14.81 0.00 (0.00%)
After hours: 4:15PM EDT
|Bid||14.52 x 1000|
|Ask||15.18 x 900|
|Day's Range||14.23 - 15.14|
|52 Week Range||9.41 - 28.61|
|Beta (5Y Monthly)||1.05|
|PE Ratio (TTM)||17.04|
|Earnings Date||Aug 04, 2020 - Aug 10, 2020|
|Forward Dividend & Yield||N/A (N/A)|
|Ex-Dividend Date||Mar 19, 2020|
|1y Target Est||18.38|
KAR Auction Services, Inc. d/b/a KAR Global (NYSE: KAR), a global vehicle remarketing and technology solutions provider, today announced the placement of $550 million in newly issued perpetual convertible preferred stock of KAR Global ("KAR"). The preferred stock has a 7.0% dividend which shall be paid in-kind for the eight quarters following closing, and thereafter in cash or in-kind at KAR's option. The initial conversion price of $17.75 per share represents an approximately 42% premium to KAR's closing price of $12.52 per share on Friday, May 22, 2020. The investment was led by funds advised by Apax Partners (the "Apax Funds"), a global private equity advisory firm, with participation by Periphas Capital, L.P. The proceeds of the transaction will be utilized to expedite the resumption of operations to meet market demand, sustain the company's technology platforms and development pipeline and navigate the industry and economic recovery.
Moody's Investors Service ("Moody's") has completed a periodic review of the ratings of KAR Auction Services, Inc and other ratings that are associated with the same analytical unit. The review was conducted through a portfolio review in which Moody's reassessed the appropriateness of the ratings in the context of the relevant principal methodology(ies), recent developments, and a comparison of the financial and operating profile to similarly rated peers.
KAR Global (NYSE: KAR), a global vehicle remarketing and technology solutions provider, today announced its participation in the following investor conference:
Investors are still uncertain just where the stock market is headed. Essentially, there are two competing opinions right now. One says that we’re just in a bear market rally, and that the worst is yet to come. The other thesis states that the current rally is real, and will mature into a new bull cycle as the economy restarts in the second half.Writing from JPMorgan, Marko Kolanovic, the investment bank's quant analyst, holds fast to that optimistic view. Kolanovic believes that epidemiological data suggests we are past the worst of the coronavirus spread, justifying the lifting of social and business restrictions. And that will open up economic activity, which will then find stimulus from low Fed interest rates and increased government ‘pump priming’ spending.Kolanovic sees the stimulus policies as more important than Q1’s weak earnings, writing, “The combined suppression of the risk free rate and credit spreads by the Fed likely has a bigger positive impact on equity valuation, compared with the negative impact of the temporary earnings loss.”Kolanovic is not the only JPM analyst who sees potential in the stock markets. The firm’s equity analysts have been working overtime to find the stocks best positioned to lead a potential bull rally. We’ve used the TipRanks database to pull up three of their stock picks, to find out why the JPM experts are tapping them for over 30% growth.KAR Auction Services (KAR)The first stock on our list belongs to a company in the second-hand vehicle market. KAR Auction Services operates a marketplace – both online and in the physical world – for used vehicles. The company sells to both individual and business buyers, people looking for a car to drive and garages looking to source parts for the shop floor. KAR sold over 3.7 million vehicles in 2019, bringing in $2.8 billion in auction revenue.KAR shares have been hit hard by the coronavirus epidemic. The combination of economic shutdowns and social lockdowns have not just put a hold on car sales – they have simply reduced the need for vehicles.Q1 earnings showed a 6% reduction in revenue, to $645.5 million, and a collapse in net income to $2.8 million from $15.3 million in the year-ago quarter. As noted, these steep reductions are attributable to the effects of the pandemic response. KAR shares are still down 38% year-to-date, badly underperforming the broader markets.However, JPM’s analyst Ryan Brinkman believes the current downturn is the time to buy in to KAR shares. The low price offers an attractive point of entry, and the stock has a clear path forward when economic activity resumes. Brinkman writes, “We believe that once stay-at-home orders are lifted and the situation moves from being one of a unique public health crisis to that of a more familiar economic downturn, aftermarket end-markets, including auctions, will earn their reputation for resiliency. People will drive again substantially similar to before, and volumes will return to salvage auctions.”Along with that optimistic assessment, Brinkman upgrades KAR from Neutral to Buy. His $19 price target suggests a strong 46% upside potential in the next 12 months. (To watch Brinkman’s track record, click here)Overall, KAR shares hold a Moderate Buy rating from the analyst consensus, which breaks down into 4 Buy reviews and 3 Holds. While the analyst corps is somewhat divided, their average price target is in line with Brinkman’s. (See KAR stock analysis at TipRanks)J2 Global Communications (JCOM)Next up is an internet communications company. J2 Global owns a diverse portfolio of 40+ online content brands, including IGN, Mashable, PCMag, BabyCenter, Everyday Health among others. In addition, J2 also runs a Cloud Service business, offering eFax and eVoice among other online services. The company boasts nearly $1.5 billion in annual revenue, and saw Q4 earnings rise to $2.19 per share.The Q4 earnings were the highest in two years, and capped a full year of rising earnings. Q4 is typically J2’s strongest quarter, while Q1 is typically the weakest, so the $1.35 estimate for Q1 earnings is less indicative of poor performance than one may think at first. On an important note, that Q1 estimate represents a modest increase of 1.5% year-over-year.JCOM shares’ price performance has roughly mirrored the broader market’s during the past three months. JCOM lost 35% in the initial slide, and has risen 21% from its trough.Initiating coverage of the stock for JPM, Cory Carpenter set a Buy rating, with a $105 price target that indicates room for 32% upside growth. (To watch Carpenter’s track record, click here)Supporting his stance, Carpenter notes the company’s strong Cloud position, writing, “We believe Cloud Services is well positioned to capitalize on growing security & privacy needs, with bundling & cross-sell potential, and we like that Digital Media monetizes through multiple rents—ads, subs, & affiliate commerce.”Key drivers for Carpenter's bull thesis include: "1) Total growth strategy drives sustainable growth, with $1B+ capital to deploy [...] 2) Diversified portfolio of leading Cloud Services & Digital Media brands. [...] 3) Strong FCF generator with M&A flywheel. JCOM prioritizes FCF, not growth at all costs, which it largely redeploys into M&A. JCOM’s 40% EBITDA margin is driven by Cloud Services’ ~50% margin and Digital Media’s ~35% margin."Carpenter is broadly in line with the rest of Wall Street, which has assigned JCOM more "buy" ratings than "holds" over the past three month -- and sees the stock growing about 26% over the next 12 months, to a target price of $101.30. (See J2 Global stock analysis on TipRanks)Montage Resources Corporation (MR)Last on our list is a small-cap hydrocarbon exploration and production company. Montage is based in the Appalachian region of Pennsylvania, Ohio, and West Virginia, where it operates natural gas and crude oil drilling wells. Montage holds over 195,000 undeveloped core acres, and operates 325 actively producing horizontal wells. The value of the company’s holdings is clear from its stock performance; in the last three months, while the markets have generally slid into a bear cycle, MR shares have gained 55%.Even with the COVID-19 epidemic and the collapse of oil markets, MR was able to increase its net daily production during Q1, reaching 6610.7 MMcfe. This was above both company guidance and analyst estimates. Quarterly income of $62.7 million also beat the expectations. The company has curtailed some production in low-margin crude oil, to compensate for the soft oil market prices.Analyst Arun Jayaram, reviewing MR for JPM, upgraded his stance on the shares from Neutral to Buy. His $8 price target implies a 43% upside growth potential for the coming year. (To watch Jayaram’s track record, click here)Jayaram is clear on his reasons for upgrading this stock. He says of MR, “We expect the market to largely look through negative estimate revision risk to 2020 forecasts to the emerging bullish natural gas narrative in 2021… Meanwhile, the company’s FCF yield of 23% leads the peer group and is well above the peer group average of 10%...”The Strong Buy analyst consensus on MR shares is based on 5 recent reviews, including 4 Buys and a single Hold. The company’s strong natural gas production is tangible asset, and its enviable free cash flow is attractive for investors. Shares are selling for $5.59, while the average price target of $6.22 suggests a modest upside of 1.6%. (See MR stock analysis at TipRanks)To find good ideas for stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights.
Good morning, and thank you for joining us today for the KAR Global First Quarter 2020 Earnings Conference Call. Today, we'll discuss the financial performance of KAR Global for the quarter ended March 31, 2020.
Shares of Cars.com (NYSE: CARS), KAR Auction Services (NYSE: KAR), and Carvana (NYSE: CVNA), are trading all over the map Thursday as Cars.com and KAR Auction are down 18% and 11%, respectively, while Carvana is up 10% on a wealth of earnings reports and a sign of optimism from Lyft (NASDAQ: LYFT). Carvana has had quite the trading day as it opened 10% lower before recovering to a 10% gain by Thursday afternoon.
KAR Auction Services (KAR) delivered earnings and revenue surprises of -47.06% and 1.78%, respectively, for the quarter ended March 2020. Do the numbers hold clues to what lies ahead for the stock?
KAR Auction Services, Inc. (NYSE: KAR), today reported its first quarter financial results for the period ended March 31, 2020. For the first quarter of 2020, the company reported revenue of $645.5 million as compared with revenue of $689.6 million for the first quarter of 2019, a decrease of 6%. Net income from continuing operations for the first quarter of 2020 decreased 82% to $2.8 million, or $0.02 per diluted share, as compared with net income from continuing operations of $15.3 million, or $0.11 per diluted share, in the first quarter of 2019. Adjusted EBITDA for the quarter ended March 31, 2020 decreased 28% to $88.6 million, as compared with Adjusted EBITDA of $122.9 million for the quarter ended March 31, 2019. Operating adjusted net income from continuing operations per diluted share decreased 55% to $0.09 for the quarter ended March 31, 2020, as compared with operating adjusted net income from continuing operations per diluted share of $0.20 for the quarter ended March 31, 2019. The company's operating results for the quarter ended March 31, 2020 were significantly impacted by the COVID-19 pandemic, as further discussed below.
The lockdowns in the U.S. has resulted in the economy being shoved into reverse, giving investors plenty of options for stocks to buy. The Bureau of Economic Analysis (BEA) announced earlier this week that the first pass at the data for the first quarter of 2020 is very bad. The U.S. gross domestic product (GDP) dropped by 4.8%, which reverses the prior quarter's gain of 2.10%.And it will get worse on the data front. The majority of the lockdowns occurred only in the closing weeks of March. This means that for the current second quarter, with the vast majority of the U.S. under full lockdown, the further drop in GDP should be even worse than for the first quarter.In addition, the BEA also reported that personal consumption -- which represents the biggest segment of the economy dropped by 7.6%. And business spending on non-residential investment dropped by 8.6%.InvestorPlace - Stock Market News, Stock Advice & Trading TipsSource: Bureau of Economic Analysis & Bloomberg U.S. GDP (White) Personal Consumption (Blue) & Business Investment (Red) Source All of this means that the U.S. economy is likely headed into technical recession. Now, with the Federal Reserve near frantically buying all sorts of bonds, credit products, loans, ETFs and more -- as well as providing lending facilities all with the legally-required credit guarantees from the U.S. Treasury -- there is some stability entering the markets and the economy. Also, with President Donald Trump's administration getting Congress to go along with stimulus programs including the Coronavirus Aid, Relief & Economic Security Act of 2020 (CARES), there is further stabilizing cash being brought into the economy.Then of course, the gradual unlocking of the economy will bring some return in spending and investment in the economy. But with no real data to base any credible scenarios for recovery timing and amounts, the next return to boom times is a wild card at best. * 7 Smart Stocks to Watch as Volatility Stays Soaring Meanwhile, the general stock market -- as measured by the S&P 500 -- is up 26.6% since March 23. And since June 3 of last year, it is up more than 3%. This means that there are plenty of folks buying stocks to buy ahead of an eventual anticipated recovery in the economy.Source: Bloomberg However, it is worth noting that the composition of the S&P 500 Index has been changing. That said, as always, not all stocks and sectors are the same when it comes to the S&P 500 Index. But one of the bigger developments has been that the weightings of sectors in the Index have been shifting over the past year. And the biggest single market sector with accelerating weighting in the Index is the Information Technology sector.Source: Bloomberg The Information Sector has jumped from 21.14% of the S&P 500 Index in May of last year to a current level of 22.188%. And with many investors and traders seeking out technology stocks as defensive investments during the lockdowns, the buying and resulting price gains of the leaders inside this segment is changing the makeup of the overall Index.In turn, this provides some arguments against the idea that the stock market is showing that things are set to get better for the broader economy. For example, if we take a look at the unweighted S&P 500 Index against the traditional weighted (and tech-heavier now) S&P 500 Index, we can see that the recovery is not the same for the rest of the broader collection of stocks.Source: Bloomberg You can see that the unweighted index (SPW) hasn't been as fully in recovery mode as the tech-heavier weighted index (SPX). This means that there are many companies out of the 505 stocks in the index that are still troubled and challenged in the stock market. And perhaps this better reflects the truer nature of the U.S. economy when it comes to companies and consumers.For investors, I argue that you should make sure that you have some companies that -- by their nature and in their businesses -- are set up to profit whether the U.S. economy does move back to boom times; Or if the current economic bust is going to be around for a while to follow. * 3 IPOs Likely to Be Delayed by the Coronavirus These companies and their stocks are what I call "heads-I-win-tails-I-win" stocks. No matter which direction the economy goes, they are set to profit. That said, these companies are: * Easterly Government Properties (NYSE:DEA) * Life Storage (NYSE:LSI) * B. Riley Financial (NASDAQ:RILY) * Ritchie Brothers (NYSE:RBA) * KAR Auction Services (NYSE:KAR)So, with that in mind, here's a look at some stocks to buy right now. Stocks to Buy: Easterly Government Properties (DEA)Source: Bloomberg Easterly Government Properties is a real estate investment trust (REIT). Many REITs have significant challenges right now. REITs that own retail properties are in serious trouble, and REITs that own leisure and entertainment properties and resorts are in serious jeopardy. Residential property REITs also have issues with tenants seeking to delay lease payments or full on default.Moreover, some commercial property REITs are also getting squeezed now by tenants that can't or won't pay. And these may well be further squeezed as more companies recognize that remote work is working potentially reducing needed office space.However, the one entity that has plenty of cash now and in the future is the U.S. government. And this is the primary tenant of Easterly. This is perhaps one of the few companies that have financial reports and data that actually have credibility in that the U.S. government will continue to pay and continue to lease its properties. Revenue has been up by 38.1% over the past year, and it derives a return on funds from operations (FFO) -- which is the return on the actual property leases of 9.7%. And it pays a dividend yield of 3.8%.DEA's stock has generated a return of more than 60% over the past five years. And yet, the stock is valued at only 1.9 times its intrinsic book value. All in all, these reasons make DEA one of the top stocks to buy. Life Storage (LSI)Source: Bloomberg Life Storage (LSI) is a beneficiary of transitions in the economy. Disruptions bring need to store household and business goods as folks will have to move or adjust living spaces. That said, the stock is reflecting the capabilities of the company while it is still down a bit for the year. But since March 23, it has outperformed the S&P 500 by a small margin.However, what makes Life Storage more attractive now and going forward is one of its developing initiatives that is very focused on the evolution of the U.S. economy and commerce.Its developing product or service called Warehouse Anywhere is exactly what the current and transitioning retail and business products market needs. Life Storage has set up facilities that are tailorable for businesses to have localized warehouse space in the company's facilities. And with radio frequency identification devices (RFID), customers can have goods delivered, tracked and deployed to their own customers on a localized basis with Life Storage offering logistics support. * 3 Millennial Stocks to Consider Buying Now This is exactly what Amazon has been developing for its own platform and for some of its platform vendors. And with that, it makes LSI a good looking member of these stocks to buy. B. Riley Financial (RILY)Source: Source Bloomberg The lockdowns in the U.S. economy has resulted in shuttering of countless retail stores around the nation. And even before the lockdowns, retail was already in trouble with thousands upon thousands of stores slated to be closed either in company consolidations or bankruptcies.Each and every store that is closed has to be dealt with. Think of all of the inventories, fixtures, real estate and other assets -- as well as settling local liabilities. And the company which is the leader and is the best in the business of closing the deal on closings is Great American Group.Great American Group has reported closing more than 6,800 stores since 2013, amounting to over $13 billion in assets. The company is set to do a fire sale of a business for 2020, as the closing market is showing signs of surging further both during and post lockdowns.Additionally, Great American Group is part of an even more interesting company called B. Riley Financial. And yes, it's another member of good stocks to buy.B. Riley was founded by its CEO Bryant Riley, who is the largest shareholder in the company, and -- along with management -- owns 27.3% of the shares of the company. That said, Bryant just bought a pile more of the stock last month.B. Riley is a financial firm that provides a big umbrella and structural underpinnings for six core businesses, which ithas either acquired or merged with over the past several years including Great American Group. B. Riley also acquired FBR - which was a favored investment bank with capital markets expertise in specific industries which I used to have regular dealings with the company in my former banking days.Then there's another business which I like quite a bit in B. Riley Principal Investments which is an alt-financial. Principal Investments makes loans and takes equity stakes in a variety of companies as it inches out traditional commercial banks. And it is benefitting from Federal Reserve buying of business loans adding to its liquidity now and opportunities later.Principal Investments works well with B. Riley Capital Management in loan origination as well as other direct asset acquisitions and management. And in turn, B. Riley Wealth Management utilizes the strengths of FBR and the other business to provide family office and other private client asset management with more than $10 billion reporter in assets under management (AUM)And then there's GlassRatner which dove tails nicely with Great American. GlassRatner specializes on workouts of failed or failing companies including restructuring, bankruptcies as well as valuation of assets and legal and accounting counseling.The company has a tremendous amount of cash and equivalents on hand - but management including Bryant Riley likes leverage to drive returns higher. As such, debts to assets are higher at 73.10%. This gives me some pause if there is a stumble - but provided that the company has divisions which work in expanding and contracting economies and markets - there are internal business hedges which makes it all the more appealing. And the stock pays a ample dividends with plenty of special additional payouts for a current yield of 5.03%. All of these reason combines make RILY a great option for investors looks for stocks to buy. Ritchie Brothers (RBA) and KAR Auction Services (KAR)How many films of economic collapses have scenes whereby family farms are being auctioned off with ma and pa tearing up for the camera?Auctions are one of the more efficient means of disposing of assets quickly and efficiently during times of strife including bankruptcies and whole industry disruptions.There are two auctioneering companies that I have inside my model portfolios of my Profitable Investing including Ritchie Brothers (RBA) and KAR Auction Services (KAR).Ritchie Brothers was founded by three brothers that inherited a furniture store business from their father. It also came with lots of debt and they needed cash quickly during a tough time. They came up with an auction and cleared their debt, raised lots of cash and their business was born.During the good times, it auctions business and industrial equipment that is in demand online and in person providing quick and cheaper access to goods that are needed in place or in the field in quick order.And during bust times, it liquidates all sorts of stuff on behalf of businesses or their lenders and again collect lots of fee income in doing so.KAR Auction Services as its name implies provides auctions for cars and other vehicles. During economic boom times, folks are eager to buy and lease new cars. And in turn - this leaves plenty of used cars that have to be liquidated to keep the flow of cars coming through dealerships around the nation. And lease companies need to get rid of off-lease cars and turn to auctions.Now in bust times - there is an absolute glut of used cars and KAR is stepping up its operations. And in addition, it also has a specialty in damaged or salvage vehicles for parts. Insurance companies don't want to keep cars that have been totaled. KAR solves their problem and has eager buyers for parts which now are often more valuable due to parts shortages with factories locked down.Both Ritchie Brothers and KAR Auction Services also pay nice dividends, as RBA yields 1.86% and KAR yields 5.07%. That said, both of these names make up two more great stocks to buy.Neil George was once an all-star bond trader, but now he works morning and night to steer readers away from traps -- and into safe, top-performing income investments. Neil's new income program is a cash-generating machine … one that can help you collect $208 every day the market's open. Neil does not have any holdings in the securities mentioned above. More From InvestorPlace * America's 1 Stock Picker Reveals Next 1,000% Winner * 25 Stocks You Should Sell Immediately * 1 Under-the-Radar 5G Stock to Buy Now * The 1 Stock All Retirees Must Own The post 5 Stocks to Buy That Win in a Boom or Bust appeared first on InvestorPlace.
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Moody's Investors Service ("Moody's") downgraded KAR Auction Services Inc's ("KAR") corporate family rating to B2 from B1, as well as the senior secured credit facilities rating to Ba3 (LGD2) from Ba2 and the senior unsecured rating to Caa1 (LGD5) from B3. Moody's also changed the outlook to negative from stable due to the disruption and uncertainty that the coronavirus outbreak will cause to KAR's business model. Moody's downgraded the speculative grade liquidity rating ("SGL") to SGL-3 from SGL-1.
Moody's Investors Service ("Moody's") changed the outlook for IAA, Inc. ("IAA") to negative from stable due to the expected disruption caused by the coronavirus outbreak to its business model. Moody's affirmed IAA's Ba3 corporate family rating ("CFR") and Ba3-PD probability of default rating, and affirmed the Ba2 (LGD2) and B2 (LGD5) ratings on IAA's senior secured credit facilities and senior unsecured notes, respectively.
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KAR Auction Services Inc. d/b/a KAR Global (NYSE: KAR) announced today it has suspended all employee air travel through March 31, 2020. This temporary precaution is being implemented in response to the COVID-19 coronavirus outbreak and is aimed at mitigating the spread of the disease and protecting the safety of the company's 15,000 employees across North America, the United Kingdom and continental Europe. The company emphasized this temporary precaution is being taken proactively, and not in response to any heightened or specific threat of exposure or spread of the virus across its 200 operating locations and communities.
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