Tag Archives: SJM

10 Stocks to Short as China Hits Back

U.S. equity markets have been much choppier so far in 2018, to say the least. Volatility has doubled. February saw the first market correction in two years. And since then, U.S. stocks have swung back and forth, with a number of big one-day moves along the way.

One of the more recent catalysts of the market’s nervousness has been an increasing fear of a trade war. What started with tariffs on imported aluminum and steel could end … well, anywhere. Given that the U.S. and China alone traded over $650 billion in goods and services, a tit-for-tat escalation could hurt both economies. And should other countries get involved, the worldwide impact could be severe.

All that said, the market hasn’t exactly plunged so far. And I tend to agree with James Brumely, who on this site called from some much-needed perspective on the confrontation. Trade alone isn’t a reason to flee the U.S. equity market, and it isn’t enough of a reason, alone, to sell or short a specific stock. Stocks like Deere & Company (NYSE:DE), Caterpillar Inc. (NYSE:CAT) and Boeing Co (NYSE:BA) are obvious short targets, but they have already have sold off, and perhaps too far.

But for these 10 stocks, trade fears add to an already-existing short case. For investors who see trade war risk as a real possibility, all 10 can provide hedges against long positions, or aggressive short bets. And for investors more sanguine on a tariff battle, there’s still enough reason elsewhere to at least consider taking a short position.

Stocks to Short: Wynn Resorts (WYNN) Wynn Resorts, Limited (WYNN) Stock Gets Hit by the Fundamentals, Not #MeToo Source: Aurlmas via Flickr (Modified)

To be sure, it would take a tremendous escalation for trade issues to hit Wynn Resorts, Limited (NASDAQ:WYNN). So at the moment, the risk of WYNN getting caught in the crossfire of a U.S.-China confrontation looks slim.

That said, the risk also could be enormous. Wynn’s concession in Macau expires in 2022. If China truly wanted to take a scalp, Wynn, Las Vegas Sands Corp. (NYSE:LVS), and MGM Resorts International (NYSE:MGM) all could potentially be at risk of being replaced.

Even a lesser action like adding additional concessions to the additional six in Macau could have a significant competitive impact on revenue and profits. And Wynn would be most at risk in this scenario, as it generates the greatest share of its earnings in Macau relative to its two other U.S.-based counterparts.

Again, that is a doomsday — and still relatively unlikely — scenario. But even some re-pricing of that risk could hit Wynn stock. And that’s not the company’s only problem in the region. As the Macau Daily Times (an English-language paper) reported, the sexual harassment allegations surrounding former CEO Steve Wynn present a risk to the company’s concession renewal.

Steve Wynn’s complete exit from the company may ameliorate that problem. But there’s also the risk that a trade war could hit the Chinese economy — and slow the stream of high rollers visiting Wynn’s properties in the enclave and driving baccarat profits on the Vegas Strip.

Add to that the possibility of a sale of its unfinished Massachusetts property and even rumors of a tie-up with MGM aren’t likely to keep WYNN afloat. And if any of the negative scenarios here actually play out, Wynn stock easily could tumble 20% or more.

Stocks to Short: RBC Bearings (ROLL) Stocks to Short: RBC Bearings (ROLL)Source: Shutterstock

The short case for RBC Bearings Incorporated (NASDAQ:ROLL) in this environment has a couple of different aspects. The first is that the company is a major supplier to the aerospace industry, which drives roughly two-thirds of revenue. So with Boeing stock one of the biggest victims of trade war fears, ROLL should have similar exposure of its own.

The second is that RBC has a good deal of exposure to steel prices, which could hit its margins. Normally, RBC has been able to pass increases along to customers, but Boeing and others may not pay up if it has its own margin concerns to worry about. The other one-third of ROLL revenue comes from industrial companies in construction and mining, oil and gas, heavy truck and rail, among other sectors. Those customers, too, could feel some pain from higher tariffs, and rising costs, making pass-through pricing difficult in that segment as well.

Meanwhile, ROLL hasn’t taken much of a hit yet and it looks rather expensive. While BA stock trades at less than 20x forward EPS, ROLL is at a whopping 26x. Profit growth really hasn’t been that impressive the last few years; instead, investors are pricing in what the company expects to be a strong performance starting in the second half of this year. But if margin pressure gets in the way – and RBC already has disappointed on that front in the past – growth will disappoint, and that premium multiple will come down.

RBC doesn’t have much of a short interest — barely 1% of the float — and it has held its valuation for some time. But the chart of late looks weaker, and if trade fears do ramp up, ROLL seems likely to head down.

Stocks to Short: Harley-Davidson (HOG) Stocks to Short: Harley-Davidson (HOG)Source: Crysis Rubel via Flickr (Modified)

Harley-Davidson Inc (NYSE:HOG) already was a heavy short target before the events of the last few weeks. That’s still the case, with almost 15% of the float sold short. And those shorts are winning, with HOG down nearly 17% YTD after a disappointing Q4 earnings report in late January.

I wrote ahead of that report that Harley-Davidson was riding into irrelevance, and I still believe that to be the case. Sales are stagnant even in a growing economy. The idea that millennials are going to buy loud, unsafe Harleys strikes me as somewhere between overly optimistic and delusional. To be fair, Harley-Davidson has struggled with the strong dollar, but even as the yen has strengthened, competitors like Yamaha Motor Co., Ltd. (OTCMKTS:YAMHF) are having success.

Trade concerns only add to an already-solid short case here, even with HOG trading at a ‘cheap’ 11x forward EPS multiple.

Harley-Davidson has admitted it could see a “significant impact” on sales in the case of rising tariffs. The European Union already has targeted the company in response to the initial steel and aluminum tariffs. HOG stock didn’t need any more bad news, but considering its debt, higher input costs, and lower sales, there’s a combination for a very severe downturn in Harley-Davidson stock, particularly if trade wars escalate.

Stocks to Short: Cloud Peak Energy (CLD) Stocks to Short: Cloud Peak Energy (CLD)Source: Via Stock Snap

President Trump has made no secret of his desire to help coal companies, and he has already taken steps toward that goal. But a battle with China very well may do more harm than good — and impact coal stocks like Cloud Peak Energy Inc. (NYSE:CLD).

It’s China whose demand actually has driven higher U.S. coal exports of late. But China could pull the rug out on that growth. China clearly has targeted Trump’s base in its initial response — and that could lead to either tariffs on coal and/or a pivot to other suppliers like Australia and Indonesia.

As the weakest publicly traded producer, that makes CLD worth a look from the short side. Cloud Peak is reliant on thermal coal, unlike, say, Arch Coal Inc (NYSE:ARCH), whose coking coal is used in steel production. Demand for thermal coal (used for power production) is in a long-term decline both in the U.S. and abroad, no matter how the Administration tries to help.

Heading into 2018, Cloud Peak was expecting a ~20% increase in exports in 2018 — without that demand, sales and profits are likely to fall. The stock already has fallen 44% just since mid-January, as investor sentiment clearly has turned negative.

Adjusted EBITDA was stable in 2017 after a significant decline the year before – but a rebound looks unlikely. With a concerning high debt load, and borrowing costs of 12%, there’s a potential for a restructuring down the line. (Both Arch and Peabody Energy Corporation (NYSE:BTU) have recently emerged from bankruptcy themselves.) Any pressure from a trade war could accelerate that timeline — and provide 100% return to a short.

Stocks to Short: LSI Industries (LYTS) Stocks to Short: LSI Industries (LYTS)Source: Shutterstock

Admittedly, LSI Industries, Inc. (NASDAQ:LYTS) is an out-of-the-box short here. The case for shorting LYTS perhaps isn’t quite as strong, and comes down more to a potential trade ahead of the company’s first quarter report later this month.

But LSI, who manufactures lighting and signage for retail companies (among them gas stations), does have exposure to trade fears in a number of ways. The first is in terms of input cost inflation. Per the company’s 10-K, raw materials account for 60% of the company’s cost of sales. And the cost of those raw materials already is rising — climbing 5-6% in fiscal 2017, with inflation continuing into calendar 2018.

So far, LSI has been able to offset those hikes with internal improvements. Indeed, LYTS stock soared after a strong fiscal Q2 report in January. But the pressure may be rising. And with China a major manufacturer of LED lighting, tariffs could disrupt that supply chain for LSI as well.

At the same time, the overall lighting market remains weak. And retrofitting spend may come down further if LSI customers see reason to be nervous about the broader economy. With LYTS trading at a mid-teen EBITDA multiple, the combination of slowing (or negative) revenue growth and higher costs could lead to an ugly fiscal Q3. And it could send LYTS down big, particularly if that EBITDA margin drops toward 10-12x.

Stocks to Short: Callaway Golf (ELY) Stocks to Short: Callaway Golf (ELY)Source: Shutterstock

Callaway Golf Co (NYSE:ELY) is another short based on the thesis that raw material costs will rise. Callaway obviously has substantial sensitivity to metal prices — steel in particular — which could affect margins.

And that would be a problem for Callaway, because its sales growth simply isn’t that torrid. The company expects just 2-3% revenue growth in 2018, outside of help from a recent acquisition. Callaway has done a phenomenal job of late taking market share, including in golf balls, but flat end markets suggest any pricing pressure could be an issue long-term.

Meanwhile, ELY stock is hardly cheap, trading at roughly 25x the midpoint of 2018 EPS guidance. Add to that potential pressure in the Chinese market itself – Asia ex-Japan drove 6% of 2017 sales – and there’s a case to make a quick buck on the short side from ELY. Moderate EPS growth projections just a bit and cut the EPS multiple down to a still-hefty 20-22x and Callaway stock drops as much as 20%.

Stocks to Short: PolyOne (POL) Stocks to Short: PolyOne (POL)Source: Via LyondellBasell

Keeping with the input cost theme, PolyOne Corporation (NYSE:POL) may be an under-the-radar victim of tariffs. The specialty chemical manufacturer already is struggling with pricing pressure, leading to weakness coming out of its Q4 earnings report in January. China’s initial tariff list included 44 chemicals, which raised alarms in the petrochemical industry served by PolyOne.

So far, PolyOne has been able to offset the pricing pressure, with 2017 the company’s eighth straight year of adjusted EPS growth. But a multi-year economic recovery has helped, and consensus expectations of 15% EPS growth this year look too high.

Here, too, there’s a case for a combination effect of both lower margins and lower sales. And while POL isn’t particularly expensive at 15x forward EPS, the cyclical nature of the space generally leads to low multiples. It’s not hard to see POL stumbling at some point this year, which at least could send the stock back toward the mid-30s range at which it traded last year — roughly 20% downside from current levels.

Stocks to Short: Campbell’s Soup (CPB) Stocks to Short: Campbell's Soup (CPB)Source: Meal Makeover Moms via Flickr (Modified)

As I’ve written several times in the past, I don’t particularly like the CPG (consumer packaged goods) space. Within that space, Campbell Soup Company (NYSE:CPB) looks like one of the weakest offerings – and an attractive short on its own.

Indeed, 12% of CPB’s float already is sold short. And with the stock down by one-third from 2016 levels, the shorts have been right so far. I don’t think that trade is over yet, either.

Campbell’s is the most indebted among major food companies. Investors were unimpressed with the company’s expensive acquisition of Snyder’s-Lance, and soup sales are falling. CPB may look cheap on an EPS basis, but including the debt its EV/EBITDA multiple still is in line with faster-growing companies. And that debt could pressure the stock if Campbell’s can’t execute a turnaround over the next couple of quarters.

On top of all of that, Campbell’s aluminum prices are going to rise – as the company itself has said. And with little room for the company to raise prices in a brutal grocery space, that could further pressure margins.

More broadly, Campbell Soup hardly seems a good business at the moment. It’s a low-growth giant at a time when smaller, nimbler companies are winning in food. All told, CPB still looks like a short. And to hedge that short, investors can go long J M Smucker Co (NYSE:SJM), which has a few of the same category risks and much, much better rewards.

Stocks to Short: Tiffany (TIF) Tiffany & Co. (TIF) Stock Looks Risky at These Elevated Levels Source: Shutterstock

Tiffany & Co. (NYSE:TIF) could have a very real problem if a trade war escalates. Growth already is pretty tepid, with the company’s Q4 sales and full-year outlook both disappointing investors last month. TIF stock still looks reasonably expensive, at 22.5x the midpoint of that EPS guidance. As both Luke Lango and Will Healy argued on this site, Tiffany already looked like an avoid at best.

The company is struggling with its engagement ring business. Millennials aren’t interested. But the company’s one clear growth engine was…China. China represented roughly 60% of the company’s Asia-Pacific sales in 2017, according to the 10-K. That’s about 16% of the company’s total sales. And the Asia-Pacific region was the one bright spot in terms of 2017 sales, with 8% constant-currency growth, most of which came from China.

Take that growth driver away – whether through tariffs, regulation, or anti-American sentiment from Chinese customers – and Tiffany starts to look a low-growth dinosaur. And that’s not a profile that is going to garner a 20x+ EPS multiple. TIF stock has bounced largely on turnaround hopes and the growth opportunity in Asia. If one of those two pillars of the bull case crumbles, Tiffany stock is going to do the same.

Stocks to Short: La-Z-Boy (LZB) Stocks to Short: La-Z-Boy (LZB)Source: Shuttershock

The entire consumer furniture space, including La-Z-Boy Incorporated (NYSE:LZB) has been choppy at best for years now. And that’s a pretty significant concern. Given a strong U.S. economy and a solid (if not roaring) housing market, profit growth should be much more impressive than it has been, particularly the past few years.

That’s particularly true for LZB, whose 4-4-5 strategy has involved buying licensed stores and building out new locations. Yet increased marketing costs and higher raw material prices have pressured margins, and LZB shares really haven’t moved for about four years now.

The short case for LZB is that potential trade pressure will be just enough to tip earnings negative – and push the stock down into the mid-20s, at least. La-Z-Boy imports from Chinese suppliers; it could face cost inflation there. Steel prices could hurt. So could polyurethane (used for foam) if chemical tariffs are expanded.

Meanwhile, La-Z-Boy will struggle to take pricing. Wayfair Inc (NYSE:W) is competing on price (and losing money in the process). Smaller rivals Bassett Furniture Industries Inc. (NASDAQ:BSET) and Hooker Furniture Corporation (NASDAQ:HOFT) both have cited success in the motion upholstery category – the most important for La-Z-Boy.

With no debt on the balance sheet, LZB isn’t likely to plunge. But investors looking for a quick double-digit return on trade fears, or a weak fiscal Q4 report in June, should consider shorting or selling calls in LZB.

As of this writing, Vince Martin is long shares of Hooker Furniture Corporation, and has no positions in any other securities mentioned.

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best upcoming stocks to invest in

SAN FRANCISCO A 2014 outing by a group of male and female Uber executives to a Korean karaokebar where women with pinned numbers were selected by male guestshas put a controversial member of the ride-hailing company’s top ranks back in the spotlight.

Emil Michael, who in the fall of that yearsuggested that the personal information of journalists who weren’t supportive of Uber be investigated, three weeks ago told a former girlfriend of CEO Travis Kalanick that she should sanitize the story of the outing, according to a report Friday in The Information.

The woman, Gabi Holzwarth, 27, said that Michael repeatedly asked her to keep details of the mid-2014 Seoul outing from reporters, including the fact that the venue featured women with numbers pinned on them. Some of the male Uber executives present selected women to drink with. Holzwarth and Kalanick left after about an hour. A female Uber marketing manager later complained to human resources about the incident. p.p1 {margin: 0.0px 0.0px 0.0px 0.0px; font: 11.0px Helvetica}span.s1 {font-kerning: none}

best upcoming stocks to invest in: (SHF)

Advisors’ Opinion:

  • [By Money Morning Staff Reports]

    In March 2012, Schiff Nutrition International Inc. (NYSE: SHF) acquired the company for $150 million in cash.

    The product is still on the market today, found at most local drug stores. It is advertised now, however, as a nutritional supplement that does not, if taken alone, ward off viruses.

best upcoming stocks to invest in: J.M. Smucker Company (The)(SJM)

Advisors’ Opinion:

  • [By Douglas A. McIntyre]

    The Pillsbury Doughboy is the mascot of the Pillsbury Company, which is owned by General Mills (NYSE: GIS) and J.M. Smucker (NYSE: SJM). The Doughboy was created by Pillsburys advertising agency almost 50 years ago. Pikachu are characters owned by The Pokemon Company International and appear in card games, video games, TV shows, movies and comic books. Founded in 1998, the Japanese company has achieved total games sales of almost 280 million. SpongeBob SquarePants was created for Nickelodeon, which is owned by Viacom (NASDAQ: VIA). The show premiered in 1999 and has spawned movies, video games and theme park rides. Ronald McDonald is a c

  • [By Teresa Rivas]

    J.M. Smucker(SJM) is falling Monday, after Morgan Stanley’sMatthew Grainger and his team cut their rating on the stock, citing pricing pressures from Wal-Mart (WMT) and growing competition from private-labels.

    Getty Images

    Grainger slash Smucker to Underweight from Equal Weight, and shaved $6 off his price target, to $126. He also cites what he calls “sustained” challenges in both its coffee and pet food business, as well as“below-average strategic optionality.”

    At the same time, he also upgraded Pinnacle Foods (PF) to Overweight from Equal Weight, and raised his price target to $63 from $58, on its double-digit earnings growth and what he sees as superior execution.

    Nonetheless, he sees many of the packaged food companies in his coverage, from Smucker to Pinnacle, as subject to pressure from Wal-Mart and off-brand rivals. From the note:

    Walmart comprises ~22% of sales across our coverage, a figure that has increased in recent years even as the retailers total grocery sales have grown at an even faster 4% CAGR. With Food margins expected to expand meaningfully, we believe this only enhances Walmart’s negotiating leverage going forward. SJM, Dean Foods (DF), and General Mills (GIS) are most at risk in the current environment, in our view.

    Recent scanner data points to a positive inflection in private label trends (share up ~30 bps L12W) across a range of center-store categories, a dynamic we believe could intensify in an increasingly competitive retail grocery landscape. Our analysis of recent trends points to the most meaningful underperformance vs. private label at GIS, SJM, ConAgra (CAG), and Campbell Soup (CPB), while only PF has outperformed in recent weeks.

    Smucker is down 1.1% to $127.95 this morning, while Pinnacle is up 0.8% to %48.47.

best upcoming stocks to invest in: Marsh & McLennan Companies, Inc.(MMC)

Advisors’ Opinion:

  • [By Reuters]

    Wendy Maeda/The Boston Globe via Getty Images
    NEW YORK — Walgreen is moving 120,000 employees to a private health insurance exchange from coverage provided directly from carriers, the company will announce Wednesday.
    The pharmacy chain will join 17 other large employers on the Aon Hewitt Corporate Health Exchange as part of a growing movement to offer employees fixed dollar amounts to purchase their own plans on such exchanges.
    The end-cost to employees depends on the plan chosen, but they typically get more options than under traditional arrangements. Private exchanges mimic the coverage mandated as part of the Affordable Care Act. Enrollment in the public exchanges starts Oct. 1.
    “What happens to employer contributions over time? Will they put in as much as they put in the past? These are unanswered questions but potential negatives,” says Paul Fronstin, a senior research associate with the Employee Benefit Research Institute. The benefit to Walgreen and other employers is unknown at this point, as their cost-savings aren’t clear.
    Of the 180,000 Walgreen (WAG) employees eligible for health care insurance, 120,000 opted for coverage for themselves and 40,000 family members. Another 60,000 employees, many of them working part-time, weren’t eligible for health insurance.
    Aon Hewitt (AON) says other participants in its program include retailer Sears Holding (SHLD) and Darden Restaurants (DRI). These new additions raise enrollment to 330,000 from 100,000 last year, and Aon Hewitt estimates enrollment will jump to 600,000 next year, a fivefold increase from 2012.
    By 2017, nearly 20 percent of employees nationwide could get their health insurance through a private exchange, according to Accenture Research (ACN). A recent report by the National Business Group on Health said that 30 percent of large employers are considering moving active employees to exchanges by 2015.

    Other major providers of private exchanges include Mercer, a division of Marsh & Mc

best upcoming stocks to invest in: Bayer Aktiengesellschaft (BAYRY)

Advisors’ Opinion:

  • [By SEEKINGALPHA.COM]

    A very risky Phase 3 drug for high cholesterol, anacetrapib, is listed and is in Phase 3; but several others of the class have failed, and there’s little reason to expect a success here (but you never know). Finally, a partnered heart failure drug that is also in Phase 3, vericiguat, is partnered with Bayer (OTCPK:BAYRY). This compound failed its primary endpoint in Phase 2. Yet, the partners agreed that there was hope for the highest of the three doses. Thus, I view this drug as a very high risk Phase 3 product. Maybe it will be successful and blockbuster, but it’s no sure thing.

  • [By Todd Campbell]

    Nektar Therapeutics is working with Bayer AG (NASDAQOTH:BAYRY) on an inhaledversion of Amikacin, an anti-bacterial that if successful in trials could be used alongside standard of care to treat gram-negative pneumonia in intubated and mechanically ventilated patients. If it’s eventually approved in the U.S., Nektar Therapeutics will receive a flat 30% royalty on sales. It’s also working with Bayer on an inhaled powder formulation of Cipro that could be used to treat chronic lung infections in cystic fibrosis patients. Top-line phase 3 results on both drugs should be available this year.

  • [By SEEKINGALPHA.COM]

    As the graphic below shows, ImmunoGen’s product pipeline is potentially significant. Furthermore, it is impressive to see the involvement and partnerships in these early stage compounds by some of the world’s leading pharmaceutical and biotech companies. This includes firms like Amgen (NASDAQ:AMGN), Roche (OTCQX:RHHBY), Bayer (OTCPK:BAYRY), Sanofi (NYSE:SNY), Eli Lilly (NYSE:LLY), and Novartis (NYSE:NVS).

  • [By Maxx Chatsko]

    BeforeBayer(NASDAQOTH: BAYRY)arrived onto the scene, I viewedMonsanto(NYSE: MON)as an intriguing growth stock. It has a rich history of delivering value to shareholders and continues to hold a dominant technological edge over key competitors in crop protection products, seeds, and traits. While little has changed its promising pipeline and portfolio, the pending acquisition throws a wrench in anyone’s plans to start or add to a position. Uncertainty stemming from the merger provides several terrible reasons to buy Monsanto at this time.

best upcoming stocks to invest in: Pound/Rand(PX)

Advisors’ Opinion:

  • [By Ben Levisohn]

    The last twelve months haven’t been kind to Praxair (PX) and Air Products & Chemicals (APD), but UBS analyst John Roberts and team argue that’s about to change, as they upgrade their shares to Buy from Neutral arguing that their earnings can withstand a slowing global economy:

    In our view, the two stocks are more alike than different. NTM P/Es are within ~0.5 pts of each other. Both stocks have declined ~20% from their historical highs the largest corrections in 20+ years aside from the financial crisis…

    Industrial gas stocks have normally grown through changes in FX, oil & China demand within normal historical ranges. And investor concerns around China forAir Products & Chemicals may still prove much bigger than reality. Nevertheless, the combination of FX & oil sector impacts on Praxair, and FX & China issues for Air Products & Chemicals, have been much larger than previously seen. With oil already down, the dollar already appreciated, & China concerns already heightened we believe forward basis would appear to carry only normal risks (& lower if FX & oil are mean-reverting, which some theories support).

    Normal high single digit EPS growth projected for both in 2017 vs 2016: Four large firms serve 70%+ of the global merchant gas market, and price normally contributes ~2% to growth. Customer older captive units being outsourced contributes another 2%. Secular drivers for oxygen include energy savings (i.e. O2 burns more efficiently than air), life sciences (healthcare & microbial processes) nitrogen secular drivers include increasing purity requirements (food freezing & semiconductors). Topline growth ~2x global GDP more normal, with EPS growth ~2x sales growth due to high fixed costs (key variable costs are inexpensive air & power).

    Financial crisis demand drop was only a few %, in line with global GDP drop Most chemicals volumes dropped 10%+ (some 40%

Hot Warren Buffett Stocks To Watch Right Now

Billionaire investor Warren Buffett is getting richer by the minute.

That’s because the Oracle of Omaha’s company Berkshire Hathaway Inc. (NYSE: BRK.A; BRK.B) has a portfolio full of dividend-yielding stocks.

Represented are Wells Fargo & Co. (NYSE: WFC), Coca-Cola Co. (NYSE: KO), and Kraft Heinz Co. (Nasdaq: KHC), just to name a few.

The Berkshire portfolio has 34 dividend stocks in total; of those, eight yield dividend returns in excess of 3% annually, according to Buffett’s latest SEC 13F filing on Feb. 14, 2017.

Hot Warren Buffett Stocks To Watch Right Now: J.M. Smucker Company (The)(SJM)

Advisors’ Opinion:

  • [By Douglas A. McIntyre]

    The Pillsbury Doughboy is the mascot of the Pillsbury Company, which is owned by General Mills (NYSE: GIS) and J.M. Smucker (NYSE: SJM). The Doughboy was created by Pillsburys advertising agency almost 50 years ago. Pikachu are characters owned by The Pokemon Company International and appear in card games, video games, TV shows, movies and comic books. Founded in 1998, the Japanese company has achieved total games sales of almost 280 million. SpongeBob SquarePants was created for Nickelodeon, which is owned by Viacom (NASDAQ: VIA). The show premiered in 1999 and has spawned movies, video games and theme park rides. Ronald McDonald is a c

  • [By Teresa Rivas]

    J.M. Smucker(SJM) is falling Monday, after Morgan Stanley’sMatthew Grainger and his team cut their rating on the stock, citing pricing pressures from Wal-Mart (WMT) and growing competition from private-labels.

    Getty Images

    Grainger slash Smucker to Underweight from Equal Weight, and shaved $6 off his price target, to $126. He also cites what he calls “sustained” challenges in both its coffee and pet food business, as well as“below-average strategic optionality.”

    At the same time, he also upgraded Pinnacle Foods (PF) to Overweight from Equal Weight, and raised his price target to $63 from $58, on its double-digit earnings growth and what he sees as superior execution.

    Nonetheless, he sees many of the packaged food companies in his coverage, from Smucker to Pinnacle, as subject to pressure from Wal-Mart and off-brand rivals. From the note:

    Walmart comprises ~22% of sales across our coverage, a figure that has increased in recent years even as the retailers total grocery sales have grown at an even faster 4% CAGR. With Food margins expected to expand meaningfully, we believe this only enhances Walmart’s negotiating leverage going forward. SJM, Dean Foods (DF), and General Mills (GIS) are most at risk in the current environment, in our view.

    Recent scanner data points to a positive inflection in private label trends (share up ~30 bps L12W) across a range of center-store categories, a dynamic we believe could intensify in an increasingly competitive retail grocery landscape. Our analysis of recent trends points to the most meaningful underperformance vs. private label at GIS, SJM, ConAgra (CAG), and Campbell Soup (CPB), while only PF has outperformed in recent weeks.

    Smucker is down 1.1% to $127.95 this morning, while Pinnacle is up 0.8% to %48.47.

Hot Warren Buffett Stocks To Watch Right Now: Mitel Networks Corporation(MITL)

Advisors’ Opinion:

  • [By Lisa Levin]

    ShoreTel Inc (NASDAQ: SHOR) shares shot up 28 percent to $7.47. Mitel Networks Corp (NASDAQ: MITL) announced plans to acquire Shortel for $7.50 per share in cash.

Hot Warren Buffett Stocks To Watch Right Now: Boardwalk Pipeline Partners L.P.(BWP)

Advisors’ Opinion:

  • [By Jim Robertson]

    On Friday, our Under the Radar Moversnewsletter suggested mid cap natural gas pipeline stock Boardwalk Pipeline Partners, LP (NYSE: BWP) as a bullish/long trade:

Hot Insurance Stocks To Own Right Now

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The people who sell insurance products and securities through financial institutions were more productive this past August than they were in August 2016, according Stathis Partners.

Stathis Partners looked at August financial institution sales production figures with help from LPL Financial, for a monthly report distributed by the Bank Insurance & Securities Association 

Stathis Partners analysts found that bank financial consultant revenue from one-time sales transactions fell to $about 16,000in August, from about $19,000 in the comparable month in 2016.

But, thanks to strong sales in the past of products that generate recurring revenue, recurrent revenue averaged about $22,000 per financial consultant, up from about $14,600 per consultant in August 2016.

Representatives for platform programs were also more productive. They averaged about $1,300 in sales in August, up from about $1,000 in August 2016. 

Hot Insurance Stocks To Own Right Now: Inphi Corporation(IPHI)

Advisors’ Opinion:

  • [By Roberto Pedone]

    Inphi (IPHI) provides high-speed analog and mixed signal semiconductor solutions for the communications, datacenter and computing markets. This stock closed up 4.7% at $13.25 in Monday’s trading session.

    Monday’s Volume: 838,000

    Three-Month Average Volume: 202,080

    Volume % Change: 378%

    From a technical perspective, IPHI jumped higher here right above some near-term support at $12.44 with heavy upside volume. This stock has been uptrending strong for the last five months, with shares soaring higher from its low of $8.62 to its intraday high of $13.85. During that uptrend, shares of IPHI have been consistently making higher lows and higher highs, which is bullish technical price action. That move briefly pushed shares of IPHI into breakout territory, since the stock flirted with some near-term overhead resistance at $13.50.

    Traders should now look for long-biased trades in IPHI as long as it’s trending above some near-term support at $12.44 and then once it sustains a move or close above its new 52-week high at $13.85 with volume that hits near or above 202,080 shares. If we get that move soon, then IPHI will set up to enter new 52-week-high territory, which is bullish technical price action. Some possible upside targets off that move are its next major overhead resistance levels at $14.79 to $16.94, or possibly even $18.

  • [By Lisa Levin]

    Technology shares rose by 1.9 percent in the US market on Friday. Top gainers in the sector included Fabrinet (NYSE: FN), and Inphi Corporation (NYSE: IPHI).

Hot Insurance Stocks To Own Right Now: J.M. Smucker Company (The)(SJM)

Advisors’ Opinion:

  • [By Douglas A. McIntyre]

    The Pillsbury Doughboy is the mascot of the Pillsbury Company, which is owned by General Mills (NYSE: GIS) and J.M. Smucker (NYSE: SJM). The Doughboy was created by Pillsburys advertising agency almost 50 years ago. Pikachu are characters owned by The Pokemon Company International and appear in card games, video games, TV shows, movies and comic books. Founded in 1998, the Japanese company has achieved total games sales of almost 280 million. SpongeBob SquarePants was created for Nickelodeon, which is owned by Viacom (NASDAQ: VIA). The show premiered in 1999 and has spawned movies, video games and theme park rides. Ronald McDonald is a c

  • [By Teresa Rivas]

    J.M. Smucker(SJM) is falling Monday, after Morgan Stanley’sMatthew Grainger and his team cut their rating on the stock, citing pricing pressures from Wal-Mart (WMT) and growing competition from private-labels.

    Getty Images

    Grainger slash Smucker to Underweight from Equal Weight, and shaved $6 off his price target, to $126. He also cites what he calls “sustained” challenges in both its coffee and pet food business, as well as“below-average strategic optionality.”

    At the same time, he also upgraded Pinnacle Foods (PF) to Overweight from Equal Weight, and raised his price target to $63 from $58, on its double-digit earnings growth and what he sees as superior execution.

    Nonetheless, he sees many of the packaged food companies in his coverage, from Smucker to Pinnacle, as subject to pressure from Wal-Mart and off-brand rivals. From the note:

    Walmart comprises ~22% of sales across our coverage, a figure that has increased in recent years even as the retailers total grocery sales have grown at an even faster 4% CAGR. With Food margins expected to expand meaningfully, we believe this only enhances Walmart’s negotiating leverage going forward. SJM, Dean Foods (DF), and General Mills (GIS) are most at risk in the current environment, in our view.

    Recent scanner data points to a positive inflection in private label trends (share up ~30 bps L12W) across a range of center-store categories, a dynamic we believe could intensify in an increasingly competitive retail grocery landscape. Our analysis of recent trends points to the most meaningful underperformance vs. private label at GIS, SJM, ConAgra (CAG), and Campbell Soup (CPB), while only PF has outperformed in recent weeks.

    Smucker is down 1.1% to $127.95 this morning, while Pinnacle is up 0.8% to %48.47.

Hot Insurance Stocks To Own Right Now: Cellectis S.A.(CLLS)

Advisors’ Opinion:

  • [By Lisa Levin]

    Cellectis SA (ADR) (NASDAQ: CLLS) shares dropped 20 percent to $25.70 after announcing FDA clinical hold of UCART123 studies.

    Shares of Opiant Pharmaceuticals Inc (NASDAQ: OPNT) were down 10 percent to $35.20. Opiant Pharma named David O'Toole as CFO.

  • [By Jim Robertson]

    Yesterday, small cap clinical-stage biopharmaceutical stock Cellectis SA (NASDAQ: CLLS) reported that they had received notice fromFDA that a clinical hold was placed on both UCART123 ongoing Phase 1 studies -in acute myeloid leukemia (AML) and in blastic plasmacytoid dendritic cell neoplasm (BPDCN). The clinical hold was initiated after Cellectis reported one fatality in the BPDCN clinical trial (ABC study) with the Company now working closelywith the investigators and the FDA in order to resume the trials with an amended protocol including a lowered dosing of UCART123. The FDA has a detailed page about clinical holds which mentions:

daily stock picks

Shares of Endo International (ENDP) have tumbled 40% today after it said profits would fall well short of analyst expectations thanks, in part, to plunging generic drug prices. Leerink’s Jason Gerberry and team look for specialty pharmaceutical companies that have similar business models–and find Akorn (AKRX), Perrigo (PRGO), and Teva Pharmaceutical Industries (TEVA). They explain:

Reuters

Endos ’16 guidance re-basing, which comes afterPerrigo (MP) provided a similar rebasing (4/25), may provide read-through for companies with high exposure to (1) significant 2014-15 US generic price hikes; (2) disproportionately high 2015 generic gross margins another indicator of price and tough Y/Y comparable. While we expect the broader spec pharma group to trade down on theEndo (MP) print, we see the most direct read-through toAkorn (MP),Perrigo (MP) and TEVA (OP), moderate read-through to Allergan (AGN) (OP) and Mallinckrodt (MNK) (OP) and limited read-through to Mylan (MYL) (OP) and Sandoz who have already reported. Our sector view is that generic price deflation will be most acute in pockets of the market, mainly opioids and one-off niche alternative dosage products while the bigger diversified players seem relatively insulated and 1Q results for Sandoz andMylan provide some support that view.

daily stock picks: Westell Technologies, Inc.(WSTL)

Advisors’ Opinion:

  • [By Jim Robertson]

    Today, our Under the Radar Moversnewsletter suggested small cap high-performance wireless infrastructure solutions stock Westell Technologies (NASDAQ: WSTL) as a buy for our short-term portfolio:

daily stock picks: Del Taco Restaurants, Inc.(TACO)

Advisors’ Opinion:

  • [By Peter Graham]

    Small cap Mexican restaurant stock Del Taco Restaurants (NASDAQ: TACO) reported fiscal Q3 2017 earnings after the market closed on Thursday with earnings meeting Wall Street expectations plus the Company also revised its guidance for fiscal year 2017 on several key metrics. Total revenuerose 6.3% to$111.0 million driven by a 6.1% increase in Company restaurant sales and a 7.9% increase in franchise revenue. Comparable restaurant sales increased 4.1% system-wide for the fiscal third quarter 2017, resulting in a 10.8% increase on a two-year basis. The Del Taco system has now generated comparable restaurant sales growth for 16 consecutive quarters whileCompany-operated comparable restaurant sales increased 3.7% marking the 21st consecutive quarter of comparable restaurant sales growth. Franchise comparable restaurant sales increased 4.6%. Net income was $5.1 million versus$4.9 million. The CEO commented:

  • [By WWW.THESTREET.COM]

    Cramer’s game plan starts on Monday, with earnings from Del Taco Restaurants (TACO)  . Despite strong same-store sales last quarter, Cramer said he’s expecting a struggle this quarter.

  • [By Jim Robertson]

    On Tuesday, our Under the Radar Moversnewsletter suggested shorting small cap Mexican restaurant stock Del Taco Restaurants (NASDAQ: TACO):

    The downtrend here is clearly well established, But, it cemented itself in place yesterday and today. On Monday the bulls took a shot, pushing and up and off of the 200-day moving average line (green) after finding support there last week. It was a short-lived effort, setting up a drastic change of heart – the people who regretted not getting out a month ago took the small uptick as a second chance to do so. Only this time, the sellers weren’t so shy. TACO broker under the 200-day moving average that had been support just a week earlier, and did so on higher volume. Today’s bearish follow-through is the clincher.

  • [By Lee Jackson]

    Del Taco Restaurants Inc. (NASDAQ: TACO) had a director at the company selling stock last week. The board member shed a total of 831,314 sharesat between $11.40 and $11.84 apiece. The total for the sale was $10 million. The shares ended the weekat $12.36, in a 52-week range of$8.43 to $15.32. The consensus price target is $17.07.

daily stock picks: J.M. Smucker Company (The)(SJM)

Advisors’ Opinion:

  • [By Teresa Rivas]

    J.M. Smucker(SJM) is falling Monday, after Morgan Stanley’sMatthew Grainger and his team cut their rating on the stock, citing pricing pressures from Wal-Mart (WMT) and growing competition from private-labels.

    Getty Images

    Grainger slash Smucker to Underweight from Equal Weight, and shaved $6 off his price target, to $126. He also cites what he calls “sustained” challenges in both its coffee and pet food business, as well as“below-average strategic optionality.”

    At the same time, he also upgraded Pinnacle Foods (PF) to Overweight from Equal Weight, and raised his price target to $63 from $58, on its double-digit earnings growth and what he sees as superior execution.

    Nonetheless, he sees many of the packaged food companies in his coverage, from Smucker to Pinnacle, as subject to pressure from Wal-Mart and off-brand rivals. From the note:

    Walmart comprises ~22% of sales across our coverage, a figure that has increased in recent years even as the retailers total grocery sales have grown at an even faster 4% CAGR. With Food margins expected to expand meaningfully, we believe this only enhances Walmart’s negotiating leverage going forward. SJM, Dean Foods (DF), and General Mills (GIS) are most at risk in the current environment, in our view.

    Recent scanner data points to a positive inflection in private label trends (share up ~30 bps L12W) across a range of center-store categories, a dynamic we believe could intensify in an increasingly competitive retail grocery landscape. Our analysis of recent trends points to the most meaningful underperformance vs. private label at GIS, SJM, ConAgra (CAG), and Campbell Soup (CPB), while only PF has outperformed in recent weeks.

    Smucker is down 1.1% to $127.95 this morning, while Pinnacle is up 0.8% to %48.47.

  • [By Douglas A. McIntyre]

    The Pillsbury Doughboy is the mascot of the Pillsbury Company, which is owned by General Mills (NYSE: GIS) and J.M. Smucker (NYSE: SJM). The Doughboy was created by Pillsburys advertising agency almost 50 years ago. Pikachu are characters owned by The Pokemon Company International and appear in card games, video games, TV shows, movies and comic books. Founded in 1998, the Japanese company has achieved total games sales of almost 280 million. SpongeBob SquarePants was created for Nickelodeon, which is owned by Viacom (NASDAQ: VIA). The show premiered in 1999 and has spawned movies, video games and theme park rides. Ronald McDonald is a c

daily stock picks: Telecom Italia S.P.A.(TI)

Advisors’ Opinion:

  • [By Lisa Levin]

    In trading on Friday, telecommunications services shares fell by 0.29 percent. Meanwhile, top losers in the sector included Telecom Italia SpA (ADR) (NYSE: TI), down 4 percent, and Internet Initiative Japan Inc. (ADR) (NASDAQ: IIJI), down 3 percent.