/* Article Data (Server Side) article (o): [object Object] WSODIssue (s): |5950967|236719|41560|65138|8347540|209440|215622|9266107 DMSourceID (s): KAPITALL Source (s): Kapitall Headline (s): Will these financial sector stocks also see estimate-beating earnings? Link (s): http://folionation.squarespace.com/news/2014/7/18/will-these-financial-sector-stocks-also-see-estimate-beating.html Thumbnail (s): DocumentDate_raw (n): 1405698480000 DocumentDate (s): July 18, 2014 DocumentDate_smart (s): Jul 18, 2014 DocumentKey (s): 1107-290734296785734927216-61LJKFKPD2JC32O70IH1UJF8SQ ContentType (s): Article TrackingPixel (s): Content (s):

Several financial sector stocks have reported earnings that have beaten analyst estimates. Will these stocks do the same?

Blackstone Group (BX) released its second-quarter results Thursday morning, and the company's earnings of $1.15 a share surpassed the average analyst earnings estimate of $0.71 a share. In fact, the New York-based private equity firm's earnings were 61.97% higher than the estimate.

Blackstone's solid second-quarter earnings comes on the heels of other estimate-beating performances fromBank of America (BAC)Citigroup (C)Goldman Sachs (GS)JP Morgan Chase (JPM), and Morgan Stanley (MS)

All six companies had different reasons for reporting better-than-expected net income. Blackstone's largest buyout fund passed a benchmark for investment performance that allowed the company to finally collect a profit.

Bank of America, Citigroup, and JP Morgan all reported weaker second-quarter earnings than a year earlier due to legal charges, but Bank of America's net income benefitted from higher revenue from stock trading while increases in lending and commercial banking helped Citigroup and JP Morgan's profits. Goldman Sachs saw higher revenue from its investment banking and investing and lending divisions, while Morgan Stanley's money management business played a crucial role in the company's earnings. 

These estimate-beating earnings inspired us to look for investment opportunities amongst financial sector stocks that have yet to report earnings. We began with a group of stocks that have a history of positive earnings surprises. This means that they've had four straight quarters of positive, estimate-beating earnings reports, with an average surprise of at least 5%

Sticking to our earnings theme, we screened for stocks that are undervalued with a price/earnings to growth (PEG) ratio below 1. This valuation ratio is calculated by dividing a stock's price-to-earnings (P/E) ratio by its expected annual earnings per share (EPS) growth. Therefore, the higher the stock's earnings growth, the lower its PEG ratio. When a stock's PEG is under 1, it is typically considered undervalued. 

For our final screen, we decided to incorporate analyst stock recommendations since they're the ones supplying estimates for company's earnings. We looked for stocks with an average analyst recommendation of "buy" or better

We were left with eight stocks on our list. Do you think these financial sector stocks will beat earnings estimates yet again? Use this list as a starting point for your own analysis, and let us know what you think in the comments.

Click on the interactive chart to view data over time. 

 

1. AmTrust Financial Services, Inc. (AFSI, Earnings, Analysts, Financials): Operates as a multinational specialty property and casualty insurance company in the United States and internationally. Market cap at $2.66B, most recent closing price at $35.69.

 


2. Argo Group International Holdings, Ltd. (AGII, Earnings, Analysts, Financials): Underwrites specialty insurance and reinsurance products in the property and casualty market worldwide. Market cap at $1.19B, most recent closing price at $44.79.

 


3. American International Group, Inc. (AIG, Earnings, Analysts, Financials): The company operates property and casualty insurance networks worldwide and conducts activities in the U.S. life insurance and retirement services industry. Market cap at $72.63B, most recent closing price at $49.45.

 


4. Popular, Inc. (BPOP, Earnings, Analysts, Financials): Provides a range of retail and commercial banking products and services primarily to corporate clients, small and middle size businesses, and retail clients in Puerto Rico and Mainland United States. Market cap at $2.83B, most recent closing price at $27.57.

 


5. E-House (China) Holdings Limited (EJ, Earnings, Analysts, Financials): Operates as a real estate services company in China. Market cap at $1.68B, most recent closing price at $12.59.

 


6. Navigators Group Inc. (NAVG, Earnings, Analysts, Financials): Engages in the underwriting and management of property and casualty insurance in the United States, the United Kingdom, Belgium, and Sweden. Market cap at $862.43M, most recent closing price at $60.85.

 


7. Nelnet Inc. (NNI, Earnings, Analysts, Financials): Focuses on providing fee-based processing services, and education-related products and services in the areas of loan financing, loan servicing, payment processing, and enrollment services. Market cap at $1.66B, most recent closing price at $35.78.

 


8. Och-Ziff Capital Management Group LLC (OZM, Earnings, Analysts, Financials): Och-Ziff Capital Management Group LLC is a publicly owned investment manager. Market cap at $2.12B, most recent closing price at $13.50.

 


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relatedData (o:Array(16)): 0 (o): [object Object] Headline (s): Three reasons why it may be premature to celebrate India's 2014 GDP at 7.3% Teaser (s): The 7.5 per cent growth in Gross Domestic Product (GDP) recorded in the fourth quarter (the number for the full fiscal year 2015 is 7.3 per cent) theoretically makes India the fastest growing major economy in the world, beating China (the Chinese economy ... Source (s): Firstpost DocumentDate (s): 38 minutes ago DocumentDate_raw (n): 1432972350000 Link (s): http://www.firstpost.com/business/three-reasons-may-premature-celebrate-indias-2014-gdp-7-3-2270946.html DocumentKey (s): HTTPwww.firstpost.com/business/three-reasons-may-premature-celebrate-indias-2014-gdp-7-3-2270946.html DMSourceID (s): Google ContentType (s): Article 1 (o): [object Object] Headline (s): EPA upsets farmers, renewable fuel backers with lower quotas for ethanol-gas ... 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Source (s): Washington Post DocumentDate (s): 8 hours ago DocumentDate_raw (n): 1432945370000 Link (s): http://www.washingtonpost.com/business/economy/american-express-president-ed-gilligan-dies/2015/05/29/1a605470-063d-11e5-8bda-c7b4e9a8f7ac_story.html DocumentKey (s): HTTPwww.washingtonpost.com/business/economy/american-express-president-ed-gilligan-dies/2015/05/29/1a605470-063d-11e5-8bda-c7b4e9a8f7ac_story.html DMSourceID (s): Google ContentType (s): Article 9 (o): [object Object] WSODIssue (s): |53894|2837268|105361|143857|149661|201895 DMSourceID (s): KAPITALL Source (s): Kapitall Headline (s): Shrink, shrank, shrunk: a picture of the US economy Link (s): http://folionation.squarespace.com/news/2015/5/29/shrink-shrank-shrunk-a-picture-of-the-us-economy.html Thumbnail (s): DocumentDate_raw (n): 1432922100000 DocumentDate (s): May 29, 2015 DocumentDate_smart (s): 14 hours ago DocumentKey (s): 1107-290734296785735358792-45TFA50IUMBTJHF2GQH4T120DL ContentType (s): Article TrackingPixel (s): Teaser (s):

Surprise! The US economy contracted in the first quarter, which makes the recovery look less like a sure thing.

The Commerce Department kicked off the weekend with a bit of bad news: it turns out that instead of growing by 0.2 percent, the US economy actually shrank by 0.7 percent in the first three months of the year. 

A bad winter, the strengthening dollar, spending-averse consumers and a shutdown at West Coast ports contributed to the contraction. On the plus side, The Wall Street Journal reports that the downward revision fell short of the 1 percent contraction consensus estimate.

Companies spent less money on business investment in the first quarter, resulting in a 2.8 percent decline. Consumer spending grew a measly 1.8 percent, way below the 4.4 percent growth achieved during the fourth quarter of 2014. Exports fell by 7.6 percent, and exports of goods plunged 14 percent—a six-year record. The trade deficit, which was severely impacted by the strong dollar and West Coast ports shutdown, also grew.

The US economy is expected to rebound in the second quarter. Bank of the West Chief Economist Scott Anderson told The New York Times that he expects growth to reach just over 2 percent this quarter, echoing most economists' projections of 2 to 3 percent growth.

But some of the issues that contributed to the first-quarter contraction are still around and could continue to hurt companies. Reuters writes that Johnson & Johnson (JNJ), Microsoft (MSFT) and Procter & Gamble (PG) have all said the strong dollar will negatively impact sales and profits. 

Below is a list of other US stocks that could really see a drop in profit and revenue thanks to a stronger dollar. These stocks were already having some difficulty selling their goods, and a stronger dollar makes the products more expensive for overseas customers.

Each of the stocks has the following traits: slower growth in revenue than inventory over the last year, an increase in inventory as a portion of current assets and falling diluted normalized earnings per share (EPS) for the past three consecutive years.  

Click on the interactive chart to view data over time. 

1. Atmel Corporation (ATML, Earnings, Analysts, Financials): Designs, develops, manufactures, and markets a range of semiconductor integrated circuit (IC) products. Market cap at $3.62B, most recent closing price at $8.76.

Revenue grew by -5.65% during the most recent quarter ($318.29M vs. $337.36M y/y). Inventory grew by 10.84% during the same time period ($274.19M vs. $247.38M y/y). Inventory, as a percentage of current assets, increased from 31.2% to 36.4% during the most recent quarter (comparing 3 months ending 2015-03-31 to 3 months ending 2014-03-31).

Diluted normalized EPS decreased from 1.05 to 0.66 during the first time interval (12 months ending 2011-12-31 vs. 12 months ending 2010-12-31).

For the second time interval, diluted normalized EPS decreased from 0.66 to 0.13 (12 months ending 2012-12-31 vs. 12 months ending 2011-12-31).

And for the last time interval, the EPS decreased from 0.13 to 0.06 (12 months ending 2013-12-31 vs. 12 months ending 2012-12-31). 

 

2. AtriCure Inc. (ATRC, Earnings, Analysts, Financials): Develops, manufactures, and sells cardiac surgical ablation systems designed to create precise lesions, or scars, in cardiac tissue. Market cap at $643.43M, most recent closing price at $22.59.

Revenue grew by 20.28% during the most recent quarter ($29.89M vs. $24.85M y/y). Inventory grew by 36.37% during the same time period ($15.11M vs. $11.08M y/y). Inventory, as a percentage of current assets, increased from 10.33% to 16.17% during the most recent quarter (comparing 3 months ending 2015-03-31 to 3 months ending 2014-03-31).

Diluted normalized EPS decreased from -0.25 to -0.35 during the first time interval (12 months ending 2011-12-31 vs. 12 months ending 2010-12-31).

For the second time interval, diluted normalized EPS decreased from -0.35 to -0.47 (12 months ending 2012-12-31 vs. 12 months ending 2011-12-31).

And for the last time interval, the EPS decreased from -0.47 to -0.56 (12 months ending 2013-12-31 vs. 12 months ending 2012-12-31).

 

3. Fairchild Semiconductor International Inc. (FCS, Earnings, Analysts, Financials): Designs, develops, manufactures, and sells power analog, power discrete, and non-power semiconductor solutions worldwide. Market cap at $2.33B, most recent closing price at $20.10.

Revenue grew by 3.37% during the most recent quarter ($355.70M vs. $344.10M y/y). Inventory grew by 19.87% during the same time period ($266.00M vs. $221.90M y/y). Inventory, as a percentage of current assets, increased from 29.84% to 35.23% during the most recent quarter (comparing 13 weeks ending 2015-03-29 to 13 weeks ending 2014-03-30).

Diluted normalized EPS decreased from 1.32 to 1.14 during the first time interval (52 weeks ending 2011-12-25 vs. 52 weeks ending 2010-12-26).

For the second time interval, diluted normalized EPS decreased from 1.14 to 0.27 (53 weeks ending 2012-12-30 vs. 52 weeks ending 2011-12-25).

And for the last time interval, the EPS decreased from 0.27 to 0.05 (52 weeks ending 2013-12-29 vs. 53 weeks ending 2012-12-30).

 

4. Haemonetics Corporation (HAE, Earnings, Analysts, Financials): Provides blood management solutions to plasma and blood collectors, blood banks, hospitals and hospital service providers, and health organizations in the United States and internationally. Market cap at $2.13B, most recent closing price at $41.73.

Revenue grew by -6.06% during the most recent quarter ($226.48M vs. $241.09M y/y). Inventory grew by 6.79% during the same time period ($211.08M vs. $197.66M y/y). Inventory, as a percentage of current assets, increased from 31.73% to 37.16% during the most recent quarter (comparing 13 weeks ending 2015-03-28 to 13 weeks ending 2014-03-29).

Diluted normalized EPS decreased from 1.65 to 1.51 during the first time interval (52 weeks ending 2012-03-31 vs. 52 weeks ending 2011-04-02).

For the second time interval, diluted normalized EPS decreased from 1.51 to 0.81 (52 weeks ending 2013-03-30 vs. 52 weeks ending 2012-03-31).

And for the last time interval, the EPS decreased from 0.81 to 0.7 (52 weeks ending 2014-03-29 vs. 52 weeks ending 2013-03-30).

 

5. Harsco Corporation (HSC, Earnings, Analysts, Financials): Provides engineered solutions to industrial customers worldwide. Market cap at $1.28B, most recent closing price at $16.10.

Revenue grew by -11.88% during the most recent quarter ($451.58M vs. $512.48M y/y). Inventory grew by 16.68% during the same time period ($194.60M vs. $166.78M y/y). Inventory, as a percentage of current assets, increased from 21.47% to 27.72% during the most recent quarter (comparing 3 months ending 2015-03-31 to 3 months ending 2014-03-31).

Diluted normalized EPS decreased from 2.01 to 1.94 during the first time interval (12 months ending 2011-12-31 vs. 12 months ending 2010-12-31).

For the second time interval, diluted normalized EPS decreased from 1.94 to 0.44 (12 months ending 2012-12-31 vs. 12 months ending 2011-12-31).

And for the last time interval, the EPS decreased from 0.44 to -0.34 (12 months ending 2013-12-31 vs. 12 months ending 2012-12-31).

 

6. MKS Instruments Inc. (MKSI, Earnings, Analysts, Financials): Provides instruments, subsystems, and process control solutions that measure, control, power, monitor, and analyze parameters of manufacturing processes worldwide. Market cap at $2.01B, most recent closing price at $37.76.

Revenue grew by 3.63% during the most recent quarter ($213.84M vs. $206.35M y/y). Inventory grew by 11.46% during the same time period ($164.41M vs. $147.51M y/y). Inventory, as a percentage of current assets, increased from 16.47% to 24.34% during the most recent quarter (comparing 3 months ending 2015-03-31 to 3 months ending 2014-03-31).

Diluted normalized EPS decreased from 2.6 to 2.42 during the first time interval (12 months ending 2011-12-31 vs. 12 months ending 2010-12-31).

For the second time interval, diluted normalized EPS decreased from 2.42 to 0.99 (12 months ending 2012-12-31 vs. 12 months ending 2011-12-31).

And for the last time interval, the EPS decreased from 0.99 to 0.67 (12 months ending 2013-12-31 vs. 12 months ending 2012-12-31). 

 

(List compiled by Mary-Lynn Cesar. Accounting data sourced from Google Finance. EPS data sourced from Yahoo! Finance. Monthly return data sourced from Zacks Investment Research. All other data sourced from FINVIZ.)

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Kapitall Wire offers free cutting edge investing ideas, intended for educational information purposes only. It should not be construed as an offer to buy or sell securities, or any other product or service provided by Kapitall Inc., and its affiliate companies.

Open a free account today get access to virtual cash portfolios, cutting-edge tools, stock market insights, and a live brokerage platform through our affiliated company, Kapitall Generation, LLC. 

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10 (o): [object Object] WSODIssue (s): |81093|282728 DMSourceID (s): KAPITALL Source (s): Kapitall Headline (s): LED leader Cree is spinning off part of the company Link (s): http://folionation.squarespace.com/news/2015/5/29/led-leader-cree-is-spinning-off-part-of-the-company.html Thumbnail (s): DocumentDate_raw (n): 1432910460000 DocumentDate (s): May 29, 2015 DocumentDate_smart (s): 17 hours ago DocumentKey (s): 1107-290734296785735358489-7MHDF5PAN5M08KPCJ3C44RH8TL ContentType (s): Article TrackingPixel (s): Teaser (s):

LED lighting is growing in popularity, so why does market leader Cree have to spin off part of its business?

LED lighting suppliers are facing dark times. As Bloomberg notes, competition is growing while profit margins are falling. Cree, Inc. (CREE), which is down 36 percent over one year, is a leader in LED chip, components and silicon carbide (SiC) materials. The LED supplier is still richly valued at 24 times forward earnings, and management is determined to boost shareholder value. To do this, the firm announced on May 18 that it is spinning off a portion of its business.  Will the move work?

Cree will spin off its Power and RF unit by offering subsidiary Class A common stock. In theory, the semiconductor stock’s overall value should go up, so long as the market assigns a respectable price multiple to the new, publicly traded company. The market must also believe Cree will still hold value as a parent company to the spinoff. At $30.47, the fair value for Cree should be sustainable: simplifying the business structure and having two units each focused on a specific market is a positive development.

However, the spinoff does not change anything fundamentally about Cree. The firm is still struggling in the consumer space, and RF/Power is a very small contributor to Cree’s bottom line. The stock is still expensive, and there may be better semiconductor product plays to consider.

Take Vishay Intertechnology (VSH), for example. With a market capitalization of $1.92 billion, Vishay is relatively close in size to Cree, which has a $3.37 billion market cap. Vishay also boasts a much lower forward P/E of 11.81.

While Cree is spinning off parts of its business, Vishay is expanding its operations. In December, Vishay completed its acquisition of Capella, an optical sensor maker for $201.3 million. Capella makes UV and IR sensors which is used in a variety of things, like PCs, Phones, and automotive systems. Considering that some of the biggest names in lighting—Royal Philips NV (PHG) and General Electric (GE)—have left or are leaving lighting altogether, Vishay's strategy might be a wise one.

Written by Chris Lau


Click on the interactive chart to view data over time. 

1. Cree Inc. (CREE, Earnings, Analysts, Financials): Develops and manufactures light emitting diode (LED) products, silicon carbide (SiC) and gallium nitride (GaN) material products, and power and radio frequency (RF) products. Market cap at $3.42B, most recent closing price at $30.92.

 

 

2. Vishay Intertechnology Inc. (VSH, Earnings, Analysts, Financials): Manufactures and supplies semiconductors and passive electronic components in the United States, Europe, and Asia. Market cap at $1.92B, most recent closing price at $13.04.

 

 

(Monthly return data soured from Zacks Investment Research. All other data sourced from FINVIZ.)

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© Kapitall, Inc. All rights reserved. Kapitall Wire is a division of Kapitall, Inc. Kapitall Generation, LLC is a wholly owned subsidiary of Kapitall, Inc.

Kapitall Wire offers free cutting edge investing ideas, intended for educational information purposes only. It should not be construed as an offer to buy or sell securities, or any other product or service provided by Kapitall Inc., and its affiliate companies.

Open a free account today get access to virtual cash portfolios, cutting-edge tools, stock market insights, and a live brokerage platform through our affiliated company, Kapitall Generation, LLC. 

Securities products and services are offered by Kapitall Generation, LLC - a FINRA/SIPC member.

11 (o): [object Object] Headline (s): Stocks, bond yields fall on Greece, US data Teaser (s): NEW YORK Global equity markets and bond yields fell on Friday, weighed by data that showed the U.S. economy contracted in the first quarter and by mixed signals from Greece's debt talks. Source (s): Reuters DocumentDate (s): 23 hours ago DocumentDate_raw (n): 1432891785000 Link (s): http://in.reuters.com/article/2015/05/29/markets-global-idINKBN0OE0WE20150529 DocumentKey (s): HTTPin.reuters.com/article/2015/05/29/markets-global-idINKBN0OE0WE20150529 DMSourceID (s): Google ContentType (s): Article 12 (o): [object Object] WSODIssue (s): |38401|260106|223505 DMSourceID (s): KAPITALL Source (s): Kapitall Headline (s): Open Text is embracing the cloud at whatever cost Link (s): http://folionation.squarespace.com/news/2015/5/28/open-text-is-embracing-the-cloud-at-whatever-cost.html Thumbnail (s): DocumentDate_raw (n): 1432838580000 DocumentDate (s): May 28, 2015 DocumentDate_smart (s): May 28, 2015 DocumentKey (s): 1107-290734296785735357542-0ESFREKQAS8C8IA5546C3HNGN8 ContentType (s): Article TrackingPixel (s): Teaser (s):

Open Text disappointed Wall Street its quarterly guidance. Hey, no one said moving to the cloud was easy.

One weak quarter is all it takes for a company’s stock to tank. Open Text (OTEX), a software company based in Canada, reported weak fiscal third-quarter results at the end of April and, on May 20, forecast a weak outlook for the current quarter and announced pending job cuts. After drifting downward throughout 2015, the stock fell sharply from $49 and closed at $42.45 on May 21.

One of the reasons for Open Text’s big miss is the strong US dollar. This alone will cost the company $0.11 per share. Open Text is expecting revenue between $440 million to $455 million and adjusted earnings of $0.64 to $0.72 per share in its fiscal fourth quarter. The consensus estimate before the announcement was earnings of $0.89 per share on revenue of $487.8 million.

Open Text still has some appeal. Like Adobe Systems (ADBE) and Nuance Communications (NUAN), the company is shifting from license sales to cloud software sales. Furthermore, Open Text has never missed expectations, and other firms shifting towards the cloud suffered equally when it issued the weak guidance last week.

Still, there are risks. Nuance, which makes voice recognition solutions, is slowly realigning its business solutions on the cloud. Only Adobe is highly successful at the moment. The Photoshop maker convinced its users to buy yearly licenses with its Creative Cloud offering. Adobe's superior products and lack of competition have resulted in strong sales, which rose 11 percent year over year to $1.11 billion in the first fiscal quarter.

Open Text does not face that much competition in its market of enterprise content, business process and customer experience management. Revenue from the company’s first cloud services was $143.8 million in the fiscal third quarter, up 12 percent year over year. Customer service support revenue grew to $184.3 million, up 2 percent year-over-year and 10 percent on a constant-currency basis. Gross margins from support were a healthy 87 percent.

Ultimately, despite currency headwinds and slower growth this quarter, Open Text’s revenue from cloud services is improving. After the stock’s nearly 26 percent drop in 2015, it may prove a possible rebound play for investors.

Written by Chris Lau

 

Click on the interactive chart to view data over time. 

1. Adobe Systems Incorporated (ADBE, Earnings, Analysts, Financials): Operates as a diversified software company in the Americas, Europe, the Middle East, Africa, and Asia. Market cap at $40.10B, most recent closing price at $80.16.

 

 

2. Nuance Communications Inc. (NUAN, Earnings, Analysts, Financials): Provides voice and language solutions for businesses and consumers worldwide. Market cap at $5.34B, most recent closing price at $17.0.

 

 

3. Open Text Corporation (OTEX, Earnings, Analysts, Financials): Develops, markets, sells, licenses, and supports enterprise content management (ECM) solutions primarily in North America and Europe. Market cap at $5.23B, most recent closing price at $42.43.

 

 

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Kapitall Wire offers free cutting edge investing ideas, intended for educational information purposes only. It should not be construed as an offer to buy or sell securities, or any other product or service provided by Kapitall Inc., and its affiliate companies.

Open a free account today get access to virtual cash portfolios, cutting-edge tools, stock market insights, and a live brokerage platform through our affiliated company, Kapitall Generation, LLC. 

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13 (o): [object Object] WSODIssue (s): |19744231|178782|197606|10808544 DMSourceID (s): KAPITALL Source (s): Kapitall Headline (s): The beautiful game is a dirty one Link (s): http://folionation.squarespace.com/news/2015/5/27/the-beautiful-game-is-a-dirty-one.html Thumbnail (s): DocumentDate_raw (n): 1432751640000 DocumentDate (s): May 27, 2015 DocumentDate_smart (s): May 27, 2015 DocumentKey (s): 1107-290734296785735356204-16DB094ULDKVPL7ARAR37CJJ8U ContentType (s): Article TrackingPixel (s): Teaser (s):

Watch out, Sepp! FIFA has been dealt a red card by the US Justice Department in a corruption investigation.

Early Wednesday morning, Swiss police arrested seven senior FIFA officials at a Zurich hotel in connection with a US Justice Department investigation into corruption at soccer's top governing body. By late morning, the Justice Department said it had indicted 14 individuals—nine current and former FIFA officials and five corporate executives—for bribery, racketeering and money laundering, among other charges.

According to the 161-page, 47-count indictment, the 14 defendants, along with 25 co-conspirators, participated in numerous schemes over the last 24 years to make themselves rich. And they allegedly did, to the tune of "well over $150 million."

Most of the charges in Wednesday's indictment concern tournaments and related activities involving North and South America, namely CONCACAF (Confederation of North, Central America and Caribbean Association Football) and CONMEBOL (South American Football Confederation). However, the indictment also mentions bribes and kickbacks between a major U.S. athletic company and the Brazilian national soccer federation, South Africa's selection as the host of the 2010 World Cup and the 2011 FIFA presidential election, which current president, Josep "Sepp" Blatter won. 

Speaking of presidential elections, Wednesday's high-profile arrests come just two days before FIFA's next one, and Blatter is widely expected to win it. Blatter, who is seeking his fourth term as the head of FIFA, has been at the center of controversy for years despite not being charged with anything today. His right-hand man, FIFA Vice President and CONCACAF President Jeffrey Webb, wasn't so lucky. 

The Wall Street Journal has a collection of some of Blatter's scandals for the unfamiliar. Highlights include a lawsuit from FIFA executive committee members over alleged financial mismanagement, facepalm-worthy statements about female soccer players and homosexual fans and, most recently, the awarding of the 2018 and 2022 World Cup to Russia and Qatar, respectively. According to the Journal, Swiss authorities are launching a separate criminal investigation into FIFA's latest World Cup host choices.

Until Wednesday morning, FIFA's decision to hold the World Cup in Russia and Qatar had been its biggest and costliest issue. Castrol, Continental, Emirates, Johnson & Johnson (JNJ) and Sony (SNEstopped sponsoring the organization at the end of 2014 when their contracts expired. No formal reasons were given for the parting of ways, but The Telegraph reports that Sony had expressed concerned over FIFA's alleged wrongdoing in the 2018 and 2022 World Cup host selection process.

So where does that leave FIFA's current sponsors? Will they leave or stay, hoping this all blows over?

Click on the interactive chart to view data over time. 

1. Anheuser-Busch InBev SA/NV (BUD, Earnings, Analysts, Financials): Engages in brewing and selling beer in North America, Latin America, Europe, and the Asia Pacific. Market cap at $195.89B, most recent closing price at $120.06.

The stock is up 1.99% as of 2:20PM.

Subsidiary Budweiser said that it is closely monitoring the developing FIFA situation.

 

2. The Coca-Cola Company (KO, Earnings, Analysts, Financials): Distributes, and markets nonalcoholic beverages worldwide. Market cap at $179.34B, most recent closing price at $40.99.

The stock is up 0.30% as of 2:20PM.

No statement has been issued.

 

3. McDonald's Corp. (MCD, Earnings, Analysts, Financials): Operates as a foodservice retailer worldwide. Market cap at $94.50B, most recent closing price at $98.46.

The stock is up 0.01% as of 2:20PM.

McDonald's said it's in contact with FIFA over the "extremely concerning" corruption allegations, stating that it "takes matters of ethics and corruption very seriously."

 

4. Visa Inc. (V, Earnings, Analysts, Financials): Operates retail electronic payments network worldwide. Market cap at $169.67B, most recent closing price at $68.54.

The stock is up 1.17% as of 2:20PM.

Visa has already expressed "grave concern" to FIFA earlier this month over migrant workers' rights in Qatar in the leadup to the 2022 World Cup.

 

(List compiled by Mary-Lynn Cesar. Monthly return data sourced from Zacks Investment Research. All other data sourced from FINVIZ.)

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ABOUT US

© Kapitall, Inc. All rights reserved. Kapitall Wire is a division of Kapitall, Inc. Kapitall Generation, LLC is a wholly owned subsidiary of Kapitall, Inc.

Kapitall Wire offers free cutting edge investing ideas, intended for educational information purposes only. It should not be construed as an offer to buy or sell securities, or any other product or service provided by Kapitall Inc., and its affiliate companies.

Open a free account today get access to virtual cash portfolios, cutting-edge tools, stock market insights, and a live brokerage platform through our affiliated company, Kapitall Generation, LLC. 

Securities products and services are offered by Kapitall Generation, LLC - a FINRA/SIPC member.

14 (o): [object Object] WSODIssue (s): |243688|58327|79521|139905|8169008|264447 DMSourceID (s): KAPITALL Source (s): Kapitall Headline (s): Best Buy is doing better than anyone expected Link (s): http://folionation.squarespace.com/news/2015/5/27/best-buy-is-doing-better-than-anyone-expected.html Thumbnail (s): DocumentDate_raw (n): 1432738560000 DocumentDate (s): May 27, 2015 DocumentDate_smart (s): May 27, 2015 DocumentKey (s): 1107-290734296785735355864-2MQHGJSA2JN6HRAR0EBE3VQ6N8 ContentType (s): Article TrackingPixel (s): Teaser (s):

Many thought Best Buy would close its doors in 2014. The company is still here, and, by the looks of it, doing well. 

Best Buy (BBY) is full of surprises. The electronics retailer reported a stellar first quarter, much to everyone’s surprise.  Is Best Buy’s worst finally behind it?

During the first quarter of 2015, Best Buy earned $0.37 per share on revenue of $8.56 billion. Revenue is lower than last year’s, but domestic gross profits improved by 120 basis points, or 1.20 percent, to 22.7 percent.

Unfortunately, the company forecast that domestic revenue growth would not be any higher than the low single-digits. Internal sales could also fall by as much as 35 percent due to fewer open stores. On the plus side, Best Buy is improving its performance because management is watching its costs, initiating focused marketing campaigns and investing in technology to support its business.

Best Buy is the largest electronics retailer by market cap. GameStop (GME) is a distant second, with a market cap at $4.2 billion:

At a price of around $34, Best Buy is well off its March peak of $41.26. The stock is fairly valued at 11.97 times forward earnings, but has room to move up if its profitability keeps improving. There’s also back-to-school season to consider in August, which has coincided with a rally in Best Buy shares.

For investors considering the stock, it may be best to add Best Buy shares on any pullback.

Written by Chris Lau

 

Click on the interactive chart to view data over time. 

1. Aaron's Inc. (AAN, Earnings, Analysts, Financials): Operates as a specialty retailer of consumer electronics, computers, residential furniture, household appliances, and accessories in the United States and Canada. Market cap at $2.58B, most recent closing price at $35.40.

 

 

2. Best Buy Co. Inc. (BBY, Earnings, Analysts, Financials): Operates as a retailer of consumer electronics, home office products, entertainment products, appliances, and related services primarily in the United States, Europe, Canada, and China. Market cap at $12.22B, most recent closing price at $33.90.

 

 

3. Conns Inc. (CONN, Earnings, Analysts, Financials): Operates as a specialty retailer of home appliances, consumer electronics, home office equipment, lawn and garden products, mattresses, and furniture in the United States. Market cap at $1.41B, most recent closing price at $39.54.

 

 

4. GameStop Corp. (GME, Earnings, Analysts, Financials): Operates as a retailer of video game products and personal computer (PC) entertainment software. Market cap at $4.31B, most recent closing price at $40.18.

 

 

5. hhgregg Inc. (HGG, Earnings, Analysts, Financials): Operates as a specialty retailer of consumer electronics, home appliances, and related services. Market cap at $107.61M, most recent closing price at $3.93.

 

 

6. Systemax Inc. (SYX, Earnings, Analysts, Financials): Operates as a direct marketer of brand name and private label products. Market cap at $312.95M, most recent closing price at $8.44.

 

 

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© Kapitall, Inc. All rights reserved. Kapitall Wire is a division of Kapitall, Inc. Kapitall Generation, LLC is a wholly owned subsidiary of Kapitall, Inc.

Kapitall Wire offers free cutting edge investing ideas, intended for educational information purposes only. It should not be construed as an offer to buy or sell securities, or any other product or service provided by Kapitall Inc., and its affiliate companies.

Open a free account today get access to virtual cash portfolios, cutting-edge tools, stock market insights, and a live brokerage platform through our affiliated company, Kapitall Generation, LLC. 

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15 (o): [object Object] WSODIssue (s): |197606|81931009|82867067|292976 DMSourceID (s): KAPITALL Source (s): Kapitall Headline (s): Shake Shack is sizzling Link (s): http://folionation.squarespace.com/news/2015/5/26/shake-shack-is-sizzling.html Thumbnail (s): DocumentDate_raw (n): 1432658220000 DocumentDate (s): May 26, 2015 DocumentDate_smart (s): May 26, 2015 DocumentKey (s): 1107-290734296785735354728-6VC6KAS57324T01MM2Q83LMLS1 ContentType (s): Article TrackingPixel (s): Teaser (s):

Popular burger chain Shake Shack is one of the hottest stocks on the market right now, but is it a bubble?

Shake Shack (SHAK) bottomed at $38.63 on February 17, and the stock keeps moving up. After taking a breather at $70, the stock rallied again and reached $92.86 on May 22. Does this burger company really deserve its $3.2 billion market cap? At this rate, each of Shake Shack's 68 locations is worth $50 million. This makes Chipotle (CMG), at $10 million a location, look inexpensive.

Shake Shack’s stock is expensive. The valuation is even more obvious when compared to McDonald’s (MCD) or Chipotle, which are valued at 20 times and 35 times forward multiples, respectively:

Shake Shack’s forward P/E is over 70. Then again, McDonald's first-quarter earnings fell by 9 percent, when adjusted for currency fluctuations, to $0.84 per share. The food chain giant is tweaking its stores in China by testing customization. It is also simplifying the menu by cutting down the number of offerings at the drive-thru.

On the other hand, Shake Shack is arguably inexpensive when compared to market darlings Amazon (AMZN), Tesla (TSLA) or even Facebook (FB). Still, the comparison is weak when comparing by valuation alone. Shake Shack is still a restaurant that sells burger and hot dogs, though the company may soon branch out into chicken sandwiches. There is no moat. Meanwhile, Facebook has a moat in social media, Amazon keeps getting bigger and Tesla’s electric cars command a high price and healthy demand.

The problem with owning Shake Shack is that a relatively inexpensive stock will still fall if other over valued ones falls, too. Tailwinds invariably become headwinds when the earnings growth rate does not justify the stock price. 

Though Q1 2015 was great for Shake Shack. The company earned just $0.04 per share, but this beat consensus by $0.07 per share. Revenue, at only $37.8 million, grew an impressive 56.3 percent. Same-store sales increased by 59.2 percent. These high-growth figures support a high multiple, but the company must continue this rate of growth indefinitely. If growth slows, the positive momentum behind the stock will slow. This would mean a lower stock price in the future.

Written by Chris Lau

 

Click on the interactive chart to view data over time. 

1. McDonald's Corp. (MCD, Earnings, Analysts, Financials): Operates as a foodservice retailer worldwide. Market cap at $94.88B, most recent closing price at $98.99.

 

 

 

2. Restaurant Brands International Inc. (QSR, Earnings, Analysts, Financials): Owns and operates quick service restaurants under the Burger King and Tim Hortons brand names. Market cap at $8.06B, most recent closing price at $39.84.

 

 

3. Shake Shack Inc. (SHAK, Earnings, Analysts, Financials): Owns, operates, and licenses Shake Shack restaurants (Shacks) in the United States, the District of Columbia, North America, Europe, and Asia. Market cap at $3.37B, most recent closing price at $92.86.

 

 

4. Yum! Brands, Inc. (YUM, Earnings, Analysts, Financials): Operates quick service restaurants. It operates in five segments: YUM China, YUM India, the KFC Division, the Pizza Hut Division, and the Taco Bell Division. Market cap at $39.28B, most recent closing price at $91.54.

 

 

(Monthly return data sourced from Zacks Investment Research. All other data sourced from FINVIZ.)

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ABOUT US

© Kapitall, Inc. All rights reserved. Kapitall Wire is a division of Kapitall, Inc. Kapitall Generation, LLC is a wholly owned subsidiary of Kapitall, Inc.

Kapitall Wire offers free cutting edge investing ideas, intended for educational information purposes only. It should not be construed as an offer to buy or sell securities, or any other product or service provided by Kapitall Inc., and its affiliate companies.

Open a free account today get access to virtual cash portfolios, cutting-edge tools, stock market insights, and a live brokerage platform through our affiliated company, Kapitall Generation, LLC. 

Securities products and services are offered by Kapitall Generation, LLC - a FINRA/SIPC member.

*/ Will these financial sector stocks also see estimate-beating earnings?

Will these financial sector stocks also see estimate-beating earnings?

Several financial sector stocks have reported earnings that have beaten analyst estimates. Will these stocks do the same?

Blackstone Group (BX) released its second-quarter results Thursday morning, and the company's earnings of $1.15 a share surpassed the average analyst earnings estimate of $0.71 a share. In fact, the New York-based private equity firm's earnings were 61.97% higher than the estimate.

Blackstone's solid second-quarter earnings comes on the heels of other estimate-beating performances fromBank of America (BAC), Citigroup (C), Goldman Sachs (GS), JP Morgan Chase (JPM), and Morgan Stanley (MS). 

All six companies had different reasons for reporting better-than-expected net income. Blackstone's largest buyout fund passed a benchmark for investment performance that allowed the company to finally collect a profit.

Bank of America, Citigroup, and JP Morgan all reported weaker second-quarter earnings than a year earlier due to legal charges, but Bank of America's net income benefitted from higher revenue from stock trading while increases in lending and commercial banking helped Citigroup and JP Morgan's profits. Goldman Sachs saw higher revenue from its investment banking and investing and lending divisions, while Morgan Stanley's money management business played a crucial role in the company's earnings. 

These estimate-beating earnings inspired us to look for investment opportunities amongst financial sector stocks that have yet to report earnings. We began with a group of stocks that have a history of positive earnings surprises. This means that they've had four straight quarters of positive, estimate-beating earnings reports, with an average surprise of at least 5%. 

Sticking to our earnings theme, we screened for stocks that are undervalued with a price/earnings to growth (PEG) ratio below 1. This valuation ratio is calculated by dividing a stock's price-to-earnings (P/E) ratio by its expected annual earnings per share (EPS) growth. Therefore, the higher the stock's earnings growth, the lower its PEG ratio. When a stock's PEG is under 1, it is typically considered undervalued. 

For our final screen, we decided to incorporate analyst stock recommendations since they're the ones supplying estimates for company's earnings. We looked for stocks with an average analyst recommendation of "buy" or better. 

We were left with eight stocks on our list. Do you think these financial sector stocks will beat earnings estimates yet again? Use this list as a starting point for your own analysis, and let us know what you think in the comments.

Click on the interactive chart to view data over time. 

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1. AmTrust Financial Services, Inc. (AFSI, Earnings, Analysts, Financials): Operates as a multinational specialty property and casualty insurance company in the United States and internationally. Market cap at $2.66B, most recent closing price at $35.69.

 

2. Argo Group International Holdings, Ltd. (AGII, Earnings, Analysts, Financials): Underwrites specialty insurance and reinsurance products in the property and casualty market worldwide. Market cap at $1.19B, most recent closing price at $44.79.

 

3. American International Group, Inc. (AIG, Earnings, Analysts, Financials): The company operates property and casualty insurance networks worldwide and conducts activities in the U.S. life insurance and retirement services industry. Market cap at $72.63B, most recent closing price at $49.45.

 

4. Popular, Inc. (BPOP, Earnings, Analysts, Financials): Provides a range of retail and commercial banking products and services primarily to corporate clients, small and middle size businesses, and retail clients in Puerto Rico and Mainland United States. Market cap at $2.83B, most recent closing price at $27.57.

 

5. E-House (China) Holdings Limited (EJ, Earnings, Analysts, Financials): Operates as a real estate services company in China. Market cap at $1.68B, most recent closing price at $12.59.

 

6. Navigators Group Inc. (NAVG, Earnings, Analysts, Financials): Engages in the underwriting and management of property and casualty insurance in the United States, the United Kingdom, Belgium, and Sweden. Market cap at $862.43M, most recent closing price at $60.85.

 

7. Nelnet Inc. (NNI, Earnings, Analysts, Financials): Focuses on providing fee-based processing services, and education-related products and services in the areas of loan financing, loan servicing, payment processing, and enrollment services. Market cap at $1.66B, most recent closing price at $35.78.

 

8. Och-Ziff Capital Management Group LLC (OZM, Earnings, Analysts, Financials): Och-Ziff Capital Management Group LLC is a publicly owned investment manager. Market cap at $2.12B, most recent closing price at $13.50.

 

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AmTrust Financial Services, Inc.(AFSI, Chart, Download SEC Filings)Argo Group International Holdings, Ltd.(AGII, Chart, Download SEC Filings)American International Group, Inc.(AIG, Chart, Download SEC Filings)Popular, Inc.(BPOP, Chart, Download SEC Filings)E-House (China) Holdings Limited(EJ, Chart, Download SEC Filings)Navigators Group Inc.(NAVG, Chart, Download SEC Filings)Nelnet Inc.(NNI, Chart, Download SEC Filings)Och-Ziff Capital Management Group LLC(OZM, Chart, Download SEC Filings)

ABOUT US

© Kapitall, Inc. All rights reserved. Kapitall Wire is a division of Kapitall, Inc. Kapitall Generation, LLC is a wholly owned subsidiary of Kapitall, Inc.

Kapitall Wire offers free cutting edge investing ideas, intended for educational information purposes only. It should not be construed as an offer to buy or sell securities, or any other product or service provided by Kapitall Inc., and its affiliate companies.

Open a free account today get access to virtual cash portfolios, cutting-edge tools, stock market insights, and a live brokerage platform through our affiliated company, Kapitall Generation, LLC. 

Securities products and services are offered by Kapitall Generation, LLC - a FINRA/SIPC member.

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