|Bid||38.17 x 800|
|Ask||38.17 x 21500|
|Day's Range||38.13 - 38.58|
|52 Week Range||26.80 - 39.70|
|Beta (3Y Monthly)||0.58|
|PE Ratio (TTM)||17.12|
|Earnings Date||Jan 29, 2020|
|Forward Dividend & Yield||2.04 (5.34%)|
|1y Target Est||39.02|
We talked about Game Creek Capital about 8 months ago. Game Creek Capital is founded by Scott Mayo and taken over by Sean Murphy after Scott's death in 2010. Before Game Creek, Sean Murphy cut his teeth at Vardon Capital Management as a senior analyst covering telecom, media, and consumer stocks. Murhpy has a B.A. […]
We are now at the very end of the third-quarter earnings season, with roughly 98% of S&P 500 companies having reported their Q3 numbers so far.The results have been broadly positive. Sure, third-quarter earnings per share dropped more than 2% year-over-year. But, trade war pressures and slowing economic activity were supposed to cause an even steeper slowdown. Indeed, about three-fourths of S&P 500 companies reported Q3 profits that were above expectations.Meanwhile, revenues largely came in above expectations, too, and rose about 4% year-over-year. Management teams also sounded a cautiously optimistic tone that profit margins would improve going forward with easing trade tensions. Consequently, the outlook is for this earnings slowdown to end soon, and turn into big profit growth in 2020.InvestorPlace - Stock Market News, Stock Advice & Trading TipsBecause of all these positive developments, stocks have surged higher this earnings season. Companies started reporting third-quarter numbers around early October. Since then, the S&P 500 has rallied 6% to all-time highs, marking one of its most impressive earnings season rallies in recent memory.Which stocks led this earnings season rally? More importantly, which of these winners can continue to grind higher in 2020?Let's answer those questions by taking a closer look at seven strong stocks to buy that won big this earnings season, and will keep winning big into 2020. Strong Stocks to Buy: Target (TGT)Source: jejim / Shutterstock.com One stock which had a particularly good third-quarter earnings season is U.S. general merchandise retailer Target (NYSE:TGT).In late November, Target reported impressive Q3 numbers which topped revenue, comparable sales, digital sales, margin and profit expectations. Management also hiked its full-year 2019 guide, while providing an above-consensus holiday quarter guide. In sum, the report affirmed that Target is not a "one hit wonder." Instead, this company is leveraging strategic growth initiatives to sustain big growth and margin improvements.All of this will persist into 2020 for a few reasons. First, the macroeconomic retail backdrop is improving. Trade tensions will ease. Consumer confidence will rebound. Spending trends will pick up, while tariff pressures will back off. Second, Target's e-commerce business is still relatively small, while omni-channel buildout is still in its early stages. In 2020, both of these verticals will sustain strong growth through geographic expansion. Third, Target's new smaller format stores are running at much higher gross margins than the larger format stores, and Target plans to open a bunch of these smaller format stores in 2020. Fourth, wage pressures should be offset by technology investments.Target will sustain big revenue growth and margin expansion in 2020. As it does, TGT stock will sustain its upward momentum, because shares remain reasonably valued at less than 20-times forward earnings. Splunk (SPLK)Source: Michael Vi / Shutterstock.com Shares of data analytics service provider Splunk (NASDAQ:SPLK) surged in the third quarter after the company reported strong numbers which broadly underscored that the company's new Data-to-Everything platform is in the first innings of a big growth ramp.Long story short, Splunk recently launched its Data-to-Everything platform. It is basically an all-in-one enterprise ecosystem where companies can turn data of all sorts into actionable insights. Splunk hopes that this new platform will become a must-have service in every office. Early demand trends support that dream. In the third quarter of 2019, strong early demand for the Data-to-Everything platform powered above-consensus revenue and profit growth.Considering the world we live in today -- one which is flooded with data and dominated by data-driven decision making -- it is highly likely that Splunk's Data-to-Everything platform continues to grow rapidly in 2020. Rapid growth from this platform will power a string of double-beat-and-raise earnings report in 2020.The sum of these strong earnings reports, coupled with broadly bullish investor sentiment thanks to easing U.S.-China trade tensions, should keep SPLK stock on a winning path. Best Buy (BBY)Source: BobNoah / Shutterstock.com Target wasn't the only retailer that reported strong third-quarter numbers at the end of November. Electronics retailer Best Buy (NYSE:BBY) did, too.Specifically, Best Buy's third-quarter revenues, comparable sales, margins and profits all came in above expectations. Management also raised its full-year guide and delivered an above-consensus fourth-quarter guide on both the revenue and margin fronts. Of importance, Best Buy appears to be sustaining strong revenue growth momentum thanks to ever-increasing demand in the consumer electronics space, while simultaneously keeping costs down and turning that strong growth into healthy profit margin expansion.This favorable dynamic should persist in 2020. Over the next twelve months, the consumer electronics space will boom thanks to a plethora of tailwinds. You have the big 5G push, and the launch of several new 5G smartphones, including a 5G iPhone. You also have the introduction of cloud gaming consoles like Stadia, and the release of a new generation of Xbox and PlayStation consoles. There's also a big streaming push unfolding with Disney (NYSE:DIS), AT&T (NYSE:T) and Comcast (NASDAQ:CMCSA) all entering the streaming wars. This push will naturally increase demand for streaming devices, which can be found at Best Buy.All in all, 2020 is shaping up to be a pretty good year for Best Buy. Healthy revenue growth and margin expansion should persist. As it does, BBY stock should keep climbing higher, especially since shares remain dirt cheap at just 13-times forward earnings. Facebook (FB)Source: TY Lim / Shutterstock.com Global internet giant Facebook (NASDAQ:FB) reported third-quarter numbers in late October that breezed past expectations and underscored that this stock can (and will) head way higher over the next 12 months.Third-quarter revenues and profits topped expectations. User growth trends remained healthy, with the user base sustaining 8%-9% year-over-year growth. Revenue growth trends also remain healthy, with revenues yet again rising in the 30% range. Expense growth moderated significantly. Operating margins, which have been getting wiped out by big data-security investments, dropped just one point year-over-year.Zooming out, Facebook's third-quarter numbers underscored that this company is past the Cambridge Analytica scandal, and that the company survived that scandal largely unscathed. User engagement, ad demand and revenue growth all remain robust. The only casualty? Profit margins. And those are already bouncing back.In 2020, everything will only get better for Facebook. Ad revenue growth will remain strong behind advertising real estate expansion on Messenger and WhatsApp, as well as heavier ad usage in Instagram and Facebook Stories. The e-commerce business will gain strong early momentum behind Facebook Pay and Instagram Shopping. Margins will improve as big data-security investments phase out, and big revenue growth drives positive operating leverage.Facebook will get back to 20%-plus revenue and profit growth in 2020. As it does, FB stock -- which trades at just 23-times forward earnings -- will run higher. Stage Stores (SSI)Source: Shutterstock The hottest and perhaps least well-known stock on this list is small department store operator Stage Stores (NYSE:SSI). But, investors shouldn't be intimated by the stock's 630% year-to-date gain (yes, you read that right). Nor should they be scared by the company's small size and relative obscurity.Instead, Stage Stores' third-quarter numbers confirm that investors should both embrace the recent red-hot rally in SSI stock and the fact that not many people know about the huge transformation playing out here.Long story short, Stage Stores has been getting killed by Amazon (NASDAQ:AMZN), Walmart (NYSE:WMT), Target and a plethora of others, because the company has lacked the resources to compete in the full-price channel with these deep-pocketed retail giants. Amid this slaughter, Stage Stores bought off-price retailer Gordmans in 2017. It was a footnote that didn't stop the bleeding. But, management started to notice that while their full-price Stage Stores locations were struggling, their off-price Gordmans locations were doing quite well.So, in 2019, management committed to turning Stage Stores into an off-price retail giant. That is, they are closing some underperforming Stage Stores locations, and converting the rest to off-price Gordmans locations, so that by the end of 2020, the entire store portfolio will be off-price.Early data from this transition is promising. In the third quarter, Stage Stores converted 17 department stores to Gordmans off-price. Not coincidentally, comparable sales rose a whopping 17%.This transition is still in its early days. By year end, Stage Stores projects to have 158 off-price locations. By the end of 2020, it will have 700. Thus, the bulk of the transition won't happen until 2020. That means the bulk of the financial benefits won't show up until 2020 or 2021. Considering SSI stock still trades at a rather lousy 0.1-times trailing sales multiple, that also means that the bulk of the SSI stock rally is still to come. PayPal (PYPL)Source: JHVEPhoto / Shutterstock.com Shares of global digital payments platform PayPal (NASDAQ:PYPL) soared this earnings season on strong third-quarter numbers which broadly underscored that this company's growth narrative remains as robust as ever.Specifically, in late October, PayPal reported yet another double-beat earnings report. But, that wasn't the impressive part. The impressive part was that PayPal sustained huge growth across all of its important metrics, despite the slowing economic backdrop. Total payment volume growth yet again exceeded 25%. Account growth again exceeded 15%. Engagement growth hit nearly 10%. Revenue growth was roughly 20%, and operating margins expanded … again.In other words, everything at PayPal is firing on all cylinders, despite slowing economic growth. In 2020, that slowing economic growth will turn into rebounding economic growth, as trade tensions ease and capital spending trends rebound. This rebound in economic activity will add more firepower to an already red-hot PayPal growth trajectory. So will further ramp in Venmo, which is quickly turning into a must-have consumer payments ecosystem.The result? PayPal's volumes, accounts, revenues, margins and profits will all sustain big growth in 2020. As they do, PYPL stock -- which remains undervalued relative to its growth prospects -- will run higher. Apple (AAPL)Source: View Apart / Shutterstock.com Consumer technology giant Apple (NASDAQ:AAPL) had a strong showing this earnings season, and that strong showing added credibility to the idea that the company could be in store for a big 2020.The story at Apple has been a simple one. For the past decade, the company has been hyper-focused on selling hardware products to consumers around the globe. That hardware business has been slowing because of market saturation issues. In order to combat that slowing growth, Apple has built out a series of subscription software businesses to more deeply monetize its huge install base.In other words, Apple has gone through eras of big hardware growth and eras of big software growth. But, the company has yet to experience an era of both big hardware and big software growth together.Until now. Apple's most recent earnings report showed that the software business remains hot, while revenue declines in the hardware business are moderating. That red-hot software business will get even hotter in 2020, as new services like Apple TV+ and Arcade gain mainstream traction. Meanwhile, the stabilizing hardware business will start growing again, sparked by big upgrade demand, lower-priced new iPhones and a 5G iPhone in late 2020.In the big picture, then, Apple is entering a golden era in 2020 wherein both its software and hardware businesses will grow together. This collaborative growth should continue to power AAPL stock to new highs.As of this writing, Luke Lango was long BBY, T, FB, SSI, WMT, PYPL and AAPL. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 Hot Stocks for 2020's Big Trends * 7 Lumbering Large-Cap Stocks to Avoid * 5 ETFs for Oodles of Monthly Dividends The post 7 Strong Stocks to Buy That Won Q3 Earnings appeared first on InvestorPlace.
The stock market has had a great 2019. Year-to-date, the S&P 500 is up about 28%. If the index were to trade flat into the end of the year, then 2019 would go down as the best year for the stock market since 2013, and the third-best year of the 2000s.But the stock market has also had a volatile 2019. Year-to-date, the S&P 500 has experienced more than 10 pullbacks of 2% or greater. By itself, that's not shocking. But what is shocking is that pretty much all of those 2% pullbacks have had the same culprit: the U.S.-China trade war.So, while I think U.S.-China trade tensions will ease going forward and the markets will consequently power higher, I also recognize that the trade war isn't over. Flare-ups will happen throughout 2020. Each one of those flare ups will be followed by a harsh stock market correction.InvestorPlace - Stock Market News, Stock Advice & Trading Tips * 7 Hot Stocks for 2020's Big Trends Given that, I don't blame you if you want sit out all the volatility and buy safety stocks in 2020 that don't have trade war exposure. If you're in that boat, this gallery is for you. I've hand picked a group of five safety stocks to buy for their strong internal fundamentals and lack of external trade war exposure. Safety Stocks to Buy: AT&T (T)Source: Jonathan Weiss / Shutterstock.com The core reason to be attracted to telecom giant AT&T (NYSE:T) in the midst of the U.S.-China trade war is that this company provides various wireless and wired communication services which consumers in the U.S. need (and will continue to pay up for), regardless of the global trade situation. Broadly, then, no matter how the trade war plays out, AT&T's revenue and profit trends should remain relatively stable, leading to a relatively stable AT&T stock price.Further, AT&T stock has two huge catalysts on the horizon which could propel shares higher in 2020. First, there's the big mainstream 5G push, which will lead to increased demand for AT&T's wireless services at more favorable price points, as well as an increase in the number of connected devices in AT&T's wireless network. Second, there's the big streaming push with HBO Max. If that service gains healthy momentum in the streaming world, then the company will have found a cure for its cord-cutting headwinds, and the stock will benefit from multiple expansion as secular cord-cutting fears disappear -- just see what happened with Disney (NYSE:DIS) stock and Disney+.Of course, any mention of T stock as a safety stock would be incomplete without mentioning that: 1) this stock is incredibly cheap at just 11-times forward earnings, and 2) the stock also has a huge dividend yield that is north of 5%. Facebook (FB)Source: Ink Drop / Shutterstock.com Perhaps shockingly, social media giant Facebook (NASDAQ:FB) makes this list of safety stocks to buy without trade war exposure because, at its core, this company does not have much trade exposure.Facebook doesn't operate in China, so there are no levers China can pull here to hurt Facebook. Further, FB's properties will remain highly engaging in all other countries that they do operate in, regardless of the trade situation. That's because Facebook provides entertainment and communication services which consumers deem as central to their day as brushing their teeth or combing their hair. So long as consumers remain engaged, advertisers will continue to pour money into the Facebook ecosystem to chase that engagement.Sure, there's the risk that escalating trade tensions depress capital spending plans. Advertising is part of those capital spending plans. In theory, if the trade war gets really bad, Facebook ad budgets could get hit. But that has yet to happen. It's unlikely to happen anytime soon, because cutting Facebook ad budgets is something no one wants to do unless things get really ugly. Things won't get really ugly in 2020. If anything, trade conditions will improve. * 7 Retail Stocks to Buy That Dominated Thanksgiving Shopping In the big picture, then, FB stock is actually well shielded from trade war volatility. At the same time, this is a 20%-plus revenue and profit growth company trading at less than 25-times forward earnings, an attractive combination which implies minimal valuation risk and huge upside potential. American Electric Power (AEP)Source: Casimiro PT / Shutterstock.com The three big reasons to like U.S. utility company American Electric Power (NYSE:AEP) so long as the U.S.-China trade war wages on are that this company: 1) has minimal trade exposure, 2) is characterized by unparalleled stability, and 3) has attractive safety stock characteristics.American Electric Power is a U.S. utility company which provides electricity and power services to U.S. consumers. They don't operate outside of the U.S. This 100% domestic focus shields the company from international trade war noise.At the same time, the electricity and power services which AEP provides are necessary, with unwavering demand. That is, regardless of how the U.S.-China trade situation plays out, U.S. consumers will forever need and pay up for electricity and power services. Demand isn't going anywhere anytime soon. Neither are AEP's revenues or profits. This financial stability creates tremendous support for AEP share price stability.Lastly, AEP stock trades at a reasonably 21-times forward earnings multiple, has a rock solid 3% dividend yield, and is supported by stable and sizable cash flows. These ideal safety stock characteristics imply that investor demand for AEP stock during turbulent times will remain strong. Walmart (WMT)Source: Sundry Photography / Shutterstock.com Investors may be shocked to see global retail giant Walmart (NYSE:WMT) on this list. After all, Walmart does operate in the retail world, and tariffs do have a direct negative impact across the entire retail world in the form of higher input prices.Walmart is no exception here. The higher tariffs go, the higher Walmart's input costs will go, and the more that will either: 1) weigh on Walmart's margins, or 2) push up Walmart's shelf prices. But if you zoom out, it's easy to see that Walmart is actually a winner here.One of two things will happen in 2020. Either U.S.-China trade tensions will meaningfully de-escalate, or they won't. If they do, Walmart will continue to fire on all cylinders through sustained omni-channel and e-commerce expansion. If they don't, tariffs will pressure the entire retail sector. But, consumers won't stop shopping. They will just become more price-sensitive. The more price-sensitive they become, the more likely they are to shop at off-price stores, and Walmart is king in the off-price category.This is exactly why WMT stock was a huge out-performer during the last economic downturn. Consumers don't stop shopping when times get tough. They just shop smarter. * 9 Tech Stocks You Wish You'd Bought During 2019 Big picture, then, it looks like WMT stock is a strong safety stock to buy, because it will outperform regardless of which way the trade war swings. McDonald's (MCD)Source: 8th.creator / Shutterstock.com Last, but not least, on this list of safety stocks to buy without trade war exposure is global fast-casual food giant McDonald's (NYSE:MCD).The bull thesis on MCD stock as a safety stock is pretty simple. Regardless of how the trade war progresses, consumers globally still need to eat. Consequently, they will still visit McDonald's stores. Further, if trade tensions do escalate, that will cause broad consumer concern, which will in turn force consumers to become more price-sensitive. The more price-sensitive they become, the more they will cut back on costs. One way to cut back on costs? Stop going to expensive restaurants, and start going to McDonald's.As such, much like Walmart, McDonald's is supported by this fact that consumers don't stop buying things when times get tough -- they just start buying cheaper things.Also of note, tariffs have not created much noise in McDonald's financials, nor will they anytime soon. The word tariff wasn't mentioned even once during the company's most recent earnings call. Nor was the U.S.-China trade war. This lack of financial noise will help keep MCD stock shielded from trade-war-induced market volatility in 2020.As of this writing, Luke Lango was long T, FB, and WMT. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 Hot Stocks for 2020's Big Trends * 7 Lumbering Large-Cap Stocks to Avoid * 5 ETFs for Oodles of Monthly Dividends The post 5 Safety Stocks to Buy Without Trade War Exposure appeared first on InvestorPlace.
For stocks like Roku (NASDAQ:ROKU), growth has beaten valuation almost every time in this market. Whether it's ROKU stock, or Shopify (NYSE:SHOP), or (for the most part) the likes of Amazon.com (NASDAQ:AMZN) and Netflix (NASDAQ:NFLX), investors have proven that they will pay almost any price for solid growth.Source: JHVEPhoto / Shutterstock.com And so, for the most part, investors who have worried about valuation have missed out on big gains. In some cases, they've lost a lot of money trying to short growth stocks.In that context, it's too simplistic to argue that a stock is "overvalued" based on a single fundamental metric. That's been true for a name like AMZN, and it's true for ROKU as well.InvestorPlace - Stock Market News, Stock Advice & Trading TipsAfter all, it's not as if the market is unaware that Roku stock trades at roughly 16 times this year's revenue or that ROKU is unprofitable. In fact, it actually takes more due diligence to understand the bull thesis. That requires long-term modeling and a long-term focus.So I'm sympathetic to the bull case. ROKU has a real opportunity as new streaming services come online. It will be profitable at some point. Anyone who has bet against Roku stock so far has lost; ROKU stock price has nearly quintupled so far this year. * 7 Hot Stocks for 2020's Big Trends Even considering all that, however, I still think the shares are overvalued above $150, and they may be disastrously overvalued. The issue isn't necessarily that ROKU stock is expensive right now, but that the growth priced in by the current valuation may not materialize. The Case for Roku StockIn this market, a 16 revenue multiple doesn't seem that outrageous. Of course, that fact alone might concern investors who see tech, or even the market as a whole, as overvalued at the moment.But at least on a relative basis, ROKU's revenue multiple isn't necessarily out of line. SHOP stock is trading at 28 times this year's revenue, while Okta (NASDAQ:OKTA) has a price-revenue multiple of roughly 27, and Zoom Video Communications' (NASDAQ:ZM) multiple is closer to 40.And Roku's growth story can arguably match that of almost any other stock in the market. Its revenue should grow close to 50% this year, and analysts' average estimates suggest a 40%-plus increase in 2020. Both figures are roughly in line with that of SHOP, whose revenue multiple is substantially higher.From that perspective, the ROKU stock price isn't necessarily outrageous. In fact, it might even be cheap. The ROKU Stock Price is More Expensive Than It LooksBut there are two problems with those comparisons. The first is a point I've admittedly made in the past; not all of Roku's revenue is all that valuable. Its 2019 guidance suggests that roughly one-third of its revenue will come from Roku players. To be blunt, selling players is not a good business for ROKU.Over the past four quarters, gross profit for the player business has totaled only $20.7 million, or just 5.7% of the revenue from players. Over the same period, ROKU as a whole spent $214 million on R&D; a good chunk of that spending no doubt was used to enhance the players.And so it's clear that the player business loses a great deal of money. The player business is a loss leader for advertising and other sales, what Roku calls "platform revenue." So the player business and its revenue shouldn't be assigned much, if any, value. In fact, investors should assume that the player business will continue to lose money.Platform revenue is the important metric. And ROKU stock is valued at roughly 24 times that figure, based on its 2019 guidance. That's an enormous multiple which is more in-line with the market's most expensive stocks. And yet platform gross margins, which were 63% in the third quarter, are lower than those of several other high-growth software names (though, to be fair, they are higher than Shopify's gross margins.)That issue alone doesn't mean ROKU stock has to pull back; even valuing the stock based only on platform revenue, an investor still can make the case that a price above $150 is reasonable, if not likely. And it does seem like the stock has a path to at least fill the gap created on Monday, when the shares plunged after Morgan Stanley downgraded Roku stock.Still, ROKU is one of the most expensive stocks in the market. That alone suggests some very real risk. Are Competitors Coming?The second issue is that Roku has more, and more intense, competition than other stocks with similar valuations. Admittedly, Roku has achieved dominant market share against the likes of Apple (NASDAQ:AAPL), Alphabet (NASDAQ:GOOG,NASDAQ:GOOGL), and Amazon.But its role as the primary gateway to streaming services is far from guaranteed. Comcast (NASDAQ:CMCSA) and other telecom companies can and will provide their own streaming boxes to existing internet customers. Amazon has partnered with TV manufacturers to install its Fire TV software; Roku has done the same, but a lack of new agreements with TV makers was one reason for Morgan Stanley's downgrade.So the argument that Roku is the primary play on new streaming services from Disney (NYSE:DIS), AT&T (NYSE:T), and Comcast itself seems too simplistic. Over time, the very need for a player is going to fade away as all screens come embedded with the necessary software. New delivery mechanisms may spring up. Roku isn't necessarily the next TiVo (NASDAQ:TIVO), but any hardware-based business is at risk of being disrupted.This is not to say that ROKU stock should be shorted or that its growth is going to come to a screeching halt in the next couple of years. Rather, Roku stock has one of the highest valuations in the market but has very real risks. That's the point that Morgan Stanley made this week -- and it's probably a good one. ROKU stock price suggests that the company's growth will last for years, and I'm simply not quite sure that will be the case.As of this writing, Vince Martin has no positions in any securities mentioned. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 Hot Stocks for 2020's Big Trends * 7 Lumbering Large-Cap Stocks to Avoid * 5 ETFs for Oodles of Monthly Dividends The post Roku Stock Simply Needs to Pull Back appeared first on InvestorPlace.
Leveraging 5G Ultra Wideband network, Verizon (VZ) partners with Sony to promote next-gen live sports viewing experience with excellent wireless connectivity, low-latency and high-definition video.
Days after Chief Financial Officer John Stephens said AT&T might issue stock shares, the company unveiled a proposed offering of a series of that type of stock. Its completion depends on certain factors, such as market conditions, the Dallas company announced Thursday. “AT&T intends to use the net proceeds of the offering for general corporate purposes,” it said in the statement.
Moody's Investors Service (Moody's) affirmed AT&T Inc.'s ratings (AT&T), including the Baa2 senior unsecured rating and the Prime-2 commercial paper rating, and assigned a Ba1 rating to its planned new Series A Perpetual Preferred Stock (preferred stock). AT&T intends to use the net proceeds for general corporate purposes, which Moody's believes may include the repurchase of its common stock under its ongoing share repurchase program.
(Bloomberg Opinion) -- The merger floodgates broke open five years ago, and now U.S. Senator Elizabeth Warren wants to close the hatch. Her proposed bill to substantially restrict big corporate tie-ups is more a presidential campaign statement than viable legislation — and it certainly won’t score her any more points with the Wall Street crowd — but she is calling attention to the maniacal pace of dealmaking in corporate America and the need to modernize antitrust laws that have permitted some recent problematic transactions.More than $7 trillion of takeovers of U.S. companies have been announced since this day in 2014 — 52,694 companies to be exact.(1) That compares with just $4.4 trillion of deals in the previous five-year period. The transactions grew over time as balance sheets flush with cash and income statements desperate for growth created a perfect storm, which more often than not was stoked by pliable regulators. The Walt Disney Co. acquired 21st Century Fox Inc.; Charter Communications Inc. bought Time Warner Cable Inc.; CVS Health Corp. took over Aetna Inc.; Marriott International Inc. merged with Starwood Hotels & Resorts Worldwide Inc.; and T-Mobile US Inc. is trying to buy Sprint Corp. Those are just some of the more recognizable names. Warren, one of the top-polling candidates heading into the Democratic primaries, wants to ban deals in which one company has annual revenue of more than $40 billion, or both businesses generate more than $15 billion in sales, according to a draft of the bill reviewed by Bloomberg News. (A notable exception would be companies facing insolvency.) That could effectively prevent every top airline, insurer, manufacturer, oil producer, retailer, technology platform and other conglomerates — perhaps even Warren Buffett’s M&A vehicle, Berkshire Hathaway Inc. — from making any acquisitions. It would sound the M&A death knell. The idea, however, is unlikely to gain broad support among lawmakers.Even so, it’s hard not to notice the rising drumbeat of politicians concerned about overreach by corporate giants, particularly those in the tech field. Senator Amy Klobuchar, another Democratic presidential candidate, plans to introduce separate antitrust legislation soon, Bloomberg News reported, citing a person familiar with the matter. (Michael Bloomberg, the founder and majority owner of Bloomberg LP, the parent of Bloomberg News and Bloomberg Opinion, is also campaigning for president.)For the Trump administration’s part, the U.S. Justice Department is already investigating whether tech giants — namely Apple Inc., Amazon.com Inc., Facebook Inc. and Google — are using their unchecked power to engage in harmful business practices. But as I wrote in July, if regulators are so concerned about protecting consumers from tech overreach, their glowing endorsement of T-Mobile’s takeover of Sprint is a funny way of showing it; it will shrink the U.S. wireless market from four to three major carriers and remove a company that’s helped to keep customer prices in check.Antitrust regulation under President Donald Trump has at times created questionable optics. Makan Delrahim, the Justice Department’s top antitrust enforcer, seemed to switch his stance on AT&T Inc.’s takeover of Time Warner Inc. as Trump railed against the deal. Time Warner was the parent of CNN, which Trump views as his personal nemesis. (I’ve argued that whatever the case, scrutiny of the megamerger was warranted considering the broad market power it gave to AT&T as media companies without such scale struggle to compete.) By comparison, Disney and Fox, which was controlled by Trump pal Rupert Murdoch, closed their megadeal with few regulatory hiccups. Warren has criticized other giant deals, such as the merger of SunTrust Banks Inc. and BB&T Corp. and the combination of seed makers Bayer AG and Monsanto Co. Given that they aren’t household names, though, most Americans are unfazed by or unaware of such deals, even though they may feel the effects later. Her bill would direct the government to take into account not just whether a merger will lead to higher prices but also what the impact might be on workers, privacy and industry innovation. To justify the cost of buying another large company, dealmakers tend to come up with ambitious estimates of synergies, a euphemism for layoffs. It’s clear that the meaning of “harm” needs to be expanded in the antitrust sense, and laws need to take a more holistic view of the potential consequences of M&A as the lines between industries continue to blur. The Big Tech factor also needs to be weighed, as some deals are being done in part to respond to companies like Amazon that are spreading their tentacles into new areas. On Wednesday, TV-network operators CBS Corp. and Viacom Inc. completed their own merger, a bid to cut costs and create more scale to compete against a new roster of even more powerful media giants: Amazon, Apple, AT&T and Disney. Even then, ViacomCBS Inc., as the merged entity is now called, may not be big enough, and so it may be only a matter of time before it gets swallowed. Warren’s overly broad proposal likely isn’t the answer. But Democrats do seem ready to at least try to rein in a market that’s gotten out of hand. For dealmakers, this may be last call at the M&A party.(1) Data compiled by Bloomberg as of Thursday morning. Excludes terminated deals.To contact the author of this story: Tara Lachapelle at firstname.lastname@example.orgTo contact the editor responsible for this story: Daniel Niemi at email@example.comThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Tara Lachapelle is a Bloomberg Opinion columnist covering the business of entertainment and telecommunications, as well as broader deals. She previously wrote an M&A column for Bloomberg News.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
While T-Mobile (TMUS) launches nationwide 5G network, Verizon (VZ) collaborates with Amazon's cloud computing arm, Amazon Web Services, for 5G edge computing.
AT&T Inc.* will webcast a keynote by Jeff McElfresh, chief executive officer of AT&T Communications, at the Barclays Global TMT Conference in San Francisco on December 12, 2019. The presentation is scheduled to begin at 8:30 a.m. PT.
AT&T Inc. (NYSE: T) ("AT&T") announced today a proposed registered public offering (the "Offering") of depositary shares, each of which represents a 1/1,000th interest in a share of its Perpetual Preferred Stock, Series A, $25,000 liquidation preference per share (equivalent to $25.00 per depositary share). The completion of the proposed offering depends upon several factors, including market and other conditions. AT&T intends to use the net proceeds of the Offering for general corporate purposes.
The streaming landscape is in the midst of an arms race that The Walt Disney Co. is only escalating with the arrival of Disney+.
(Bloomberg) -- Huawei Technologies Co. has sued the Federal Communications Commission, seeking to overturn a regulatory decision that will hurt the Chinese corporation’s business with its last major American clients.China’s largest technology company by sales said it has filed a lawsuit with the Fifth Circuit Court of Appeals, challenging the American agency’s decision to bar the use of federal subsidies by rural carriers purchasing its equipment. Huawei complained it wasn’t accorded due process and was unfairly labeled a national security threat.The lawsuit is the latest attempt by Huawei to fight American sanctions and curbs that threaten the world’s largest networking business. Huawei, which the White House accuses of aiding Beijing in espionage, is stepping up a worldwide legal and publicity campaign to protest what it deems unfair treatment by the U.S. and its allies. It’s turned increasingly to courts to fight a plethora of issues from alleged defamation to American network restrictions.“The U.S. is great because it embraces openness, inclusiveness and the rule of law,” Chief Legal Officer Song Liuping told reporters at a briefing in Shenzhen on Thursday. “If it abuses its power, the ultimate loser may be itself.”FCC representatives weren’t immediately available for comment outside of normal business hours.Read more: Huawei Sues U.S. Over Equipment Ban, Escalating Legal ClashHuawei has initiated a number of high-profile legal actions to defend its business and reputation overseas. In March, the company brought the U.S. government to court in Texas, arguing a provision in the 2019 National Defense Authorization Act that barred it from certain networks violated the U.S. Constitution. It also filed defamation claims in Paris last month over claims made on TV about its alleged ties with the Chinese government, something the company has repeatedly denied. Meng Wanzhou, the Huawei chief financial officer who faces potential extradition to the U.S. for alleged fraud, has also sued the Canadian authorities for wrongful detention.Even as Huawei fights to safeguard its reputation abroad, it may be facing a public backlash back home. This week, news that it had reported an employee to police who was subsequently detained for 251 days -- then released without charges -- sparked a social media furor against the company’s infamously demanding work environment. Local media reported the longtime employee had sought severance pay upon dismissal over unspecified reasons, but was then detained on extortion charges. “We are obligated to report to the authorities if we find any suspicious or unlawful acts,” Song said Thursday, saying he had nothing more to add.The backlash stood in stark contrast to the consistent support Huawei has enjoyed at home since it ended up in Washington’s cross-hairs. Huawei is considered a central facet of sensitive U.S.-Chinese negotiations intended to defuse trade tensions between the world’s two largest economies. The Trump administration however has said issues related to the company won’t be included in any potential deal and is a separate process.The FCC’s move comprises one aspect of a broader campaign to contain a Chinese national champion Washington views with suspicion. In May, the White House placed Huawei on a blacklist that prohibited the sale of American software and circuitry. It’s so far defied those curbs -- reporting hyper-growth in quarterly sales and smartphone shipments -- but expects Washington’s ban to erase $10 billion in 2019 revenue. That’s down from the $30 billion Huawei’s billionaire founder, Ren Zhengfei, previously feared.The U.S. market itself has shrunk in importance in past years for Huawei. The country’s biggest telecom carriers, including AT&T Inc. and Verizon Communications Inc., barely buy any of its gear and dropped plans to sell Huawei phones last year under pressure from the U.S. government. Huawei still maintains business ties with a number of small American carriers serving rural areas.(Updates with comments from a press briefing from fourth paragraph)To contact Bloomberg News staff for this story: Gao Yuan in Beijing at firstname.lastname@example.orgTo contact the editors responsible for this story: Peter Elstrom at email@example.com, Edwin ChanFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
The bills — which contained names, addresses and phone numbers, and many included call histories — were collected as part of an offer to allow cell subscribers to switch to Sprint, according to Sprint-branded documents found on the server. The documents explained how the cell giant would pay for the subscriber's early termination fee to break their current cell service contract, a common sales tactic used by cell providers. In some cases we found other sensitive documents, such as a bank statement, and a screenshot of a web page that had subscribers' online usernames, passwords and account PINs — which in combination could allow access to a customer's account.
(Bloomberg) -- Viacom Inc. and CBS Corp. completed their merger on Wednesday, ending three years of on-and-off talks and creating what they boast is an entertainment colossus without peer. The hope is that the combined company, rechristened ViacomCBS Inc., will spit out hit TV shows and movies faster than you can say Netflix.But Wall Street has been skeptical. Shares in both companies have tumbled more than 14% since they announced plans to combine in August, erasing billions of dollars in market value. Shareholders of CBS have sued the company in Delaware, alleging the merger only benefits its controlling shareholder, National Amusements Inc., the movie-theater chain owned by the Redstone family.The shares began to rebound on Wednesday, a sign that investors are finally warming to the deal. But ViacomCBS still has a long way to go before winning over skeptics.Even media analysts, typically a staid and supportive bunch, have questioned the logic of the deal. Michael Nathanson, co-founder of Moffett Nathanson LLC, dubbed an October filing that outlined details of the merger “an abject disaster.”That wasn’t the reception Shari Redstone was hoping for when she began agitating for a merger of the two companies back in 2016. That was when she supplanted her father, Sumner Redstone, as the public face of a family business with a clear goal: reunite the two companies that her father split apart in 2006.Wall Street was mixed on the deal at the time, but saw the logic for Viacom. The owner of MTV and Nickelodeon was losing teenagers to Netflix, advertisers to YouTube and confidence among its own employees. Combining with CBS would give the combined company the heft to negotiate better deals with pay-TV operators and advertisers.CEO ClashesYet the family met resistance from the leadership of both companies, leading to legal disputes with both Viacom chief Philippe Dauman, her dad’s old lawyer, and CBS boss Les Moonves, a TV industry legend. Dauman was fired in 2016, and Moonves was ousted last year after more than a dozen women accused him of sexual misconduct.Now that the merger is finally a reality, it looks late -- and the combined company looks small. ViacomCBS has a market capitalization of about $20 billion, a fraction of heavyweights Walt Disney Co., Comcast Corp., AT&T Inc. and Netflix Inc. Its $27 billion in annual sales is a fraction of all those companies but Netflix, which is growing at a much faster rate.Redstone would prefer investors look at another number: the $13 billion that the two companies are spending annually on TV shows and movies. That figure puts ViacomCBS in the same league as the biggest entertainment companies in the world, and speaks to what Redstone and Viacom chief Bob Bakish have said is a differentiated strategy. While AT&T, Comcast and Disney trip over one another to create their own Netflix, ViacomCBS will sell to all of them.Viacom’s Paramount produces “Jack Ryan” for Amazon, while Nickelodeon just signed a deal to make programs for Netflix. CBS both produces “Dead to Me” for Netflix and several shows for its own streaming service.Shares RallySome investors are coming over to their way of thinking. Viacom rallied the most since May on Wednesday, climbing as much as 6.1%. CBS rose as much as 6.2%. Both stocks came off their highs by the close, each rising more than 3%. ViacomCBS begins trading under the symbols VIACA and VIAC on Thursday.“It’s somewhat frustrating the way the stocks have traded; it’s like there are no believers out there,” said John Miller, a senior vice president at Ariel Investments, which holds stock in both companies. “We continue to believe this merger makes complete sense.”Miller said he expects “unbelievable” political advertising revenue in the 2020 election cycle, and said the companies are bringing together valuable programming. “The combination will make both companies stronger,” he said.Still, the combined company’s strategy remains confusing to many. At the same time it licenses “South Park,” one of its most popular programs, to AT&T’s HBO Max, ViacomCBS will maintain its own streaming service, All Access. The spending on original programming for All Access and Showtime is what prompted Nathanson to use the phrase “abject disaster” in the first place. The cash burn from that spending exceeded his forecast.Tough SpotBakish, who will run the combined company, is in an unenviable position. He doesn’t want to give up on the money he can get licensing programs to streaming services starved for hit shows, but he can’t forgo the world of streaming altogether. Wall Street has rewarded Disney for taking on Netflix head-to-head, but it is in the unique position of owning Marvel, “Star Wars” and Pixar.Investors’ concerns don’t stop there. They expected more cost synergies. They wanted more insight into how the two companies would benefit one another. Press appearances from Bakish have done little to assuage their concerns.But competing on the internet is not the only -- or even the main -- rationale for doing the deal. It does create a formidable TV company that will own the most-watched U.S. network, the most-watched kids’ TV network, one of the major Hollywood studios and a premium cable network in Showtime. All together, they will command more than 20% of TV viewing and the largest audience in almost every demographic of any company.“It’s a reach story,” Bakish told Bloomberg News in an interview the day the deal was announced. “We will have the largest TV business in the U.S. on a combined basis, and it strengthens our position to create value.”Bakish, Redstone and the leadership at CBS all say they’re convinced this deal is a no-brainer. Now they just need to convince everyone else.(Updates with deal’s completion in first paragraph, shares in 11th paragraph.)To contact the reporter on this story: Lucas Shaw in Los Angeles at firstname.lastname@example.orgTo contact the editors responsible for this story: Nick Turner at email@example.com, John J. Edwards IIIFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
President Donald Trump on Wednesday dismissed the significance of repeated contacts between his personal attorney Rudy Giuliani and phone numbers linked to the White House and its budget office — contacts that were revealed in the House intelligence committee’s impeachment report. The 300-page House report is serving as the basis for the House Judiciary Committee’s efforts beginning Wednesday to formally move forward on drafting articles of impeachment against Trump.
Backed by favorable business dynamics, AT&T (T) forecasts consolidated revenues at a CAGR of 1-2% for 2020-2022, and EBITDA margins to expand 200 basis points by 2022.
Verizon (VZ) collaborates with Amazon Web Services to create an enhanced cloud computing technology for enterprise customers by deploying ultra-low latency applications at the edge of the 5G network.
Plex is debuting a new streaming service that offers free TV and movies. Though the service will be ad-supported, it features thousands of movies and shows from a variety of studios like MGM, Warner Bros., and Lionsgate. Plex CEO Keith Valory joins Yahoo Finance’s Zack Guzman, Emily McCormick and Strictly Cookies CFO Courtney Comstock to discuss on YFi PM.