4 percent drop in October The component of wholesale inventories that goes into the calculation of gross domestic product wholesale stocks excluding autos also rose 0 8 percent in November suggesting inventories could be a small drag on GDP in the fourth quarter Inventory investment contributed almost eight tenths of a percentage point to the economy s 3 2 percent annualized growth pace in the third quarter The Atlanta Fed raised its fourth quarter GDP growth estimate by one tenth of a percentage point to a 2 8 percent rate after the wholesale inventory data
Sales at wholesalers shot up 1 5 percent in November after increasing 0 8 percent in October At November s sales pace it would take wholesalers 1 24 months to clear shelves the fewest since November 2014 down from 1 25 months in October |
WFC | Investors strip most cash in four years from U S domestic stock funds | By Trevor Hunnicutt NEW YORK Reuters Investors are slimming down equity stakes bloated by a nearly decade long bull market withdrawing 22 billion from U S domestic stock funds in a single week Investment Company Institute ICI data showed on Wednesday The withdrawal during the holiday shortened week ended Jan 3 marked the largest weekly retreat from the U S based domestic stock funds in nearly four years according to the trade group A growing chorus of investors including GMO LLC co founder Jeremy Grantham are saying the market is in a melt up as prices start to be driven up irrationally by investors fearing they are missing out on strong profits The S P 500 has more than tripled since its 2009 low The current bull market was born on pessimism grew on skepticism and after a huge run higher is moving toward a general feeling of optimism said Scott Wren senior global equity strategist at Wells Fargo NYSE WFC Co s Investment Institute in a note on Wednesday We do not believe the bull market is over But we are closely watching in addition to the fundamentals investor sentiment Because the eventual euphoria which will come at some point will likely be at the top Funds focused on equities outside the United States have largely been spared withdrawals attracting cash every week last year while domestic focused funds ended the year having posted outflows But in the latest week inflows to world stock funds weakened to 1 1 billion the lowest since last January ICI said The group s data covers mutual funds and exchange traded funds ETFs based in the United States Demand for bonds remained strong despite a yield spike in December and again this week that pushed long dated Treasuries prices down sharply U S based bond fund net inflows rose to 7 6 billion during the latest week the largest in 10 weeks The ICI data does not include fund inflows or withdrawals that occurred during the most recent long bond sell off The following table shows estimated ICI flows for mutual funds and ETFs all figures in million of dollars 1 3 12 27 12 20 12 13 12 6 17 Equity 21 009 4 099 1 584 6 809 8 621 Domestic 22 065 1 208 9 550 5 347 5 962 World 1 056 2 892 7 966 1 463 2 659 Hybrid 327 940 2 122 1 415 2 139 Bond 7 570 4 109 1 599 5 015 6 160 Taxable 7 056 4 487 1 512 4 943 6 471 Municipal 515 378 87 72 311 Commodity 305 296 434 5 421 Total 14 071 6 972 2 541 10 414 13 064 |
WFC | Mexican Peso Canadian Dollar Decline on U S Nafta Exit Risk | Bloomberg Mexico s peso and Canada s dollar dropped after reports the U S may pull out of the trillion dollar trade pact that President Donald Trump has threatened to dump if it doesn t favor his nation
Both currencies pared losses after a White House official said there hasn t been any change in Trump s position on Nafta The peso fell 0 5 percent to 19 3398 per dollar as of 3 04 p m in New York after falling as much as 0 9 percent The Canadian dollar slipped 0 6 percent to 1 2543 per dollar Yields on Canadian government 2 year notes fell six basis points to 1 74 percent
Canada believes there s an increasing likelihood that Trump will give six months notice to withdraw from the two decade old pact according to two Canadian government officials who spoke on condition of anonymity Canada is said to have begun preparing contingency plans for how to proceed if Trump gives a withdrawal notice which isn t binding and wouldn t necessarily kill Nafta
If the news report gets more confirmation other sources or U S officials something like that then the peso s weakness could be sustained and extended said Danny Fang a New York based analyst at Banco Bilbao Vizcaya Argentaria SA For the Canadian dollar it s a similar story
Here are what other analysts had to say
Juan Carlos Rodado New York based head of research at Natixis SA
If true this is honestly a bomb for the Mexican peso he said
We have three options a deal which is more unlikely given the timeline a break up or potentially postponing the negotiations as the Mexican political cycle kicks in Options two and three are both negative for the peso Says trend for Mexican peso is weakness until July 1 with Nafta noise adding to election uncertainty
Shaun Osborne chief economist at Bank of Nova Scotia
Nafta comments a bit of a reality check for BoC tightening expectations at least he said
There s more upside likely here considering that Nafta risks is one major uncertainty that could keep the Bank of Canada on the sidelines near term Upside risk to 1 2650 1 27 in the next week or so technically
Bipan Rai a strategist at Canadian Imperial Bank of Commerce
The Nafta headlines are from unknown government sources and I have a hard time seeing how the BoC would alter its thinking based on something that s not official There might be some palpable concern at the Bank but these headlines wouldn t and shouldn t add to the fire
In regards to the CAD its high time we had some Nafta premium priced in Markets have been far too complacent about termination risk for too long and outside of the BoC meeting next week USD CAD could see some upside pressure as we head into the next round of negotiations
Erik Nelson a New York based currency strategist at Wells Fargo NYSE WFC
Markets are approaching this headline with caution until there are more concrete signs of a possible Nafta exit by the United States
Move from 17 50 to nearly 20 00 in recent months has to some extent reflected markets pricing in a greater probability of an unfavorable Nafta outcome according to him |
CMCSA | Malaysia orders China map cut from Abominable film as furor widens | KUALA LUMPUR Reuters Malaysia s film censors have ordered a scene removed from the animated movie Abominable which shows China s nine dash line in the South China Sea an official said on Thursday amid growing anger among countries with overlapping claims in the waterway
The U shaped line is used on Chinese maps to illustrate its territorial claims over vast expanses of the resource rich South China Sea including areas claimed by other countries
Vietnam pulled the movie from cinemas on Monday while the Philippines foreign minister has called for the scene showing the map to be cut and the film boycotted
Malaysia s Film Censorship Board said on Thursday it has given the green light for the movie to be screened in cinemas without the scene depicting the map
The animated film titled Abominable has been given approval for screening in Malaysia under the condition that the controversial map is removed from the film the board s chairman Mohamad Zamberi Abdul Aziz said in an emailed statement to Reuters
The film will be released in Malaysian cinemas on Nov 7
Abominable about a Chinese girl who discovers a yeti living on her roof was jointly produced by Shanghai based Pearl Studio and Comcast owned CMCSA O DreamWorks Animation
Pearl Studio did not immediately respond to an emailed request for comment Dreamworks could not be reached for comment
Four Southeast Asian countries Malaysia Vietnam the Philippines and Brunei as well as Taiwan contest China s claims in the South China Sea
Malaysia had been critical of China s South China Sea position but has been less outspoken recently especially after China pumped in billions of dollars into infrastructure projects in the country
Foreign Minister Saifuddin Abdullah said earlier on Thursday Malaysia needs to boost its naval capabilities to prepare for possible conflict in the South China Sea even as it pursues non militarisation of the waterway |
CMCSA | Abominable film axed in Malaysia after rebuffing order to cut China map | KUALA LUMPUR Reuters DreamWorks animated movie Abominable will not be released in Malaysia after its producers declined to meet a censor board requirement to cut a scene showing China s nine dash line in the South China Sea the movie distributor said on Sunday
The U shaped line is used on Chinese maps to illustrate its territorial claims over vast expanses of the resource rich South China Sea including areas claimed by other countries
Vietnam pulled the movie from cinemas last week while the Philippines foreign minister has called for the scene showing the map to be cut and the film boycotted
Malaysia s Film Censorship Board said last week that it has given the green light for the movie to be screened in cinemas without the scene depicting the map
Universal has decided not to make the censor cut required by the Malaysian censor board and as such will not be able to release the film in Malaysia a spokeswoman for the film s distributor United International Pictures told Reuters
Malaysia s Film Censorship Board did not have an immediate comment
The film was set to be released in Malaysian cinemas on Nov 7
Abominable about a Chinese girl who discovers a yeti living on her roof was jointly produced by Shanghai based Pearl Studio and DreamWorks Animation Comcast NASDAQ CMCSA owns DreamWorks and its parent company Universal Pictures
China claims most of the South China Sea through which more than 3 4 trillion worth of goods are transported annually under its unilaterally declared nine dash line The line overlaps territorial claims made by Malaysia Vietnam the Philippines Brunei and Taiwan
Last week Malaysian Foreign Minister Saifuddin Abdullah said the country needs to boost its naval capabilities to prepare for possible conflict in the South China Sea even as it pursues non militarisation of the waterway |
CMCSA | Comcast Earnings Revenue Beat in Q3 | Investing com Comcast NASDAQ CMCSA reported third quarter earnings that beat analysts expectations on Thursday and revenue that topped forecasts
The firm reported earnings per share of 0 79 on revenue of 26 83B Analysts polled by Investing com forecast EPS of 0 74 on revenue of 26 81B That compared to EPS of 0 65 on revenue of 22 14B in the same period a year earlier The company had reported EPS of 0 78 on revenue of 26 86B in the previous quarter
Comcast follows other major Services sector earnings this monthOn Tuesday McDonald s reported third quarter EPS of 2 11 on revenue of 5 43B compared to forecasts of EPS of 2 21 on revenue of 5 49B
Costco earnings beat analysts expectations on October 3 with fourth quarter EPS of 2 69 on revenue of 47 5B Investing com analysts expected EPS of 2 54 on revenue of 47 44B
Stay up to date on all of the upcoming earnings reports by visiting Investing com s earnings calendar |
CMCSA | Comcast tops profit forecast as it gains high speed internet customers | By Helen Coster and Neha Malara
Reuters Comcast Corp O CMCSA beat Wall Street profit and revenue estimates on Thursday as the company added high speed internet customers and lost more video subscribers than expected
Comcast s third quarter showed that its focus on the higher margin broadband business necessary to stream content is helping to offset a decline in cable subscribers
Four things stood out as wrapped up the quarter our incredible strength in broadband the enduring popularity of our premium content our strong global footing just one year after the Sky acquisition and how the combination of these things puts us in a unique position to compete including in the streaming market said Chief Executive Officer Brian Roberts
Comcast shares were up 2 32 at 46 78 in premarket trading
Revenue from the company s high speed internet business grew 9 3 to 4 72 billion with the gain of 379 000 subscribers in the quarter beating analysts average estimate of 344 000 net additions according to research firm FactSet
Comcast s results also reflected the widespread cord cutting across the cable business The company lost 238 000 video customers in the three months ended Sept 30 higher than the 224 000 it lost in the previous quarter above the 203 000 loss estimated by research firm FactSet
In September Comcast announced it will offer Xfinity Flex its streaming media set top box and a voice remote for free to its U S internet only customers It had previously charged those customers 5 per month for the service and remote The product is meant to make it easier for subscribers of multiple streaming services to find shows
The company s NBCUniversal business which includes NBC Entertainment and Universal Pictures reported revenue of 8 30 billion down 3 5 from a year earlier In April NBCUniversal is launching a streaming service called Peacock which will be available as a subscription or with ads stocked with 15 000 hours of content from the company s library
British pay TV group Sky which Comcast acquired after outbidding Twenty First Century Fox last year generated revenue of 4 55 billion missing estimates of 4 75 billion Comcast attributed that miss to tough macroeconomic conditions in the UK Germany and Italy
The Philadelphia company said revenue rose 21 2 to 26 83 billion beating analysts average estimate of 26 77 billion according to IBES data from Refinitiv
Net income attributable to Comcast rose to 3 22 billion or 70 cents per share from 2 89 billion or 62 cents per share a year earlier
Excluding items the company earned 79 cents per share ahead of estimates of 75 cents |
CMCSA | Comcast CMCSA Earnings Expected To Grow Should You Buy | Wall Street expects a year over year increase in earnings on higher revenues when Comcast CMCSA reports results for the quarter ended September 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 stock might move higher if these key numbers top expectations in the upcoming earnings report which is expected to be released on October 24 On the other hand if they miss the stock may move lower
While management s discussion of business conditions on the earnings call will mostly determine the sustainability of the immediate price change and future earnings expectations it s worth having a handicapping insight into the odds of a positive EPS surprise
Zacks Consensus Estimate
This cable provider is expected to post quarterly earnings of 0 75 per share in its upcoming report which represents a year over year change of 15 4
Revenues are expected to be 27 07 billion up 22 3 from the year ago quarter
Estimate Revisions Trend
The consensus EPS estimate for the quarter has been revised 2 5 lower 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 an aggregate change may not always reflect the direction of estimate revisions by each of the covering analysts
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 Our proprietary surprise prediction model the Zacks Earnings ESP Expected Surprise Prediction has this insight at its core
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 Comcast
For Comcast the Most Accurate Estimate is higher than the Zacks Consensus Estimate suggesting that analysts have recently become bullish on the company s earnings prospects This has resulted in an Earnings ESP of 0 89
On the other hand the stock currently carries a Zacks Rank of 3
So this combination indicates that Comcast will most likely 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 Comcast would post earnings of 0 75 per share when it actually produced earnings of 0 78 delivering a surprise of 4
Over the last four quarters the company has beaten consensus EPS estimates four 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
Comcast appears 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 | Warren Buffett s Berkshire Hathaway could get a 37 billion windfall from tax cuts | Warren Buffett s Berkshire Hathaway NYSE BRKa could be one of the biggest beneficiaries of tax reform according to Barclays LON BARC
Analysts estimate that its book value could rise by about 37 billion because of the lower corporate tax rate
The tax cut reduces Berkshire s deferred tax liability which represents what it would owe the government if it sold its portfolio and took profits
Warren Buffett s Berkshire Hathaway could be one of the biggest beneficiaries of tax reform in the insurance sector according to Barclays
The company s book value could increase by about 37 billion said Jay Gelb an insurance analyst at Barclays in a note on Monday That s 10 billion more than what he estimated in a November note before the tax plan was finalized and signed
Gelb estimated this because Berkshire would have a lower deferred tax liability which represents what the company would owe the federal government if it sold its equity portfolio and took profits
The Tax Cuts and Jobs Act signed by President Trump in December permanently cuts the corporate tax rate from 35 to 21 This means Berkshire s deferred tax liability about 78 billion would fall because of the lower rate
We would view this magnitude of book value increase as favorable for BRK shares since it is generally valued based on price to book value Gelb said He has a price target of 357 000 on Berkshire s A shares about 19 more than where they opened for trading on Monday
Berkshire Hathaway could also benefit from tax reform because its biggest investments are in the financials sector Companies in this sector have historically paid the highest effective tax rate in the S P 500 according to Wells Fargo NYSE WFC That could be a boon for some companies in the share of Berkshire s public portfolio about 40 that s in in financials |
CMCSA | Comcast Falls 3 | Investing com Comcast NASDAQ CMCSA fell by 3 01 to trade at 44 45 by 10 52 14 52 GMT on Thursday on the NASDAQ exchange
The volume of Comcast shares traded since the start of the session was 7 06M Comcast has traded in a range of 44 43 to 45 79 on the day
The stock has traded at 47 1600 at its highest and 44 4500 at its lowest during the past seven days |
CMCSA | StockBeat Roku Jumps as Macquarie Says Users Could Triple | Investing com Roku surged on Wednesday after Macquarie upgraded its outlook on the streaming giant on expectations that a move into international markets could see its user base triple within the next three years
Macquarie upgraded its rating on Roku to outperform from neutral and raised its price target on the stock to 130 from 110 sending shares of Roku NASDAQ ROKU soaring around 8
With Roku already established in the U S domestic market the road to pick up more users may lie abroad as the shift to connected television a trend well underway in the U S catches on internationally according to Macquarie
Roku can grow its user base by 200 to 300 to more than 70 million active accounts by 2022 from 31 million currently the bank estimated
The potential uptick in user growth would bolster the company s financial performance with Macquarie estimating that 72 million more subscribers by 2022 could drive platform revenue to 2 3 billion and generate total revenue of 2 7 billion
That is more than double the company s 2019 guidance for revenue in the range of 1 075 billion to 1 095 billion
The thumbs up from Macquarie cooled concerns somewhat about the threat of rising competition to Roku from bigger companies with Comcast NASDAQ CMCSA rolling out its Xfinity Flex streaming box and Facebook NASDAQ FB set launch its Portal TV streaming device on Nov 5
The concerns caused the shares to drop more than 44 from a Sept 9 peak of 176 55 to a low of 98 08 on Sept 27 The share have risen 19 since
As a result Roku is up 280 for the year and has an average price target of 131 according to consensus estimates from Investing com |
CMCSA | U S arrests counterterrorism analyst over leaks to journalists | By Sarah N Lynch and Andy Sullivan WASHINGTON Reuters A counterterrorism analyst with the U S Defense Intelligence Agency was arrested on Wednesday over charges he leaked classified materials about a foreign country s weapons system to two journalists in 2018 and 2019 the U S Justice Department said in federal court filings on Wednesday Information that 30 year old Henry Kyle Frese passed to the journalists appeared in at least eight different news stories the Justice Department alleged in an indictment unsealed in the U S District Court for the Eastern District of Virginia The two reporters to whom he leaked information were colleagues and one of them was apparently romantically involved with Frese the FBI said in court filings Those news stories relied on five separate intelligence reports issued between March and June 2018 Reuters could not immediately determine if Frese had obtained a lawyer in the case This marks the sixth federal case involving leaks of classified information in a little over two years A crackdown on leaking was initiated by the Trump administration in 2017 and led by then Attorney General Jeff Sessions The first case to emerge during the Trump administration involved Reality Winner a former intelligence analyst who divulged a report about Russian interference in the 2016 election to the Intercept news website Another similar case earlier this year involved a former intelligence analyst named Daniel Everette Hale who was also charged in connection with leaking information to the Intercept related to a U S drone strike program Until the criminal case against Winner no one had been charged with leaking classified information since 2013 said John Demers the head of the Justice Department s National Security Division in a call with reporters on Wednesday to announce the charges against Frese Our investigators and prosecutors nationwide will continue to devote themselves to media leak cases in order to protect our nation from the threat posed by the rare intelligence community official who breaks his or her oath he said During the course of its investigation the FBI learned that Frese was a follower on one of the reporter s public Twitter feeds and that Frese shared a residential address with the journalist from August 2017 through August 2018 The reporter with whom he lived is referred to in court records as Journalist 1 It appears that they were involved in a romantic relationship for some or all of that period of time the FBI agent wrote in a sworn statement The Justice Department did not identify the two journalists to whom he allegedly leaked or their news outlets but said they worked for two separate outlets owned by the same parent company Public Twitter messages referenced in the court filings indicate that Journalist 1 is Amanda Macias a national security reporter for CNBC The filings also reference public Twitter messages that indicate Journalist 2 is Courtney Kube a national security correspondent for NBC Both CNBC and NBC are owned by Comcast NASDAQ CMCSA Macias authored or co authored with Kube a number of articles during the timeframes cited in the court filings that reference U S intelligence reports and weapons systems of foreign nations such as China and Russia Neither reporter was accused of any wrongdoing Neither immediately responded to requests for comment An NBC spokesman declined to comment In the spring of 2018 the FBI alleges Journalist 1 called Frese on his cellphone The next day Frese started searching for an intelligence report involving topics unrelated to his work responsibilities Seven days later the reporter sent him a direct message on Twitter asking if he would speak with Journalist 2 who was a more senior and seasoned reporter He replied he was down to help Journalist 2 because doing so would help Journalist 1 progress in her career
Phone records show he communicated multiple times with both of them including on the same day an article was published containing classified information from the intelligence reports the FBI said |
CMCSA | Comcast Rises 3 | Investing com Comcast NASDAQ CMCSA rose by 3 03 to trade at 45 85 by 15 36 19 36 GMT on Friday on the NASDAQ exchange
The volume of Comcast shares traded since the start of the session was 14 72M Comcast has traded in a range of 44 64 to 45 86 on the day
The stock has traded at 45 8600 at its highest and 43 6100 at its lowest during the past seven days |
CMCSA | Bored by Brexit British TV starts Brexit free news channel | LONDON Reuters After three years of Brexit crisis Sky News is betting that some viewers are so bored by the divorce drama that there is a market for a channel dedicated to news that has nothing to do with Britain s exit from the European Union Ever since the 2016 referendum British politicians have been debating how on what terms and whether the United Kingdom should leave though with just over two weeks to go until the latest Brexit deadline of Oct 31 little is unclear A Reuters Institute for the Study of Journalism report this year showed that more than a third of people surveyed avoided the news with a majority of those who do citing Brexit as the main reason Sky News Brexit Free will cater to those who find the Brexit carousel less than scintillating the head of Sky News John Ryley said It s something we know our viewers will find valuable Ryley said in a statement Brexit is an historic story that has a major impact and we will continue to give it comprehensive coverage The new channel simply gives people the option to take a break from Brexit apply a filter to their headlines and hear about issues away from Westminster and Brussels with a focus on hard hitting original journalism The channel will be on air from 1700 1600 GMT to 2200 on weekdays on the Sky pay tv platform
U S cable company Comcast O CMCSA emerged triumphant in a long running battle to buy Sky when it beat Rupert Murdoch s Twenty First Century Fox O FOXA in an auction last year |
WFC | Tegna 1 6 as Wells Fargo rates Outperform on upside | Tegna NYSE TGNA is up 1 6 after an upgrade to Outperform at Wells Fargo NYSE WFC Analyst Marci Ryvicker boosted the price target on the company to 19 from 14 implying 32 upside from today s price Between the broadcast group s exposure to upcoming Super Bowl and Olympics on NBC and a political spending uptick expected for some contentious midterm elections this fall she sees heavy potential upside Now read |
WFC | Asia currencies to pare 2017 gains but growth to cushion them Reuters poll | By Vivek Mishra BENGALURU Reuters Asian currencies are set to pare gains this year that they made in 2017 as the Federal Reserve raises interest rates further and Asian central banks proceed cautiously cushioned by solid growth expectations a Reuters poll showed After four years of depreciation Asia FX bounced back in 2017 owing in part to a rebound in exports a synchronized global recovery and investors reaching again for more risk The South Korean won among the best performers in Asia last year rose over 11 percent against the dollar while others have all appreciated more than 6 percent But according to over 60 foreign exchange strategists polled this week most major Asian currencies will slip back a few percentage points by the end of this year Only some are expected to make modest gains How Asian currencies fare in 2018 depends on the effects of policy normalization in the major advanced economies on global liquidity and ultimately on portfolio flows to Asia and a strengthening and broadening in Asian economic growth with export recovery spilling over into domestic demand wrote strategists at ANZ in their 2018 FX outlook note We see growth winning out in the end though the currency moves in the region will be more diffused with growth sensitive currencies outperforming while high yielding currencies and those with external deficits underperforming The dollar index DXY which measures the greenback against a basket of six currencies lost about 10 percent in 2017 owing to uncertainty over whether President Donald Trump s administration would be able to pass sweeping tax cuts Despite that success just before the end of 2017 traders remain unsure about the economic impact of those cuts which will cost over 1 trillion in additional borrowing over a decade The greenback s ability to recover losses made in 2017 in the current year depends on the Fed s interest rate pathway Despite the Fed hiking rates three times last year the benchmark 10 year Treasury yield failed to rise ending 2017 at 2 41 percent a tad lower than 2016 s close of 2 43 percent But if yields go up in 2018 on the back of expected further policy tightening by the Fed Asian currencies could start to lag as investors rebalance their portfolios After gaining over 6 percent last year China s yuan is forecast to depreciate slightly to 6 60 per dollar in six months and to 6 60 by end 2018 from Thursday s close of 6 49 the poll showed The yuan rose to its firmest against the U S dollar in nearly four months on Tuesday breaching a key threshold supported by a stronger fixing and broad dollar weakness During the recent phase of U S dollar weakness the government has allowed a strong appreciation against the dollar while the CNY has moved more or less sideways against the currency basket since April said Ulrich Leuchtmann research head at Commerzbank DE CBKG in a note to clients On Wednesday the People s Bank of China allowed the yuan mid point reference rate to appreciate to its highest since May 2016 of 6 49 per dollar which is 6 percent more than its closing value that year The volatility in USD CNY is likely to remain higher in the future The government is likely to react more sensitively to a CNY devaluation than to an appreciation in order to prevent a capital flight from flaring up again after it was only stopped by extensive controls on capital movements in 2015 and 2016 Leuchtmann said India s rupee is also forecast to depreciate marginally against the dollar to 64 50 per dollar in six months and 65 00 in a year compared with Thursday s close of 63 39 If current account deficits were to get too large India could be vulnerable to sudden episodes of panic by foreign investors that could lead to sharp declines in the value of the Indian rupee said Wells Fargo NYSE WFC strategist Erik Nelson However we think for the medium to long term the outlook is pretty constructive said Nelson who is optimistic that India s economy will perform better after a slowdown last year That was induced in part by a shock removal of most of India s currency in circulation announced in late 2016 as well as the implementation of a new national Goods and Services Tax We did have some disruptions initially but now I think we are probably going to start to reap the rewards or benefits of those reforms particularly the GST tax Nelson added
For other stories from the global FX poll Polling by Shaloo Shrivastava and Khushboo Mittal Editing by Robin Pomeroy |
CMCSA | Britain to investigate 5 billion U S takeover of defense firm Cobham | By Kate Holton LONDON Reuters Britain will investigate the national security impact of the purchase of defense company Cobham by U S private equity firm Advent International potentially delaying or even blocking the 5 billion deal Business minister Andrea Leadsom s move on Wednesday is not unusual where there are potential security concerns and follows British government intervention in the pending acquisition of satellite group Inmarsat by an international private equity consortium that includes U S firm Warburg Pincus Leadsom has issued a European intervention notice calling for a report from the Competition and Markets Authority CMA by Oct 29 to determine whether Cobham the maker of air to air refueling equipment should be sold The government could decide the deal then needs a full inquiry due to Cobham s role in supporting aircraft such as the F 35 Joint Strike Fighter and Eurofighter Typhoon as well as advanced naval vessels satellites and military vehicles Other deals investigated on national security grounds have often been cleared after undertakings from the buyer The CMA will now prepare a report on the national security aspects of the proposed transaction the business department said This is a statutory process to ensure national security implications of a proposed sale are fully assessed One of the most open economies in the world Britain has sold some highly innovative firms to foreign buyers in recent years including the semiconductor designer Arm to Japan s Softbank and pay TV group Sky to Comcast NASDAQ CMCSA The London Stock Exchange is trying to fend off a 39 billion takeover approach launched this month by Hong Kong Exchanges and Clearing SPECIAL STATUS Cobham launched in the 1930s by a British adventurer and explorer employs 10 000 people It has struggled in recent years issuing a string of profit warnings in 2016 and 2017 Russ Mould investment director at platform AJ Bell said investors could be disappointed in the timing of the intervention coming two days after Cobham shareholders approved the deal Now investors are in limbo he said Although a muted share price reaction with the shares trading not too far from Advent s offer level suggests rightly or wrongly that the market expects the deal to go through Advent has a track record in buying British technology having snapped up electronics company Laird for 1 65 billion last year and Cobham investors approved the takeover on Monday Some Cobham operations such as its Advanced Electronic Solutions unit have special security agreement status that allows them to bid for U S defense contracts Cobham Chief Executive David Lockwood said on Monday that requirement would disappear under Advent ownership enabling the group to combine infrastructure and share knowledge more quickly and easily within the company Lockwood said he had already held some discussions with government about the takeover but would not go into details Advent is committed to being a responsible steward of Cobham encouraging its future growth and success a spokesman for the U S group said We will continue to engage constructively and cooperatively with the UK Government in this part of their review
Cobham shares slipped 0 5 with the stock at 160 pence per share just below the offer price of 165 pence |
CMCSA | Comcast CMCSA Stock Moves 1 06 What You Should Know | Comcast CMCSA closed at 44 05 in the latest trading session marking a 1 06 move from the prior day This move was narrower than the S P 500 s daily loss of 1 79 Elsewhere the Dow lost 1 86 while the tech heavy Nasdaq lost 1 56
Prior to today s trading shares of the cable provider had gained 1 46 over the past month This has outpaced the Consumer Discretionary sector s loss of 0 95 and the S P 500 s gain of 0 72 in that time
Wall Street will be looking for positivity from CMCSA as it approaches its next earnings report date This is expected to be October 24 2019 In that report analysts expect CMCSA to post earnings of 0 76 per share This would mark year over year growth of 16 92 Our most recent consensus estimate is calling for quarterly revenue of 27 35 billion up 23 54 from the year ago period
For the full year our Zacks Consensus Estimates are projecting earnings of 3 09 per share and revenue of 109 96 billion which would represent changes of 21 18 and 16 35 respectively from the prior year
Investors might also notice recent changes to analyst estimates for CMCSA These recent revisions tend to reflect the evolving nature of short term business trends With this in mind we can consider positive estimate revisions a sign of optimism about the company s business outlook
Our research shows that these estimate changes are directly correlated with near term stock prices Investors can capitalize on this by using the Zacks Rank This model considers these estimate changes and provides a simple actionable rating system
The Zacks Rank system which ranges from 1 Strong Buy to 5 Strong Sell has an impressive outside audited track record of outperformance with 1 stocks generating an average annual return of 25 since 1988 The Zacks Consensus EPS estimate has moved 0 15 lower within the past month CMCSA is currently sporting a Zacks Rank of 3 Hold
Valuation is also important so investors should note that CMCSA has a Forward P E ratio of 14 42 right now For comparison its industry has an average Forward P E of 17 97 which means CMCSA is trading at a discount to the group
We can also see that CMCSA currently has a PEG ratio of 1 21 This popular metric is similar to the widely known P E ratio with the difference being that the PEG ratio also takes into account the company s expected earnings growth rate The Cable Television industry currently had an average PEG ratio of 2 18 as of yesterday s close
The Cable Television industry is part of the Consumer Discretionary sector This group has a Zacks Industry Rank of 204 putting it in the bottom 20 of all 250 industries
The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors Our research shows that the top 50 rated industries outperform the bottom half by a factor of 2 to 1
Be sure to follow all of these stock moving metrics and many more on Zacks com |
CMCSA | Comcast CMCSA Stock Moves 1 08 What You Should Know | Comcast CMCSA closed the most recent trading day at 44 11 moving 1 08 from the previous trading session This move was narrower than the S P 500 s daily loss of 1 56 Elsewhere the Dow lost 1 19 while the tech heavy Nasdaq lost 1 67
Heading into today shares of the cable provider had lost 3 94 over the past month lagging the Consumer Discretionary sector s loss of 3 72 and the S P 500 s loss of 1 22 in that time
CMCSA will be looking to display strength as it nears its next earnings release which is expected to be October 24 2019 The company is expected to report EPS of 0 75 up 15 38 from the prior year quarter Our most recent consensus estimate is calling for quarterly revenue of 27 20 billion up 22 87 from the year ago period
Looking at the full year our Zacks Consensus Estimates suggest analysts are expecting earnings of 3 05 per share and revenue of 109 68 billion These totals would mark changes of 19 61 and 16 05 respectively from last year
It is also important to note the recent changes to analyst estimates for CMCSA These revisions help to show the ever changing nature of near term business trends With this in mind we can consider positive estimate revisions a sign of optimism about the company s business outlook
Based on our research we believe these estimate revisions are directly related to near team stock moves To benefit from this we have developed the Zacks Rank a proprietary model which takes these estimate changes into account and provides an actionable rating system
Ranging from 1 Strong Buy to 5 Strong Sell the Zacks Rank system has a proven outside audited track record of outperformance with 1 stocks returning an average of 25 annually since 1988 Within the past 30 days our consensus EPS projection has moved 1 15 lower CMCSA is currently a Zacks Rank 3 Hold
Investors should also note CMCSA s current valuation metrics including its Forward P E ratio of 14 64 This valuation marks a discount compared to its industry s average Forward P E of 18 04
Also we should mention that CMCSA has a PEG ratio of 1 23 This metric is used similarly to the famous P E ratio but the PEG ratio also takes into account the stock s expected earnings growth rate The Cable Television was holding an average PEG ratio of 2 37 at yesterday s closing price
The Cable Television industry is part of the Consumer Discretionary sector This group has a Zacks Industry Rank of 183 putting it in the bottom 29 of all 250 industries
The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors Our research shows that the top 50 rated industries outperform the bottom half by a factor of 2 to 1
To follow CMCSA in the coming trading sessions be sure to utilize Zacks com |
WFC | For 2018 s Best Carry Trades Wall Street Looks to Latin America | Bloomberg Investors are targeting Latin America for the most profitable carry trades in 2018 betting a region that lagged behind peers last year is poised for a comeback
Wall Street firms including Banco Bilbao Vizcaya Argentaria SA Wells Fargo NYSE WFC Co and Credit Agricole PA CAGR SA cite the region s high interest rates and forecasts for faster economic growth In Argentina for example a monetary policy rate of 28 75 percent is the highest in the world
The banks are expecting a reversal from last year when currency appreciation was the primary driver for the most profitable currency trades long positions in the Polish zloty and the Czech koruna funded by dollars This time around they re anticipating that Latin American interest rates will provide the biggest returns even as forecasts call for most of the region s currencies to slip
Latin America stands out said Eric Viloria a strategist at Wells Fargo in New York Even after rate cuts in Brazil the interest rates are still relatively high
Brazil s real offered the top carry return in 2016 when interest rates were above 14 percent most of the year handing investors gains of 37 percent Last year the central bank slashed borrowing costs to a record 7 percent resulting in a carry return of just 5 5 percent Still the benchmark rate is higher than in peers like South Africa India or Indonesia
Viloria also highlights Mexico where interest rates were lifted to 7 25 percent in December to fight surging inflation and surpassed Brazil s rate for the first time ever Traders are wagering Mexico s rate will climb to 8 5 percent by the end of 2018
Alejandro Cuadrado the global head of foreign exchange at BBVA MC BBVA in New York has the Argentine peso as his top carry pick for 2018 even as he forecasts a small depreciation The country offered the best carry trade return in 2011 2013 2014 and 2015 but last year fell to 31rd place in the ranking as the peso s 15 percent slide trimmed carry gains to 3 4 percent
This is backed by the persistent hawkish bias of the central bank he said
Credit Agricole SA strategists led by Sebastien Barbe wrote in a Dec 22 report that emerging market currencies are likely to appreciate slightly versus the dollar this year As interest rates remain relatively high they see capital flows continuing to head toward developing nations
This is not the end of the EM carry trade yet the strategists wrote |
WFC | Dick s Sporting Goods jumps after Wells Fargo lift | Wells Fargo NYSE WFC upgrades Dick s Sporting Goods NYSE DKS to an Outperform rating after having the retailer set at Market Perform Analyst Tom Nikic points to tax reform benefits for Dick s 100 U S store base and sees industry consolidation helping the company nab more market share The Wells team lifts its price target on Dick s to 35 from 26 Sources CNBC and Bloomberg Shares of Dick s are up 3 12 premarket to 30 41 Now read |
WFC | U S factory construction data brighten economic outlook | By Lucia Mutikani WASHINGTON Reuters U S factory activity increased more than expected in December boosted by a surge in new orders growth in a further sign of strong economic momentum at the end of 2017 The economy s robust fundamentals were also underscored by other data on Wednesday showing construction spending rising to a record high in November amid broad gains in both private and public outlays Given the bullish growth outlook economists expect the Federal Reserve will raise interest rates in March after increasing borrowing costs three times last year Strong manufacturing and construction data confirm the U S economy is firing on all cylinders at the turn of the year said Sal Guatieri a senior economist at BMO Capital Markets in Toronto The Fed remains solidly on track to lift rates again in March and two more times this year with possible upside risk if growth doesn t simmer down The Institute for Supply Management ISM said its index of national factory activity jumped to a reading of 59 7 last month the second highest reading in six years from 58 2 in November A reading above 50 indicates growth in manufacturing which accounts for about 12 percent of the U S economy The survey s new orders sub index shot up 5 4 points to 69 4 the highest reading since January 2004 Manufacturers also reported an increase in export orders While a measure of factory employment fell 2 7 points last months it remained at lofty levels consistent with an expansion in manufacturing payrolls Factories also reported paying more for raw materials with the survey s prices index jumping by 3 5 points Rising raw material prices bolster the view that inflation will pick up in 2018 Manufacturing is likely to get a boost this year from a 1 5 trillion tax cut approved by the Republican controlled U S Congress last month The overhaul of the tax code the most sweeping in 30 years slashed the corporate income tax rate to 21 percent from 35 percent Business spending surged in anticipation of the corporate tax cuts Recent weakness in the dollar and a strengthening global economy are expected to buoy exports of U S made goods which would underpin manufacturing It is more than just domestic developments that are lifting animal spirits said John Silvia chief economist at Wells Fargo NYSE WFC Securities in Charlotte North Carolina A number of the published industry comments focused on a pick up in demand from overseas The dollar DXY was trading higher against a basket of currencies U S stock indexes hit record highs and prices of U S Treasuries rose BULLISH OUTLOOK The ISM survey showed manufacturers upbeat about the economic outlook Machinery producers reported strong international sales and computer and electronic products manufacturers said they were seeing a ramp up with companies releasing early 2018 spend now Food beverage and tobacco products manufacturers however struck a more cautious note saying that while the economy and business were strong signals of headwinds in 2018 are persistent In a separate report on Wednesday the Commerce Department said construction spending rose 0 8 percent to an all time high of 1 257 trillion in November It advanced 2 4 percent on a year on year basis The manufacturing and construction reports added to data ranging from the labor market to housing and consumer spending in sketching a robust picture of the U S economy Following Wednesday s data the Atlanta Fed raised its fourth quarter gross domestic product estimate by four tenths of a percentage point to an annualized rate of 3 2 percent The economy grew at a 3 2 percent pace in the third quarter In November spending on private residential projects soared 1 0 percent to the highest level since February 2007 after rising 0 3 percent in October The increase was in line with a recent jump in homebuilding and supported expectations that housing would boost economic growth in the fourth quarter after being a drag on GDP since the April June period Spending on nonresidential structures rebounded 0 9 percent in November after falling 0 2 percent in the prior month Overall spending on private construction projects climbed 1 0 percent in November to a record high That followed a 0 3 percent increase in October Outlays on public construction projects rose 0 2 percent in November after jumping 3 5 percent in October Economists however expect modest gains in public spending in the months ahead
Many state budgets are being squeezed by weaker than expected revenues and face other budgetary pressures related to things like health care said Nancy Vanden Houten a senior economist at Oxford Economics in New York Also the impact of the new tax law on state and local budgets is not yet clear |
WFC | WWE 3 on Wells Fargo upgrade | World Wrestling Entertainment NYSE WWE 3 premarket after Wells Fargo NYSE WFC upgraded the stock to Outperform from Market Perform noting it checks all of the boxes for us and we believe it has a clear path of catalysts through 2018 The firm also raised the price target on shares to 43 from 23 Now read |
WFC | Wells Fargo Sprint CFO change feeds spending narrative | Sprint NYSE S is off 4 4 since announcing a changeover in its chief financial officer this morning with former Altice CEO Michel Combes taking over for Tarek Robbiati and signaling a new phase of transformation Wells Fargo NYSE WFC s Jennifer Fritzsche isn t surprised by the downturn on the news Unfortunately we believe this feeds the narrative of concern that S needs to spend on network and continue to aggressively cut costs she writes Robbiati did as asked in lowering cost of capital but Combes expertise Sprint calls hime a turnaround strategist will be useful at this point in Sprint s evolution she says Key questions will be be What is Combes view on financing and funding of S s capx initiatives and continued ability to cut costs Now read |
CMCSA | Comcast Falls 3 | Investing com Comcast NASDAQ CMCSA fell by 3 02 to trade at 42 44 by 15 36 19 36 GMT on Friday on the NASDAQ exchange
The volume of Comcast shares traded since the start of the session was 10 16M Comcast has traded in a range of 42 45 to 43 83 on the day
The stock has traded at 44 4600 at its highest and 42 0500 at its lowest during the past seven days |
CMCSA | Kelly Clarkson hoping to keep it real for new U S talk show | By Rollo Ross
LOS ANGELES Reuters Kelly Clarkson the first American Idol launches her own talk show next week with a mix of music celebrities and ordinary people that she hopes will be more uplifting than the daily news coming out of the United States
The Kelly Clarkson Show launching on Comcast NASDAQ CMCSA Corp s NBC on Monday as a daily afternoon show will add to a resume of the Because of You singer that has included actress Grammy winning singer mentor on The Voice and children s book author
I just want everybody to be here and having a good time and it to be an hour of television that isn t depressing like the news Clarkson said
Clarkson who worked as a cocktail waitress before shooting to fame in 2002 after winning the first season of the singing show American Voice admits she is not a traditional choice to host a talk show but hopes that is what will make the show unique
Although I am of pop culture I m not really in it a lot I lead a very normal life outside of work the 37 year old mother of two said
I d like to see some actors sitting next to some baking champion sitting next to some artists So it s gonna be a mix of celebrity and real people she added
Clarkson plans to open every show by singing a cover version of a song by an artist she admires everyone from Aretha Franklin to Cardi B
Clarkson has not forgotten her roots She hopes to reunite the original American Idol panel of judges Simon Cowell Paula Abdul and Randy Jackson for her show
I love all of them They ve always been very supportive of me Look at all four of us Nobody knew where we would all be now Life is so weird where it leads you you never know And I just think it d be a really interesting show she said |
CMCSA | Comcast Rises 3 | Investing com Comcast NASDAQ CMCSA rose by 3 03 to trade at 45 20 by 12 41 16 41 GMT on Wednesday on the NASDAQ exchange
The volume of Comcast shares traded since the start of the session was 9 71M Comcast has traded in a range of 44 22 to 45 22 on the day
The stock has traded at 45 2200 at its highest and 42 5500 at its lowest during the past seven days |
WFC | Wells Fargo tests new rule on metals | Fighting the last war the OCC earlier this year put in place a rule prohibiting banks from placing bets on the prices of metals This hasn t at all stopped banks from continuing with their active metals leasing business it s just that they now do it through non bank affiliates who aren t backstopped by federal deposit insurance Wells Fargo NYSE WFC however wants to bring some of that business back inside its banking division reports Reuters and has asked for regulatory permission to do a platinum leasing deal for an energy client Why the need to do it under the bank umbrella Financing costs for the bank would be cheaper than that for the non bank unit allowing Wells to offer better terms to customers Now read |
WFC | Marijuana firms in cloudy haze over banking woes | By Aparajita Saxena Reuters Zach Lazarus chief executive officer of A Green Alternative a marijuana dispensary in San Diego California has lost count every time he re opened a bank account after it was closed because of his connection to the cannabis industry Lazarus has had to play a game of whack a mole with banks likening his frustrations to a popular arcade game in which a player repeatedly gets rid of something only to have it re appear somewhere else We have had Chase Manhattan and Wells Fargo NYSE WFC shut us down my wife s personal bank accounts and credit cards have been shut down as well all because I m in the cannabis industry he says Lazarus and other marijuana business owners in the 8 billion industry resort to cash only transactions for business and to pay employees because they cannot get access to banks Despite making legal inroads in the United States with California the latest state to legalize marijuana for recreational use starting Jan 1 owners still feel the pinch The main problem is the classification of marijuana as a Schedule I controlled substance by the U S Food and Drug Administration alongside heroin LSD and ecstasy making it almost impossible to get banking services Banks are governed by federal laws and doing business or extending services to the firms means tougher scrutiny often at significant costs as banks have to do their own due diligence to prove transactions are legal They are required to prove that the firms are not selling to minors funding crime groups and not using the pretext of selling marijuana to push illegal drugs among other things A poll conducted by industry publication Marijuana Business Daily in 2015 showed 60 percent of the companies operating in the cannabis industry reported not even having a basic bank account UNDERGROUND ECONOMY The void makes it hard for cannabis companies to conduct basic financial transactions such as deposit money receive federal insurance or pay taxes Most marijuana companies have a courier service or a Brinks truck or a big wheelbarrow full of cash that they send to the Internal Revenue Service to pay their taxes says Stuart Titus CEO of California based Medical Marijuana Inc PK MJNA With an estimated 165 000 to 230 000 full and part time workers according to Marijuana Business Daily many marijuana business owners pay their employees in cash It is basically a kind of underground cash based economy said Titus Sapphire Blackwood director of public affairs for the Association of Cannabis professionals says she got paid in cash at her last firm a San Diego based cannabis consulting company Because I get paid in cash and even though I did no illegal activity I ve had to deposit so much cash every week and every so often I felt like I was being stared at by the banks It s frightening she said Blackwood s current firm also had banking problems All the deposit accounts were closed because the word cannabis was in the name of the company she said SHADY WORKAROUNDS Workarounds exist but most are borderline unethical A widely used practice is to create a shell or a holding company whose operations are acceptable to banks and conduct financial transactions through the holding company In many states that have legalized cannabis pot companies deposit cash under a different description says Tim McGraw CEO of Canna Hub a California based real estate development and property management company for the cannabis industry A lot of operators set up accounts as real estate management companies or call themselves medical marijuana companies when they are anything but McGraw added Others use personal bank accounts to deposit cash earned from the sale of products wire payments to employees and pay companies However California s state treasurer John Chiang wants the state to consider creating a public government owned bank that could serve cannabis companies Chiang s office formed a group made up of representatives from law enforcement agencies banks taxing authorities local government and the cannabis industry It held several meetings with owners to discuss ways to alleviate banking challenges and make information more available to banks for better transparency Talks have also begun to form a multi state group to lobby Congress to ease federal regulations for marijuana companies and remove the Schedule I drug classification But it will be an uphill battle In November Attorney General Jeff Sessions at a congressional hearing said former President Barack Obama era guidelines on cannabis will remain meaning even though a state can legalize marijuana it will continue to be illegal on the federal level
To view a graphic on Legalization legislation jpg click on this link |
WFC | Gold ETFs Awaiting Bullish Reversals In Second Half Of 2017 | Gold ETFs have had a roller coaster ride so far in 2017 The largest gold ETF SPDR Gold Shares HK 2840 V GLD has gained about 5 9 in the year to date frame as of July 4 2017 while the fund shed about 3 in the last three months In fact gold logged its of this year in June
The latest patch of dismal performance can be attributed to rising rate worries The Fed has hiked interest rates twice this year and may go for another hike by the end of 2017 Ideally this should boost the greenback and hurt the metal s investing
Also global markets remained steady and lured away more investors to equities from gold If this was not enough parts of Donald Trump s agenda including his travel ban have been approved lately This has spurred investors confidence in the future of the much awaited tax reform and an upbeat equity market This in turn has hurt gold investing read
However the downing trend may change in the second half of 2017 We ll tell you why
Safe Haven Demand
The wind beneath the wings could be a rise in safe haven demand in the wake of heightened volatility in the global market The third quarter of 2017 started with concerns including North Korea s launch and the possibility of a referendum in France if the key institutional reforms are not quickly approved by the parliament
Since gold is viewed as a hedge against market turmoil its prices recoiled from seven week lows on July 4 following North Korea s missile launch If political risks take the upper hand in the balance of the year be it related to Trump s policy uncertainty or Europe s election uncertainty gold ETFs may gain strength GLD NYSE GLD was up about 0 4 on July 5 read
If Trump Rally Stalls
So far the U S market rally has been propelled by Trump s pledges for fiscal reflation However it is to be seen how many of the vows will be transformed into reality given the increasing political disagreement
If economic measures taken by Trump fall short of expectations there could be a marked correction in stocks Volatility levels might flare up opening up scope for a gold rush Institute senior global equity strategist has already indicated that the rally in the S P 500 may slow down in the second half of the year
UBS Group AG s wealth management unit noted that gold may trade in a range of an ounce in the short term UBS believes that the pickup in nominal rates will be equally matched by the pickup in inflation Decent demand this year and weaker output and a still subdued dollar may bode well for the metal As per State Street Global Advisors gold may swing from 1 150 to 1 350 in the second half depending on global economic conditions
Will India s GST Rollout Boost Illegal Sales
India is one of the key gold consumers The country launched GST goods and services tax on July 1 in order to fill in for unite more than a dozen of indirect taxes levied by state and central governments Under the GST norm taxes on gold increased to 3 from 1 2 previously
The move may boost illegal transactions in the black market as per an article published on A hike in import duties to 10 in 2013 has already increased gold smuggling in India As per Reuters the World Gold Council estimates that 120 tons of gold was smuggled into India in 2016 Now GST could trigger both smuggling and illegal sales If this happens the overall demand picture should not be that hurt due to higher taxes read
ETFs in Focus
Investors having faith in the above said fundamentals may play ETRACS CMCI Gold Total Return ETN GLD ETFS Physical Swiss Gold Shares ETF and Van Eck Merk Gold Trust ETF
Want key ETF info delivered straight to your inbox Zacks free Fund Newsletter will brief you on top news and analysis as well as top performing ETFs each week |
CMCSA | Five things to look for in Twitter s results | By Arriana McLymore
NEW YORK Reuters Twitter Inc N TWTR will have a chance to detail its plans to grow users and ad dollars on Friday when it releases its second quarter earnings before the market opens
Investors will have their eyes on Twitter s monetizable daily active users mDAUs its revenues ad growth and products live steam partnerships and updates to its prototype app Twttr
Below is a closer look at each in t DAILY ACTIVE USERS
Twitter reported 134 million average mDAUs in its first quarter an 11 year over year increase Analysts at Cowen expect a 28 million rise in mDAUs in the second quarter a 1 increase
Twitter began reporting mDAUs a metric that tracks the number of daily users logging on to the platform instead of monthly active users in the first quarter of this year The new metric is supposed to help investors and advertisers better understand engagement on Twitter
Twitter s introduction of mDAUs drew skepticism however some analysts think mDAUs paint a better picture of engagement Investors need to keep an eye on Twitter s mDAU growth and how long people are using the app
REVENUE
Ads make up a bulk of Twitter s revenue while data licensing are its other major revenue source Twitter s first quarter saw revenue rise 18 year over year
Twitter s revenues are slated for a slight 1 rise in its second quarter from 778 million to 832 million according to Refinitiv s Eikon Investors should watch out for Twitter s second quarter ad revenue growth as the company plans to launch more ad products
AD PRODUCTS
Twitter said last quarter that it planned to improve its ad formats and promotion products on its mobile app a move that could make more advertisers happy
They re getting more attuned with their users preferences said analyst Michael Pachter at Wedbush Securities They re making ads more likely to be seen
Twitter CEO Jack Dorsey said the company tailors live content to users based on whom they follow
Investors should watch out for new ad products and how they mesh with advertisers needs which could be a catalyst in Twitter s growth
LIVE STREAM PARTNERSHIPS
Twitter s live video deals with NBCUniversal O CMCSA and the National Basketball Association point to the company s efforts to be a conversation hub as it focuses on elevating content that gets people to tweet
Twitter wants to make following events and interests as easy as following an account Bigger and better partnerships for the live streams could catch advertisers attention
Some experts are not convinced that the live streams will have a major impact on daily users or ads as the content is generally available on television and other platforms
Investors need to look for other major brands partnering with Twitter and the amount of engagement live streams are able to pull in
THE PROTOTYPE APP
Wall Street is wondering about Twitter s next steps for its prototype app Twttr The company launched the app in March to give users a place to test out features and designs The invite only platform is at times a peephole into Twitter s upcoming tools and an additional avenue for advertisers |
CMCSA | Comcast Falls 3 | Investing com Comcast NASDAQ CMCSA fell by 3 02 to trade at 41 36 by 11 40 15 40 GMT on Monday on the NASDAQ exchange
The volume of Comcast shares traded since the start of the session was 6 19M Comcast has traded in a range of 41 35 to 42 20 on the day
The stock has traded at 45 0800 at its highest and 41 3400 at its lowest during the past seven days |
CMCSA | Comcast Falls 3 | Investing com Comcast NASDAQ CMCSA fell by 3 15 to trade at 40 74 by 09 50 13 50 GMT on Wednesday on the NASDAQ exchange
The volume of Comcast shares traded since the start of the session was 2 51M Comcast has traded in a range of 40 72 to 41 54 on the day
The stock has traded at 44 2600 at its highest and 40 7100 at its lowest during the past seven days |
CMCSA | Hollywood studio cancels The Hunt movie release after criticism | By Alex Dobuzinskis LOS ANGELES Reuters Universal Pictures on Saturday canceled the release of The Hunt a satirical thriller about a group of Americans who are captured to be hunted and killed for sport following apparent criticism by President Donald Trump and a recent series of mass shootings The Comcast Corp NASDAQ CMCSA division had held back on marketing the film slated for release on Sept 27 after the shootings in El Paso Texas and Dayton Ohio last week It gave no reason for the cancellation A Universal Pictures representative did not return an email seeking comment We stand by our filmmakers and will continue to distribute films in partnership with bold and visionary creators like those associated with this satirical social thriller but we understand that now is not the right time to release this film Universal said in a statement Trump taking to Twitter on Friday criticized liberal Hollywood and an unnamed film with a pending release The movie coming out is made in order to inflame and cause chaos Trump tweeted Trailers released online for the film depicted a group of wealthy villains orchestrating the open field hunting of several Americans held against their will The film came from Blumhouse Productions which has produced a number of popular horror films such as The Purge and Get Out A Blumhouse representative did not immediately respond to calls on Saturday The Hollywood Reporter citing details in the film s screenplay reported earlier this week that a character at one point called the people being hunted deplorables In 2016 then Democratic presidential nominee Hillary Clinton said half the supporters of her Republican rival Trump belonged in a basket of deplorables of people who were racist homophobic sexist xenophobic or Islamophobic Since then some Trump supporters have used the term deplorables as a badge of honor Trailers for The Hunt which featured heavy use of firearms circulated online in media reports as the United States was dealing with the aftermath of a number of mass shootings including in El Paso where 22 people many of them Hispanic were killed The accused gunman in El Paso confessed while surrendering and told police he was targeting Mexicans according to a police affidavit released on Friday |
CMCSA | Comcast Rises 3 | Investing com Comcast NASDAQ CMCSA rose by 3 34 to trade at 43 88 by 09 48 13 48 GMT on Tuesday on the NASDAQ exchange
The volume of Comcast shares traded since the start of the session was 2 30M Comcast has traded in a range of 42 47 to 43 89 on the day
The stock has traded at 43 9200 at its highest and 40 7200 at its lowest during the past seven days |
CMCSA | Dot com On Steroids Roku s Stock Crashes 20 In One Day | It didn t take long for high flying Roku NASDAQ ROKU to nose dive after it skyrocketing more than 500 over the past eight months Roku a streaming equipment provider saw its stock price plunge 20 today after fears of increased competition from Comcast NASDAQ CMCSA and Facebook NASDAQ FB The deathblow to Roku began on Wednesday as it s stock price fell 13 when Comcast released news that it would provide its customers with free streaming players
On Thursday Roku s stock recovered a bit but then fell another 20 on Friday as Pivotal Research Group announced a 60 sell recommendation Roku opened on Friday morning at 127 but then fell below 104 before closing at 108
Now if you watched my last video China Silver Wildcard Where s Silver Going I posted a chart on Roku and explained why it wasn t worth 170 a share The chart below was made on September 5th when Roku closed at 166
As I stated in the video Roku had skyrocketed 530 over the past eight months from 27 to 170 I also showed Roku s financial Q2 2019 statement where I pointed out that ROKU continued to lose money and forecasted that Roku s price is going to collapse at some point because it s not worth that sort of extreme valuation
Here is Roku s weekly chart
After Roku hit 175 in just two weeks it crashed 67 lower to 108 05 Roku was a perfect Short Trade because the stock was extremely overbought and would have fallen at some point regardless of the news of Comcast and Facebook FB competition That news release was just an excuse for investors who bought at much lower prices to CASH IN ON PROFITS before the stock fell even further
If we take a look at Roku s Daily chart we can see that it BROKE below a critical trend line
Because Roku fell below that lower BLUE DASHED trend line it will likely continue lower after correcting back and touching that lower trend line I believe Roku will probably fall back to the 75 range where it has strong support level
If we look at the Roku weekly chart it also shows that 75 Support Level
I wasn t surprised that Roku fell this much because anytime a stock shoots up that quickly it usually experiences a significant and steep correction
I wanted to post this article on Roku to show the sort of insanity and trading that is plaguing the markets |
WFC | Minor layoffs at Wells mortgage unit | The bank has trimmed about 60 from its mortgage operation as business slows 59B in mortgages in Q3 this year vs 70B a year ago and as it continues to deal with the fallout from a number of misdeeds including charging improper fees to mortgage customers for interest rate commitments Still the job cuts are fairly inconsequential given total Wells Fargo NYSE WFC headcount of 268K at the end of Q3 Now read |
WFC | Fed s Quarles to recuse himself from Wells Fargo matters | WASHINGTON Reuters Randal Quarles the top Federal Reserve official tasked with policing Wall Street said on Friday that he would recuse himself from any matters concerning Wells Fargo NYSE WFC Co the nation s third largest bank Wells Fargo which last year paid 190 million to settle a phony accounts scandal is under investigation by two other financial agencies over whether the bank charged its customers too much for auto insurance and mortgages Quarles who joined the Fed on October 13 is regarded as the country s top banking regulator and will be a critical voice as the central bank rethinks how it approaches bank supervision He said in a memo that he and his family had sold their financial interests in Wells Fargo and repaid a business loan to the bank meaning he was legally allowed to oversee the lender But the former Wall Street lawyer and private equity investor said he would still bow out from all Fed decisions on the bank I have made this decision in order to avoid even the appearance of a conflict Quarles wrote the Fed s chief counsel Mark Van Der Weide A Wells Fargo spokeswoman declined to comment on Quarles recusal Quarles has ties to Wells Fargo through his father in law Spencer Eccles Eccles was the head of First Security Corporation when the Utah bank was bought out by Wells Fargo in a 2 9 billion deal in 2000 Since then Eccles has held a non executive position with Wells Fargo according to several online biographies Mr Eccles is Chairman Emeritus of the Intermountain Banking Region of Wells Fargo Co according to an online biography of trustees for Intermountain Healthcare a nonprofit based in Salt Lake City The Wells Fargo spokeswoman declined to make any comment on the position of chairman emeritus A Federal Reserve spokesman said the emeritus title was honorary and that Eccles has no formal role at the bank In September the New York Federal Reserve faulted its president William Dudley for not disclosing that his sister in law worked for Wells Fargo Conflicts of interest have long been a point of contention between those who argue regulators benefit from hiring people with real world experience and critics who say the revolving door makes it impossible to regulate effectively That debate has heightened under U S President Donald Trump who has stocked his administration with former business executives and pledged to slash regulations |
WFC | Senator Warren hits out at effort to politicize U S consumer agency | By Pete Schroeder and Michelle Price WASHINGTON Reuters Democratic Senator Elizabeth Warren is taking aim at budget chief Mick Mulvaney s plan to fill the ranks of the U S consumer financial watchdog with political allies according to letters seen by Reuters the latest salvo in a broader battle over who should run the bureau President Donald Trump last month appointed Mulvaney as acting director of the Consumer Financial Protection Bureau CFPB though the decision is being legally challenged by the agency s deputy director Leandra English who says she is the rightful interim head Mulvaney told reporters earlier this month he planned to bring in several political appointees to help overhaul the agency but Warren warned in a pair of letters sent Monday to Mulvaney and the Office of Personnel Management OPM which oversees federal hiring that doing so was inappropriate and potentially illegal The CFPB is meant to be an independent agency staffed primarily by non political employees Hiring political appointees could violate civil service laws designed to protect such employees from undue political pressure and discrimination Warren said Your naked effort to politicize the consumer agency runs counter to the agency s mission to be an independent voice for consumers with the power to stand up to Wall Street banks Warren who helped create the CFPB wrote to Mulvaney In a separate letter Warren asked the OPM to review Mulvaney s unprecedented and unjustified plans In a third letter sent to Mulvaney and English Warren asked for information about a review of ongoing enforcement actions at the CFPB Reuters reported earlier this month that a potential multimillion dollar settlement with Wells Fargo NYSE WFC is among the enforcement actions under review amid the change in CFPB leadership Spokespeople for Mulvaney and the OPM did not immediately respond to requests for comment Mulvaney who also serves directly under Trump as the head of his Office of Management and Budget OMB said in the long term he would like to see professional staff alongisde political appointees mirroring an arrangement in place at the OMB We will be staffing up with more permanent political people so the professional staff here have a better feel for where the administration wants to take the bureau Mulvaney said But Warren said such an arrangement though understandable for bureaus like the OMB which sit directly beneath the White House was not suitable for independent financial regulators
The leadership of the CFPB has been in question since the agency s first director Richard Cordray resigned in November |
CMCSA | Second U S Democratic debate sets TV ratings record | LOS ANGELES Reuters The second debate among Democrats running for U S president attracted 18 1 million television viewers across three networks a record audience for a Democratic primary face off NBC News said on Friday Thursday s event featuring front runners Joe Biden and Bernie Sanders was shown on broadcaster NBC cable channel MSNBC and Spanish language network Telemundo all owned by Comcast Corp NASDAQ CMCSA The previous record for a Democratic debate was 15 8 million viewers set in October 2015 Republican candidates set the all time record for a primary debate audience in August 2015 when 24 million tuned in for the first performance by Donald Trump in a debate on Fox News Channel During Thursday s event candidate Kamala Harris dominated her rivals and confronted Biden about his opposition to school busing in the 1970s An additional 9 million people watched live on Thursday via online streaming NBC said The debate was the second of two with Democratic candidates aiming to challenge Trump An estimated 15 3 million television viewers tuned in on Wednesday to watch Elizabeth Warren Beto O Rourke and eight other challengers NBC said |
CMCSA | Comcast Earnings Beat Revenue Misses In Q2 | Investing com Comcast NASDAQ CMCSA reported second quarter earnings that beat analysts expectations on Thursday and revenue that fell short of forecasts
The firm reported earnings per share of 0 78 on revenue of 26 86B Analysts polled by Investing com anticipated EPS of 0 75 on revenue of 27 14B That compared to EPS of 0 65 on revenue of 21 74B in the same period a year earlier The company had reported EPS of 0 76 on revenue of 26 86B in the previous quarter
Comcast follows other major Services sector earnings this month
On Wednesday Visa A reported third quarter EPS of 1 37 on revenue of 5 84B compared to forecasts of EPS of 1 32 on revenue of 5 7B
AT T earnings matched analysts expectations on Wednesday with second quarter EPS of 0 89 on revenue of 44 96B Investing com analysts expected EPS of 0 89 on revenue of 44 87B
Stay up to date on all of the upcoming earnings reports by visiting Investing com s earnings calendar |
CMCSA | Comcast CMCSA Upgraded To Buy What Does It Mean For The Stock | Investors might want to bet on Comcast CMCSA as it has been recently upgraded to a Zacks Rank 2 Buy This upgrade is essentially a reflection of an upward trend in earnings estimates one of the most powerful forces impacting stock prices
The sole determinant of the Zacks rating is a company s changing earnings picture The Zacks Consensus Estimate the consensus of EPS estimates from the sell side analysts covering the stock for the current and following years is tracked by the system
The power of a changing earnings picture in determining near term stock price movements makes the Zacks rating system highly useful for individual investors since it can be difficult to make decisions based on rating upgrades by Wall Street analysts These are mostly driven by subjective factors that are hard to see and measure in real time
Therefore the Zacks rating upgrade for Comcast basically reflects positivity about its earnings outlook that could translate into buying pressure and an increase in its stock price
Most Powerful Force Impacting Stock Prices
The change in a company s future earnings potential as reflected in earnings estimate revisions and the near term price movement of its stock are proven to be strongly correlated The influence of institutional investors has a partial contribution to this relationship as these big professionals use earnings and earnings estimates to calculate the fair value of a company s shares An increase or decrease in earnings estimates in their valuation models simply results in higher or lower fair value for a stock and institutional investors typically buy or sell it Their transaction of large amounts of shares then leads to price movement for the stock
For Comcast rising earnings estimates and the consequent rating upgrade fundamentally mean an improvement in the company s underlying business And investors appreciation of this improving business trend should push the stock higher
Harnessing the Power of Earnings Estimate Revisions
Empirical research shows a strong correlation between trends in earnings estimate revisions and near term stock movements so it could be truly rewarding if such revisions are tracked for making an investment decision Here is where the tried and tested Zacks Rank stock rating system plays an important role as it effectively harnesses the power of earnings estimate revisions
The Zacks Rank stock rating system which uses four factors related to earnings estimates to classify stocks into five groups ranging from Zacks Rank 1 Strong Buy to Zacks Rank 5 Strong Sell has an impressive externally audited track record with Zacks Rank 1 stocks generating an average annual return of 25 since 1988 You can see the complete list of today s Zacks 1 Rank Strong Buy stocks here
Earnings Estimate Revisions for Comcast
This cable provider is expected to earn 3 11 per share for the fiscal year ending December 2019 which represents a year over year change of 22
Analysts have been steadily raising their estimates for Comcast Over the past three months the Zacks Consensus Estimate for the company has increased 2 5
Bottom Line
Unlike the overly optimistic Wall Street analysts whose rating systems tend to be weighted toward favorable recommendations the Zacks rating system maintains an equal proportion of buy and sell ratings for its entire universe of more than 4000 stocks at any point in time Irrespective of market conditions only the top 5 of the Zacks covered stocks get a Strong Buy rating and the next 15 get a Buy rating So the placement of a stock in the top 20 of the Zacks covered stocks indicates its superior earnings estimate revision feature making it a solid candidate for producing market beating returns in the near term
You can learn more about the Zacks Rank here
The upgrade of Comcast to a Zacks Rank 2 positions it in the top 20 of the Zacks covered stocks in terms of estimate revisions implying that the stock might move higher in the near term |
CMCSA | Comcast CMCSA Soars To 52 Week High Time To Cash Out | Have you been paying attention to shares of Comcast CMCSA Shares have been on the move with the stock up 8 8 over the past month The stock hit a new 52 week high of 46 62 in the previous session Comcast has gained 36 3 since the start of the year compared to the 19 6 move for the Zacks Consumer Discretionary sector and the 35 3 return for the Zacks Cable Television industry
What s Driving the Outperformance
The stock has a great record of positive earnings surprises as it hasn t missed our earnings consensus estimate in any of the last four quarters In its last earnings report on July 25 2019 Comcast reported EPS of 0 78 versus consensus estimate of 0 75 while it missed the consensus revenue estimate by 1 2
For the current fiscal year Comcast is expected to post earnings of 3 11 per share on 110 19 billion in revenues This represents a 21 96 change in EPS on a 16 59 change in revenues For the next fiscal year the company is expected to earn 3 39 per share on 116 06 billion in revenues This represents a year over year change of 9 21 and 5 33 respectively
Valuation Metrics
Comcast may be at a 52 week high right now but what might the future hold for the stock A key aspect of this question is taking a look at valuation metrics in order to determine if the company is due for a pullback from this level
On this front we can look at the Zacks Style Scores as they provide investors with an additional way to sort through stocks beyond looking at the Zacks Rank of a security These styles are represented by grades running from A to F in the categories of Value Growth and Momentum while there is a combined VGM Score as well The idea behind the style scores is to help investors pick the most appropriate Zacks Rank stocks based on their individual investment style
Comcast has a Value Score of B The stock s Growth and Momentum Scores are C and B respectively giving the company a VGM Score of A
In terms of its value breakdown the stock currently trades at 15X current fiscal year EPS estimates On a trailing cash flow basis the stock currently trades at 9 3X versus its peer group s average of 8 5X Additionally the stock has a PEG ratio of 1 26 This isn t enough to put the company in the top echelon of all stocks we cover from a value perspective
Zacks Rank
We also need to consider the stock s Zacks Rank as this supersedes any trend on the style score front Fortunately Comcast currently has a Zacks Rank of 2 Buy thanks to rising earnings estimates
Since we recommend that investors select stocks carrying Zacks Rank of 1 Strong Buy or 2 Buy and Style Scores of A or B it looks as if Comcast meets the list of requirements Thus it seems as though Comcast shares could still be poised for more gains ahead |
CMCSA | Here s Why Momentum Investors Will Love Comcast CMCSA | Momentum investing revolves around the idea of following a stock s recent trend in either direction In the long context investors will be essentially be buying high but hoping to sell even higher With this methodology taking advantage of trends in a stock s price is key once a stock establishes a course it is more than likely to continue moving that way The goal is that once a stock heads down a fixed path it will lead to timely and profitable trades
While many investors like to look for momentum in stocks this can be very tough to define There is a lot of debate surrounding which metrics are the best to focus on and which are poor quality indicators of future performance The Zacks Momentum Style Score part of the Zacks Style Scores helps address this issue for us
Below we take a look at Comcast CMCSA a company that currently holds a Momentum Style Score of B We also talk about price change and earnings estimate revisions two of the main aspects of the Momentum Style Score
It s also important to note that Style Scores work as a complement to the Zacks Rank our stock rating system that has an impressive track record of outperformance Comcast currently has a Zacks Rank of 2 Buy Our research shows that stocks rated Zacks Rank 1 Strong Buy and 2 Buy and Style Scores of A or B outperform the market over the following one month period
You can see the current list of Zacks 1 Rank Stocks here
Set to Beat the Market
Let s discuss some of the components of the Momentum Style Score for CMCSA that show why this cable provider shows promise as a solid momentum pick
A good momentum benchmark for a stock is to look at its short term price activity as this can reflect both current interest and if buyers or sellers currently have the upper hand It s also helpful to compare a security to its industry this can show investors the best companies in a particular area
For CMCSA shares are up 4 31 over the past week while the Zacks Cable Television industry is up 4 1 over the same time period Shares are looking quite well from a longer time frame too as the monthly price change of 8 79 compares favorably with the industry s 4 37 performance as well
While any stock can see its price increase it takes a real winner to consistently beat the market That is why looking at longer term price metrics such as performance over the past three months or year can be useful as well Shares of Comcast have increased 11 32 over the past quarter and have gained 29 2 in the last year On the other hand the S P 500 has only moved 5 81 and 5 06 respectively
Investors should also take note of CMCSA s average 20 day trading volume Volume is a useful item in many ways and the 20 day average establishes a good price to volume baseline a rising stock with above average volume is generally a bullish sign whereas a declining stock on above average volume is typically bearish Right now CMCSA is averaging 14 765 342 shares for the last 20 days
Earnings Outlook
The Zacks Momentum Style Score also takes into account trends in estimate revisions in addition to price changes Please note that estimate revision trends remain at the core of Zacks Rank as well A nice path here can help show promise and we have recently been seeing that with CMCSA
Over the past two months 7 earnings estimates moved higher compared to 2 lower for the full year These revisions helped boost CMCSA s consensus estimate increasing from 3 05 to 3 11 in the past 60 days Looking at the next fiscal year 8 estimates have moved upwards while there have been 2 downward revisions in the same time period
Bottom Line
Given these factors it shouldn t be surprising that CMCSA is a 2 Buy stock and boasts a Momentum Score of B If you re looking for a fresh pick that s set to soar in the near term make sure to keep Comcast on your short list |
WFC | Exclusive Wells Fargo sanctions are on ice under Trump official sources | By Patrick Rucker and Pete Schroeder WASHINGTON Reuters The new acting head of the U S consumer finance watchdog is reviewing whether Wells Fargo Co N WFC should pay tens of millions of dollars over alleged mortgage lending abuse according to three sources familiar with the dispute The San Francisco based bank said in October that it would refund homebuyers who were wrongly charged fees to secure low mortgage rates a black mark against a lender which has already been roiled by scandal over its treatment of customers The Consumer Financial Protection Bureau CFPB had been investigating the mortgage issue since early this year said one current and two former officials The agency accepted an internal review from Wells Fargo and set settlement terms in early November said the sources who were not authorized to speak about internal discussions But that matter and roughly a dozen others are in question now that Mick Mulvaney the agency chief tapped by President Donald Trump has said he is reviewing the CFPB s prior work Richard Cordray the former CFPB director who initiated the Wells Fargo action approved the terms of a possible settlement before stepping down said the sources That proposal envisions a Wells Fargo payout of tens of millions of dollars but likely short of the record 100 million payout the bank made to the CFPB last year over a phony accounts scandal sources said More than 100 000 borrowers paid the fee to lock in a fixed rate loan between September 2013 and February 2017 the bank has said adding it believes a substantial number of those charges were appropriate A Wells Fargo spokesman on Thursday declined to comment on the CFPB actions but said the bank was committed to returning any fees that were wrongly levied Over the next few months we will be contacting other customers who paid those fees and will provide refunds said spokesman Tom Goyda Mulvaney has pledged to examine enforcement work that Cordray had left unfinished which includes the potential Wells Fargo sanctions In an interview with the Washington Times newspaper last week Mulvaney said he is reviewing 14 open enforcement matters that Cordray left on his desk A CFPB official said that review should not taint any eventual settlements Acting Director Mulvaney made it clear to staff that any pause should not and will not impact any ongoing negotiations said John Czwartacki an adviser to Mulvaney Mulvaney has moved swiftly to change course at the CFPB which was created during President Barack Obama s administration and has forced financial services companies to pay out 12 billion in fines and consumer relief No new staff will be hired and no new rules will be written for industry until a review of the agency is completed Mulvaney has said Before he took charge of the CFPB Mulvaney had been one of its vocal critics and called the bureau a joke Mulvaney is now in a legal fight with Leandra English another senior CFPB official over who should lead the agency until a permanent chief can be appointed English has vowed to defend the bureau s existing consumer protections while Mulvaney has pledged to have the agency step out of the way of business A federal court has so far endorsed Mulvaney s position at the top of the bureau but English is continuing a legal fight One of the CFPB s major achievements was the 100 million fine it levied on Wells Fargo last year after it was revealed that staff were opening bank accounts without customer consent In September Republican staff for the U S House of Representatives Financial Services Committee asked whether that settlement was too paltry In a report titled Did the CFPB let Wells Fargo Beat the Rap Republican staff wrote that the CFPB might have had room to seek a penalty of 10 billion or more against Wells Fargo
The committee s policy director Brian Johnson joined Mulvaney last week as a senior adviser to the CFPB |
WFC | Factbox Trump on Twitter December 8 Hanukkah Roy Moore Wells Fargo | The following statements were posted to the verified Twitter accounts of U S President Donald Trump realDonaldTrump and POTUS The opinions expressed are his own Reuters has not edited the statements or confirmed their accuracy realDonaldTrump Tonight FLOTUS Melania and I were thrilled to welcome so many wonderful friends to the WhiteHouse and wish them all a very HappyHanukkah 0036 EST I fulfilled my campaign promise others didn t 0041 EST Big crowd expected today in Pensacola Florida for a Make America Great Again speech We have done so much in so short a period of time and yet are planning to do so much more See you there 0811 EST LAST thing the Make America Great Again Agenda needs is a Liberal Democrat in Senate where we have so little margin for victory already The Pelosi Schumer Puppet Jones would vote against us 100 of the time He s bad on Crime Life Border Vets Guns Military VOTE ROY MOORE 1006 EST Fines and penalties against Wells Fargo NYSE WFC Bank for their bad acts against their customers and others will not be dropped as has incorrectly been reported but will be pursued and if anything substantially increased I will cut Regs but make penalties severe when caught cheating 1018 EST MAKE AMERICA GREAT AGAIN 1246 EST
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WFC | Trump says fines against Wells Fargo could be increased | By Patrick Rucker and Dan Freed WASHINGTON NEW YORK Reuters President Donald Trump took aim at the third largest U S bank on Friday writing on Twitter that government fines and penalties against Wells Fargo NYSE WFC Co could be hiked amid an ongoing sales scandal Fines and penalties against Wells Fargo Bank for their bad acts against their customers and others will not be dropped as has incorrectly been reported but will be pursued and if anything substantially increased I will cut Regs but make penalties severe when caught cheating Trump wrote Reuters reported on Thursday that the new acting head of the U S consumer finance watchdog agency was reviewing whether Wells Fargo should pay tens of millions of dollars over alleged mortgage lending abuse according to three sources familiar with the dispute It was not clear whether Trump was reacting to the Reuters report San Francisco based Wells Fargo has been rocked by a sales scandal in which thousands of its employees enrolled perhaps millions of customers in products they did not want or need Last year the bank paid a record 100 million fine to the CFPB over an earlier phony accounts scandal The White House referred questions about Trump s tweet to a spokesman for Mick Mulvaney the new interim head of the Consumer Financial Protection Bureau CFPB John Czwartacki senior advisor at the CFPB said the regulator would not comment on any pending enforcement matters but added that as a matter of principle Acting Director Mulvaney shares the President s firm commitment to punishing bad actors and protecting American consumers The Republican president has pledged to roll back rules put in place under his Democratic predecessor Barack Obama that put Wall Street on a tighter leash after the 2007 09 financial crisis The financial industry is hoping regulatory agencies will adopt a less aggressive approach to fines under the Trump administration Those hopes were raised when Mulvaney Trump s pick to lead the CFPB on a temporary basis told reporters this week that he was reviewing more than 100 enforcement actions currently in the works including litigation cases that are being settled and investigations Mulvaney said he would delay at least two enforcement actions without naming them The notion that this administration is or will be tough on Wall Street doesn t pass the laugh test and that fact is evident in deeds not tweets said Lisa Donner the executive director of Americans for Financial Reform a coalition of groups advocating for tougher oversight of the financial system CHANGING OF THE GUARD Mulvaney is part of a changing of the guard and change of approach at key U S financial regulatory agencies as Trump administration promises to unburden banks from red tape and crisis era rules are slowly being implemented The Comptroller of the Currency OCC the agency that regulates many of the largest U S banks wants to ease up on severance pay restrictions imposed on Wells Fargo in the wake of its sales scandal according to a Reuters report In addition the Republican controlled Congress in October killed a rule that allowed customers to band together to sue financial firms over disputes Wells Fargo said in October that it would refund homebuyers who were wrongly charged fees to secure low mortgage rates a black mark against a lender that already had been roiled by scandal over its treatment of customers Richard Cordray the Obama era official who left as head of the CFPB last month had approved the terms of a possible settlement with Wells Fargo over the fees according to three sources familiar with the matter That proposal envisioned a Wells Fargo payout of tens of millions of dollars but likely short of the record 100 million payout it made to the CFPB last year Legal experts said it is highly unusual for presidents to weigh in on specific financial enforcement actions Even regulatory chiefs typically do not comment on ongoing investigations concerned that public remarks could compromise the case in some way Trump s talk of potentially higher fines appeared to have only a moderate impact on shares of Wells Fargo which generates more than 20 billion in annual earnings Its stock was up about 0 05 percent to 59 39 in afternoon trading down from a session high of 59 89
Wells Fargo spokesman Mark Folk declined to comment on Trump s tweet |
WFC | U S producer prices rise strongly point to firming inflation | By Lucia Mutikani WASHINGTON Reuters U S producer prices rose in November as gasoline prices surged and the cost of other goods increased leading to the largest annual gain in nearly six years The fairly strong report from the Labor Department on Tuesday suggested a broad acceleration in wholesale price pressures which could assuage concerns among some Federal Reserve officials over persistently low inflation This demand led price push from higher commodity prices is a classic early warning signal that consumer goods will also see increasing inflationary pressures said Chris Rupkey chief economist at MUFG in New York The Labor Department said its producer price index for final demand increased 0 4 percent last month advancing by the same margin for three straight months In the 12 months through November the PPI shot up 3 1 percent That was the biggest gain since January 2012 and followed a 2 8 percent rise in October Economists had forecast the PPI rising 0 3 percent last month and increasing 2 9 percent from a year ago A key gauge of underlying producer price pressures that excludes food energy and trade services also rose 0 4 percent last month The so called core PPI had increased by 0 2 percent for two straight months It rose 2 4 percent in the 12 months through November the largest gain since the series started in August 2014 after increasing 2 3 percent in October The dollar firmed against a basket of currencies on the data while prices for U S Treasuries fell U S stock index futures were trading mostly higher The broad rise in producer prices supports views that weak inflation readings experienced through the first half of the year probably were temporary Some Fed officials worry that the factors that held down inflation early in the year could become more persistent The Fed officials were due to gather for a two day policy meeting starting later on Tuesday The U S central bank is expected to raise interest rates on Wednesday for a third time this year with a robust labor market and strengthening economy expected to overshadow policymakers earlier concerns about tame inflation INFLATION MOVING UP The central bank tracks the personal consumption expenditures PCE price index excluding food and energy which has undershot the Fed s 2 percent target for nearly 5 1 2 years The pickup over the year will be welcomed by the Fed as an indication that inflation is gradually moving up said Sarah House an economist at Wells Fargo NYSE WFC Securities in Charlotte North Carolina Inflation data on Wednesday is expected to show the consumer price index rising 0 4 percent in November after nudging up 0 1 percent in October according to a Reuters survey The core CPI is seen rising 0 2 percent for a second straight month Last month gasoline prices surged 15 8 percent the biggest gain since August 2009 after dropping 4 6 percent in October Gasoline accounted for two thirds of the 1 0 percent increase in the final demand goods index There were also increases in the prices of light motor trucks pharmaceutical preparations beef residential electricity and jet fuel Wholesale food prices rose 0 3 percent in November after increasing 0 5 percent in October Prices for services gained 0 2 percent last month after increasing 0 5 percent in October Core goods climbed 0 3 percent in November rising by the same margin for a third consecutive month Prices for passenger cars accelerated 0 5 percent last month the largest increase since December 2016 after being unchanged in October
The cost of healthcare services was unchanged last month after rising 0 3 percent in October Those costs feed into the Fed s preferred core PCE price index |
WFC | Highlights of Tuesday s NHL games | The Sports Xchange Highlights of National Hockey League games on Tuesday Devils 5 Kings 1 Taylor Hall scored twice and Cory Schneider made 16 saves as New Jersey beat Los Angeles 5 1 on Tuesday night The win snapped New Jersey s two game skid and halted the Kings eight game winning streak the longest in the NHL this season and one shy of the longest in franchise history Hall recorded his second multi goal game of the season while Travis Zajac Brian Boyle and Brian Gibbons also scored for the Devils Torrey Mitchell scored a third period goal for the Kings Lightning 3 Blues 0 Brayden Point and Nikita Kucherov each scored and Andrei Vasilevskiy made 32 saves to lead Tampa Bay to its fifth consecutive win The Lightning moved into sole possession of the top spot in the NHL standings breaking a tie with the Blues who had won four straight Tyler Johnson added an empty net goal with 22 seconds to play Flyers 4 Maple Leafs 2 Claude Giroux scored one goal and set up Sean Couturier s game winner with a spectacular between the skates pass in the closing minutes of regulation to give Philadelphia a victory over Toronto Taylor Leier and Scott Laughton also scored for the Flyers who won for the fourth straight time following a 10 game losing streak It was the Flyers first win at Wells Fargo NYSE WFC Center since Nov 9 snapping an 0 4 2 streak Brian Elliott earned the win with 20 saves Patrick Marleau and James van Riemsdyk scored for the Maple Leafs who had their three game winning streak snapped Frederik Andersen stopped 35 shots in the loss Oilers 7 Blue Jackets 2 Mark Letestu scored a short handed goal and had an assist and Connor McDavid tallied a goal and three assists to lead Edmonton over Columbus Ryan Nugent Hopkins Milan Lucic Matt Benning Zack Kassian and Jesse Puljujarvi also scored for the Oilers and Puljujarvi Anton Slepyshev Michael Cammalleri Leon Draisaitl and Darnell Nurse each contributed an assist Oliver Bjorkstrand and Jack Johnson scored for the Blue Jackets Capitals 5 Avalanche 2 Evgeny Kuznetsov had three assists Braden Holtby stopped 22 shots as Washington defeated Colorado Jakub Vrana John Carlson Matt Niskanen Brett Connolly and Devante Smith Pelly scored for the Capitals and Madison Bowey had two assists Colin Wilson and Tyson Jost scored for the Avalanche and Semyon Varlamov made 22 saves against his former team Sabres 3 Senators 2 Evander Kane Kyle Okposo and Benoit Pouliot scored to lead Buffalo over Ottawa Buffalo has points in its last four games 2 0 2 after losing 11 of 12 games 1 9 2 Robin Lehner made 24 saves Cody Ceci and Derick Brassard scored for the Senators who have lost 12 of their past 13 games Mike Condon made 23 saves Blackhawks 3 Panthers 2 OT Patrick Kane scored at 2 24 of overtime and Brandon Saad tallied a goal and an assist as Chicago defeated Florida for its third straight victory Corey Crawford made 35 saves to help preserve the victory Jonathan Toews goal with 6 02 remaining drew the Blackhawks even when he beat Panthers goalie John Reimer who finished with 25 saves Jamie McGinn and Nick Bjugstad scored for the Panthers Wild 2 Flames 1 SO Chris Stewart and Mikael Granlund scored in a shootout lifting Minnesota over Calgary The Wild got a regulation goal from Matt Cullen and 16 saves from goalie Alex Stalock en route to their third consecutive win Devan Dubnyk started the game in goal for Minnesota but left with an injury The Flames got a regulation goal from Micheal Ferland and 21 saves from goalie Mike Smith but saw their two game winning streak snapped Johnny Gaudreau had Calgary s only shootout goal Hurricanes 3 Golden Knights 2 shootout Phil Di Giuseppe scored the decisive goal in a shootout to give Carolina the win over Vegas snapping the home side s four game winning streak
Cam Ward who notched his 300th career win finished with 22 saves Marcus Kruger and Trevor van Riemsdyk scored in regulation for the Hurricanes Both were traded by Vegas to the Hurricanes during the summer for draft picks The goals were the first of the season for each player Deryk Engelland and Reilly Smith lit the lamp for the Golden Knights The game marked the return of Vegas goaltender Marc Andre Fleury who had missed 25 games since Oct 13 with a concussion Fleury a 14 year veteran made 35 saves |
WFC | What Does UK Hung Parliament Mean For Europe ETFs | British Prime Minister Theresa May s wager on gaining majority backfired when her Conservatives party emerged the largest but lost majority in a snap election on June 8 2017 May stunned the world in April by calling this June election three years ahead of schedule Continuous opposition from members of the House of Lords on Brexit negotiations led Theresa May to take this step
Now Britain is likely to have a hung parliament in the absence of a clear majority As per the election saw about 69 of turnout the highest since 1997 To gain a majority a party needs to get 326 seats while the Conservatives have secured 310 As a result May s party won t be able to form a government without the help of minority parties
Labour Party leader Jeremy Corbyn has already asked for May s resignation Some market watchers believe that she would attempt to form a government even if her party loses its majority
However at this moment Britain needs a stable and strong government so that it can push through its mandates seamlessly So any kind of coalition government may not be productive for Britain over the long run
Plus incumbent Theresa May is less likely to secure support from other parties given her inclination toward a hard Brexit as per And failure to amass the required seats may throw her away from power
Market Impact
No doubt the result triggered the bout of political uncertainty in the U K Notably formal Brexit talks are slated to start in about This will ensure Britain s exit from the EU in
The CurrencyShares British Pound Sterling ETF NYSE FXB dropped over 0 1 on June 8 while it lost about 1 9 after hours in appreciation of huge volatility iPath GBP USD Exchange Rate ETN will also be in focus in the near term read
Will a Soft Brexit Boost Europe Markets Pound
May s faltering situation indicates that the Brexit process may be deferred or the terms of the separation of Britain from the EU s single market and customs union which is fundamentally a will now be benign
As per analysts like chief portfolio strategist at Wells Fargo NYSE WFC Funds Management a hung parliament isn t a worst case scenario In fact it could be positive over the long term as it means Brexit would have to take a softer form So the U K election is not likely to be hugely impactful on global stocks over the medium term read
Notably in June 2016 when Britons voted in favor of leaving the EU with the leave camp gaining 51 9 support global stocks were sold off and British pound plunged to a 31 year low So one can understand that a soft Brexit will end up benefiting the currency read
Likely Impact on Europe ETFs
That being said we would like to note that short term gyrations are expected from the market in the near term Guenther Oettinger said with a weak negotiating partner there s a danger that the negotiations will turn out badly for both sides So U K ETFs like iShares MSCI United Kingdom and Euro zone ETFs like iShares MSCI Eurozone would be in focus in the days to come
Investors should also note that as soon as Britain cuts the cord with EU its importance as a corporate transit to the rest of Europe would be lost going by an article published on This would impact iShares MSCI Europe Financials a lot So the fate of this hung parliament has a lot to do with the future course of EUFN read
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WFC | Parabolic Bit Coin And Its Meteoric Rise | The Crypto Bubble A Speculator s Dream in Cyberspace
When writing an article about the recent move in bitcoin one should probably not begin by preparing the chart images Chances are one will have to do it all over again It is a bit like ordering a cup of coffee in Weimar Germany in early November 1923 One had to pay for it right away as a cup costing one wheelbarrow of Reichsmark may well end up costing two wheelbarrows of Reichsmark half an hour later These days the question is how many wheelbarrows of US dollars one may need to pay for a bitcoin
Is it real As our readers know the nature of reality poses certain When we started writing this bitcoin had just moved up by more than 600 in one week to its then level of 2 400 within a little more than a day it reached an interim peak of 2 760 then plunged to an interim low of around 1850 in just two trading days only to rally to a new high of 2 930 over the next two weeks Currently it trades at 2 750 don t hold it against us if these figures are no longer true by the time this post is published
Naturally the increasingly parabolic look of the bitcoin chart raises the question whether it represents a bubble and if so how large it will become A good answer to the second part of the question is usually larger than anyone thinks possible As to the first part it may be fair to say that it has been in a bubble since shortly after its birth At one point in 2009 the currency could be bought for 1 100 of 1 US cent USD 0 0001 It rallied to 5 cents by 2010 which is quite a big move We dimly remember a story about a pizza restaurant selling Margheritas for BTC 20 000 apiece at the time In 2011 it reached a peak of 18 50 and so on and so forth
In recent weeks we occasionally watched in mute fascination as bitcoin fluctuated in ranges of several hundred dollars in the space of a few hours On May 22 it had a little dip just below the 2 000 mark to give everyone a good entry point But would it really be worth it What if the bubble was about to collapse Three days later the courageous dip buyers were up by almost 40 Given how overbought bitcoin looks one would have thought it a good idea to take the money and run but of course we have no idea how crazy things will still get before everybody really starts dialing 1 800 GETMEOUT
At the time we copy pasted this chart it traded at 2 750 By the time we finish writing this post it may be quite a bit lower or higher maybe we should flip a bitcoin to decide which way it will go next
A competing crypto currency by the name of Ethereum what a name has gained more than 2 400 this year rising from 10 in January to 258 in early June The move from 80 to 258 took just three weeks So yes it is a bubble of sorts with an almost Tulipomania like air about it It is a speculator s dream in many ways BTC and ETH are undoubtedly great trading sardines What interests us though is why this is happening What is driving it
Fractal Patterns
One interesting thing about the chart of bitcoin is that it has a text book Elliott wave shape we have not labeled the chart but it seems obvious to us that it lends itself to such labeling This applies to the weekly chart shown further below as well and also to other time frames Regardless of what one thinks of Elliott wave theory price trends in financial markets definitely have fractal characteristics
Empirically they consist of sequences of patterns that are recurring over and over again in every conceivable time frame i e the same patterns or rather very similar patterns such as for instance triangles that form on daily weekly or monthly charts also form on one minute ten minute and hourly charts These patterns appear to reflect various stages in the evolution of market psychology within the time frames captured by these charts
R N Elliott cataloged such recurring patterns in the stock market and tried to find out if they followed rules that could be defined and used for forecasts Obviously such an endeavor is fraught with many difficulties Particularly the validity of the theoretical framework that was created after the empirical identification of said patterns and the promulgation of the technical rules governing the Elliott wave principle seems questionable
But that is not really what we want to discuss here One doesn t necessarily have to believe that the Elliott wave principle is valid or useful for making accurate market forecasts in order to recognize that its leading practitioners have gathered a number of useful empirical insights
In this particular case we mention it mainly because typically textbook Elliott wave patterns only emerge in markets with broad participation Since these patterns reflect the predominant mood of market participants or if you will the market mind recognizable shapes only tend to form in liquid markets with a large number of participants While we cannot say what precisely the threshold is i e at what point pure randomness is replaced with something that resembles a more orderly arrangement the price chart itself conveys the information that the threshold has been crossed
The bid ask spread of bitcoin is usually quite tight as well although it has tended to widen amid the recent increase in volatility We observed trading activity at one of the larger exchanges while it traded around 2 400 and a the time the bid ask spread fluctuated from as little as 30 cents to short term wides of up to 7 when short term volatility spiked Even at its widest the spread was therefore just 0 2 which also shows that this is market with broad participation Keep in mind that we just observed the spread over a limited time window it is therefore possible that it will occasionally be wider but probably not by much
Bitcoin weekly In this time frame one can also clearly discern the Elliott wave shape of the bitcoin chart which is currently in its fifth major bubble like move since 2009 The earliest bubble phases are not really discernible on this linear chart but in percentage terms they were actually far larger than the two big moves that can be immediately recognized In other words the biggest profits were actually made from 2009 to 2013
In short a large number of market participants evidently regards bitcoin at the very least as a legitimate investment asset Everything we write here will ultimately lead to the one question we really want to discuss namely bitcoin s status as money We will get to that in Part 2 but we can tell you already that we continue to regard it as a secondary medium of exchange
Exchanges in Trouble with Correspondence Banks Honni Soit Qui Mal Y Pense
Honni Soit Qui Mal Y Pense shame on anyone who thinks ill of it The motto appears on a representation of the garter surrounding the Shield of the Royal coat of arms of the United Kingdom It already appeared in the 16th century on the coat of arms of
One of the things that make bitcoin so attractive is that it allows anonymous untraceable payments to be made without middlemen We actually have to amend that a bit there are middlemen since transactions have to be processed or rather confirmed by bitcoin miners and they charge a fee for that These fees have recently risen sharply as the number of transactions has spiked while the technical capabilities of the blockchain to handle them in a timely manner remains limited a k a the
In fact bitcoin first came to the broader public s attention when it was revealed that the Silk Road market for illegal drugs and unregistered weapons on the darkweb used bitcoin as its medium of exchange When news of this were reported in the press for the first time the third bitcoin bubble got going
We actually don t believe such marketplaces should even be illegal as we have grave reservations regarding the prohibitions that make them so but obviously the anonymity of bitcoin transactions is a helpful feature for shadow economy entrepreneurs When people learned about this their assessment of bitcoin s potential to become a legitimate medium of exchange i e money changed drastically
It is little surprise that bitcoin exchanges have often turned out to be somewhat opaque institutions as well The formerly biggest one Mt Gox found an ignominious end in 2013 with most of its customers bitcoins ending up stolen Two of the largest by volume exchanges today are BTC e and Bitfinex No one even knows where the servers of they sound Russian The exchange is as anonymous as a bitcoin wallet so to speak And yet it is the second largest bitcoin exchange in the world
Bitfinex is located in Taiwan and has been at great pains to project an image of legitimacy but that hasn t helped it from being hampered by one of the interfaces with the world outside of bitcoin it urgently needs to actually function in the long run To be precise what happened was that its US correspondence bank Wells Fargo NYSE WFC
At the same time Wells Fargo also withdrew from servicing Tether and its customers Tether a crypto currency that is backed 1 1 with US dollars but can be used for transactions over blockchain type wallets and has become a popular replacement for USD on bitcoin exchanges Although every USDT in issue seems indeed backed by one dollar it has become impossible to exchange them unless one is a resident of Taiwan
In the meantime these problems have and several of them now find themselves unable to transfer or receive US dollars This has created a very interesting situation In a way Bitfinex has become a closed system as most of the dollars that are already deposited there will have to remain there for the time being
In response to this development many traders exchanged their dollars at Bitfinex for bitcoin as bitcoin balances can of course still be transferred to bitcoin wallets without a hitch Banking cartel members cannot get in the way nor can anyone else This has caused bitcoin to temporarily trade at and was no doubt a major factor in fueling the recent rally
The contents of the Bitfinex cold wallet the third richest bitcoin address in the world which holds the bitcoin of Bitfinex customers The plunge in the wallet s balance in April was triggered by the exchange s banking problems There seems to be hope that the problem will be resolved eventually so balances have slightly increased again from their previous low point Moreover by the correspondence bank issue and can still withdraw or deposit any currency they like
In the meantime many speculators in Asian countries from Korea to Japan to China seem to have become active in the bitcoin market and are adding more fuel to the fire but we suspect that the increasing problems with getting US dollars or other fiat currencies in and out of numerous bitcoin exchanges is actually the major factor driving the rally
At the same time it has become known that another bitcoin exchange We have not yet heard about Coinbase experiencing correspondence bank problems so it looks almost as if traders are herded into specific exchanges As we said above Honi soit qui mal y pense
What makes this interesting to us is the fact that one of the reasons why bitcoin functions as a secondary medium of exchange is precisely the fact that it is considered liquid i e that it can be exchanged for fiat currencies at any time at a reasonably small bid ask spread We currently don t believe that all bitcoin exchanges will be cut off from the fiat money system but some sort of concerted attempt at suppression of these exchanges is clearly underway
Moneyness
It may well be that Wells Fargo and other banks are merely concerned about potential regulatory issues if they continue to work with bitcoin exchanges but why now all of a sudden and not before In any case the issue is important in connection with the potential for bitcoin and other crypto currencies to become genuine media of exchange i e money that is accepted widely for the final payment for other goods and services in the economy without reservations
In Part 2 we will return to discussing bitcoin in the context of monetary theory We already pointed out in past articles that a good case can be made that bitcoin does not conflict with Menger s theory on the origin of money or the related regression theorem of Ludwig von Mises We have given the issue some more thought in the meantime and have come up with a few new ideas in this context which we think support this argument
We still prefer gold as the premier stateless money or let us rather say monetary asset since gold is nowadays not really money in the strictest definition of the term even though the markets of course treat it as they would any other currency But that doesn t mean that bitcoin is not a viable contender for moneyness as well particularly as it is a creature of the free market just as gold money is
The fact that assorted fiat monies have recently declined faster against bitcoin than against gold is irrelevant in this context In our opinion gold still enjoys advantages bitcoin cannot hope to match More on this in part 2
Addendum and Bonus Chart
As we finish writing this article bitcoin trades at 2855 it hasn t taken very long for it to gain another 100 And here is a daily chart of the closest bitcoin competitor ethereum ETH USD which as you might guess has risen a bit further as well
Ethereum daily from 10 earlier this year to 264 today |
WFC | Time For High Beta And Momentum ETFs | U S stocks have shrugged off all uncertainties regarding fired Federal Bureau of Investigation Director James Comey s testimony and went on to soar higher as it gave no big shock Comey once again hinted at Trump s alleged connections with Russia said he had that Russia interfered with the election but was confident that no votes had been altered
On the same day the ECB held a policy meeting which came in line with expectations of market participants The status quo in the ECB meeting and no additional shocker in Commey s testimony once again brought Trump s reflation trade back into the picture
Trump s promises of massive tax cuts 1 trillion of infrastructure spending considerable defense budget increase job creation and easing regulations again came into the fore Investors should note that the most feared part of Trump administration a tone of protectionism has been ebbing gradually read
Also an announcement from Commerce Secretary that a national security review of the U S steel industry will seek to protect the interests of both domestic steel producers and consumers boosted infrastructure stocks specifically steel companies as per
As a result three key U S ETFs S P 500 based AX SPY Dow Jones Industrial Average based V DIA and Nasdaq 100 based fund gained in the range of 0 05 to 0 1 on June 8 2017 Investors are now a bit edgy as there is a chance of a hung parliament in the U K at the time of writing
As per analysts like chief portfolio strategist at Wells Fargo NYSE WFC Funds Management a hung parliament isn t a worst case scenario In fact it could be positive over the long term as it means Brexit would have to take a softer form So investors have a feeling that the U K election is not likely to be hugely impactful on U S mainly and global stocks over the medium term
All in all investors can definitely cash in on renewed hopes on Wall Street and positive sentiments Targeting high beta and high momentum ETFs could prove to be great tools in this regard Below we highlight a few high beta and momentum ETFs that may find a place on investors wish list
High Beta ETF
Beta is directly related to market movement Notably high beta funds tend to rise or fall more than the stock market and are thus more volatile When markets soar high beta funds experience larger gains than the broader market counterparts and thus outpace their rivals
PowerShares S P 500 High Beta Portfolio This fund tracks the performance of about 100 stocks from the S P 500 Index with the highest realized volatility over the past 12 months The fund charges 25 bps in fees It gained about 0 9 on June 8 2017
High Momentum ETFs
Momentum investing might be an intriguing idea for those seeking higher returns in a short spell It looks to reflect profits from buying stocks that are sizzling on the market read
Fidelity Momentum Factor ETF
The Fidelity U S Momentum Factor Index reflects the performance of stocks of large and mid capitalization domestic companies signaling momentum It charges 29 bps in fees and added about 0 4 on June 8
iShares MSCI USA Momentum Factor ETF
This ETF seeks to track the performance of large and mid cap U S stocks exhibiting relatively higher momentum characteristics The fund charges 15 bps in fees IT gained over 0 3 on June 8
PowerShares DWA Tactical Sector Rotation ETF
The underlying index is designed to gain exposure to the strongest relative strength sectors in the U S through the universe of nine PowerShares DWA sector Momentum ETFs It charges 75 bps in fees and was up about 1 1 on June 8
PowerShares DWA Momentum Low Volatility Rotation ETF
Th fund is appropriate for those who want global exposure The underlying index of the fund looks to gain exposure to the equity market that displays the strongest relative strength at any given time PowerShares DWA Momentum Portfolio PDP PowerShares DWA SmallCap Momentum Portfolio DWAS and PowerShares DWA Developed Markets Momentum Portfolio PIZ are the top three holdings of the fund DWLV was up over 0 5 on June 8 read
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CMCSA | U S to take fresh look at opening automakers key spectrum band | By David Shepardson WASHINGTON Reuters The U S Federal Communications Commission plans to vote in June on launching a new review of a key spectrum band reserved for automakers that could boost Wi Fi use a person briefed on the matter said on Tuesday In 1999 the FCC reserved 75 megahertz of spectrum in the 5 9 GHz band for automakers to develop technology to allow vehicles to communicate with each other Called Dedicated Short Range Communications DSRC the technology could eliminate hundreds of thousands of annual car crashes automakers and regulators say FCC Chairman Ajit Pai said in remarks to the Wi Fi World Congress on Tuesday that the time has come for the FCC to take a fresh look at this band that has gone largely unused This valuable mid band spectrum is largely lying fallow and it has been so for two decades now just as the internet has gone from dial up modems to gigabit Wi Fi Pai said It is time to launch a comprehensive review of the future of the 5 9 GHz band make a sober assessment of the facts and then make a timely decision NCTA the Internet Television Association which represents major cable and content companies like Comcast Corp NASDAQ CMCSA and CBS Corp NYSE CBS praised Pai s call The group has urged the FCC to open the spectrum band to Wi Fi use saying it was too valuable to our country s economic future to allow it to go unused any longer The Intelligent Transportation Society of America which backs using the spectrum for auto safety said it was time to move past the regulatory uncertainty that has hung like a cloud for the past six years and provide the necessary environment to make roads safer A person briefed on the plan said Pai plans to unveil the proposed rulemaking for an initial vote in June The proposal will ask a series of questions and will not make any determinations On April 26 Toyota Motor Corp said it was halting plans to install DSRC technology on U S vehicles saying it needed to see additional federal government support to preserve the 5 9 GHz spectrum band for DSRC Automakers have been divided in the United States over whether to proceed with the DSRC system or use a 4G or 5G based system DSRC transmissions enable vehicle to vehicle and vehicle to infrastructure communications and broadcast precise vehicle information up to 10 times per second including location speed and acceleration In December 2016 the U S Transportation Department proposed to mandate DSRC in all new vehicles but the Trump administration has not acted on the proposal Ford Motor NYSE F Co said in January it planned to deploy an alternative cellular vehicle to everything technology or C V2X in all new U S vehicle models beginning in 2022 We ll need to consider what the future of automotive safety technology is likely to look like and the spectrum needs of such technologies including whether they will require specifically dedicated airwaves Pai said Tuesday Pai cited a November study from Rand that said opening that spectrum band could add between 60 billion and 105 billion annually to the U S gross domestic product
The National Highway Traffic Safety Administration in October said it was crucial to auto safety to preserve the spectrum band and noted there are more than 70 active deployments of vehicle to infrastructure communications with thousands of vehicles already on the road |
CMCSA | Comcast CMCSA Down 4 9 Since Last Earnings Report Can It Rebound | A month has gone by since the last earnings report for Comcast CMCSA Shares have lost about 4 9 in that time frame outperforming the S P 500
Will the recent negative trend continue leading up to its next earnings release or is Comcast due for a breakout Before we dive into how investors and analysts have reacted as of late let s take a quick look at its most recent earnings report in order to get a better handle on the important catalysts Comcast Q2 Earnings Beat Estimates Revenues MissComcast reported second quarter 2019 adjusted earnings of 78 cents per share that beat the Zacks Consensus Estimate by 3 cents The figure increased 13 year over year Consolidated revenues increased 23 6 year over year to 26 89 billion but lagged the Zacks Consensus Estimate of 27 19 billion However revenues on a Pro Forma basis considering the Sky transaction on Jan 1 2017 increased 0 8 year over year Cable Communication Revenue DetailsRevenues climbed 3 9 from the year ago quarter to 14 45 billion Total Customer Relationships increased 152K to 30 9 million High speed Internet revenues grew 9 4 year over year to 4 66 billion primarily driven by increased residential high speed Internet customers and rate adjustments Total high speed Internet customer net additions were 209K Moreover residential high speed Internet ARPU grew 4 year over year in the reported quarter Business Services revenues increased 9 8 to 1 93 billion driven by customer base expansion Wireless revenues grew 21 to 244 million supported by an increase in the number of customer lines Comcast added 181K wireless lines in the reported quarter Other revenues increased 6 from the year ago quarter to 427 million primarily due to higher sales from security and automation services Total security and automation customer net additions were 23K at the end of the second quarter Advertising revenues declined 8 7 to 607 million primarily due to lower political advertising revenues Voice revenues were 982 million down 1 1 year over year owing to a declining number of residential voice customers Video revenues dropped 0 6 to 5 59 billion reflecting a decline in the number of residential video customer count Total video customer net losses were 224K while total voice customer net losses were 65K Comcast stated that it s not going to chase unprofitable video subscribers that will ultimately boost profitability per subscriber At the end of the second quarter 66 6 of Comcast s residential customers received at least two Xfinity products NBCUniversal Revenues Down Y YRevenues declined 0 8 year over year to almost 8 21 billion Cable Networks revenues increased 2 5 from the year ago quarter to 2 95 billion primarily due to higher distribution up 3 4 and content licensing other revenues up 5 1 Advertising revenues were flat year over year Broadcast Television revenues inched up 0 5 from the year ago quarter to 2 40 billion driven by increased distribution other revenues up 14 7 partially offset by lower advertising down 4 2 and content licensing revenues down 1 7 Filmed Entertainment revenues decreased 14 8 from the year ago quarter to 1 46 billion Theatrical revenues plunged 53 1 due to a lesser number of major releases than the year ago quarter Content licensing revenues increased 9 8 year over year Theme Parks revenues were 1 46 billion up 7 5 year over year driven by higher attendance owing to favorable timing of the spring holidays and increased guest spending Sky Revenue DetailsPro Forma Revenues declined 3 3 year over year to 4 83 billion At constant currency cc revenues increased 2 4 Direct to consumer revenues declined 4 up 1 7 at cc from the year ago quarter to 3 89 billion Content revenues increased 21 27 7 at cc to 376 million benefiting from exclusive sports rights recently acquired by the company in Italy and Germany and higher monetization of the its slate of original programming Advertising revenues deteriorated 10 7 down 5 6 at cc from the year ago quarter to 563 million Pro Forma Total Customer Relationships increased 304K to 24 million in the reported quarter Operating DetailsConsolidated programming production costs increased 31 from the year ago quarter to 8 26 billion As percentage of revenues programming production costs expanded 180 basis points bps on a year over year basis Consolidated adjusted EBITDA increased 17 5 from the year ago quarter to 8 72 billion Pro Forma including Sky operations adjusted EBITDA increased 7 6 Segment wise Cable Communications adjusted EBITDA increased 7 4 from the year ago quarter to 5 85 billion EBITDA margin expanded 130 bps to 40 5 Cable Communications operating expenses increased 1 6 on a year over year basis on higher programming and non programming costs Cable Communications results include a loss of 88 million from the wireless business compared with a loss of 185 million in the year ago quarter NBCUniversal adjusted EBITDA increased 8 1 from the year ago quarter to 2 32 billion reflecting growth at Broadcast Television Filmed Entertainment Cable Networks and Theme Parks adjusted EBITDA Sky s adjusted EBITDA on a pro forma basis increased 13 4 up 19 9 at cc to 772 million Notably Sky s operating costs and expenses fell 5 9 down 0 4 at cc to 4 06 billion Consolidated operating income increased 6 8 year over year to 5 36 billion However operating margin contracted 310 bps from the year ago quarter to 19 9 Cash Flow LiquidityIn second quarter 2019 Comcast generated 7 billion of cash from operations compared with 7 23 billion in the previous quarter Capital expenditures increased 0 6 to 2 3 billion NBCUniversal s capital expenditures rose 2 7 to 473 million Sky reported capital expenditures of 177 million Free cash flow was 4 20 billion in the reported quarter During the quarter Comcast paid out dividends worth 954 million OutlookFor Xfinity Mobile wireless business Comcast expects customer acquisition expenses to increase in the seasonally strong third and fourth quarters Moreover the company now expects Cable EBITDA margin for 2019 to expand slightly above 100 bps on a year over year basis better than earlier guidance of up to 100 bps improvement Cable EBITDA margin was 38 7 in 2018
How Have Estimates Been Moving Since Then
In the past month investors have witnessed a downward trend in fresh estimates
VGM Scores
At this time Comcast has an average Growth Score of C though it is lagging a lot on the Momentum Score front with an F However the stock was allocated a grade of A on the value side putting it in the top quintile for this investment strategy
Overall the stock has an aggregate VGM Score of B If you aren t focused on one strategy this score is the one you should be interested in
Outlook
Estimates have been broadly trending downward for the stock and the magnitude of these revisions has been net zero Notably Comcast has a Zacks Rank 3 Hold We expect an in line return from the stock in the next few months |
WFC | Wells Fargo CEO sees better commercial loan results in fourth quarter | Reuters Wells Fargo NYSE WFC Co will likely see improvement in its business lending segment when it reports fourth quarter earnings in January Chief Executive Officer Tim Sloan said at an investor presentation on Tuesday Commercial lending was a weak spot for the U S lender when it reported third quarter results in October with balances falling by more than 5 billion compared to the prior period Sloan said the commercial lending environment has been slower than he expected overall this year though the run off of two large corporate loans in the third quarter also had what he called an idiosyncratic impact Sloan said he sees the residential mortgage business slowing in the fourth quarter primarily due to seasonal factors Wells Fargo is the third largest U S bank by assets and the leading U S mortgage lender Much of Sloan s presentation was devoted to Wells Fargo s expense targets While he offered no update to the bank s plans to cut 2 billion off expenses in 2018 and another 2 billion in 2019 he said he would offer more detail when Wells Fargo reports fourth quarter results
Wells Fargo shares were up 0 4 percent in morning trading |
WFC | California Department of Insurance seeks to suspend Wells Fargo s licenses | Reuters The California Department of Insurance is seeking to suspend or revoke Wells Fargo Co s N WFC licenses for alleged improper insurance sales practices related to the company s online insurance referral program An investigation by the department found the company had issued about 1 500 insurance policies and charged premiums without customers knowledge or permission the agency said in a statement late on Tuesday Wells Fargo was not immediately available for comment The third largest U S lender by assets last week announced plans to exit the personal insurance business which includes auto homeowners renters and umbrella insurance products and said it would immediately begin winding down marketing and product promotion activity Wells Fargo has been working for more than a year to recover from a sales scandal that has impacted several of its consumer businesses including some insurance products In 2016 the San Francisco based bank paid 185 million to regulators after an investigation found that Wells Fargo had opened fraudulent deposit and credit card accounts
Wells has already exited several other insurance businesses including crop insurance |
WFC | New York pension fund seeks more pay disclosure from Wells Fargo | By Dan Freed Reuters New York state Comptroller Thomas DiNapoli is asking Wells Fargo Co N WFC to disclose more information about employee incentive pay an issue that was at the heart of a scandal that has roiled the third largest U S lender for more than a year DiNapoli oversees the New York State Common Retirement Fund the third largest U S state pension fund with more than 200 billion in assets and a top 50 Wells Fargo shareholder with nearly 14 million shares The bank has not reassured investors that its pay practices encourage long term sustainable growth DiNapoli said in an emailed statement Wells Fargo spokesman Mark Folk said the bank values input from shareholders and is reviewing the proposal Wells Fargo s scandal began in September 2016 when the bank settled with regulators over the creation of potentially up to 2 1 million fake accounts a number the bank later revised to as high as potentially 3 5 million Compensation incentives contributed to problematic behavior in the creation of fake accounts according to an internal report by Wells Fargo s board of directors released on April 10 Other problems have since come to light in different areas of the bank including auto insurance residential mortgages and foreign exchange trading The proposal by DiNapoli requests that Wells Fargo s board prepare a report disclosing detailed information about incentive based pay throughout the bank Should the board agree to produce such a report DiNapoli would withdraw the proposal according to a letter by his staff to Wells Fargo Chief Executive Tim Sloan Barring such an agreement DiNapoli requested the proposal be included on the bank s proxy statement to be voted on by shareholders at Wells Fargo s annual meeting in the spring
DiNapoli submitted a similar proposal last year but Wells Fargo got permission from the U S Securities and Exchange Commission to leave it off the proxy arguing it was similar to another shareholder proposal calling for a broader report on several matters including evidence that incentive systems are aligned with customers best interests |
WFC | Dave And Buster s Is Ready To Run | Dave Buster s Entertainment NASDAQ PLAY is set to release earnings after the market closes on Tuesday June 6 The Estimize community has a bullish outlook on PLAY with an EPS consensus of 82 which is more optimistic than the Street s 80 As far as revenue goes the Estimize community comes in at 299 96M compared to 299 90M from the Street
Dave and Buster s continues to open new locations most recently in New Orleans which is a 40 000 square foot paradise for drinkers gamers and foodies This is in conjunction with two other locations one in Myrtle Beach South Carolina and one in Alpharetta Georgia The push to make Dave and Buster s a household name should only continue with the appointment of former President and CEO of Hard Rock Cafe Hamish Dodds to the Board of Directors Dave and Buster s currently has an outperform rating from Wells Fargo NYSE WFC with a price target of 75 from an initial 65 50
What are you expecting for PLAY |
WFC | Key Wells Fargo Price Points To Watch | Wells Fargo NYSE WFC has been steadily declining since March 1 when the stock traded as high as 59 99 a share Today WFC s stock is at 51 99 which is about 8 lower from the March peak As you know leading financial stocks in the U S have been under pressure recently as bond yields have declined
Where are WFC s key support levels There are two major chart support levels for Wells Farg The first key area is around the 49 level which is where WFC broke out in November 2016 The second key support level for WFC is around 45 which is major support because it s where the stock broke out of a bearish base Very often bearish pattern failures will be major support levels when retested |
CMCSA | Biden raises 6 3 million in first 24 hours of campaign | By Ginger Gibson and James Oliphant WASHINGTON Reuters U S Democratic presidential candidate Joe Biden raised 6 3 million in the first 24 hours of his campaign providing a stronger showing than any of his rivals Biden 76 brought in the bulk of that haul through smaller contributions his campaign spokesman TJ Ducklo wrote on Twitter with 97 percent of those donations under 200 He bested the rest of the Democratic field in first day fundraising including Bernie Sanders who raised 5 9 million and Beto O Rourke who brought in 6 1 million Prior to entering the race on Thursday Biden faced speculation that he was going to be unable to raise small dollar donations via the Internet which has been viewed as a test of viability and support in the Democratic Party To qualify for the first debate in June candidates need to receive donations from 65 000 different donors Biden reached that mark in the first 12 hours of his campaign Ducklo said Biden has joined most of the rest of the Democratic field in swearing off donations from Washington lobbyists and PACs associated with corporations But he did hold a fundraiser on the first day of his campaign at the Philadelphia home of David Cohen a Comcast NASDAQ CMCSA executive
Biden served as former President Barack Obama s vice president for two terms He is competing with 19 others for the Democratic presidential nomination and the chance to likely face President Donald Trump next year in the general election |
CMCSA | Comcast s Sky adopts CFlight tool to improve data for advertisers | By Sheila Dang Reuters Comcast Corp NASDAQ CMCSA unit Sky said on Wednesday it has adopted a new tool to improve audience data for its advertisers as Comcast looks to expand its reach following its 40 billion acquisition of the UK pay TV provider Sky will use CFlight a metric created by Comcast s NBCUniversal arm which unifies the way viewership of advertisements is counted regardless of whether an ad is viewed on television or streaming platforms like Hulu This is the first time CFlight which NBCUniversal launched last year will be used outside the United States the companies said The advertising world has long sought an industry wide standard to measure TV audiences whether they re watching content through a cable box or a streaming service Better data will make it easier for advertisers to buy ads to fit their targets and compare how the ads are performing the companies said We need to make sure it s easy for advertisers to track and measure their money with us John Litster managing director of Sky Media said in an interview On linear television or programs watched on broadcast networks or through cable and satellite viewership for an ad is determined by the average commercial minute viewing or the average rating over the course of a show when the ad was aired For digital ads CFlight s standard requires the ad to be watched from beginning to end Combined the metric is able to determine the total views of an ad across linear and digital Sky Media s Germany and Italy segments will also use CFlight in the future Litster said Sky is also in early talks with its competitors in Britain TV channels ITV LON ITV and Channel 4 to get them to adopt CFlight he said Media company Viacom and TV advertising company Simulmedia are already using CFlight in the United States The metric is open source meaning anyone can see the methodology that CFlight uses to measure ad impressions and the companies using it are not grading their own homework said Kavita Vazirani executive vice president of strategic insights and analytics at NBCUniversal in an interview |
CMCSA | Biden meets with big dollar California donors invites press to attend | By Tim Reid LOS ANGELES Reuters Democratic presidential front runner Joe Biden on Wednesday held the first of two high dollar fundraisers in Los Angeles which he opened to the press in a bid to counter criticism he is relying too heavily on the often closed door events The former vice president s first Los Angeles event was held at the home of Cynthia Telles a UCLA School of Medicine faculty member and a board member of Kaiser Permanente which runs the Kaiser Foundation Hospitals A later fundraiser was due to be attended by Hollywood power broker and film executive Jeffrey Katzenberg Responding to potential concerns by voters in Democratic nominating primaries about big money donations to his campaign and who exactly is donating Biden will provide limited media access to all of his fundraising events It s reflective of Joe Biden s long standing commitment to transparency a Biden campaign representative said in an email The strategy was also aimed at tackling criticism from some Democrats that Biden is relying too heavily on corporate and wealthy donors something many in the party s crowded presidential field have pledged to avoid as they seek to build their campaigns on a network of small dollar grassroots supporters Two rivals U S Senators Elizabeth Warren and Bernie Sanders have criticized Biden for attending a fundraiser at the home of Comcast NASDAQ CMCSA executive and lobbyist David Cohen shortly after announcing his presidential bid last month It s a smart move Karen Finney a longtime Democratic strategist said of Biden s move to open such events to the press It s saying I m doing these types of fundraisers but people can see what I say and who the people attending are Political strategists say the presence of media will also help keep Biden on message and not lead him to make potentially damaging off the cuff remarks in a private setting In past presidential races former Democratic President Barack Obama 2016 Democratic nominee Hillary Clinton and 2012 Republican nominee Mitt Romney all made comments at closed door events that were leaked and came back to haunt their campaigns OLD JOE At the first event on Wednesday Biden told a crowd of about 200 on the front lawn of Telles home after food that included shrimp and tuna ceviche that his campaign would be about restoring dignity to America s workers and bringing the country together Biden said he got criticized for being old Joe and for talking about the way things used to be but added Folks we ve got to bring the country together There s no way this country can function without consensus Guests paid up to the personal campaign contribution limit of 2 800 to attend the event Thank you for your donations Biden told them I promise you I promise you I promise you I will try and not let you down Biden was scheduled to speak at an evening fundraiser at the Brentwood home of former Obama administration Ambassador to Spain James Costos and his husband the designer Michael Smith Tickets to that event cost 2 800 and were also available to those who could guarantee to raise at least 10 000 for Biden s campaign Between fundraisers Biden visited a taco shop with Los Angeles Mayor Eric Garcetti where he pledged to voters never to speak ill of a fellow Democratic presidential candidate
Referring to the party s current roster of 22 White House contenders he added This field s going to be winnowed out pretty quickly This is going to work its way through and that goes for all of us |
CMCSA | Is Comcast CMCSA A Great Value Stock Right Now | While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks we also know that investors tend to develop their own individual strategies With this in mind we are always looking at value growth and momentum trends to discover great companies
Considering these trends value investing is clearly one of the most preferred ways to find strong stocks in any type of market Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued leaving room for profits
On top of the Zacks Rank investors can also look at our innovative Style Scores system to find stocks with specific traits For example value investors will want to focus on the Value category Stocks with high Zacks Ranks and A grades for Value will be some of the highest quality value stocks on the market today
One company value investors might notice is Comcast CMCSA CMCSA is currently holding a Zacks Rank of 2 Buy and a Value grade of A The stock is trading with a P E ratio of 13 06 which compares to its industry s average of 17 95 Over the last 12 months CMCSA s Forward P E has been as high as 14 59 and as low as 11 94 with a median of 13 55
CMCSA is also sporting a PEG ratio of 1 10 This popular figure is similar to the widely used P E ratio but the PEG ratio also considers a company s expected EPS growth rate CMCSA s industry currently sports an average PEG of 1 52 Over the last 12 months CMCSA s PEG has been as high as 1 20 and as low as 0 93 with a median of 1 11
Value investors also use the P S ratio The P S ratio is is calculated as price divided by sales Some people prefer this metric because sales are harder to manipulate on an income statement This means it could be a truer performance indicator CMCSA has a P S ratio of 1 85 This compares to its industry s average P S of 2 34
Finally our model also underscores that CMCSA has a P CF ratio of 8 04 This figure highlights a company s operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook This stock s P CF looks attractive against its industry s average P CF of 9 17 Over the past year CMCSA s P CF has been as high as 8 53 and as low as 4 45 with a median of 7 62
These are only a few of the key metrics included in Comcast s strong Value grade but they help show that the stock is likely undervalued right now When factoring in the strength of its earnings outlook CMCSA looks like an impressive value stock at the moment |
WFC | Wells Fargo to exit personal insurance business | Reuters Wells Fargo Co N WFC said on Tuesday it would exit the personal insurance business and immediately begin winding down marketing and product promotion activity Wells Fargo s personal insurance business includes auto homeowners renters and umbrella insurance products The business financial contribution was not material to the company according to the bank s statement on Tuesday Wells Fargo has been working for more than a year to recover from a sales scandal that has impacted several of its consumer businesses including some insurance products The bank has also been working to cut costs as profits have fallen due in part to legal and regulatory problems Wells the third largest U S lender by assets has already exited several other insurance businesses including crop insurance which it sold in 2016 It announced a deal in June to sell its commercial insurance business That deal has yet to close
The personal insurance business is the last remaining insurance brokerage agency Wells Fargo owns |
WFC | Highlights of Tuesday s NHL games | The Sports Xchange Highlights of Tuesday s National Hockey League games Sharks 3 Flyers 1 Chris Tierney and Marc Edouard Vlasic scored even strength goals and Joe Thornton added a power play tally as the San Jose Sharks opened a four game road trip with a 3 1 win over the slumping Philadelphia Flyers on Tuesday night at the Wells Fargo NYSE WFC Center Goaltender Aaron Dell who filled in for injured starter Martin Jones stopped 22 shots for the Sharks San Jose extended its points streak to five games 3 0 2 Claude Giroux scored for the Flyers who lost for the ninth consecutive time 0 4 5 The Flyers have blown leads in seven of those nine games including a 1 0 lead against the Sharks The Flyers are riding their longest losing streak since the 2007 08 season when they lost 10 in a row and still made the playoffs Panthers 5 Rangers 4 Florida squandered a three goal lead but Denis Malgin s goal with 1 09 remaining proved to be the difference in a victory against New York Aleksander Barkov Jamie McGinn and Micheal Haley staked the Panthers to a 3 0 lead in the first period Jonathan Huburdeau had the Panthers fourth goal James Reimer earned the win by making 33 saves Chris Kreider recorded two goals and an assist Pavel Buchnevich had a goal and two assists and David Desharnais had three assists for New York J T Miller had the Rangers other goal Ondrej Pavelec took the loss in relief despite stopping 19 of 21 shots after replacing Henrik Lundqvist during the first period Islanders 5 Canucks 2 Five players scored for New York which remained red hot with a victory over Vancouver Andrew Ladd Calvin de Haan Jordan Eberle Andres Lee and John Tavares collected the goals for the Islanders who have won four straight and seven of eight New York is also unbeaten in regulation at home 8 0 2 Islanders goalie Jaroslav Halak recorded 23 saves Thomas Vanek and Bo Horvat scored for the Canucks who have lost three straight 0 2 1 and five of seven 2 3 2 Goalie Anders Nilsson made 31 saves Lightning 2 Sabres 0 Andrei Vasilevskiy made 34 saves to lead Tampa Bay over Buffalo It was the second shutout of the season and the sixth of his career for Vasilevskiy who leads the NHL in wins with 16 Defensemen Mikhail Sergachev and Dan Girardi scored for the Lightning who snapped a two game losing streak Robin Lehner made 24 saves for the Sabres whose struggles continued Buffalo has one win in its past 10 games Blue Jackets 3 Hurricanes 2 SO Cam Atkinson and Artemi Panarin scored in a shootout and Columbus defeated Carolina Blue Jackets goaltender Joonas Korpisalo stopped both Carolina shots in the shootout and finished with 29 saves Josh Anderson scored his team leading ninth goal of the season in the first period and Zach Werenski had the lone goal in the second period that gave the Blue Jackets a 2 1 lead Hurricanes left winger Brock McGinn tied it at 2 at 10 09 of the third period with a high blast for his sixth goal of the season Noah Hanifin scored a Carolina goal in the first period and Scott Darling finished with 36 saves Kings 4 Red Wings 1 Anze Kopitar scored twice including the eventual game winner and set up another as Los Angeles rallied for a victory over Detroit Dustin Brown and Adrian Kempe also scored for the Kings who won successive games for the first time since a three game winning streak in October Jonathan Quick made 23 saves Mike Green scored for the Red Wings who have lost five straight 0 2 3 Detroit also dropped to 500 4 4 4 on home ice this season Predators 3 Blackhawks 2 In their first trip to Bridgestone Arena since getting swept by Nashville in last season s Western Conference playoffs Chicago was once again stymied by Pekka Rinne The Nashville goalie turned away 37 shots including at least five point blank chances to lead his team to victory Austin Watson Filip Forsberg and Roman Josi scored for the Predators and Tommy Wingels and Lance Bouma had the Blackhawks goals Oilers 3 Coyotes 2 OT Matt Benning scored with 5 35 left in regulation to tie the game and Ryan Nugent Hopkins scored on a breakaway with 39 8 seconds left in overtime to lift Edmonton past Arizona Zack Kassian scored in the first period for Edmonton Benning also had an assist Christian Fischer scored in the first period and Oliver Ekman Larsson scored in the second for the Coyotes and Max Domi had two assists Maple Leafs 4 Flames 1 Roman Polak Nikita Zaitsev Nazem Kadri and Leo Komarov scored as Toronto topped Calgary Maple Leafs goalie Frederik Andersen made 19 saves to improve his record to 14 7 1 Michael Stone scored the lone goal of the game for the Flames who will have a chance to avenge the loss when the same two teams meet in Toronto on Dec 6 Netminder Mike Smith did his best to keep the Flames in the game by stopping 26 of 29 shots he faced Stars 3 Golden Knights 0
Radek Faksa scored his first career hat trick and Ben Bishop stopped 34 shots for his second shutout of the season as Dallas defeated Vegas The loss snapped a five game win streak and also an eight game home win streak for the Golden Knights both of which had tied the NHL record for a team in its inaugural season The Stars snapped a four game road losing streak and won for the fourth time in five games Dallas also became the first team to shut out Vegas which entered the contest second in the NHL in scoring with an average of 3 7 goals per game |
WFC | New Mexico AG to ask Wells Fargo for damages in accounts scandal | Reuters New Mexico s attorney general on Wednesday announced plans to ask Wells Fargo Co N WFC to pay damages on behalf of customers who were victims of a scandal in which the bank created as many as 3 5 million unauthorized accounts A push by Wells Fargo to get existing customers to buy more of its products known as cross selling was at the center of the fake accounts scandal that has dogged the bank for more than a year The company settled with regulators in September 2016 New Mexico Attorney General Hector Balderas said his investigation showed that Wells Fargo s corporate management used cross selling as a tactic and pressured employees to put profits over people San Francisco based Wells Fargo is the largest bank in New Mexico with 93 branches according to Balderas
Many lawsuits have been filed against the bank including those on behalf of customers and several top company officials including then CEO John Stumpf and retail banking chief Carrie Tolstedt have left the bank |
WFC | Redwood Trust CEO to exit | Marty Hughes will retire as Redwood Trust RWT 1 1 CEO and board member effective May 22 He s been CEO since 2010 Current President Chris Abate will succeed Hughes as CEO and has also joined the board effective today Abate joined Redwood in 2006 was CFO from 2012 to 2017 and has been president since July 2016 He ll be replaced in the president role by Dashiell Robinson who joined three months ago from Wells Fargo NYSE WFC Securities Source Press ReleaseAlongside the company announces its intention to keep its quarterly dividend at 0 28 per share through 2018 Source Press ReleaseNow read |
WFC | Fed rate expectations on the rise before tax cuts passed Senate Reuters poll | By Shrutee Sarkar BENGALURU Reuters The U S Federal Reserve is almost certain to raise interest rates later this month according to a Reuters poll of economists a majority of whom now expect three more rate rises next year compared with two when surveyed just weeks ago The results from a survey taken just before the U S Senate voted to pass tax cuts that are expected to add about 1 4 trillion to the national debt over the next decade show economists were already becoming more convinced that rates will need to go even higher While about 80 percent of economists surveyed in October said such tax cuts were not necessary the passage of the bill President Donald Trump s first major legislative success means the forecast risks have shifted toward higher rates and faster The poll s newly raised expectations for three rate rises next year are now in line with the Fed s own projections But they come despite a split among U S policymakers on the outlook for inflation which has remained persistently low That is a similar challenge faced by other major central banks who are generally turning away from easy monetary policy put in place since the financial crisis looking through still weak wage inflation and overall price pressures for now The core personal consumption expenditures price index PCE which excludes food and energy and is the Fed s preferred inflation measure has undershot the central bank s 2 percent target for nearly 5 1 2 years The latest Reuters poll results suggest it is expected to average below 2 percent until 2019 While the U S economy expanded in the third quarter at a 3 3 percent annualized rate its fastest pace in three years the latest Reuters poll taken mostly before the release of that data suggested that may be the best growth rate at least until the second half of 2019 The most optimistic growth forecast at any point over the next year or so was 3 7 percent well below the post financial crisis peak of 5 6 percent in the fourth quarter of 2009 Still all the 103 economists polled including 19 large banks that deal directly with the Fed said the federal funds rate will go up again in December by 25 basis points to 1 25 1 50 percent This is about just getting back to a neutral level where monetary policy is neither encouraging growth or pushing against growth said Brett Ryan senior U S economist at Deutsche Bank DE DBKGn which recently shifted its view to four rate rises next year The Fed is still accommodative at the moment and we are still some ways away from the neutral fed funds rate which would in the Fed s view be closer to 2 75 percent The Fed can hike without slowing the economy Financial markets are also pricing in over a 90 percent chance of a 25 basis point hike in December largely based on the falling unemployment rate and reasonably strong economic growth this year Asked what is the primary driver behind the Fed s wish to raise rates further over 40 percent of respondents said it was to tap down future inflation However almost a third of economists said it is to gather enough ammunition to combat the next recession At some point we are going to have a downturn and they the Fed are going to need to react and it is harder to do that when rates are closer to zero said Sam Bullard an economist at Wells Fargo NYSE WFC The remaining roughly 30 percent had varied responses including some who said higher rates were needed to avoid risks to financial stability Over 90 percent of the 66 economists who answered another question said that the coming changes at the Fed a new Fed Chair along with several new Fed Board members will also not alter the current expected course of rate hikes
Both the rate tightening outlook and balance sheet reduction program will remain in place as the Fed officials fill open seats Easing of financial regulation is likely the area that has the most forthcoming changes Bullard said Additional reporting and polling by Khushboo Mittal and Mumal Rathore Editing by Ross Finley and Hugh Lawson |
WFC | CB Leading Economic Index Growth In April All Time High | The Latest LEI for April increased to 126 9 from 126 5 in March and is currently at an all time high The 0 3 percent month over month gain matched the increase forecast by Briefing com
The Conference Board LEI for the U S increased again in April fueled by positive contributions from all its components except for building permits and stock prices In the six month period ending April 2017 the leading economic index increased 2 4 percent about a 4 9 percent annual rate well above the growth of 0 7 percent about a 1 5 percent annual rate during the previous six months Also the strengths among the leading indicators have remained widespread in PDF
Here is a log scale chart of the LEI series with documented recessions as identified by the The use of a log scale gives us a better sense of the relative sizes of peaks and troughs than a more conventional linear scale
For additional perspective on this indicator see the latest which includes this overview
The recent trend in the U S LEI led by the positive outlook of consumers and financial markets continues to point to a growing economy perhaps even a cyclical pickup said Ataman Ozyildirim Director of Business Cycles and Growth Research at The Conference Board First quarter s weak GDP growth is likely a temporary hiccup as the economy returns to its long term trend of about 2 percent While the majority of leading indicators have been contributing positively in recent months housing permits followed by average workweek in manufacturing have been the sources of weakness among the U S LEI components
For a better understanding of the relationship between the LEI and recessions the next chart shows the percentage off the previous peak for the index and the number of months between the previous peak and official recessions
LEI and Its Six Month Smoothed Rate of Change
Based on suggestions from Neile Wolfe of LLC and Dwaine Van Vuuren of we can tighten the recession lead times for this indicator by plotting a smoothed six month rate of change to further enhance our use of the Conference Board s LEI as a gauge of recession risk
As we can see the LEI has historically dropped below its six month moving average anywhere between 2 to 15 months before a recession The latest reading of this smoothed rate of change suggests no near term recession risk Here is a twelve month smoothed out version which further eliminates the whipsaws |
WFC | Should You Buy Brazil ETFs After Brutal Sell Off | Political woes are not new to the Brazilian economy especially when it comes to presidents facing corruption related allegations The current President Michel Temer has lately been accused of bribing Eduardo the former speaker of the house and thus manipulating the corruption probe and last year s impeachment of former president Dilma Rousseff Notably Rousseff was held responsible for illegally
Following the news of corruption allegations against Temer that in fact triggered the speculation of Brazil s Bovespa index registered its on May 18 since October 2008 Brazil ETFiShares MSCI Brazil Capped ETF lost about 16 3 on May 18 2017 However the fund rebounded about 6 8 the very next day read
Brazilian Stocks and Economy So Far This Year
Brazilian stocks and ETFs were on a tear in early 2017 Hopes of new reforms that can shore up the country s recession stricken economy after the impeachment of Dilma Rousseff commodity strength easing inflationary pressure and the resultant rate cuts perked up Brazil ETFs
The country slashed interest rates by 25 bps for the first time in four years in mid October giving signs of a turnaround in the long ailing economy read
The Brazilian central bank again cut rates by 25 bps in November 75 bps in January another 75 bps in February and 100 bps to 11 25 in April This gave a boost to consumer confidence in Brazil as low rates provide some relief to debt ridden families and lift business sentiments
Should You Use Temer Turmoil as Buying Opportunity
While this fast policy tightening cycle may halt in the coming days if the Temer turmoil continues longer one should not forget the brighter side Brazil is gradually turning into a fintech hub as per
Secondly the subdued greenback thanks to some weaker than expected U S economic data and multiple allegations against Trump might favor Brazilian stocks and ETFs This is because Brazil is a commodity rich country and a weaker greenback will help commodity prices hold ground believe that the recent shake up would likely dissipate creating value in the long term
Whatever be the case political uncertainty will keep Brazilian index highly volatile in the coming days iShares MSCI Brazil Small Cap ETF may suffer more than EWZ as small cap stocks are tied more to the developments in the domestic economy see all
With future leadership prospects in Brazil now significantly more uncertain the outlook for fiscal reform and budget consolidation has deteriorated as per a at Wells Fargo NYSE WFC Securities
Bottom Line
Still investors with a strong stomach for risks can play EWZ which is about to enter an oversold territory as indicated by the relative strength index of 38 31 The short term moving average 9 day for EWZ is above the mid term average 50 day and long term average 200 day suggesting bullishness
Want key ETF info delivered straight to your inbox Zacks free Fund Newsletter will brief you on top news and analysis as well as top performing ETFs each week |
CMCSA | Comcast Earnings Beat Revenue Misses In Q1 | Investing com Comcast NASDAQ CMCSA reported first quarter earnings that Beat analysts expectations on Thursday and revenue that fell short of forecasts
The firm reported earnings per share of 0 76 on revenue of 26 86B Analysts polled by Investing com expected EPS of 0 68 on revenue of 27 2B That compared to EPS of 0 62 on revenue of 22 79B in the same period a year earlier The company had reported EPS of 0 64 on revenue of 27 85B in the previous quarter
Comcast follows other major Services sector earnings this month
On Wednesday Visa A reported second quarter EPS of 1 31 on revenue of 5 49B compared to forecasts of EPS of 1 24 on revenue of 5 46B
Verizon earnings Beat analysts expectations on Tuesday with first quarter EPS of 1 2 on revenue of 32 13B Investing com analysts expected EPS of 1 17 on revenue of 32 15B
Stay up to date on all of the upcoming earnings reports by visiting Investing com s earnings calendar |
CMCSA | Comcast Rises 3 | Investing com Comcast NASDAQ CMCSA rose by 3 11 to trade at 43 15 by 09 36 13 36 GMT on Thursday on the NASDAQ exchange
The volume of Comcast shares traded since the start of the session was 2 38M Comcast has traded in a range of 42 11 to 43 19 on the day
The stock has traded at 43 2200 at its highest and 41 5100 at its lowest during the past seven days |
CMCSA | 3 Reasons Why Comcast CMCSA Is A Great Growth Stock | Investors seek growth stocks to capitalize on above average growth in financials that help these securities grab the market s attention and produce exceptional returns However it isn t easy to find a great growth stock
By their very nature these stocks carry above average risk and volatility Moreover if a company s growth story is over or nearing its end betting on it could lead to significant loss
However it s pretty easy to find cutting edge growth stocks with the help of the Zacks Growth Style Score part of the Zacks Style Scores system which looks beyond the traditional growth attributes to analyze a company s real growth prospects
Comcast CMCSA is on the list of such stocks currently recommended by our proprietary system In addition to a favorable Growth Score it carries a top Zacks Rank
Studies have shown that stocks with the best growth features consistently outperform the market And for stocks that have a combination of a Growth Score of A or B and a Zacks Rank 1 Strong Buy or 2 Buy returns are even better
Here are three of the most important factors that make the stock of this cable provider a great growth pick right now
Earnings Growth
Earnings growth is arguably the most important factor as stocks exhibiting exceptionally surging profit levels tend to attract the attention of most investors For growth investors double digit earnings growth is highly preferable as it is often perceived as an indication of strong prospects and stock price gains for the company under consideration
While the historical EPS growth rate for Comcast is 15 investors should actually focus on the projected growth The company s EPS is expected to grow 19 7 this year crushing the industry average which calls for EPS growth of 9 2
Impressive Asset Utilization Ratio
Growth investors often overlook asset utilization ratio also known as sales to total assets S TA ratio but it is an important feature of a real growth stock This metric exhibits how efficiently a firm is utilizing its assets to generate sales
Right now Comcast has an S TA ratio of 0 43 which means that the company gets 0 43 in sales for each dollar in assets Comparing this to the industry average of 0 35 it can be said that the company is more efficient
In addition to efficiency in generating sales sales growth plays an important role And Comcast is well positioned from a sales growth perspective too The company s sales are expected to grow 16 7 this year versus the industry average of 0
Promising Earnings Estimate Revisions
Beyond the metrics outlined above investors should consider the trend in earnings estimate revisions A positive trend is a plus here Empirical research shows that there is a strong correlation between trends in earnings estimate revisions and near term stock price movements
The current year earnings estimates for Comcast have been revising upward The Zacks Consensus Estimate for the current year has surged 1 3 over the past month
Bottom Line
While the overall earnings estimate revisions have made Comcast a Zacks Rank 2 stock it has earned itself a Growth Score of B based on a number of factors including the ones discussed above
You can see the complete list of today s Zacks 1 Rank Strong Buy stocks here
This combination positions Comcast well for outperformance so growth investors may want to bet on it |
CMCSA | IMAX s Q2 Earnings Surpass Estimates Revenues Rise Y Y | IMAX Corporation NYSE IMAX reported second quarter 2019 adjusted earnings of 32 cents per share that beat the Zacks Consensus Estimate by 4 cents and increased 6 7 year over year Total revenues of 104 8 million beat the Zacks Consensus Estimate of 98 million and increased 6 6 from the year ago quarter The year over year revenue growth was driven by an upside in the theater and network business segments Category wise equipment and product sales were 19 7 million up 28 1 from the year ago quarter Additionally services and rentals revenues were up 3 4 and 2 9 year over year to 56 7 million and 25 9 million respectively Finance income decreased 16 year over year to 2 6 million IMAX shares increased almost 3 to close at 21 95 on Jul 31 following second quarter 2019 results However shares declined 2 6 to close at 21 38 on Aug 1 IMAX shares have returned 13 7 year to date compared with the s rally of 3 9 Year to date PerformanceSegment DetailsIMAX network business revenues were 64 7 million up 6 3 year over year Within the segment IMAX DMR revenues were up 8 7 to 39 3 million Gross box office from IMAX DMR films increased 6 5 year over year to 364 9 million in the reported quarter The increase was primarily due to robust China box office Notably Greater China box office increased 28 8 year over year to 130 1 million Greater China is currently IMAX s second largest market measured by revenues and accounted for roughly 35 7 of total revenues in the reported quarter IMAX s largest single international partnership is in China with Wanda Film Wanda s total commitment is for 359 theater systems in Greater China of which 344 theater systems are under the parties joint revenue sharing arrangement Moreover IMAX released 19 films 15 new and 4 carryovers compared with 14 films 10 new and 4 carryovers in the year ago quarter Joint revenue sharing arrangements contingent rent was 25 3 million up 2 3 year over year IMAX theater business generated revenues of 34 94 million up 13 2 year over year driven by one additional installment of system upgrades and three additional systems recognized as hybrid joint revenue sharing lease arrangements Within this segment IMAX systems revenues increased 8 8 from the year ago quarter to 16 6 million Theater system maintenance revenues were 13 2 million up 7 1 Moreover other theater revenues increased 14 4 to 2 58 million in the reported quarter New business revenues plunged 84 7 year over year to 0 5 million However other revenues increased 34 3 from the year ago quarter to 4 65 million Network Growth StatisticsAs of Jun 30 2019 70 7 of IMAX theater systems in operation were located within international markets all countries other than the United States and Canada up from 67 9 as on Jun 30 2018 There were 1 541 IMAX theater systems 1 445 commercial multiplexes 15 commercial destinations 81 institutional operating in 81 countries as on Jun 30 2019 In second quarter 2019 IMAX installed 27 new IMAX theater systems and upgraded eight systems New installs consisted of 9 sales type 13 JVs and 5 hybrids Notably total signings were 73 in second quarter of which 45 were for IMAX laser There were 612 theaters in backlog as of Jun 31 2019 compared with 635 in the corresponding period of 2018 In the year to date period the company signed deals across regions Europe North America and Japan The company s large deals include CGV deal in China for 40 theaters and with Cineworld Regal for 15 U S theaters Operating DetailsGross margin contracted 460 basis points bps on a year over year basis to 56 8 in the reported quarter Network business gross margin contracted 370 bps on a year over year basis to 66 8 The decreased gross margin ratio was primarily attributed to the increase in contractual marketing obligations related to IMAX DMR films that delivered particularly strong box office during the quarter Theater gross margin was 44 2 in second quarter 2019 down from 51 9 in the year ago period due to the mix of systems installed in the quarter and higher sustained engineering costs required to support the IMAX with Laser roll out Adjusted EBITDA was 41 4 million in the reported quarter compared with 39 5 million in the year ago period Adjusted EBITDA margin expanded 100 basis points to 44 Selling general administrative SG A expenses declined 1 1 year over year to 32 1 million Research development R D expenses decreased 68 8 on a year over year basis to 1 22 million Operating income margin expanded 790 bps on a year over year to 22 9 in the reported quarter Balance Sheet Cash FlowAs of Jun 30 2019 IMAX had cash and cash equivalents of 106 5 million compared with 123 1 million in the prior quarter Cash flow from operating activities was 49 2 million Free cash flow was 34 1 million at the end of the quarter 2019 GuidanceBox office is expected to grow in low double digits compared with the earlier guidance of mid to high single digit range IMAX is anticipated to install 185 190 theater systems The company expects to upgrade 45 screens to IMAX laser and is anticipated to install approximately 140 145 new systems Additionally adjusted EBITDA margins are anticipated to increase in the range of 41 to 42 compared with the 2018 reported figure of 39 6 The company anticipates its box office performance to be strong in 2019 owing to popular releases like Avengers Endgame Spider Man Far From Home and Lion King IMAX stated that films including Bond 25 will use IMAX cameras in 2020 Notably Comcast s NASDAQ CMCSA Universal Pictures is one of the producers of the film Zacks Rank Stocks to ConsiderIMAX currently has a Zacks Rank 3 Hold Callaway Golf Company NYSE ELY and AMC Entertainment NYSE AMC are some better ranked stocks in the broader consumer discretionary sector Both sport a Zacks Rank 1 Strong Buy You can see Both Callaway and AMC Entertainment are set to report their quarterly earnings on Aug 8 Breakout Biotech Stocks with Triple Digit Profit PotentialThe biotech sector is projected to surge beyond 775 billion by 2024 as scientists develop treatments for thousands of diseases They re also finding ways to edit the human genome to literally erase our vulnerability to these diseases Zacks has just released Century of Biology 7 Biotech Stocks to Buy Right Now to help investors profit from 7 stocks poised for outperformance Our recent biotech recommendations have produced gains of 98 119 and 164 in as little as 1 month The stocks in this report could perform even better |
WFC | U S bond fund investors stirred not shaken | By Trevor Hunnicutt NEW YORK Reuters U S fund investors pumped millions into bond funds for a 50th straight week the Investment Company Institute ICI said on Wednesday showing that caution in recent weeks may not portend a flight from debt generally Taxable bond mutual funds and exchange traded funds ETFs took in 839 million during the turbulent week ended Nov 15 the lowest in nearly a year as high yield debt came under pressure according to the trade group But the funds still have not posted a week of outflows in nearly a year that has seen them pull in nearly 270 billion according to Thomson Reuters Lipper research unit This year as markets have been transfixed by stocks and other risk assets scaling record peaks bonds have been the clear winner among U S funds taking in more than 2 for every 1 gathered by their equity counterparts according to data from Lipper There s not a lot of value for the amount of risk that you re taking in the high yield market said Tracie McMillion head of global asset allocation at Wells Fargo NYSE WFC Co s Investment Institute referring to higher risk bonds issued by corporations and local municipalities We don t think this is the end of the bull market We just think we re later in the cycle so it s a time to start getting a little more cautious U S fund investors walloped high yield funds with their fourth largest weekly withdrawals on record during the week ended Nov 15 according to Lipper as investor sentiment deteriorated following setbacks to several corporate mergers and in U S tax reform efforts The funds have brought some of that money back in the days since Overall bond funds took in 1 5 billion during the week aided by a 19th straight week of flows into municipal funds ICI said Stock funds posted 54 million in outflows with 4 2 billion in domestic stock outflows almost offset by a 50th consecutive week of inflows for funds focused abroad |
WFC | U S regulator preparing to sue Santander bank over auto loans sources | By Patrick Rucker WASHINGTON Reuters A leading U S consumer watchdog is preparing to sue Santander MC SAN bank SOVBAN UL alleging that the Spanish bank overcharged borrowers on auto loans two sources familiar with the plans said on Friday The action by the Consumer Financial Protection Bureau CFPB could come as early as Monday said the sources who requested anonymity because they were not authorized to speak about the matter A Santander spokeswoman Raschelle Burton on Friday declined to comment A spokesman for the CFPB did not immediately respond to a request for comment According to the sources the lawsuit centers on a financial product known as guaranteed auto protection GAP that can shield a car buyer from some of the expense of a serious collision If a driver s auto insurance only covers replacement cost GAP coverage may cover the entire balance of the loan Consumers often purchase GAP insurance in the dealer showroom and the costs are built into the car loan Federal and state officials have been looking into whether consumers have been paying for unneeded GAP insurance or have seen their loan rates climb too high when GAP coverage was added Last month Reuters reported that the Office of the Comptroller of the Currency a bank regulator was examining how Wells Fargo NYSE WFC administered its auto loan business In 2015 Santander Consumer USA Holdings Inc N SC agreed to pay at least 9 35 million to resolve charges that it improperly repossessed cars of members of the U S military It neither admitted nor denied any wrongdoing
In March Santander Consumer USA Holdings agreed to pay 22 million in connection with what the attorney general in Massachusetts called a first in the nation settlement involving subprime auto loan securitization |
WFC | Trump names interim consumer agency head likely sparking showdown | By Pete Schroeder WASHINGTON Reuters U S President Donald Trump has designated White House Budget Director Mick Mulvaney acting director of the Consumer Financial Protection Bureau until a permanent director is nominated and confirmed the White House said on Friday The action came hours after Richard Cordray submitted his formal resignation and named a deputy director as his replacement setting the stage for a political and legal battle over the regulator s leadership The president looks forward to seeing Director Mulvaney take a common sense approach to leading the CFPB s dedicated staff an approach that will empower consumers to make their own financial decisions and facilitate investment in our communities the White House said in its statement Democratic lawmakers are eager to preserve the regulator for as long as possible while Republicans want to put in place new leadership to chart a drastically different course The six year old bureau has policed consumer financial markets drafting aggressive rules curbing products like payday loans while issuing multimillion dollar fines against large financial institutions like Wells Fargo NYSE WFC But Republicans have consistently complained the agency is too powerful and lacks oversight from Congress on its operations and they are eager to take control Mulvaney who has criticized the bureau in the past said I look forward to working with the expert personnel within the agency to identify how the bureau can transition to be more effective in its mission while becoming more accountable to the taxpayer The succession plan has never been tested with Cordray as its first and only full time director Cordray had previously announced plans to resign by the end of November In a statement to staff he said that Leandra English the CFPB s chief of staff had been named deputy director and would take over as acting director of the agency upon his exit However the White House had already said it planned to name its own interim leadership at the regulator Trump has pushed to ease regulations on businesses including the financial sector a stance seemingly at odds with Cordray s more aggressive regulatory approach Earlier this month White House deputy press secretary Raj Shah said that the administration will announce an acting director and the president s choice to replace Mr Cordray at the appropriate time There are competing theories in Washington as to who can name Cordray s replacement Democrats point to language in the Dodd Frank law that created the CFPB stipulating the deputy director replaces the director when he or she leaves
But others say a separate law governing federal vacancies gives Trump power to name someone elsewhere in the administration to that role temporarily while the White House identifies a full time nominee who would be confirmed by the Senate |
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