Tag Archives: Wedbush

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.

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Cboe is the first to trade with bitcoin futures

Bitcoin has so far been a great deal for many investors in 2017. The price have skyrocketed, and something is about to change right now. Cboe Global Markets, which is the Chicago-based exchange group, launched bitcoin futures on Sunday. That can be a game changer.

Cboe President Chris Concannon is also planning to launch other cryptocurrency`s, and other firms like CME Group has hinted they will launch bitcoin futures very soon, but most of them have a “wait and see” approach.

 

 

As you can see from the chart above, the price is down. The new product will give investors the opportunity to pay a high price for its insurance, and its traders must put a lot of money on the table for their bets.

Bitcoin can be very volatile, and Cboe knows that. Traders are required to have 44% of the bitcoin settlement price set aside for their bet. This is a down-payment for their risk, and margins for the futures are under 10%. VIX margins can get up to 50% because of their risk.

Many are negative to bitcoin, and TD Ameritrade is taking a «wait and see» approach and wont provide the product for clients. Nor will Fidelity, Etrade and Charles Schwab. Two of the largest brokers; JPMorgan and Citigroup didnt start to participate in the market Sunday. Nor did Societe Generale, Interactive Brokers and Wedbush, according to Financial Times.

But anyway, Wall Street are watching the market, and so far there are a number of concerns over Gemini and that is low volumes on the exchange and system outages. Gemini is the cryptocurrency exchange founded by the Winklevoss twins. Cboe is basing its bitoin contracts on pricing on Gemini.

Gemini is still very small and the exchange sees only 1,4% of trading in the entire bitcoin market, and its activity can`t paint an accurate picture of the broader crypto-market. With its low volume and the lack of liquidity, it is also very easy to manipulate.

Cryptocurrency volumes topped as much as $26 billion in a single trading day, but trading firms are under pressure to enhance their technology. The ticker code for bitcoins is XBT and the trading began yesterday, on Sunday, December 10, 2017.

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.

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