Connect with us

Government

J.P. Morgan: 2 Stocks to Consider Buying (and 1 to Stay Away From)

In a report on current market conditions – and the strategic view going forward – JPMorgan’s Marko Kolanovic sees plenty of reasons for optimism. Kolanovic sees that risk has eased
Read More…
The post J.P. Morgan: 2 Stocks to Consider Buying (and…

Published

on

In a report on current market conditions – and the strategic view going forward – JPMorgan’s Marko Kolanovic sees plenty of reasons for optimism. Kolanovic sees that risk has eased in the last few weeks, and taking the usual daily fluctuations into account, markets are likely to see a sustained rally.

The biggest news, in Kolanovic’s view, are the positive reports about the rapid development and imminent availability of a COVID-19 vaccine. This is a ‘game-changer,’ allowing investors to “look through the recent surge in COVID-19 cases to the impending end of the pandemic and broader reopening of the economy.”

In a close second, as far as market importance is concerned, is the split result of the national election. Kolanovic describes a Biden Presidency combined with increased Republican strength in the House and a continued Republican Senate majority as ‘the best of both worlds.’ A divided government is unlikely to dismantle the pro-business moves taken by the Trump Administration, while Biden is likely to ease the trade war. The result, according to the Kolanovic team, will be “less market volatility, which could drive inflows to risk assets.”

To this end, JPM’s stock analysts have been busy scanning the tickers, seeking out those that are likely to win – or lose – in the coming months. Of particular interest, we’ve pulled the TipRanks data on two stocks that the firm predicts will show double-digit growth, and one that JPM says to avoid.

Vroom, Inc. (VRM)

We’ll start with Vroom, an online retailer in the used vehicle space. In addition to cars, the company also sells spare parts and accessories, and offers insurance, car rentals, and funding for purchases, for US customers only.

Vroom is a newcomer in the markets; it IPO’d in June and rose quickly, peaking in on September 1. Since then, the shares have slipped and are now down 22% since their first day’s close. The rise and fall are the result of conflicting tailwinds and headwinds pushing against the stock.

On the positive side, Vroom has gained during the general shift to online retail. Also, the company’s focus on used vehicles was beneficial during the pandemic, when customers were nervous or cash-strapped – but in either case, reluctant to lay out large sums for a new car. On the negative side of the ledger, that reluctance to spend slipped over to the used car market, too. Vroom had to contend with low margins while cutting prices to attract sales.

Covering the stock for JPM, analyst Rajat Gupta sees the stock’s current state as an opportunity for investors. The bad times are likely temporary, he believes, and this company is set to take off.

“Net-net, with near-term expectations now reset and potential for acceleration in both unit growth and gross profit into 2021, we view the setup as favorable in the near to medium term for the stock with little incremental negative catalysts… we believe execution will be key given heavy reliance on third parties for key operational aspects such as reconditioning and logistics,” Gupta wrote.

In line with this assessment, Gupta rates the stock an Overweight (i.e. Buy), and his $70 price target implies an upside of 91% for the year ahead. (To watch Gupta’s track record, click here)

Even after the fall in its share value, Vroom retains a Strong Buy from the analyst consensus. The rating is based on 11 reviews, including 10 Buys and 1 Sell. VRM is selling for $36.81, and its $59.40 average price target suggests it has room for ~61% growth on the one-year horizon. (See VRM stock analysis on TipRanks)

Colfax Corporation (CFX)

Next up is Colfax, a niche manufacturing company. Colfax produces a range of equipment for the welding, medical device, and air and gas handling markets, ranging from medical equipment for joint reconstruction to welding helmets and cutting torches. While it may sound incongruous, the combination works for Colfax, and the company is experiencing a turnaround from corona crisis losses in 2Q20.

The third quarter earnings, at 41 cents per share, showed both good and bad. It was down 32% year over year, but has more than quadrupled sequentially and beat the estimates. Revenues were up 29% sequentially, coming in at $805 million. Management expects to see continued sequential improvements through the remainder of 2020, and predicts full-year earnings in the range of 45 cents to 50 cents per share.

Representing JPM, 5-star analyst Stephen Tusa commented, “[We] see the stock as being relatively cheap compared to close peers within the Fab Tech and Med Tech space with significant upside post COVID-19 that does not appear to be entirely realized in the valuation as of yet compared to the peer FY2 expectations. CFX has strong brands and franchises… and an underappreciated productivity opportunity with primary end market bounce back in Fab Tech and demand spikes in Med Tech.”

Tusa backs his upbeat comments with an Overweight (i.e. Buy) rating and a $52 price target indicating his confidence in a 38% one-year upside. (To watch Tusa’s track record, click here)

Overall, Colfax has a Moderate Buy rating from the analyst consensus, based on 8 reviews breaking down to 5 Buys, 2 Holds, and 1 Sell. However, the majority expect shares to stay range bound for now, as the current $38.63 average price target indicates. (See CFX stock analysis on TipRanks)

Beyond Meat (BYND)

Last on today’s list of JPM calls is Beyond Meat, a company that made a lot of waves last year when it raised over $3.8 billion in its IPO. The company offers a vegetarian-based meat substitute, and it markets as more nutritious, better tasting – and more like meat – than competing products. The company was founded back in 2009, and has expanded its lineup of products to include simulated beef, pork, and chicken products.

Overall, BYND stock still presents a positive façade. The shares are up 88% year-to-date, and the company registered a net profit in 1Q20, just as the corona crisis started. Since then, however, earnings have turned negative – and even worse, revenues showed a strong sequential drop in Q3. The latest quarterly figures showed $94 million at the top line, down 16% from Q2 and well below the forecast of $133 million, and an EPS loss of 28 cents – far worse than the 3-cent loss predicted.

The biggest hit to Beyond Meat came from declines in restaurant business that was only partially redeemed by a 40% surge in grocery sales. The company did announce a partnership with McDonald’s to provide the meat substitute for the fast food giant’s new McPlant menu, but even that announcement was bungled. BYND shares fell sharply when it was rumored that McD’s had developed the meat substitute in-house. While that misconception has been corrected, BYND has only partially bounced back.

In short, this company is facing serious headwinds in the near-term, and JPM is advising caution due to “visibility so low and the most recent quarter surprisingly soft.”

Ken Goldman, rated 5-stars at TipRanks, writes of BYND, “We are now trying to model a company for which (a) we are not exactly clear why 3Q was so bad (the company’s explanation did not seem to be backed up by meaningful data), and (b) the partnership with McDonald’s could either be a game-changer or a dud.”

Goldman’s caution is clear from his Underweight rating (i.e. a Sell), and his $104 price target suggests a 26% downside to the stock. (To watch Goldman’s track record, click here)

JPM is not the only firm advising caution here. Beyond Meat’s analyst consensus rating is a Moderate Sell, based on 2 Buys, 7 Holds, and 7 Sells set in recent weeks. The stock is selling for $141.91 and its average price target of $110.71 indicates a probable downside of 22% in the coming year. (See BYND stock analysis on TipRanks)

To find good ideas for stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights.

Disclaimer: The opinions expressed in this article are solely those of the featured analysts. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.

The post J.P. Morgan: 2 Stocks to Consider Buying (and 1 to Stay Away From) appeared first on TipRanks Financial Blog.

Read More

Continue Reading

International

United Airlines adds new flights to faraway destinations

The airline said that it has been working hard to "find hidden gem destinations."

Published

on

Since countries started opening up after the pandemic in 2021 and 2022, airlines have been seeing demand soar not just for major global cities and popular routes but also for farther-away destinations.

Numerous reports, including a recent TripAdvisor survey of trending destinations, showed that there has been a rise in U.S. traveler interest in Asian countries such as Japan, South Korea and Vietnam as well as growing tourism traction in off-the-beaten-path European countries such as Slovenia, Estonia and Montenegro.

Related: 'No more flying for you': Travel agency sounds alarm over risk of 'carbon passports'

As a result, airlines have been looking at their networks to include more faraway destinations as well as smaller cities that are growing increasingly popular with tourists and may not be served by their competitors.

The Philippines has been popular among tourists in recent years.

Shutterstock

United brings back more routes, says it is committed to 'finding hidden gems'

This week, United Airlines  (UAL)  announced that it will be launching a new route from Newark Liberty International Airport (EWR) to Morocco's Marrakesh. While it is only the country's fourth-largest city, Marrakesh is a particularly popular place for tourists to seek out the sights and experiences that many associate with the country — colorful souks, gardens with ornate architecture and mosques from the Moorish period.

More Travel:

"We have consistently been ahead of the curve in finding hidden gem destinations for our customers to explore and remain committed to providing the most unique slate of travel options for their adventures abroad," United's SVP of Global Network Planning Patrick Quayle, said in a press statement.

The new route will launch on Oct. 24 and take place three times a week on a Boeing 767-300ER  (BA)  plane that is equipped with 46 Polaris business class and 22 Premium Plus seats. The plane choice was a way to reach a luxury customer customer looking to start their holiday in Marrakesh in the plane.

Along with the new Morocco route, United is also launching a flight between Houston (IAH) and Colombia's Medellín on Oct. 27 as well as a route between Tokyo and Cebu in the Philippines on July 31 — the latter is known as a "fifth freedom" flight in which the airline flies to the larger hub from the mainland U.S. and then goes on to smaller Asian city popular with tourists after some travelers get off (and others get on) in Tokyo.

United's network expansion includes new 'fifth freedom' flight

In the fall of 2023, United became the first U.S. airline to fly to the Philippines with a new Manila-San Francisco flight. It has expanded its service to Asia from different U.S. cities earlier last year. Cebu has been on its radar amid growing tourist interest in the region known for marine parks, rainforests and Spanish-style architecture.

With the summer coming up, United also announced that it plans to run its current flights to Hong Kong, Seoul, and Portugal's Porto more frequently at different points of the week and reach four weekly flights between Los Angeles and Shanghai by August 29.

"This is your normal, exciting network planning team back in action," Quayle told travel website The Points Guy of the airline's plans for the new routes.

Read More

Continue Reading

International

Walmart launches clever answer to Target’s new membership program

The retail superstore is adding a new feature to its Walmart+ plan — and customers will be happy.

Published

on

It's just been a few days since Target  (TGT)  launched its new Target Circle 360 paid membership plan. 

The plan offers free and fast shipping on many products to customers, initially for $49 a year and then $99 after the initial promotional signup period. It promises to be a success, since many Target customers are loyal to the brand and will go out of their way to shop at one instead of at its two larger peers, Walmart and Amazon.

Related: Walmart makes a major price cut that will delight customers

And stop us if this sounds familiar: Target will rely on its more than 2,000 stores to act as fulfillment hubs. 

This model is a proven winner; Walmart also uses its more than 4,600 stores as fulfillment and shipping locations to get orders to customers as soon as possible.

Sometimes, this means shipping goods from the nearest warehouse. But if a desired product is in-store and closer to a customer, it reduces miles on the road and delivery time. It's a kind of logistical magic that makes any efficiency lover's (or retail nerd's) heart go pitter patter. 

Walmart rolls out answer to Target's new membership tier

Walmart has certainly had more time than Target to develop and work out the kinks in Walmart+. It first launched the paid membership in 2020 during the height of the pandemic, when many shoppers sheltered at home but still required many staples they might ordinarily pick up at a Walmart, like cleaning supplies, personal-care products, pantry goods and, of course, toilet paper. 

It also undercut Amazon  (AMZN)  Prime, which costs customers $139 a year for free and fast shipping (plus several other benefits including access to its streaming service, Amazon Prime Video). 

Walmart+ costs $98 a year, which also gets you free and speedy delivery, plus access to a Paramount+ streaming subscription, fuel savings, and more. 

An employee at a Merida, Mexico, Walmart. (Photo by Jeffrey Greenberg/Universal Images Group via Getty Images)

Jeff Greenberg/Getty Images

If that's not enough to tempt you, however, Walmart+ just added a new benefit to its membership program, ostensibly to compete directly with something Target now has: ultrafast delivery. 

Target Circle 360 particularly attracts customers with free same-day delivery for select orders over $35 and as little as one-hour delivery on select items. Target executes this through its Shipt subsidiary.

We've seen this lightning-fast delivery speed only in snippets from Amazon, the king of delivery efficiency. Who better to take on Target, though, than Walmart, which is using a similar store-as-fulfillment-center model? 

"Walmart is stepping up to save our customers even more time with our latest delivery offering: Express On-Demand Early Morning Delivery," Walmart said in a statement, just a day after Target Circle 360 launched. "Starting at 6 a.m., earlier than ever before, customers can enjoy the convenience of On-Demand delivery."

Walmart  (WMT)  clearly sees consumers' desire for near-instant delivery, which obviously saves time and trips to the store. Rather than waiting a day for your order to show up, it might be on your doorstep when you wake up. 

Consumers also tend to spend more money when they shop online, and they remain stickier as paying annual members. So, to a growing number of retail giants, almost instant gratification like this seems like something worth striving for.

Related: Veteran fund manager picks favorite stocks for 2024

Read More

Continue Reading

Government

President Biden Delivers The “Darkest, Most Un-American Speech Given By A President”

President Biden Delivers The "Darkest, Most Un-American Speech Given By A President"

Having successfully raged, ranted, lied, and yelled through…

Published

on

President Biden Delivers The "Darkest, Most Un-American Speech Given By A President"

Having successfully raged, ranted, lied, and yelled through the State of The Union, President Biden can go back to his crypt now.

Whatever 'they' gave Biden, every American man, woman, and the other should be allowed to take it - though it seems the cocktail brings out 'dark Brandon'?

Tl;dw: Biden's Speech tonight ...

  • Fund Ukraine.

  • Trump is threat to democracy and America itself.

  • Abortion is good.

  • American Economy is stronger than ever.

  • Inflation wasn't Biden's fault.

  • Illegals are Americans too.

  • Republicans are responsible for the border crisis.

  • Trump is bad.

  • Biden stands with trans-children.

  • J6 was the worst insurrection since the Civil War.

(h/t @TCDMS99)

Tucker Carlson's response sums it all up perfectly:

"that was possibly the darkest, most un-American speech given by an American president. It wasn't a speech, it was a rant..."

Carlson continued: "The true measure of a nation's greatness lies within its capacity to control borders, yet Bid refuses to do it."

"In a fair election, Joe Biden cannot win"

And concluded:

“There was not a meaningful word for the entire duration about the things that actually matter to people who live here.”

Victor Davis Hanson added some excellent color, but this was probably the best line on Biden:

"he doesn't care... he lives in an alternative reality."

*  *  *

Watch SOTU Live here...

*   *   *

Mises' Connor O'Keeffe, warns: "Be on the Lookout for These Lies in Biden's State of the Union Address." 

On Thursday evening, President Joe Biden is set to give his third State of the Union address. The political press has been buzzing with speculation over what the president will say. That speculation, however, is focused more on how Biden will perform, and which issues he will prioritize. Much of the speech is expected to be familiar.

The story Biden will tell about what he has done as president and where the country finds itself as a result will be the same dishonest story he's been telling since at least the summer.

He'll cite government statistics to say the economy is growing, unemployment is low, and inflation is down.

Something that has been frustrating Biden, his team, and his allies in the media is that the American people do not feel as economically well off as the official data says they are. Despite what the White House and establishment-friendly journalists say, the problem lies with the data, not the American people's ability to perceive their own well-being.

As I wrote back in January, the reason for the discrepancy is the lack of distinction made between private economic activity and government spending in the most frequently cited economic indicators. There is an important difference between the two:

  • Government, unlike any other entity in the economy, can simply take money and resources from others to spend on things and hire people. Whether or not the spending brings people value is irrelevant

  • It's the private sector that's responsible for producing goods and services that actually meet people's needs and wants. So, the private components of the economy have the most significant effect on people's economic well-being.

Recently, government spending and hiring has accounted for a larger than normal share of both economic activity and employment. This means the government is propping up these traditional measures, making the economy appear better than it actually is. Also, many of the jobs Biden and his allies take credit for creating will quickly go away once it becomes clear that consumers don't actually want whatever the government encouraged these companies to produce.

On top of all that, the administration is dealing with the consequences of their chosen inflation rhetoric.

Since its peak in the summer of 2022, the president's team has talked about inflation "coming back down," which can easily give the impression that it's prices that will eventually come back down.

But that's not what that phrase means. It would be more honest to say that price increases are slowing down.

Americans are finally waking up to the fact that the cost of living will not return to prepandemic levels, and they're not happy about it.

The president has made some clumsy attempts at damage control, such as a Super Bowl Sunday video attacking food companies for "shrinkflation"—selling smaller portions at the same price instead of simply raising prices.

In his speech Thursday, Biden is expected to play up his desire to crack down on the "corporate greed" he's blaming for high prices.

In the name of "bringing down costs for Americans," the administration wants to implement targeted price ceilings - something anyone who has taken even a single economics class could tell you does more harm than good. Biden would never place the blame for the dramatic price increases we've experienced during his term where it actually belongs—on all the government spending that he and President Donald Trump oversaw during the pandemic, funded by the creation of $6 trillion out of thin air - because that kind of spending is precisely what he hopes to kick back up in a second term.

If reelected, the president wants to "revive" parts of his so-called Build Back Better agenda, which he tried and failed to pass in his first year. That would bring a significant expansion of domestic spending. And Biden remains committed to the idea that Americans must be forced to continue funding the war in Ukraine. That's another topic Biden is expected to highlight in the State of the Union, likely accompanied by the lie that Ukraine spending is good for the American economy. It isn't.

It's not possible to predict all the ways President Biden will exaggerate, mislead, and outright lie in his speech on Thursday. But we can be sure of two things. The "state of the Union" is not as strong as Biden will say it is. And his policy ambitions risk making it much worse.

*  *  *

The American people will be tuning in on their smartphones, laptops, and televisions on Thursday evening to see if 'sloppy joe' 81-year-old President Joe Biden can coherently put together more than two sentences (even with a teleprompter) as he gives his third State of the Union in front of a divided Congress. 

President Biden will speak on various topics to convince voters why he shouldn't be sent to a retirement home.

According to CNN sources, here are some of the topics Biden will discuss tonight:

  • Economic issues: Biden and his team have been drafting a speech heavy on economic populism, aides said, with calls for higher taxes on corporations and the wealthy – an attempt to draw a sharp contrast with Republicans and their likely presidential nominee, Donald Trump.

  • Health care expenses: Biden will also push for lowering health care costs and discuss his efforts to go after drug manufacturers to lower the cost of prescription medications — all issues his advisers believe can help buoy what have been sagging economic approval ratings.

  • Israel's war with Hamas: Also looming large over Biden's primetime address is the ongoing Israel-Hamas war, which has consumed much of the president's time and attention over the past few months. The president's top national security advisers have been working around the clock to try to finalize a ceasefire-hostages release deal by Ramadan, the Muslim holy month that begins next week.

  • An argument for reelection: Aides view Thursday's speech as a critical opportunity for the president to tout his accomplishments in office and lay out his plans for another four years in the nation's top job. Even though viewership has declined over the years, the yearly speech reliably draws tens of millions of households.

Sources provided more color on Biden's SOTU address: 

The speech is expected to be heavy on economic populism. The president will talk about raising taxes on corporations and the wealthy. He'll highlight efforts to cut costs for the American people, including pushing Congress to help make prescription drugs more affordable.

Biden will talk about the need to preserve democracy and freedom, a cornerstone of his re-election bid. That includes protecting and bolstering reproductive rights, an issue Democrats believe will energize voters in November. Biden is also expected to promote his unity agenda, a key feature of each of his addresses to Congress while in office.

Biden is also expected to give remarks on border security while the invasion of illegals has become one of the most heated topics among American voters. A majority of voters are frustrated with radical progressives in the White House facilitating the illegal migrant invasion. 

It is probable that the president will attribute the failure of the Senate border bill to the Republicans, a claim many voters view as unfounded. This is because the White House has the option to issue an executive order to restore border security, yet opts not to do so

Maybe this is why? 

While Biden addresses the nation, the Biden administration will be armed with a social media team to pump propaganda to at least 100 million Americans. 

"The White House hosted about 70 creators, digital publishers, and influencers across three separate events" on Wednesday and Thursday, a White House official told CNN. 

Not a very capable social media team... 

The administration's move to ramp up social media operations comes as users on X are mostly free from government censorship with Elon Musk at the helm. This infuriates Democrats, who can no longer censor their political enemies on X. 

Meanwhile, Democratic lawmakers tell Axios that the president's SOTU performance will be critical as he tries to dispel voter concerns about his elderly age. The address reached as many as 27 million people in 2023. 

"We are all nervous," said one House Democrat, citing concerns about the president's "ability to speak without blowing things."

The SOTU address comes as Biden's polling data is in the dumps

BetOnline has created several money-making opportunities for gamblers tonight, such as betting on what word Biden mentions the most. 

As well as...

We will update you when Tucker Carlson's live feed of SOTU is published. 

Tyler Durden Fri, 03/08/2024 - 07:44

Read More

Continue Reading

Trending