The Wall Street Journal columnist Bill McGurn discusses the Capitol Hill riot and calls to impeach President Trump.
The Wall Street Journal columnist Bill McGurn discusses the Capitol Hill riot and calls to impeach President Trump.
Tech stocks could come under pressure as President-elect Joe Biden's stimulus plan works its way through the U.S. economy.
(Bloomberg) -- U.S. stock futures fell, erasing early gains, as investors assessed the details of President-elect Joe Biden’s $1.9 trillion spending-bill proposal that includes $350 billion in aid to states.Contracts on the S&P 500 Index were down 0.4% as of 11:36 a.m. in London, after rising as much as 0.2% earlier. The underlying index lost 0.4% in the cash session, with investors growing concerned about the path for Federal Reserve policy now that signs of faster inflation are emerging.In Europe, the Stoxx Europe 600 Index followed through, dropping as much as 0.7%, dragged lower by energy and mining shares. The health care sector outperformed and was the only industry group firmly in the green.The Fed’s largesse and prior federal spending packages worth almost $3 trillion have powered a 70% gain in U.S. stocks from the pandemic lows in March. Biden’s plan -- long telegraphed since his election in November -- is more than double the package approved in late December, and proposes sending $1,400 to qualified individuals. It also calls for increasing the federal minimum wage to $15 an hour.U.S. stocks have pushed to record after record since the vaccine approvals and Biden’s election in November. His agenda, including ambitious aid and a follow-up plan to spend on projects such as infrastructure, got a boost Jan. 5 when Democrats won control of the Senate.Vice President Kamala Harris’ vote should help seal Democratic wins on issues that require a simple majority for passage in the evenly split upper house. However, Biden proposals including aid to states and money for health care are likely to require 60 votes, which would appear difficult to achieve.“Given the distaste Republicans have for state aid, Mr. Biden’s bipartisan hopes will be immediately tested,” Jeffrey Halley, senior market analyst with Oanda Asia Pacific Pte., wrote in a note. “And that is before the remake America bills come through with the almost certain increases in taxes.”The record climbs in stocks have stretched valuations to levels not seen in two decades, prompting warnings of a bubble that will lead to a rapid selloff. Investors have tolerated them so far because of Biden’s pledge to amp up spending not only on direct aid, but also on fighting the virus and rolling vaccines. His bill sets aside $20 billion for a national vaccine program and $50 billion to expand testing capacity.Signs of froth abound, though. In a note titled “This Is Ludicrous,” Bespoke Investment Group summed up the recent action. It cited 59 U.S.-listed stocks that are trading at prices that are more than 10 times sales and have more than doubled in the past three months. Stocks currently in that category have risen 760% since March and have a combined market capitalization of $320 billion, according to George Pearkes, global macro strategist at the firm.“Stimulus is always going to be net positive for near-term growth and profits, but the question is always how much is already priced in,” said Dan Suzuki, deputy chief investment officer at Richard Bernstein Advisors. “There’s more room for stimulus to get priced in from here, but it only adds to the cyclical recovery that will likely take place regardless of whether stimulus gets passed.”(An earlier version of this story was corrected to reflect the size of the plan in the first paragraph.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
The idea that value stocks are finally about to awaken after a decadelong slumber is almost a joke in financial circles. What is at least slightly different about Vanguard’s perspective is that its model suggests that investors have been correct in shunning value stocks, at least until the last few years. “Our research indicates that a value premium does exist and that the recent outperformance of growth stocks can be partially explained by downward-trending long-term inflation levels and the lack of material acceleration in earnings growth over the last decade,” the firm says.
Palantir Technologies shares soared after reports said star money manager Cathie Wood's ARK Next Generation Internet ETF bought 497,100 shares of the data analytics software provider. It has skyrocketed 186% since its September initial public offering amid investor euphoria for young software companies. Ark Next Generation recently traded at $158.10, down 1.04%, but has soared 152% over the past year, betting on hot tech-related stocks such as Tesla (9.92% of assets), Roku (5.78% of assets) and Grayscale Bitcoin Trust (4.65% of assets).
Watching the markets with an eye to the main chance, Raymond James strategist Tavis McCourt sees both risk and opportunity in current market conditions. The opportunity, in his opinion, stems from the obvious factors: the Democrats won both Georgia Senate seats in the recent runoff vote, giving the incoming Biden Administration majority support in both Houses of Congress – and increasing the odds of meaningful fiscal support getting signed into law in the near term. More importantly, the coronavirus vaccination program is proceeding, and reports are showing that Pfizer’s vaccine, one of two approved in the US, is effective against the new strain of the virus. A successful vaccination program will speed up the economic recovery, allowing states to loosen lockdown regulations – and get people back to work. The risks are also coming from the political and public health realms. The House Democrats have passed articles of impeachment against President Trump, despite the imminent natural closure of his term of office, and that passage reduces the chances of political reconciliation in a heavily polarized environment. And while the COVID strain is matched by current vaccines, there is still a risk that a new strain will develop that is not covered by existing vaccinations – which could restart the cycle of lockdowns and economic decline. Another risk McCourt sees, beyond those two, would be a sharp rise in inflation. He doesn’t discount that, but sees it as unlikely to happen soon, writing. “…product/service inflation is only really a possibility AFTER re-openings, so the market feels a bit bullet proof in the very near term, and thus the continued rally, with Dems winning the GA races just adding fuel to the stimulus fire,” McCourt noted. Some of McCourt’s colleagues among the Raymond James analyst cadre are keeping these risks in mind, and putting their imprimatur on strong dividend stocks. We’ve looked into Raymond James' recent calls, and using the TipRanks database, we’ve chosen two stocks with high-yield dividends. These Buy-rated tickers bring a dividend yield of 7%, a strong attraction for investors interested in using the current good times to set up a defensive firewall should the risks materialize. Enterprise Products Partners (EPD) We’ll start in the energy sector, a business segment long known for both high cash flows and high dividends. Enterprise Products Partners is a midstream company, part of the network that moves hydrocarbon products from the wellheads to the storage farms, refineries, and distribution points. Enterprise controls over 50,000 miles worth of pipelines, shipping terminals on Texas’ Gulf coast, and storage facilities for 160 million barrels oil and 14 billion cubic feet of natural gas. The company was hurt by low prices and low demand in 1H20, but partially recovered in the second half. Revenues turned around, growing 27% sequentially to reach $6.9 billion in Q3. That number was down year-over-year, slipping 5.4%, but came in more than 6% above the Q3 forecast. Q3 earnings, at 48 cents per share, were just under the forecast, but were up 4% year-over-year and 2% sequentially. EPD has recently declared its 4Q20 dividend distribution, at 45 cents per common share. This is up from the previous payment of 44 cents, and marks the first increase in two years. At $1.80 annualized, the payment yields 7.9%. Among the bulls is Raymond James' Justin Jenkins, who rates EPD a Strong Buy. The analyst gives the stock a $26 price target, which implies a 15% upside from current levels. (To watch Jenkins’ track record, click here) Backing his bullish stance, Jenkins noted, "In our view, EPD's unique combination of integration, balance sheet strength, and ROIC track record remains best in class. We see EPD as arguably best positioned to withstand the volatile landscape… With EPD's footprint, demand gains, project growth, and contracted ramps should more than offset supply headwinds and lower y/y marketing results…" It’s not often that the analysts all agree on a stock, so when it does happen, take note. EPD’s Strong Buy consensus rating is based on a unanimous 9 Buys. The stock’s $24.63 average price target suggests an upside of 9% from the current share price of $22.65. (See EPD stock analysis on TipRanks) AT&T, Inc. (T) T is one of the market’s instantly recognizable stock. The company is a member in long standing of the S&P 500, and it has reputation as one of the stock market’s best dividend payers. AT&T is a true large-cap industry giant, with a market cap of $208 billion and the largest network of mobile and landline phone services in the US. Its acquisition of TimeWarner (now WarnerMedia), in a process running between 2016 and 2018, has given the company a large stake in the mobile content streaming business. AT&T saw revenues and earnings decline in 2020, under pressure from the corona pandemic – but the decline was modest, as that same pandemic also put a premium on telecom and networking systems, which tended to support AT&T’s business. Revenues in 3Q20 were $42.3 billion, 5% below the year-ago quarter. On positive notes, free cash flow rose yoy from $11.4 billion to $12.1 billion, and the company reported a net gain of 5.5 million new subscribers. The subscriber growth was driven by the new 5G network rollout – and by premium content services. The company held up its reputation as a dividend champ, and has made its most recent dividend declaration for payment in February 2021. The payment, at 52 per common share, is the fifth in a row at current level and annualizes to $2.08, giving a yield of 7.2%. For comparison, the average dividend among tech sector peer companies is only 0.9%. AT&T has kept its dividend strong for the past 12 years. Raymond James analyst Frank Louthan sees AT&T as a classic defensive value stock, and describes T’s current state as one with the bad news ‘baked in.’ “[We] believe there is more that can go right during the next 12 months than can get worse for AT&T. Throw in the fact that shares are heavily shorted, and we believe this is a recipe for upside. Large cap value names are hard to come by, and we think investors who can wait a few months for a mean reversion while locking in a 7% yield should be rewarded for buying AT&T at current levels,” Louthan opined. In line with these comments, Louthan rates T an Outperform (i.e. Buy), and his $32 price target implies room for 10% growth from current levels. (To watch Louthan’s track record, click here) What does the rest of the Street think? Looking at the consensus breakdown, opinions from other analysts are more spread out. 7 Buy ratings, 6 Holds and 2 Sells add up to a Moderate Buy consensus. In addition, the $31.54 average price target indicates ~9% upside potential. (See AT&T stock analysis on TipRanks) To find good ideas for dividend stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights. Disclaimer: The opinions expressed in this article are solely those of the featured analysts. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
Here are analysts' top stocks to buy in the first quarter.The S&P 500 closed out 2020 at all-time highs on optimism surrounding additional government stimulus measures and a potential global economic rebound in 2021.
After her birth I wanted to establish a 529 plan. Now that we’re heading into 2021 with all this talk about debilitating college loan debt, I’ve started wondering if it still makes sense to start a brand-new 529 plan or just simply keep contributing to my current 403(b) retirement account, then tapping that early for her, if needed.
Four things could pop the "rational bubble" in equities, says Mohamed El-Erian — even if they're not likely to happen right now.
What are the fastest-growing stocks to watch in 2021? Here's a list featuring GRWG stock, Square, Daqo and four other stocks expecting up to 156% growth.
The major U.S. equity-indexes are hovering around all-time highs, and a question that frequently pops up these days, is whether some companies’ valuations might be overstretched. However, some operate at the opposite end of the spectrum, and could yet offer investors untapped opportunities. H.C. Wainwright analyst Ram Selvaraju points in the direction of Sorrento Therapeutics (SRNE), as one such company. Selvaraju rates SRNE a Buy along with a $30 price target, which implies a 275% upside from current levels. (To watch Selvaraju’s track record, click here) So, what’s behind the optimistic outlook? Well, for starters, Sorrento has a stake in two cell-based immunotherapy companies that could “drive value in Sorrento shares over the coming months.” One is Celularity, a clinical-stage cell therapeutics company focused on cellular medicines for cancer, infectious diseases, and degenerative diseases. Celularity is expected to go public later this year via a SPAC merger with GX Acquisition Corp. The merged company’s equity value following the transaction’s closure will land at roughly $1.7 billion. Selvaraju estimates Sorrento's position should be worth in the $200 million region. The second company is NantKwest, which recently signed a deal to merge with ImmunityBio. The transaction is expected to close in 1H21. Sorrento owns roughly 8.2 million shares of the clinical-stage immunotherapy company. These are currently worth around $121 million, going by NantKwest’s recent share price. Additionally, the analyst highlights Sorrento’s “burgeoning portfolio of assets spanning three distinct therapeutic areas (non-opioid pain management, oncology and COVID-19).” In fact, on the Covid-19 front alone, Sorrento has taken a broad-based approach and has a long list of diagnostic, prophylactic and therapeutic offerings in the pipeline, with “updates likely to come fast and furious.” These include two rapid detection tests; COVI-STIX, for which the company filed for Emergency Use Authorization (EUA) in the U.S. in December, and COVI-TRACE, which Selvaraju claims could come in handy at any mass gathering event. “We believe that the incentive to facilitate the large-scale and indeed ubiquitous deployment of the COVI-TRACE test is extremely high and governments worldwide may seek to implement this in their respective regions,” the 5-star analyst opined. Other Covid-19 candidates include COVIGUARD - a SARS-CoV-2 neutralizing antibody, COVI-AMG - an affinity-matured version of the COVIGUARD neutralizing antibody, a neutralizing antibody cocktail named COVI-SHIELD and COVIDTRAP, an ACE2 receptor decoy, intended to imitate the mammalian ACE2 receptor that acts as the primary portal for the SARS-CoV-2 virus to penetrate human cells. It has been relatively quiet when it comes to other analyst activity. In the last three months, only 2 analysts have issued ratings. However, as they were both Buys, the word on the Street is that SRNE is a Moderate Buy. Based on the $25.50 average price target, shares could climb 219% higher in the next twelve months. (See SRNE stock analysis on TipRanks) To find good ideas for healthcare stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights. Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
The ESG mega-trend sent trillions of dollars pouring in last year. But the real boom could be set to take off beginning January 20th
Loop Capital analyst Ananda Baruah repeated a Buy rating and boosted his target price on Apple stock to $155 from $131. Apple reports earnings later this month.
Marijuana stocks surged as a Democratic Senate adds to cannabis legalization momentum. Are any pot stocks good buys now amid profitability challenges?
Stocks dipped as traders considered details of President-elect Joe Biden’s newly unveiled stimulus proposal and weighed the likelihood of the package getting advanced quickly through Congress.
Jim Cramer shares stock-market news including why Penn National stock has room to run, investors' unwillingness to embrace ESG stocks and how to pick EV stocks.
The Federal Reserve might need to print money to help finance Biden's coronavirus relief proposal, to keep Treasury bond interest rates from climbing.
JPMorgan delivered results that blew away analysts’ expectations even as the COVID-19 pandemic continued to exert significant headwinds on the global economy.
Playtika, a developer of casino and mobile games, raised $1.9 billion with an initial public offering that gave it a valuation near $11 billion. The Playtika IPO exceeded expectations.
This daughter writes: ‘My conscience is getting the better of me, and I would like to be transparent about being the joint owner of this savings account.’
Whether markets move up or down, every investor loves a bargain. There’s a thrill in finding a valuable stock at low, low price – and then watching it appreciate in the mid- to long-term. The key here for investors is finding options in which the risk/reward combination will work toward long-term advantage. So, how are investors supposed to distinguish between the names poised to get back on their feet and those set to remain down in the dumps? That’s what the pros on Wall Street are here for. Using TipRanks’ database, we pinpointed two beaten-down stocks the analysts believe are gearing up for a rebound. Despite the hefty losses incurred over the past 52 weeks, the two tickers have scored enough praise from the Street to earn a “Strong Buy” consensus rating. Theravance Biopharma (TBPH) We will start with Theravance, a biopharmaceutical company that focuses on developing organ-specific medications. It’s current pipeline includes drug candidates for the treatment of inflammatory lung and intestinal conditions, as well as neurogenicorthostatic hypotension. The research programs range from Phase 1 to Phase 3 trials. Theravance already has YUPELRI on the market as a COPD treatment. YUPELRI underlies the lion’s share of Theravance’s revenue, which in Q3 reach $18.3 million. This was up 47% year-over-year, and was driven by a 124% increase in YUPELRI sales. Of more immediate interest to investors is Trelegy Ellipta, GlaxoSmithKline’s new once daily inhaler medication developed as a maintenance treatment for asthma, which was approved by the FDA in September, 2020. This approval will give Theravance a slice of the income on a drug with a broad potential audience, as asthma affects more than 350 million people globally. Theravance owns royalty rights on Trelegy, with income estimated at 5.5% to 8.5% of total sales. Trelegy was initially approved in the US as the first once-daily single inhaler triple therapy for the treatment of COPD. Like many biopharmas, Theravance has high overhead and its approved drugs are at the start of their profitable lives. This keeps the net earnings and revenues down, at least for the near-term, and leads to a discount share price – TBPH has slipped 32% over the past 52 weeks. Covering the stock for Leerink, analyst Geoff Porges remains bullish on Theravance, mainly due to the combination of its robust pipeline and its approved treatments for lung diseases. “Theravance’s respiratory medicines are its key near-term valuation drivers… We still forecast ~$2.4B in WW Triple sales at peak (2027E). Beyond TBPH’s commercial/partnered assets, the company is also developing an improved JAK inhibitor (JAKi) partnered with JNJ (OP) for inflammatory bowel disease (IBD), and a norepinephrine and serotonin reuptake inhibitor (NSRI) TD-9855 (ampreloxetine) for neurogenic orthostatic hypotension (nOH). Each of these drugs leverages novel delivery of unique compounds against proven mechanisms-of-action and could offer superior safety and/or treatment effect, from their wider therapeutic windows,” Porges noted. To this end, Porges rates TBPH an Outperform (i.e. Buy) and gives it a $35 price target, implying an impressive one-year upside of 104%. (To watch Porges’ track record, click here) Overall, there are 5 reviews on file, and all are to Buy, making the Strong Buy consensus unanimous. TBPH shares are priced at $16.95, and their $33.60 average price target suggests a 97% upside from that level. (See TBPH stock analysis on TipRanks) NiSource, Inc. (NI) NiSource is a utility holding company, with subsidiaries in the natural gas and electricity sectors. NiSource provides power and gas to over 4 million customers in Indiana, Kentucky, Maryland, Massachusetts, Ohio, Pennsylvania, and Virginia. The majority of NiSource’s customers, about 88%, are in the gas sector; the company’s electric operations serve customers in Indiana only. The company saw revenues in the third quarter come in at $902 million, down from $962 in the prior quarter and $931 in the year-ago quarter. Overall, however, revenues have conformed to the company’s historic pattern: The second and third quarters are relatively low, while the top line increases with cold weather in Q4 and peaks in Q1. This is typical of utility companies in North America. Despite the lower year-over-year revenues, NiSource has felt confident enough to maintain its dividend payment, holding it steady at 21 cents per common share through 2020. This annualizes to 84 cents, and gives a yield of 3.8%. Not only has the company felt confident to pay income to shareholders, it has also felt confident to invest heavily in renewable energy resources. The company has a FY20 capital spending plan exceeding $1.7 billion, and is guiding toward $1.3 billion for FY21. These expenditures will fund ‘green’ energy projects. NI is currently trading at $21.67, a striking distance from its 52-week low. One analyst, however, thinks this lower stock price gives investors an attractive entry point today. Argus analyst Gary Hovis rates NI a Buy along with a $32 price target. This figure implies a 48% upside from current levels. (To watch Hovis' track record, click here) "NI shares appear favorably valued at 18.1-times our 2021 EPS estimate, below the average multiple of 21.6 for comparable electric and gas utilities," Hovis noted. "NiSource could also become a buyout target, as larger utilitiesand private equity firms have purchased smaller utilities because oftheir stable earnings growth and above-average dividend yields." Overall, Wall Street sees a clear path forward for NiSource – a fact clear from the unanimous Strong Buy consensus rating, based on 3 recent Buy-side reviews. The shares are selling for $21.68, and the average price target of $28.75 suggests an upside of ~32% on the one-year timeframe. (See NI stock analysis on TipRanks) To find good ideas for beaten-down stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights. Disclaimer: The opinions expressed in this article are solely those of the featured analysts. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.