If the latest Wall Street mega-deal doesn’t make you want to switch online brokerage accounts for a lucrative sign-up bonus, maybe it should. Wall Street giant Morgan Stanley announced an agreement Thursday to pay $13 billion to acquire the online brokerage E-Trade which has 5.2 million customer accounts. “The combination will significantly increase the scale and breadth of Morgan Stanley’s Wealth Management franchise, and positions Morgan Stanley to be an industry leader in Wealth Management across all channels and wealth segments,” Morgan Stanley said in a statement.
Michael Bloomberg, the billionaire former New York City mayor running for the Democratic presidential nod, says he will release his tax returns — but that’s no easy feat. “I can’t go to TurboTax,” Bloomberg, the founder and CEO of the global media and financial data company Bloomberg L.P., told Democratic debate moderators on Wednesday night. Bloomberg, who is worth $65.2 billion according to Forbes, said he makes money from all over the globe, so his tax payments are complex.
The Dow Jones Industrial Average dropped again on Friday—and yields on long-term Treasury debt fell to record lows—but investors can’t simply blame the coronavirus outbreak in China this time. A key U.S. economic indicator registered its weakest reading since 2013. The Markit Services PMI, or purchasing manager index, came in under 50—the level that divides growth from contraction.
You’ve heard of helicopter parents? Welcome to the world of helicopter investing and our call of the day from Barclays Wealth Management’s chief investment officer William Hobbs, who says investors are too angst-ridden lately about one particular monster under the bed.
Investors continue to voice concern on a potential president Bernie Sanders.
The selling pushed the S&P 500 and Nasdaq Composite off record highs.
It's the end of an era for Victoria's Secret, the lingerie giant that for 28 years has been under the wing of mall retail group L Brands. On Thursday, private equity firm Sycamore Partners announced that it would acquire a 55% stake in the company for $525 million.The deal, which takes Victoria's Secret off the public market at a valuation of $1.1 billion, is notable not only for its relatively modest size (L Brands' market capitalization has fallen from $29 billion at its peak in 2015 to around $6.5 billion today) but also for the brand's new owner. Here's what you need to know about the company:1\. Sycamore Partners has been involved in more than a dozen retail industry buyouts since it was founded in 2011, acquiring, and later exiting, several major names in footwear, including Stuart Weitzman, Nine West and Kurt Geiger. The New York-based company currently manages $10 billion in assets, and its retail portfolio includes Belk, The Limited, Talbots, Staples, Torrid and Hot Topic.2\. While the firm has reaped hundreds of millions of dollars in profits from its investments, its methods have often been controversial, in some cases saddling retailers with massive debt that eventually played a role in their bankruptcies. Arguably the highest-profile dispute centered on its $2.2 billion acquisition of The Jones Group in 2014. According to a lawsuit filed in early 2018 by creditors of Nine West Holdings, the collection of brands that remained after Sycamore sold off other parts of the Jones Group portfolio, alleged that the financial firm "engaged in outright fraud" at several points in the transaction.First, the suit alleged, Sycamore used deceptively low earnings projections to negotiate a low-ball $395 million purchase price for the Stuart Weitzman brand — also part of The Jones Group at the time — and then bumped these up to more realistic figures to sell the shoe company off to Coach Inc. (now Tapestry Inc.) for $548 million, pocketing the difference. The suit also accused the private equity firm of inflating earnings forecasts for the Nine West chain during the buyout, allowing the group to take on $1.5 billion in debt that it would ultimately be unable to repay.Sycamore denied any wrongdoing, and there were months of contentious disputes that included Sycamore threatening to stop buying Nine West products at the department store Belk, one of its other portfolio companies, should the suit go forward. Ultimately, all parties settled early in 2019. Nine West emerged from bankruptcy in March 2019 under the new name Premier Brands Group Holdings LLC.3\. Several of the businesses Sycamore has exited are now in healthier positions. Kurt Geiger, another former Jones Group property, was bought by European private equity firm Cinven for a reported $372 million in December 2015. Since then, its new owners have focused on growing the business through international expansion, investing in new stores and technology, and growing its popular handbags category.For the year ended January 2019, the brand's earnings increased 5.7% to 38.1 million pounds ($49 million), while sales were up 3% to 349 million pounds ($450 million).4\. The private equity business has become a controversial specter in retail today, as major shifts in consumer behavior and technological change have upended the market. Traditional retailers are a much riskier bet than they were in decades past, and critics have accused private equity firms of extracting profits from the companies they invest in while leaving them too cash-strapped to compete.According to a 2019 study from the progressive advocacy group Center for Popular Democracy, 71% of the highest-profile retail bankruptcies since 2012 were at private equity-owned companies. During that time, the study said, private equity’s investment in retail led to the direct elimination of 597,000 jobs.“Retail had always been thought of as one of those industries that were good for private equity because it was steady and there hadn’t been these revolutionary changes over the course of 40 years,” Howard Berkower, attorney and partner at law firm McCarter & English, told FN in 2018. “Now it’s changed a lot and [PE owners] don’t have the skill set, the available equity or the firepower because [the companies they buy out are] already over-levered.”More from Footwear News * These Retail Stocks Rank Among the Worst Performers of 2019 * Victoria's Secret Confirms Its Fashion Show Is Canceled * Victoria's Secret Models in Metallic Sandals Are Trending at UNICEF Summer Gala
Not all dividend stocks are created equal. The average dividend yield among S&P companies is only 2%, not much higher than a Treasury bond. Years of low-interest policy from the Fed has worked to push return rates down across the board, and dividend yields – on average – have simply lagged slightly.Of course, that’s an average. You can still find high returns out there, and dividend stocks are a logical place to look. After all, while Fed rates may establish a cap for bond interest, dividends are only limited by the paying company’s overall profits. The sky’s the limit.We’re taking a look at that boundless upper limit today, using the TipRanks Stock Screener tool to pull up three stocks with 8% or better dividend yields. And back to our initial point, to show how high dividends are not the only factor to consider, Wall Street’s analysts only rate two of these as Buys. Let’s dive in.Plains GP Holdings (PAGP)Our first stock is a holding company, whose subsidiaries operate in the oil industry. The company’s operational arms are involved in the crude oil midstream sector, including transport, storage, terminalling, and marketing, as well as the liquid petroleum gas (LPG) and natural gas storage segments. PAGP has a $3 billion market cap, a high upside potential, and a surprising low point of entry.The stock is down 26% over the past 12 months, as the oil industry has faced a continuing low-price regime. While oil is a necessary commodity, that today’s economy cannot do without, a combination of high production and slack demand has put downward pressure on prices. WTI, the main US benchmark price, is down 6.6% in the past 12 months, and trading has been volatile in the oil markets.Despite the headwinds in the oil markets, PAGP beat the revenue estimates in its Q4 earnings report, while missing on earnings. EPS was reported at 26 cents, down steeply year-over-year and only half what was expected. In better news, the company reported $9.15 billion to top-line revenue, 9.3% better than the $8.37 billion forecast.With net-positive earnings and rising revenues, PAGP was able to maintain its 36-cent per share quarterly dividend, even while the payout ratio bumped up to a dangerous 136%. The company has been making reliable dividend payments since 2014, and has raised the payment modestly in the past two years. At $1.44 annualized, the yield is a generous 8.54%.Barclays analyst Christine Cho sees PAGP growing going forward, resting as it does on a sound foundation. She writes, in her recent report on the stock, “Fundamentals remain on solid footing for the industry, with midstream companies largely posting record profits, production set to grow in 2020, and crude prices generally stabilizing… we think global supply/demand for oil is more balanced, supported by the combination of increased capital discipline on the part of U.S. shale producers, OPEC production cuts, and subsiding recession fears...”Cho puts a $24 price target on PAGP, suggesting an upside of 42% behind her Buy rating. (To watch Cho’s track record, click here)Overall, Plains GP has a Strong Buy from the analyst consensus, with 4 recent reviews that include 3 Buys and 1 Hold. Shares are priced affordably, at $16.83, and the $21.33 average price target implies room for a robust 26% upside. (See Plains GP’s stock analysis at TipRanks)Ares Capital Corporation (ARCC)Moving on, we enter the investment management sector. Ares Capital is an asset manager with a focus on providing full-service financial solutions for middle-market companies. It has been traded publicly since 2014 and the stock has paid a reliable dividend ever since. ARCC has a market cap over $8 billion, and brings in over $1.5 billion in annual revenue.In Q4, Ares met earnings expectation, with EPS reported on target at 45 cents. Quarterly investment income was up 12% year-over-year, to $386 million, but missed the forecast. Total investment income for 2019 was reported at $1.53 billion, in line with estimates and up 14.3% from 2018. While the earnings and revenue were generally seen as good, the company reported 28.7% higher expenses in Q4, a development that pushed stock prices down 1.4% since the release.The quarterly figures were good enough to maintain ARCC’s dividend, which pays out 40 cents per share quarterly. The $1.60 annualized figure gives a yield of 8.42%, far above the broader market average. At 89%, the payout ratio indicates that Ares returns most of its profits to shareholders – but that it can afford to do so. ARCC has been slowing raising the dividend payment over the last few years.Lana Chan, 4-star analyst from BMO Capital, likes what she sees in ARCC. Citing especially the company’s ability to meet challenges, she writes, “ARCC currently has ~$3 billion in undrawn credit commitments and remains at the low end of its targeted leverage range, giving management ample dry powder to take advantage of any future market opportunities.”Chan gives this stock a Buy rating, and backs it with a $21 price target. Her target indicates an 11% growth potential in coming months. (To watch Chan’s track record, click here)Also bullish is Jefferies 5-star analyst John Hecht. He wrote of the stock’s overall condition, “Revenues of $386M were consistent with our forecast, as robust portfolio growth and higher dividend income offset ongoing yield compression. The portfolio grew 16% YoY, ahead of our forecast, as ARCC ramped leverage to 0.93x. Credit remains stable and below peer averages while NOI is comfortably ahead of ARCC's consistent distribution…”In line with his upbeat outlook, Hecht set a $20.50 price target, with an 8.5% upside potential, to support his Buy rating on ARCC. (To watch Hecht’s track record, click here)With 8 recent Buy ratings, ARCC’s analyst consensus view is a unanimous Strong Buy. This is another affordable stock, priced at just $18.89. The average price target of $20 suggests a modest upside potential of 5.88% for the stock. (See Ares Capital stock analysis at TipRanks)Hersha Hospitality (HT)The last stock on our list is the sell-side call. Hersha Hospitality is a real estate investment trust (REIT), a company specializing in buying, owning, operating, and leasing various residential and commercial properties. In compliance with tax law, these companies must return the bulk of their profits to shareholders, making them frequent visitors to “great dividend stock” lists. But not always.Hersha owns 48 hotels, with a total of 7,644 rooms, on both coasts of the US. The company’s West Coast properties are located in California and Washington, while the more numerous East Coast properties are located in Massachusetts, New York, Pennsylvania, Washington DC, and South Florida. New York and California have the most Hersha properties, with 10 and 7 respectively.High costs in urban areas have put a damper on company profits, and the company reported 53 cents per share in funds from operations (FFO). This was 8.6% below the forecast, and a 23% drop from the prior year’s Q3. Total revenue, at $135 million, was closer to the forecast (missing by less than 1%), and up 5.5% year-over-year. In the last four quarters, HT has only beating the forecasts once – and the stock is down 18% in the past 12 months.While earnings were mixed, Hersha kept up its dividend payments. The company pays out 28 cents per share quarterly, or $1.12 annualized, and shows a yield of 8%. Hersha has paid out the dividend reliably since 2011, an enviable record. The payout ratio is low for an REIT, at just 53%.Wall Street’s analysts are not impressed with HT shares right now. Writing from Barclays, Anthony Powell notes “Hersha’s 3Q19 results missed our estimates, guidance and consensus as conditions in several of the company’s urban markets were more challenging than the company originally forecast. While Hersha continued to outperform in several of its markets, the overall softer environment in 3Q and October drives a 6% reduction in EBITDA guidance for the year. Looking forward… high supply growth in New York and relatively high leverage will remain concerns for investors”Powell’s $14 price target on HT shares indicates a slight downside from current prices, in line with his Sell rating. (To watch Powell’s track record, click here)4-star analyst Ari Klein, of BMO Capital, is also downbeat on this stock. He writes, “HT reported a weaker 3Q19 and lowered 2019 guidance, including adjusted EBITDA guidance by 5% at the midpoint and adjusted FFOps by 8%... EBITDA growth is not materializing as expected by HT…”Klein rates the stock a Sell, and his $12.50 price target implies a downside of 11.4%. (To watch Klein’s track record, click here)Hersha Hospitality gets a Moderate Sell rating from the analyst consensus, with 2 Hold and 1 Sell rating given in recent weeks. Shares are priced at $14.11, and the $14.33 average price target suggests a minimal upside of 1.56%. (See Hersha stock analysis at TipRanks)
If you’re looking for a platform for investing, you may consider two of the largest brokerage firms, Vanguard and Fidelity. Each offers plenty of low-cost funds, brokerage and retirement savings accounts, third party financial products and mobile app offerings. To … Continue reading ->The post Vanguard vs. Fidelity: Which Brokerage is Best? appeared first on SmartAsset Blog.
As the Canadian cannabis market continues to fail to meet sales projections, the licensed producers (LPs) with the best balance sheets are poised to lead a market rebound. With both Aurora Cannabis and Tilray implementing restructurings, the industry could see a void in certain markets providing opportunities for companies with the ability to fund growth initiatives.Based on the Aurora restructuring, the company is exiting several international markets along with shifting a focus to a value brand. Along with cutting cultivation goals from close to 700,000 kg to only 150,000 kg, the company plans to strip out over C$60 million in quarterly operating expenses. The disruption from removing so many expenses should leave some voids in the market allowing opportunistic moves by companies with the ability to continue investing.In a smaller manner, Tilray is cutting 10% of their workforce. The company hasn’t detailed their plans regarding exiting any businesses, but a business the size of Tilray cutting 140 employees will leave an inevitable void. The move will allow a better funded business to capture more market share as the job functions of the exiting employees aren’t fully absorbed within the smaller workforce.We’ve delved into these three Canadian companies poised to lead a market rebound as other companies restructure and focus on survival:Aphria (APHA)Aphria remains the best value in the sector combined with having the catalysts of their new facility ramping up production. The stock is down to only $4.20 now offering only a $1.12 billion market valuation.The company recently reported FQ2 revenues of C$120.6 million along with positive EBITDA. The cannabis business only accounts for C$33.7 million in quarterly revenues, but the business is poised to jump due to the Aphria Diamond facility increasing production capacity to 255,000 kg annually from a previous level of only 115,000 kg.Aphria forecast revenues reaching C$600 million in FY20 leading to a near C$50 million boost per quarter for the 2H of the year. The big forecast includes adjusted EBITDA in the C$40 million range.The Canadian cannabis company recently raised C$80 million secured by the new cultivation facility pushing the cash balance to nearly C$500 million at the end of November. In January, Aphria raised another C$100 million from an institutional investor to provide additional capital for international expansion and working capital.Due to the additional cultivation capacity, Aphria has a major catalyst to boost the company from existing levels. The stock has the better potential for substantial gains on a turnaround due to their leading financial position and low valuation.The word on the Street rings largely bullish on this cannabis player, with TipRanks analytics demonstrating APHA as a Moderate Buy. Out of 6 analysts tracked in the last 3 months, 4 are bullish on Aphria stock, while 2 remain sidelined. With a return potential of over 60%, the stock's consensus price target stands at $6.83. (See Aphria stock analysis at TipRanks)Cronos Group (CRON)Cronos is the one company with the cash balance that hasn’t aggressively spent the balance as of yet. The cannabis company ended the September quarter with a cash balance of $2.0 billion from the investment by Altria Group all the way back in 2018.Analysts only forecast 2020 revenues reaching $118 million due to the lack of investments in cultivation facilities so far with the focus more on building global operations, CBD products and Cannabis 2.0 products. The company has an asset-light strategy with a focus on buying cannabis derived products from third parties to be branded under Cronos brands. The biggest issue for the stock is the strategy has been light on products.Investors should see Cronos as the most likely acquirer of beaten down assets, especially any strong cannabis brands that don’t have the capital to remain in business or expand. In this manner, the company is likely to lead the market turnaround via consolidation.A few timely deals to remove a couple of competitors from the Canadian cannabis market could do wonders for removing capacity and pricing pressure from the sector. Cronos can easily spend $500 million to $1 billion without damaging their capital position and ability to invest in growing the existing businesses while boosting their revenue streams.Based on the above factors, Wall Street also has high hopes for CRON. As 3 Buy ratings were assigned in the last three months compared to no Holds or Sells, the consensus is a ‘Strong Buy.’ To top it all off, its $10.29 average price target puts the potential twelve-month gain at a whopping 43%. (See Cronos stock analysis at TipRanks)Canopy Growth (CGC)The largest valued cannabis stock remains Canopy Growth. The company has the cash and backing from Constellation Brands to lead in any sector rebound.For the just reported quarter, Canopy generated December revenues of C$123.8 million for 49% growth over last year due to European acquisitions in the CBD space. The company is now double the size of Aurora and, prior to any reorganization, is spending C$150.3 million on operating expenses or at least three times the reduced base of Aurora.New CEO David Klein discussed some general plans to reorganize the business, but investors shouldn’t expect the scale of the others. Clearly, Canopy needs to cut the C$91.7 million quarterly EBITDA loss in order for the market to have confidence in their sector leadership in the future.The company can reduce the EBITDA loss via revenue growth and higher margins, but some additional constraints on operating expenses would go a long way to reduce any fears of out of control losses. Canopy has a C$2.3 billion cash balance remaining from the Constellation Brands investment allowing for continued investment in international markets and Cannabis 2.0 products. The large cash balance allows the new CEO to continue investing while shutting some smaller segments not generating strong margins and burning cash.The biggest issue for the stock is the $8 billion market valuation. The stock trades at 14x FY21 revenue estimates of ~$550 million. The stock will rebound on any cannabis turnaround, but investors shouldn’t expect massive gains due to the large cap status of Canopy.To find good ideas for cannabis stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights.Disclosure: No position.
The U.S. 30-year Treasury bond yield dropped to an all time low on Friday, sparking worries among investors who wonder what it’s saying about the economy’s future prospects.
The capital gains tax is what you owe for the money you've made selling certain assets. Here's what you need to know about the current rate and what can be exempt.
Economist David Rosenberg believes the stock market has become too disconnected from the economy to reflect the troubles bubbling beneath the surface. A shakeout is coming, he warns.
Former New York mayor Mike Bloomberg vowed Friday to release female former employees from nondisclosure agreements, days after Sen. Elizabeth Warren of Massachusetts hammered him on hush agreements at the Democratic presidential debate in Las Vegas. The billionaire said in a statement that his namesake company had identified three NDAs signed with women over more than three decades “to address complaints about comments they said I had made.” Those women would be released from the confidentiality agreements if they contacted the company, he said. “I’ve done a lot of reflecting on this issue over the past few days and I’ve decided that for as long as I’m running the company, we won’t offer confidentiality agreements to resolve claims of sexual harassment or misconduct going forward,” Bloomberg said.
Berkshire Hathaway Inc. (BRK)(BRK) will release Warren Buffett’s eagerly awaited annual shareholder letter, the company’s annual report and its latest earnings around 8 a.m. Eastern on its website, where investors can also peruse the chairman and chief executive’s past missives. Mark Hulbert: Warren Buffett had a tough year—how might he explain it? Investors of all stripes have dived into the lengthy letters over the years to pick up Buffett’s insights on a range of topics beyond Berkshire’s performance.
The IBD Live Team discussed stocks to buy and watch during Friday's IBD Live. Among stocks on the move, the Team analyzed a 3% pullback in Microsoft stock.
Shares of Esperion Therapeutics crumbled Friday after the biotech company's cholesterol medicine gained Food and Drug Administration approval. Nexletol aims to lower "bad" LDL cholesterol.
There are many strategies to invest for retirement, but if they include loading up on stocks in your old age, they’re dangerous, says Raoul Pal, former hedge fund manager and chief executive officer and co-founder of financial media company Real Vision. In an effort to assist Americans in preparing properly for their retirement, Pal and his company released a two-week campaign of retirement-related videos, which focus on different aspects of the investment process. The two weeks-worth of content end with a documentary on the retirement crisis, which includes conversations with prominent retirement experts, including a former SEC attorney and economists.
The commercial spacecraft company started by Richard Branson has a decade of stops, starts, and missed deadlines. Why, given the multiple risks, has the stock soared some 200% this year?
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It's time for investors to take some profits in stocks, the pros begin to argue.
Tandem Diabetes is poised to outperform bearish quarterly expectations, an analyst said as he predicted Tandem Diabetes stock would continue a sizable run in 2020 and take share from rivals.
San Antonio based USAA Federal Savings Bank, a subsidiary of USAA, will discontinue its car buying services and its 13-year relationship with Santa Monica, California-based automobile eCommerce company TrueCar, Inc. (NASDAQ: TRUE), according to a statement released by TrueCar before its earnings call on Feb. 20. This transition agreement will be active through Sept. 30, in which USAA will pay a $20 million transition services fee to TrueCar, while also continuing revenue share that will remain the same as the previous agreement. The revenue shares include an undisclosed amount for each USAA member sale; for each trade-in or sale of a used vehicle by a member in which they did not purchase a vehicle from TrueCar; as well as a customized fee for sales from an original equipment manufacturer such as BMW North America LLC, Fiat Chrysler Automobiles, Mercedes, Volvo, Audi and Nissan, according to documents filed by TrueCar to the U.S. Securities and Exchange Commission.
L Brands will own a stand-alone Bath & Body Works, which analysts say is poised to grow in earnings and sales.