Category Archives: Stocks

Snap Inc was a bubble but is now down to a normal level again

Snapchat was a big bubble when it went public in March last year. It went straight up to about $27, but the story has so far been a disaster. The stock has plummeted. It closed at $6,59 after the bell on Wednesday, down -3,37 percent.

Snap is losing money, and they still have negative user growth. Two things investors don`t like at all. The company will report earnings on Thursday 25, and the reported earnings for the same quarter last year was $-0,32.

If we compare Snap with Facebook and Twitter, the company is now down to earth again. But when it comes to popularity, Instagram is more popular among teenagers than Snapchat. A survey found that 85 percent of teens use Instagram at least once a month. 84 percent use Snapchat.

The company have 188 million Daily users and most of them is kids. Snaps CEO Evan Spiegel admitted the company rushed the redesign, and they didnt spend enough time to test the new platform. It all ended up with angry users.

Snaps market capitalization also fell by about $12 billion after a bad ad campaign with Rihanna. She used Facebooks Instagram to complain about the ad with Snap.

Snap need to report a growth in DAU`s to lift the stock again. A decline in their DAU can make the trend to continue. What we know so far is that this stock is very volatile and you can see how the stock jumped in February and June this year.

Snap Inc is expected to report earnings on Thursday 25, 2018, after market close. The report will for the fiscal Quarter ending September 2018. Earnings forecast for the quarter is $-0,27. Better than last years earnings at $-0,32.

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Shiny bull. The author has made every effort to ensure accuracy of information provided; however, neither Shiny bull nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Shiny bull and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

Advertisements

Leave a comment

Filed under Stocks

Deutsche Bank are struggling and the stock has plummeted since the financial crisis

Deutsche Bank reached a top right before the financial crisis in 2007. The stock peaked at $122, but since then it has plummeted. Some people think that this is the end of the bank and some think that the bank will come back. The stock closed at $10,70 on Tuesday.

The bank has been struggling for years but they are not alone. They have a lot of challenges inside its own bank, but European monetary policy and other political risk are also something investors should have on their watch list. Deutsche Bank will report earnings on Wednesday.

Deutsche Bank said in a report that it intends to reduce personnel by at least 7 000 by the end of 2019. It`s a big challenge to reduce personnel cost for German corporations, because the labor laws are very strict.

European banks (EUFN) has suffered so far in 2018. UKs RBS and Barclay's is down. So are Switzerlands UBS, Spains Santander and Netherlands ING, but Germany`s Deutsche Bank is one of the worst.

The Fed continues to tighten but the ECB is till «printing» money. We know the story of some of the U.S banks. They have gone straight up, but the stocks in Europe have under-performed despite the fact that the ECB continued to blow up the balance sheet.

The ECB balance sheet has gone straight up in three years while the Euro stoxx has slowly declined. So is it for the P/E ratio of the MSCI Europe Index (IEUR) which is down about 50 percent.

Two former Deutsche Bank AG traders were found guilty by a New York jury on Wednesday last week of engaging in a scheme to manipulate the Libor benchmark interest rate between 2005 and 2011.

Libor (the London interbank offered rate) underpins trillions of dollars of financial products and is based on what banks say they believe they would pay if they borrowed from other banks. A case like this didn`t help the banks reputation.

Deutsche Bank has long been struggling to turn a profit under CEO John Cryan`s tenure, but earlier this year, Christian Sewing replaced Cryan and became new CEO of the bank. Deutsche Bank is working hard to strengthen its brand in its home market.

Sewing is known for being a cost-cutter. So far, he has cut about 1,700 jobs and eliminated daily office fruit bowls. He is also planning to shrink the New York office by 30 percent and move away from Wall Street.

The bank`s revenue is down 21 percent in the last two years. It seems it will drop again this year and that will be to its lowest level in a decade. They are also losing market share.

A few years ago, people were waiting for their turn to pay bills in the bank. And you know what, they paid for it. Of course. An employee did it for the customers. They paid for the service. But this has changed.

Now, people have internet and they can log in to their own bank account and do all the job alone. But who is paying for it now? The customers. The one that is doing the job. Wow. What kind of service is that? You do the job and you pay for it. That`s business. But it will change. This way of thinking belongs to the old school.

Deutsche Bank AG is expected to report earnings on Wednesday 24 October 2018 before market open. The report will be for the fiscal Quarter ending September 2018. The reported Earnings for the same quarter last year was $0,35.

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Shiny bull. The author has made every effort to ensure accuracy of information provided; however, neither Shiny bull nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Shiny bull and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

Leave a comment

Filed under Stock market, Stocks

Investors are greedy and takes profit in the growth stock American Eagle Outfitters

I will continue to follow-up with an article about the retail market. In my recent articles I have had a focus on retailer stocks like Alibaba, Kohl`s and J C Penny. Some of them are plummeting, but others are skyrocketing.

Take a look at American Eagle Outfitters (AEO). The stock has gone from $10 to nearly $30 in just 12 months, but now, like other successful retailers, it seems like the bulls would take a break for a while. The stock hit a 10-year high of $29,88 last week.

AEO is set to report earnings before the open on Wednesday, August 29, and analysts are beginning to be skeptical to this equity right now.

Wedbush just lowered its AEO rating to «neutral» from «outperform,» saying it`s moving to the sidelines with the stock near its $29 price target. The brokerage firm suggested that L Brands recent struggles could give AEO a chance to gain market share, which may mean more promotional activity in the near term.

But bearish sentiment is building elsewhere. The unemployment rate is low and the wages is increasing a little bit. But  the new wave of consumer spending isn`t enough to justify a $30 share price for AEO at the moment.

Wall Street analysts are expecting sales to increase 10,12 percent compared to the prior year quarter. AEO is also expected to report a $930 million jump. Expected profit is $1,52 per share compared to profit of $1,16 per share last year.

A full-year revenue last year came in at $3,80 billion, while analysts estimate a full-year revenue to be $3,97 billion this time on average.

President Donald Trump made a new trade deal with Mexico today. That deal will be good for AEO that opened the first store in Mexico City at Fashion Mall Perisur on February 20, 2013 and at Centro Santa Fe on June.

Not only that. President Donald Trump slashed the tax which is helping AEO a lot. So does a stronger dollar. Just look at the numbers. Diluted EPS is up 57,14 percent. Net profit margin; +46,53 percent. Net income; +58,22 percent, and revenue +8,02 percent YoY. Not bad for a company with a $5 billion market cap.

The stock declined -$4,57 percent on Monday, and you can clearly see that investors are taking profit from this growth stock. By 2021, AEO`s earnings can reach $285 million, from current levels of $204 million. An annual growth rate of about 8 percent.

A share price above $30 would be overvalued, and the current share price of AEO is above its future cash flow value of $22,77.

American Eagle Outfitters Inc is expected to report earnings on August 29, 2018 before market open. The report will be for the fiscal Quarter ending July 2018. The consensus EPS forecast for the quarter is $0,31 versus $0,19 for the same quarter last year.

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Shiny bull. The author has made every effort to ensure accuracy of information provided; however, neither Shiny bull nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Shiny bull and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

Leave a comment

Filed under Stocks

Alibaba is doing it well but the stock is declining while we are witnessing a divergence in EM and US tech

Alibaba is a great company. A chinese e-commerce giant I have collaborated with many year before it went public in the U.S. The firm have a strong fundamentals, but despite that, Alibaba has declined about 20 percent in the last 8 weeks.

This is very interesting because Alibaba grew revenues by nearly 60 percent, and I don`t think it will stop here at all. Nor is it expensive if we measure it with forward earnings which is about 32,4 right now. There must be something going on here.

Like we saw in Kohls a few days ago, maybe there is some profit taking here. Kohls has skyrocketed last 12 months. Up about 100 percent. But Alibaba has declined about 20 percent last two months.

I think it can be the fear of the coming trade war. There has been a carnage in the Chinese tech sector recently. We saw a collapse in Tencent. A company that lost more than Facebook`s drop. We also saw a big drop in JD.com following poor earnings.

What we are witnessing is a divergence in EM and US tech. Since June, the EM tech sector has accounted for about 40 percent in the value of EM equities. Both, the EM and the US tech sector has jumped about 50 percent to the end of June, but since then, the US tech sector is up by 5 percent, while the EM tech sector is down 6 percent.

This is very bad news for EM tech investors. JPM`s quant guru, Marko Kolanovic also spotted this bizarre phenomenon, and in a note he said that “the recent divergence in the performance of US Equities vs the rest of the world is unprecedented in history.”

Kolanovic also looks at price momentum which he finds is «positive for US stocks and negative for Europe and Emerging markets across all relevant look back windows, and this has never happened before.»

As Kolanovic summarizes: “buybacks are creating a shortage of US stocks, the Fed is creating a shortage of US dollars, and Trump`s trade wars and sanctions are further boosting the USD.”

You can clearly see how Alibaba reached an all-time high in the mid June, trading above $210, and then, alongside other Chinese tech stocks that has declined. The stock is also following the divergence trend.

All this is happening despite the fact that the firm is doing it well. The Amazon of China, are also operating three main sites like Taobao, Tmall and Alibaba. In addition, they have a cloud computing firm, and they grabbed 4 percent of the cloud computing market share last quarter.

Thats far beyond Amazon and Microsoft, but near IBM with 8 percent and Google with 6 percent, according to Synergy Research Group. Alibaba stock is up about 170 percent over the last three-year, but some investor fear that Alibaba can be negatively impacted by the ongoing trade dispute between the worlds two largest economies, which is reportedly starting to hit China harder than anticipated.

Alibaba stock is up about 170 percent over the last three years, which outpaced its industrys 96 percent.climb and the S&P 500s 50 percent jump. But the trade war can hit Alibaba more than we like to think. On top of that, the Chinese economy is slowing. The stock is up only 2,3 percent last 12 months, while S&P 500 is up 17 percent and its industry gained 37 percent.

Investors will await data on Alibabas cloud business, which is expected to nearly double YoY growth for its June quarter. Customer management revenue for Alibabas China Commerce Retail segment, which is driven by ads shown on Taobao and Tmall, rose 35 percent last quarter. The segment`s commisssion revenue, which is driven by Tmall, rose 39 percent.

Jack Ma must have done something right with its intime department stores and innovative Hema supermarkets, as well as Ele.me, which is set to merge with Alibaba`s Koubei local services JV and its Tmall Direct Import online store.

Alibabas China Commerce Retail segment rose more than 10-fold annually in June quarter. Cainiao is also contributing to Alibabas revenue growth.

«We belive the future of New Retail will be a harmonious integration of online and offline, and Hema is a prime example of this evolution that`s taking place,» Daniel Zhang, CEO of Alibaba Group said. «Hema is a showcase of the new business opportunities that emerge from online-offline integration.»

Alibaba Group Holding Limited is expected to report earnings on Thursday 23, 2018, before market open. The report will be for the fiscal Quarter ending June 2018, and the consensus EPS forecast for the quarter is $0,75 vs $0,94 for the same quarter last year.

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Shiny bull. The author has made every effort to ensure accuracy of information provided; however, neither Shiny bull nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Shiny bull and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

Leave a comment

Filed under Stocks

Kohl`s is doing it much better than most of its competitors and the stock is up around 100% YoY

I wrote about J C Penny last week. A stock that is continuing to decline on Monday. Many retailers are struggling, but not all. Kohls is a much different story. Kohls is doing it much better than most of its competitors.

The stock is doubled from $35 in May last year to $78 on Monday. Up 3,15 percent before their earning report on Tuesday. They simply beat their competitors on e-commerce, store productivity, ROIC and revenue which is pretty impressive.

Many of Kohls competitors are closing down stores, but Kohls are going in the opposite direction by opening up stores. Sales revenue increased over 6 percent in their fourth-quarter report. Diluted earnings per share came in at $5,12 in the same period.

ROIC is between 10 – 20 percent for a healthy store, while Kohls is near 10 percent, and they are keeping up their momentum. Both, J C Penny and Macys reported bad reports last week, but also here, Kohl`s are reporting positive revenue growth.

Kohls opened up its fifth e-commerce fulfillment center last year, and they have an estimated 37 million views a month to their websites. The company is also collaborating with Amazon were people can return products to Kohls.

Kohls private brands, which include Sonoma, Croft & Barrow, and Apt 9 generate nearly half of the firms $19 billion in annual sales. They also has plans to re-launch and reimagine the billion-dollar Sonoma brand for apparel and home goods.

Other brands are Jennifer Lopez and Marc Anthony. Two artist with great success on the stage.

Kohl`s uses a «racetrack» aisle that circles the entire store, a technique borrowed from discount stores. In 2011, they announced plans to remodel 100 of its 1,100 locations. Changes included redone store sections, fitting room, and newer merchandise displays.

In 2015, Kohls opened a test store built around selling only returned, yet as new clothing, home goods, jewelry, and accessories. The store, called OFF/AISLE by Kohls, sells items at a marked down price. The stores have a restrictive return policy different from regular Kohl`s stores.

In early January 2017, Kohls shares fell 19 percent in value, in what Wall Street Journal said was "the stocks worst day on record.”

Kolhl`s Corporation is expected to report earnings on August 21, 2018 before market open. The report will be for the fiscal quarter ending in July 2018. Earnings in April was a 30 percent surprise with an EPS of 0,64. The consensus EPS for the quarter this time is $1,66.

The weekly chart is positive and positive news can push the stock to a new all-time high.

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Shiny bull. The author has made every effort to ensure accuracy of information provided; however, neither Shiny bull nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Shiny bull and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

Leave a comment

Filed under Stocks