Monthly Archives: February 2019

Top 10 Dividend Stocks To Watch Right Now

Dividend stocks can help income investors sleep at night as the companies often have durable competitive advantages that enable them to increase their dividends often, buy back shares, or both. Two stocks that definitely have competitive advantages and offer a stable dividend are Walmart (NYSE:WMT) and Polaris Industries (NYSE:PII). Sadly, many investors overlook these stocks simply because they screen for dividend yields exceeding 3% — but these two companies are too good to pass up.

E-commerce or bust

Walmart grew its brick-and-mortar business over decades into the juggernaut retailer it is now, but its recent moves have made one thing very clear: It’s e-commerce or bust. Walmart announced on May 9, 2018, that it would acquire a 77% stake in Flipkart, an Indian e-commerce company, for a staggering $16 billion.

It was an expensive move, especially considering Walmart reduced its earnings-per-share guidance for 2018 by $0.25 to $0.30, and it could reduce the retailer’s 2019 earnings by roughly $0.60 per share. While it’s a short-term speed bump for Walmart’s earnings, Morgan Stanley notes that as recently as 2016, only 14% of India’s internet users purchased products online, and that’s expected to jump to 50% as soon as 2026. In addition, India is an attractive geographic region that boasts a rising middle class of consumers.

Top 10 Dividend Stocks To Watch Right Now: Cummins Inc.(CMI)

Advisors’ Opinion:

  • [By Logan Wallace]

    City Holding Co. boosted its position in Cummins Inc. (NYSE:CMI) by 13.6% during the second quarter, HoldingsChannel reports. The institutional investor owned 7,663 shares of the company’s stock after acquiring an additional 920 shares during the quarter. City Holding Co.’s holdings in Cummins were worth $1,019,000 as of its most recent SEC filing.

  • [By Logan Wallace]

    Jacobs & Co. CA increased its stake in shares of Cummins Inc. (NYSE:CMI) by 8.2% in the second quarter, Holdings Channel reports. The firm owned 28,587 shares of the company’s stock after buying an additional 2,175 shares during the period. Jacobs & Co. CA’s holdings in Cummins were worth $3,802,000 as of its most recent SEC filing.

  • [By Max Byerly]

    Cummins (NYSE:CMI) had its target price trimmed by Citigroup from $160.00 to $150.00 in a research report released on Monday. The firm currently has a neutral rating on the stock.

  • [By Ethan Ryder]

    Macquarie Group Ltd. decreased its stake in shares of Cummins Inc. (NYSE:CMI) by 7.9% during the 2nd quarter, according to the company in its most recent 13F filing with the Securities and Exchange Commission. The firm owned 18,060 shares of the company’s stock after selling 1,540 shares during the period. Macquarie Group Ltd.’s holdings in Cummins were worth $2,401,000 as of its most recent SEC filing.

  • [By Lee Samaha]

    As you can see in the table above, Resource Industries is currently the smallest segment, but its cyclical recovery is crucial to Caterpillar meeting its guidance. The problem here is that metals and minerals prices have been declining in the last six months, and this calls into question the idea that miners are in the early innings of a long cycle of investment. Throw in talk of near-term weakness from companies like Cummins (NYSE:CMI) — and Caterpillar for that matter — and the outlook is uncertain.

  • [By Maxx Chatsko]

    The near-zero natural gas engines were created by a joint venture between Cummins (NYSE:CMI) and Westport Fuel Systems (NASDAQ:WPRT), called Cummins Westport. Unveiled on May 1, the engine lineup can be used in medium- and heavy-duty trucks, including buses, refuse vehicles, and long-haul trucks. In fact, the ISX 12N engine, as it is called, is the world’s first Class 8 on-highway truck engine to be certified near-zero by the California Air Resources Board, which sets emission standards that are followed by 16 other states. The Tesla Semi and Nikola One are both Class 8 vehicles, or what most people refer to as semis.

Top 10 Dividend Stocks To Watch Right Now: America First Tax Exempt Investors L.P.(ATAX)

Advisors’ Opinion:

  • [By Shane Hupp]

    Shares of America First Tax Exempt Investors, L.P. (NASDAQ:ATAX) hit a new 52-week high and low during mid-day trading on Monday . The company traded as low as $6.47 and last traded at $6.43, with a volume of 54800 shares changing hands. The stock had previously closed at $6.43.

  • [By Joseph Griffin]

    Bank of Montreal Can bought a new position in shares of America First Multifamily Investors LP (NASDAQ:ATAX) during the 2nd quarter, according to its most recent Form 13F filing with the SEC. The institutional investor bought 22,500 shares of the financial services provider’s stock, valued at approximately $143,000.

  • [By Stephan Byrd]

    BidaskClub upgraded shares of America First Multifamily Investors (NASDAQ:ATAX) from a strong sell rating to a sell rating in a research report sent to investors on Thursday morning.

  • [By Joseph Griffin]

    America First Multifamily Investors LP (NASDAQ:ATAX) announced a quarterly dividend on Friday, September 14th, Wall Street Journal reports. Stockholders of record on Friday, September 28th will be given a dividend of 0.125 per share by the financial services provider on Wednesday, October 31st. This represents a $0.50 annualized dividend and a dividend yield of 8.50%. The ex-dividend date is Thursday, September 27th.

  • [By Max Byerly]

    Get a free copy of the Zacks research report on America First Multifamily Investors (ATAX)

    For more information about research offerings from Zacks Investment Research, visit Zacks.com

  • [By Motley Fool Transcribers]

    America First Multifamily Investors LP (NASDAQ:ATAX)Q2 2018 Earnings Conference CallAug. 13, 2018, 4:30 p.m. ET

    Contents:
    Prepared Remarks Questions and Answers Call Participants
    Prepared Remarks:

    Operator

Top 10 Dividend Stocks To Watch Right Now: Littelfuse Inc.(LFUS)

Advisors’ Opinion:

  • [By Logan Wallace]

    Get a free copy of the Zacks research report on Littelfuse (LFUS)

    For more information about research offerings from Zacks Investment Research, visit Zacks.com

  • [By Ethan Ryder]

    Littelfuse, Inc. (NASDAQ:LFUS) SVP Matthew Cole sold 150 shares of the business’s stock in a transaction dated Wednesday, August 8th. The shares were sold at an average price of $227.26, for a total transaction of $34,089.00. Following the transaction, the senior vice president now directly owns 4,163 shares of the company’s stock, valued at $946,083.38. The transaction was disclosed in a legal filing with the SEC, which can be accessed through the SEC website.

  • [By Joseph Griffin]

    Get a free copy of the Zacks research report on Littelfuse (LFUS)

    For more information about research offerings from Zacks Investment Research, visit Zacks.com

  • [By Shane Hupp]

    Teacher Retirement System of Texas reduced its holdings in Littelfuse, Inc. (NASDAQ:LFUS) by 7.9% during the 2nd quarter, according to its most recent disclosure with the Securities and Exchange Commission (SEC). The firm owned 5,036 shares of the technology company’s stock after selling 430 shares during the period. Teacher Retirement System of Texas’ holdings in Littelfuse were worth $1,149,000 as of its most recent SEC filing.

  • [By Joseph Griffin]

    SG Americas Securities LLC raised its position in Littelfuse, Inc. (NASDAQ:LFUS) by 72.3% in the 1st quarter, according to the company in its most recent filing with the Securities and Exchange Commission (SEC). The firm owned 4,391 shares of the technology company’s stock after purchasing an additional 1,843 shares during the period. SG Americas Securities LLC’s holdings in Littelfuse were worth $914,000 at the end of the most recent reporting period.

  • [By Ethan Ryder]

    Littelfuse (NASDAQ:LFUS) was upgraded by stock analysts at ValuEngine from a “hold” rating to a “buy” rating in a report issued on Thursday.

Top 10 Dividend Stocks To Watch Right Now: S&P GSCI(GD)

Advisors’ Opinion:

  • [By Stephan Byrd]

    Summit Financial Group Inc. lowered its position in General Dynamics Co. (NYSE:GD) by 26.8% in the second quarter, according to its most recent Form 13F filing with the Securities & Exchange Commission. The fund owned 5,470 shares of the aerospace company’s stock after selling 2,000 shares during the quarter. Summit Financial Group Inc.’s holdings in General Dynamics were worth $1,020,000 as of its most recent SEC filing.

  • [By Lou Whiteman]

    Scale matters in the government IT business, as larger companies are better able to manage the increasingly large and complex systems customers demand, and a broader cost basis helps in putting together low-cost, competitive bids. In recent years, a wave of mergers and acquisitions has left a clear top two in the market. Industry leader Leidos Holdings (NYSE:LDOS) in 2016 bought the IT business of Lockheed Martin, while General Dynamics (NYSE:GD) vaulted to No. 2 earlier this year via its acquisition of CSRA.

  • [By ]

    Finally, General Dynamics Corp. (GD) , along with Lockheed and BAE Systems, could possibly profit from heightened demand ships and other vehicles. 

Top 10 Dividend Stocks To Watch Right Now: UniSource Energy Corporation(UNS)

Advisors’ Opinion:

  • [By Max Byerly]

    Uni Select (TSE:UNS)‘s stock had its “hold” rating restated by equities research analysts at TD Securities in a report issued on Friday. They currently have a C$24.00 price objective on the stock. TD Securities’ price target points to a potential upside of 8.21% from the stock’s current price.

  • [By Ethan Ryder]

    Uni Select (TSE:UNS) had its price target lifted by investment analysts at Macquarie from C$24.00 to C$25.00 in a report released on Wednesday. Macquarie’s price objective suggests a potential upside of 18.32% from the stock’s current price.

Top 10 Dividend Stocks To Watch Right Now: Laboratory Corporation of America Holdings(LH)

Advisors’ Opinion:

  • [By Joseph Griffin]

    Envestnet Asset Management Inc. reduced its position in shares of LabCorp (NYSE:LH) by 45.1% during the first quarter, HoldingsChannel.com reports. The fund owned 19,179 shares of the medical research company’s stock after selling 15,727 shares during the quarter. Envestnet Asset Management Inc.’s holdings in LabCorp were worth $3,116,000 at the end of the most recent reporting period.

  • [By Shane Hupp]

    These are some of the headlines that may have impacted Accern’s analysis:

    Get LabCorp alerts:

    $2.92 Earnings Per Share Expected for LabCorp (LH) This Quarter (americanbankingnews.com) Global Contract Research Organization Market 2018 Pioneers by 2023: Parexel, LabCorp (Covance), PRA, PPD … (theexpertconsulting.com) OmniSeq and LabCorp Launch OmniSeq Advance? Assay (nasdaq.com) LabCorp’s latest collaboration aims to accelerate personalized, genomic medicine (bizjournals.com) Can Laboratory Corporation of America Holdings (NYSE:LH) Continue To Outperform Its Industry? (finance.yahoo.com)

    LH has been the topic of several analyst reports. Barclays lifted their target price on shares of LabCorp from $195.00 to $210.00 and gave the stock an “overweight” rating in a research note on Monday, February 26th. They noted that the move was a valuation call. Zacks Investment Research raised shares of LabCorp from a “hold” rating to a “buy” rating and set a $190.00 target price on the stock in a research note on Friday, February 9th. Jefferies Group reaffirmed a “hold” rating and issued a $176.00 target price on shares of LabCorp in a research note on Tuesday, March 6th. ValuEngine raised shares of LabCorp from a “hold” rating to a “buy” rating in a research note on Friday, February 2nd. Finally, Morgan Stanley lifted their target price on shares of LabCorp from $182.00 to $192.00 and gave the stock an “overweight” rating in a research note on Wednesday, February 28th. Five research analysts have rated the stock with a hold rating, twelve have given a buy rating and two have assigned a strong buy rating to the stock. LabCorp has an average rating of “Buy” and an average target price of $191.06.

  • [By Joseph Griffin]

    Renaissance Technologies LLC trimmed its position in Laboratory Corp. of America Holdings (NYSE:LH) by 39.0% during the second quarter, according to its most recent 13F filing with the SEC. The fund owned 556,105 shares of the medical research company’s stock after selling 355,300 shares during the period. Renaissance Technologies LLC owned about 0.55% of Laboratory Corp. of America worth $99,838,000 as of its most recent filing with the SEC.

  • [By Joseph Griffin]

    Here are some of the headlines that may have impacted Accern Sentiment’s rankings:

    Get Laboratory Corp. of America alerts:

    Stock Traders Buy Large Volume of Laboratory Corp. of America Put Options (LH) (americanbankingnews.com) Credit Suisse Group Lowers Laboratory Corp. of America (LH) to Hold (americanbankingnews.com) Laboratory Corp. of America (LH) Set to Announce Quarterly Earnings on Wednesday (americanbankingnews.com) Can LaunchPad Aid LabCorp's (LH) Covance Arm in Q1 Earnings? (finance.yahoo.com) As Laboratory Corp Of America Holdings (LH) Shares Rose, Shareholder Veritas Investment Management Llp … (djzplanet.com)

    LH has been the subject of several research analyst reports. Craig Hallum restated a “buy” rating and set a $204.00 price target (up from $180.00) on shares of Laboratory Corp. of America in a research note on Wednesday, February 7th. Morgan Stanley upped their target price on Laboratory Corp. of America from $182.00 to $192.00 and gave the stock an “overweight” rating in a research report on Wednesday, February 28th. Zacks Investment Research downgraded Laboratory Corp. of America from a “hold” rating to a “sell” rating in a research report on Wednesday, January 3rd. Mizuho set a $178.00 target price on Laboratory Corp. of America and gave the stock a “hold” rating in a research report on Wednesday, January 24th. Finally, Robert W. Baird set a $183.00 target price on Laboratory Corp. of America and gave the stock a “hold” rating in a research report on Thursday, February 8th. Seven investment analysts have rated the stock with a hold rating, ten have assigned a buy rating and two have assigned a strong buy rating to the company. The company presently has an average rating of “Buy” and a consensus price target of $189.19.

  • [By Motley Fool Transcribers]

    Laboratory Corp Of America Holdings  (NYSE:LH)Q4 2018 Earnings Conference CallFeb. 07, 2019, 9:00 a.m. ET

    Contents:
    Prepared Remarks Questions and Answers Call Participants
    Prepared Remarks:

    Operator

  • [By Shane Hupp]

    Laboratory Corp. of America (NYSE: LH) and OpGen (NASDAQ:OPGN) are both medical companies, but which is the better business? We will compare the two companies based on the strength of their earnings, analyst recommendations, profitability, risk, valuation, institutional ownership and dividends.

Top 10 Dividend Stocks To Watch Right Now: Cellcom Israel Ltd.(CEL)

Advisors’ Opinion:

  • [By Ethan Ryder]

    Millicom (OTCMKTS: MIICF) and Cellcom Israel (NYSE:CEL) are both computer and technology companies, but which is the better business? We will contrast the two businesses based on the strength of their risk, valuation, dividends, institutional ownership, analyst recommendations, earnings and profitability.

  • [By Lisa Levin]

    Thursday afternoon, the health care shares rose 1.79 percent. Meanwhile, top gainers in the sector included Partner Communications Company Ltd. (NASDAQ: PTNR), up 8 percent, and Cellcom Israel Ltd. (NYSE: CEL) up 7 percent.

  • [By Lisa Levin]

    Thursday afternoon, the telecommunication services shares surged 0.58 percent. Meanwhile, top gainers in the sector included Intelsat S.A. (NYSE: I), up 5 percent, and Cellcom Israel Ltd. (NYSE: CEL) up 2.5 percent.

  • [By Stephan Byrd]

    Partner Communications (NASDAQ: PTNR) and Cellcom Israel (NYSE:CEL) are both small-cap computer and technology companies, but which is the superior stock? We will compare the two companies based on the strength of their earnings, analyst recommendations, institutional ownership, risk, valuation, profitability and dividends.

  • [By Ethan Ryder]

    Hellenic Telecom Organization (NYSE: CEL) and Cellcom Israel (NYSE:CEL) are both utilities companies, but which is the better investment? We will contrast the two businesses based on the strength of their profitability, earnings, valuation, risk, institutional ownership, dividends and analyst recommendations.

Top 10 Dividend Stocks To Watch Right Now: Amphenol Corporation(APH)

Advisors’ Opinion:

  • [By Max Byerly]

    WESPAC Advisors SoCal LLC reduced its position in shares of Amphenol Co. (NYSE:APH) by 3.1% during the 4th quarter, according to the company in its most recent filing with the Securities and Exchange Commission. The institutional investor owned 7,725 shares of the electronics maker’s stock after selling 250 shares during the period. WESPAC Advisors SoCal LLC’s holdings in Amphenol were worth $626,000 at the end of the most recent reporting period.

  • [By Ethan Ryder]

    Greenleaf Trust reduced its holdings in Amphenol (NYSE:APH) by 4.0% during the 1st quarter, according to its most recent disclosure with the Securities and Exchange Commission (SEC). The firm owned 17,234 shares of the electronics maker’s stock after selling 714 shares during the period. Greenleaf Trust’s holdings in Amphenol were worth $1,484,000 as of its most recent SEC filing.

  • [By Tom Gentile]

    The Amephenol Corp. (NYSE: APH) is an electronic and fiber optic manufacturing company in Connecticut. Late last month, on April 25, the company released their earnings and beat all expectations, including earnings per share and reported revenue.

  • [By Joseph Griffin]

    Aphria Inc (TSE:APH)’s share price shot up 14% during trading on Wednesday . The stock traded as high as C$20.36 and last traded at C$19.86. 16,904,801 shares changed hands during trading, an increase of 184% from the average session volume of 5,950,322 shares. The stock had previously closed at C$17.42.

  • [By Logan Wallace]

    Get a free copy of the Zacks research report on Amphenol (APH)

    For more information about research offerings from Zacks Investment Research, visit Zacks.com

Top 10 Dividend Stocks To Watch Right Now: Lorillard Inc(LO)

Advisors’ Opinion:

  • [By Shane Hupp]

    News articles about Lorillard (NYSE:LO) have been trending extremely positive recently, according to Accern Sentiment. Accern identifies negative and positive media coverage by analyzing more than twenty million news and blog sources in real-time. Accern ranks coverage of publicly-traded companies on a scale of negative one to one, with scores nearest to one being the most favorable. Lorillard earned a news impact score of 0.81 on Accern’s scale. Accern also gave news coverage about the company an impact score of 44.1727475800447 out of 100, indicating that recent media coverage is somewhat unlikely to have an effect on the stock’s share price in the next several days.

Top 10 Dividend Stocks To Watch Right Now: Tyco International Ltd.(Switzerland)

Advisors’ Opinion:

  • [By ]

    In addition to South Korea’s small ETF, there are a few funds traded in Europe that track Mexican assets. Here are the ones to watch:

    Xtrackers MSCI Mexico UCITS ETF (Germany)iShares MSCI Mexico Capped UCITS ETF USD (Switzerland)HSBC MSCI Mexico Capped UCITS ETF (U.K.)Kim Kindex MSCI Mexico ETF (South Korea)Stocks

    Some of the larger companies based in Mexico are dual listed in Europe. While trading in these securities is limited, there may be some movement in the European morning hours. Here are a few to watch:

Why Axon Enterprise, Mylan, and Weight Watchers International Slumped Today

The stock market spent most of the session in the red on Wednesday, but by the close, that was far from evident. The Dow Jones Industrial Average fell about 70 points, but other major indexes finished closer to unchanged as investors took solace in the continued strength of the U.S. economy. Even with that tailwind, some individual companies weren’t so fortunate, suffering from business-specific challenges that hurt their share prices. Axon Enterprise (NASDAQ:AAXN), Mylan (NASDAQ:MYL), and Weight Watchers International (NASDAQ:WTW) were among the worst performers. Here’s why they did so poorly.

Axon gets zapped

Shares of Axon Enterprise fell 8% after the Taser maker reported its fourth-quarter financial results. Axon saw a 21% rise in revenue, led higher by big gains in its cloud business and in sales from international sources. Bookings for its software and sensor offerings climbed by more than half as well, and other backward-looking metrics looked strong. However, top-line gains didn’t translate into as much earnings growth as investors had wanted to see, and shareholders also seemed put off by guidance for 2019, which includes sales projections for growth of just 14% to 17%. Axon will just have to prove that it can sustain faster growth if it wants to regain investors’ confidence.

Police officer with Axon branded body camera prominently displayed on upper torso.

Image source: Axon Enterprise.

Mylan doesn’t look well

Mylan saw its stock drop 15% following the release of the pharmaceutical giant’s fourth-quarter report. Revenue for the quarter was down 5% from the year-ago period, and adjusted earnings fell 9% on a per-share basis, closing a tough year for the company. Moreover, continuing manufacturing challenges at its West Virginia facility plagued Mylan, and even though the drugmaker hopes that 2019 will prove more promising, anticipated sales growth won’t necessarily translate into higher profit. In the long run, Mylan will have to show that investments in its research and development capabilities will pay off with blockbuster drugs.

Weight Watchers leaves investors confused

Finally, shares of Weight Watchers International plunged over 34%. The weight loss and wellness specialist reported a 6% rise in revenue in the fourth quarter of 2018, with adjusted operating income climbing 28%. But guidance for 2019 was extremely weak, with calls for $1.25 to $1.50 in earnings per share comparing terribly to the $3.19 per share that Weight Watchers posted in 2018. Early reads on the key January membership season also showed poor results, and the company’s name change to WW was badly communicated and confusing to customers. CEO Mindy Grossman still believes that changing the company’s emphasis from weight loss to wellness fits better with shifting consumer preferences, but with heavy competition in the industry, Weight Watchers can’t afford any further missteps in execution.

Exxon Mobil Co. (XOM) Stake Lessened by Cadinha & Co. LLC

Cadinha & Co. LLC lessened its stake in shares of Exxon Mobil Co. (NYSE:XOM) by 22.0% during the third quarter, according to the company in its most recent 13F filing with the Securities & Exchange Commission. The fund owned 27,472 shares of the oil and gas company’s stock after selling 7,750 shares during the quarter. Cadinha & Co. LLC’s holdings in Exxon Mobil were worth $2,336,000 as of its most recent SEC filing.

Other hedge funds and other institutional investors also recently made changes to their positions in the company. Swiss National Bank raised its position in shares of Exxon Mobil by 2.9% during the second quarter. Swiss National Bank now owns 15,058,036 shares of the oil and gas company’s stock valued at $1,245,751,000 after buying an additional 423,200 shares during the last quarter. Sumitomo Mitsui Trust Holdings Inc. raised its position in shares of Exxon Mobil by 8.2% during the second quarter. Sumitomo Mitsui Trust Holdings Inc. now owns 13,735,708 shares of the oil and gas company’s stock valued at $1,136,355,000 after buying an additional 1,045,871 shares during the last quarter. LSV Asset Management raised its position in shares of Exxon Mobil by 5.1% during the second quarter. LSV Asset Management now owns 9,895,042 shares of the oil and gas company’s stock valued at $818,616,000 after buying an additional 477,971 shares during the last quarter. Fisher Asset Management LLC raised its position in shares of Exxon Mobil by 4.1% during the third quarter. Fisher Asset Management LLC now owns 5,855,133 shares of the oil and gas company’s stock valued at $497,803,000 after buying an additional 228,513 shares during the last quarter. Finally, Bank of Montreal Can raised its position in shares of Exxon Mobil by 36.4% during the third quarter. Bank of Montreal Can now owns 5,317,473 shares of the oil and gas company’s stock valued at $452,092,000 after buying an additional 1,420,065 shares during the last quarter. 53.20% of the stock is currently owned by hedge funds and other institutional investors.

Get Exxon Mobil alerts:

Shares of XOM opened at $79.47 on Thursday. Exxon Mobil Co. has a fifty-two week low of $64.65 and a fifty-two week high of $87.36. The firm has a market capitalization of $332.30 billion, a P/E ratio of 16.12, a price-to-earnings-growth ratio of 1.75 and a beta of 0.90. The company has a current ratio of 0.83, a quick ratio of 0.54 and a debt-to-equity ratio of 0.10.

Exxon Mobil (NYSE:XOM) last posted its quarterly earnings data on Friday, February 1st. The oil and gas company reported $1.51 earnings per share for the quarter, beating the Zacks’ consensus estimate of $1.08 by $0.43. Exxon Mobil had a net margin of 7.18% and a return on equity of 10.89%. The business had revenue of $71.90 billion for the quarter, compared to analysts’ expectations of $78.87 billion. During the same quarter in the previous year, the business posted $0.88 earnings per share. The business’s revenue was up 8.1% compared to the same quarter last year. As a group, analysts anticipate that Exxon Mobil Co. will post 4.09 EPS for the current year.

The company also recently disclosed a quarterly dividend, which will be paid on Monday, March 11th. Shareholders of record on Monday, February 11th will be given a dividend of $0.82 per share. This represents a $3.28 dividend on an annualized basis and a yield of 4.13%. The ex-dividend date of this dividend is Friday, February 8th. Exxon Mobil’s dividend payout ratio (DPR) is 66.53%.

In other Exxon Mobil news, VP David S. Rosenthal sold 7,562 shares of the business’s stock in a transaction on Tuesday, December 4th. The shares were sold at an average price of $81.24, for a total transaction of $614,336.88. Following the transaction, the vice president now owns 258,250 shares in the company, valued at $20,980,230. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which is available at this hyperlink. Also, VP Robert N. Schleckser sold 7,855 shares of the business’s stock in a transaction on Friday, November 30th. The shares were sold at an average price of $78.91, for a total transaction of $619,838.05. Following the transaction, the vice president now owns 207,940 shares in the company, valued at approximately $16,408,545.40. The disclosure for this sale can be found here. Insiders have sold 58,587 shares of company stock worth $4,507,808 in the last quarter. Company insiders own 0.08% of the company’s stock.

Several equities research analysts have recently issued reports on XOM shares. HSBC reiterated a “buy” rating and set a $95.00 price objective on shares of Exxon Mobil in a research report on Tuesday, November 6th. Societe Generale set a $92.00 price target on shares of Exxon Mobil and gave the stock a “buy” rating in a research report on Tuesday, November 20th. Royal Bank of Canada set a $95.00 price target on shares of Exxon Mobil and gave the stock a “buy” rating in a research report on Friday, February 1st. Argus restated a “buy” rating on shares of Exxon Mobil in a research report on Wednesday, February 6th. Finally, Mizuho set a $77.00 price target on shares of Exxon Mobil and gave the stock a “hold” rating in a research report on Wednesday, November 28th. Three research analysts have rated the stock with a sell rating, twelve have given a hold rating and nine have issued a buy rating to the company’s stock. The company has a consensus rating of “Hold” and an average price target of $84.57.

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About Exxon Mobil

Exxon Mobil Corporation explores for and produces crude oil and natural gas in the United States, Canada/Other Americas, Europe, Africa, Asia, and Australia/Oceania. It operates through Upstream, Downstream, and Chemical segments. The company also manufactures petroleum products; manufactures and markets commodity petrochemicals, including olefins, aromatics, polyethylene, and polypropylene plastics, as well as various specialty products; produces transportation fuels, such as marine gasoil and diesel; and transports and sells crude oil, natural gas, and petroleum products.

Recommended Story: Outstanding Shares

Want to see what other hedge funds are holding XOM? Visit HoldingsChannel.com to get the latest 13F filings and insider trades for Exxon Mobil Co. (NYSE:XOM).

Institutional Ownership by Quarter for Exxon Mobil (NYSE:XOM)

Hot Low Price Stocks To Own Right Now

Source: ThinkstockUntil about 2008 or so, discussion about the future price of crude oil was directed by the concept of peak oil. That is, when does the world reach peak production, after which the price of crude will skyrocket. In less than a decade, the discussion is now focused on the concept of “peak demand,” the point at which global demand for crude begins to decline.

The recent Oil & Money conference in London sharpened the focus on peak demand. Saudi Arabia’s minister of energy and industry, Khalid Al-Falih, told conference attendees that cutbacks in capital spending on exploration, forced on the industry by low prices for the past two years, could mean that shortfalls in supply are coming.

Exxon Mobil Corp. (NYSE: XOM) CEO Rex Tillerson disagreed:

Hot Low Price Stocks To Own Right Now: Aceto Corporation(ACET)

Advisors’ Opinion:

  • [By Joseph Griffin]

    Aceto (NASDAQ: ACET) and PetIQ (NASDAQ:PETQ) are both small-cap medical companies, but which is the better business? We will contrast the two companies based on the strength of their risk, analyst recommendations, earnings, institutional ownership, valuation, dividends and profitability.

  • [By Shane Hupp]

    Aceto (NASDAQ: ACET) and PetIQ (NASDAQ:PETQ) are both small-cap medical companies, but which is the better stock? We will contrast the two businesses based on the strength of their profitability, dividends, earnings, valuation, risk, analyst recommendations and institutional ownership.

  • [By Chris Lange]

    Aceto Corp. (NASDAQ: ACET) saw its shares halved on Thursday after the company gave a critical update. There is a lot going on for Aceto in this update, and most of it is not good news. Amid credit negotiations there are also changes at the highest level of management, making this a tough pill to swallow.

  • [By Stephan Byrd]

    Aceto (NASDAQ:ACET) will be posting its quarterly earnings results after the market closes on Wednesday, September 12th. Analysts expect Aceto to post earnings of $0.26 per share for the quarter.

  • [By Lisa Levin]

    Check out these big penny stock gainers and losers

    Losers
    Prothena Corporation plc (NASDAQ: PRTA) shares dipped 69 percent to $11.48 after a disappointing update relating to the company's treatment for AL amyloidosis. Prothena, a clinical-stage biopharmaceutical company that focuses on therapies in the neuroscience and orphan categories, said a Phase 2b study of its therapy called NEOD001 failed to achieve its primary or secondary endpoints. Prothena's Phase 2b study explored its NEOD001 therapy versus a placebo in previously-treated patients with AL amyloidosis and persistent cardiac dysfunction.
    Gridsum Holding Inc. (NASDAQ: GSUM) fell 44.3 percent to $4.06. Gridsum reported suspension of audit report on financial statements.
    Flotek Industries, Inc. (NYSE: FTK) shares declined 34.1 percent to $4.16 as the company issued weak revenue forecast for the first quarter.
    Akorn, Inc. (NASDAQ: AKRX) dropped 32.3 percent to $13.35 after Fresenius terminated its merger deal with Akorn.
    Chicago Bridge & Iron Company N.V. (NYSE: CBI) fell 31.2 percent to $13.44. Subsea 7 made an unsolicited bid to buy McDermott for $7 per share. However, the acquisition offer is contingent on McDermot terminating its pending merger with Chicago Bridge & Iron.
    Controladora Vuela Compañía de Aviación, S.A.B. de C.V. (NYSE: VLRS) dropped 18 percent to $5.76. Controladora Vuela recently reported first-quarter results that showed a loss for the quarter. Imperial Capital downgraded Controladora Vuela Compania de Aviacion from Outperform to In-Line.
    Atossa Genetics Inc. (NASDAQ: ATOS) fell 18.2 percent to $2.8797 after declining 19.35 percent on Friday.
    Alcoa Corporation (NYSE: AA) fell 12.3 percent to $52.63.
    Luby's, Inc. (NYSE: LUB) shares declined 10.3 percent to $2.448 following Q2 results.
    Aceto Corporation (NASDAQ: ACET) shares tumbled 10 percent to $2.26.
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  • [By Lisa Levin]

    Aceto Corporation (NYSE: ACET) shares dropped 62 percent to $2.795 following announcement of financial challenges. The company has suspended further guidance and is evaluating strategic alternatives. Aceto also expects reduction in dividend moving forward. Canaccord Genuity downgraded Aceto from Buy to Sell.

Hot Low Price Stocks To Own Right Now: Capital Senior Living Corporation(CSU)

Advisors’ Opinion:

  • [By Logan Wallace]

    Barclays reissued their average rating on shares of Capital Senior Living (NYSE:CSU) in a research note released on Monday morning.

    Several other equities analysts have also issued reports on the company. ValuEngine lowered Capital Senior Living from a strong-buy rating to a buy rating in a research note on Thursday, December 27th. JMP Securities restated an outperform rating on shares of Capital Senior Living in a research note on Monday, December 31st. Finally, Zacks Investment Research upgraded Capital Senior Living from a hold rating to a buy rating and set a $8.75 price target on the stock in a research note on Monday, January 21st. Four research analysts have rated the stock with a hold rating and two have issued a buy rating to the stock. Capital Senior Living presently has a consensus rating of Hold and an average price target of $9.38.

  • [By Max Byerly]

    State of New Jersey Common Pension Fund D lessened its stake in shares of Capital Senior Living (NYSE:CSU) by 5.3% in the first quarter, Holdings Channel reports. The institutional investor owned 180,000 shares of the company’s stock after selling 10,000 shares during the quarter. State of New Jersey Common Pension Fund D’s holdings in Capital Senior Living were worth $1,935,000 as of its most recent filing with the SEC.

  • [By Joseph Griffin]

    Get a free copy of the Zacks research report on Capital Senior Living (CSU)

    For more information about research offerings from Zacks Investment Research, visit Zacks.com

  • [By Stephan Byrd]

    Media stories about Capital Senior Living (NYSE:CSU) have trended somewhat positive on Sunday, Accern Sentiment Analysis reports. The research firm rates the sentiment of press coverage by reviewing more than 20 million blog and news sources in real-time. Accern ranks coverage of companies on a scale of negative one to one, with scores nearest to one being the most favorable. Capital Senior Living earned a daily sentiment score of 0.01 on Accern’s scale. Accern also assigned press coverage about the company an impact score of 46.062391046142 out of 100, indicating that recent press coverage is somewhat unlikely to have an impact on the stock’s share price in the immediate future.

Hot Low Price Stocks To Own Right Now: Applied DNA Sciences Inc(APDN)

Advisors’ Opinion:

  • [By Logan Wallace]

    Media coverage about Applied DNA Sciences (NASDAQ:APDN) has trended somewhat positive on Monday, Accern Sentiment Analysis reports. The research firm rates the sentiment of press coverage by analyzing more than 20 million news and blog sources in real-time. Accern ranks coverage of public companies on a scale of -1 to 1, with scores closest to one being the most favorable. Applied DNA Sciences earned a daily sentiment score of 0.04 on Accern’s scale. Accern also assigned press coverage about the technology company an impact score of 47.7961768116482 out of 100, indicating that recent press coverage is somewhat unlikely to have an impact on the stock’s share price in the next several days.

  • [By Stephan Byrd]

    Applied DNA Sciences Inc (NASDAQ:APDN) shares rose 5.3% during mid-day trading on Wednesday . The company traded as high as $1.84 and last traded at $1.60. Approximately 2,707 shares were traded during mid-day trading, a decline of 98% from the average daily volume of 165,954 shares. The stock had previously closed at $1.52.

  • [By Shane Hupp]

    Ascent Capital Group (NASDAQ: ASCMA) and Applied DNA Sciences (NASDAQ:APDN) are both small-cap industrial products companies, but which is the superior stock? We will contrast the two businesses based on the strength of their analyst recommendations, valuation, dividends, risk, profitability, earnings and institutional ownership.

Hot Low Price Stocks To Own Right Now: Morgan Stanley Asia-Pacific Fund, Inc.(APF)

Advisors’ Opinion:

  • [By Stephan Byrd]

    Peel Hunt upgraded shares of Anglo Pacific Group (LON:APF) to a buy rating in a report released on Tuesday morning. Peel Hunt currently has GBX 190 ($2.53) target price on the stock, up from their previous target price of GBX 181 ($2.41).

Is Marijuana Stock GW Pharmaceuticals a Buy Following Its Quarterly Results?

GW Pharmaceuticals (NASDAQ:GWPH) has the distinction of being the only company to secure Food and Drug Administration (FDA) approval for a cannabidiol (CBD) marijuana therapy. The company’s Epidiolex won the FDA green light last summer after demonstrating it reduces seizures in epilepsy patients. GW Pharmaceuticals launched Epidiolex in November after it received the most favorable Drug Enforcement Agency scheduling possible. On Tuesday, management unveiled results, including Epidiolex’s initial commercial performance. Is this pot stock a buy?

What it does

Epidiolex is a purified CBD that’s secured regulatory approval for use in patients with Dravet syndrome and Lennox-Gastaut syndrome (LGS), two tough-to-treat forms of epilepsy. Patients with Dravet syndrome or LGS often don’t respond to existing antiepileptic therapies, making new treatment options like Epidiolex particularly important.

Marijuana growing at a GW Pharmaceuticals greenhouse.

IMAGE SOURCE: GW Pharmaceuticals.

In trials involving patients who had tried and failed on existing antiepileptic medications, using Epidiolex reduced seizure frequency from between 40% and 50%.

The commercial opportunity is big

The addressable market of Dravet and LGS patients is relatively small at about 35,000. However, Epidiolex costs $32,500, and many more patients suffering from resistant forms of epilepsy could someday benefit from its use.

There are about 3.4 million Americans with epilepsy, 470,000 of whom are children, and approximately one-third of those patients are inadequately treated by traditional antiepileptic medications.

The need for new treatment alternatives for patients has helped GW Pharmaceuticals overcome payer objections. In January, the company said 22 million people covered by Express Scripts drug formulary could access Epidiolex without prior authorization and that four of the five biggest commercial insurers have initiated coverage of Epidiolex after prior authorization.

How’d it do?

On Feb. 26, GW Pharmaceuticals unveiled results for the quarter ending Dec. 31. In the period, the focus was on educating doctors about Epidiolex’s risks and benefits, yet sales still clocked in at $4.7 million.

That’s not a lot, but sales could grow meaningfully in 2019. About 4,500 patient enrollment forms were filled out in the drug’s first two months, and over 500 doctors have already written a prescription. In January, filled prescriptions grew 150% from December 2018.

A man looks through binoculars.

IMAGE SOURCE: GETTY IMAGES.

What to watch next

Prescription renewal rates and new prescription trends will be key to track in 2019. If patients are refilling and doctors demonstrate their confidence by writing increasingly more scripts, then it would add credence to the thinking that Epidiolex can generate sales in the nine figures or higher someday.

Investors will also want to watch for phase 3 data from a trial evaluating Epidiolex in tuberous sclerosis complex (TSC). Epilepsy is the most common symptom of TSC, and there are about 25,000 TSC patients who could benefit from Epidiolex if its trial pans out. Results from this study are anticipated in the second quarter. If successful, a filing for approval in TSC is planned before the end of 2019.

Epidiolex’s commercial opportunity could expand sooner than that, though. The European Union is expected to weigh in with a go/no-go decision on Epidiolex in the coming months. If approved, management hopes to launch it in France, Germany, Italy, Spain, and the U.K. this year.

Overall, Epidiolex is off to a solid start, but a lot still needs to happen for GW Pharmaceuticals to transition into a profitable drugmaker. At $80 million, the company’s operating expenses far outstripped its revenue, resulting in a net loss of $72 million last quarter. Therefore, only aggressive investors who can withstand the risk of ongoing losses ought to consider adding this company to their portfolio following these results.

The Bank of Nova Scotia (BNS) Q1 2019 Earnings Conference Call Transcript

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Image source: The Motley Fool.

The Bank of Nova Scotia (NYSE:BNS) Q1 2019 Earnings Conference CallFeb. 26, 2019 7:30 a.m. ET

Contents:
Prepared Remarks Questions and Answers Call Participants
Prepared Remarks:

Philip Smith — Senior Vice President of Investor Relations

Good morning, and welcome to Scotiabank’s 2019 first-quarter results presentation. My name is Philip Smith, senior vice president of investor relations. Presenting to you this morning is Brian Porter, Scotiabank’s president and chief executive officer; Raj Viswanathan, our chief financial officer; and Daniel Moore, our chief risk officer. Following our comments, we’ll be glad to take your questions.

Also present to take questions are Scotiabank’s business line group heads: James O’Sullivan from Canadian banking; Nacho Deschamps from international banking; and Jake Lawrence and James Neate from global banking and markets. Before we start, and on behalf of those speaking today, I will refer you to Slide 2 of our presentation, which contains Scotiabank’s caution regarding forward-looking statements. With that, I will now turn the call over to Brian Porter.

Brian Porter — President and Chief Executive Officer

Thank you, Phil, and good morning, everyone. I will be starting on Slide 4. During the first quarter, we demonstrated continued progress in the execution of our strategy by achieving several important objectives, which position us for further growth, simplify our footprint and operations and derisk the bank. This morning, we advance the strategy even further by announcing that the bank has signed a non-binding Memorandum of Understanding to combine Thanachart Bank with Thai Military Bank.

This transaction, if completed, would allows us to monetize most of our investments in Thanachart Bank and increase our common equity Tier 1 ratio while retaining a smaller equity interest in a larger, stronger combined bank. In terms of our financial performance in the quarter, the bank delivered adjusted earnings of $2.3 billion and diluted earnings per share of $1.75. Our return on equity was 13.7%. Based on these results, we are increasing our quarterly dividend to shareholders by $0.02 to $0.87 per share.

This represents a 6% increase over the prior year. While market volatility negatively impacted some of our businesses in the quarter, we still experienced strong growth in revenue, up 7%, assets up 12% and deposits up 9% on a year-over-year basis while continuing to invest in our businesses. international banking delivered double-digit earnings growth and positive operating leverage. Our capital ratios continue to be strong, and our integration efforts are tracking very well.

This growth allowed the bank to reach $1 trillion in assets for the first time. I would like to thank our customers for their trust and loyalty and our employees for their dedication and hard work in achieving this important milestone. Higher expenses reflected the impact of acquisitions and continued investment in our businesses. We also demonstrated good progress integrating previously announced acquisitions.

BBVA Chile and MD Financial are experiencing excellent retention of both clients and assets, and synergies are being realized, as we have previously outlined. These efforts remain key bank priorities for the balance of the year. Raj will have more to say on our integration progress in a moment. To recap, over the last five years, we have invested strategically to increase our scale and market share across our key markets in Canada and the Pacific Alliance while improving earnings growth and asset quality.

We have simplified the bank by selling our operations in 18 countries that were either rated non-investment grade or unrated while redeploying capital in higher-rated, investment-grade jurisdictions such as Canada and Chile. In addition to divestitures, we announced last fall we were selling our pension and insurance business in the Dominican Republic and our banking operations in El Salvador. Finally, we have consistently invested in technology and strengthened the core functions of the bank. These include investments in the digitization of the bank, investments in AML and cybersecurity to protect the bank and our customers.

As we continue to execute our strategy, the bank will be better positioned for consistent long-term growth and improve shareholder returns. Turning to our business lines, I’d like to make a few brief comments. The Canadian bank had strong loan and deposit growth and good credit quality. We saw some signs of moderation in mortgage growth, in line with the low end of our guidance range given the pull forward of demand in the same period last year due to the B20 guidelines.

The competitive environment remained strong and mortgage spreads were very tight during the quarter. Wealth management also demonstrated solid growth with net income up 7% year over year and stable asset levels in the quarter despite volatile markets, with good contribution from our acquisitions. Our private banking segment was a highlight, demonstrating very strong growth compared to last year. Importantly, the quality of our overall wealth management business was recognized by a record number of industry performance awards in the first quarter.

International banking’s strong performance continued in the first quarter with earnings increasing 18% and delivering positive operating leverage. Our acquisitions are continuing — are contributing to the growth, in line with our expectations. We are seeing positive fundamentals in the Pacific Alliance countries. Capital markets volatility was challenging for the industry in both Canada and the U.S., and this directly impacted our origination and secondary trading businesses within our global banking and markets business.

Despite these conditions, we delivered strong corporate loan growth in the quarter, and the better results overall in January support our outlook for stronger results over the remainder of the year. Our digital strategy continues to progress well with steady progress in digital retail sales and digital adoption. We recently announced the establishment of a FinTech accelerator in Mexico City, which will develop solutions in a variety of areas, including data analytics, electronic payments and cybersecurity. This represents yet another example of our leadership in digital banking and our commitment to technology.

The bank remains well capitalized with a common equity Tier 1 ratio of 11.1% or 11.2% on a pro forma basis. The monetization of our interest in Thanachart Bank would further increase our capital position by approximately 25 basis points and provide even greater flexibility for capital deployment. While economic growth in Canada has moderated slightly, unemployment levels remain below 6%, and we see continued wage growth, job creation and immigration, which is positive for the Canadian economy. We remain constructive on our economic outlook for the balance of the year.

Across the Pacific Alliance, we continue to see a positive economic outlook with GDP growth averaging 3% across the region for the balance of the year. In summary, the quarter’s performance reflects continued progress in the execution of our strategy. I’ll now turn the call over to Raj to update you on our recent acquisitions.

Raj Viswanathan — Chief Financial Officer

Thanks, Brian. I’ll begin on Slide 6, which provides a brief progress update on the integration and synergies associated with our recent material acquisitions of BBVA Chile and MD Financial. Client retention rates at MD Financial are ahead of plan with 98% of both assets and clients so far, which speaks to the continued high levels of client trust with MD Financial. Employee satisfaction also remains high, and we’ve experienced minimal advisor attrition.

We had over 1,600 cross-referrals between Scotiabank and MD Financial since September 2018. With regards to BBVA Chile, we have captured approximately 45% of our total target synergies to date and remain on track to achieve total pre-tax synergies of $1,150 million to $1,180 million per year by 2020. Our existing operations in Chile with BBVA Chile has resulted in increased loan market share of approximately 16 basis points year over year. Client attrition is tracking well below our expectations, which were 5% in retail and 10% in commercial.

Overall, we remain on track to achieve our targeted accretion of $0.15 to adjusted diluted EPS in 2020 for acquisitions that we announced in 2018. Turning now to the Q1 ’19 key financial performance on Slide 7. All of my comments will be on an adjusted basis, which excludes acquisition-related costs. We’re pleased with the bank’s solid start to 2019, particularly in light of the market volatility that negatively impacted our global banking and markets businesses.

The bank delivered $2.3 billion in earnings and diluted EPS of $1.75 for the quarter, down 6% compared to last year. Excluding the impact of the remeasurement benefit of $150 million or $0.12 per share in Q1 2018, adjusted diluted EPS was in line year over year. Revenues increased 7% from last year, driven by solid growth in both net interest and non-interest income, including the benefit from acquisitions. As noted earlier, challenging industry market conditions negatively impacted our capital markets revenue-related revenues, which reduced all bank revenue growth by approximately 2%.

Net interest income was up 9%, about two-thirds from acquisitions and the rest from volume growth. In addition to continued residential mortgage volume growth in Canadian banking, business lending grew double digits and credit cards grew high single digits. In the Pacific Alliance, we saw double-digit growth in both commercial and retail loans as well as strong corporate loan growth in global banking and markets. The core banking margin was down 1 basis point versus last year due to the change in business mix from the impact of international banking acquisitions and higher margins in Canadian banking.

This was offset by lower margin in global banking and markets and asset/liability management activities. Non-interest income grew 6% compared to last year. This growth was driven by strong contribution from acquisitions, income from associated corporations, insurance revenues as well as the impact of the gain on a foreclosed asset in international banking and the alignment of the reporting period of Peru with the bank this quarter. Partly offsetting were lower trading revenues, advisory fees and impact of the new revenue accounting standard, which requires COG-related expenses to be offset against COG-related revenues applied prospectively.

Expenses were up 18% year over year. Acquisitions and the prior-year benefit remeasurement, and the impact of the new revenue accounting standard contributed approximately two-thirds of this expense growth. The remaining growth related to increased investments in technology and regulatory initiatives, higher share-based payments costs, business growth-related expenses and the negative impact of foreign currency translation. The bank’s productivity ratio increased to 54.1%.

Adjusting for the acquisition-related costs and the impact of the prior-year benefits remeasurement credit, the productivity ratio was up 220 basis points. The credit quality of our portfolios remained solid with a PCL ratio on impaired loans of 47 basis points, up 4 basis points from last year. There were net provisions on performing loans of $9 million and, when combined with provisions on impaired loans, resulted in a total PCL ratio of 47 basis points. Our tax rate was in line with last quarter due to higher tax benefits in a number of jurisdictions.

The effective tax rate is expected to be in the lower end of our outlook through the remainder of 2019. On Slide 8, we provide an evolution of our CET 1 capital ratio over the last quarter. The bank’s strong internal capital generation of 28 basis points was deployed in organic growth and the growth in risk-weighted assets. This quarter, the bank’s capital ratio was impacted 9 basis points by the remeasurement of employee pension and post-retirement benefits largely due to the decline in the discount rate by 40 basis points.

Risk-weighted assets increased by approximately $8 billion or 2% primarily due to strong organic asset growth across our businesses and the impact of foreign currency translation. During the quarter, we repurchased 3.25 million shares at $71.93 per share. Since June 2018, under the current NCIB, we have purchased 9.23 million shares. Including the pro forma impact of all announced acquisitions and select non-core dispositions yet to close, the CET1 ratio is expected to be 11.2%.

We are pleased with the pace of capital results, driven by strong internal capital generation and the divestitures that will improve the bank’s CET1 ratio to exceed 11.5% by end of fiscal 2019. As Brian mentioned earlier, the monetization of our significant investment in Thanachart Bank would further increase our pro forma CET1 ratio by approximately 25 basis points. Turning now to the business line results beginning on Slide 9. Canadian banking reported net income of $1.1 billion, down 3% year over year or down 2% adjusting for the impact of acquisition-related costs.

Revenues were up 3% from last year, including strong contributions from acquisitions. Net interest income grew 5% due to improved spreads and volume growth. Residential mortgages grew 3%, business loans a strong 10% and personal loans at 3%. Deposits grew by 9% with personal deposits growing at 7% and non-personal deposit at a strong 12%.

For the second straight quarter, deposit growth outpaced asset growth. The net interest margin was up 3 basis points year over year primarily due to the impact of prior Bank of Canada rate increases and business mix. Sequentially, margins were down 1 basis point, reflecting competitive pricing pressures and slightly higher funding costs. Non-interest income was up 1% due to higher fee income, driven by the wealth acquisitions and higher credit fees.

These were mostly offset by lower net card revenues due to the adoption of the new revenue accounting standard, which reduced both non-interest income and expenses by approximately $55 million; lower gains on sale of real estate; and the prior-year interact reorganization gains. Wealth management adjusted earnings increased by 6% year over year, driven by strong contributions from the MD Financial and JF acquisitions. Global asset management has leveraged strong foundational growth and momentum to strengthen their collective businesses in Q1 2019. In global asset management, ScotiaFunds is ranked No.

1 among the banks for one-year and three-year performance. And combined with Dynamic Funds, 94% of Scotia and Dynamic Funds assets were in the top two quartile in 1-year returns. ScotiaMcLeod was ranked No. 1 in revenue and No.

1 in assets per advisor, and Scotiatrust was ranked No. 1 in trust and foundation assets and Total Estate revenue for the full year by Investor Economics. Provision for credit losses were up $23 million. Higher provision on impaired loans was primarily due to higher provision on one commercial account.

Provision on performing loans increased in line with asset growth. On an adjusted basis, expenses increased 7% year over year with half of the growth driven by acquisitions and the adoption of the new revenue accounting standard. The balance of growth was driven by higher investment in regulatory initiatives, digital and technology, partly offset by the benefits from cost reduction initiatives. The division’s adjusted productivity ratio was 50%.

Turning to the next slide on international banking. On a reported basis, earnings of $782 million in Q1 ’19 were up 16% year over year, while adjusted earnings of $805 million were up 19% year over year. 6% of the adjusted earnings growth related to the alignment of the reporting period of Peru with the bank this quarter. My comments which follow are on an adjusted and constant currency basis.

Q1 results reflected strong asset and deposit growth in the Pacific Alliance, including the benefit of recent acquisitions, positive operating leverage and good credit quality. The Pacific Alliance had very strong net income growth of 23%, driven by strong loan and deposit growth. The results benefited from a strong performance in Chile, Mexico and Colombia. Revenues grew a strong 22%, of which approximately half was driven by recently closed acquisitions.

The Pacific Alliance had an increase of 31% in revenue year over year. Loans grew by 29% compared to a year ago. Loan growth in the Pacific Alliance region increased 44% year over year, including acquisitions in both retail and commercial in Chile and Colombia. Mexico and Peru had strong, double-digit loan growth.

Net interest margin of 4.52% was down 14 basis points year over year primarily due to the business mix impact of the BBVA acquisition, as we previously indicated. Quarter over quarter, the margin was stable. The provision for credit loss ratio on impaired loans decreased 2 basis points year over year, while provision on performing loans increased by $21 million, in line with asset growth and due to lower commercial provision last year. Expenses were up 18% with approximately two-thirds driven by acquisitions.

The remaining increase was driven by business volume growth and inflation. Operating leverage was a strong positive 4.2% for the quarter, leading to an improvement in the productivity ratio of approximately 180 basis points. Excluding the alignment of the reporting period of Peru with the bank this quarter, operating leverage was positive 2.1%, and the improvement in the productivity ratio was approximately 90 basis points. Moving to Slide 11, global banking and markets.

Net income of $335 million was down 26% year over year, significantly impacted by lower market-sensitive revenues given the industry conditions. Lower trading revenues, primarily in interest and credit trading, and higher non-interest expenses were partly offset by the favorable impact of foreign currency translation, reversal of provision for credit losses and slightly lower taxes. Revenues were down 10% year over year, mainly reflecting lower non-interest income. Non-interest income was down 12% year over year primarily due to lower client-driven, trading-related revenues that were down approximately $90 million.

This was partly offset by higher fee income. Net interest income was down 5% versus last year due to lower lending margins primarily due to lower loan origination fees. Margins, however, were up a strong 8 basis points compared to last quarter. Profit loan growth was strong, up 8% quarter over quarter and 15% year over year.

The strong growth in lending in our corporate book was primarily due to M&A activity in the U.S. Approximately 90% of the growth in lending volumes this quarter was to investment-grade corporates. The PCL ratio improved 3 basis points year over year. The improvement was primarily driven by reversals on performing loans due to improving credit quality in the energy portfolio.

Expenses were up 13% year over year, driven by higher regulatory and technology investments, share-based compensation and the favorable impact of foreign currency translation. I’ll now turn to the other segment on Slide 12, which incorporates the results of Group Treasury, smaller operating units and certain corporate adjustments. The results also include the net impact of assets and liability management activities. The other segment reported a net loss of $54 million this quarter.

The net loss in this segment versus net income last year was due to higher non-interest expenses as Q1 ’18 benefited from the benefits remeasurement credit, lower gains on the sale of investment securities and lower contributions from asset/liability management activities, which were driven by margin compression on high-quality, liquid assets. This was partly offset by higher tax benefits this quarter. This completes my review of our financial results. I’ll now turn it over to Daniel, who will discuss risk management.

Daniel Moore — Chief Risk Officer

Thank you, Raj. And I’ll turn to Slide 14. In summary, we continue to be comfortable with the risk fundamentals of our portfolio. That’s because underlying credit quality trends are stable across our retail and across our commercial portfolios in Canada and, indeed, across our Pacific Alliance countries.

For instance, in Canada, we continue to see improving delinquency rates in all geographies and products. We believe this performance is attributable to our focus on high-quality A- and B-grade customers. The bank continues to make tangible investments across our selection capabilities and in our data analytics capabilities to better segment our customers with preapprovals and credit limit increases as well as credit limit reductions where necessary. As well, we continue to perform ongoing stress testing, which considers factors such as concentrated clients, higher interest rates, unemployment as well as the impact of higher trade tensions across global economies.

These capabilities, along with our diversified geographic and product footprint, position us well for a variety of macroeconomic outcomes. Turning now to the quarter. Our PCL ratio on impaired loans, or what is referred to as Stage 3, came in at 47 basis points, up 5 basis points compared to last quarter and 4 basis points relative to last year. This growth was in line with portfolio growth and change in business mix as international, which has a higher PCL ratio than global banking and markets and Premium Banking, now comprises a larger portion of our total portfolio due to recent acquisitions.

The total PCL ratio was up 8 basis points versus last quarter, reflecting higher performing and impaired PCL. The increase in performing loan PCL this quarter was primarily due to higher provisions in international banking, which benefited last quarter from the reversal of hurricane-related provisions. The increase in impaired provisions, on the other hand, was due to lower recoveries in Canadian retail and one specific Canadian commercial account. Overall, we see continued strength in our Canadian personal and commercial Banking businesses relative to last quarter, which benefited from higher recoveries.

Higher domestic commercial impaired provisions this quarter were driven mainly by the one client fraud-related specific syndicated commercial account I just mentioned. Moving on to international banking. We continue to see good credit quality trends and the benefits of our diversification. Lower commercial impaired losses were due to Barbados debt restructuring charge last quarter while retail impaired losses remained relatively flat.

In global banking and markets, recoveries in the performing portfolio were driven by continued improvement in the U.S. energy book. And given our focused operations in Europe, we do not see any material impact to the bank related to Brexit. Looking now at other credit metrics.

Gross impaired loans increased modestly to $5.3 billion from $5.1 billion last quarter, but the gross impaired loans ratio remains generally flat versus last quarter and down compared to a year ago. Our net formations of $941 million were above the 2-year average. The increased formations were partially driven by global banking and markets in Europe and the U.S. as well as in our P&C business and were partly offset by lower commercial formations.

Turning now to Slide 15. You can see here the recent trend in loss ratios for each of our businesses. Our overall trend is stable, which we expect to continue over the balance of the year. We believe our credit portfolios continue to reflect the benefits of broad diversification, and underlying performance remained strong.

I would highlight the quarter-over-quarter increase in Canadian banking was driven in part by the provision on that one specific client fraud-related commercial account. And similarly, the quarter-over-quarter increase in international banking was also due to commercial PCLs but, in this case, driven by the reversal of previously recorded hurricane-related provisions in the Caribbean that are no longer in here. GBM continued to see reversals from corporate energy-related disposals. Turning now to Slide 16.

You can see the recent trends in net write-off ratios for each of our businesses. Looking over the last five quarters, our net write-off ratio has been relatively stable with a small impact in international banking from the previously recorded 1-month reporting lag in Peru and acquisitions. And we would expect that stable trend to continue. In summary, we continue to see the benefits of our diversified business model and our investments in digital and analytics, as evidenced by our stable PCL ratios, by our stable delinquency rates and by our stable net write-offs.

We remain confident in the credit quality of our portfolio. I’ll now turn the call back over to Brian for closing remarks.

Brian Porter — President and Chief Executive Officer

Thank you, Daniel. Before we open the call for questions, I’d like to make a few comments on the bank’s strategic progress to date and where we are headed. Regarding the announcement today on the Thanachart Bank, it marks a major step in the repositioning of the bank’s geographic footprint that began five years ago. During this period, we have announced or completed the sale of our operations in 18 countries and sold five non-core businesses while simultaneously gaining scale in our key markets and businesses, improving the quality of our earnings, building capital and greatly improving our technology and controls.

The collective management actions results in a better, lower-risk bank with focused operations. We are better positioned to provide excellent products and services to our customers and a stronger return to our shareholders. As I discussed previously in 2019, we will be focused on the integration of our recent acquisitions. If completed, the sale of Thanachart Bank would provide the bank with greater optionality, which includes growing our key operations in the Americas.

With that, I’ll now turn the call back to Raj.

Raj Viswanathan — Chief Financial Officer

Thanks, Brian. That concludes our prepared remarks, and we’ll now be pleased to take your questions. [Operator instructions] Operator, can we have the first question on the phone, please? 

Questions and Answers:

Operator

Yes, sir. We’ll first go to Robert Sedran with CIBC Capital Markets.

Robert Sedran — CIBC Capital Markets — Analyst

Hi, good morning. I wanted to ask about expenses and, I guess, both in Canada and in the global banking and markets segment, and maybe start with James. Just the operating leverage guidance for the year was better, I guess, than what we saw in Q1. Can you give us a bit of an update on what you’re thinking? And then on the global banking side, a pretty big surge in expenses, an the explanation is the same on both slides, the technology and regulatory spending.

Just curious if there’s something abnormal in that global banking and markets number in this quarter.

James O’Sullivan — Group Head, Canadian Banking

All right, well, I’ll start then with domestic banking, Rob. And good morning. So expense growth in domestic banking was 2% year over year. There is an IFRS 15 impact there, so adjusted for IFRS 15, expense growth was at 16%.

We do expect it to moderate from here. We have what I would describe as a bit of a tough comp from this time last year. So our perspective on expenses is that expense growth will take their cue from revenue growth, and that’s how we’re thinking about the balance of the year. In terms of operating leverage, we did have negative operating leverage for the quarter.

But I think with the productivity ratio of 46% for the quarter in our domestic banking business, I think we pretty clearly have our medium-term target of 45% or better in sight, and that’s what we’re gunning for.

Raj Viswanathan — Chief Financial Officer

I’ll start on GBM, Rob. It’s Raj. year over year, yes, expense growth was up as a percentage, 13%. But as you can see, it’s off a very small base.

And GBM has got a lot of regulatory and technology investment ongoing simply because of the markets that we operate in, the fact that we need to predict the parameter of the bank, and a lot of those relating to either regulatory changes or AML related. And Jake, I don’t know if you want to add some more on that.

Jake Lawrence — Head-Global Banking & Markets

Yes, Rob, quarter over quarter, we also had some seasonality in performance-related compensation, but we’re more confident in the revenue outlook from here, which will drive a better operating leverage picture as we go over the course of 2019.

Raj Viswanathan — Chief Financial Officer

And I think specifically on the expense, Rob, for GBM, we expect it to moderate toward the second half of the year. It’s a lot of investments in the early part of the year, frankly starting from the second half of last year, but we expect it to moderate in the second half of this year.

Robert Sedran — CIBC Capital Markets — Analyst

Because when I look at the slide pack, Raj, I see it almost $100 million higher than in Q3 and Q4 of last year. That’s — I understand it’s off of a smaller base, but $100 million is still a fair bit of a move. So I appreciate the comments around seasonality, but I was just curious if there’s something that I’m missing on that front. But I guess I’ll — we’ll move on.

Thank you.

Raj Viswanathan — Chief Financial Officer

OK. Operator, can we have the next question on the phone, please.

Operator

Yes, sir. We’ll next go to Meny Grauman with Cormark Securities.

Meny Grauman — Cormark Securities — Analyst

Hi, good morning. Just wanted to dig a little bit deeper into revenue growth in Canadian banking, especially when we look excluding wealth management flat year over year and down sequentially. So just wondering if there’s any thing unusual there that you’d highlight. And then if you look forward, what is the — what do you expect to improve for the rest of the year? Or do you expect this picture to improve for the rest of the year?

James O’Sullivan — Group Head, Canadian Banking

Yes, sure. Thanks, Meny. So again, if you adjust for the impact of IFRS 15 and the impact of reduced onetimes, because we did have an Interact gain this time last year and meaningful real estate gains as well, if you adjust for those two, revenue growth is about 4%. And I’d say the balance, the difference between that and what we might have expected for Q1 I would describe as business conditions, including volumes and spreads.

Volumes were lower than planned, and margins were tighter than planned. But we have a positive outlook, Meny. November and December, I think, were months of peak volatility in markets. Clearly, markets have recovered.

We think normalcy is returning to the business environment as well, and that really forms the basis of our outlook. We think job creation is going to continue, and that’s going to drive consumer borrowing. So for revenue growth, we expect it to improve from here, particularly, I would say, in the second half of the year. And again, I think it’s improving macro and the reduced impact of onetimes are going to drive that revenue growth.

Meny Grauman — Cormark Securities — Analyst

And just on a related question, I know that there’s a report that the federal budget is going to include some easing of mortgage rules. Where do you stand on that issue? And do you factor that into your outlook in terms of maybe seeing even an acceleration in mortgage business related to that?

James O’Sullivan — Group Head, Canadian Banking

Yes, so residential mortgage growth came in at 3% on a year-over-year basis, as it did last quarter. I think there are some really important information for all of us just around the corner, and that information is going to come to us in the spring housing market, which should start in the coming weeks. And we’re positioning ourselves, Meny, for that market. We want to be a strong participant in it.

So as we sit here today, our goal would continue to be four-or-so mortgage growth for the full year. And as we’ve said before, we feel much better about Canada’s housing markets today than we did 24 months ago. We continue to believe that we’re getting the soft landing that many of us have encouraged. And I think if you look at the latest data from the Canadian Real Estate Association, or the MLS data, I think it’s consistent with that view.

Home sales are down 4% year over year, but the Home Price Index is up 1%. So we look at the market, and we see strong housing demand fundamentals. So that’s low unemployment, tight labor markets pretty much across the country, aging millennials and strong immigration. So we think fundamentals can and will drive the market forward, and we were particularly impressed with the January employment data.

So look, just around the corner is the spring housing market. We think that’s a very important data point for everyone associated with this industry.

Meny Grauman — Cormark Securities — Analyst

Thank you.

Raj Viswanathan — Chief Financial Officer

Operator, can we have the next question on the phone, please.

Operator

Yes, sir. Next we’ll go to Doug Young with Desjardins Capital Markets.

Doug Young — Desjardins Capital Markets — Analyst

Hi, good morning. I guess maybe just a two-part question on the international banking side, but it should be fairly quick. Just, one, if I do the back of the envelope, it looks like Peru earnings actually declined year over year. Correct me if I’m wrong.

And if that’s the case, just wanted little bit more detail. And then in the past, you’ve given what BBVA Chile contributed earnings-wise. Just wanted to know if you would be willing to give that number for Q1.

Nacho Deschamps — Group Head, International Baking

Sure, let me — this is Nacho. Let me tell you first about Peru. Peru had a softer quarter this Q1. And let’s remember Peru growth was 50% of earnings last year, and we continue to — Peru’s outlook to be positive.

They had a very positive loan growth. Retail loans grew 4%. And we expect the economy to grow in Peru 4% in 2019. So overall, we see stronger revenue growth, stronger loan growth and activity going forward.

And the — I would say the reason for the year-over-year comparison, we had a significant capital market gains last year and treasury results. In terms of Chile, we are very pleased with the integration of Chile. And I would say the most important data point there is that the combined entity, which is 14%, grew 16 — or 15 bps market share by the end of last year. We have captured $30 million in pre-tax synergies, which is $70 million run rate.

I mentioned that during the first year, we had expected to pick up NIAT between $50 million and $70 million. I can tell you that I’m confident now we will be above $70 million of NIAT during the first year. And the integration from a technology perspective is on track and on budget. We expect to conclude it by the end of this year.

Doug Young — Desjardins Capital Markets — Analyst

Great. Thank you.

Raj Viswanathan — Chief Financial Officer

Operator, can we have the next question on the phone, please.

Operator

Yes, sir. Next question comes from Gabriel Dechaine with National Bank.

Gabriel Dechaine — National Bank Financial — Analyst

Good morning. A couple of quick ones here. Corporate loan book, you had the big growth number. I’m just wondering what the visibility or timing of ancillary fee revenue generation from that balance sheet growth.

Then on the card fees, the expense — card expenses, I guess they moved up higher. We also saw balances move higher. Is there a relationship there? And when do you expect the expenses maybe moderated, maybe some promotions fade?

Jake Lawrence — Head-Global Banking & Markets

Hey, Gabe, it’s Jake. I’ll talk to the first piece. Yes, we did have strong corporate loan growth. As Raj noted in his comments, 90% of the growth was investment grade, so we’re not compromising credit quality.

Some of the transactions that led to the growth were — was existing customers and some was M&A related. I mean, we expect the ancillary and capital markets related to show up likely in the second half of this year is the expectation.

James O’Sullivan — Group Head, Canadian Banking

On credit cards, average balances are up about 7% year over year. I think purchase volumes are up about 9%. Our Tangerines card balances, by the way, are up a very strong 39% year over year. In terms of movements in revenue and expenses, we would have to adjust for the impact of IFRS 15.

That’s where the bulk of the IFRS 15 impact resides.

Gabriel Dechaine — National Bank Financial — Analyst

I know, but on the expense line there, it’s up quite a bit year over year, the card expenses. So — but I don’t think that’s an IFRS 15 item, what you incurred on promotional and loyalty costs, is it not?

Raj Viswanathan — Chief Financial Officer

Yes, I think — yes, card expenses have been slightly elevated, but it also includes our international bank card offerings, I think, Gabe, the number you were referring to which is not suspect. And I wouldn’t say anything unusual over there. It’s primarily volume driven over there and specific promotions which we’ve had in multiple parts of our operations. But I wouldn’t call out anything specific.

Gabriel Dechaine — National Bank Financial — Analyst

Maybe a timing promotion phase, like that? Anyway, well…

Raj Viswanathan — Chief Financial Officer

Yes, we expect it to moderate for sure.

Gabriel Dechaine — National Bank Financial — Analyst

OK. Thanks.

Raj Viswanathan — Chief Financial Officer

Operator, can we have the next question on the phone, please.

Operator

Yes, sir. We’ll next go to Ebrahim Poonawala with Bank of America Merrill Lynch.

Ebrahim Poonawala — Bank of America Merrill Lynch — Analyst

Good morning. I was wondering if you can give talk to just in terms of your margin outlook both in Canada and international banking. And tied to that, just in terms of — speak to what are the pluses and minuses when you think about balance sheet growth, the rate environment across these markets that we should be — think through when we think about your margin guidance.

James O’Sullivan — Group Head, Canadian Banking

Sure. Ebrahim, it’s James. I’ll start on — with a Canadian perspective. So the margin this quarter at 2.39% was down 1 basis point sequentially and up 4 basis points year over year.

I would describe it as one of those kind of unusual quarters where what — you gain on a swing if you lose on the roundabout because if you peel it back, we picked up 6 basis points in the deposit margins sequentially. We lost 7 basis points in asset margin, and the bulk of that would have been in the mortgage book. Q1 was a highly unusual quarter in the mortgage market. There were bunch of things going on associated with both the months of December — November and December that we described as months of peak volatility.

You had the 5-year of government of Canada rate declining 70, 80 basis points from kind of 2.50% to 1.80%. You had a what I would describe as a persistently high kind of cost of funds in the face of that. And you had a very competitive market given that the comp for last year included a lot of B20 pull forward. So it was an unusual quarter when you look underneath, but it netted out to down 1 basis point sequentially.

So going forward, I think when you look in particularly at our strong deposit growth, which we expect to continue, and our rate outlook, which now would include, say, one hike in the back half of the year, so it moderated that view, you’re going to get a basis point, maybe two, but let’s call it a basis point or so of improvement from here for the balance of the year.

Raj Viswanathan — Chief Financial Officer

In the case of international banking for the past 16 quarters, we have had stable NIM with a variation of plus/minus 10 bps. Q-over-Q, you see our NIM is flat at 4.50%. The year-over-year comparison difference is due to the acquisition of Chile. We have incorporated around $20 billion in assets with lower margin, lower risk, too.

But we expect our — our NIM is flat Q-over-Q, and we expect it to remain at that level of around 4.50% with some variation, plus/minus 10, going forward.

Ebrahim Poonawala — Bank of America Merrill Lynch — Analyst

Right. And if I can just follow up very quickly on both those. One, just to clarify, James, the basis point improvement from 1Q level, is that for the rest of the year? Or is it a basis point expansion you expect for every quarter going forward? And to Nacho, what…

James O’Sullivan — Group Head, Canadian Banking

Well — yes, no, finish your question.

Ebrahim Poonawala — Bank of America Merrill Lynch — Analyst

Yes, and just one for Nacho just quickly in terms of the 10 basis points, plus or minus. My understanding is, as we are looking to grow our unsecured consumer book in these markets, where we should see higher yields, so why should margins not actually move higher? Like what’s mitigating that?

James O’Sullivan — Group Head, Canadian Banking

So for Canada, it would be a basis point or so per quarter for the balance of the year.

Nacho Deschamps — Group Head, International Baking

And in international, more of the secured, which is a longer-term impact. The variation of these plus/minus 10 bps is really due to the growth — relative growth of wholesale and retail business.

Ebrahim Poonawala — Bank of America Merrill Lynch — Analyst

Got it. Thank you.

Raj Viswanathan — Chief Financial Officer

Operator, can we have the next question on the phone, please.

Operator

Yes, sir. We’ll go to Mario Mendonca with TD Securities.

Mario Mendonca — TD Securities — Analyst

Good morning. First then, how would you — and this is probably best — this is really directed at capital markets. How would you characterize the changes expected in capital markets going forward? Is it — is this like a complete overhaul of the capital markets business? Or are you just sort of retooling things at the edges? And then so following on that, like, what do you really expect this to cost, this retooling or rejigging of capital markets? And when do you think it will be complete? That’s — there’s a lot there, but I’m trying to understand that business better.

Jake Lawrence — Head-Global Banking & Markets

OK. Good morning, Mario. Thanks for the question. The repositioning of the business is completed.

That had been done over the past few years, whether it was around the metals business, some of our portfolios overseas. We’re now focused on growth as we look forward. We’ve got a lot of strength in the business. It shows up in corporate lending this quarter.

What we need to do is broaden out our capabilities in some areas so we can tap into those corporate relationships and better drive fee income as we move forward. We’ll see some of that showing up in Q2 and on through the balance of the year. In terms of the costs, we don’t expect there to be a material increase. This is a people-based business, and we’re going to make investments in our existing people, into new people, and that will drive the better result.

Mario Mendonca — TD Securities — Analyst

Now the increase in the expenses that Rob Stearn referred to, is that essentially just adding a bunch of new people? Or is that, like, comp associated with adding — like broadening out your capabilities, as you said?

Jake Lawrence — Head-Global Banking & Markets

No, it’s not, Mario. A lot of it is project and regularly related to AML. And as Raj alluded to, we expect that to be winding down over the second half of this year. There is obviously also some seasonality we noted quarter over quarter, which won’t occur again in Q2.

So we’re not expecting a big investment required from here. We’ve got a lot of great pieces in place in our business. We need to get them further aligned, working better together. And we expect that’s going to start to deliver improved results beginning in Q2.

Mario Mendonca — TD Securities — Analyst

OK. And then just finally a quick question for Brian Porter. The pace of change at this bank over the last few years, whether it’s two, three, four years, has been greater than I’ve seen at any bank, whether it’s personnel, acquisitions, divestitures, digital transformation. Are you — how do you see it over the next three or four years? Will the pace of change slow materially going forward?

Brian Porter — President and Chief Executive Officer

Yes, thank you for the question, Mario. The pace of change will slow. As I said in my comments, that we dealt with our geographic footprint. We were able to dispose of the businesses that we felt were non-core.

We’re comfortable with the work we’ve done in terms of aligning our footprint. The acquisitions we did last year were critically important to get scale in Chile, which is a key market. We basically reworked our whole wealth management business in Canada, and we’re very pleased with the end result. So anything you see from here on end will be what I would classify as tinkering.

The major transactions are done and announced. The Thanachart Bank transaction, we’re pleased with this. It’s been on and off for the better part of four years, and it’s taken — it’s been heavily negotiated. The transaction will probably close late in calendar ’19, so Q1 of 2020, if you will.

And so we’re pleased to have that behind us, and we’re focusing on the optionality we have within our footprint and continuing to grow our business.

Mario Mendonca — TD Securities — Analyst

Thank you.

Raj Viswanathan — Chief Financial Officer

Operator, can we have the next question on the phone, please.

Operator

Yes, sir. Next question comes from Sohrab Movahedi with BMO Capital Markets.

Sohrab Movahedi — BMO Capital Markets — Analyst

Quickly, Jake or James. Since, I don’t know, Q1 ’14, let’s say, quarterly — 20 quarters, there’s only been six or seven quarters where the earnings out of capital markets has had a three handle on it. You’ve had lower quarters, but this is among the lowest ones. So why would you think — how do you rejig? What do you see the earnings potential, call it, on a quarterly basis out of that segment?

Jake Lawrence — Head-Global Banking & Markets

Thanks, Sohrab, for the question. And yes, the business had largely been focused on not being a volatile contributor to the overall bank earnings. It is driven around our corporate customers and built around those customers. So as we look forward, I’m not going to give you specific quarterly guidance, but we do see a material uptick from here in Q2, and we want to see strengthening over the course of the year.

So as I noted in my earlier answer, the repositioning is done. The focus is now on growth, investing to drive a better result. We’re about 15% of earnings this quarter. That’s not where we want to be as a division.

We want to be generating better returns on the capital that our shareholders are providing us, and we view this as the bottom point.

Sohrab Movahedi — BMO Capital Markets — Analyst

OK. And Brian, on the Thanachart, I mean, obviously, there are some earnings that will be disposed of, I assume, if the transaction transpires. Where do you see that earnings kind of being backfilled? And then can you maybe give a bit of a color as to how you see the mix of earnings then three years down the road, two years down the road between Canada, international and, I guess, GPM and wealth as well?

Brian Porter — President and Chief Executive Officer

Good question. Thanachart contributes about $250 million of earnings today. The acquisitions we announced last year, so Chile and MD largely along with Jarislowsky, Fraser and the purchase in Colombia, contributed about $300 million of earnings. So there’s a nice match there.

And this provides us optionality to further invest in our business throughout our footprint in the Americas, whether it’s Canada, one of the Pacific Alliance countries or our wealth business. And we like the optionality of the bank. We also have the option of repurchasing shares, which — we like to have that in our toolbox. So there isn’t going to be anything that’s off strategy here.

We’re going to be — continue to focus on our operations. The other point I’d make is, and I know that there’s concern about technology spend out there, I would go back to the BB&T-SunTrust announcement. And the major impetus for that transaction, as spoken by the two CEOs involved, was the investment — the importance of the investment in technology. And that’s what we’re doing here at this bank.

We’re focused on the long-term positioning of this franchise. And if you’re not investing in technology, if you’re not digitizing your bank, if you’re not investing in cyber and AML, you’re going to be left behind. So that’s our primary focus. We’re unrelenting on that.

We’re going to stay very focused, and that’s a key point.

Sohrab Movahedi — BMO Capital Markets — Analyst

So in international and — I mean, just, Brian, not to be belabor the point, but how do you see the mix of business here? I mean, is the mix of business going to continue to be as is? Or do you see Canada becoming a smaller portion of the overall bank?

Brian Porter — President and Chief Executive Officer

No, you’re not going to see Canada go below 50% of earnings for the bank. We like balance. We like diversification. If something happens in one country, then we’ve got that balance.

And one thing that I think is misunderstood about the bank is that over the last five years, we had the least volatility in our quarterly earnings of our peer group. So diversification matters. So we take balance into account. That’s why we felt the wealth management acquisitions here in Canada were critically important diversification away from RWA, consistent predictability in terms of fee income.

That type of thing is very important for us. So that doesn’t mean we’re not going to invest outside the country, but it’s all of about balance.

Sohrab Movahedi — BMO Capital Markets — Analyst

Thank you.

Raj Viswanathan — Chief Financial Officer

Operator, can we have the next question on the phone, please.

Operator

Yes, sir. We’ll next go to Darko Mihelic with RBC Capital Markets.

Darko Mihelic — RBC Capital Markets — Analyst

Thank you. Good morning. I was looking at Slide 6 where you provided a bit of an integration update, and I wanted to maybe better understand the MD Financial statistics that are on this page. Maybe it’s just, I mean, I really have a fundamental misunderstanding of how things work.

I would have thought that there would been a great, big welcome package sent out to all the MD Financial physicians and so on. So when I look at these numbers, I see 1,600 cross-referrals and 775 new banking customers. That’s on a base of 110,000 clients. So it doesn’t look like a big number to me, and I’m wondering, does this is sort of accelerate as you go forward? Is this — it’s at a slow start or — and I guess the 98% client retention, that means 2% less.

That’s actually 2,200 clients. It’s actually more than what you brought on. So I’m just — maybe you can better conceptualize this for me. And does it sort of speed up over time? And will that have a meaningful impact on the Canadian results for the back half of the year?

James O’Sullivan — Group Head, Canadian Banking

Sure. Well, Darko, it’s James. Let me be very clear here, we couldn’t be more pleased with how MD is going so far. We could not be more pleased.

The retention is 98.4% based on assets. And to your opening comment, everyone got a welcome package, a great, big welcome package. And there’s more to come to be sure. But let me give you a bit of color on what MD accomplished over the quarter.

A, M&A were up in Q1 notwithstanding fairly volatile markets. MD added seven new strategic partnerships with national medical associations over the course of the quarter. So examples of that would be The Canadian Association of General Surgeons. But let me just take a moment to really kind of reemphasize our core strategy and why we’re confident in this business.

This business — MD has been in business now for 50 years. That’s an unparalleled 50 years serving the unique needs of the physician community across this country. And the physician community has unique needs. They navigate substantial student debt.

They have to transition into practice. They have to run their own businesses. They have to decide whether to incorporate. They have to wind down businesses at the end of their career.

This is not the kind of business that is built by anyone overnight. We’re going to leverage 50 years of unique experience, plus capital, plus talent. And we’re going to take this business to even greater heights, and it’s off to an amazing start.

Darko Mihelic — RBC Capital Markets — Analyst

I guess the question — and so, does it accelerate it from here? And what is it that you do to accelerate the referrals and the new customers?

James O’Sullivan — Group Head, Canadian Banking

Absolutely, it accelerates from here. And so the — where you’re going to see the greatest opportunity or where we’re going to see the greatest opportunity is in private banking, it’ll be in insurance consulting and it’ll be in our estate and wills business, which we have already sort of combined with theirs. So this was primarily a wealth management shop. It was doing a great job of managing the investments of physicians.

Now we have an opportunity to approach this way more holistically and bring just much, much more to the physician community, and that’s well under way.

Darko Mihelic — RBC Capital Markets — Analyst

OK. Thanks very much for the color.

Raj Viswanathan — Chief Financial Officer

So we apologize that we have run out of time and we won’t be able to take any more additional questions given the next bank call is almost at time to start. For the analyst questions we did not get to, we will follow up and give you individual calls to ensure that we answer your questions. Thanks, everybody, for participating in today’s call, and see you next quarter. Thanks again.

Duration: 61 minutes

Call Participants:

Philip Smith — Senior Vice President of Investor Relations

Brian Porter — President and Chief Executive Officer

Raj Viswanathan — Chief Financial Officer

Daniel Moore — Chief Risk Officer

Robert Sedran — CIBC Capital Markets — Analyst

James O’Sullivan — Group Head, Canadian Banking

Jake Lawrence — Head-Global Banking & Markets

Meny Grauman — Cormark Securities — Analyst

Doug Young — Desjardins Capital Markets — Analyst

Nacho Deschamps — Group Head, International Baking

Gabriel Dechaine — National Bank Financial — Analyst

Ebrahim Poonawala — Bank of America Merrill Lynch — Analyst

Mario Mendonca — TD Securities — Analyst

Sohrab Movahedi — BMO Capital Markets — Analyst

Darko Mihelic — RBC Capital Markets — Analyst

More BNS analysis

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What happened

Shares of INSYS Therapeutics (NASDAQ:INSY) jumped a whopping 40.3% in August, according to data from S&P Global Market Intelligence. The biotech’s massive valuation change came from news about a settlement with the U.S. Department of Justice (DOJ), which seems completely reasonable, followed by a not-so-reasonable increase as shorts covered their positions at the end of the month.

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    Taking a medical breakthrough from concept through commercial success is like ascending a mountain that grows taller and more treacherous with every setback. It’s taken Alnylam Pharmaceuticals, Inc. (NASDAQ:ALNY) 16 years to launch its first drug, so challenges have had plenty of time to take up positions along this company’s path to a successful first launch.

Hot Biotech Stocks To Watch Right Now: Amgen Inc.(AMGN)

Advisors’ Opinion:

  • [By Stephan Byrd]

    Marco Investment Management LLC raised its holdings in shares of Amgen, Inc. (NASDAQ:AMGN) by 4.6% in the 2nd quarter, according to the company in its most recent disclosure with the Securities & Exchange Commission. The firm owned 118,601 shares of the medical research company’s stock after buying an additional 5,265 shares during the period. Amgen comprises approximately 3.4% of Marco Investment Management LLC’s portfolio, making the stock its 3rd largest position. Marco Investment Management LLC’s holdings in Amgen were worth $21,893,000 as of its most recent SEC filing.

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  • [By Cory Renauer]

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Papa John's International Inc (PZZA) Q4 2018 Earnings Conference Call Transcript

Logo of jester cap with thought bubble.

Image source: The Motley Fool.

Papa John’s International Inc  (NASDAQ:PZZA)Q4 2018 Earnings Conference CallFeb. 26, 2019, 5:00 p.m. ET

Contents:
Prepared Remarks Questions and Answers Call Participants
Prepared Remarks:

Operator

Good day, ladies and gentlemen. And welcome to Papa John’s Fourth Quarter 2018 Conference Call and Webcast. At this time, all participants are in a listen-only mode. Later we will conduct a question-and-answer session, and instructions will be given at that time. (Operating Instructions) As a reminder, today’s conference is being recorded.

I would now like to turn the call over to Steve Coke, Vice President of Investor Relations and Strategy. You may begin.

Steven R. Coke — Vice President, Investor Relations and Strategy

Thank you, Victor. Good afternoon. Joining me on the call today are President and CEO, Steve Ritchie; our CFO, Joe Smith; and Mike Nettles, our Chief Operating and Growth Officer, Steve and Joe will have comments about our business and provide a financial update. After the prepared remarks, Steve, Joe and Mike will be available for Q&A.

Our discussion today will contain forward-looking statements involving risks that could cause actual results to differ materially from these statements. Forward-looking statements should be considered in conjunction with the cautionary statements in our earnings release and the risk factors included in our SEC filings. Please refer to our earnings release in the Investor Relations section of our website for a reconciliation of non-GAAP financial measures discussed on this call. Finally, we ask any members of the media to be in a listen-only mode.

Now, I’d like to turn the call over to Steve Ritchie for his comments. Steve?

Steve M. Ritchie — President and Chief Executive Officer

Thank you, Steve, and good afternoon, everyone. As you saw, the fourth quarter and full year results reported today are consistent with the preliminary results we announced earlier this month. Overall, North America comps were down 8.1% for the fourth quarter and were down 7.3% for the full year. International comps decreased 2.6% for the fourth quarter and were down 1.6% for the year. The North America results are disappointing to all of us and continue to reflect the consumer sentiment challenges our brand has experienced in the US. In addition, sales were impacted by the conversions of the Company’s new loyalty program and ineffective promotions, our creative and value offerings have not resonated with consumers in a heightened competitive environment. Despite these difficulties, we remain confident in the long-term potential of Papa John’s.

Our confidence is supported by three factors. First, we have a differentiated brand. Papa John’s is the quality leader in the pizza category. In our case Better Ingredients, do mean better pizza and we think quality will be an attribute that consumers continue to value.

Secondly, we have new partners who bring additional expertise and financial resources to help us capitalize on this differentiated market position. As previously reported, Starboard made a $200 million convertible preferred stock investment in the Company in early February. Starboard and our new directors Jeff Smith and Anthony Sanfilippo have accomplished significant turnarounds and value creation at other companies in the restaurant, retail and consumer industries. Already, Jeff has been actively engaged as our new Chairman as we evaluate and adjust our plans and strategies for 2019. He is also helping us to stay focused on the value drivers of Papa John’s, namely quality pizza and building strong consumer connections.

The third factor supporting my confidence in Papa John’s is the commitment of our team and their continued enthusiasm for our Company. Even with a significant amount of work that allows ahead. We know we must improve how we communicate with and connect with our customers. It is not just about spending more on advertising and promotions. We need to do a better job of showcasing our quality as a real product differentiator, while making it easier for our customers to purchase our pizza whenever, wherever and however they want. In connection with the Starboard agreement, we have begun to examine investment opportunities within our strategic pillars to reinforce our Better Ingredients, Better Pizza, market position and reinvigorate performance. We are in the early stages of this evaluation and do not have specific details to share today.

However, we are making progress within our strategic pillars and this progress is important to the long-term success of the Company. Let me spend a few moments updating you on our work in these areas. First, making people a priority. Over the past months we have launched a number of initiatives to communicate the importance of people to Papa John’s and to begin transforming our culture in a positive way. As part of this, we engaged outside experts to conduct a cultural audit and provide recommendations on actions we need to take to ensure our commitment to diversity, equity and inclusion is represented throughout the Company. The audit is now complete and we have already begun to implement several of the recommendations.

As an example of the steps we have taken, we recently completed the diversity, equity, inclusion training for our corporate office team members that I mentioned on last quarter’s call. We have nearly 100% participation rate for the 7 hour workshop and employees rated the experienced 4.5 out of 5. We are now rolling the workshops out to our field team and the program is available to our franchisees at no cost to them.

In January, we hired our first Chief People Officer, Marvin Boakye. Marvin has more than 20 years of human resource experience, as well as expertise in change management and culture transformation. He is leading the implementation of our Talent Management Strategy, which includes overseeing people operations, compensation and benefits, and learning and development.

As a clear marker for our commitment to employees and their development, we recently announced a higher education benefit program with Purdue University Global. The program covers 100% of tuition cost of undergraduate and graduate online degree programs for Papa John’s 20,000 corporate team members and offers significantly reduced tuition to franchise employees. The program allows participating employees to expand their skill set, build leadership and management expertise, and prepare to advance their careers. This is a first of its kind of benefit in the quick service restaurant industry and no one we believe will help improve employee retention, especially at the restaurant level and will differentiate Papa John’s as employer of choice in a competitive employment environment.

Turning now to the work we are doing to improve Papa John’s brand differentiation. We firmly believe that our ingredients are what differentiates Papa John’s from our competitors. However, our creative has continued to underplay this attribute, with a focus on limited time products, loyalty and promotions. As a result, our brand has not been breaking through the significant marketing dollars that our competitors are spending.

Next month we will be launching TV and digital campaigns that show Papa John’s leaning into the story of our products and ingredients, and doing it in a way that is relevant to millennial and Gen Z consumers. We want to ensure the new generation of pizza consumer to understand the quality foundation of our brand, so that we can attract new customers. Better Ingredients, Better Pizza is our brand equity. As a part of this brand differentiation work, we will offer specialty pizzas that are unique in the market.

For example, in February we featured the Philly Cheesesteak Pizza. This has been a fan-favorite in the past and we are excited to bring it back to our lineup. In March, we will introduce permanent menu additions with six handcrafted specialty pizzas, including the Ultimate Pepperoni, Meatball Pepperoni, Philly Cheesesteak, Fiery Buffalo Chicken, Zesty Italian Trio and the Super Hawaiian. And later this year, we will introduce a new Hot and Honey Chicken Waffles — and Waffles Pizza (ph), which was the winner of our Pick Our Next Specialty Pizza contests that ran in February.

As you know, creating accessible value has also been a focus area for us. Let me update you on our work in this area. Late in the fourth quarter, we relaunched our PAPA REWARDS loyalty program. The surge in migration to the new program combined with the free cheesestick introductory offer, but unexpected temporary pressure on the average ticket per order. However, we believe the transition to the new rewards program was important, because of the value and variety it provides our customers and the consumer insights we gain. In particular, we now have the data that allows us to engage in one to one marketing with our customers and by segment, which enables us to drive traffic without relying on blanket discounts across all channels.

For example, we executed a successful rewards-only promotion that offered free pizza to members, who spent $20 during Super Bowl week. These targeted offerings and others exclusive perks that are tailored to the customer also build brand loyalty. Over time, we believe the new PAPA REWARDS program will be a positive contributor to our performance and our brand differentiation.

Also during the fourth quarter, we began developing additional everyday value offerings that we are now testing in select markets. For example, we know that certain segments of our business are heavily carryout and we are now testing offerings that speak to those customers. We’ll be examining the results from these tests and making further adjustments or expansions in the coming quarter as we determine the offerings the best of each value consumer.

Turning to technology, our fourth strategic pillar. As we’ve previously discussed, Mike Nettles and his team have elevated the consumer experience across our digital and mobile platforms, and have expanded the way customers can order Papa John’s. Our mobile channel is now represent around three quarter of digital sales. On our website, we deployed mobile first design improvement and an intelligent chatting technology to better engage our customers. On our mobile apps, which have seen significant growth, we’ve integrated Apple Pay and Google Pay, enabled more targeted messaging and made a number of enhancements to simplify the user experience and advance our loyalty program.

In addition, ordering is now available on Apple TV, Amazon Alexa and through DoorDash, which currently serves more than 1,300 restaurants and will increase further in the coming months. These channels are enabled by APIs that allow us to launch future partnerships with unprecedented speed and cost efficiency. We are examining the potential for further improvements in our technology, including new app capabilities, innovative partnerships and additional ways to enhance the delivery experience for our drivers and our customers. Pizza brings people together and we want our digital and social capabilities to fully reflect this mission.

And now to our work related to unit economics. We have continued our work with a third-party efficiency experts and food aggregators to drive both revenue and efficiencies in our restaurant level operations. Specifically, we have identified procedures to improve food cost controls and we have made enhancements to our labor management system that better align labor goals with individual restaurant characteristics.

In addition, we maintain our commitment to supporting the long-term financial health of our franchisees. We are continuing to provide royalty relief for all domestic traditional restaurants for the first quarter of 2019. Furthermore, we are extending the high level of support to franchisees and higher cost markets on both coasts of the US. We believe these efforts coupled with our review of additional technology solutions that we are currently evaluating for our restaurants will provide opportunities to improve unit economics in 2019.

Over the past several weeks, I’ve spent a significant amount of time with our Company store operations team to identify and address operational improvements that are needed. Our team has accepted the challenge of improving sales and operations to set the pace for the North America system. We will continue to evaluate our Company store performance by market to ensure that we are maximizing long-term value.

Before turning the call over to Joe, I’d like to provide an update on International. Our International business continues to grow sales and restaurant unit counts at a double-digit pace, as both increased 11% during the quarter. For the year, we opened 304 International restaurants, which was the record breaking performance for our brand. Our robust expansion continues as we just opened our first restaurant in Pakistan and have now entered 12 new countries since 2016. We are now in 47 countries and territories around the globe, and we are getting very close to opening International restaurant number 2000.

We are pleased that our organizational changes made during 2018 are fostering improved performance, while comp sales were still not where we wanted them to be for the quarter, we did see marked improvement in the UK and the Middle East. We continue to see positive signs of a turnaround in both businesses. In the International business as a whole as evidenced by the flat January comp sales we previously announced.

In summary, we still have lots of hard work to deliver sustainable growth in the business and you see that in the guidance we announced today, which Joe will review shortly in detail. However, we are making progress and our recent investment agreement with Starboard represents a strong vote of (ph) confidence in our Company and the opportunities ahead. The additional financial resources and the new expertise gains of the agreement, better position us to realize these opportunities. We are operating and allocating capital with deeper discipline. We are focused on people and pizza, and our team members and franchisees are enthusiastic about the opportunities ahead.

Now — let me now turn the call over to Joe to discuss our financial results for the quarter in more detail. Joe?

Joseph H. Smith — Senior Vice President and Chief Financial Officer

Thank you, Steve. For the fourth quarter, we reported a diluted loss per share of $0.44 on a GAAP basis, compared to diluted earnings per share of $0.81 in the fourth quarter of 2017. The decline in our earnings per share was primarily attributable to our special charges, which will be described below. In addition, results were impacted by lower North America comparable sales and the impact of other special items in the prior year comparable quarter, including an extra week of operations and the remeasurement of our deferred tax liability, resulting from the 2017 Tax Cuts and Jobs Act.

During the fourth quarter, we incurred special charges of $25.9 million, approximately $15.5 million of these costs, included support to our North America restaurants through short-term royalty reductions for franchisees and a contribution to the National Marketing Fund. In addition, we incurred $8.1 million of cost associated with activities of the Special Committee of the Board of Directors, including legal and advisory costs, culminating in the recent strategic investment by Starboard Value.

The remainder of the special charges were primarily associated with reimaging costs and other asset write-offs. For the full year, our special charges were $50.7 million. Excluding these special charges and other special items as detailed in our earnings press release, we reported adjusted diluted earnings per share of $0.15 on a non-GAAP basis, compared to $0.54 in the fourth quarter of 2017.

Our fourth quarter net loss on a GAAP basis was $13.8 million. Excluding special items, our fourth quarter net income was $4.6 million, compared to $18.9 million for the corresponding quarter in 2017. As outlined in our earnings press release, 2018 GAAP EPS was $0.05, as compared to $2.83 for 2017. Excluding special items in both years, our adjusted EPS was $1.34 in 2018, as compared to $2.51 in 2017.

Consolidated fourth quarter revenues, excluding the 53rd week in 2017 decreased $62.7 million or 13.4%, primarily driven by lower comparable sales for North America, which resulted in lower Company-owned restaurant revenues, lower royalties and decreased North America commissary sales. In addition, the refranchising of 62 Company-owned restaurants in North America earlier in the year reduced total revenues on a quarter and year-to-date basis by approximately $15 million and $42 million, respectively, as compared to the prior year comparable periods. International revenues also decreased due to the refranchising of our Company-owned operation in China earlier this year.

Now turning to the business units for the fourth quarter. Domestic Company-owned restaurants’ operating margin decreased $9.3 million or 0.6% as a percentage of related revenues, primarily due to the impact of lower comparable sales and the adoption of the new revenue recognition standards that revised the method of accounting for the customer loyalty program. In addition, the 53rd week of operations in 2017 contributed approximately $2.4 million of the decrease.

North America franchise royalties and fees decreased $9.2 million or 34.1% as compared to the fourth quarter of 2017, primarily due to the $5.5 million of short-term royalty reductions granted to our North America franchisees and further reduced due to negative comparable sales. In addition, the 53rd week of operations in 2017 contributed approximately $2 million of the decrease.

North America commissary operating margin decreased $5.5 million or 2.4% as a percentage of related revenues due to the decline in North America restaurants sales and due to the required reporting of $2.6 million in franchise restaurant equipment incentives under the new revenue recognition standards, which was previously included in our G&A expenses. In addition, the 53rd week of operations in 2017 contributed approximately $1.7 million of the decrease for the quarter.

Our International operating margin decreased $2.5 million due to lower new restaurant openings fees and lower revenues from the United Kingdom Quality Control Center due to the required reporting of franchise restaurant equipment incentives under the new revenue recognition standards. In addition, the 53rd week of operations in 2017 contributed approximately $700,000 of the decrease. As a percentage of International revenues, the operating margin increased 0.7%, primarily due to the divestiture of our China operations.

For the fourth quarter, G&A cost increased $20.2 million, primarily due to the previously mentioned special charges, the remainder of the increase is primarily due to higher technology initiative costs and the $1.5 million contribution to the newly formed Papa John’s Foundation. These increases were partially offset by the previously mentioned required reporting of franchise restaurant equipment incentives.

Net interest expense increased $3.2 million in the fourth quarter, due to an increase in the average outstanding debt, including the impact of share repurchases made through 2018, as well as higher interest rates. At the end of the year, our outstanding debt balance was $625 million. Subsequent to year end, we have used the Starboard investment proceeds to reduce our revolving line of credit, while we execute our disciplined approach to capital allocation and review our opportunities to further invest in the five strategic priorities, Steve previously discussed.

For the full year, our effective tax rate was 44.9%, which is higher than the 24.1% effective rate for 2017. The increase in the tax rate is primarily due to the impact of lower pre-tax earnings in 2018 and the required recapture of operating losses associated with the divestiture of our China operation. Our free cash flow, which is a non-GAAP measure that we define as cash flow from operations, less capital expenditures was approximately $30.8 million for the full year, as compared to $82.4 million in 2017. This was primarily due to the Company’s lower net income in 2018.

We paid a cash dividend of $7.1 million or $0.225 per common share during the fourth quarter for a total of $29 million of dividends paid in 2018. The full year dividend was $0.90 per share. Subsequent to the fourth quarter, on January 30, 2019, our Board of Directors declared a first quarter dividend of $0.225 per common share. During 2018, the Company repurchased approximately 2.7 million shares of stock for an aggregate cost of approximately $158 million. The Company did not purchase any shares at early August.

Turning now to our outlook for 2019. We expect our GAAP EPS to be between zero and $0.50 for the full year, including anticipated special charges of $30 million to $50 million, which will largely be assistance to the North America franchise system and costs associated with the Special Committee of the Board of Directors. We expect adjusted diluted earnings per share to be between $1 and $1.20, excluding special charges. North America comparable sales are expected to be between negative 1% and negative 5%, while International comparable sales are expected to be flat to positive 3%. We anticipate global growth of 75 to 150 net units. We are also planning to invest between $45 million and $50 million on capital projects in 2019. Our preliminary tax rate in 2019 is expected to be between 21% and 20%. Finally, block cheese prices are projected to be in the low to mid $1.60 range.

I’ll now turn the call back over to Steve Ritchie for his final remarks before we take Q&A. Steve?

Steve M. Ritchie — President and Chief Executive Officer

Thank you, Joe. Just to say (ph), I am confident Papa John’s is positioned for long-term success as we work to better showcase our quality and improve the customer experience. With the additional financial resources and new expertise, gain through the partnership with Starboard, we will be making targeted investments directed to the highest return initiatives across our five strategic pillars. We look forward to unveiling additional product, menu, advertising and customer engagement strategies to four to five (ph) Papa John’s position as the Better Ingredients, Better Pizza Company.

As always, we appreciate your continued support. And I will now turn the call over to the operator for Q&A.

Questions and Answers:

Operator

(Operator Instructions) Our first question comes from line of Alex Slagle from Jefferies. You may begin.

Alexander Russell Slagle — Jefferies LLC — Analyst

Hey, guys. Thanks for the question. Just wondering (ph) if you could provide some commentary around the February same-store sales trends in the US and maybe what gives you confidence in the range, the comp range you outlined in the guidance, specifically, if there is any measurable metrics you’re following, maybe brand sentiment or something like that?

Steve M. Ritchie — President and Chief Executive Officer

Sure, Alex. It’s Steve. So thanks for the question. So, just stepping back a bit, certainly challenging into 2018 and a very difficult start in January. So I call that out, because I think there’s a couple of more short-term non-recurring factors in the business and kind of our outlook on the full year of 2019 which we called out some of the — which we’re very excited about the long-term potential of the loyalty program. But it did provide extensive pressure on check when we coupled that with the — we wanted to obviously gain visibility and awareness of the program to garner our attention and increase the enrollment piece, we coupled that with the new cheesestick promotion and then we layered on a pretty extensive value for Papa John’s in January with the two medium promotion at $6 each.

So I think a number of those things provided pressure in late December and January, but moving forward to your question. In February, we’re seeing very solid improvement from February from the January and we certainly have incorporated that into our full-year outlook, which we’re not proud necessarily of the negative 1 to negative 5, but we do know the first half of 2019 is going be more challenging than the back half of 2019. But we’re very pleased with the progress thus far here in February on the backs of — getting back to talking about quality, getting back to talking about interesting ingredients and an interesting product that being our Philly Cheesesteak Pizza and that’s been supported by complete new marketing and creative campaign from the team here. So excited about the outlook.

Alexander Russell Slagle — Jefferies LLC — Analyst

Thanks. And then on the development front, if you could provide an idea around the expected gross openings or closings in 2019 that’s baked into that net guidance?

Steve M. Ritchie — President and Chief Executive Officer

Sure. Joe, you want to talk a little bit about development…

Joseph H. Smith — Senior Vice President and Chief Financial Officer

Yeah. I mean, we are not going to give the specific numbers on that obviously and kind of look at where we are this year and hopefully that will give you a pretty good guidepost.

Steve M. Ritchie — President and Chief Executive Officer

Alex, it’s Steve. I just add to that. Yeah, we probably don’t want to give details on the breakdown of that, but I think you look at the overall gross performance, as I outlined in my opening comments, 304 units in the International side, our expectations are similar — those kind of track rates that we’ve experienced in the international side, we know that we’re going to continue to experience some pressure on closures domestically, but I would call out that a good chunk of the closures that we experience in 2018 was the non-traditional venues. So that is more of a non-recurring event. So we do expect a step down in closures domestically in 2019, just because of that event. And obviously, the quicker we can turn the sales around the more optimal will have potential on the overall net units hitting at the higher end of our range there.

Alexander Russell Slagle — Jefferies LLC — Analyst

Okay. Thanks for that.

Operator

Thank you. And our next question comes from line of Peter Saleh from BTIG. You may begin.

Peter Mokhlis Saleh — BTIG, LLC — Analyst

Great. Thanks. I just wanted to ask about the marketing budget. I think, Steve, you had mentioned next month you guys are going to launch a new campaign. What is the expected marketing budget in 2019 versus 2018? Will you be investing more dollars into the marketing budget and how do you plan to spend it, how is the cadence looking for 2019 versus 2018, is it going to be heavier spend in the second and third quarters or how should we think about your marketing dollars spent this year?

Steve M. Ritchie — President and Chief Executive Officer

Sure. Sure. Peter, it’s Steve. So I will touch on it a bit. So, I mean, first off, just stepping back on our overall National Marketing Fund contribution rate in 2018 that was 4.5%. That did step up the first day of January to 4.7% — 4.75%, obviously that contribution rate is driven off of same-store sales and overall units. So there is some pressure on the overall side of the revenue is coming in and that contribution rate that drives it. But because of the increase in the contribution rate we do think we get close to parity levels on the overall access to our National Marketing Fund dollars. We will have additional pressure as you would expect from an inflation standpoint on the media side. But the team has done a nice job. They are really thinking about the cadence of how we plan out, each of the quarters, I don’t want to get into specific cadences of the investments within the quarter. But it will be a well thought allocation of those investments. We will still be, as you would expect, spending money into television, spend the money into digital and social. We’ll be evaluating things like our partnerships that we have and also looking to expand that in potential influencers to help support the brand.

Last year in the fourth quarter PJI, Papa John’s International did make an investment of $10 million into the National Marketing Fund, so that certainly is a headwind as we get look into 2019. But those are part of that evaluation process with the $200 million investment, as we talked about half of that being invested back into the business. Those holes will be areas that Mike Nettles and myself and the rest of the team will be looking at how do we evaluate, where we make the right investments to take up some of the shortfalls we may have in the marketing front and making sure that we’re making the right investments to support unit economics and the franchisees and primarily obviously to get sales back to the levels that we need to get them at. So I’d say a lot of that. And Mike, I don’t know if I — you want to add any color, just to give a little bit commentary around where we’re at from the growth team perspective.

Michael R. Nettles — Executive Vice President, Chief Operating and Growth Officer

Sure. Thanks, Steve. Hi, Peter. So really the only thing I would probably add to what Steve just said is, our spend will probably be a little different this year than it was last year. Clearly if you look back at 2018 we had quite a few challenges on the PR side of the equation and the sentiment side of the equation. So we had to put a lot more effort probably into that then maybe commercial retail marketing. This year it continues. We’ve actually done quite a bit on the brand reputation side of the equation, but you’re going to see a lot more commercial advertising for the brand and very different, with the launch of PAPA REWARDS. Peter as we shared with you and others in the past, a big part of that is actually the introduction of one to one marketing. And so a lot of that marketing now goes through our own individual proprietary channels as opposed to us having to go out through maybe the top of the funnel kind of traditional marketing. But, nonetheless, you will see a heightened level of commercial messaging, a lot more on the one to one, which really gives us a very different marketing mix in 2019 than we have in 2018.

Peter Mokhlis Saleh — BTIG, LLC — Analyst

Great. And then, just, I know you guys received $200 million from Starboard, $100 million is already accounted for. The other $100 million is that anticipate to sit on the balance sheet or do you guys expect to use some of that for — some of these investments could some of this going to the marketing fund or how do you guys anticipate using those funds over time?

Joseph H. Smith — Senior Vice President and Chief Financial Officer

Yeah. Peter, this is Joe. We will start off as you said, paying down the revolving line of credit, but the nice thing is, obviously, we can access that back. So the debt will initially go down, but then under the revolver we can access that and make the necessary investments that once we test improve that those investments have a good return. We’ll destroy that back and use those accordingly.

Steve M. Ritchie — President and Chief Executive Officer

And Peter just add on to the latter part of that question on where we going to spend the money. So we are still — we’re only three weeks in. So we want to make sure that we are working with all of our stakeholders to assess what are the best places to be investing this money. But we’ve talked about our five strategic priorities being people, brand, the value in the product side, technology and then, of course, unit economics. Those are very broad and there’s a number of initiatives that are layer up within the growth team to support those. So we are in that the assessment phase of evaluating each one of those initiatives. But we know the areas where we need to invest is to improve team member experience and improve customer experience and the lagging indicator of that obviously being sales.

So we need to get the sales turnaround to improve unit economics. We know we’ll be able to do that by making sure we’re really leaning into the things that are going to improve, again team member experience and customer experience. So as we make decisions — as we get through our assessment phase here, certainly, we’ll be communicating those things out to the Street. I don’t have a timeline on that yet, because we want to be very thoughtful, and to Joe’s point, there will be a lot of test improve out scaling things from a small standpoint in individual markets before we do anything from a national perspective.

Peter Mokhlis Saleh — BTIG, LLC — Analyst

Great. And then just my last question, Steve, I think, you mentioned, more menu innovation and potentially some more news on the value front. Can you give us a little bit more specifics in terms of what you may be testing? What you may be thinking about from either a carryout or delivery perspective on the value side?

Steven R. Coke — Vice President, Investor Relations and Strategy

Sure. Sure. It’s Steve. I’ll start and then I’ll ask Mike to jump in as well, because he’s got spent a lot of his time here lately on the product side and we get — there is a lot of excitement and energy around the things that we’re evaluating as the operator. As you know, my long track record in operations, looking through the lens of what also is that — it is not going to create operations complexity in our business model, always looking through the lens of simplicity. But trying to make sure that we are connecting with things with our consumers.

So the first piece is — it might not sound like a lot, but this is the most extensive product launch that we’ve had in the history of the brand in terms of number of pizzas. So the first one I would highlight is the six handcrafted specialty pizzas that are soft launching this week to national — our media supported launch next week, those six handcrafted specialty pizzas I called out in my prepared remarks. They include a number of new premium ingredients and we think the uniqueness of that will also be very good value proposition, because we’re offering them at $12 for not only the six new specialty pizzas, but we’re extending that to all of our specialty pizzas. And as I talked about February performance improving that is the same promotion, but with just the Philly Cheesesteak Pizza and all specialties in period two here in February. So nice performance from that. So we want to continue along that.

As far as additional value and product side, we are — I think we’re — everyone is well aware that we have been testing sandwiches out in various markets across the country, continuing to test and read and learned to understand how that may play within our value proposition. And I ask Mike to talk about a little bit just strategically how we’re thinking about it from a product standpoint and some of the other areas that will be targeting and how we’re looking at value in general. Mike, because I know this is a big part of the growth teams work.

Michael R. Nettles — Executive Vice President, Chief Operating and Growth Officer

Sure. So, Peter, if we’ve always stood for Better Ingredients and Better Pizza. That’s a big part of our brand heritage. I think we — in years past, maybe we’ve not spoken to that in a way that’s resonated directly with the consumers as we need to and so we’re really leaning heavily back into that. We believe that Better Ingredients do make for a better Pizza and quite frankly our customers deserve a better Pizza and an overall elevated better Pizza experience. So a big part of that starts with the product. Steve just said, with all the new specialties coming out. But if you follow us on social media, you can see that we’ve really been engaging our customers with some fun ideas, help us choose our next really cravable kind of pizza item. The winner right now of that contest has been the Hot Honey Chicken and Waffle Pizza. So you can expect to see hit — that hitting our menu at some point soon.

Some of these new creations may be introduced as LTOs, but just like the Philly Cheesesteak Pizza was a fan favorite and came back in this past period. It remains on the menu now as one of our new signature specialty items that are out there. So we’re going to lean heavy into really trying to come up with some bold and some creative pizza types that you can get at Papa John’s, but you can actually enjoy the Better Ingredients that go along with them that really help us to tell that story.

If you’ve also been kind of following the brand for at least the last two periods you’ve seen two very clear messages from us $6 and $12, and that’s very intentional. You’ll probably see that moving forward in the periods yet to come as we tried to test some of these value constructs. We hear from our customers a perception sometimes that maybe Papa John’s has been priced too high in the past, relative to the overall experience that they receive. So as we lean on Better Pizzas, we really lean in on the operating experience and the customer experience. We’re also going to lean in heavily on saying, hey, there is an accessible value construct that you can come in and get a pizza for $6, we led that in period one with two medium one tops for $6 each and in period two that’s a carryout special, which is also medium one top for $6, may not always be the pizza, maybe something else, but that’s a big part of us testing those value constructs with very high customer acceptance and specifically, new customer acceptance are actually being targeted in such a way that we’re driving new customers to the brand and it’s working out very well for us.

The $12 side of the equation, $12 specialty for the Philly Cheesesteak in period two that became a $12 any that now leads us into period three where we’re finding a very high overwhelming support for our great handcrafted specialties that we’ve got out there. The $12 price point seems to resonate well, customer see it as not only accessible, but as you can imagine it actually drives a nice check for us as well. So we’re happy with that as a starting point, but we’re going to continue innovating on both of those things to really make sure that is not just a better Pizza and overall better Pizza experience.

Peter Mokhlis Saleh — BTIG, LLC — Analyst

All right. Thank you very much.

Michael R. Nettles — Executive Vice President, Chief Operating and Growth Officer

Peter.

Steve M. Ritchie — President and Chief Executive Officer

Thank you, Peter.

Operator

Thank you. And our next question comes from the line of Alton Stump from Longbow Research. You may begin.

Alton Kemp Stump — Longbow Research LLC — Analyst

Yes. Thank you and good afternoon.

Steve M. Ritchie — President and Chief Executive Officer

Hey, Alton.

Alton Kemp Stump — Longbow Research LLC — Analyst

I just wanted to ask, I apologies, if I missed, what you said exactly in the comments, but as far as the concessions given the franchisees. I think, you mentioned, Steve, that they’re going to at least run through the end of the first quarter. So, are those just for the next three months as far as the commitment there and then you can see where you’re at as sort of 2Q or is it longer commitment then just all rest of the first quarter?

Steve M. Ritchie — President and Chief Executive Officer

Sure. Alton, it’s Steve. Yes. In my prepared remarks, I did call out that we have made formal commitments in concessions of royalty relief through the first quarter for all of our franchisees in the domestic business. But I did also call out in the first half of the year we do expect to have continued unit economic pressure as we continue to push some of the marketing initiatives to get the sales going the right direction. So within the outlook for our guidance, we provided ourselves with headroom to be able to find the right level of support to provide to our franchisees throughout the rest of 2019, but focusing in on what we believe will be the more challenging part of the year through that first half.

Alton Kemp Stump — Longbow Research LLC — Analyst

Okay. Makes sense Steve. And just one more and I’ll hop back in the queue. Just from a market perspective, I was kind of think about how is your efforts to fixed brand image versus what’s going out there with new products, new promotions. How do you balance that, in other words like, it feel that there’s more brand fixing that you need to do first for more aggressive promotions or you think you can do both at the same time over the course of the current year?

Steve M. Ritchie — President and Chief Executive Officer

Sure, Alton. It’s Steve and I’ll let — I’m going to let Mike comment on this, because this is something that, obviously, that we have to balance and we’ve had an interesting challenge here over the last year and trying to find and strike the right balance of product versus things that we can do to help on the sentiment side. We have to do both. So I think what you’ve seen represented from us and I will call out February without getting into specific financial results. But we did — we’ve done some things with making our first official grant of the Papa John’s foundation that we have not officially announced publicly yet. The start-up of the Papa John’s foundation, but we made a $500,000 grant to then a college.So I call that out because it’s around doing good things in the communities that we serve. It was very, very well received and help make significant sentiment improvement marks for the brand.

It can’t be one thing. It has to be a cadence of multiple things. So we’ve got for the full calendar year 2019 continuing to have plans on things from a public relations standpoint, but just doing good work. At the same time, a lot of the work that we’ve been doing on diversity, equity and inclusion, as I called out internally. A lot of internal work. Happy to be through the conclusion of the cultural audit. But the cultural audit concluded in gave us in extensive lineup of recommendations that Marvin Boakye, our new Chief People Officer and Victoria Russell, our Chief of Diversity, Equity and Inclusion will be leading the efforts to work on the internal.

I fundamentally believe the more work that she can do on the internal culture, the more of that output will translate into overall better consumer sentiment for the brand. And I will tell you that we’ve had our some challenges over the last year. But we found the opportunity to think about partnerships and influencers because of the work that we have been doing over the last several months.

At the same time, to your question on product, you have to figure out how to do both, because we do have to have exciting value proposition innovative products out there, leaning in on the quality story. So that we think for the 2019 calendar year, we’ve built out a roadmap with the appropriate level of multiple things to move the brand forward. Mike I said a lot of there, but I don’t know if there’s anything that you’d like to add on to that just to complement.

Michael R. Nettles — Executive Vice President, Chief Operating and Growth Officer

The only thing I would add, because I think Steve did a good job of kind of outlining is, if — in our business, one of the things we are really focusing on in late 2018 and certainly leading into 2019 and beyond is the quality and the better story, but not just to tell it in terms of our ingredients, tell it in terms of the happiness and kind of real human kind of interaction basis.

So everything from the work that we’re doing, as Steve said, inside the organization with our people and with those voices that we talked about and the Voices campaign, the commercial that had a lot of success back in the last quarter of 2018 to making sure we continue to tell people the story of why they want to buy Papa John’s. Not just for the better product that it is, but because we’re good corporate citizens, because we have a good placement out there in the communities that we support and we have happy and engaged people inside the store servicing the needs of those customers accordingly.

So we know that this is a long-term effort. This is something we’re going to have to keep pulsing on, but back to the calendaring function that Steve just talked about, the team actually set up the full year in advance and we’ve got a very strategic set of kind of master messaging that goes out each period with some underlayments to go with it and really trying to push at an integrated level with all channels, whether it’s broadcast television or social media, you will see many of these messages again and again, and when we say Better Ingredients, we don’t just mean what’s on top of the pizza, but actually, who is making the pizza and who we’re serving it too. That’s a big part of our messaging moving forward.

Alton Kemp Stump — Longbow Research LLC — Analyst

Great. Thank you, Steve and Mike.

Steve M. Ritchie — President and Chief Executive Officer

Thanks, Alton.

Operator

And our next question comes from line of Greg Badishkanian from Citi. You may begin.

Frederick Charles Wightman — Citigroup Inc. — Analyst

Hey, guys. It’s actually Fred Wightman on for Greg. The February commentary was really helpful. It’s nice to hear that things sound like they’ve improved, but should we be expecting any impact from the Easter shift as we move through the rest of the quarter?

Joseph H. Smith — Senior Vice President and Chief Financial Officer

Yeah, Fred. This is Joe Smith. Looking at that and also just the change in New Year’s Eve. It’s actually gone not be too significant for us, probably, less than 1% impact on our comparable sales.

Frederick Charles Wightman — Citigroup Inc. — Analyst

Okay. And then — that’s helpful. And then understanding that you’re still seeing some ticket headwinds from the loyalty shift. What are you guys assuming for pricing for the year?

Steve M. Ritchie — President and Chief Executive Officer

Fred, it’s Steve. We don’t typically breakout check and traffic on an annual basis. But I will tell you that we are going to be very focused on getting traffic going the right direction. We still have a relatively low share within a very fragmented large category about a $40 billion category. So we’re going to be very focused on getting traffic moving back in the right direction. We do know the layer to your point. The loyalty program and what that’s going to do is a balancing act of how we will appropriately plan out the cadence of all of our promotions through the year. So we know we got to get traffic growing, but we do want to have stability in our check and what we had in period one that I call it out was instability in our check because of the multiple things all at the same time. So we wouldn’t expect that to be a drag on what we would deem to be appropriate kind of check averages on a go-forward basis.

Frederick Charles Wightman — Citigroup Inc. — Analyst

Okay. And then the gap between Company-owned and franchise did come down a little bit this quarter. How should we think about that going forward?

Steve M. Ritchie — President and Chief Executive Officer

Fred, this is Steve again. So are we — we had a long track record of very solid performance as you would know. I think the CAGR on a five-year basis through 2017 and excluding 2018 was about 5% per year for our corporate restaurants. So they’ve had a tremendous run and they were surpassed our franchise results by 1% to 2% per year on an average year. So the franchise folks have closed the gap a bit. But there are a number of factors within the individual corporate markets that have caused some, what I would call to be more short-term pressure on the overall comps. I don’t believe as we get through the full year that you’re going to see the kind of spread that we’ve experienced over the last couple of quarters. We do have some work to do in our corporate restaurants. We have had significant pressure, not only in sales, but on overall margins. But in the conversations I called out in my prepared remarks, the planning, energy and drive from our corporate operations leadership team, getting back to the basics and the fundamentals that drove the performance for multiple years. There is a level of energy and confidence that we’ll get back to those levels. So I fully expect the gaps to close as we progress throughout the year.

Frederick Charles Wightman — Citigroup Inc. — Analyst

Very helpful. Thanks guys.

Steve M. Ritchie — President and Chief Executive Officer

Thanks, Fred.

Operator

And our next question will come from the line of Will Slabaugh from Stephens. You may begin.

William Everett Slabaugh — Stephens Inc. — Analyst

Yeah. Thanks, guys. Had a question on the check and the traffic, just given the movement that you talked about in the past a couple of periods. So it sounds like that taken impact you mentioned was multiple discount that layered on one another, I wondered if you could quantify that in any way versus the recovery that you’ve seen more recently? And I guess, maybe kind of behind the question is, how traffic behave during that period, do we see fairly similar traffic results and it was mainly just ticket that was driving it down and how you feel about sort of the traffic growth that you’re seeing right now. I guess relative to your expectations and if it’s behaved as you would have expected along with that February recovery that you talked about.

Steve M. Ritchie — President and Chief Executive Officer

Sure, Will. It’s Steve. I mean, I would just say that overall disappointment both in traffic and in check in December and January. We saw a slight uptick maybe in the traffic side, but there wasn’t the kind of lift that we would expect for the check declines that we experienced in December and January. With that being said, turning the page to February, we’ve got back to, as I called out, more stable levels of what we would be looking for on the check side and seeing significant improvement from January, February on the overall transaction level on a per week basis by store and as you look at that on a comp perspective. So I think you got to kind of exclude some of the things that happened in December and January, because there’s so many things that are moving in that month and a half period of time. We are thinking about moving forward and we like what we’ve seen in February. We think we can balance out that with based on the cadence of the promotions that we have as we think about the rest of this year and again we’re going to be very focused on getting traffic moving back in the right direction, because we donated a lot of share in 2018 and we certainly want to get that share back over a period of time.

William Everett Slabaugh — Stephens Inc. — Analyst

Got it. And then one more question if I could, your menu innovation you’ve been talking about, it sounds like, you’re capitalizing here first as you sort of kind of reemerge here as — on your brand equity is around quality. So I’m curious how you plan to treat some of these more specialty pizzas, if that $12 price point is something that you plan to sort of hang with royal, it sounds like that it is, because you mentioned $12 and $6 or if there is room there if you feel like there is room to go up. If you go more specialty and how you feel like the brand could play, if you did go more premium. And then kind of what that means for value. If $6 ends up being your national value message. Does that make sense for every market or might value be more regionalized or localized down the road?

Michael R. Nettles — Executive Vice President, Chief Operating and Growth Officer

Hey, Will. It’s Mike. I’ll take some of that and my colleagues here can chime in. But basically from our perspective we’re still in test mode. $6 and $12 seem to be working very well for us together, more so than maybe individually. They are targeted a very different customer segments for using our newly developed marketing technology to really go after those segments with various types of messaging and promotional offers that really pulse on those and it’s working really well. It’s been a great formula so far. Still has room for tweaking and we’re not sure that those will be the final numbers that we had on forever.

However, having said that, there will always be opportunities for franchisees in different markets that have some opportunity for upsells. That’s a feature that is really important to us in the digital systems, which would allow our franchisee to actually have a little more local flavor on what they upsell you to or what you’re being up sold from. They also have quite a bit of control over the pricing of that, be it just extra ingredients or would you like to Papa size that and take it to an extra large pizza, as opposed to the large pizza. So there’ll be plenty of opportunity to keep pushing for a little higher premium and we’ve not ruled out that there could even be a tier above the $12 side of the equation.

Clearly, we have some of that now with our extra large pizza. It’s one of the few in the industry that actually is there and performs, and it’s actually a great ticket draw for us, but there’ll be some other opportunities for us to continue pulsing around that as well. So while it’s working, I don’t want to say that that is our absolute future. We’ll continue to looking at it and clearly looking for opportunities. To Steve’s point, they not just drive transactions, but also drive check as we look for opportunities to put more out in front of the customers that they really want.

Steve M. Ritchie — President and Chief Executive Officer

And Will, it’s Steve. Just a — just call out one more thing and Mike said this before, but I think it is very important as the introduction of the new loyalty program, that is a complete value platform. So it is a richer program, it provides more value to the consumer and also gives them the flexibility of being able to order anything on our menu now. So we certainly want to highlight that as part of our overall frequency driver for the brand from the loyalty and value perspective. At the same time, we do know that we got to have a real balance and rigor out there as you called out on the individual markets, some of our high wage market, so we will be leveraging some of the new tech within the loyalty program.

To be more specific, targeted, segmenting out, building out some of our one-to-one capabilities, so that we’re not broad brushing value or value is not a need state from a consumer perspective. So we’re excited about some of the new tech that we have and we are excited about how we might target that and when we say $6, it might not mean one item at $6. It might be requirement of multiple items purchased at $6 and this may not be pizza.

So we just know that we need to have a value layer out there that gets — provide the opportunity for consumers to get access. So excited about the learnings that we’ve seen thus far, but to Mike’s point, we’ve not made final decisions on exactly how we intend to have that $6 layer, unlike we like what we have seen and we will obviously can continue at least through period three in March there with the $12 specialty piece.

Michael R. Nettles — Executive Vice President, Chief Operating and Growth Officer

Yeah. Will, just one final comment on that, you would have seen this, if you were Papa John’s customer during the Super Bowl. We’ve done bounce back promotion. That’s fairly common in this industry. But for the first time we actually executed a bounce back program through the new PAPA REWARDS system. And so it was literally no need to enroll. You bought a pizza from us during the period around Super Bowl and you are automatically enrolled for a bounce back of a free pizza in the following period.

And there really was a high usage of that at a customer level, but it also gave us very directed ability to communicate to that customer, what rewards they had. They were dropped into their wallet. They didn’t have to remember a promo code. It was all automated through the system. Really a good example of why we’re going to continue playing with the right price points, because we have new technology and capabilities to really maximize on this and deliver some really surprise and delight on the consumer side, but also drive some incremental check and profitability opportunities for us on the business side.

William Everett Slabaugh — Stephens Inc. — Analyst

Got it. Thanks for all that guys.

Steve M. Ritchie — President and Chief Executive Officer

Thank you, Will.

Operator

Thank you. And our next question comes from the line of Chris O’Cull from Stifel. You may begin.

Christopher Thomas O’Cull — Stifel, Nicolaus & Company, Incorporated — Analyst

Thanks. Good afternoon, guys. I apologize if I missed some of your responses, I’ve been bouncing back and forth between calls, but why — Steve why do you think the Philly Cheesesteak promotion is working better in February than it did last fall?

Steve M. Ritchie — President and Chief Executive Officer

We didn’t run the Philly Cheesesteak last fall, but we — our LTO products actually…

Christopher Thomas O’Cull — Stifel, Nicolaus & Company, Incorporated — Analyst

Okay.

Steve M. Ritchie — President and Chief Executive Officer

…in the past. Well, it actually performed quite well in the past and the last time that we did run that specific promotion. And some of our LTOs in the past with the specialty pizzas have performed at the mix expectations, but we’ve seen very nice incremental new customer traffic coming from those promotions. And I think the best way to compare it against though is that what we did in period one trying to have parity value, coupled with loyalty, coupled with the free cheesesteak promotion, drove extensive pressure on check and i.e. negatively impacted the overall sales piece. But also it’s not just about the Philly Cheesesteak Pizza, I think the marketing teams did a really nice job on the creative execution.

So it really does highlight the quality of our ingredients. We have a new media buying agency that we brought on last year. That’s some of that work, making sure that we’re allocating the right investments, targeting the right consumer. So it’s really a recipe for success as opposed to it’s all about one product that’s drove the overall performance and improvement we’ve seen in February and it’s not a limited time offer. So we’ve done a complete refresh of our overall specialty line-up here and introduced new pizzas and also took off some of our underperforming specialty pizzas as well.

Michael R. Nettles — Executive Vice President, Chief Operating and Growth Officer

To that same point, it’s Mike, Chris, just to add on to it. Last time we would have run Philly Cheesesteak and it did perform well. It was marketed the same way to everybody in the Papa John’s universe. So we just did a broadcast marketing like we always did and let that kind of speak for itself. This time we still did that with some really compelling creative to go along with it a lot of messaging around it, but again leveraging all the investments we made in 2018 with new marketing technology, there was a massive amount of targeted marketing.

We went after people that have bought it before. We went after people that look like the people that had bought it before through database marketing and the one-to-one marketing and we found really good reception by using that new technology to try to drive more customers into the brand that we thought would really like it by telling that great ingredients story and that Better Pizza story. So, the technology is working really well for us on the marketing side, that’s a big reason why the growth team was built to merge both the technology pieces and the marketing pieces together, so that we have much higher efficacy in our overall messaging and that’s just starting. We’ve got a lot of room to play with, but quite frankly, we’re really pleased with how that technology is working so far.

Christopher Thomas O’Cull — Stifel, Nicolaus & Company, Incorporated — Analyst

Okay. That’s helpful. And then, Joe, do you know what percentage of domestic franchisees had a loss last year in 2018?

Joseph H. Smith — Senior Vice President and Chief Financial Officer

Yeah. Chris, I mean, we’re not going to get into specific information on that. Obviously, we have seen some of our franchisees face some more pressures. We have some metrics that we use and that is some of the metrics that we use to know how to go in and help some of the specific franchisees that might need additional help.

Steve M. Ritchie — President and Chief Executive Officer

And I’ll just add to it. Chris, it’s Steve. I mean, I think, that this — what we intended to do there and I think that pretty successfully is bridge some of the challenges from a unit economic perspective with the multiple things that we didn’t support last year. So if we didn’t do those things or would have been a much higher percentage of stores that would have been below that breakeven point, we have a percentage of stores that are below the breakeven point that we are constantly trying to drive the top-line, improve their execution and overall unit economics.

But as we looked at it, we are — how can we provide levels of support to the bridge solutions to improving the overall sales in addition to making investments like we did last year in the National Marketing Fund, the $10 million. So it’s a balancing act, but clearly depicted by the increasing number of closures last year gives you a feel for the amount of pressure that was occurring on the business model last year.

Christopher Thomas O’Cull — Stifel, Nicolaus & Company, Incorporated — Analyst

No. It’s helpful. And then, Joe, I know in the past the Company has targeted a 6% commissary margin. Do you have an expectation for the commissary margin this year?

Joseph H. Smith — Senior Vice President and Chief Financial Officer

Yeah. I mean, Chris, again, we’re not going to get into specific percentage margins. But, again, we are always going to keep that relatively consistent. It is lower last year as again we made some — we reduced our margin to assist our franchisees. I think you see that. Again, we continue to evaluate it, but we’ve always tried to maintain something consistent that we think is fair to our franchisees and us, and we’re not going to obviously increase that significantly.

Steve M. Ritchie — President and Chief Executive Officer

Yeah. Chris, I mean, I think, it’s — I mean, it’s fair question, as we did in the fourth quarter last year to Joe’s point we did provide a level of relief on the food service side. But based on the transaction level that we experienced, the margins at the food service side of the business is clearly driven by transactions and peace counts, and when we saw those declines, we didn’t feel it appropriate to raise prices for our franchisees. So that was part of the level of support that we provided. That was a one-off. We have had a very consistent verbal agreement with our franchisees for many, many years. We want to continue to honor that verbal agreement and to Joe’s point maintain a consistent margin prior to the 2018 piece and use the other pieces to help continue to support our franchisees and again assessing where we may make investments to fix the top-line. So I would expect, if you look at your modeling, we thinking about margin percentages looking more similar to pr

Caterpillar’s double downgrade is ‘excessive,’ don’t run away from the stock, expert says

Caterpillar just got bulldozed by UBS.

The firm gave a rare double downgrade from buy to sell with analysts warning that an earnings decline in 2020 had not yet been priced into the stock.

Mark Tepper, president and founder of Strategic Wealth Partners, disagrees.

“I wouldn’t be running away from this stock. I think the double downgrade was excessive,” Tepper said Tuesday on CNBC’s “Trading Nation.”

UBS’ call is an outlier on the Street. The stock has an average overweight rating and $150 price target, according to data pooled by FactSet. That’s 8 percent higher than current levels. UBS’ $125 price target marks 10 percent downside.

“The hurdles are low, so the potential for outperformance is there,” Tepper said. “They’ve been dealing with rising costs over the course of the last few years, but it seems like their recent price increases should offset that. And let’s not forget, they had record profits last year.”

Caterpillar posted record profit of $11.22 a share in fiscal 2018, up 63 percent from a year earlier. Full-year sales rose by 20 percent.

“Over the last several years they’ve really been focusing on restructuring the business, which should help with profitability going forward,” said Tepper. “Loan growth is on fire and commercial and industrial loan growth is leading the way, growing by over 10 percent per year so that loan growth is good for profit growth. So we think there’s potential for the stock to go up from here.”

But Boris Schlossberg, managing director of FX strategy at BK Asset Management, said Tuesday he is “still dubious” on the stock given global growth fears.

“CAT has really become a proxy for macro global growth in many ways,” Schlossberg said on “Trading Nation.” “The thing that’s going to drive the stock much more than anything individual to the company is really how well the global PMI has gone.”

Global economic growth continued to slow at the beginning of the year, bottoming at its lowest level in 2½ years in January, according to J.P. Morgan’s global composite purchasing managers index. The U.S. remained strong, but France and Italy saw growth contract while China, Japan and Russia slowed.

“If they can stabilize and begin to perk up, that would give me a lot more confidence that CAT is going to benefit from that recovery. Until then, I think you’ve pretty much got to stay away,” Schlossberg said.

Caterpillar shares fell 2 percent on Tuesday, the worst performer on the Dow. They were down 0.3 percent in Wednesday’s premarket but were still up 9 percent this year.

Disclaimer

Top 5 Performing Stocks To Buy For 2019

Shares of Punjab National Bank (PNB) added 3 percent intraday Friday as company put on sale three NPAs worth Rs 136 crore.

The company has put on sale three non-performing assets to recover Rs 136 crore dues from the borrowers.

“We intend to place these accounts for sale to ARCs/ NBFCs/other banks/FIs on the terms and conditions stipulated in the bank’s policy, in line with the

regulatory guidelines,” PNB said in the invite for expression.

The three non-performing accounts (NPAs) or bad loans that have been put on sale are Gwalior Jhansi Expressways with an outstanding of Rs 55 crore; SVS

Buildcon Pvt Ltd Rs 50 crore and Shiva Texfabs Ltd Rs 31.06 crore.

The process of e-bidding for the sale of these accounts will happen on July 7, 2018, the bank said.

Earlier in April also, the bank had invited bids to sell three NPA accounts Shree Sidhbali Ispat Ltd (Meerut) with non-performing loans of (Rs 165.30 crore), Sri Guruprabha Power Ltd (Chennai) Rs 31.52 crore and Dharamnath Investment (Mumbai) Rs 17.63 crore to recover dues.

Top 5 Performing Stocks To Buy For 2019: Internap Network Services Corporation(INAP)

Advisors’ Opinion:

  • [By Stephan Byrd]

    Internap Corp (NASDAQ:INAP) has received an average rating of “Buy” from the six analysts that are currently covering the firm, MarketBeat reports. Two equities research analysts have rated the stock with a sell rating, one has issued a hold rating, one has issued a buy rating and two have given a strong buy rating to the company. The average 12-month price objective among brokerages that have covered the stock in the last year is $28.00.

  • [By Ethan Ryder]

    Shares of Internap Corp (NASDAQ:INAP) saw unusually-strong trading volume on Tuesday . Approximately 1,086,029 shares traded hands during mid-day trading, an increase of 306% from the previous session’s volume of 267,673 shares.The stock last traded at $5.85 and had previously closed at $5.32.

  • [By Stephan Byrd]

    Internap (NASDAQ:INAP) issued its quarterly earnings data on Thursday. The information technology services provider reported ($0.70) earnings per share (EPS) for the quarter, missing analysts’ consensus estimates of ($0.57) by ($0.13), MarketWatch Earnings reports. The business had revenue of $74.20 million for the quarter, compared to analyst estimates of $73.99 million. Internap had a negative return on equity of 271.76% and a negative net margin of 16.15%. The firm’s revenue for the quarter was up 2.9% compared to the same quarter last year. During the same period in the previous year, the business posted ($0.02) earnings per share.

  • [By Joseph Griffin]

    Get a free copy of the Zacks research report on Internap (INAP)

    For more information about research offerings from Zacks Investment Research, visit Zacks.com

Top 5 Performing Stocks To Buy For 2019: Omnicell Inc.(OMCL)

Advisors’ Opinion:

  • [By Stephan Byrd]

    Get a free copy of the Zacks research report on Omnicell (OMCL)

    For more information about research offerings from Zacks Investment Research, visit Zacks.com

  • [By Shane Hupp]

    Omnicell, Inc. (NASDAQ:OMCL) shares hit a new 52-week high on Tuesday . The stock traded as high as $65.85 and last traded at $65.90, with a volume of 3793 shares traded. The stock had previously closed at $64.15.

  • [By Logan Wallace]

    Get a free copy of the Zacks research report on Omnicell Technologies (OMCL)

    For more information about research offerings from Zacks Investment Research, visit Zacks.com

  • [By Shane Hupp]

    Shares of Omnicell, Inc. (NASDAQ:OMCL) have been given an average rating of “Buy” by the nine analysts that are covering the company, MarketBeat Ratings reports. Two investment analysts have rated the stock with a hold recommendation and six have given a buy recommendation to the company. The average 12-month price target among brokerages that have covered the stock in the last year is $66.40.

Top 5 Performing Stocks To Buy For 2019: Statoil ASA(STO)

Advisors’ Opinion:

  • [By Matthew DiLallo]

    Another highlight in April was that Shell gave the green light to the Vito project, which is a joint venture with Statoil (NYSE:STO) in the Gulf of Mexico. Shell and Statoil were able to cut that project’s cost estimate by 70% from the original design so that it’s now profitable at $35 a barrel. The partners expect the project to produce 100,000 BOE/D of low-cost oil and gas when it comes online in 2021.

  • [By Tyler Crowe]

    Anyone that has watched oil prices tick up recently has probably expected oil producers to report some impressive earnings results this past quarter, and Statoil (NYSE:STO) did just that with a 21% boost to the bottom line. At the same time, management is using all of its additional cash to do some wheeling and dealing that should help boost its growth possibilities in the nearer term.

  • [By Shane Hupp]

    Statoil (NYSE: STO) and Delek US (NYSE:DK) are both oils/energy companies, but which is the superior stock? We will compare the two businesses based on the strength of their institutional ownership, earnings, valuation, analyst recommendations, dividends, profitability and risk.

Top 5 Performing Stocks To Buy For 2019: Anixter International Inc.(AXE)

Advisors’ Opinion:

  • [By Shane Hupp]

    Strs Ohio boosted its position in Anixter International Inc. (NYSE:AXE) by 15.4% during the second quarter, according to its most recent 13F filing with the SEC. The firm owned 18,700 shares of the technology company’s stock after acquiring an additional 2,500 shares during the period. Strs Ohio’s holdings in Anixter International were worth $1,183,000 as of its most recent SEC filing.

  • [By Stephan Byrd]

    TheStreet upgraded shares of Anixter International (NYSE:AXE) from a c+ rating to a b rating in a report issued on Wednesday morning.

    Several other equities analysts also recently commented on the stock. ValuEngine downgraded shares of Anixter International from a sell rating to a strong sell rating in a research note on Tuesday. Zacks Investment Research downgraded shares of Anixter International from a strong-buy rating to a hold rating in a research note on Tuesday, September 25th. Finally, Longbow Research upgraded shares of Anixter International from a neutral rating to a buy rating in a research note on Friday, July 20th. One research analyst has rated the stock with a sell rating, two have given a hold rating and one has issued a buy rating to the stock. Anixter International has a consensus rating of Hold and an average target price of $85.50.

  • [By Max Byerly]

    Get a free copy of the Zacks research report on Anixter International (AXE)

    For more information about research offerings from Zacks Investment Research, visit Zacks.com

  • [By Max Byerly]

    TheStreet upgraded shares of Anixter International (NYSE:AXE) from a c+ rating to a b- rating in a research report released on Wednesday morning.

    Several other brokerages have also recently issued reports on AXE. Zacks Investment Research raised Anixter International from a sell rating to a hold rating in a report on Monday, December 3rd. ValuEngine downgraded Anixter International from a sell rating to a strong sell rating in a research report on Wednesday, January 30th. Finally, Wells Fargo & Co cut their target price on Anixter International from $70.00 to $60.00 and set a market perform rating on the stock in a research report on Friday, December 21st. Two investment analysts have rated the stock with a sell rating, one has assigned a hold rating and one has assigned a buy rating to the company. The stock presently has an average rating of Hold and a consensus target price of $70.50.

Top 5 Performing Stocks To Buy For 2019: Vanguard FTSE Developed Markets ETF (VEA)

Advisors’ Opinion:

  • [By WWW.GURUFOCUS.COM]

    For the details of ETF Portfolio Partners, Inc.’s stock buys and sells, go to www.gurufocus.com/StockBuy.php?GuruName=ETF+Portfolio+Partners%2C+Inc.

    These are the top 5 holdings of ETF Portfolio Partners, Inc.Vanguard Total Stock Market (VTI) – 194,472 shares, 17.91% of the total portfolio. Shares added by 1.13%iShares Core U.S. Aggregate Bond (AGG) – 254,189 shares, 17.72% of the total portfolio. Shares added by 3.15%iShares Russell 1000 (IWB) – 98,181 shares, 9.78% of the total portfolio. Shares added by 0.56%Vanguard FTSE Developed Markets (VEA) – 322,914 shares, 9.08% of the total portfolio. Shares added by 1.20%iShares S&P 500 Value (IVE) – 108,531

  • [By Max Byerly]

    Pure Financial Advisors Inc. lessened its stake in VANGUARD TAX-MA/FTSE DEVELOPED MKTS (NYSEARCA:VEA) by 4.8% in the second quarter, according to its most recent 13F filing with the Securities & Exchange Commission. The institutional investor owned 404,056 shares of the company’s stock after selling 20,568 shares during the quarter. VANGUARD TAX-MA/FTSE DEVELOPED MKTS accounts for 3.9% of Pure Financial Advisors Inc.’s investment portfolio, making the stock its 6th largest position. Pure Financial Advisors Inc.’s holdings in VANGUARD TAX-MA/FTSE DEVELOPED MKTS were worth $17,334,000 as of its most recent filing with the Securities & Exchange Commission.

  • [By Shane Hupp]

    Relaxing Retirement Coach lowered its stake in shares of Vanguard FTSE Developed Markets ETF (NYSEARCA:VEA) by 17.1% during the fourth quarter, according to its most recent disclosure with the Securities and Exchange Commission. The firm owned 19,460 shares of the company’s stock after selling 4,026 shares during the quarter. Relaxing Retirement Coach’s holdings in Vanguard FTSE Developed Markets ETF were worth $723,000 as of its most recent filing with the Securities and Exchange Commission.

  • [By Max Byerly]

    Sawtooth Solutions LLC lifted its holdings in shares of Vanguard FTSE Developed Markets ETF (NYSEARCA:VEA) by 12.6% in the 2nd quarter, according to the company in its most recent disclosure with the Securities and Exchange Commission (SEC). The institutional investor owned 1,361,089 shares of the company’s stock after acquiring an additional 152,089 shares during the period. Vanguard FTSE Developed Markets ETF makes up 4.2% of Sawtooth Solutions LLC’s holdings, making the stock its 3rd biggest holding. Sawtooth Solutions LLC owned 0.08% of Vanguard FTSE Developed Markets ETF worth $58,391,000 as of its most recent SEC filing.

  • [By Logan Wallace]

    Sanctuary Wealth Management L.L.C. lifted its stake in shares of Vanguard FTSE Developed Markets ETF (NYSEARCA:VEA) by 0.2% during the first quarter, according to the company in its most recent disclosure with the Securities & Exchange Commission. The fund owned 673,046 shares of the company’s stock after acquiring an additional 1,571 shares during the period. Vanguard FTSE Developed Markets ETF accounts for approximately 25.1% of Sanctuary Wealth Management L.L.C.’s portfolio, making the stock its 2nd biggest holding. Sanctuary Wealth Management L.L.C.’s holdings in Vanguard FTSE Developed Markets ETF were worth $29,782,000 at the end of the most recent reporting period.

  • [By Max Byerly]

    Heritage Way Advisors LLC increased its position in shares of VANGUARD TAX-MA/FTSE DEVELOPED MKTS (NYSEARCA:VEA) by 10.4% during the second quarter, according to the company in its most recent Form 13F filing with the SEC. The fund owned 129,626 shares of the company’s stock after acquiring an additional 12,161 shares during the quarter. VANGUARD TAX-MA/FTSE DEVELOPED MKTS makes up approximately 4.1% of Heritage Way Advisors LLC’s holdings, making the stock its 2nd biggest holding. Heritage Way Advisors LLC’s holdings in VANGUARD TAX-MA/FTSE DEVELOPED MKTS were worth $5,561,000 at the end of the most recent quarter.