Tag Archives: CRM

Hot Casino Stocks For 2019

When casino gambling is legalized in Japan, we’re going to see an all-out spending war among resort operators because it could become the world’s most lucrative market. And because of the potential Japan offers casino operators, the feeding frenzy they promise could also make it the most expensive gambling market in the world.

How much is too much?

The big casinos certainly want to spend big. Las Vegas Sands (NYSE:LVS) says a new integrated resort in Japan will cost anywhere from $6 billion to $10 billion, two to three times more than it spent on building its brand new French-themed Parisian resort in Macau. MGM Resorts (NYSE:MGM) says it, too, could spend $10 billion for a new casino in Japan, quadruple the cost of its MGM Cotai that’s scheduled to open later this year. Wynn Resorts (NASDAQ:WYNN) hasn’t put a price tag on it yet, though it spent over $4 billion to open the Palace in Macau last August, but CEO Steve Wynn says the opportunity is “thoroughly delicious.”

Image source: Getty Images.

Hot Casino Stocks For 2019: ArQule Inc.(ARQL)

Advisors’ Opinion:

  • [By Lisa Levin] Gainers
    Melinta Therapeutics, Inc. (NASDAQ: MLNT) shares surged 20.6 percent to $6.39. WBB Securities upgraded Melinta Therapeutics from Hold to Speculative Buy.
    Shoe Carnival, Inc. (NASDAQ: SCVL) shares climbed 17.2 percent to $30.87 after the company reported upbeat quarterly earnings.
    Acorn International, Inc. (NYSE: ATV) shares rose 15.2 percent to $28.804 after the company declared a special one-time cash dividend of $14.97 per ADS.
    Foot Locker, Inc. (NYSE: FL) gained 15 percent to $53.35 after the company reported better-than-expected results for its first quarter.
    Sears Hometown and Outlet Stores, Inc. (NASDAQ: SHOS) surged 14.2 percent to $2.625.
    ArQule, Inc. (NASDAQ: ARQL) rose 13 percent to $5.12 after gaining 4.86 percent on Thursday.
    Quality Systems, Inc. (NASDAQ: QSII) gained 12.8 percent to $16.97 after the company posted better-than-expected FQ4 results.
    Loma Negra Compañía Industrial Argentina Sociedad Anónima (NYSE: LOMA) shares rose 12 percent to $12.94.
    ArQule, Inc. (NASDAQ: ARQL) shares rose 12 percent to $5.07.
    Mirati Therapeutics, Inc. (NASDAQ: MRTX) climbed 11.4 percent to $43.50.
    Zai Lab Limited (NASDAQ: ZLAB) gained 11.3 percent to $24.7000.
    Zymeworks Inc. (NASDAQ: ZYME) rose 9.7 percent to $19.64.
    Park City Group, Inc. (NASDAQ: PCYG) climbed 9 percent to $7.90.
    Roku, Inc. (NASDAQ: ROKU) gained 7.9 percent to $38.82 after Citron reversed previously bearish position on the stock.
    Sears Holdings Corporation (NASDAQ: SHLD) shares jumped 7.3 percent to $3.55.
    Deckers Outdoor Corp (NYSE: DECK) rose 3.5 percent to $107.27 after reporting better-than-expected results for its fiscal fourth quarter.

    Check out these big penny stock gainers and losers

  • [By Maxx Chatsko]

    Shares of ArQule (NASDAQ:ARQL) rose over 70% today after the company reported full-year 2018 operating results and provided full-year 2019 guidance. That said, investors are probably used to wild swings in the stock price by now. The development-stage pharma didn’t turn in a particularly impressive performance last year. Management expects revenue to drop significantly in the year ahead as collaboration revenue dries up, which will also widen operating losses.

  • [By Maxx Chatsko]

    Shares of development-stage biopharma ArQule (NASDAQ:ARQL) rose nearly 17% today after the company announced two appointments to its management team in two newly created positions. Dr. Marc Schegerin will serve as senior vice president, corporate strategy, communication, and finance. Dr. Shirish Hirani will serve as senior vice president, program management and product planning. 

Hot Casino Stocks For 2019: Salesforce.com Inc(CRM)

Advisors’ Opinion:

  • [By Daniel Sparks]

    Despite the Street’s high expectations for salesforce.com (NYSE:CRM) going into the company’s second-quarter results for its fiscal 2019, the software-as-a-service company beat consensus analyst estimates and raised its outlook for the full year. The quarter included accelerating revenue growth, surging cash flow from operations, impressive growth in unearned revenue, and more.

  • [By Chris Lange]

    When Salesforce.com Inc. (NYSE: CRM) reported its most recent quarterly results after the markets closed on Monday, the firm said that it had $0.70 in earnings per share (EPS) and $3.60 billion in revenue. Consensus estimates had called for $0.55 in EPS and $3.56 billion in revenue, and in the fourth quarter of last year it posted EPS of $0.35 on $2.85 billion in revenue.

  • [By ]

    The seven companies cited by Cramer are Salesforce.com Inc.  (CRM) , Workday Inc. (WDAY) , ServiceNow Inc. (NOW) , Splunk Inc. (SPLK) , New Relic Inc. (NEWR) , VMWare Inc. (VMW) , and Adobe Systems Incorporated (ADBE) .

  • [By ]

    In the Lightning Round, Cramer was bullish on Salesforce.com (CRM) , American Airlines (AAL) , Align Technology (ALGN) , Procter & Gamble (PG) , United Bankshares (UBSI) , Valeant Pharmaceuticals (VRX) and Dominion Energy (D) .

Hot Casino Stocks For 2019: Castlight Health, inc.(CSLT)

Advisors’ Opinion:

  • [By Stephan Byrd]

    Fmr LLC grew its holdings in shares of Castlight Health Inc (NYSE:CSLT) by 2.1% during the second quarter, Holdings Channel reports. The institutional investor owned 12,620,881 shares of the software maker’s stock after buying an additional 254,616 shares during the period. Fmr LLC owned 0.09% of Castlight Health worth $53,639,000 at the end of the most recent quarter.

  • [By Joseph Griffin]

    Gagnon Advisors LLC grew its stake in shares of Castlight Health Inc (NYSE:CSLT) by 29.7% during the 2nd quarter, HoldingsChannel reports. The firm owned 1,169,056 shares of the software maker’s stock after acquiring an additional 267,662 shares during the period. Castlight Health makes up approximately 3.1% of Gagnon Advisors LLC’s portfolio, making the stock its 17th largest position. Gagnon Advisors LLC’s holdings in Castlight Health were worth $4,968,000 at the end of the most recent reporting period.

  • [By Ethan Ryder]

    Castlight Health Inc (NYSE:CSLT) shot up 2.6% on Monday . The stock traded as high as $3.10 and last traded at $2.97. 6,914 shares traded hands during mid-day trading, a decline of 99% from the average session volume of 535,927 shares. The stock had previously closed at $3.05.

  • [By Ethan Ryder]

    Inovalon (NASDAQ:INOV) and Castlight Health (NYSE:CSLT) are both small-cap computer and technology companies, but which is the better investment? We will compare the two companies based on the strength of their institutional ownership, valuation, risk, analyst recommendations, earnings, dividends and profitability.

  • [By Max Byerly]

    Get a free copy of the Zacks research report on Castlight Health (CSLT)

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

Hot Casino Stocks For 2019: Nemaska Lithium Inc. (NMKEF)

Advisors’ Opinion:

  • [By ]

    Other juniors include: Advantage Lithium (OTCQB:AVLIF) [TSXV:AAL], AIS Resources [TSXV:AIS] (OTCQB:AISSF), American Lithium Corp. [TSX-V: LI] (OTCQB:LIACF), Argentina Lithium and Energy Corp. [TSXV:LIT] (OTCQB:PNXLF), Argosy Minerals [ASX:AGY] (OTC:ARYMF), AVZ Minerals [ASX:AVZ] (OTC:AZZVF), Bacanora Minerals [TSXV:BCN] [AIM:BCN] [GR:1BQ] (OTC:BCRMF), Birimian Ltd [ASX:BGS] (OTC:EEYMF), Critical Elements [TSXV:CRE] [GR:F12] (OTCQX:CRECF), Dajin Resources [TSXV:DJI] (OTCPK:DJIFF), Enigri (private), Eramet (EN Paris:ERA) (OTCPK:ERMAY), European Metals Holdings [ASX:EMH] [AIM:EMH] [GR:E861] (OTC:ERPNF), Far Resources [CSE:FAT] (OTCPK:FRRSF), Force Commodities [ASX:4CE], Kidman Resources [ASX:KDR] [GR:6KR], Latin Resources Ltd [ASX: LRS] (OTC:LAXXF), Lithium Australia [ASX:LIT] (OTC:LMMFF), Lithium Power International [ASX:LPI] (OTC:LTHHF), LSC Lithium [TSXV:LSC] (OTC:LSSCF), MetalsTech [ASX:MTC], MGX Minerals [CSE:XMG] (OTC:MGXMF), Millennial Lithium Corp. [TSXV:ML] (OTCQB:MLNLF), Neo Lithium [TSXV:NLC] (OTC:NTTHF), NRG Metals Inc. [TSXV:NGZ] (OTCQB:NRGMF), Nemaska Lithium [TSX:NMX] [GR:NOT] (OTCQX:NMKEF), North American Lithium (private), Piedmont Lithium [ASX:PLL] (OTC:PLLLY), Prospect Resources [ASX:PSC], Sayona Mining [ASX:SYA] (OTCPK:DMNXF), Savannah Resources [LSE:SAV], Standard Lithium [TSXV:SLL] (OTC:STLHF), and Wealth Minerals [TSXV:WML] (OTCQB:WMLLF).

  • [By ]

    Over the past two months, Nemaska Lithium (OTCQX:NMKEF) has steadily been updating the market on its half-billion-dollar-plus financial raise. The company has aggressively set targets to build out a vertically integrated lithium mining and processing operation ideally positioned to meet growing demand in North America and Europe.

  • [By ]

    Canadian hard-rock lithium chemicals company Nemaska Lithium (OTCQX:NMKEF) is presently at the end of completing a $500 million capital raise which will allow the company to expand into Phase 2 production of the its facility in Quebec. The company has closed an equity deal valued at nearly $100 million from Japan’s SoftBank (OTCPK:SFTBY), executed a streaming agreement with Orion Mine Finance LF valued at over $150 million, and engaged with such high-quality financial groups including Clarkson Platou Securities and Pareto Securities as managers of the bond issuance. Further, Nemaska has signed multiple offtake agreements, including NorthVolt, FMC, Softbank and Johnson Matthey Battery Materials, for the purchase of its lithium chemicals once production begins.

  • [By ]

    I recently finished putting together the Lithium subsector index of my Industrial Minefinder™ Junior Index (IMJI). To start out, the IMJI Lithium subsector will include 4 companies and comprise 8% of the overall IMJI index, which will include 50 companies in all. Here is a table that shows the holdings:

    Company Market Cap
    ($USD millions;
    as of Jan 2, 2018) Contained
    Lithium Carbonate Equivalent (LCE) in Total Resource
    (tonnes) Index
    Weighting Kidman Resources (OTCPK:KDDRF) $596 7,010,955 23% Lithium Americas (OTC:LAC) $809 39,287,234 32% Millennial Lithium (OTCQX:MLNLF) $308 3,009,000 12% Nemaska Lithium (OTCQX:NMKEF) $835 1,593,802 33% $2,548 100%

    The following 6 companies are on the bench for the index:

  • [By ]

    In April 2018, Nemaska (OTCQX:NMKEF) drew nearly $100 million in investment from Japan’s SoftBank (OTCPK:SFTBY) group in exchange for a 9.9% interest in the company and access to lithium hydroxide produced by the company. In March 2018, CATL the world’s soon-to-be largest lithium battery manufacturer purchased a controlling stake in the Quebec Lithium project in consideration for $66 million. In February 2018, Korean steel giant, POSCO (PKX) announced a supply agreement and investment into Australian lithium miner Pilbara Minerals (OTCPK:PILBF). In January 2018, Toyota Tsusho (OTCPK:TYHOF), the strategic trading arm of Toyota Motors, invested approximately A$300 million in Orocobre (OTCPK:OROCF) in consideration for 15% of the company. Now, in April 2018, Swedish battery start-up NorthVolt has announced that it has signed an agreement for the supply of up to 5,000 metric tons per year of lithium hydroxide produced at Nemaska Lithium’s commercial plant in Shawinigan, Quebec. In connection with the supply of lithium chemicals, NorthVolt has agreed to deliver to Nemaska a 10 million euro promissory note that can be converted into voting shares of NorthVolt.

Hot Tech Stocks To Invest In 2019

Saudi Arabia’s sovereign wealth fund is seriously considering an investment in electric-luxury-car start-up Lucid Motors, according to a Reuters report.

That’s significant for a few reasons, starting with this one: Tesla (NASDAQ:TSLA) CEO Elon Musk has been looking to the Saudi fund for financial support in his effort to take Tesla private.

Is the fund’s interest in Lucid a sign that it’s edging away from a deal with Tesla? Let’s take a closer look. 

Who is Lucid Motors?

If you haven’t heard of Lucid Motors, here’s a quick summary:

Lucid, based in Menlo Park, California, is a serious electric-vehicle start-up backed by investors from the U.S., Japan, and China. The company’s chief technology officer, Peter Rawlinson, is a well-regarded industry veteran who was chief engineer on Tesla’s groundbreaking Model S sedan. 

The Lucid Air is a luxurious high-performance electric sedan with impressive technical specs. Lucid hopes to put it into production in 2019. Image source: Lucid Motors.

Hot Tech Stocks To Invest In 2019: Salesforce.com Inc(CRM)

Advisors’ Opinion:

  • [By Jack Delaney]

    For instance, an investor who heavily weighs the price-to-earnings (PE) ratio before buying a stock would never buy Salesforce.com Inc. (NYSE: CRM) at a PE ratio of 14,976.41.

  • [By Leo Sun]

    Veeva has strong ties with Salesforce (NYSE:CRM), the world’s top provider of cloud-based CRM (customer relationship management) solutions. Veeva founder and CEO Peter Gassner was previously Salesforce’s senior vice president of technology, and Veeva’s CRM platform is powered by the Salesforce1 app development platform. Veeva’s services are also integrated into Salesforce’s marketing and service clouds.

  • [By Joseph Griffin]

    salesforce.com, inc. (NYSE:CRM) insider Parker Harris sold 2,050 shares of the business’s stock in a transaction dated Tuesday, June 19th. The stock was sold at an average price of $138.08, for a total value of $283,064.00. Following the completion of the transaction, the insider now directly owns 20,192 shares of the company’s stock, valued at approximately $2,788,111.36. The sale was disclosed in a legal filing with the SEC, which is accessible through this hyperlink.

  • [By Joseph Griffin]

    Traders sold shares of salesforce.com, inc. (NYSE:CRM) on strength during trading hours on Monday following insider selling activity. $109.05 million flowed into the stock on the tick-up and $156.21 million flowed out of the stock on the tick-down, for a money net flow of $47.16 million out of the stock. Of all equities tracked, salesforce.com had the 0th highest net out-flow for the day. salesforce.com traded up $0.89 for the day and closed at $151.32Specifically, Director John Victor Roos sold 176 shares of the firm’s stock in a transaction that occurred on Thursday, July 12th. The shares were sold at an average price of $145.80, for a total transaction of $25,660.80. Following the completion of the sale, the director now owns 13,217 shares of the company’s stock, valued at $1,927,038.60. The sale was disclosed in a legal filing with the Securities & Exchange Commission, which is available through this hyperlink. Also, General Counsel Amy E. Weaver sold 494 shares of the firm’s stock in a transaction that occurred on Thursday, August 23rd. The shares were sold at an average price of $147.23, for a total transaction of $72,731.62. Following the sale, the general counsel now directly owns 20,764 shares of the company’s stock, valued at approximately $3,057,083.72. The disclosure for this sale can be found here. In the last three months, insiders have purchased 18,000 shares of company stock valued at $2,584,260 and have sold 473,203 shares valued at $67,972,294. 6.00% of the stock is owned by company insiders.

  • [By ]

    The seven companies cited by Cramer are Salesforce.com Inc.  (CRM) , Workday Inc. (WDAY) , ServiceNow Inc. (NOW) , Splunk Inc. (SPLK) , New Relic Inc. (NEWR) , VMWare Inc. (VMW) , and Adobe Systems Incorporated (ADBE) .

  • [By Joe Tenebruso]

    salesforce.com (NYSE:CRM) reported fiscal 2019 first-quarter results on May 29. The enterprise software giant continues to expand its share of the $120 billion global customer relationship management (CRM) market, which is driving its sales and profits sharply higher.

Hot Tech Stocks To Invest In 2019: Archrock, Inc.(AROC)

Advisors’ Opinion:

  • [By Ethan Ryder]

    News stories about Archrock (NYSE:AROC) have trended somewhat positive on Saturday, according to Accern Sentiment. The research firm identifies positive and negative media coverage by reviewing more than 20 million blog and news sources. Accern ranks coverage of companies on a scale of -1 to 1, with scores nearest to one being the most favorable. Archrock earned a coverage optimism score of 0.12 on Accern’s scale. Accern also gave headlines about the energy company an impact score of 47.3449329112104 out of 100, indicating that recent media coverage is somewhat unlikely to have an effect on the stock’s share price in the next few days.

  • [By ]

    As it happens, I am familiar with about half of these stocks. Archrock (Nasdaq: AROC), Qualcomm (Nasdaq: QCOM), Schlumberger (NYSE: SLB, and Trinity Industries (NYSE: TRN) are all interesting names that I’ve either owned in the past or have written about recently over at High-Yield Investing.

  • [By Joseph Griffin]

    Wells Fargo & Company MN grew its stake in shares of Archrock Inc (NYSE:AROC) by 138.5% during the second quarter, HoldingsChannel reports. The firm owned 695,393 shares of the energy company’s stock after purchasing an additional 403,838 shares during the quarter. Wells Fargo & Company MN’s holdings in Archrock were worth $8,345,000 at the end of the most recent quarter.

  • [By Stephan Byrd]

    Principal Financial Group Inc. boosted its position in Archrock Inc (NYSE:AROC) by 2.6% during the first quarter, according to its most recent 13F filing with the SEC. The firm owned 561,090 shares of the energy company’s stock after acquiring an additional 14,287 shares during the period. Principal Financial Group Inc.’s holdings in Archrock were worth $4,910,000 as of its most recent SEC filing.

Hot Tech Stocks To Invest In 2019: RealPage, Inc.(RP)

Advisors’ Opinion:

  • [By Joseph Griffin]

    Fiera Capital Corp cut its position in RealPage (NASDAQ:RP) by 11.4% in the first quarter, according to the company in its most recent 13F filing with the Securities & Exchange Commission. The firm owned 149,545 shares of the software maker’s stock after selling 19,281 shares during the quarter. Fiera Capital Corp’s holdings in RealPage were worth $7,702,000 at the end of the most recent quarter.

  • [By Shane Hupp]

    CommerceHub (NASDAQ: CHUBK) and RealPage (NASDAQ:RP) are both computer and technology companies, but which is the better business? We will compare the two companies based on the strength of their earnings, valuation, risk, institutional ownership, dividends, profitability and analyst recommendations.

  • [By Ethan Ryder]

    RealPage Inc (NASDAQ:RP) COO Ashley Chaffin Glover sold 18,000 shares of the business’s stock in a transaction that occurred on Thursday, August 30th. The stock was sold at an average price of $61.52, for a total transaction of $1,107,360.00. Following the completion of the sale, the chief operating officer now owns 108,401 shares in the company, valued at $6,668,829.52. The transaction was disclosed in a legal filing with the SEC, which is available through this link.

  • [By Shane Hupp]

    Tyler Technologies (NASDAQ: RP) and RealPage (NASDAQ:RP) are both mid-cap computer and technology companies, but which is the better investment? We will contrast the two companies based on the strength of their valuation, analyst recommendations, institutional ownership, risk, dividends, earnings and profitability.

  • [By Stephan Byrd]

    RealPage (NASDAQ:RP) had its target price increased by KeyCorp from $61.00 to $65.00 in a research note published on Friday morning. The firm currently has an overweight rating on the software maker’s stock.

  • [By Shane Hupp]

    RealPage Inc (NASDAQ:RP) shares hit a new 52-week high on Monday . The company traded as high as $62.55 and last traded at $62.40, with a volume of 452409 shares. The stock had previously closed at $61.40.

Hot Tech Stocks To Invest In 2019: McGrath RentCorp(MGRC)

Advisors’ Opinion:

  • [By Ethan Ryder]

    McGrath RentCorp (NASDAQ:MGRC) VP Kay Dashner sold 1,993 shares of the company’s stock in a transaction on Friday, June 1st. The shares were sold at an average price of $65.30, for a total transaction of $130,142.90. Following the sale, the vice president now directly owns 4,891 shares in the company, valued at approximately $319,382.30. The sale was disclosed in a filing with the Securities & Exchange Commission, which is available at this hyperlink.

  • [By Motley Fool Transcribing]

    McGrath RentCorp (NASDAQ:MGRC) Q4 2018 Earnings Conference CallFeb. 26, 2019 5:00 p.m. ET

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

    Operator

  • [By Ethan Ryder]

    McGrath RentCorp (NASDAQ: MGRC) and Triton International (NYSE:TRTN) are both finance companies, but which is the superior business? We will compare the two businesses based on the strength of their profitability, analyst recommendations, dividends, risk, earnings, valuation and institutional ownership.

Hot Tech Stocks To Invest In 2019: Open Text Corporation(OTEX)

Advisors’ Opinion:

  • [By Motley Fool Transcribing]

    Open Text (NASDAQ:OTEX) Q2 2019 Earnings Conference CallJan. 31, 2019 5:00 p.m. ET

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

    Operator

  • [By Shane Hupp]

    Get a free copy of the Zacks research report on Open Text (OTEX)

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

  • [By Joseph Griffin]

    Get a free copy of the Zacks research report on Open Text (OTEX)

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

  • [By Joseph Griffin]

    Open Text Corp (NASDAQ:OTEX) (TSE:OTC) has earned a consensus rating of “Buy” from the thirteen brokerages that are presently covering the firm, MarketBeat Ratings reports. One equities research analyst has rated the stock with a hold rating and ten have issued a buy rating on the company. The average 1-year price objective among brokerages that have issued a report on the stock in the last year is $44.89.

  • [By Ethan Ryder]

    Wells Fargo & Company MN increased its holdings in shares of Open Text Corp (NASDAQ:OTEX) (TSE:OTC) by 4.2% during the 1st quarter, Holdings Channel reports. The institutional investor owned 99,321 shares of the software maker’s stock after purchasing an additional 4,003 shares during the period. Wells Fargo & Company MN’s holdings in Open Text were worth $3,456,000 as of its most recent SEC filing.

Hot Tech Stocks To Invest In 2019: FormFactor, Inc.(FORM)

Advisors’ Opinion:

  • [By Demitrios Kalogeropoulos]

    Semiconductor test equipment specialist FormFactor (NASDAQ:FORM) trailed the market last month by shedding 11% compared to a 0.4% increase in the S&P 500, according to data provided by S&P Global Market Intelligence.

  • [By Stephan Byrd]

    FormFactor (NASDAQ:FORM) was downgraded by ValuEngine from a “hold” rating to a “sell” rating in a report released on Monday.

  • [By Stephan Byrd]

    SG Americas Securities LLC grew its position in FormFactor, Inc. (NASDAQ:FORM) by 237.1% in the second quarter, Holdings Channel reports. The fund owned 27,817 shares of the semiconductor company’s stock after buying an additional 19,565 shares during the period. SG Americas Securities LLC’s holdings in FormFactor were worth $370,000 as of its most recent filing with the Securities and Exchange Commission.

  • [By Brian Feroldi]

    FormFactor (NASDAQ:FORM), which manufactures testing equipment for semiconductor components, reported its second-quarter results on Wednesday, and as expected, the company posted year-over-year declines in revenue and profits. However, the declines were not as bad as management had projected. Margins also held up well during the trying period. Traders bid up the stock in response to the better-than-expected quarterly results and on the hope that the bottom is in the rearview mirror.

Top 10 Casino Stocks To Own For 2019

We already hit an 82% winner from gambling stocks, and we’re going to share another potential profit opportunity in just a bit.

But first, let’s start with some major news about a new collaboration…

Las Vegas casino operator Boyd Gaming Corp. (NYSE: BYD) just signed a strategic partnership with FanDuel, a popular online fantasy sports gaming site. FanDuel and Boyd will explore sports betting and online gaming opportunities across the country.

Boyd Gaming is a leader in the gaming industry, and once it completes two acquisitions, it will operate 29 casinos across 10 states.

Top 10 Casino Stocks To Own For 2019: Nabors Industries Ltd.(NBR)

Advisors’ Opinion:

  • [By Max Byerly]

    Get a free copy of the Zacks research report on Nabors Industries (NBR)

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

  • [By Logan Wallace]

    Nabors Industries (NYSE:NBR) was the recipient of a significant drop in short interest in April. As of April 30th, there was short interest totalling 39,104,204 shares, a drop of 6.2% from the April 13th total of 41,702,268 shares. Currently, 11.5% of the shares of the stock are short sold. Based on an average trading volume of 6,716,985 shares, the days-to-cover ratio is presently 5.8 days.

  • [By Stephan Byrd]

    Get a free copy of the Zacks research report on Nabors Industries (NBR)

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

  • [By Dan Caplinger]

    The stock market had a mildly positive day on Friday, and gains of between 0.1% and 0.3% were common for most of the major benchmark indexes. Without any outright hostility among leaders of the G-7 nations in their summit in Canada’s Quebec City, investors seemed content to go into the weekend with confidence in the prospects for the U.S. economy and its biggest businesses. Yet some individual companies had bad news that held their shares back from participating in the rally. Nabors Industries (NYSE:NBR), PolarityTE (NASDAQ:COOL), and Evolus (NASDAQ:EOLS) were among the worst performers on the day. Here’s why they did so poorly.

Top 10 Casino Stocks To Own For 2019: Canadian National Railway Company(CNI)

Advisors’ Opinion:

  • [By Motley Fool Staff]

    In this segment, Brendan Mathews — a member of the Stock Advisor research team, and the portfolio lead for Odyssey 2 and Supernova — talks about the lessons one can learn from the tale of Canadian National(NYSE:CNI), a Stock Advisor recommendation since 2008. One might expect a railroad company to be a steady, predictable performer, but its stock chart looks more like a roller coaster over that period. (And, as a bonus, they also chat a bit about the story of salesforce.com(NYSE:CRM), so stick around to the end.)

  • [By Max Byerly]

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

    Get Canadian National Railway alerts:

    Keep an eye on Price Trends: Canadian National Railway Company (CNI), Telephone and Data Systems, Inc. (TDS) (talktraders.com) Amtrak study could help trains run on time (whig.com) Canadian National Railway Is Regaining Momentum (seekingalpha.com) JetBlue Announces Ratification of 4-Year Pilot Contract (finance.yahoo.com) Norfolk Southern Rewards Shareholders With 11% Dividend Hike (finance.yahoo.com)

    Several research firms have recently weighed in on CNI. Zacks Investment Research upgraded Canadian National Railway from a “hold” rating to a “buy” rating and set a $101.00 price target for the company in a research note on Monday. CIBC downgraded Canadian National Railway from a “sector outperform” rating to a “sector perform” rating in a research note on Tuesday, May 1st. Cowen reiterated a “buy” rating and set a $98.00 price target on shares of Canadian National Railway in a research note on Wednesday, July 25th. Goldman Sachs Group downgraded Canadian National Railway from a “buy” rating to a “neutral” rating and set a $102.00 price target for the company. in a research note on Monday, May 14th. Finally, Citigroup increased their price target on Canadian National Railway from $85.00 to $90.00 and gave the stock a “neutral” rating in a research note on Wednesday, July 25th. Thirteen equities research analysts have rated the stock with a hold rating and nine have assigned a buy rating to the stock. Canadian National Railway currently has an average rating of “Hold” and a consensus target price of $89.98.

  • [By Paul Ausick]

    GE got some good news this past week with an order for 200 locomotives from Canadian National Railway Co. (NYSE: CNI). The locomotives will be built at GE’s plant in Fort Worth, Texas, and deliveries to the rail operator will begin next year. The balance of the locomotives will be delivered in 2019 and 2020.

  • [By Neha Chamaria]

    Canadian National Railway (NYSE:CNI) is facing a unique problem: too much demand that it can’t seem to handle. Severe capacity shortages and delay in deliveries last quarter proved costly for the railroad, as evidenced by its just released first-quarter earnings report.

Top 10 Casino Stocks To Own For 2019: Sims Metal Management Limited(SMS)

Advisors’ Opinion:

  • [By Joseph Griffin]

    Speed Mining Service (CURRENCY:SMS) traded 4.2% higher against the dollar during the 24 hour period ending at 0:00 AM E.T. on May 20th. One Speed Mining Service token can now be purchased for $16.33 or 0.00192074 BTC on cryptocurrency exchanges including CoinExchange and HitBTC. Speed Mining Service has a market capitalization of $1.71 million and $413.00 worth of Speed Mining Service was traded on exchanges in the last 24 hours. Over the last seven days, Speed Mining Service has traded 4.2% lower against the dollar.

  • [By Stephan Byrd]

    Speed Mining Service (CURRENCY:SMS) traded 7.8% lower against the US dollar during the 24 hour period ending at 8:00 AM Eastern on June 7th. During the last seven days, Speed Mining Service has traded 21.8% lower against the US dollar. One Speed Mining Service token can currently be bought for approximately $11.56 or 0.00150095 BTC on major exchanges including CoinExchange and HitBTC. Speed Mining Service has a market capitalization of $1.21 million and $182.00 worth of Speed Mining Service was traded on exchanges in the last 24 hours.

Top 10 Casino Stocks To Own For 2019: Cleveland BioLabs, Inc.(CBLI)

Advisors’ Opinion:

  • [By Joseph Griffin]

    Senomyx (NASDAQ: SNMX) and Cleveland BioLabs (NASDAQ:CBLI) are both small-cap consumer staples companies, but which is the superior business? We will contrast the two companies based on the strength of their institutional ownership, risk, dividends, profitability, analyst recommendations, earnings and valuation.

  • [By Max Byerly]

    EXACT Sciences (NASDAQ: EXAS) and Cleveland BioLabs (NASDAQ:CBLI) are both medical companies, but which is the better stock? We will compare the two companies based on the strength of their risk, institutional ownership, profitability, earnings, valuation, analyst recommendations and dividends.

Top 10 Casino Stocks To Own For 2019: Nevro Corp.(NVRO)

Advisors’ Opinion:

  • [By Ethan Ryder]

    Wells Fargo & Company MN lessened its holdings in Nevro (NYSE:NVRO) by 5.2% during the first quarter, HoldingsChannel.com reports. The fund owned 823,579 shares of the medical equipment provider’s stock after selling 45,510 shares during the quarter. Wells Fargo & Company MN’s holdings in Nevro were worth $71,378,000 at the end of the most recent quarter.

  • [By Paul Ausick]

    Nevro Corp. (NYSE: NVRO) traded down about 19% Friday and posted a new 52-week low of $54.87 after closing Thursday at $68.04. The stock’s 52-week high is $94.34. Volume totaled around 5.7 million, close to 15 times the daily average. The company had no specific news.

  • [By Brian Feroldi]

    After reporting first-quarter results,shares in Nevro Corp. (NYSE:NVRO),a medical device maker that is focused onpain management, fell 15% as of 10:58 a.m. EDT on Tuesday.

  • [By Ethan Ryder]

    Nevro (NYSE:NVRO) had its price objective cut by Canaccord Genuity from $110.00 to $102.00 in a note issued to investors on Tuesday, Marketbeat Ratings reports. The brokerage currently has a “buy” rating on the medical equipment provider’s stock. Canaccord Genuity’s price target indicates a potential upside of 34.87% from the stock’s current price.

  • [By Logan Wallace]

    Nevro (NYSE:NVRO) released its quarterly earnings results on Monday. The medical equipment provider reported ($0.59) EPS for the quarter, missing the Zacks’ consensus estimate of ($0.32) by ($0.27), Bloomberg Earnings reports. Nevro had a negative net margin of 11.22% and a negative return on equity of 15.01%.

  • [By Lisa Levin]

    Check out these big penny stock gainers and losers

    Losers
    Nevro Corp. (NASDAQ: NVRO) fell 11.6 percent to $81.58 in pre-market trading after reporting wider-than-expected Q1 loss.
    Hertz Global Holdings, Inc. (NYSE: HTZ) shares fell 8.3 percent to $20.33 in pre-market trading after the company reported a wider-than-expected loss for its first quarter.
    Zillow Group, Inc. (NASDAQ: Z) fell 7.5 percent to $51.74 in pre-market trading. Zillow reported upbeat earnings for its first quarter, but issued weak sales guidance for the second quarter.
    Sanchez Energy Corporation (NYSE: SN) fell 7.2 percent to $3.11 in pre-market trading after reporting wider-than-expected Q1 loss.
    Atossa Genetics Inc. (NASDAQ: ATOS) shares fell 5.5 percent to $4.14 in pre-market trading after rising 11.17 percent on Monday.
    Albemarle Corporation (NYSE: ALB) fell 5.1 percent to $95.00 in pre-market trading. Albemarle declared a quarterly dividend of $0.335 per share.
    Tata Motors Limited (NYSE: TTM) fell 4.8 percent to $23.80 in pre-market trading.
    Ormat Technologies, Inc. (NYSE: ORA) fell 4.5 percent to $57.14 in pre-market trading after reporting Q1 results.
    Kitov Pharma Ltd (NASDAQ: KTOV) shares fell 4.3 percent to $2.25 in pre-market trading after gaining 1.73 percent on Monday.
    51job, Inc. (NASDAQ: JOBS) shares fell 4.2 percent to $93 in pre-market trading after rising 3.55 percent on Monday

Top 10 Casino Stocks To Own For 2019: Eagle Materials Inc(EXP)

Advisors’ Opinion:

  • [By Matthew DiLallo]

    Despite some weather issues during the quarter, Eagle Materials (NYSE:EXP) finished its fiscal year on a positive note and delivered record revenue. That solid finish enabled the diversified materials producer to set full-year records for both sales and earnings. Meanwhile, with a strong balance sheet and some tailwinds at its back, the company sees even better days ahead.

  • [By Logan Wallace]

    Cementos Pacasmayo (NYSE: CPAC) and Eagle Materials (NYSE:EXP) are both construction companies, but which is the superior stock? We will compare the two companies based on the strength of their risk, profitability, earnings, analyst recommendations, institutional ownership, dividends and valuation.

  • [By Stephan Byrd]

    Eagle Materials (NYSE:EXP) – Analysts at Northcoast Research issued their Q1 2019 earnings per share (EPS) estimates for shares of Eagle Materials in a research note issued to investors on Thursday, May 17th. Northcoast Research analyst K. Hocevar anticipates that the construction company will post earnings of $1.53 per share for the quarter. Northcoast Research also issued estimates for Eagle Materials’ Q2 2019 earnings at $1.80 EPS, Q3 2019 earnings at $1.70 EPS, Q4 2019 earnings at $1.17 EPS and FY2020 earnings at $7.40 EPS.

  • [By Lisa Levin]

    Some of the stocks that may grab investor focus today are:

    Wall Street expects Home Depot Inc (NYSE: HD) to report quarterly earnings at $2.06 per share on revenue of $25.22 billion before the opening bell. Home Depot shares fell 0.04 percent to $191.00 in after-hours trading.
    Switch Inc (NYSE: SWCH) reported weaker-than-expected earnings for its first quarter on Monday. Switch shares dropped 7.18 percent to $14.36 in the after-hours trading session.
    Analysts are expecting Boot Barn Holdings, Inc. (NYSE: BOOT) to have earned $0.16 per share on revenue of $163.65 million in the latest quarter. Boot Barn will release earnings after the markets close. Boot Barn shares gained 1.4 percent to $21.80 in after-hours trading.
    Famous Dave’s of America, Inc. (NASDAQ: DAVE) reported upbeat earnings for its first quarter on Monday. Famous Dave’s of America shares gained 7.69 percent to $8.40 in the after-hours trading session.
    Before the markets open, Eagle Materials Inc (NYSE: EXP) is estimated to report quarterly earnings at $1.08 per share on revenue of $306.04 million. Eagle Materials shares fell 0.09 percent to $105.72 in after-hours trading.

    Find out what's going on in today's market and bring any questions you have to Benzinga's PreMarket Prep.

Top 10 Casino Stocks To Own For 2019: Enbridge Inc(ENB)

Advisors’ Opinion:

  • [By Lisa Levin] Gainers
    McDermott International, Inc. (NYSE: MDR) rose 19 percent to $7.20 in pre-market trading. Subsea 7 S.A. confirmed a $7.00 per share proposal to acquire McDermott.
    Clarus Corporation (NASDAQ: CLAR) rose 18.5 percent to $8.00 in pre-market trading.
    Enbridge Inc. (NYSE: ENB) rose 9.3 percent to $34.09 in pre-market trading after falling 2.41 percent on Friday.
    Lannett Company, Inc. (NYSE: LCI) rose 8.4 percent to $18 in pre-market trading. Lannett named Maureen M. Cavanaugh as senior vice president and chief commercial operations officer.
    Navios Maritime Midstream Partners L.P. (NYSE: NAP) rose 7.1 percent to $4.55 in pre-market trading after gaining 11.26 percent on Friday.
    Corcept Therapeutics Incorporated (NASDAQ: CORT) rose 6.9 percent to $18.80 in pre-market trading after falling 3.19 percent on Friday.
    Helios and Matheson Analytics Inc. (NASDAQ: HMNY) rose 5.7 percent to $2.40 in pre-market trading after falling 10.98 percent on Friday.
    Vectren Corporation (NYSE: VVC) shares rose 5.6 percent to $69.20 in pre-market trading. CenterPoint Energy, Inc. (NYSE: CNP) announced plans to acquire Vectren for $72 per share in cash
    Genprex, Inc. (NASDAQ: GNPX) shares rose 5.2 percent to $4.50 in pre-market trading.
    Atossa Genetics Inc. (NASDAQ: ATOS) rose 5.1 percent to $3.70 in pre-market trading after declining 19.35 percent on Friday.
    Sangamo Therapeutics, Inc. (NASDAQ: SGMO) shares rose 5 percent to $20 in pre-market trading.
    Magellan Midstream Partners, L.P. (NYSE: MMP) shares rose 5 percent to $68.41 in pre-market trading.
    Halozyme Therapeutics, Inc. (NASDAQ: HALO) shares rose 4.9 percent to $19.78 in the pre-market trading session.

    Find out what's going on in today's market and bring any questions you have to Benzinga's PreMarket Prep.

  • [By Matthew DiLallo]

    Several high-yielding dividend stocks have taken it on the chin this year due to a sell-off in the stock market and rising interest rates. That one-two punch has hit pipeline stocks the hardest, with several top-notch companies tumbling by a double-digit percentage since the start of the year. Three that stand out as excellent options to consider buying now that they’re on sale are Magellan Midstream Partners (NYSE:MMP), Antero Midstream Partners (NYSE:AM), and Enbridge (NYSE:ENB).

  • [By Shane Hupp]

    Shares of Enbridge Inc (TSE:ENB) (NYSE:ENB) reached a new 52-week high during mid-day trading on Thursday after GMP Securities raised their price target on the stock from C$55.00 to C$57.00. The company traded as high as C$47.50 and last traded at C$46.67, with a volume of 2103786 shares changing hands. The stock had previously closed at C$46.84.

Top 10 Casino Stocks To Own For 2019: Salesforce.com Inc(CRM)

Advisors’ Opinion:

  • [By Danny Vena]

    There was a lot to like when Salesforce.com (NYSE:CRM) reported its first-quarter financial results. The company delivered another impressive quarter, exceeding expectations and increasing its forecast for the full year.

  • [By Harsh Chauhan]

    AI is going to revolutionize customer relationship management (CRM), and there aren’t many better bets than Salesforce.com to tap into this. The company forecasts that spendingon AI deployment in CRM could jump from $7.9 billion in 2016 to as much as $46.3 billion in 2021.

  • [By Leo Sun]

    Veeva provides cloud-based customer relationship management (CRM) services for healthcare companies. Its core products include the Veeva Vault, which tracks prescribing habits, clinical trials, and industry regulations; and the Veeva Commercial Cloud, which helps drug companies maintain customer relationships.

  • [By Daniel Sparks]

    Amid the S&P 500’s nearly 5% gain over the past six months, one subsector has done exceptionally well: software-as-a-service (SaaS) stocks, particularly those providing platforms and applications to help businesses. The market seems head over heels for these stocks. Cloud-based customer relationship management companysalesforce.com(NYSE:CRM), financial software companyIntuit(NASDAQ:INTU), e-commerce platformShopify (NYSE:SHOP), and payment processor Square(NYSE:SQ) have all soared 30% or more during the last six months alone.

Top 10 Casino Stocks To Own For 2019: Entergy Louisiana, Inc.(ELA)

Advisors’ Opinion:

  • [By Ethan Ryder]

    Elastos (CURRENCY:ELA) traded down 2.3% against the dollar during the 1-day period ending at 20:00 PM E.T. on June 19th. Elastos has a market capitalization of $150.76 million and approximately $6.03 million worth of Elastos was traded on exchanges in the last day. In the last seven days, Elastos has traded 6.9% lower against the dollar. One Elastos coin can currently be bought for $28.91 or 0.00428971 BTC on major exchanges including Huobi and BCEX.

Top 10 Casino Stocks To Own For 2019: AVEO Pharmaceuticals, Inc.(AVEO)

Advisors’ Opinion:

  • [By Shane Hupp]

    AVEO Pharmaceuticals, Inc. (NASDAQ:AVEO)’s share price traded down 24.2% during mid-day trading on Tuesday . The company traded as low as $2.15 and last traded at $2.16. 9,547,354 shares traded hands during trading, an increase of 395% from the average session volume of 1,930,275 shares. The stock had previously closed at $2.85.

  • [By Joseph Griffin]

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

    Get AVEO Pharmaceuticals alerts:

    Deadline Upcoming in $15 Million Settlement in the AVEO Pharmaceuticals Inc (NASDAQ:AVEO) Investor Lawsuit (digitaljournal.com) $1.35 Million in Sales Expected for AVEO Pharmaceuticals, Inc. (AVEO) This Quarter (americanbankingnews.com) AVEO Pharmaceuticals, Inc. (AVEO) Expected to Announce Earnings of -$0.06 Per Share (americanbankingnews.com) Equity Opportunities Iv Growth Purchases 236,479 Shares of AVEO Pharmaceuticals, Inc. (AVEO) Stock (americanbankingnews.com) AVEO Pharmaceuticals, Inc. (AVEO) Major Shareholder Buys $392,301.27 in Stock (americanbankingnews.com)

    Several analysts recently weighed in on the company. Zacks Investment Research raised AVEO Pharmaceuticals from a “strong sell” rating to a “hold” rating in a research note on Friday, May 4th. BidaskClub raised AVEO Pharmaceuticals from a “strong sell” rating to a “sell” rating in a research note on Saturday, March 24th. Finally, ValuEngine raised AVEO Pharmaceuticals from a “hold” rating to a “buy” rating in a research note on Wednesday, May 2nd. One investment analyst has rated the stock with a sell rating, one has given a hold rating and six have assigned a buy rating to the company. The stock presently has an average rating of “Buy” and a consensus target price of $4.05.

  • [By Brian Orelli]

    Shares of AVEO Pharmaceuticals (NASDAQ:AVEO) are down 17.9% at 11:58 a.m. EDT after the company issued an 8-K with the Securities and Exchange Commissionthat disclosed a settlement of a five-year-old class action lawsuit brought on by shareholders. Hidden 12 paragraphs into the document, AVEO Pharmaceuticals also disclosed that data for its phase 3 TIVO-3 trial will be delayed until the fourth quarter.

  • [By Maxx Chatsko]

    Shares of AVEO Pharmaceuticals (NASDAQ:AVEO) fell 17% today after the company announced first-quarter 2018 results and provided a business update. As a development stage biopharma company, there’s wasn’t much in the way of new financial details. However, the company did announce that it was delaying the expected readout of top-line data from the ongoing phase 3 trial of its lead drug candidate from the second quarter of 2018 to the third quarter of 2018.

  • [By Shane Hupp]

    Get a free copy of the Zacks research report on AVEO Pharmaceuticals (AVEO)

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

Best China Stocks To Invest In Right Now

China has taken a substantial lead in robotics, although the opinion comes from the Chinese themselves. While the claim may be true, it is certainly self-serving.

The race for the lead in robotics had several countries claiming large advances. The same holds true for some universities and private research organizations. All in all, since robotics is not a single industry, one group could be ahead in a small part of the business but well behind in others.

There is a second debate at the center of the robotics race. That is whether robots will trigger the unemployment of tens, if not hundreds, of millions of people worldwide, or whether robots will become assistants to people that help them do their jobs even menial ones that do not require education or training. The jury will not be able to settle on who is right about thisuntil there are enough robots to affect the labor market one way or another.

The People’s Daily, China’s official newspapers reports:

Best China Stocks To Invest In Right Now: TG Therapeutics, Inc.(TGTX)

Advisors’ Opinion:

  • [By Ethan Ryder]

    TG Therapeutics, Inc (NASDAQ:TGTX) was down 6.5% during mid-day trading on Tuesday . The stock traded as low as $11.35 and last traded at $12.57. Approximately 1,971,105 shares were traded during mid-day trading, an increase of 37% from the average daily volume of 1,433,791 shares. The stock had previously closed at $13.45.

Best China Stocks To Invest In Right Now: Salesforce.com Inc(CRM)

Advisors’ Opinion:

  • [By Ethan Ryder]

    Synovus Financial Corp increased its stake in Salesforce.com (NYSE:CRM) by 14.0% during the 1st quarter, according to its most recent filing with the Securities and Exchange Commission (SEC). The firm owned 26,511 shares of the CRM provider’s stock after buying an additional 3,262 shares during the period. Synovus Financial Corp’s holdings in Salesforce.com were worth $3,088,000 as of its most recent SEC filing.

  • [By Joseph Griffin]

    Salesforce.com (NYSE:CRM) had its price target increased by JMP Securities from $126.00 to $140.00 in a research note published on Tuesday. The brokerage currently has a market outperform rating on the CRM provider’s stock.

  • [By Anders Bylund]

    Finally, the stock enjoyed a quick adrenaline kick when salesforce.com (NYSE:CRM) announced an acquisition of MuleSoft (NYSE:MULE), another mid-cap company with tight connections to the cloud computing market. The deal sparked speculation that other companies in that category could see software giants kicking their tires soon enough, and that would presumably include MongoDB.

  • [By Chris Lange]

    Salesforce.com Inc. (NYSE: CRM) fiscal fourth-quarter results are scheduled for Wednesday. The consensus forecast is for $0.34 in EPS on $2.81 billion in revenue. Shares were trading at $114.96. The consensus price target is $124.85. The 52-week range is $80.50 to $115.67.

  • [By Nicholas Rossolillo]

    Salesforce.com (NYSE:CRM) CEO Marc Benioff often talks about having a beginner’s mind — trying to view the world like it’s a new place you’ve never experienced before. That thinking is leading the company toward developing a blockchain and cryptocurrency solution that Benioff hopes will be ready for the company’s Dreamforce 2018 software conference this September. For investors, that means Salesforce could be the latest way to take advantage of the cryptocurrency boom … without having to buy any bitcoin.

Best China Stocks To Invest In Right Now: 8×8 Inc(EGHT)

Advisors’ Opinion:

  • [By Lisa Levin] Gainers
    Cocrystal Pharma, Inc. (NASDAQ: COCP) rose 15.3 percent to $2.41 in pre-market trading after declining 25.09 percent on Thursday.
    Expedia Group, Inc. (NASDAQ: EXPE) shares rose 10.7 percent to $117.75 in pre-market trading after the company reported stronger-than-expected earnings for its first quarter on Thursday.
    DMC Global Inc. (NASDAQ: BOOM) rose 10.6 percent to $35.00 in pre-market trading after reporting Q1 results.
    Genprex, Inc. (NASDAQ: GNPX) rose 10.2 percent to $12.12 in pre-market trading after climbing 86.76 percent on Thursday.
    Sprint Corporation (NYSE: S) shares rose 7 percent to $6.42 in pre-market trading on reports that the company has made progress on merger talks with T-Mobile.
    Amazon.com, Inc. (NASDAQ: AMZN) rose 6.9 percent to $1,621.95 in pre-market trading after the company posted upbeat results for its first quarter. The company sees second quarter operating income of $1.1 billion – $1.9 billion and sales of $51 billion – $54 billion.
    Riot Blockchain, Inc. (NASDAQ: RIOT) shares rose 5.5 percent to $7.88 in pre-market trading after gaining 1.49 percent on Thursday.
    Intel Corporation (NASDAQ: INTC) rose 5.3 percent to $55.86 in pre-market trading as the company reported better-than-expected results for its first quarter and also raised its FY18 sales outlook.
    8×8, Inc. (NASDAQ: EGHT) rose 5.3 percent to $21.00 in pre-market trading.
    Southwestern Energy Company (NYSE: SWN) shares rose 5.1 percent to $4.75 in pre-market trading as the company reported better-than-expected earnings for its first quarter.
    Diamond Offshore Drilling, Inc. (NYSE: DO) rose 5 percent to $20.24 in pre-market trading.
    Baidu, Inc. (NASDAQ: BIDU) rose 4.5 percent to $249.50 in pre-market trading following upbeat Q1 profit.
    Charter Communications, Inc. (NASDAQ: CHTR) rose 4.3 percent to $311 in pre-market trading. Charter is expected to release quarterly earnings today.
    SINA Corporation (NASDAQ: SINA) shares rose 3.9 pe

Best China Stocks To Invest In Right Now: Sonoco Products Company(SON)

Advisors’ Opinion:

  • [By Ethan Ryder]

    Packaging Co. of America (NYSE: PKG) and Sonoco (NYSE:SON) are both industrial products companies, but which is the better investment? We will compare the two businesses based on the strength of their risk, profitability, dividends, analyst recommendations, earnings, institutional ownership and valuation.

  • [By Ethan Ryder]

    Sonoco (NYSE: SON) and Packaging Co. of America (NYSE:PKG) are both industrial products companies, but which is the superior investment? We will compare the two businesses based on the strength of their analyst recommendations, earnings, profitability, risk, dividends, institutional ownership and valuation.

  • [By Logan Wallace]

    American International Group Inc. decreased its position in shares of Sonoco (NYSE:SON) by 3.2% during the 1st quarter, according to the company in its most recent Form 13F filing with the Securities and Exchange Commission (SEC). The institutional investor owned 198,994 shares of the industrial products company’s stock after selling 6,634 shares during the period. American International Group Inc. owned 0.20% of Sonoco worth $9,651,000 at the end of the most recent quarter.

Top 5 Tech Stocks To Buy For 2019

The Dow Jones Industrial Average and the S&P 500 closed sharply lower Tuesday, with the daily decline wiping out all of April’s advance. The Dow
DJIA, +0.25%
ended down 423 points, or 1.7%, at 24,025, pushing it to a monthly decline of 0.3%. The equity gauge finished lower for five straight sessions, representing its longest skid since the end of March of 2017. A steep selloff in shares of 3M Co.
MMM, -1.14%
contributed the lion’s share of the 121-year-old benchmark’s fall, coming after the industrial giant reported earnings that failed to inspire buying sentiment. Meanwhile, the S&P 500 index
SPX, +0.18%
finished down 1.3% at 2,634, pushing the index to a monthly loss of 0.2%. The Nasdaq Composite Index
COMP, -0.05%
meanwhile, closed down 1.7% at 7,007, with the session’s drop for the technology-laden index erasing its monthly advance. The index is down 0.8% so far in April.

Top 5 Tech Stocks To Buy For 2019: FormFactor, Inc.(FORM)

Advisors’ Opinion:

  • [By Jim Robertson]

    On Tuesday, our Elite Opportunity Pronewsletter suggested small cap semiconductor equipment & testing stock FormFactor, Inc (NASDAQ: FORM) as a short term long trade thats a pure small cap play with excellent valuation metrics, in addition to some very attractive chart implications right now:

  • [By Lisa Levin]

    Check out these big penny stock gainers and losers

    Losers
    World Fuel Services Corporation (NYSE: INT) tumbled 18 percent to $22.90 following Q1 results.
    Biglari Holdings Inc. (NYSE: BH) fell 17.4 percent to $349.52. Washington Prime Group will replace Biglari Holdings in the S&P SmallCap 600 on Tuesday, May 1.
    Flex Ltd. (NASDAQ: FLEX) dipped 15.7 percent to $14.03 after a mixed fourth quarter report.
    FormFactor, Inc. (NASDAQ: FORM) fell 15.3 percent to $11.65. FormFactor is expected to release Q1 results on May 2.
    Data I/O Corporation (NASDAQ: DAIO) dropped 14.3 percent to $6.24 following Q1 results.
    National Instruments Corporation (NASDAQ: NATI) fell 14.3 percent to $ 42.34 after reporting Q1 results.
    United States Steel Corporation (NYSE: X) dipped 14.2 percent to $32.37 following Q1 results.
    Civeo Corporation (NYSE: CVEO) dropped 13.5 percent to $3.33. Civeo posted a Q1 loss of $0.42 per share on sales of $101.504 million.
    athenahealth, Inc. (NASDAQ: ATHN) fell 12.4 percent to $125.310 after reporting Q1 results.
    Charter Communications, Inc. (NASDAQ: CHTR) shares tumbled 12.1 percent to $262.06 as the company posted Q1 results.
    Value Line, Inc. (NASDAQ: VALU) fell 11.3 percent to $19.10.
    Federated Investors, Inc. (NYSE: FII) shares dropped 11.2 percent to $27.605 after the company posted downbeat quarterly earnings.
    AV Homes, Inc. (NASDAQ: AVHI) declined 10.7 percent to $17.20 following Q1 results.
    CalAmp Corp. (NASDAQ: CAMP) dropped 9.4 percent to $21.01 after reporting Q4 results.
    Tandem Diabetes Care, Inc. (NASDAQ: TNDM) shares fell 8.9 percent to $7.280 following mixed Q1 results.
    Sony Corporation (NYSE: SNE) shares fell 8.4 percent to $45.97 after reporting Q4 results.
    LogMeIn Inc (NASDAQ: LOGM) fell 8.2 percent to $109.825. LogMeIn reported upbeat earnings for its first quarter, but issued weak second quarter and FY18 earning guidance.
    Eleven Biotherapeutics, Inc. (NASDAQ: EBIO

Top 5 Tech Stocks To Buy For 2019: Jabil Circuit Inc.(JBL)

Advisors’ Opinion:

  • [By Peter Graham]

    A long term performance chart shows shares of small cap Sanmina Corp (NASDAQ: SANM), a previous Elite Opportunity Pro (EOP) newsletter suggestion as the next breakout stock, andmid cap Flextronics International being bigger winners (albeit FLEX has steadily risen for two years while SANM has already peaked) compared with the moderately positive performance of mid cap Jabil Circuit, Inc (NYSE: JBL) and small cap Celestica Inc (NYSE: CLS):

  • [By Monica Gerson]

    Jabil Circuit, Inc. (NYSE: JBL) is projected to post its quarterly earnings at $0.60 per share on revenue of $4.50 billion.

    Guess?, Inc. (NYSE: GES) is expected to post its quarterly earnings at $0.58 per share on revenue of $657.59 million.

  • [By Peter Graham]

    Nevertheless, a long term performance chart shows Sanmina Corp previously being an outperformer, but now falling off whilepotential large cap peer Flextronics International Ltd (NASDAQ: FLEX) has given a steady performance over the last two years and small capCelestica Inc (NYSE: CLS) and mid capJabil Circuit, Inc (NYSE: JBL) have similar unaspiring charts:

  • [By Peter Graham]

    A long term performance chart shows Sanmina Corp along with potential peersCelestica Inc (NYSE: CLS), Jabil Circuit, Inc (NYSE: JBL) and Flextronics International Ltd (NASDAQ: FLEX)all having similar looking charts; but SANM has been the outperformer:

Top 5 Tech Stocks To Buy For 2019: Interpublic Group of Companies, Inc. (IPG)

Advisors’ Opinion:

  • [By Paul Ausick]

    The Interpublic Group of Companies Inc. (NYSE: IPG) dropped about 2.3% Thursday to post a new 52-week low of $20.94 after closing Wednesday at $21.44. The 52-week high is $25.71. Volume reached nearly 13 million shares traded, nearly 3 times the daily average of around 3.8 million. The company had no specific news, but Tuesday’s weak earnings report continues to weigh on the share price.

  • [By Laurie Kulikowski]

    We rate INTERPUBLIC GROUP OF COS as a Buy with a ratings score of A. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company’s strengths can be seen in multiple areas, such as its revenue growth, notable return on equity, reasonable valuation levels, good cash flow from operations and largely solid financial position with reasonable debt levels by most measures. We feel its strengths outweigh the fact that the company has had sub par growth in net income. 

  • [By Lisa Levin] Related TRST Earnings Scheduled For October 21, 2016 Major Accounting Changes Are Coming To The Financial Industry
    Related MORN One Of The World's Most Powerful Women, Fidelity Personal Investing President Kathleen Murphy, To Tell Her Story At The Benzinga Global Fintech Awards The 2017 Benzinga Global Fintech Awards Will Include An 'Unprecedented Group' Of Judges Morningstar Packs Conference Lineup For Financial Advisors (Investor’s Business Daily) Companies Reporting Before The Bell
    Rockwell Collins, Inc. (NYSE: COL) is estimated to report quarterly earnings at $1.31 per share on revenue of $1.33 billion.
    General Electric Company (NYSE: GE) is expected to report quarterly earnings at $0.17 per share on revenue of $26.46 billion.
    Honeywell International Inc. (NYSE: HON) is estimated to report quarterly earnings at $1.60 per share on revenue of $9.32 billion.
    Interpublic Group of Companies Inc (NYSE: IPG) is expected to report quarterly earnings at $0.03 per share on revenue of $1.76 billion.
    Schlumberger Limited. (NYSE: SLB) is estimated to report quarterly earnings at $0.26 per share on revenue of $7.02 billion.
    SunTrust Banks, Inc. (NYSE: STI) is expected to report quarterly earnings at $0.83 per share on revenue of $2.21 billion.
    ManpowerGroup Inc. (NYSE: MAN) is projected to report quarterly earnings at $1.11 per share on revenue of $4.68 billion.
    Kansas City Southern (NYSE: KSU) is estimated to report quarterly earnings at $1.15 per share on revenue of $593.82 million.
    Stanley Black & Decker, Inc. (NYSE: SWK) is projected to report quarterly earnings at $1.19 per share on revenue of $2.74 billion.
    WABCO Holdings Inc. (NYSE: WBC) is estimated to report quarterly earnings at $1.44 per share on revenue of $721.89 million.

Top 5 Tech Stocks To Buy For 2019: Salesforce.com Inc(CRM)

Advisors’ Opinion:

  • [By Nicholas Rossolillo]

    Salesforce.com (NYSE:CRM) CEO Marc Benioff often talks about having a beginner’s mind — trying to view the world like it’s a new place you’ve never experienced before. That thinking is leading the company toward developing a blockchain and cryptocurrency solution that Benioff hopes will be ready for the company’s Dreamforce 2018 software conference this September. For investors, that means Salesforce could be the latest way to take advantage of the cryptocurrency boom … without having to buy any bitcoin.

  • [By Sreekanth Anasa]

    After dominating the public cloud,the Vmware (NYSE:VMW) partnership and the expanded alliance with Salesforce (NYSE:CRM)has put AWS on course to capture enterprise cloud market as well. Large enterprise customers are shifting their buying behavior and the world is moving fast to buy as you go infrastructure and software models. AWS partnership with VMware ensures ithas aproper hybrid cloud strategy to offer the enterprises the best of both public and private cloud.

  • [By Nelson Hem]

    See what Barron's feels the prospects are for Energy Transfer Partners LP (NYSE: ETP) if it cuts its distribution and dumps its general partner, and salesforce.com, inc. (NYSE: CRM) with its generous potential upside. Also whether regional banks like Zions Bancorp (NASDAQ: ZION) could see a boost from a proposed regulatory change, and the sweetheart deal the Koch brothers got with Meredith Corporation (NYSE: MDP).

  • [By Peter Graham]

    On the earnings call, Ellison noted that the company had surpassed Salesforce.com, inc (NYSE: CRM) in annualized recurring cloud revenue: We are now well on our way to passing them and becoming number one in the enterprise SaaS market.”

  • [By Chris Lange]

    Salesforce.com Inc. (NYSE: CRM) fiscal fourth-quarter results are scheduled for Wednesday. The consensus forecast is for $0.34 in EPS on $2.81 billion in revenue. Shares were trading at $114.96. The consensus price target is $124.85. The 52-week range is $80.50 to $115.67.

  • [By Chris Lange]

    Salesforce.com, Inc. (NYSE: CRM) reported fiscal third quarter financial results after markets closed Tuesday. While shares did take a step back in Wednesdays session, analysts were still fairly positive following the report.

Top 5 Tech Stocks To Buy For 2019: Kingtone Wirelessinfo Solution Holding Ltd(KONE)

Advisors’ Opinion:

  • [By Money Morning News Team]

    While a 209% gain is exciting, FunctionX’s gains are in the past. After looking at the 10 top penny stocks to watch this week, we’ll show you a small-cap stock with serious profit potential ahead of it…

    Penny Stock Current Share Price Law Week’s Gain
    FunctionX Inc. (OTCMKTS: FNCX) $0.03 209%
    Turtle Beach Corp. (Nasdaq: HEAR) $4.48 52.73%
    DPW Holdings Inc. (NYSE: DPW) $1.16 51.31%
    Energy XXI Gulf Coast Inc. (Nasdaq: EGC) $5.62 49.33%
    MYnd Analytics Inc. (Nasdaq: MYND) $1.91 49.21%
    Kingtone Wirelessinfo Solutions Holding Ltd. (Nasdaq: KONE) $6.43 48.42%
    Rennova Health Inc. (OTCMKTS: RNVA) $0.02 44.30%
    International Tower Hill Mines Ltd. (NYSE: THM) $0.72 41.64%
    Blonder Tongue Labs Inc. (NYSE: BDR) $1.13 41.14%
    Bellicum Pharmaceuticals Inc. (Nasdaq: BLCM) $8.87 40.53%

    As the gains above suggest, penny stocks can provides tremendous returns for investors very quickly. However, it’s important to note that investing in penny stocks is also inherently risky.

Top 5 High Tech Stocks To Invest In Right Now

Poker giant Stars Group Inc. agreed to buy Sky Betting & Gaming in a deal valued at $4.7 billion, moving deeper into sports betting to create the biggest publicly listed online gambling company.

Toronto-based Stars Group will pay cash and stock to owners CVC Capital Partners and Sky Plc, it said Saturday in a statement. The operator of PokerStars estimates it would get about a third of its revenue from sports, the fastest-growing online gaming segment, including recent acquisitions in Australia.

“Sky Betting & Gaming’s premier sports betting product is the ideal complement to our industry-leading poker platform,” Chief Executive Officer Rafi Ashkenazi said in the statement, calling the acquisition “a landmark moment” for Stars Group.

The agreement calls on Stars Group to pay $3.6 billion and approximately 37.9 million newly issued common shares based on the closing price of its common stock on April 20. Stars Group said it has obtained debt financing of approximately $6.9 billion, including $5.1 billion of first lien term loans, $1.4 billion of senior unsecured notes and a $400 million revolving credit facility. The proceeds will be used for the cash portion of the deal, as well as to refinance the company’s existing first lien term loan and repay SBG’s outstanding debt, it said.

Top 5 High Tech Stocks To Invest In Right Now: CrossAmerica Partners LP(CAPL)

Advisors’ Opinion:

  • [By Monica Gerson]

    Crossamerica Partners LP (NYSE: CAPL) is projected to report its quarterly earnings at $0.05 per share on revenue of $479.03 million.

    Buckeye Partners, L.P. (NYSE: BPL) is expected to report its quarterly earnings at $1.04 per share on revenue of $1.00 billion.

  • [By Ethan Ryder]

    Get a free copy of the Zacks research report on CrossAmerica Partners (CAPL)

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

Top 5 High Tech Stocks To Invest In Right Now: St. Jude Medical, Inc.(STJ)

Advisors’ Opinion:

  • [By Emily Stewart]

    Paulson picked up 45,500 shares of St. Jude Medical (STJ) . The stake is worth $3.5 million as of the end of the second quarter.

    St. Jude Medical develops, manufactures and distributes cardiovascular medical devices for cardiac rhythm management, cardiovascular, atrial fibrillation therapy areas and neurostimulation medical devices for the management of chronic pain. It has a $23.6 billion market cap and trades at a P/E of 36.03. 

Top 5 High Tech Stocks To Invest In Right Now: MGT Capital Investments Inc(MGT)

Advisors’ Opinion:

  • [By Lisa Levin]

    MGT Capital Investments Inc. (NYSE: MGT) shares shot up 73 percent to $2.98 after John McAfee proposed to become Executive Chairman and CEO.

    Shares of Anacor Pharmaceuticals Inc (NASDAQ: ANAC) got a boost, shooting up 55 percent to $99.49 after the company agreed to be acquired by Pfizer Inc. (NYSE: PFE) for $99.25 per share.

  • [By Lisa Levin]

    MGT Capital Investments Inc. (NYSE: MGT) was down, falling around 24 percent to $2.47 as the company reported that it has received a subpoena from the Securities and Exchange Commission. MGT Capital said there is no indication that ‘the company is or will be the subject of any enforcement proceedings.’

Top 5 High Tech Stocks To Invest In Right Now: Salesforce.com Inc(CRM)

Advisors’ Opinion:

  • [By ]

    In the Lightning Round, Cramer was bullish on Salesforce.com (CRM) , American Airlines (AAL) , Align Technology (ALGN) , Procter & Gamble (PG) , United Bankshares (UBSI) , Valeant Pharmaceuticals (VRX) and Dominion Energy (D) .

  • [By WWW.THESTREET.COM]

    “There are two things that mess up your relationships, it’s anger and fear,” explains Robbins. Robbins points to Salesforce (CRM) CEO Marc Benioff as being a total giver, which has set him up for success in business.

  • [By WWW.THESTREET.COM]

    In the Lightning Round, Cramer was bullish on Western Digital (WDC) , Twilio (TWLO) , Adient (ADNT) , Salesforce.com (CRM) , AT&T (T) and Verizon (VZ) .

  • [By ]

    For example, 100 million Prime members? That’s sick and something that should at least cause a bit of trepidation in the winning hallways of Netflix (NFLX) . Working on secret projects for Amazon Web Services to catch up to leaders such as Microsoft (MSFT) and Salesforce (CRM) ? That’s worrisome for each of those companies looking out over the next 10 years. Nearing the roll-out of Amazon Prime benefits into Whole Foods stores? Look out Kroger (KR) , Walmart (WMT) , Target (TGT) and others.

  • [By WWW.THESTREET.COM]

    There was no macro on the Salesforce.com (CRM) call. We did not hear macro mentioned when it came to The Children’s Place (PLCE) call. If you heard macro with Nvidia (NVDA) , let me know. I sure didn’t. While it seems like ages ago, I still can recall–starkly–that you didn’t get a lot of macro on the Netflix (NFLX) call either.

Top 5 High Tech Stocks To Invest In Right Now: KKR(KKR)

Advisors’ Opinion:

  • [By Motley Fool Staff]

    KKR (NYSE:KKR) Q1 2018 Earnings Conference CallMay. 3, 2018 11:00 a.m. ET

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

    Operator

  • [By WWW.THESTREET.COM]

    In the Lightning Round, Cramer was bullish on Kohlberg Kravis Roberts (KKR) , Opko Health (OPK) and Allergan (AGN) .

    Cramer was bearish on Kimberly-Clark (KMB) , Novartis AG (NVS) , Chemours (CC) and Gulfport Energy (GPOR) .

  • [By Jon C. Ogg]

    The long saga regarding Pandora Media Inc. (NYSE: P) has finally come to a head. Well, maybe. Rather than KKR & Co. L.P. (NYSE: KKR) investing $150 million, Sirius XM Holdings Inc. (NASDAQ: SIRI) will be investing up to $480 million in the streaming music rival. With its ticketing unit sale taking place as well, it might seem that Pandora is getting a great deal and helping to bolster its books.

  • [By Wayne Duggan]

    On this day 39 years ago, KKR & Co. L.P. Unit (NYSE: KKR) completed the first modern leveraged buyout of a public company, taking over manufacturer Houdaille Industries for $355 million.

  • [By WWW.GURUFOCUS.COM]

    For the details of Jeff Ubben’s stock buys and sells, go to www.gurufocus.com/StockBuy.php?GuruName=Jeff+Ubben

    These are the top 5 holdings of Jeff UbbenTwenty-First Century Fox Inc (FOX) – 53,326,334 shares, 18.41% of the total portfolio. Alliance Data Systems Corp (ADS) – 5,877,400 shares, 15.07% of the total portfolio. CBRE Group Inc (CBG) – 24,916,923 shares, 10.92% of the total portfolio. Shares reduced by 13.72%KKR & Co LP (KKR) – 47,750,000 shares, 10.18% of the total portfolio. Shares added by 4.82%Morgan Stanley (MS) – 17,959,620 shares,

  • [By ]

    In the Lightning Round, Cramer was bullish on Spotify (SPOT) , Alkermes (ALKS) , Johnson & Johnson (JNJ) , Thermo Fisher Scientific (TMO) , Sorrento Therapeutics (SRNE) , NVIDIA (NVDA) , Nucor, Eli Lilly (LLY) and Kohlberg Kravis Roberts (KKR) .

A Different Take On Splunk

Not too long ago, Splunk (SPLK) announced its Q4 FY ’18 and full-year FY ’18 results, and those results were generally received gleefully by analysts and investors alike. Jim Cramer, for example, hosted Splunk’s CEO, Doug Merritt, on “Mad Money” and suggested that Splunk is still in the “early innings” in terms of growth.

On March 27, 2018, the company held an Analyst Day to discuss its performance, forecast, and strategy moving forward. Broadly, the company laid out a revenue goal of $2 BB by FY ’20, with non-GAAP operating margin growth along the way. Its underlying strategy – again, broadly speaking – revolves around a transition to subscription-based licensing, additional market penetration, sales coverage, and growing the company’s cloud business.

In this article, I attack elements of Splunk’s outlook and strategy based on irregularities/risks that I believe are exposed through an analysis of the earnings call discussion, the Analyst Day presentation/discussion, and the company’s financial data.

The last article I published on Seeking Alpha – nearly eight months ago – discussed my reasoning against a Cisco (CSCO) acquisition of Splunk. For reasons beyond the scope of this article, I actually hesitated to publish it. Ultimately, I did publish, and it elicited, shall we say, a strong reaction. With most sentiment around Splunk fervently bullish, I expect this article and its decidedly bearish tone might evoke a similar reaction.

So be it. I reiterate from the prior article that I don’t believe Splunk is in its early innings of growth anymore, contrary to the position held by Mr. Cramer. That view, coupled with the risks I discuss herein, led me to recommend that existing investors think carefully about their position.

As this article became a bit longer than I originally expected, I divided it into numbered sections. While the sections do relate to each other, some readers might consider “moving between” sections, as opposed to reading the article sequentially.

The article index is as follows:

1.0 Overview and Index (i.e. what you’re reading right now).

2.0 A Quick Look At The Numbers

3.0 Operating Margin Is… Uh… What Now?

4.0 Analysts/Investors Are Ignoring Risks Around Licensing Mix

4.1 Subscription Renewals Are Not A Layup

4.2 License Model Impact On Operations

4.3 License Model Impact On Average Deal Size

4.4 Summing Up The Risks Around Licensing Mix

5.0 Market Strategy May Be Unrealistic

6.0 Don’t Count On Cloud

7.0 A Quick Look At Insider Trading Behavior

8.0 Conclusion

Finally, Splunk Annual Reports, which I reference, can be accessed here. I’m also including, along with the article, Splunk’s earnings call transcript and Analyst Day presentation, along with supporting financial data:

Q4 FY 2018 Earnings Transcript

Analyst Day FY 2019

Q4 FY 2018 Earnings Press Release

Insider Trading

2.0 A Quick Look At The Numbers

Before we dive in, let’s take a quick look at Splunk’s Q4 ’18/FY ’18 performance as presented during its earnings call. Splunk’s fourth quarter revenue was $419.7 million, up 37% year over year, fiscal year revenue was $1,271 billion, up 34% year-over-year, and billings also increased healthily in both periods. But GAAP operating loss for the quarter was $23.9 million, and GAAP operating loss for the full year is $259 million.

Splunk FY ’18 Fourth Quarter Highlights

Total revenues were $419.7 million, up 37% year over year. Total billings were $622.8 million, up 44% year over year. GAAP operating loss was $23.9 million. GAAP operating margin was negative 5.7%. Non-GAAP operating income was $73.0 million. Non-GAAP operating margin was 17.4%. GAAP loss per share was $0.18. Non-GAAP income per share was $0.37. Operating cash flow was $146.1 million with free cash flow of $139.5 million.

Splunk FY ’18 Full Year Highlights

Total revenues were $1.271 billion, up 34% year over year. Total billings were $1.551 billion, up 38% year over year. GAAP operating margin was negative 20.0%. Non-GAAP operating margin was 9.2%. Operating cash flow was $262.9 with free cash flow of $242.4 million.

Splunk noted during its earnings call that “for the full year, operating margin was 9.2% above our expectations due to the strength of our overall top line performance.” The company went on to say,

“given our op margin outperformance in fiscal ’18 and considering the benefit we expect to receive from the commission changes, we are increasing our op margin expectation for fiscal ’19 to 11.5%, up from the 10.5% we previously guided.”

I had originally planned to discuss operating margin toward the end of this article, but let us begin our analysis there.

3.0 Operating Margin Is Uh What Now?

Splunk’s non-GAAP (keyword is “non-GAAP”) operating margin was an important topic of discussion during the Analyst Day. Before diving into the margin discussion, I’d like to reiterate another point I made in my last Seeking Alpha article discussing Splunk.

“Splunk’s expense ratios are especially high largely due to stock-based employee compensation, which the company omits for its non-GAAP results. But, investors should carefully consider these non-cash costs. As Warren Buffett said in his FY 2015 Annual Report:

“…It has become common for managers to tell their owners to ignore certain expense items that are all too real. ‘Stock-based compensation’ is the most egregious example. The very name says it all: ‘compensation.’ If compensation isn’t an expense, what is it? And, if real and recurring expenses don’t belong in the calculation of earnings, where in the world do they belong?”

I encourage readers to keep the point above in mind.

Moving forward, the company, like most other software vendors selling subscription licenses, will report results under the new ASC 606 accounting standard vs. the “old” ASC 605 standard. Under this rule, software companies are able to recognize the full value of certain subscription licenses upfront. This is delineated in the slide below, presented during the Analyst Day:

Source: Splunk Analyst Day Presentation

This accounting change impacts Splunk’s reported income. For example, as per the slide below, under 606, total revenues for FY ’17 decline from $950 to $944 MM, while revenues for FY ’18 increase from $1,271 MM to $1,309 MM. We also see that non-GAAP operating margin for FY ’18 increases from 9% to 14% under 606.

Source: Splunk Analyst Day Presentation

The purpose of this article is not to go into the intricacies of the new standard, although I urge readers to review the following for a good overview: ASC 606 & IFRS 15: How the new Revenue Standards will impact Subscription Companies – Zuora).

However, I do wish to highlight some irregularity in terms of how Splunk presented its operating margin results during the Analyst Day. The company presented this slide to highlight non-GAAP operating margin growth:

Source: Splunk Analyst Day Presentation

Now, consider the data above in context with this slide:

Source: Splunk Analyst Day Presentation

In the slide above, on the left, Splunk illustrates the operating margin improvement for FY ’18 under 606 from 9.2% to 14.2%. On the right, the company illustrates how it arrives at its forecasted operating margin of 11.5% for FY ’19, again under 606.

But now, look back at the operating margin leverage slide where the company appears to show non-GAAP operating margin growth. The company has mixed results from 605 and 606 accounting standards to create this growth curve. Specifically, in this slide, the 9.2% non-GAAP operating margin result for FY ’18 is under 605, whereas the non-GAAP operating margin forecasts for FY ’19 and FY ’20 are under 606. This slide is misleading in my view. It’s a bit like mixing GAAP and non-GAAP results together.

In fact, if we normalize the last three data points in this slide under 606, we have the following (asterisk delineates forecast):

FY ‘ 18 FY ’19* FY ’20*
14.2% 11.5% 14.0%

So, non-GAAP operating margin is really not forecast to increase, it is decreasing between FY’ 18 and FY ’19 and actually roughly flat between FY ’18 and FY ’20. During the Analyst Day Q&A period, one of the analysts (Walter) pointed out that the company is staring at “flat margins with the same profile of revenue,” meaning the top-line goal of $2 BB by FY’ 20 has remained steady over various Splunk forecasts. This analyst suggested that perhaps the “missing link,” in terms of why operating margin is flat, is the company’s activity around reinvestment initiatives. Dave Conte, Splunk Senior VP and CFO, replied as follows, which I transcribed from the Analyst Day webcast:

“So, at this time last year, the $2BB milestone was always under 606, so that transition to subscription, which we laid out the path on that subscription journey, was also fundamental to that outlook. And at that time, the guide that I provided was 12 to 14 percent. OK, so now that we’ve progressed, we’ve got a year under our belt, we’ve got 24 months to go, well 22 and a half months to go to that endpoint milestone, I’ve increased the guide to 14. And I think the important part on this, this 606 adoption is there’s a benefit from commission accounting, because we always had built in the transition, the 606 revenue transition, that was always fundamental. The benefit for us is in the commission accounting, OK. That’s the piece that we’re reinvesting. And the numbers I showed, again, I think I said explicitly this isn’t guidance, but it’s as an example, OK the guide is 11 and a half percent positive operating margin. We get some benefit from changing commission accounting which we are reinvesting in the initiatives represented by my colleagues on the stage today.”

(If you’d like to listen to this particular question/answer, it is around the 3:41 mark – that is, 3 hours, 41 minutes.)

Dave Conte’s answer to the question seemed rather indirect to me. A simple answer would have been along the lines of “Yes; operating margin is expected to be roughly flat between FY ’18 and FY ’20 due to reinvestment activity.” Moreover, Dave Conte’s answer does not explain why 605 and 606 accounting standards were mixed on the operating margin leverage slide, although, admittedly, he was not asked that specific question. Finally, it would have been helpful if his answer explained why the company has raised non-GAAP operating margin guidance for FY ’20 from 12% to 14% (the 12% figure was presented in FY ’17).

I’m concerned as to why the company appears to obfuscate margin performance on the operating margin leverage slide, in an effort to create the appearance of growth.

Also, Splunk has provided through its own commentary some reasons to think that operating margins are at risk. As we will discuss further in the article, Dave Conte has stated that he expects subscription license durations to ease down. If that is so, an investor should wonder if that fact is in conflict with the increased guide for FY ’20. After all, the company has indicated they intend to reinvest the main expense benefit that they receive under 606 (i.e. commission expense). So, if you are reinvesting your main accounting benefit, and subscription contracts – which will dominate your license mix (we’ll discuss this in detail in a moment) – are expected to be shorter in duration and therefore lower in value, where is the increased operating margin guide coming from for FY’ 20?

I also would remind investors of Splunk’s GAAP operating margin performance from FY’ 2012 through FY’ 2018:

Data Source: Splunk Annual Reports FY ’13 – FY ’18, Chart Source: Yves Sukhu

GAAP margin has been trending in the right direction over the last few years, but given the discussion on non-GAAP operating margin above, I’m concerned about a possible reversal.

I reminded readers at the outset of this section that Splunk backs out its rather large stock-based compensation expense to generate non-GAAP results. In fairness, the company indicated during the Analyst Day that this expense is normalizing:

Source: Splunk Analyst Day Presentation

While this may be so, it is the approach of backing out the expense, and not necessarily the expense itself that is concerning. Given the approach to calculating non-GAAP results and given how the non-GAAP operating margin figures were presented/discussed during the Analyst Day, I personally am led to believe that there may be substantial risk around future operating margin performance (both GAAP and non-GAAP).

4.0 Analysts/Investors Are Ignoring Risks Around Licensing Mix

During the earnings call, Splunk noted that its “largest tailwind is term license bookings.” By “term license”, the company is referring to on-premise software licenses with a fixed duration (e.g. one year, two years, etc.), which of course is in contrast to a perpetual license that a customer owns forever. To be clear, Splunk also sells cloud-based licenses which also have a fixed duration but are (obviously) used in the cloud, and not on premise.

NOTE: Splunk often uses the word “duration” to reference its non-perpetual license types (term + cloud). I will use “subscription” in this section and throughout the article as an equivalent term.

Splunk is moving from a dominant perpetual license model to a dominant subscription license model, with term and cloud licenses expected to comprise 75% of bookings by FY 2020.

Source: Splunk Analyst Day Presentation

This is not surprising, as the enterprise software industry in general is moving in the direction of subscription-licenses over perpetual licenses. However, let me inject a bit of personal anecdote here which is relevant to the discussion: No software company “wants” to move to subscription-based licensing over perpetual licenses if the latter was how they were previously selling. They are doing it because they don’t have a choice.

Analysts on the earnings call, as well as those participating during the Analyst Day, seemed to be generally pleased with Splunk’s growing percentage of subscription-based licenses since none brought up any major objections/concerns. It’s reasonable to assume that analysts believe Splunk will grow its subscription-license revenues at an increasing rate that exceeds the declining rate of perpetual licenses. On the surface, revenue and sales data seem to support that belief. First, Splunk’s top line has continued to grow at an impressive rate, and software license growth specifically has grown at a 44% CAGR since FY 2012.

Source: Splunk Analyst Day Presentation

Source: Splunk Analyst Day Presentation

Second, Splunk’s average sales price has increased steadily.

Source: Splunk Analyst Day Presentation

These trends have occurred as the license mix has been shifting. However, a deeper analysis exposes potential issues that analysts/investors may be overlooking and avoiding.

4.1 Subscription Renewals Are Not a Layup

Stating the obvious, customers like subscription-based licenses since they allow costs to be spread out over time (i.e. versus a single up-front payment for a perpetual license).

Customers also like subscription-licenses from the standpoint of limiting their “lock-in” with any given vendor. Arguably, customers are less likely to leave a technology for which they have a perpetual license, given the nature of the license itself, as well as the (likely) large, upfront cost that they paid to acquire the license. Since subscription licenses are temporary by definition, customers may be more inclined, at the end of their license terms, to consider their options.

As I see it, herein lies the challenge for Splunk (and many other software companies) given the shift to more subscription-based licenses.

The company’s re-subscription rate “may” fall over time as competitors and new market entrants give customers pause before committing to another subscription period. In its FY 2017 Annual Report on page 19, Splunk states:

“Any decline in our customer renewals could adversely affect our future operating results(Much) of our software is sold under perpetual license agreementsIn order for us to improve our operating results, it is important that our existing customers renew their term licenses, subscriptions and maintenance and support agreements when the contract term expires Our customers have no obligation to renew their term licenses, subscriptions or maintenance and support agreements with us after the terms have expired.”

As mentioned above, customer preferences have shifted toward subscription-based licensing precisely because they do not want to be locked into technologies over multiple years. Perhaps executive management indirectly makes this point on the FY ’18 Q4 earnings call where David Conte stated:

“We expect duration to ease down as the (subscription license) pool gets larger.”

He goes on to say:

“The typical behavior for customers under a subscription contract is to pay annually.”

As best I can tell, Splunk does not provide data on their retention rates for subscription licenses. But, the “law of competition” dictates that retention rates “should” decline over time. Of course, by how much and how fast is difficult to answer. From a top-line perspective, Splunk’s growth in subscription revenue must obviously be greater than any declines due to subscriber loss.

Moreover, Splunk may come under pressure to renew customer subscriptions at an increasing frequency if subscription periods continue to “ease down.” You might argue that the subscription period will eventually reach a “bottom” because Splunk simply will not write subscription contracts for less than a given duration (e.g. one year). I agree with that argument. However, let us again think about the possible effect of competitive pressures. If competitors opt to move into shorter-duration subscription contracts (e.g. month-to-month), Splunk may have no choice but to follow suit.

Granted, what I have written above is speculative. But I’d argue that it is “reasonably probable.” I believe analysts and investors are assuming (incorrectly) that subscription-based revenue will continue to grow without any significant subscriber loss. This is a risky assumption, to say the least, in the face of a highly volatile and competitive market.

To close this section, I note that not one analyst on the earnings call, or during the Analyst Day Q&A period, asked about subscription retention rates (historical or forecasted).

4.2 License Model Impact on Operations

Let’s also think about the move to a subscription-dominant licensing model from a structural perspective. Splunk presently has a “heavy” direct sales force, with sales/marketing costs accounting for nearly 64% of total revenues in FY ’18. It may prove difficult to support that kind of sales model on a preponderance of short-duration contracts because of the potential variability in revenue. If the revenue mix is going to favor shorter-duration subscription-based contracts moving forward, then Splunk will likely incur pressure on its current sales model. It would seem Doug Merritt, Splunk CEO and President, hinted at this point on the earnings call, again – without stating it directly, saying:

“we could have a growing and more effective and monetizable ecosystem of partnersand continued sales migrationfrom a heavy direct to a much more blended group.”

(Readers are encouraged to review the full transcript for context.)



Data Source: Splunk Annual Reports FY ’13 – FY ’18, Table Source: Yves Sukhu

As we see above, sales and marketing has been Splunk’s largest operating expense. Does Splunk need a direct sales model to survive? Presumably yes, unless they’ve enjoyed setting a match to piles of money over the last several years. Moreover, as will be discussed later in the article, Splunk intends to sharpen its focus on markets outside its core IT Operations (ITOM) and Security markets via sales coverage.

It seems reasonable, therefore, to assume that sales and marketing expenses will continue to be the largest operating expense moving forward. It should be pointed out that historically Splunk’s ability to support such an expensive sales force has rested on a licensing mix that was dominated by perpetual licenses. So, the company’s ability to maintain its current sales structure on a preponderance of subscription licenses is unclear and “untested.” That’s not to say that it cannot be done. But, it is a significant risk.

4.3 License Model Impact on Average Deal Size

Let’s revisit the slide that Splunk presented on Average Selling Price:

Source: Splunk Analyst Day Presentation

It’s an impressive chart, especially as average selling price has more than doubled since FY ’12. As the company implies in this slide (and states explicitly elsewhere), increased customer adoption over time is driving the growth in ASP. Perhaps even more impressive is the chart displaying the number of deals over $1 million:

Source: Splunk Analyst Day Presentation

Naturally, an abundance of large deal sizes helps to increase the overall ASP. Evidently, Splunk believes the trend in ASP growth will continue in spite of the change in licensing mix. ASP is extremely important, as it is a key input into maintaining/growing operating margin. Will Splunk’s trend in ASP continue?

I see four potential problems.

1. The first problem lies with the ability for the company to continue driving enterprise adoption agreements (EAAs). The company defines EAAs as follows in its FY ’17 Annual Report:

“From time to time, we also enter into transactions that are designed to enable broad adoption of our software within an enterprise, referred to as enterprise adoption agreements. These agreements often include provisions that require revenue deferral and recognition over time.”

Per the last slide, Splunk has done a good job demonstrating growth in these types of contracts. And the company might well continue this trend. However, there are a couple potential issues with EAAs:

EAA contract volume can “swing” from one extreme to another year over year. Often, companies can have blowout years with large numbers of enterprise agreements, and less-than-stellar years in between the blowout periods. This typically has to do with the multi-year nature of EAAs, as well as the fact that this type of agreement is usually suitable for only a subset of a company’s customers. With regard to the multi-year aspect of EAAs, a customer who enters into a three-year EAA is, more than likely, not going to do another deal until that three-year period is expired. With regard to the “limited” suitability of this kind of agreement, it is possible for a company to “exhaust” its EAA customer pool by simply selling such agreements to all available (typically large) customers. Recurrence is not guaranteed. Let’s say that a customer’s EAA lasts for three years. By the time the EAA is ready for renewal, the customer may have other, perhaps less costly, options to consider vs. renewing the EAA or entering into another kind of license agreement. Of course, the idea of the EAA is to get the customer to deploy as much of the Splunk software as possible during the EAA period. Even so, it is still possible for a customer to identify a competing technology during the EAA term and determine that it may be better for them to switch to that technology (for whatever reason).

A decline in EAA revenue volume will drag on ASP. In fact, Dave Conte acknowledged that “bubbles” are possible with EAAs in his presentation during the Analyst Day. But he also indicated that he personally believed Splunk’s EAA growth will continue.

2. The second problem lies in the average value of subscription licenses. Average subscription license value will be less than the average perpetual license value, and Splunk noted during the Analyst Day that their financial models are built on the assumption that subscription licenses will be roughly two-thirds the size of a perpetual license. (I do leave open the possibility that there could be some unusually large subscription license sales.) If perpetual licenses become the smallest piece of the “license pie,” then, under one scenario, the average perpetual license deal size will have to increase to compensate to maintain ASP. Simply, the dynamics of the new licensing mix may make it more challenging for Splunk to maintain, much less grow its ASP.

3. Competitive pressures are likely to drive down the average value of all license types (subscription and perpetual). Consider the following statement from Splunk’s FY ’17 Annual Report:

“During fiscal 2015, we increased the license capacity of our entry-level licenses for Splunk Enterprise and decreased the price of Splunk Cloud. Although we believe that this price reduction will enable our customers to more rapidly increase their ability to adopt our offerings, there is no guarantee this will occur. It is possible that such price reduction will not be offset by an increase in order volume, which would have the effect of lowering our revenues and negatively impacting our financial results.”

These pricing and licensing moves suggest a reaction to competitive pressures, unless, of course, Splunk was feeling particularly generous in 2015. These pressures will only get worse.

4. Splunk had an unusually large number of “mega-orders,” larger than $10MM in FY ’18:

Source: Splunk Analyst Day Presentation

These “mega-orders” were not backed out when calculating ASP. Arguably, the ASP for FY ’18 is artificially high due to the influence of these very large orders, which obviously show great variation in terms of their number year over year in the slide above. As with EAAs, there’s a certain subset of Splunk’s overall customer base that can “absorb” such a large transaction. I have no idea how large that subset is, so perhaps Splunk has many more opportunities to sell such large deals. An analyst (Jesse) inquired about the unusual number of large orders in FY ’18 and asked why it happened and if investors should expect that kind of large order performance moving forward. Dave Conte replied that he could not say it was a “new normal” and offered no explanation as far as why so many large orders were processed in FY ’18. Accordingly, investors should be prepared for volatility in terms of the number of these transactions executed year over year.

4.4 Summing Up the Risks Around Licensing Mix

If we aggregate the main points of sections 4.1, 4.2, and 4.3, Splunk’s top-line, operating margin, and actual operating structure (among other things) are at risk as the company shifts toward a subscription-dominant license model. Certainly, and contrary to everything I have presented in this section, the company could:

Drive high average subscription license values which more than compensate for any loss in perpetual revenue. Drive high volumes of subscription licenses which more than compensate for any loss in perpetual revenue. Outperform in terms of perpetual license revenue despite the shift to subscription-based licenses. Continue the growth trend in large and EAA deals.

My main issue is that the licensing model risks carry a weight that’s not reflected in analyst questions/discussions with Splunk. Yes, some analysts participating in the Analyst Day hinted at some licensing mix concerns, as discussed above. But none truly challenged the company, which I think was a disservice to investors.

5.0 Market Strategy May Be Unrealistic

Splunk repeatedly called attention to its total addressable market opportunity during the Analyst Day. Here is the slide presented:

Source: Splunk Analyst Day Presentation

Almost every data-centric company has a slide like this. The narrative is always the same:

The rate of data growth is so high that our addressable market opportunity is expanding like crazy!

This kind of thinking is misleading, and investors should be wise to it. As any market expands, competition will intensify – barring a monopolistic opportunity, which Splunk does not have in any market. So, while the overall market size grows, the “slice of the pie” that any particular market participant can attack may actually be getting smaller. So, the slide above is really meaningless from an investor’s standpoint without the context of a detailed competitive analysis. It is notable – not in a good way – that Splunk did not offer any substantial discussion on competition during the Analyst Day, nor did any of the analysts challenge the company in regard to competitive pressures.

Splunk calculates its current TAM by summing the estimated market size of the five main solution areas that the company is targeting. Splunk also mentioned the size of these markets in the prior fiscal year (FY ’17) to emphasize not just the sheer size of their TAM but the strong growth rate as well. The data presented from the Analyst Day is as follows:

FY ’18 FY ’17
IT Operations (ITOM) $23 BB $20 BB
Security $11 BB $10 BB
Application Development $13 BB $12 BB
Business Analytics $ 6 BB $6 BB
IoT & Industrial Data $9 BB $7 BB
TOTAL $62 BB $55 BB

Within its two largest markets, IT Operations (ITOM) and Security, the company noted during the Analyst Day that it has only achieved 2% and 6% penetration, respectively. (Assuming they mean that in terms of sales volume, then Splunk generated roughly $460 MM for IT Operations use cases and roughly $660 MM for Security.)

All of this, according to Splunk, means the company has a massive opportunity in front of it.

But I’m confused by Splunk’s strategy which is to “play” in all five markets of the table. I come back to my comment about intensifying competition. Let’s look at Splunk’s two largest markets of IT Operations (ITOM) and Security where – in their words – they have only just started to penetrate and capture market share. Splunk is hardly alone in either of these markets. While they are deservedly a leader in both areas, consider some of the other “heavyweight” players in both markets:

IT Operations Security
IBM (IBM) IBM (IBM)
BMC Software Microfocus
CA Technologies (CA) Intel (INTC)
Dell Software LogRhythm
Microsoft (MSFT) Cisco (CSCO)

As an investor, would you not expect that all of the companies above are going to continue to aggressively compete in these markets as they grow? Why would any of these companies willingly cede any ground/market share to Splunk? And these companies are just the heavyweights. There are any number of startups/niche players that want a bigger piece of the pie. For example, for the Security space (specifically, the SIEM space where Splunk is a leader), here’s Gartner’s magic quadrant:

There are quite a few niche players who presumably want to move “up and to the right.” If Splunk has only penetrated the ITOM market at 2%, the Security market at 6%, has significant market size in both markets but also has significant competition in both markets, wouldn’t it make sense to double down and focus on these markets? Moreover, both the ITOM and Security markets are changing from a technology perspective. As a (possibly oversimplified) example, security has moved from once-upon-a-time simple event capture/monitoring to complex activity analytics where software is tasked with interpreting the “meaning” of various system/network activity and data to detect threats. The latter is not easy to do and is why Splunk has made certain investments in the Security space over the last few years, including the recently announced acquisition of Phantom (an InQTel backed company).

I don’t understand why Splunk would try to attack five markets, when:

The company has good momentum and is a leader in two of those markets. The company claims that there is a lot of open ground in both those markets left to capture. The company has finite resources, is undoubtedly going to face intensifying competition in its core markets, and will likely need to allocate a majority of its resources to keep pace with competitors in those markets.

One analyst (Michael) offered one question along this line of thinking during the Q&A section of the Analyst Data, asking “why now” in terms of emphasizing a focus on business analytics and IoT markets. Doug Merritt broadly responded that the company “really hadn’t put anyone on business analytics and IoT” and that Splunk needs to “put (its) money where (its) mouth is, and find repetitive patterns in those expansion areas.”

In terms of business analytics, Splunk has had this market on its radar since its first year as a public company. The following is from the company’s FY ’13 Annual Report:

Most of our customers currently use our software to support application management, IT operations, security and compliance functions. Our ability to grow our business depends in part on our ability to persuade current and future customers to expand their use of our software to additional use cases, such as facilities management, supply chain management, business analytics and customer usage analytics.

So, here we are several years later, and the company is suggesting that business analytics hasn’t been a focus, nor have they established a repeatable sales pattern for this market. If that’s true, what makes Splunk think they can even be competitive in the business analytics market now? Business analytics is hardly a nascent market, and has become terribly saturated. Some of the major players include:

Business Analytics Heavyweights
Tableau
Domo
Qlik
IBM (Cognos/SPSS)
Oracle (OBIEE)
Microsoft (Excel/Power BI)
SAS

The list above doesn’t even consider players like Salesforce.com (NYSE:CRM), which introduced its Wave Analytics offering not too long ago, and Amazon Web Services (NASDAQ:AMZN), which contracted with Zoomdata (another InQTel backed company) to develop its QuickSight offering. Perhaps this saturation is reflected in Splunk’s own data, as the TAM table shows flat growth in the business analytics market.

So, why is Splunk targeting a market where:

They are late to the party. It is essentially dominated by a handful of super-heavyweight players. It does not offer the same growth opportunity as core markets. They have not yet found a repeatable sales pattern after several years.

It doesn’t seem to make a lot of sense.

In regard to the IoT market, it is so nebulous right now that it is hard to know what it is, and what it isn’t. Last year, I had written a Seeking Alpha article about General Electric (NYSE:GE) where I pointed out the huge variations in IoT market size estimates. I should note that GE, in fact, has a partnership with Splunk for its own IoT initiative. There’s little doubt that, as the sheer number of connected machines and devices grows, then the data volume they throw off will grow. But, to reiterate, it is somewhat difficult to quantify the opportunity here. For example, edge computing is another buzzy buzzword these days, where machine/device data is not “sent” to a central store like Splunk for analysis but is rather analyzed/interpreted “near” the machine/device, or on the machine/device itself. So, just because the volume of data is growing does not necessarily mean that all that data is going to be transmitted, stored, and analyzed in aggregate. The broader point in my article on GE – which I think is also relevant here – was that the company (GE in that case) was throwing around (what I perceived as) ridiculous numbers in regard to their IoT market opportunity.

The application development market offers similar characteristics to the business analytics market in that it has achieved a certain level of maturity and features several heavyweight players.

With a combined $34 billion market opportunity in its core markets (using Splunk’s own numbers), I’m at a loss why the company would even consider stretching its resources. Think about this from the standpoint of research and development (R&D):

Data Source: Splunk Annual Reports FY ’13 – FY ’18, Chart Source: Yves Sukhu

The trend in Splunk’s R&D spend relative to revenue is clear. Investors should ask themselves: How can the company effectively spread these limited R&D resources across five distinct markets, each of which demand specific R&D investment and are highly competitive?

As per Doug Merritt, the company intends to put resources on expansion markets. Since the company clearly believes in a direct-sales-oriented approach for attacking markets, will Splunk hire more salespeople to focus on business analytics, application development, and IoT? Where will the money come from for that? How will the company maintain its operating margin guidance if it expands sales?

I’m forced to ask: does Splunk have or foresee problems with its core markets (ITOM, Security), e.g. saturation, intensifying competition, etc.? If so, that would be worrisome to say the least from an investor standpoint.

6.0 Don’t Count on Cloud

Splunk touted its cloud business numerous times during the Analyst Day presentation and during the associated Q&A section. The company is relying on the cloud business to compensate for declining perpetual license revenue, and to also help it capture more customers.

Let’s focus on the revenue aspect of this business first. Splunk estimates its cloud business will be generating $250 MM by FY ’20:

Source: Splunk Analyst Day Presentation

I have some doubts about this. First of all, the company appears to be extrapolating a trend based on two major data points (i.e. FY ’17 and FY ’18 performance). So, their experience/history with significant revenues from their cloud business is limited, which – one would think – makes it difficult to forecast. Further, think about one of the defining characteristics of cloud-based solutions:

They tend to get cheaper over time.

Did Amazon Web Services (AWS) become the 800,000 pound gorilla that it is by charging MORE for the various services it provides? No, of course not. It captured share by dramatically under-cutting traditional IT solution providers. I remember signing up for AWS in the early days, when I’d receive – every couple weeks or so – an email detailing a continued price reduction of some particular AWS resource.

I seriously doubt Splunk will be able to maintain its pricing in the cloud. Investors should expect significant competition, because, after all, it is the “easiest” environment for competitors to enter due to such a low barrier to entry. Today, Splunk enjoys a strong relationship with AWS, but, let me pose another question to readers:

Why shouldn’t AWS kill Splunk?

Think about Splunk in terms of core capabilities: It is essentially a system for data collection, data storage/retrieval, data correlation, and data visualization. AWS has capabilities in all these areas, and more. They have greater development resources than Splunk. So, again, why shouldn’t they kill Splunk altogether?

Doug Merritt didn’t exactly make this point on the Q4 earnings call, but he noted “AWS’ job is to continue to offer more and more services, both infrastructure and platform services, to the community.” He goes on to correctly note “and our job is to keep adding more value on top of those services so that people would still want to do business with Splunk in addition to, or with, AWS. And that’s just – that’s a game that we all know how to play in tech.” Mr. Merritt is 100% right in his comments. But, if I were an investor in Splunk, I would be deeply concerned that the company, which is telling me cloud is core to its future growth strategy, could be killed off by its biggest cloud partner. Splunk’s “competitive moat” around its cloud business does not look deep or wide.

Naturally, if Splunk is forced to drop pricing in the cloud due to competitive pressures, then the company will have to sell more deals to make up the same amount of revenue.

Splunk also is counting on the cloud business to help the company achieve its customer target of 20,000 by FY ’20. As we see below, the rate of growth in Splunk’s customer count has decreased and flatlined somewhat:

Data Source: Splunk Annual Reports FY ’13 – FY ’18, Chart Source: Yves Sukhu

One analyst (Ramo – I’m not sure about the name spelling) commented about this during the Analyst Day Q&A stating that he was “struggling” with the fact that Splunk has been adding (more or less) 2,000 extra customers per year. He specifically asked: “What’s the thing that’s keeping that number where it is? Is it lead generation? What’s the driver to bring that higher?” Splunk provided numerous answers to the question, but the answer relevant to this section came from Sendur Sellakumar who commented that Splunk looks at its partnership with AWS as a mechanism to capture new customers. Additionally, and discussed earlier during the Analyst Day, Mr. Sellakumar, remarked that one of the strategies to drive business growth with AWS is to have “(Splunk) reps talk with their reps.” This strategy is logical, but not necessarily sustainable.

It’s entirely likely that the realized trend in new customer acquisition via AWS decreases over time for the reasons discussed above. I concede that such a dynamic may not happen in FY ’19 or FY ’20, but I think it is still probable. With respect to the approach of driving a strong relationship between the respective AWS and Splunk sales forces, this makes sense But, don’t you think that every other AWS partner wants to do the same thing? As long as AWS remains “king of the cloud,” everybody will “want a piece” of their sales team to drive promotion and sales of their products/solutions. Splunk will be competing with many vendors for the “mindshare” of AWS reps.

Splunk has painted a rosy picture of its cloud business. But I believe it is likely not to perform or grow with the strength or robustness that has been communicated. It may not be sustainable over the long term.

7.0 A Quick Look At Insider Trading Behavior

Given all the risks I have pointed out in this article, I was curious to explore insider trading activity for Splunk. In effect, I wondered if there were any patterns that might imply insiders are concerned about risk. I looked at activity from April 2012 (the month Splunk stock first traded) through today, using data from openinsider.com.

I found that:

No insider made an open market purchase of Splunk stock during the period analyzed. Godfrey Sullivan, Splunk’s Chairman and former CEO, has – via automatic dispositions – reduced his share count from approximately 2.77 million shares in April 2012 to about 253,000 shares as of March 14, 2018. That represents a nearly 91% reduction in ownership. The total value of these dispositions is just over $357 million.

In regard to the first bullet, we all know insiders usually acquire shares via grants/options. So, the fact that no insiders made any open exchange purchases might strike investors as a “nothing to see here nothing-burger.” Still, if these insiders believe so strongly in the company’s opportunity and prospects, one might expect to see at least some open market share purchases. In regard to the second bullet, it is obviously common for insiders to enter into predefined disposition plans. But that’s not to say that an insider has to enter into a disposition plan. Again, assuming there’s strong belief in the company’s long-term opportunity, why enter into an aggressive disposition plan in the first place?

8.0 Conclusion

Splunk’s stock price over the last 12 months has reflected an almost cult-like enthusiasm from investors and analysts:

Source: Inveyo

Frankly, it would not surprise me to see the stock continue to test new highs throughout the remainder of the calendar year. But I believe such price movements would be entirely disconnected from the underlying business and associated risks.

I believe Splunk’s market opportunity and ongoing operating structure may not be as viable as offered by the company and analysts alike. Further, many analysts, particularly those on the FY ’18 earnings call and participating during the Splunk’s Analyst Day, seem to lack a willingness to truly challenge the company on points discussed in this article. Consequently, major risks are not – in my view – being properly discussed and analyzed by the investment community.

Lastly, I’m troubled by the company’s presentation of non-GAAP operating margin results during its Analyst Day which I felt was misleading. It suggests to me that ongoing operating performance may be at risk.

With current market conditions for the tech sector overwhelmingly bullish, a bearish voice is likely to be drowned out rather quickly. So, I expect much of what I have laid out here to be entirely ignored. Nonetheless, for the small minority of Splunk investors looking beyond price momentum, I urge you to be cautious.

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

U.S. IPO Weekly Recap: Dropbox Pops 36% In Decacorn’s Big Debut

The unicorn class just breathed a sigh of relief. Dropbox (Pending:DBX), once the poster child for excessive private valuations, priced above its range at $21 and then popped 36%. The most highly-valued tech IPO since Snap (NYSE:SNAP), Dropbox boasts over $1 billion in annual sales, paired with fast growth and expanding margins. The takeaway: Expect more tech.

Broader markets dropped. This past week, the IPO Index traded off -3.6% and the S&P 500 fell -6.0%. The VIX Volatility Index surged to about 25, the point at which IPOs start postponing.

Two IPOs did postpone this week: Israeli biotech PolyPid (Pending:POLY) and blank check company Terrapin 4. And even with new tariffs roiling Chinese stocks, two deals from China were completed: Sunlands Online Education (STG; -3%) and micro-cap fintech Golden Bull (DNJR; +16%).

3 IPOs During the Week of March 19th, 2018

Issuer
Business

Deal
Size

Market Cap
at IPO

Price vs.
Midpoint

First Day
Return

Return
at 03/23

Dropbox

$756M

$9,437M

24%

+36%

+36%

Leading web-based cloud storage and collaboration platform.

Golden Bull

$6M

$58M

-6%

+16%

+16%

Provides a peer-to-peer lending platform in China for auto-secured loans.

Sunlands Online Education

$150M

$1,996M

-8%

-3%

-3%

A leading provider of online courses for degree-equivalent exams in China.

Out of the box: Dropbox’s down-round leads to an up IPO

Dropbox raised $756 million (25% insider) by pricing above the upwardly-revised range. Its $9.4 billion IPO market cap was still a down-round to the $10 billion valuation it received privately in 2014, but those Series C investors ended the day with a gain. Its stock closed at $28.48, a strong gain of 36%, but still below its opening price. Salesforce (NYSE:CRM) invested $100 million in a concurrent private placement, days after announcing its $6.5 billion acquisition of 2017 software IPO MuleSoft (NYSE:MULE)

We don’t need no (Sunlands Online) Education

Chinese online course provider Sunlands Online Education Group raised $150 million at a $2.0 billion market cap by pricing at the low end. The stock initially popped over 20%, before deteriorating to a loss of -3%. The extremely fast growing company is also extremely unprofitable.

Two IPOs postpone: A biotech and a blank check

Israeli biotech PolyPid postponed its $75 million IPO, citing market conditions. Some recent biotechs have pulled back, and the prevention of surgical site infections is not an especially hot area. Blank check company Terrapin 4 Acquisition (TRTLU), led by Nathan Leight, reduced its proposed offering to $200 million and ultimately postponed; investors may be cautious given the recent performance of Yatra Online (Terrapin 3).

IPO Pipeline Update: 8 new filers including Dell’s Pivotal Software

8 Filings During the Week of March 19th, 2018

Issuer
Business

Deal
Size

Sector

Lead
Underwriter

FirstCaribbean Bank (FCI)

$300M

Financials

Barclays

Leading bank in Barbados, the Bahamas and Cayman Islands spun out of CIBC.

Level One Bancorp (LEVL)

$25M

Financials

Raymond James

Michigan-based commercial bank with $1.3 billion in assets.

Mereo BioPharma (MREO)

$81M

Health Care

Cowen

Commercializing a portfolio of rare disease drugs acquired from large pharmas.

Pivotal Software (PIVI.RC)

$500M

Technology

Morgan Stanley

DellEMC spin-off providing a platform for enterprises to manage cloud-based apps.

Surface Oncology (Pending:SURF)

$75M

Health Care

Goldman

Clinical-stage biotech developing next generation antibody cancer therapies.

MorphoSys (MOR)

$150M

Health Care

Goldman

Licensing antibodies to pharmas and developing its own therapy for lymphoma.

Pure Acquisition (PACQU)

$300M

SPAC

Oppenheimer

Blank check company formed and led by oil and gas veteran Jack Hightower.

GrafTech International (EAF)

$100M

Materials

JP Morgan

Vertically-integrated manufacturer of graphite electrodes used in steelmaking.

IPO Market Snapshot

The Renaissance IPO Indices are market cap weighted baskets of newly public companies. The Renaissance IPO Index has returned 1.3% year-to-date and the S&P 500 is down 3.2%. Renaissance Capital’s IPO ETF (NYSE: IPO) tracks the index, and top ETF holdings include Snap (SNAP) and US Foods (NYSE:USFD). The Renaissance International IPO Index is up 3.4% year-to-date, while the ACWX is down 2.8%. Renaissance Capital’s International IPO ETF (NYSE: IPOS) tracks the index, and top ETF holdings include Orsted (DONG Energy) and ASR Nederland.

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