98.90 -0.12 (-0.12%)
Pre-Market: 8:16AM EDT
|Bid||98.37 x 1000|
|Ask||98.90 x 1300|
|Day's Range||98.99 - 101.04|
|52 Week Range||84.75 - 118.23|
|Beta (3Y Monthly)||1.58|
|PE Ratio (TTM)||33.66|
|Earnings Date||Aug 21, 2019|
|Forward Dividend & Yield||2.20 (2.22%)|
|1y Target Est||113.86|
Home Depot's (HD) integrated retail strategy, which encompasses digital properties and physical stores, is one of its key drivers. Strength in Pro and DIY categories also bodes well.
Moody's Investors Service ("Moody's") has assigned a definitive Aaa (sf) rating to the SynchronySeries Class A (2019-2) Notes issued by Synchrony Card Issuance Trust, sponsored by Synchrony Bank. The ratings are based on the counterparty risk assessment (CR Assessment), private monitored rating or low volatility credit estimate, as applicable, of the sponsor, which we use to assess the likelihood of the sponsor becoming insolvent and shutting down its credit card portfolio, the quality of the underlying credit card receivables, the transaction's structural protections, the expertise of Synchrony Bank, as servicer, and the credit enhancement from subordinate notes and the Subordinated Transferor Amount. Assets of the trust consist of private label and co-branded credit card receivables generated on accounts originated and underwritten by Synchrony Bank.
AMS Retail Solutions executives believe a new contract with an international appliance manufacturer — Samsung Home Appliances — and other growth will push the company to double its workforce to 1,000 employees.
Lowe's (LOW) reported earnings 30 days ago. What's next for the stock? We take a look at earnings estimates for some clues.
The most you can lose on any stock (assuming you don't use leverage) is 100% of your money. But when you pick a...
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Decent comps performance and top-line growth are likely to aid Lowe's (LOW) amid dismal margins and muted bottom-line view for FY19.
Editor's note: This article is a part of InvestorPlace.com's Best ETFs for 2019 contest. Vince Martin's pick for the contest is the iShares U.S. Home Construction ETF (BATS:ITB).Heading into 2019, the case for the iShares U.S. Home Construction ETF (BATS:ITB) was reasonably simple. Pretty much anything housing-related had been sold off big in 2018. In fact, ITB stock fell some 31% for the year. Yet the economy still seemed strong. Broad markets, even with a rough Q4, were in decent shape. Economically sensitive housing-related stocks were plunging despite the news simply being not that bad.InvestorPlace - Stock Market News, Stock Advice & Trading TipsThat divergence was why I named ITB as my pick for the Best ETFs of 2019 contest. So far, it has been a solid choice, with the ITB ETF gaining 29% year-to-date against a 17% rise in the S&P 500. Homebuilder stocks have risen, as have most of the industry's retailers and many of its suppliers.But at this point, the case for ITB gets a little thinner. After the first quarter, the fund had returned 16%, but that was only modestly better than low double-digit gains in most broad market indices. And so I made the case in late March that ITB still had some catching up to do.Three months later, ITB hasn't completely caught up. Since the beginning of 2018, the fund remains negative against an ~10% gain for the S&P 500. But the gap certainly has closed. As such, this ETF will need some outside help if it's going to keep rising. * 10 'Buy-and-Hold' Stocks to Own Forever The Case Against ITB as One of the Best ETFsUp 29% YTD, it certainly seems like the easy money has been made here. That seems particularly true looking at the fund's key holdings: 27% of assets are in the country's two largest homebuilders, D.R. Horton (NYSE:DHI) and Lennar (NYSE:LEN).Both stocks have rallied sharply this year (+29% for DHI, +33% for LEN), driving a good chunk of the fund's gains. Another 40% of the fund owns smaller homebuilders -- most of which have followed similar patterns. Most of the group is below their highs, but many have at least returned to 2018 trading levels.Home Depot (NYSE:HD) has gained nicely, and is threatening a new all-time high. Lowe's (NYSE:LOW) has underperformed, but is still positive. In December, ITB was a case of buying a group of stocks at or near the lows. That's not the argument anymore.Now, ITB needs at least a few components to break out from the highs -- and not just rebound off the lows. That might be tough. Tariffs are pressuring margins in the space. Trade war concerns are affecting the macroeconomic outlook. There's still a belief that a downturn in the U.S. has to be on the way at some point, as we head into year eleven of the economic expansion. Homebuilder stocks, in particular, likely would take a big hit.At this point, risks are rising and valuations aren't as cheap. That's a combination that suggests, at the least, that ITB's appreciation is going to slow in the second half. The Case for the iShares U.S. Home Construction ETFFor market and macro bulls, however, ITB still looks like a solid pick. The ETF remains about 15% below early 2018 highs. With some help from lower interest rates, which would lower mortgage costs, and economic strength, it could re-take those highs, suggesting another 20% or so in upside.From a longer-term standpoint, the ETF still sits below where it traded back in 2006. ITB started trading on May 1st of that year. The housing crisis followed, and in less than three years, 85% of its value had been wiped out. It has been a long climb back from those lows, but if the economy cooperates, that climb can continue. * 7 Blue-Chip Stocks to Buy for a Noisy Market That's the key point, though: if the economy cooperates. To even consider ITB at this point, an investor truly has to trust both the economy and the broad market. If trade war concerns ease and/or if strong U.S. job and macro growth continues, ITB will keep rising. And, in that scenario, the ETF likely will outperform broad markets in the second half, just as it did in the first.But this is a different argument than it was six months ago. Then, the ETF looked like it was pricing in an almost-certain recession. That's just not the case anymore. For macro bulls, the ITB ETF is a way to get leveraged upside on more good economic news ahead. But it's not as cheap, or attractive, as it was six months ago.As of this writing, Vince Martin did not hold a position in any of the aforementioned securities. More From InvestorPlace * 4 Top American Penny Pot Stocks (Buy Before June 21) * 7 Blue-Chip Stocks to Buy for a Noisy Market * 5 Strong Buy Biotech Stocks for the Second Half * 6 Stocks Ready to Bounce on a Trade Deal Compare Brokers The post Best ETFs for 2019: iShares U.S. Home Construction ETF Still Has a Chance appeared first on InvestorPlace.
Lowe's Companies Inc NYSE:LOWView full report here! Summary * Perception of the company's creditworthiness is negative * ETFs holding this stock are seeing positive inflows * Bearish sentiment is low * Economic output in this company's sector is contracting Bearish sentimentShort interest | PositiveShort interest is low for LOW with fewer than 5% of shares on loan. The last change in the short interest score occurred more than 1 month ago and implies that there has been little change in sentiment among investors who seek to profit from falling equity prices. Money flowETF/Index ownership | PositiveETF activity is positive. Over the last month, ETFs holding LOW are favorable, with net inflows of $11.05 billion. Additionally, the rate of inflows is increasing. Economic sentimentPMI by IHS Markit | NegativeAccording to the latest IHS Markit Purchasing Managersâ€™ Index (PMI) data, output in the Consumer Servicesis falling. The rate of decline is significant relative to the trend shown over the past year, and is accelerating. Credit worthinessCredit default swap | NegativeThe current level displays a negative indicator. LOW credit default swap spreads are near their highest levels of the last 3 years, which indicates the market's more negative perception of the company's credit worthiness.Please send all inquiries related to the report to firstname.lastname@example.org.Charts and report PDFs will only be available for 30 days after publishing.This document has been produced for information purposes only and is not to be relied upon or as construed as investment advice. To the fullest extent permitted by law, IHS Markit disclaims any responsibility or liability, whether in contract, tort (including, without limitation, negligence), equity or otherwise, for any loss or damage arising from any reliance on or the use of this material in any way. Please view the full legal disclaimer and methodology information on pages 2-3 of the full report.
Monday marked the first time since the company's last earnings report in late May that its stock price has seen $100 per share.
Fiscal year 2019 guidance has now been reset to earnings per share of $5.65. At $95.37, LOW is selling for about 16.9x forward earnings. At that time the consensus earnings-per-share estimate for fiscal 2018 was $5.45.
The leader in the professional and DIY home renovation and repair supply niches, Home Depot, Inc. (HD), has long been considered a steady, reliable stock. In today’s market environment – with President Trump’s aggressive trade policy and the opposition Democratic Party’s increasingly anti-business and anti-wealth policy stance – those are the very traits that may make HD an ever more attractive stock.The share price has, long-term, reflected that reliability. In the last five years, it has showed a slow and steady increase, capped by a 12% gain in recent weeks after last month’s market sell-off. The Underlying StrengthsHome Depot is the largest home improvement retailer in the US, with over $108 billion in annual revenue (nearly 50% more than its closest rival, Lowe’s [LOW]). HD is widely recognized as a leader in the contract supply industry, and in recent months, the company has seen a steep increase in its tool rental business – a segment directly primarily at professional builders. According to company CEO Craig Menear, “We know 90% of pros rent tools, but several years ago, only about one out of 10 pros rented from us. Today, that number has improved to one out of four, yet there remains opportunity for further growth as we continue to invest in our tool rental experience.”Increase in tool rental helped push the company’s Q1 results to a 5.7% increase in net sales year-over-year (at $26.4 billion for the quarter), and 9.1% year-over-year increase in EPS (to $2.27). Net sales were in-line with expectations, while the EPS was a significant 4% beat of the forecast. A miss in same-store comparable sales was attributed to unusually wet weather nationwide during the quarter, which put a damper on construction activities.Financial blogger Luke Longo (Track Record & Ratings) finds additional reason for optimism in the current state of the employment and housing sectors. Specifically, he sees “record low unemployment, a healthy job participation rate, and decade-high wage growth” interacting with lower mortgage rates to create “support for a healthy housing market.” As long as these factors remain, he says, “Home Depot will continue to report solid numbers, and HD stock will trend higher.” Looking ForwardWhile HD’s management sees a solid foundation for the company now, they are preparing for the future. The company is confident enough to issue additional debt, locking in low rates in an effort to keep its large debt total affordable. While a somewhat risky move, it drew approval from five-star Guggenheim analyst Steven Forbes (Track Record & Ratings), who said, “HD raised $400 million more than we assumed, providing the company with greater near-term financial flexibility."Forbes went on to comment about the company’s overall state and performance potential: “With no change to our interest expense outlook, we are maintaining our 2019 EPS estimate of $10.12 while reiterating our BUY rating and $215 price target. Bottom line, we continue to envision share price outperformance as we move through 2019 driven mainly by our conviction in HD's "Core" expense (business-as-usual) leverage…” His $215 price target suggests a modest 4.5% upside to the stock.Also taking an upbeat line on HD is Stifel’s John Baugh (Track Record & Ratings). He agrees with the company on the overall business landscape, pointing out that a combination of weather and deflation artificially depressed same-store comps during Q1. For prospects going forward, Baugh says, “Management is optimistic on the macroeconomic environment and does not see any impact from SALT (state and local tax deduction changes), home price appreciation slowing, or weak housing turnover.” In other words, no matter what happens, people still need to maintain their homes. Baugh raised his price target on HD by 5%, to $210. At the time he set that target, on May 22, it indicated a potential 22% upside. The Bottom LineHome Depot offers investors a firm business model in a niche that customers will always need. The company has a growing professional customer base, and a comfortable lead over its competition. The situation is neatly summed up by another financial blogger, Matthew Cochrane (Track Record & Ratings), who writes, “When one takes a longer view, though, it becomes clear that this home-improvement retail giant is on the correct side of several trends and has made the right investments to stay on top of potential e-commerce competitive threats as well as its primary rival, Lowe's Companies.”A look at HD’s analyst consensus confirms the general view: the stock has a ‘Moderate Buy’ ratings, based on 10 buys and 4 holds assigned over the past three months. The average price target, $207, suggests a 1% upside to the current share price of $205. Given the company’s solid quarterly results, expect that upside to adjust slightly higher in coming weeks.View HD Price Target & Analyst Ratings Detail
The voices are growing louder that the US economy is starting to sputter. From Morgan Stanley, stock strategist Michael Wilson said last month, “Recent data points suggest US earnings and economic risk is greater than most investors may think,” and the May jobs report, released on June 7, backed him up. The numbers were grim, with only 75,000 new jobs reported for the month, and the previous two months revised down by an equal amount. Other data has shown a slowdown in the services sector, and a nine-year low in manufacturing activity.The data is starting to point towards trouble, but the real problem with protecting your portfolio in a downturn lies in the lagging definition of a recession: two consecutive quarters of negative economic growth. Given that growth data is typically reported one month after the fact, this means that investors will always be 4 to 7 months late in taking protective measures. So, let’s be proactive about this, and take a look at TipRanks’ database to find some reliable stocks for defensive investing. These are not necessarily “classic” defensive stocks; rather, these companies have shown by recent performance that they can deliver profits even in a downturn. Apple, Inc. (AAPL)First on our list today is Apple, partly because these days it seems you just can’t build a portfolio without a tech giant but mostly because Apple has proven both its long-term reliability and its short-term resiliency. For the long term, Apple is up 130% in the last five years, while in the short haul the company recovered well from the Q4 2018 downturn and has already made up more than half the losses from last month’s market swoon.More importantly, Apple has also shown that it can adapt and change. Steve Jobs’ unique vision underlay his company’s growth in the early 2000s, and his death in 2011 prompted fears that his successor, Tim Cook, would not fill his shoes and the company would stagnate. It is fair to say that events of the past three quarters have laid that fear to rest. While Cook is not Jobs, he hasn’t needed to be – he took over a mature company with established niches and a growing customer base. He has shown himself fully capable of meeting the challenges the market has posed.Cook met last year’s market dip head-on. He admitted that Apple’s core iPhone sales were not going to fully recover, and orchestrated a plan to meet the changing conditions by shifting the sales focus to Services, reconciling iPhone to a longer replacement cycle, and promoting the iPad, iMac, and Macbook lines. Under all of this, helping to ensure success, is the near-billion strong loyal customer base that the company has built over the past decade.So, Apple has the solid foundation that every defensive stock needs. Looking forward, the company made a favorable impression on market analysts earlier this month at the Worldwide Developers Conference. Kathryn Huberty (Track Record & Ratings) of Morgan Stanley said after Apple’s presentation, “After (Monday’s) announcements, we believe Apple Watch and Mac will more meaningfully contribute to App Store growth, while further solidifying Apple as the most attractive platform for app developers.” Noting the company’s commitment to increasing its Services sector, she added, “Apple's top growth opportunity is driving increased user engagement with apps.” Huberty gives Apple a buy rating with a $231 price target, seeing an upside of 19%.Piper Jaffray’s Michael Olson (Track Record & Ratings) also gives Apple high ratings. Peering into the future of iPhone, he notes that 20% of current owners are interested in upgrading to 5G, and says, “Interest in 5G will only grow from here, so this is a favorable early sign that 5G is viewed as a key feature… we believe that as long as services revenue continues to perform well, it will tide many investors over until anticipation for 5G iPhones intensifies.” His price target on AAPL, $230, also suggests an 19% upside.The analyst consensus on AAPL shares is a ‘Moderate Buy,’ based on 19 buy ratings, 16 holds, 2 sells given over the last three months. Shares are trading at $192, so the $212 average price target indicates an upside of 10%.View AAPL Price Target & Analyst Ratings Detail Johnson & Johnson (JNJ)This one is a traditional defensive stock, and it has a reputation for being a bit staid, but don’t let that fool you: Johnson & Johnson offers real value, consistently delivering on both dividend and long-term equity growth. Both are markers of a strong defensive play.The company’s current dividend yield is 2.72%, which may seem small, but at current share prices it equates to an annual payout of $3.80. Better than the actual dividend payment, however, is JNJ’s dividend history. The company has been paying, and steadily increasing, its dividend since the early 1970s. This policy of consistently rewarding shareholders provides a steady source of income for investors, and also encourages them to reinvest that income in the company. It’s a win-win policy.As a long-term investment, JNJ has, like Apple, proven its worth. The stock has gained 56% in the last 5 years, and shows a 9% gain over the past 12 months. And also like Apple, JNJ has proven resilient in the face of adversity: last December, the stock took a hard hit from bad press related to the widely reported talcum powder recall, but has since regained most of that loss. In another example of corporate resiliency, JNJ was recently given a buy rating with a $157 price target by five-star analyst Joanne Wuensch (Track Record & Ratings) of BMO Capital, after she reviewed the status of current legal action the company faced in the state of Oklahoma in regard to the opioid abuse epidemic. Wuensch notes that the case will likely be resolved quickly, and points out, “Litigation is a common occurrence in the health care sector that takes significant time to resolve, and often headlines are worse than reality.” Her price target indicates confidence in the stock, and a 12% upside.Johnson & Johnson’s success rests on two separate bases. The first, and most widely recognized, is the company’s array of popular consumer brands. JNJ is the producer of Band-Aids, Listerine, and Tylenol, to name just a few. Consumer products provide a respectable 16.7% of annual revenue (nearly $14 billion), but the real money for JNJ lies in pharmaceuticals. To put it in perspective, two drugs – Remicade and Simponi – account for 11.3% of the company’s total revenues, two-thirds as much as all of the consumer products.Unlike many large-scale drug producers, Johnson & Johnson is not deeply exposed to payment issues with the Medicare and Medicaid systems. This is important for investors, as both programs have reputations for underpaying, and with an election year coming up both programs are likely to become political footballs as candidates promise ever more benefits. This is a key point noted by Terence Flynn (Track Record & Ratings). Writing for Goldman Sachs, Flynn says, “The company has the lowest exposure to Medicare/Medicaid within the group. As a result, the stock will be less impacted by potential drug pricing headlines/policy proposals ahead of the 2020 presidential election.” Flynn sets a price target of $163 for JNJ, suggesting an upside of 16%.JNJ’s consensus rating of ‘Moderate Buy’ is derived from 7 buy and 5 hold reviews. The stock’s $149 average price target and $140 share price equate to an upside potential of 7%.View JNJ Price Target & Analyst Ratings Detail McDonald’s Corporation (MCD)Fast food burgers might not come immediately to mind when you hear the phrase ‘Return on Investment,’ but McDonald’s has been delivering more than just quick eats. The company has gained an impressive 16% so far this year, rising from $176 on January 2 to a closing price of $205 on June 14. Even more impressive, between May 3 and June 3, while the S&P 500 was slipping 6.8%, MCD shares were gaining 1.2%.It’s all part of a steady-growth story going back to May of 2015, when current CEO Steve Easterbrook took over. McD’s had just posted its first sales decline in more than a decade, and the new chief’s mandate was simple: refresh a stale brand. His ‘Turnaround Plan’ got the company back to basics, emphasizing fresher, higher quality ingredients; a streamlined menu; and physical rebuilding efforts in the company’s aging franchise locations. Through it all, McDonald’s has maintained its high dividend; the payout is now $4.64 annually, for a yield of 2.26%.The market’s analysts agree that MCD is on a stable upward path. Writing at BTIG, Peter Saleh (Track Record & Ratings) says, “The company's menu strategy shift has boosted comps. Expect the increased menu focus on bundles and full price items – and away from deep discounts - to drive higher U.S. average check for the next couple of quarters.” Saleh boosted his price target to $220 on MCD, suggesting an upside of 7%.Saleh’s not alone. Weighing in from Merrill Lynch last week, Gregory Francfort (Track Record & Ratings) sees “2Q-4Q same-store sales (including 3.9%-4.2% for the U.S.) looking conservative with more upside potential than downside risk.” Like Saleh, he gives MCD a $220 price target.Overall, MCD has a ‘Moderate Buy’ consensus based on 19 analyst ratings given in the last three months, including 14 buys and 5 holds. The stock sells for $205 as of June 14, and the average price target of $216 indicates an upside potential of 5.5%.View MCD Price Target & Analyst Ratings Detail Lowe’s Companies, Inc. (LOW)If the US economy does turn down to recession, Lowe’s is in an excellent position to take advantage of the changed conditions. The do-it-yourself home improvement supplier operates on the big-box model, using bulk to offer discounts on the products and services that, in bad times, homeowners are more likely to handle as DIY.This puts Lowe’s strength as a defensive play is in its niche – the stores offer products that most people need, at discounts that grow more attractive in a downturn. Home maintenance won’t stop for a recession, and DIY really is a good way to save money. In addition, Lowe’s has maintained its lucrative contractor business.And now we get to the weakness in this stock. Lowe’s is the second largest home improvement superstore, after Home Depot (HD), and the company is having trouble boosting revenues and earnings against its larger competition. LOW shares have been on a roller coaster ride for the last 18 months, although they are up nearly 8% year-to-date. On an operational level, Lowe’s has had difficulty executing online sales strategy and home delivery, and managing inventory control. Both are putting serious drag on the bottom line, and holding down revenue growth.Pushing back is CEO Marvin Ellison, who took over in July of last year. He has marked both online sales and inventory control as key parts of a turnaround effort to improve the company’s sales and revenue growth. Early assessments of Ellison’s success are guardedly optimistic; LOW did beat sales and revenue expectations in its most recent quarterly report, although EPS missed by 8%. As Keith Hughes (Track Record & Ratings), of SunTrust Robinson points out, “The recovery will not be a "quick story", even though we are positive on the re-set of expectations and maintain that the 10% projected earnings growth this year still tops Home Depot's (HD) expected flat growth.” Hughes sets a $120 price target on LOW, suggesting an upside of 20%.UBS analyst Michael Lasser (Track Record & Ratings) also sets a buy rating on LOW, with an upbeat $115 target and 15% upside. He writes, “The risk-reward ration on the stock is attractive.”On consensus, Lowe’s keeps a ‘Strong Buy’ rating, based on the 14 buys and 4 holds given in the past three months. While the company faces headwinds, it holds a strong position in a valuable niche, and is widely perceived as facing its difficulties effectively. Of the stocks in this article, LOW offers the best upside potential, at 16%, based on the $99 share price and $115 average price target.View LOW Price Target & Analyst Ratings Detail Walmart, Inc. (WMT)Like Lowe’s, Walmart gains its defensive-stock status from its business model. The king of brick-and-mortar retailers offers discount customers the ultimate in one-stop shopping, putting everything that consumers could want or need under one roof, from baby diapers to daily groceries to minor car repairs. Really, there’s nothing you can’t get at Walmart and that fact has made it the world’s largest company by revenue and the world’s largest private employer.Walmart’s biggest competition comes from Amazon.com (AMZN), but it is more of a whale and elephant story than a cage match. Each company is dominant in its own domain, and each has faced challenges trying to expand on the other’s territory. Walmart may have found a way to leverage its existing stores for an online advantage – rather than offer home delivery (an area in which Amazon already excels), Walmart offers online purchasers an option to pick up their merchandise at the nearest Walmart location. This is a viable alternative, since according to some estimates everyone in the US lives within 10 miles of a Walmart store.As a defensive play, Walmart’s greatest advantage is the pedestrian nature of its business. Everyone needs the products they offer, and in hard times, Walmart’s famously low prices will simply look more attractive. Writing after WMT reported FY20 Q1 earnings, Raymond James’ Budd Bugatch (Track Record & Ratings) said, “Investors should be most encouraged by the U.S. segment, which showed a 5.5 percent year-over-year increase in operating income to $4.1 billion. The business saw strength from a favorable sales mix while e-commerce margins came in better than management's own expectations.” While he believes the company is on firm footing, his price target, at $110, suggests only a modest 1% upside.Guggenheim’s Robert Drbul (Track Record & Ratings) sums up Walmart’s case quite well in his recent research note: “We believe the business remains quite healthy, with solid physical/digital results in recent quarters… We continue to believe WMT’s resources uniquely position it to successfully evolve in an ever-changing retail environment. While trade concerns/tariffs may create quarter-to-quarter fluctuations, we believe the management team will astutely navigate any changes.” Drbul maintained a $115, which indicates a 5.5% upside from current levels.On average, WMT shares have a price target of $113, which gives an upside of 4.5% from the share price of $109. The analyst consensus of ‘Moderate Buy’ is based on 8 buys, 2 holds, and 1 sell set in the last three months.View WMT Price Target & Analyst Ratings DetailYou can learn more about these stocks using TipRanks Stock Comparison tool. This is a powerful new tool that shows all the data on multiple stocks. See for yourself how the Comparison Tool works, by using it to look at the stocks in this article.Disclosure: This author holds a long position in Apple, Inc.
Moody's Investors Service ("Moody's") has assigned a provisional (P)Aaa (sf) rating to the SynchronySeries Class A (2019-2) Notes to be issued by Synchrony Card Issuance Trust, sponsored by Synchrony Bank. The ratings are based on the counterparty risk assessment (CR Assessment), private monitored rating or low volatility credit estimate, as applicable, of the sponsor, which we use to assess the likelihood of the sponsor becoming insolvent and shutting down its credit card portfolio, the quality of the underlying credit card receivables, the transaction's structural protections, the expertise of Synchrony Bank, as servicer, and the credit enhancement from subordinate notes and the Subordinated Transferor Amount. Assets of the trust consist of private label and co-branded credit card receivables generated on accounts originated and underwritten by Synchrony Bank.
(Bloomberg Opinion) -- Nelson Peltz’s latest investment target is a big, slow-moving target with a massive bullseye on its back. The renowned U.S. activist has zoned in on Ferguson Plc, a plumbers’ merchant formerly known as Wolseley. His gripe is that the company trades at a stubborn discount to American peers. The snag is that remedies aren’t easy to administer.Ferguson is among the handful of U.K.-domiciled, London-listed blue-chips that aren’t really British companies. Some – such as BTG Plc or Firstgroup Plc – have already attracted takeover or activist interest. North America generates 87% of Ferguson’s revenue; the company recently changed its name to that of its U.S. subsidiary; it reports in dollars.The one un-American characteristic is the valuation. Ferguson has traded at a consistent discount to U.S. peers such as Home Depot Inc. and Lowe’s Cos Inc. The obvious explanation is that the company is listed on the wrong exchange, which makes it harder to attract its natural investor base. But that’s not the only interpretation. The valuation may also reflect a lack of faith in Ferguson’s strategy or management, or some challenges unique to its business. Either way, the discount slightly narrowed on Thursday after the disclosure that various Peltz funds had amassed a 6% stake. This pushed the stock up 6%, valuing the group at 13 billion pounds ($16 billion).It is hard to know whether Ferguson would get a higher valuation if it just moved its listing. Markets may not be 100% efficient, but capital is global and location can’t be the only explanation for the lack of investor love here. True, some funds are restricted geographically in where they can put money but that’s unlikely to be a huge factor in holding back demand for Ferguson shares.Such restrictions on funds might, though, be an obstacle to engineering a move for Ferguson. Unilever Plc’s plan to simplify its Anglo-Dutch structure into a single Netherlands company would have seen it lose its spot on the FTSE 100. That irked index investors and those with mandates to hold U.K. stocks who would have been forced to sell their shares. The plan foundered.Unilever wasn’t a one-off. Re-domiciling headquarters or listings has long been controversial. The textbook case is the thwarted migration of car parts maker LucasVarity back in the late 1990s from the U.K. to the U.S. For these changes, existing investors generally demand a premium. The cleanest way to achieve a move is to take the company private, then relist it.More pertinent are worries about the company’s resilience in the face of a U.S. slowdown. U.S. organic growth is slowing from a recent high single-digit percentage clip, while margins have barely improved since 2015, UBS analysts point out. The share price seems to be assuming that Ferguson’s long-run sustainable operating margin is just 5%, according to independent research provider Willis Welby, which argues that this is overly pessimistic.Peltz’s pitch is that he likes to engage with the management of his portfolio companies. Ferguson has responded diplomatically that it looks forward to dialogue, as it does with all shareholders. The mere presence of such a big name has got people excited. The tougher job will be convincing investors that the company’s equity story – twinning organic growth with a strategy of acquiring competitors – is still a winner. That case has yet to be made.To contact the author of this story: Chris Hughes at email@example.comTo contact the editor responsible for this story: James Boxell at firstname.lastname@example.orgThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Chris Hughes is a Bloomberg Opinion columnist covering deals. He previously worked for Reuters Breakingviews, as well as the Financial Times and the Independent newspaper.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
Trian, the hedge fund run by veteran activist investor Nelson Peltz, has taken a 6 per cent stake in Ferguson, indicating it would attempt to drive up returns at the FTSE 100 plumbing and heating equipment supplier. Shares in Ferguson jumped as much as 11 per cent on Thursday before closing up 6 per cent at £56.30, their highest level since last October, giving the company a market capitalisation of around £13bn.
MOORESVILLE, N.C. , June 11, 2019 /PRNewswire/ -- Lowe's Companies, Inc. (NYSE: LOW) announces that Marvin R. Ellison , president and chief executive officer, and David M. Denton , chief financial officer, ...
With stocks flying high on the heels of a Mexico-U.S. trade deal, bullish picks are likely multiplying across the web. But we're going to take the road less traveled with today's gallery by focusing on stocks to sell. The reasons are simple.First, active traders who desire to increase their quantity of trades must of necessity play the bullish and bearish side of the market. Otherwise, you end up with way too much exposure creating large fluctuations in your account value. Just think about someone who was swinging 15 bearish trades and no bullish ones last week when the market rallied five-days in a row. Ouch! By diversifying strategies you can trade more but have less risk.Second, last week's runup may have turned some trends higher but many remain bearish. The rally simply returned them to resistance creating compelling short setups.InvestorPlace - Stock Market News, Stock Advice & Trading Tips * 7 A-Rated Stocks to Buy Under $10 Let's take a closer look at three stocks to sell. Canopy Growth Corp (CGC) Click to Enlarge Source: ThinkorSwim Pot stocks lost their mojo last month, and Canopy Growth (NYSE:CGC) wasn't immune to the fall. CGC fell below its 200-day moving average for the first time in six months. Its descent has been long enough to reverse the 20-day and 50-day moving averages lower. Last week's rebound returned CGC stock to potential resistance, setting up a classic swing sell pattern.The only question is whether it will trigger. This morning's 3.7% rally is extending last week's gains, so I suggest waiting until the stock breaks a prior day's low before deploying bear trades.For now, I like using today's low of $42.61 as the trigger. If we take it out, then consider buying Aug $45 puts. A break above $46 would cause me to change my tune. Lyft (LYFT) Click to Enlarge Source: ThinkorSwim The Uber (NYSE:UBER) IPO breathed new life into LYFT (NASDAQ:LYFT) shares last month. Since bottoming at $47.17, LYFT stock has rebounded 27%. And while I'm open to the possibility of continued strength in the stock, overhead resistance at $63 has me eyeing a bearish trade here.The risk, if wrong, is minimal. And the potential reward is substantial if LYFT rolls over. For the first target, you can use the closest support pivot at $54. After that, $50 comes into play. Consider using a break of Friday's low at $59.21 as your trigger. * 10 Stocks to Buy That Could Be Takeover Targets For strategy selection, I like the Oct $60/$50 bear put spread, which currently costs $5.30. Lowes (LOW) Click to Enlarge Source: ThinkorSwim Out of today's selection of stocks to sell, Lowe's (NYSE:LOW) has the cleanest swing sell setup. Its share price was slammed after disappointing the Street with last month's earnings announcement. The high volume swoon carried LOW stock to a fresh three-month low. Since then, we've seen an oversold bounce returning LOW to a horizontal resistance zone and its descending 20-day moving average.While the rebound may continue for a day or two yet, this price zone is an area to watch closely for sellers to emerge. For now, use Friday's low ($96.70) as the trigger for bearish plays.The Oct $95/$90 bear put spread costs $1.80 and offers a low risk way to capitalize on the next downswing.As of this writing, Tyler Craig didn't hold a position in any of the aforementioned securities. Check out his recently released Bear Market Survival Guide to learn how to defend your portfolio against market volatility. More From InvestorPlace * 4 Top American Penny Pot Stocks (Buy Before June 21) * 7 Stocks to Buy As They Hit 52-Week Lows * 4 Antitrust Tech Stocks to Keep an Eye On * 5 Gold and Silver Stocks Touching Intraday Highs Compare Brokers The post 3 Stocks That Can't Escape the Bears' Crosshairs appeared first on InvestorPlace.
House flipping rates reached a nine-year high in the first quarter of the year, making up just over 7% of all homes sold nationwide, according to real estate firm Attom Data. Yahoo Finance's Seana Smith and Attom Data Solutions chief product officer Todd Teta discuss.