I went "whole hog" on a trade in my monthly newsletters, investing in one particular country over the last month. I'm talking about Japan. You NEED to be in this trade. Let me briefly explain why… About a month ago, I recommended Japan in my True Wealth Systems newsletter as my top idea. Not long afterward, I followed that up with a different Japan play, making it my top recommendation in my flagship True Wealth letter. The reason was simple: We had EVERYTHING we wanted to see in a trade… Everyone hated Japan – nobody was even paying attention. And Japan was cheap and in the start of an uptrend. That's what I want to see! Just in the last week, the rest of the investment world has started coming around to my way of thinking… For example, investment bank Morgan Stanley just went "whole hog" on Japan, according to CNBC.com. "Morgan Stanley 'double upgrades' Japan equities," the news service wrote last week.
Top Cheap Stocks To Invest In Right Now: Wendy’s/Arby’s Group Inc.(WEN)
Advisors’ Opinion:
- [By Jim Jubak, Senior Markets Editor, MoneyShow.com]
It’s hard for any company to raise prices in the current non-inflationary environment. But it’s especially hard right now for operators of fast food restaurants, given the intense price competition in a very crowded marketplace. McDonald’s sales growth in recent quarters has been driven by the success of its Dollar Menu, so raising prices in that segment are a big deal for the company. In addition, pushback from franchisees who say they can’t afford to refurbish their stores, given higher charges from McDonald’s hits at one of McDonald’s key advantages in its market—it’s ability to refresh stores more frequently than competitors. A McDonald’s refresh at $600,000 on average, according to the company, costs substantially more than a remodel at Burger King (BKW) at $300,000 or Wendy’s (WEN) at $375,000 for the least expensive version. McDonald’s restaurants average $2.5 million in annual sales.
- [By Ben Levisohn]
Upgrades had a big impact on stocks today. Wendy’s (WEN), for instance, gained 4.5% to $8.62 after being upgraded to Buy at Argus, while Cash America (CSH) advanced 3.7% to $44.32 after being upgraded to Market Outperform from Market Perform at JMP Securities. Walgreen (WAG) proved the big winner in the S&P 500 afterGoldman Sachs called the stock a Conviction Buy.
- [By Ben Levisohn]
The market is treating Chipotle as if it is an Amazon, Tesla, Apple or Google, when in fact all they do is make burritos. With the money it would cost you to buy Chipotle today @ $14 billion dollars you could buy Wendy’s (WEN), Cheesecake Factory (CAKE), Papa John’s International (PZZA), and Dunkin’ Brands (DNKN). Chipotle would need to generate at least $24 in earnings per share in order to justify the current market cap — they are not even expected to generate half of that next year. Chipotle is expected to report Q1 on April 25 and the market, in my opinion, has already more than priced in good news.
Top Cheap Stocks To Invest In Right Now: USG Corporation(USG)
Advisors’ Opinion:
- [By The Ticker Tape]
Homebuilders like Lennar, PulteGroup, Inc. (NYSE: PHM), and D.R. Horton, Inc. (NYSE: DHI) could benefit from a strengthening housing recovery. If you’re bullish on housing, you might want to take a step back and think about other companies in that space. Home improvement stores like Home Depot Inc (NYSE: HD) and Lowe's Companies, Inc. (NYSE: LOW) could get a boost as well as companies that supply products for new homes like Whirlpool Corporation (NYSE: WHR) and USG Corporation(NYSE: USG).
- [By Jon C. Ogg]
USG Corp. (NYSE: USG) was reiterated as Hold but the price target was raised to $35 from $29 (versus a $34.23 close) at Jefferies.
Thursday’s top analyst upgrades and downgradesincluded Biogen, Goldcorp, GoPro, Oracle, Sirius XM, Tyson Foods, Ciena and many more.
Top Cheap Stocks To Invest In Right Now: Kohl’s Corporation(KSS)
Advisors’ Opinion:
- [By Ben Levisohn]
Kohl’s (KSS) tumbled to the bottom of the S&P 500 today after offering earnings guidance that was well below analyst forecasts.
Getty Images
Kohl’sdropped 19% to $42.01 today, while the S&P 500 dipped 0.1% to 2,269.00.
RBC’s Brian Tunick and Bilun Boyner worry that the bear case gas been revived:
Kohl’s reported Holiday comps of -2%, below our model for -0.5%, as sales remained volatile through the quarter. Similar to early commentary by peers, stronger sales for Black Friday and the week before Christmas were offset by softness in early November and December. In line with Q3, the strongest categories were men’s, home, and footwear while accessories was most challenging.
In addition to the sales downside,Kohl’s lowered its EPS guidance to $3.603.65 (from $3.804.00) to reflect lower than expected gross margins (we estimate were down 5060bps versus our prior model for up 40bp), which was mainly due to mix, timing of sales, and promotional environment as the company worked to exit the year with clean inventory positions (planning to end the year with inventories down mid-to-high SD)…
AlthoughKohl’s still has a reasonable 1H’17 opportunity with easy gross margin compares, Under Armour (UA) launch, and potential for a new CFO, we believe disappointing Holiday sales and the guidance cut removed most of the market’s excitement around a return to momentum, reviving the secular bear case around department stores and Kohl’s. Maintaining Underperform and lowering price target to $42.
Kohl’s market capitalization fell to $7.7 billion today from $9.2 billion yesterday. It reported net income of $673 million on sales of $19 billion in 2016.
- [By Chris Lange]
Kohls Corp. (NYSE: KSS) has faced an incredibly tough year so far, with its stock down nearly 25%, not to mention its facing the onslaught of e-commerce from sites like Amazon. Faced with the problem of adapt or die, Kohls is taking steps to change its format, but is it too late?
- [By Ben Levisohn]
L Brands surged 11% to $47.85 today, while the S&P 500 rose 0.2% to2,357.49. And while L Brands was the best performer, retailers made up half of the 10 best performing stocks in the benchmark today: Nordstrom (JWN) advanced 2.9% to $44.71, Gap (GPS) jumped 5.1% to $24.06, Kohl’s (KSS) climbed 5.6% to $39.60, andBed Bath & Beyond (BBBY), which reported earnings last night, gained 3.4% to $39.08.
- [By Money Morning Staff Reports]
2017 Retail Death No. 2: Kohl’s Corp. (NYSE: KSS): Kohl’s slashed its full-year forecast of earnings per share to $3.60-$3.65 just yesterday (Jan. 5) – down from $3.80-$4.00 roughly two months ago in November 2016. Its reason for doing so was comparable holiday sales, which fell 2.7% in 2016 from fourth-quarter 2015.
- [By Teresa Rivas]
Kohls (KSS) is rising on Thursday, following its better-than-expected fourth quarter.
Getty Images
The retailer said it earned $1.44 a share on revenue that fell 2.8% year over year to $6.21 billion. Analysts were expecting earnings of $1.33 a share on revenue of $6.21 billion. Same-store sales slipped 2.2% in the quarter.
For the full year, Kohls said that it expects earnings between $3.50 and $3.80 a share, up from prior guidance of $3.60 to $3.65 a share; analysts are looking for earnings per share of $3.64. It sees sales falling in a range of down 1.3% to up 0.7%, which translates to $18.44 billion to $18.82 billion. Analysts are forecasting $18.69 billion in sales.
Cowen & Co.s Oliver Chen and his team reiterated a Market Perform rating and $53 price target on Kohls following the report. He writes that strong gross margins helped the results come in better than feared, and its inventory, down 6%, looked to be in good shape. From his note:
KSS+12c EPS beat was driven by bettergross margin (+14c, 33.4% or +33bps y/y vs our 32.8% y/y or -30bps y/y),sales (+6c, $6.205B or -3.6% y/y vs. our $6.152B or -3.7% y/y), andtax rate (+3c, 36.7% vs our 37.4%), partially offset by higher than anticipatedSG&A (-10c, $1.360B or +2.1% y/y vs our $1.332B or 0% y/y) andD&A (-1c, $239MM or +0% vs our $237MM, or -1% y/y).4Q EBIT margin was 7.6%, which declined -85bps y/y.
Kohls is up 0.7% to $42.06 in recent trading, although its fallen nearly 15% since the start of the year.
- [By WWW.THESTREET.COM]
The next market worry is retail, with shares of Macy’s (M) falling over 14%, Kohl’s (KSS) down 19% and L Brands (LB) sinking more than 7%.
Cramer said the good news is that money is not leaving the stock market, it’s simply moving from the new winners back to the old winners, stocks like Facebook (FB) and Apple (AAPL) , two Action Alerts PLUS holdings.
Top Cheap Stocks To Invest In Right Now: Express-1 Expedited Solutions Inc.(XPO)
Advisors’ Opinion:
- [By WWW.THESTREET.COM]
In the Lightning Round, Cramer was bullish on GlaxoSmithKline (GSK) , Chubb (CB) , XPO Logistics (XPO) , FedEx (FDX) and Nordson (NDSN) .
Cramer was bearish on Prudential (PRU) , Advanced Semiconductor Engineering (ASX) and ZTO Express (ZTO) .
- [By WWW.THESTREET.COM]
With a trailing 12-month price-to-earnings ratio of 28.79, FedEx’s valuation is in line with UPS (27.52) and far cheaper than XPO Logistics (XPO) (90.25).
