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Why Clorox Company Stock Jumped 11.9% in June to Deliver Its Best Month This Year

What happened

Clorox (NYSE:CLX) shares made a dramatic comeback in June, ending the month 11.9% higher according to data provided byS&P Global Market Intelligence and reversing a major chunk of the losses they’d piled on year to date.

Interestingly, Clorox shares have been on the rise ever since the company reported its third-quarter earnings early May despite a full-year earnings downgrade. What gives?

So what

Rising cost pressure has been a common theme across the consumer goods industry. Clorox’s third-quarter gross margin dropped to 42.8%from 44% as a result. Yet, the company earned 5% higher net profit year over year on lower taxes and 3% growth in sales. More importantly, Clorox upgraded its full-year sales guidance to the higher end of its previous range of 1%-3%. On the flip side, it downgraded its fiscal 2018 earnings per share (EPS) outlook to $6.15-$6.30 from $6.17-$6.37. There’s nothing to worry here, though.

Clorox's products and brands.

Image source: Clorox Company.

In March, Clorox announced plans to acquire health and wellness company, Nutranext for $700 million, to be financed through cash and debt. While Clorox expects the acquisition to add a percentage point to its top line this year (hence the revenue outlook upgrade), acquisition-related expenses are expected to dilute its earnings.

Investors were encouraged by Clorox’s resilience amid challenging cost conditions. To top that, the company announced a share repurchase program worth $2billion later in May, reflecting management’s confidence in its long-term goals, which include 3%-5% growth in annual sales and conversion of 11%-13% annual revenue into free cash flows.

Rising cash flows should also mean higher dividends for shareholders: Clorox has already made a mark in the dividend world as a Dividend Aristocrat and rewarded shareholders with a good 14% increase in dividends earlier this year.

So what

Clorox’s full-year outlook, after the downgrade, calls for a solid 16% growth in EPS at the midpoint. While the Nutranext acquisition is unlikely to be accretive before fiscal 2020, Clorox should still be able to grow its EPS at a decent clip next year. The growth potential in earnings and dividend, coupled with the buyback program, was good enough for the market to propel Clorox shares higher last month.

Merrill to Pay $15.7 Million for Duping Mortgage Bond Customers

Bank of America Corp.’s Merrill Lynch unit will pay $15.7 million to settle a U.S. regulator’s allegations that it failed to properly supervise traders who persuaded clients to overpay for mortgage bonds by misleading them about how much the firm paid for the securities.

Merrill agreed to pay a fine of about $5.2 million, and to pay disgorgement and interest of more than $10.5 million, the Securities and Exchange Commission said in a statement Tuesday. Salespeople at the firm illegally profited from improper markups on residential mortgage backed securities that were in some cases twice as much as what customers should have paid, the SEC said.

“Lying to customers about the acquisition price can deprive investors of important information,” said Daniel Michael, head of the SEC Enforcement Division’s complex financial instruments unit. “The commission found that Merrill Lynch failed in its obligation to supervise traders who allegedly used their access to market information to take advantage of the bank’s own customers.”

Cracking down on bank traders who mislead clients about opaque markets for mortgage bonds has been a priority for the SEC and Justice Department in recent years. But the government has faced several setbacks. A federal appeals in May court threw out the conviction of former Jefferies & Co. managing director Jesse Litvak. The same day as the Litvak ruling, a jury acquitted former Cantor Fitzgerald LP trader David Demos of five counts of securities fraud.

In settling the SEC case, Merrill didn’t admit or deny the agency’s allegations. Paul Mishkin, an attorney for Merrill Lynch at Davis Polk & Wardwell, didn’t immediately respond to a phone call and email seeking comment.

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Top 5 Warren Buffett Stocks To Buy For 2019

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Pretend you’re Warren Buffett. You’re in your 80s. You’re worth over $70 billion. Obviously your children will receive a huge inheritance.

Not so fast.

Warren’s view on inherited wealth has always been that he will give his children “enough money so they would feel they can do anything but not so much that they could do nothing.” So, for example, he gave his son Peter enough money to pay off some equipment loans for his music business as well as the mortgage on his $194,000 home. (At the same time, though, he has heavily endowed his children’s independent charitable foundations, in 2006 giving each $1 billion to pursue their own philanthropic goals.)

Granted, you may not have the assets Buffett has accumulated. (Who does?)  But still: the amount of money you leave your children can have a major impact on their lives, both positively and negatively, and so can the manner in which you leave it. Buffett’s goal is to ensure his children live engaged and productive lives. Your goals may be different, and a variety of estate planning tools can help you achieve those goals.

Top 5 Warren Buffett Stocks To Buy For 2019: Southwestern Energy Company(SWN)

Advisors’ Opinion:

  • [By Max Byerly]

    Southwestern Energy (NYSE: SWN) and WPX Energy (NYSE:WPX) are both mid-cap oils/energy companies, but which is the superior investment? We will contrast the two companies based on the strength of their valuation, earnings, analyst recommendations, dividends, risk, profitability and institutional ownership.

  • [By Lisa Levin] Gainers
    Cocrystal Pharma, Inc. (NASDAQ: COCP) rose 15.3 percent to $2.41 in pre-market trading after declining 25.09 percent on Thursday.
    Expedia Group, Inc. (NASDAQ: EXPE) shares rose 10.7 percent to $117.75 in pre-market trading after the company reported stronger-than-expected earnings for its first quarter on Thursday.
    DMC Global Inc. (NASDAQ: BOOM) rose 10.6 percent to $35.00 in pre-market trading after reporting Q1 results.
    Genprex, Inc. (NASDAQ: GNPX) rose 10.2 percent to $12.12 in pre-market trading after climbing 86.76 percent on Thursday.
    Sprint Corporation (NYSE: S) shares rose 7 percent to $6.42 in pre-market trading on reports that the company has made progress on merger talks with T-Mobile.
    Amazon.com, Inc. (NASDAQ: AMZN) rose 6.9 percent to $1,621.95 in pre-market trading after the company posted upbeat results for its first quarter. The company sees second quarter operating income of $1.1 billion – $1.9 billion and sales of $51 billion – $54 billion.
    Riot Blockchain, Inc. (NASDAQ: RIOT) shares rose 5.5 percent to $7.88 in pre-market trading after gaining 1.49 percent on Thursday.
    Intel Corporation (NASDAQ: INTC) rose 5.3 percent to $55.86 in pre-market trading as the company reported better-than-expected results for its first quarter and also raised its FY18 sales outlook.
    8×8, Inc. (NASDAQ: EGHT) rose 5.3 percent to $21.00 in pre-market trading.
    Southwestern Energy Company (NYSE: SWN) shares rose 5.1 percent to $4.75 in pre-market trading as the company reported better-than-expected earnings for its first quarter.
    Diamond Offshore Drilling, Inc. (NYSE: DO) rose 5 percent to $20.24 in pre-market trading.
    Baidu, Inc. (NASDAQ: BIDU) rose 4.5 percent to $249.50 in pre-market trading following upbeat Q1 profit.
    Charter Communications, Inc. (NASDAQ: CHTR) rose 4.3 percent to $311 in pre-market trading. Charter is expected to release quarterly earnings today.
    SINA Corporation (NASDAQ: SINA) shares rose 3.9 pe
  • [By Paul Ausick]

    Southwestern Energy Co. (NYSE: SWN) traded down about 5.2% Friday and posted a new 52-week low of $4.00 after closing Thursday at $4.22. The stock’s 52-week high is $9.75. Volume was around 21 million, about 10% below the daily average of around 23 million shares. The company had no specific news.

Top 5 Warren Buffett Stocks To Buy For 2019: Helios and Matheson Analytics Inc(HMNY)

Advisors’ Opinion:

  • [By Evan Niu, CFA]

    Shares of MoviePass majority ownerHelios and Matheson Analytics (NASDAQ:HMNY) have plunged today, down by 23% as of 11:30 a.m. EDT, after the company saidit had closed a previously announced capital raise, while acknowledging that it had received a formal notice of delisting from the Nasdaq. The decline follows yesterday’s drop.

  • [By Peter Graham]

    Small cap analytics stock Helios and Matheson Analytics (NASDAQ: HMNY) is thethird most shorted stock on the NASDAQ with short interest of 54.30% according to Highshortinterest.com. Helios and Matheson Analytics is a provider of information technology services and solutions, offering a range of technology platforms focusing on big data, artificial intelligence, business intelligence, social listening, and consumer-centric technology. The Company owns a majority interest in MoviePass Inc., the nation’s premier movie-theater subscription service.Other holdings include RedZone Map, a safety and navigation app for iOS and Android users, and a community-based ecosystem that features a socially empowered safety map app that enhances mobile GPS navigation using advanced proprietary technology.

  • [By Lisa Levin] Gainers
    Valeritas Holdings, Inc. (NASDAQ: VLRX) shares jumped 17 percent to $3.65.
    Cambium Learning Group, Inc. (NASDAQ: ABCD) shares rose 13.5 percent to $11.70.
    McDermott International, Inc. (NYSE: MDR) gained 11.6 percent to $6.75 after the UK-based offshore oil service company Subsea 7 made an unsolicited bid to buy McDermott for $7 per share. However, the acquisition offer is contingent on McDermot terminating its pending merger with Chicago Bridge & Iron Company.
    Nautilus, Inc. (NYSE: NLS) shares jumped 11.2 percent to $14.95. Nautilus is expected to release Q1 results on May 7, 2018. Craig-Hallum initiated coverage on Nautilus with a Buy rating and a $19.00 price target.
    GEE Group, Inc. (NYSE: JOB) shares gained 11 percent to $2.2199.
    Check-Cap Ltd. (NASDAQ: CHEK) surged 10.8 percent to $4.50.
    Foresight Autonomous Holdings Ltd (NASDAQ: FRSX) rose 10.1 percent to $3.39.
    Stars Group Inc. (NASDAQ: TSG) climbed 9.6 percent to $32.10. Stars Group Inc (NASDAQ: TSG) announced plans to acquire Sky Betting & Gaming for $4.7 billion.
    Insmed Incorporated (NASDAQ: INSM) shares jumped 9.1 percent to $25.66. Credit Suisse upgraded Insmed from Neutral to Outperform.
    Tennant Company (NYSE: TNC) rose 8.4 percent to $75.65 after the company posted upbeat Q1 results and raised its FY18 earnings outlook.
    Command Security Corporation (NYSE: MOC) shares gained 6.4 percent to $3.0960 after the company disclosed a $23 million five-year contract with LaGuardia Gateway Partners for LaGuardia Airport New Central Terminal Building.
    Helios and Matheson Analytics Inc. (NASDAQ: HMNY) rose 6.2 percent to $2.41 after falling 10.98 percent on Friday.
    Vectren Corporation (NYSE: VVC) shares rose 5.7 percent to $69.31. CenterPoint Energy, Inc. (NYSE: CNP) announced plans to acquire Vectren for $72 per share in cash.
    Hanesbrands Inc. (NYSE: HBI) gained 4.9 percent to $18.035. Stifel Nicolaus upgraded Hanesbrands from Hold to Buy.
    M
  • [By Lisa Levin]

    Shares of Helios and Matheson Analytics Inc. (NASDAQ: HMNY) were down 40 percent to $2.29 after pricing public share offering.

    Sears Hometown and Outlet Stores, Inc. (NASDAQ: SHOS) was down, falling around 29 percent to $2.30. Sears Hometown and Outlet Stores reported a Q4 loss of $1.46 per share on revenue of $395.77 million.

Top 5 Warren Buffett Stocks To Buy For 2019: Fossil Inc.(FOSL)

Advisors’ Opinion:

  • [By Chris Lange]

    Fossil Group Inc. (NASDAQ: FOSL) will share its latest quarterly earnings on Tuesday. The consensus estimates call for a net loss of $0.82 per share and $538.49 million in revenue. Shares ended last week at $14.51, in a 52-week range of $5.50 to $18.44. The consensus analyst target is $13.00.

  • [By Chris Lange]

    The stock posting the largest daily percentage gain in the S&P 500 ahead of the close Thursday was Fossil Group, Inc. (NASDAQ: FOSL) which rose about 5% to $20.56. The stocks 52-week range is $5.50 to $20.65. Volume was 1.5 million compared to the daily average volume of 2.1 million.

  • [By Garrett Baldwin]

    President Trump will announce today if he will pull the United States out of the Obama-era nuclear deal. Trump wants European members of the treaty to amend certain issues regarding Iran’s uranium enrichment capacity. Energy stocks and oil prices had been rising on speculation that Trump would slap Iran again with economic sanctions, disrupting the region’s oil production. Comcast Corp.(Nasdaq: CMCSA) is currently working to obtain enough capital to purchase certain assets of Twenty-First Century Fox Inc.(NYSE: FOXA). The ability to raise capital would allow Comcast to replace Disney’s $52 billion bid for the many of Fox’s key businesses. Markets are reacting to a speech made this morning by U.S. Federal Reserve Chair Jerome Powell. During a speech in Zurich, Switzerland, Powell said that rising U.S. interest rates would not have a significant impact on emerging markets and foreign stock markets. This has long been a concern for other nations as the U.S. dollar rises and American bonds become more attractive to international investors.
    Four Stocks to Watch Today: DIS, C, SNAP
    The Walt DisneyCo.(NYSE: DIS) will lead another busy day of earnings reports today. Investors will be exploring the impact of recent price hikes at the company’s theme parks, as well as the ongoing concerns about cable cutting and how this trend affects ESPN. Markets anticipate that the company will report earnings per share of $1.68 on top of $14.23 billion in revenue. Shares of Citigroup Inc. (NYSE: C) are on the move. The uptick came after activist investor ValueAct announced a $1.2 billion stake in the investment bank. Citigroup shares were up 1.2% in pre-market hours. Shares of Snap Inc. (NYSE: SNAP) gained 1% in pre-market hours. The owner of social media giant Snapchat said that its CFO Drew Vollero will step down next week. The executive will be replaced by a financial executive at Amazon.com Inc. (Nasdaq: AMZN). Snap continues to face incredible pressures after the f

Top 5 Warren Buffett Stocks To Buy For 2019: Staffing 360 Solutions, Inc.(STAF)

Advisors’ Opinion:

  • [By Shane Hupp]

    Staffing 360 Solutions (NASDAQ: STAF) and ADECCO Grp AG/ADR (OTCMKTS:AHEXY) are both business services companies, but which is the better investment? We will compare the two companies based on the strength of their profitability, dividends, analyst recommendations, risk, institutional ownership, earnings and valuation.

Top 5 Warren Buffett Stocks To Buy For 2019: FIRST REPUBLIC BANK(FRC)

Advisors’ Opinion:

  • [By Max Byerly]

    MUFG Americas Holdings Corp lessened its position in shares of First Republic Bank (NYSE:FRC) by 19.4% during the first quarter, according to its most recent filing with the Securities and Exchange Commission. The firm owned 13,956 shares of the bank’s stock after selling 3,360 shares during the period. MUFG Americas Holdings Corp’s holdings in First Republic Bank were worth $1,292,000 as of its most recent filing with the Securities and Exchange Commission.

  • [By Max Byerly]

    Get a free copy of the Zacks research report on First Republic Bank (FRC)

    For more information about research offerings from Zacks Investment Research, visit Zacks.com

  • [By Ethan Ryder]

    Commerce Bank lessened its stake in shares of First Republic Bank (NYSE:FRC) by 76.8% in the 1st quarter, HoldingsChannel reports. The fund owned 56,614 shares of the bank’s stock after selling 187,752 shares during the period. Commerce Bank’s holdings in First Republic Bank were worth $5,243,000 at the end of the most recent quarter.

  • [By Logan Wallace]

    California Public Employees Retirement System lowered its position in shares of First Republic Bank (NYSE:FRC) by 2.6% in the 1st quarter, HoldingsChannel reports. The institutional investor owned 348,984 shares of the bank’s stock after selling 9,363 shares during the period. California Public Employees Retirement System’s holdings in First Republic Bank were worth $32,319,000 at the end of the most recent reporting period.

Buy Swaraj Engines; target of Rs 2402: Centrum

Centrum’s research report on Swaraj Engines

Despite a strong growth in the India tractor industry, Swaraj Engines (SWE) reported a moderate volume growth. Considering stellar growth reported by M&Ms tractor division, this performance was below our estimates. 4QFY18 EBITDA/PAT improved 19.0%/17.0% YoY, on the back of 9.8% growth in volumes and 49 bps YoY expansion in EBITDA margin. SWEs EBITDA and PAT were below our expectations on account of a slower than expected volume growth, affecting the topline.

Outlook

We value SWE on our differentiated AOCF/EV methodology and arrive at a TP of Rs2,402 (27.8x FY20E EPS) which indicates a 16.0% upside from current levels. Hence, we maintain our Buy rating on the stock. Key risks are a) dependence on a single client (i.e. Swaraj tractors) and b) lower-than-estimated growth in tractor volumes.

For all recommendations report,click here

Disclaimer:The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

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Critical Analysis: Echo Therapeutics (ECTE) vs. Soleno Therapeutics (SLNO)

Echo Therapeutics (OTCMKTS: ECTE) and Soleno Therapeutics (NASDAQ:SLNO) are both small-cap medical companies, but which is the superior business? We will compare the two businesses based on the strength of their earnings, profitability, analyst recommendations, dividends, risk, valuation and institutional ownership.

Profitability

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This table compares Echo Therapeutics and Soleno Therapeutics’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Echo Therapeutics N/A N/A N/A
Soleno Therapeutics N/A -54.36% -40.91%

Earnings and Valuation

This table compares Echo Therapeutics and Soleno Therapeutics’ top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Echo Therapeutics N/A N/A -$22.19 million N/A N/A
Soleno Therapeutics $1.45 million 38.04 -$15.66 million ($1.35) -2.07

Soleno Therapeutics has higher revenue and earnings than Echo Therapeutics.

Risk and Volatility

Echo Therapeutics has a beta of 1.38, meaning that its stock price is 38% more volatile than the S&P 500. Comparatively, Soleno Therapeutics has a beta of 5.11, meaning that its stock price is 411% more volatile than the S&P 500.

Analyst Ratings

This is a summary of recent ratings and target prices for Echo Therapeutics and Soleno Therapeutics, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Echo Therapeutics 0 0 0 0 N/A
Soleno Therapeutics 0 0 3 0 3.00

Soleno Therapeutics has a consensus price target of $7.33, indicating a potential upside of 162.84%. Given Soleno Therapeutics’ higher probable upside, analysts plainly believe Soleno Therapeutics is more favorable than Echo Therapeutics.

Insider & Institutional Ownership

45.8% of Soleno Therapeutics shares are owned by institutional investors. 7.0% of Echo Therapeutics shares are owned by company insiders. Comparatively, 43.3% of Soleno Therapeutics shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Summary

Soleno Therapeutics beats Echo Therapeutics on 7 of the 9 factors compared between the two stocks.

About Echo Therapeutics

Echo Therapeutics, Inc. engages in the development of transdermal skin permeation and diagnostic medical devices for wearable-health consumer and diabetes outpatient markets. It is developing continuous glucose monitoring (CGM) system, a needle-free wireless continuous glucose monitoring system in a hospital setting in the European Union. The company has a licensing agreement with Ferndale Pharma Group, Inc. to develop, manufacture, distribute, and market devices for skin preparation prior to the application of topical anesthetics or analgesics prior to a range of needle-based medical procedures in North America, the United Kingdom, South America, Australia, New Zealand, Switzerland, and other portions of the European Community. In addition, it has a license agreement with Handok Pharmaceuticals Co., Ltd. to develop, use, market, import, and sell CGM to medical facilities and individual consumers in South Korea; and a license, development, and commercialization agreement with Medical Technologies Innovation Asia, Ltd to research, develop, manufacture, and use CGM in the People's Republic of China, Hong Kong, Macau, and Taiwan. The company was founded in 1989 and is headquartered in Iselin, New Jersey.

About Soleno Therapeutics

Soleno Therapeutics, Inc. focuses on the development and commercialization of novel therapeutics for the treatment of rare diseases. Its lead candidate, diazoxide choline controlled-release (DCCR), a tablet for the treatment of Prader-Willi Syndrome (PWS), is entering into late-stage clinical development. The company was formerly known as Capnia, Inc. and changed its name to Soleno Therapeutics, Inc. in May 2017. Soleno Therapeutics, Inc. was founded in 1999 and is based in Redwood City, California.