/* Article Data (Server Side) article (o): [object Object] WSODIssue (s): |57009|207857|68598|199467|41560 DMSourceID (s): KAPITALL Source (s): Kapitall Headline (s): Price to book ratios: the value to watch while banks report earnings Link (s): http://folionation.squarespace.com/news/2014/7/18/price-to-book-ratios-the-value-to-watch-while-banks-report-e.html Thumbnail (s): DocumentDate_raw (n): 1405698720000 DocumentDate (s): July 18, 2014 DocumentDate_smart (s): Jul 18, 2014 DocumentKey (s): 1107-290734296785734927225-74E42EGDPUQK80UGC0973G1U76 ContentType (s): Article TrackingPixel (s): Content (s):

It’s earnings week for America’s largest banks, and these five have price to book ratios below 1. 

Price to book (P/B) ratios are one of the most important metrics to value investors. It is caluclated by dividing the current market cap of a company by its tangible assets—cash and capital. When a company has a P/B of 1 it is valued at the exact amount of its tangible assets.

Since the financial crisis, banks have been routinely valued at a P/B below 1 as investors, fearing new regulations and fines will inhibit banking’s growth in coming years, have scaled down their expectations for the sector. 

Read more about undervalued financial services stocks from Kapitall. 

These expectations, however, lead to a possible inefficiency in the market. If these five banks were to be dismantled today their shares would be worth more based on tangible assets alone than the market’s current valuation.

So what does that mean? In short, it means that if banks report earnings that beat the street’s expectations this week, these low prices could disappear fast. Do you think banking is undervalued? Use the list below to begin your analysis and let us know what you think in the comments. 

Click on the interactive chart to view data over time. 

 

1. Bank of America Corporation (BAC, Earnings, Analysts, Financials): Provides banking and financial services to individuals, small- and middle-market businesses, corporations, and governments primarily in the United States and internationally. Market cap at $175.76B, most recent closing price at $16.53.

 


2. Morgan Stanley (MS, Earnings, Analysts, Financials): Provides various financial products and services to corporations, governments, financial institutions, and individuals worldwide. Market cap at $57.74B, most recent closing price at $30.31.

 


3. Citigroup, Inc. (C, Earnings, Analysts, Financials): Provides consumers, corporations, governments, and institutions with a range of financial products and services. Market cap at $148.31B, most recent closing price at $48.98.

 


4. MetLife, Inc. (MET, Earnings, Analysts, Financials): Provides insurance, annuities, and employee benefit programs primarily in the United States, Japan, Latin America, the Asia Pacific, Europe, and the Middle East. Market cap at $57.9B, most recent closing price at $50.87.

 


5. 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.

 


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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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relatedData (o:Array(16)): 0 (o): [object Object] Headline (s): UPDATE 1-Constellation's profit beats Street; buys Meiomi wine brand Teaser (s): (Adds details, share move). July 1 (Reuters) - Constellation Brands Inc reported a better-than-expected quarterly profit, helped by higher sales of its Corona and Modelo beers, and said it would buy the Meiomi wine brand for about $315 million. Source (s): Reuters DocumentDate (s): 15 minutes ago DocumentDate_raw (n): 1435754025000 Link (s): http://www.reuters.com/article/2015/07/01/constellation-br-results-idUSL3N0ZH3LN20150701 DocumentKey (s): HTTPwww.reuters.com/article/2015/07/01/constellation-br-results-idUSL3N0ZH3LN20150701 DMSourceID (s): Google ContentType (s): Article 1 (o): [object Object] Headline (s): US private sector adds 237000 jobs in June: ADP Teaser (s): NEW YORK U.S. private employers added 237,000 jobs in June, the biggest gain since December, suggesting further improvement in the jobs market which may allow the Federal Reserve to raise interest rates later this year, a report by a payrolls processor ... Source (s): Reuters DocumentDate (s): 26 minutes ago DocumentDate_raw (n): 1435753350000 Link (s): http://www.reuters.com/article/2015/07/01/us-usa-economy-employment-adp-idUSKCN0PB4OI20150701 DocumentKey (s): HTTPwww.reuters.com/article/2015/07/01/us-usa-economy-employment-adp-idUSKCN0PB4OI20150701 DMSourceID (s): Google ContentType (s): Article 2 (o): [object Object] Headline (s): Fiat Chrysler Sales Jump in June Teaser (s): Fiat Chrysler Automobiles FCAU 0.00 % NV said Wednesday that its U.S. auto sales rose 8.2% in June, as strong sales of Jeep and Chrysler vehicles helped propel the auto maker to its best June sales since 2006. Source (s): Wall Street Journal DocumentDate (s): 26 minutes ago DocumentDate_raw (n): 1435753350000 Link (s): http://www.wsj.com/articles/fiat-chrysler-sales-jump-in-june-1435753561 DocumentKey (s): HTTPwww.wsj.com/articles/fiat-chrysler-sales-jump-in-june-1435753561 DMSourceID (s): Google ContentType (s): Article 3 (o): [object Object] Headline (s): Toyota's First Female Executive Resigns After 90 Days Teaser (s): Toyota Motor Corp.'s first female executive lasted just 90 days in the job, resigning two weeks after a drug-related arrest and dealing a setback to efforts by President Akio Toyoda to diversify its management ranks. Source (s): Bloomberg DocumentDate (s): 37 minutes ago DocumentDate_raw (n): 1435752675000 Link (s): http://www.bloomberg.com/news/articles/2015-07-01/toyota-s-first-female-executive-resigns-after-90-days DocumentKey (s): HTTPwww.bloomberg.com/news/articles/2015-07-01/toyota-s-first-female-executive-resigns-after-90-days DMSourceID (s): Google ContentType (s): Article 4 (o): [object Object] Headline (s): Somebody is cutting Internet cables, causing massive outages Teaser (s): The FBI is investigating a mysterious string of attacks on fiber optic cables in the San Francisco Bay area, including one that severely disrupted Internet service at numerous businesses and residential buildings Tuesday morning. Source (s): Fortune DocumentDate (s): 48 minutes ago DocumentDate_raw (n): 1435752000000 Link (s): http://fortune.com/2015/07/01/cutting-internet-cables/ DocumentKey (s): HTTPfortune.com/2015/07/01/cutting-internet-cables/ DMSourceID (s): Google ContentType (s): Article 5 (o): [object Object] Headline (s): Ace Buying Chubb in Cash-and-Stock Deal Valued at $28.3B Teaser (s): Insurer Ace is buying The Chubb Corp. in a cash-and-stock deal valued at about $28.3 billion that will boost its international presence. Source (s): ABC News DocumentDate (s): 1 hour ago DocumentDate_raw (n): 1435750672000 Link (s): http://abcnews.go.com/Business/wireStory/ace-buying-chubb-cash-stock-deal-valued-283b-32147871 DocumentKey (s): HTTPabcnews.go.com/Business/wireStory/ace-buying-chubb-cash-stock-deal-valued-283b-32147871 DMSourceID (s): Google ContentType (s): Article 6 (o): [object Object] Headline (s): General Mills's Revenue Growth Weaker Than Expected Teaser (s): General Mills Inc. on Wednesday reported weaker-than-expected revenue in its May quarter, as the food maker continues to struggle with changing consumer tastes and a strong dollar. Source (s): Fox Business DocumentDate (s): 1 hour ago DocumentDate_raw (n): 1435749975000 Link (s): http://www.foxbusiness.com/industries/2015/07/01/general-mills-revenue-growth-weaker-than-expected/ DocumentKey (s): HTTPwww.foxbusiness.com/industries/2015/07/01/general-mills-revenue-growth-weaker-than-expected/ DMSourceID (s): Google ContentType (s): Article 7 (o): [object Object] Headline (s): Euro zone factory growth stutters as China, Japan heals Teaser (s): Asia's largest economies showed hints of healing last month but euro zone factory growth remained tepid as Greek debt talks, and the country's possible departure from the bloc, dominated debate in Europe. Source (s): Reuters DocumentDate (s): 2 hours ago DocumentDate_raw (n): 1435747278000 Link (s): http://www.reuters.com/article/2015/07/01/us-global-economy-europe-idUSKCN0PB4CD20150701 DocumentKey (s): HTTPwww.reuters.com/article/2015/07/01/us-global-economy-europe-idUSKCN0PB4CD20150701 DMSourceID (s): Google ContentType (s): Article 8 (o): [object Object] WSODIssue (s): |3145557|4147820|237989 DMSourceID (s): KAPITALL Source (s): Kapitall Headline (s): IAC is spinning off Match.com Link (s): http://folionation.squarespace.com/news/2015/6/30/iac-is-spinning-off-matchcom.html Thumbnail (s): DocumentDate_raw (n): 1435691220000 DocumentDate (s): June 30, 2015 DocumentDate_smart (s): 17 hours ago DocumentKey (s): 1107-290734296785735392040-5RNTJDELNTID4C67HNKJ2UR924 ContentType (s): Article TrackingPixel (s): Teaser (s):

Match.com has brought happiness to millions of couples. Will the spinoff do the same for IAC shareholders?

IAC/InterActive (IACI) is already trading well above the $60 lows the stock encountered last year. On June 25, the stock reached a new high of $82.40 on unusually strong trading volume. There is one big reason investors should expect more upside though: the Match.com IPO.

Spinning off The Match Group from IAC is a natural progression for IAC. Over the last twenty years, the company has generated solid returns for shareholders. It grew from a company with a $275 million base to, along with its other spinoffs, having $44 billion in combined shareholder value. The IPO will represent fewer than 20 percent of common stock of Match.com.

IAC recently closed at $81.19 on very strong trading volume. The stock has a market cap of $6.6 billion and a book value of $1.8 billion. The P/E is reasonable, too, at 16.3 times based on $4.94 per share earnings. The stock’s dividend yield is 1.7 percent. This is not very high for income investors, but the strong performance from IAC could mean steady returns ahead.

There also isn’t much competition out there for IAC and Match.com. Spark Networks (LOV) and MeetMe (MEET) are down around 40 percent each this year. MeetMe’s social network is gaining no traction; similarly, Spark Networks is struggling. In the first quarter, Spark Network’s subscriber figures were weak, and the average paid subscribers fell 25 percent year over year to 213,445.

Taking this into consideration, IAC shareholders have good reason to hold onto the stock as Match.com becomes a public company. 

Written by Chris Lau

 

Click on the interactive chart to view data over time. 

1. IAC/InterActive Corp (IACI, Earnings, Analysts, Financials): Engages in the Internet business in the United States and internationally. Market cap at $6.55B, most recent closing price at $78.32.

 

 

2. Spark Networks Inc. (LOV, Earnings, Analysts, Financials): Provides online personals services in the United States and internationally. Market cap at $79.92M, most recent closing price at $3.12.

 

 

3. MeetMe Inc. (MEET, Earnings, Analysts, Financials): Owns and operates a social network for meeting new people on the Web and on mobile platforms in the United States. Market cap at $75.00M, most recent closing price at $1.70.

 

 

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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.

9 (o): [object Object] Headline (s): Greece travel Q&A: Tourists urged to bring cash Teaser (s): Tourists travelling to Greece have been advised to avoid relying on cards and that cash will be the best form of currency as the country enters a week of political and economic uncertainty. Source (s): USA TODAY DocumentDate (s): 22 hours ago DocumentDate_raw (n): 1435674643000 Link (s): http://www.usatoday.com/story/money/2015/06/30/greece-travel-tourists-cash/29505425/ DocumentKey (s): HTTPwww.usatoday.com/story/money/2015/06/30/greece-travel-tourists-cash/29505425/ DMSourceID (s): Google ContentType (s): Article 10 (o): [object Object] Headline (s): Greece offers conditional okay to bailout, Germany sceptical Teaser (s): ATHENS/BRUSSELS Greek Prime Minister Alexis Tsipras has written to international creditors saying Greece could accept their last bailout offer if some conditions were changed, but Germany expressed scepticism while saying the door was still open for ... Source (s): Reuters DocumentDate (s): Jun 30, 2015 DocumentDate_raw (n): 1435652147000 Link (s): http://in.reuters.com/article/2015/07/01/eurozone-greece-idINKCN0PA0PY20150701 DocumentKey (s): HTTPin.reuters.com/article/2015/07/01/eurozone-greece-idINKCN0PA0PY20150701 DMSourceID (s): Google ContentType (s): Article 11 (o): [object Object] WSODIssue (s): |36276|211573 DMSourceID (s): KAPITALL Source (s): Kapitall Headline (s): Should you add Netflix to your list? Link (s): http://folionation.squarespace.com/news/2015/6/29/should-you-add-netflix-to-your-list.html Thumbnail (s): DocumentDate_raw (n): 1435593480000 DocumentDate (s): June 29, 2015 DocumentDate_smart (s): Jun 29, 2015 DocumentKey (s): 1107-290734296785735390498-0SS0VKIR9IS4OL143L5RFCS3F8 ContentType (s): Article TrackingPixel (s): Teaser (s):

After Carl Icahn ditched Netflix last week, maybe it's better to own a Netflix account than actual shares.

Shares of Netflix (NFLX) defied gravity and reached $706.24 earlier this year before pulling back. The stock then closed at $651.62 last week after Carl Icahn, a famous activist investor, sold whatever he had left in the company and netted $1.6 billion.

Icahn tweeted about his sale:

 

Sold last of our $NFLX today. Believe $AAPL currently represents same opportunity we stated NFLX offered several years ago.

— Carl Icahn (@Carl_C_Icahn) June 24, 2015

Apple and Netlifx are not comparable, and both represent opposite ends of the spectrum when it comes to valuation. Investors are paying a huge premium for Netflix. The belief is that the online movie streaming giant will grow exponentially for years to come. Netflix has a forward P/E over 70. Apple’s forward P/E, on the other hand, is only 14:

Apple is generating enormous profits from the iPhone, but the company has two problems. First, its new music streaming business is late to the market. The initiative keeps the company relevant in streaming music but is unlikely to add meaningfully to profits. Second, the Apple Watch has yet to prove it is successful. The first generation wearable has limited battery life (of less than one day) and requires an iPhone.

Netflix is a $39.5 billion company. Its upcoming share split will boost liquidity and attract smaller investors.

Those considering an investment in Netflix should exercise caution. The share split changes nothing in the valuation of the stock: the market cap stays the same (number of shares x stock price). Even though the Apple comparison may not be apt, investors might consider following Icahn and selling the stock today.

Written by Chris Lau


Click on the interactive chart to view data over time. 

1. Apple Inc. (AAPL, Earnings, Analysts, Financials): Designs, manufactures, and markets personal computers, mobile communication and media devices, and portable digital music players, as well as sells related software, services, peripherals, networking solutions, and third-party digital content and applications worldwide. Market cap at $730.21B, most recent closing price at $126.75.

 

2. Netflix Inc. (NFLX, Earnings, Analysts, Financials): Provides subscription-based Internet services for TV shows and movies in the United States and internationally. Market cap at $39.50B, most recent closing price at $651.62.

 

 

(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.

12 (o): [object Object] WSODIssue (s): |72150991|72150994|72528478 DMSourceID (s): KAPITALL Source (s): Kapitall Headline (s): Greek crisis takes a turn for the worse Link (s): http://folionation.squarespace.com/news/2015/6/29/greek-crisis-takes-a-turn-for-the-worse.html Thumbnail (s): DocumentDate_raw (n): 1435589880000 DocumentDate (s): June 29, 2015 DocumentDate_smart (s): Jun 29, 2015 DocumentKey (s): 1107-290734296785735390427-75BCGC1BSFS20RJPNBJAMF82SP ContentType (s): Article TrackingPixel (s): Teaser (s):

Banks are closed, capital controls are in place and the Greek crisis is sending markets down worldwide.  

The Greek crisis, now well in its fifth year after the initial credit rating downgrade, has escalated. Negotations between Greece and its creditors broke down yet again this past weekend, bringing the debt-ridden country closer to a near inevitable default and possible exit from the eurozone. Stocks around the world were down in early-morning trading as a result of the latest developments (or lack thereof).

On Saturday, finance ministers from the 19-member currency bloc rejected Greece's request for a one-month extension to its bailout. That same day Prime Minister Alexis Tsipras unexpectedly called for a referendum on July 5—five days after Greece's International Monetary Fund debt is due—so Greek voters can decide whether or not to accept the terms of the European Central Bank, European Commission and IMF's bailout deal. Following Tsipras's announcement, the ECB decided on Sunday not to increase its emerging liquidity assistance to Greece, which was helping Greek banks operate in the midst of endless withdrawals.

This led the Bank of Greece to recommend that banks remain closed and capital controls be implemented in order to prevent a collapse. Banks will be closed until July 7, and ATM withdrawals will be capped at €60 per day and €1800 per month. Though the Athens Stock Exchange is closed, the Global X FTSE Greece 20 ETF (GREK) and National Bank of Greece (NBG) trade in the US and have plunged since market open on Monday, down 15.28 percent and 22.63 percent, respectively, at 10:00AM EST.

But Tuesday, June 30, is the big deadline: that's when Greece's bailout agreement expires and the country is supposed to make a €1.55 billion loan payment to the IMF. There's very little chance of that happening now. Plus, Tuesday's bill is only one of several that the cash-strapped government is on the hook for in the coming weeks. There's the €2 billion owed to Treasury bill holders on July 10, and another €452.6 million to the IMF on July 13.

The Greek crisis certainly brought the drama this weekend, but the fears of financial instability aren't limited to the streets of Athens or Brussels. The Wall Street Journal reports that the Stoxx Europe 600 index fell 2.3 percent in early trade and markets in Italy and Spain slid more than 3 percent in the morning. Yields on benchmark 10-year Treasury notes fell to their lowest levels since October on Monday, which means prices are rising due to increased investor interest. Meanwhile, US stocks tumbled at market open.

So what's an investor to do? In a morning appearance on Bloomberg's "Market Makers," bearish Swiss investor Marc Faber, who also edits the Gloom Boom & Doom Report, recommended investing in precious metals. Here's a list of the top-performing government bond and precious metals exchange-traded funds (ETFs) pulled from ETFdb.com. Each of the stocks has returned 1 percent on more year to date.

Click on the interactive chart to view data over time. 

 

1. AdvisorShares Garman Gold/Euro ETF (GEUR, Earnings, Analysts, Financials): Provides investors with exposure to gold denominated in euros. Assets under management at $3.44M, most recent closing price at $13.13.

Performance YTD: 5.80%.

 

2. AdvisorShares Gartman Gold/Yen (GYEN, Earnings, Analysts, Financials): Provides investors with exposure to gold denominated in Japanese yen. Assets under management at $3.89M, most recent closing price at $38.99.

Performance YTD: 1.98%.

 

3. SPDR Barclays 0-5 Year TIPS (SIPE, Earnings, Analysts, Financials): Tracks a market value weighted index of TIPS that mature in 0-5 years. Assets under management at $3.44M, most recent closing price at $19.55.

Performance YTD: 1.24%.

 

 

(List compiled by Mary-Lynn Cesar. All data sourced from ETFdb.com)

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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.

13 (o): [object Object] WSODIssue (s): |70131635|83994|45563793 DMSourceID (s): KAPITALL Source (s): Kapitall Headline (s): Same-sex marriage is officially a right Link (s): http://folionation.squarespace.com/news/2015/6/26/same-sex-marriage-is-officially-a-right.html Thumbnail (s): DocumentDate_raw (n): 1435345800000 DocumentDate (s): June 26, 2015 DocumentDate_smart (s): Jun 26, 2015 DocumentKey (s): 1107-290734296785735388513-5VI4BG5MKTGLIH4BIIR06E56DN ContentType (s): Article TrackingPixel (s): Teaser (s):

The Supreme Court has ruled that same-sex marriage must be legal nationwide. That's how you kick off Pride. 

In a 5-4 decision, the Supreme Court ruled on Friday that same-sex marriage is a constitutional right and officially overturned marriage bans in 14 states. The landmark decision in Obergefell v. Hodges comes—as Bloomberg points out—11 years after Massachussets became the first state to legalize same-sex marriage. It's also just in time for Pride in New York, San Francisco and other cities.

Justice Anthony Kennedy, the court's swing vote, sided with the court's liberal wing and wrote the majority opinion:

 

The last paragraph of Justice Kennedy's opinion is a powerful piece of writing. pic.twitter.com/8d2r5dFU9b

— Kevin Pang (@pang) June 26, 2015

 

Back in March, we wrote about the then-impending Obergefell v. Hodges case. In that article, we screened for stocks among the nearly 400 companies and employer organizations that had signed a friend-of-the-court brief in support of same-sex marriage.

Specifically, we looked for stocks that were rallying above their 20-day, 50-day and 200-day simple moving averages (SMA) and had an average analyst recommendation of buy or better as indicated by an assigned numerical value under 3. The stocks below still satisfy the above criteria. 

But, ultimately, today isn't about corporations or stocks; it's about the U.S. making significant progress on an incredibly important civil rights issue. America should be very proud indeed.

Click on the interactive chart to view data over time. 

 

1. Aramark (ARMK, Earnings, Analysts, Financials): Provides food, facilities, and uniform services to education, healthcare, business and industry, sports, leisure, and corrections clients primarily in North America. Market cap at $7.56B, most recent closing price at $31.56.

The stock is rallying 0.80% above its 20-day SMA, 1.09% above its 50-day SMA and 5.36% above its 200-day SMA.

Average analyst recommendation is 2.

Aramark has returned -1.76% in the three-and-a-half months since our last article on same-sex marriage and the Supreme Court.

 

2. CVS Health Corporation (CVS, Earnings, Analysts, Financials): Operates as a pharmacy services company in the United States. Market cap at $119.10B, most recent closing price at $105.01.

The stock is rallying 2.75% above its 20-day SMA, 3.81% above its 50-day SMA and 10.99% above its 200-day SMA.

Average analyst recommendation is 1.7.

CVS Health has returned 1.87% in the three-and-a-half months since our last article on same-sex marriage and the Supreme Court.

 

3. Facebook Inc. (FB, Earnings, Analysts, Financials): Operates as a global social networking company. Market cap at $245.79B, most recent closing price at $87.98.

The stock is rallying 5.66% above its 20-day SMA, 7.44% above its 50-day SMA and 11.04% above its 200-day SMA.

Average analyst recommendation is 1.8.

Facebook has returned 8.76% in the three-and-a-half months since our last article on same-sex marriage and the Supreme Court.

 

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

Analyze These Ideas: Getting Started

Dig Deeper: Access Company Snapshots, Charts, 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.

14 (o): [object Object] WSODIssue (s): |38401|38982|260106 DMSourceID (s): KAPITALL Source (s): Kapitall Headline (s): Can Autodesk lure users with subscription services? Link (s): http://folionation.squarespace.com/news/2015/6/25/can-autodesk-lure-users-with-subscription-services.html Thumbnail (s): DocumentDate_raw (n): 1435261680000 DocumentDate (s): June 25, 2015 DocumentDate_smart (s): Jun 25, 2015 DocumentKey (s): 1107-290734296785735387214-6HUOAI5CP7KCEBM5NVMCDVKHHM ContentType (s): Article TrackingPixel (s): Teaser (s):

Autodesk's foray into the world of subscription services is off to a lukewarm start. Can the firm turn it around?

Design software maker Autodesk (ADSK) is yet another tech firm that is switching its revenue flow from up-front licenses to subscriptions. The change could lead to a temporary slowdown in earnings growth, which means there is a good chance that Autodesk’s stock may fall in the quarters ahead.

Nuance Communications (NUAN) is undergoing the same transition, but it is taking a long time for the company’s subscription revenue to exceed license sales. Adobe Systems (ADBE), on the other hand, is doing well. The maker of Photoshop and other image processing tools is rapidly increasing its subscription, and during its second quarter earned $0.48 per share on revenue of $1.16 percent.

Autodesk is still in the early phases of selling software subscriptions for its CAD and 3D printing offerings, so its revenue model may face obstacles in the coming months. First, the company would charge less for subscription than it does for licensing. Second, its customer base may not feel the need to switch to subscriptions. In the second quarter, subscriptions for PC software totalled 95,000; this is down from the 100,000 in Q1. Autodesk has a total of 2.33 million subscriptions. Looking ahead, customers' delay in upgrading will also likely cause the company's revenue growth to slow.

The slower pace in billings, up only 3 percent year-over-year in the last quarter, along with expectations for earnings of $0.95 - $1.10 per share for fiscal 2016 suggests the stock is too expensive, considering its 49.47 forward P/E.

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 $39.87B, most recent closing price at $79.70.

 

 

2. Autodesk Inc. (ADSK, Earnings, Analysts, Financials): Provides design software and service solutions to customers in architecture, engineering, and construction; manufacturing; and digital media and entertainment industries. Market cap at $12.20B, most recent closing price at $53.57.

 

 

3. Nuance Communications Inc. (NUAN, Earnings, Analysts, Financials): Provides voice and language solutions for businesses and consumers worldwide. Market cap at $5.71B, most recent closing price at $18.20.

 

 

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

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15 (o): [object Object] WSODIssue (s): |75408|78281|203700|284244 DMSourceID (s): KAPITALL Source (s): Kapitall Headline (s): Supreme Court says Obamacare subsidies are here to stay Link (s): http://folionation.squarespace.com/news/2015/6/25/supreme-court-says-obamacare-subsidies-are-here-to-stay.html Thumbnail (s): DocumentDate_raw (n): 1435259280000 DocumentDate (s): June 25, 2015 DocumentDate_smart (s): Jun 25, 2015 DocumentKey (s): 1107-290734296785735387179-0CM7ASAEFPDA54I8OD23A05R12 ContentType (s): Article TrackingPixel (s): Teaser (s):

The highest court in the land handed the Obama administration a huge win by upholding Obamacare subsidies.

On Thursday morning, the Supreme Court voted in a 6-3 ruling to uphold tax subsidies in the Affordable Care Act that allowed millions of Americans to buy health insurance. Opponents of the healthcare law had argued that a four-word phrase in the 20,000-page bill—"established by the state"—meant that Obamacare subsidies shouldn't exist in the 34 states where the federal government operates insurance marketplaces, or exchanges, since the states decided to not set up their own. 

"Not so fast," cried the Supreme Court. Chief Justice John Roberts, writing for the majority opinion in King v. Burwell, stated, "Congress passed the Affordable Care Act to improve health insurance markets, not to destroy them." Roberts went on to add that Obamacare subsidies play an integral role in the success of federal exchanges and are necessary to "avoid the type of calamitous result that Congress plainly meant to avoid."

"Not so fast," cried Justice Antonin Scalia, who dissented alongside Justices Clarence Thomas and Samuel Alito, as he shared his disapproval from the bench. Scalia argued that it was hard to see why "established by the state" would be present in the law if the subsidies didn't strictly apply to state exchanges. And in a sick burn that only the funniest Supreme Court Justice could give, he said, "We really should start calling the law SCOTUScare." 

But at the end of day, as President Obama declared in his victory press conference shortly after the ruling, Obamacare is "here to stay"—which could actually be a good thing for the healthcare industry. Reuters reports that health service providers and insurers as well as hospital operators were rallying after the decision. As of 1:00PM EST, the iShares Dow Jones US Healthcare ETF (IYH) is up 0.58 percent today.

And as The New York Times noted back in October, the insurance industry has actually benefited immensely from the law due to greater demand for private insurance. Paul Heckley, managing director at the Navigant Center for Healthcare Research and Policy Analysis, told the Times, "The irony is if you look sector by sector, the A.C.A. has resulted in pretty substantial earnings across the board."

With that in mind, here is a list of health care providers that have experienced greater growth in earnings per share (EPS) and revenue than the industry average over the last five years, which is how long it's been since Obamacare was signed into law. Do you think these companies can attribute any of their growth in earnings and sales to Obamacare subsidies? Take a look at the links to their earnings and financials to get a better picture, and let us know what you think in the comments.

Click on the interactive chart to view data over time. 

1. Cigna Corp. (CI, Earnings, Analysts, Financials): Operates as a health service organization. Market cap at $39.96B, most recent closing price at $155.26.

EPS growth over the past five years at 10.61% vs. an industry average of 8.12%.

Sales growth over the past five years at 13.60% vs. an industry average of 12.26%.

 

2. Centene Corp. (CNC, Earnings, Analysts, Financials): Operates as a multiline healthcare company in the United States. Market cap at $9.45B, most recent closing price at $79.48.

EPS growth over the past five years at 18.12% vs. an industry average of 8.12%.

Sales growth over the past five years at 32.19% vs. an industry average of 12.26%.

 

3. Molina Healthcare Inc. (MOH, Earnings, Analysts, Financials): Provides Medicaid-related solutions to meet the health care needs of low-income families and individuals, as well as assists state agencies in their administration of the Medicaid program. Market cap at $3.85B, most recent closing price at $68.87.

EPS growth over the past five years at 10.38% vs. an industry average of 8.12%.

Sales growth over the past five years at 21.38% vs. an industry average of 12.26%.

 

4. WellCare Health Plans Inc. (WCG, Earnings, Analysts, Financials): Provides managed care services for government-sponsored healthcare programs in the United States. Market cap at $3.90B, most recent closing price at $88.54.

EPS growth over the past five years at 8.67% vs. an industry average of 8.12$.

Sales growth over the past five years at 13.51% vs. an industry average of 12.26%.

 

(List compiled by Mary-Lynn Cesar. EPS and sales data sourced from Fidelity. Monthly return data sourced 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. 

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*/ Price to book ratios: the value to watch while banks report earnings

Price to book ratios: the value to watch while banks report earnings

It’s earnings week for America’s largest banks, and these five have price to book ratios below 1. 

Price to book (P/B) ratios are one of the most important metrics to value investors. It is caluclated by dividing the current market cap of a company by its tangible assets—cash and capital. When a company has a P/B of 1 it is valued at the exact amount of its tangible assets.

Since the financial crisis, banks have been routinely valued at a P/B below 1 as investors, fearing new regulations and fines will inhibit banking’s growth in coming years, have scaled down their expectations for the sector. 

Read more about undervalued financial services stocks from Kapitall. 

These expectations, however, lead to a possible inefficiency in the market. If these five banks were to be dismantled today their shares would be worth more based on tangible assets alone than the market’s current valuation.

So what does that mean? In short, it means that if banks report earnings that beat the street’s expectations this week, these low prices could disappear fast. Do you think banking is undervalued? Use the list below to begin your 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. Bank of America Corporation (BAC, Earnings, Analysts, Financials): Provides banking and financial services to individuals, small- and middle-market businesses, corporations, and governments primarily in the United States and internationally. Market cap at $175.76B, most recent closing price at $16.53.

 

2. Morgan Stanley (MS, Earnings, Analysts, Financials): Provides various financial products and services to corporations, governments, financial institutions, and individuals worldwide. Market cap at $57.74B, most recent closing price at $30.31.

 

3. Citigroup, Inc. (C, Earnings, Analysts, Financials): Provides consumers, corporations, governments, and institutions with a range of financial products and services. Market cap at $148.31B, most recent closing price at $48.98.

 

4. MetLife, Inc. (MET, Earnings, Analysts, Financials): Provides insurance, annuities, and employee benefit programs primarily in the United States, Japan, Latin America, the Asia Pacific, Europe, and the Middle East. Market cap at $57.9B, most recent closing price at $50.87.

 

5. 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.

 

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Bank of America Corporation(BAC, Chart, Download SEC Filings)Morgan Stanley(MS, Chart, Download SEC Filings)Citigroup, Inc.(C, Chart, Download SEC Filings)MetLife, Inc.(MET, Chart, Download SEC Filings)American International Group, Inc.(AIG, Chart, Download SEC Filings)

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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.

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