Today, megabanks Citigroup (C), JPMorgan Chase (JPM) and Wells Fargo (WFC) reported better-than-expected earnings. Only Citigroup is trading higher, however. Macquarie’s David Konrad and Jack Walsh explain what’s to like in Citi’s earnings:
We recommend buying Citis shares withbetter-than-expected earnings of $1.24, which compares favorable with the Street at $1.16 and our estimate of $1.14. Although, similar to JPMorgan Chase & Co (JPM US, US$67.74, Neutral , TP: US$70.00), FICC came in better than expected, and we are more encouraged by the better-than-expected operating leverage in the Global Consumer Bank following the Costco Wholesale (COST) card purchase and better sales in Asia. Despite the stock being up nearly 12% over the past three months, it is still the cheapest stock relative to peers at 77% of TBV. TBV increased 8% YoY.
Hot Cheap Stocks To Watch Right Now: S&P Smallcap 600(PH)
- [By Shane Hupp]
ClariVest Asset Management LLC reduced its stake in shares of Parker Hannifin (NYSE:PH) by 3.0% during the 1st quarter, according to its most recent filing with the SEC. The firm owned 122,268 shares of the industrial products company’s stock after selling 3,773 shares during the period. ClariVest Asset Management LLC owned approximately 0.09% of Parker Hannifin worth $20,913,000 at the end of the most recent quarter.
- [By Ethan Ryder]
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- [By Joseph Griffin]
State Board of Administration of Florida Retirement System reduced its position in Parker Hannifin (NYSE:PH) by 3.7% during the 1st quarter, according to its most recent filing with the Securities and Exchange Commission (SEC). The institutional investor owned 172,950 shares of the industrial products company’s stock after selling 6,667 shares during the period. State Board of Administration of Florida Retirement System owned approximately 0.13% of Parker Hannifin worth $29,580,000 as of its most recent SEC filing.
- [By Logan Wallace]
Ardevora Asset Management LLP reduced its stake in shares of Parker Hannifin (NYSE:PH) by 0.5% in the first quarter, HoldingsChannel.com reports. The fund owned 154,400 shares of the industrial products company’s stock after selling 800 shares during the quarter. Ardevora Asset Management LLP’s holdings in Parker Hannifin were worth $26,407,000 as of its most recent filing with the Securities & Exchange Commission.
Hot Cheap Stocks To Watch Right Now: S&P GSCI(GD)
- [By ]
Cramer and Moreno also looked at General Dynamics (GD) which peaked in early March, before starting a downtrend until Tuesday. Last week, General Dynamics fell to the lower end of its channel, but then it bounced right to the high end, and Wednesday it firmly broke out above the high end of this channel. The stochastic oscillator, which is a powerful momentum indicator is making a bullish crossover, and based on today’s move, Moreno thinks General Dynamics can return to its old highs at $230.
- [By Lou Whiteman]
For investors looking to put new money to work in a defense prime today, I’d recommend General Dynamics (NYSE:GD) over either Raytheon or Northrop Grumman. General Dynamics currently trades at a 20% discount to its rivals on a price-to-earnings basis and at a 13% discount on a price-to-sales basis due to continued weakness in its business jet division. There’s more risk to General Dynamics, but there is also more potential upside should it get its aerospace business on track and close that valuation gap.
- [By Todd Shriber, ETF Professor]
Code Pink takes issue with BlackRock's investments in aerospace and defense companies such as General Dynamics Corp.(NYSE: GD), Lockheed Martin Corp. (NYSE: LMT) and Northrop Grumman Corp. (NYSE: NOC).
- [By Lou Whiteman]
General Dynamics (NYSE:GD)stock has had an odd couple of years, gaining more than 17% in 2017 but still lagging most of its defense rivals. Interest in defense stocks, including General Dynamics, has ebbed in recent months, but the company still trades at a discount to some of its chief rivals.
- [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.
Hot Cheap Stocks To Watch Right Now: International Business Machines Corporation(IBM)
- [By Matthew Frankel]
To illustrate some of these points, as well as some other reasons Buffett and the rest of Berkshire’s team may be inclined to sell stocks, here are a few examples from the company’s history:
IBM (NYSE:IBM): Berkshire had been gradually unloading its IBM stake for some time, and Buffett confirmed that the last of the shares were sold during the first quarter of 2018. In a nutshell, Buffett says he misjudged IBM’s competitive challenges, and as a result, it has revalued the stock lower. This is a prime example of the concept of “when your original thesis no longer applies, get out.” Wells Fargo (NYSE:WFC): Berkshire has sold some of its Wells Fargostock in recent quarters, and you might assume it has something to do with the bank’s infamous “fake accounts” scandal. But you’d be wrong. Buffett has said several times that he intends to stick with Wells Fargo, but regulatory rules prevent him from owning more than 10% of the bank’s shares. The recent sales were solely to remain under that threshold. Freddie Mac (NASDAQOTH:FMCC): Many newer Berkshire investors are surprised to hear that Buffett was ever a fan of mortgage giant Freddie Mac, but Berkshire owned 9% of the company’s shares in the late 1990s. Berkshire made lots of money on the investment, but Buffett started to see troubling signs — specifically, the company was taking on far too much risk to keep its earnings growing at a double-digit rate. Buffett ended up selling all of Berkshire’s Freddie Mac shares by 2000, and we all know what happened during the mortgage meltdown — there’s a reason Freddie Mac is a penny stock today. ExxonMobil (NYSE:XOM): Until late 2014, Berkshire was one of ExxonMobil’s largest shareholders. However, Buffett realized that oil prices weren’t likely to stay as high as he originally thought, so Berkshire’s entire stake was abruptly sold. Goldman Sachs (NYSE:GS):Warren Buffett’s preferred uses for Berkshire Hathaway’s capital are to acquire entire businesses and buy common
- [By ]
I believe that some companies such as a 4.4%-yielding International Business Machines (NYSE: IBM), while having cheaper valuations because of past missteps and/or the weight of the older “legacy” business, do have significant potential to play a role in the future and make money from the advances in modern technology.
- [By Anders Bylund, Timothy Green, and Steve Symington]
Anders Bylund (IBM): Big Blue is changing, and the transformation hurts. The technology giant has been shedding hardware operations in recent years in an effort to refocus on artificial intelligence, mobile software, and cloud computing.
- [By Keith Noonan, Rich Smith, and Timothy Green]
With that in mind, we asked three Motley Fool investors to identify a top high-yield stock that’s worth holding forever. Read on to see why they picked UBS (NYSE:UBS), International Business Machines (NYSE:IBM), and AT&T (NYSE:T).
- [By Anders Bylund, Chris Neiger, and Ashraf Eassa]
Anders Bylund (IBM): There hasn’t been a better time to buy IBM as an income stock in the last 25 years. Aside from a very brief stint at 4.4% in February 2016, Big Blue hasn’t offered 4.2% yields since the fall of 1993. But that’s where the stock stands today, and I think you should lock in those ultra-generous yields while they last.
Hot Cheap Stocks To Watch Right Now: USG Corporation(USG)
- [By Jason Hall, George Budwell, and Chuck Saletta]
And while it may not always work out well to simply copy the moves other investors make, it can pay off to use their buying and selling moves as jumping-off points in your own research. We asked three real-world investors for their insight, and they wrote about two recent Buffett buys ofApple Inc.(NASDAQ:AAPL) andUSG Corporation(NYSE:USG), and a recent Baker Brothers buy ofHeron Therapeutics Inc(NASDAQ:HRTX).
- [By Dan Caplinger]
Warren Buffett likes to hold his stock positions for the long run, and his experience with USG (NYSE:USG) has been typical of his other long-term investments. The Oracle of Omaha started buying shares of the manufacturer of Sheetrock drywall and other building materials back in 2000, accumulating a sizable stake that has ballooned to more than 30% of the company. USG ended up going through bankruptcy in order to get a handle on its asbestos liability claims, but thanks largely to Buffett’s involvement, the building materials company not only survived bankruptcy but also saw share prices soar briefly on hopes that USG would once again fully participate in the then-strong housing boom.
- [By Stephan Byrd]
ValuEngine upgraded shares of USG (NYSE:USG) from a buy rating to a strong-buy rating in a report published on Tuesday.
A number of other research analysts have also recently weighed in on the stock. Credit Suisse Group upgraded shares of USG from an underperform rating to a neutral rating and dropped their target price for the company from $35.00 to $24.00 in a research note on Friday, April 27th. Jefferies Group reiterated a hold rating and issued a $40.00 target price on shares of USG in a research note on Monday, April 23rd. SunTrust Banks boosted their target price on shares of USG from $42.00 to $44.00 and gave the company a hold rating in a research note on Tuesday, April 17th. Buckingham Research boosted their target price on shares of USG from $34.00 to $42.00 and gave the company a neutral rating in a research note on Monday, April 16th. Finally, Nomura boosted their target price on shares of USG from $39.00 to $44.00 and gave the company a neutral rating in a research note on Tuesday, March 27th. Two investment analysts have rated the stock with a sell rating, ten have issued a hold rating, four have assigned a buy rating and one has given a strong buy rating to the stock. The stock currently has a consensus rating of Hold and an average price target of $39.00.
- [By Jordan Wathen]
As USG Corporation (NYSE:USG) drags its feet on an offer to sell the company for $42 per share, Berkshire intends to use its 30.8% ownership stake to motivate its top brass to make a deal. Berkshire told Bloomberg it intends to vote its shares against USG’s board members who are up for re-election at this year’s annual meeting, a clear message that Buffett is ready to cash in, even if USG’s management and board are not.
- [By Ethan Ryder]
USG Co. (NYSE:USG) – Equities research analysts at SunTrust Banks reduced their Q3 2018 earnings per share estimates for shares of USG in a report issued on Monday, July 9th. SunTrust Banks analyst K. Hughes now forecasts that the construction company will post earnings of $0.57 per share for the quarter, down from their previous estimate of $0.61. SunTrust Banks currently has a “Hold” rating and a $44.00 price target on the stock. SunTrust Banks also issued estimates for USG’s FY2018 earnings at $2.05 EPS, Q3 2019 earnings at $0.71 EPS and FY2019 earnings at $2.53 EPS.