It was a good day on Wall Street as the three major indexes all flexed higher in intraday trading to continue the longest economic expansion in history. The DJIA gained over 180 points while the S&P 500 popped 0.27% and the NASDAQ Composite gained 0.28%. The gains in the equity market were followed by the 10-year US Treasury note jumping to its highest yield since the election of Donald Trump.
The 10-year yield jumped 15 basis points to 1.96% and helped correct the spread of the yield curve, which inverted over the summer and exacerbated worries of a potential economic contraction. With the stock market booming to new highs as the world’s two largest economies work to settle their differences, investors should look back into equities as the economic run continues.
Store Capital STOR is an internally managed net-lease real estate investment trust. It is engaged in the acquisition, investment, and management of Single Tenant Operational Real Estate. The REIT has seen its shares climb over 38% in 2019 thus far, outpacing the broader real estate market’s 21.4% run. REITs are a solid move to consider in a market where the Fed just cut rates for the third time this year.
REITs utilize low interest rates to refinance their debts and use the left-over cash to further expand their operations. Store Capital sports a juicy 3.59% dividend yield and a beta ratio of 0.19 that can provide some volatility insurance to a portfolio. Our fiscal 2019 estimates call for net revenue to climb 21.74% to $633.71 million and for FFO to grow 3.26% to $1.90 per share. Store Capital’s estimate revisions have trended higher, earning the stock a Zacks Rank #1 (Strong Buy).
Crocs CROX is coming off another spectacular quarter that sent its shares soaring nearly 16% in the aftermath of its Q3 earnings report. Revenue jumped 20% in the period, and adjusted earnings per share tripled from year-ago levels. The back-to-school season helped catapult sales in the Americas by 35% and the strong results has management stoked for the upcoming holiday season. The strong quarterly performance led to management providing an upbeat guidance where they boosted their expected full fiscal year revenue growth.
The company says it now expects 2019 revenue to increase 11% to 12% year over year, which is up from previous guidance of 9% to 11% growth. Our fiscal 2019 estimates forecast a bottom-line surge of over 88% to $1.62 per share and a sales climb of 12.11% to $1.22 billion. Crocs is a Zacks Rank #1 (Strong Buy), and has put together an admirable comeback over the past few years after it struggled to gain traction in 2016 and 2017.
Cirrus LogicCRUS is a semiconductor whose chips are used in a wide range of industrial and consumer markets including portable and non-portable media players, smartphones, tablets, and other electronics. It may be time to come back to semiconductors as Washington and Beijing are in talks to repair their battered relationship. The chipmaker is coming off a second quarter report that sent its shares soaring over 14%.
Q2 revenue was up over 6% Y/Y and Non-GAAP (adjusted) earnings grew over 43%. Cirrus attributed its growth in the second quarter to the higher production of boosted amplifiers' haptic drivers and a new smart codec for smartphones. The company is starting to ween itself off its dependence on Apple (AAPL) as it gained momentum in other applications such as laptops, tablets and digital headsets.
The company’s expansion in China is also impressive as its CEO stated that the company is still shipping components to Huawei and that it recently scored design wins from other Chinese OEMs. Cirrus Logic’s shares have skyrocketed over 107% YTD and the stock is listed as a Zacks Rank #1 (Strong Buy).
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