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Oppenheimer: 2 Compelling Stocks to Bet on (And 1 to Avoid)

Oppenheimer: 2 Compelling Stocks to Bet on (And 1 to Avoid)



Life goes on, even during the coronavirus pandemic. Oppenheimer’s Chief Investment Strategist John Stoltzfus has released a detailed note, in time for the start of earnings season, laying out the boundaries and parameters of economic life right now, in what he has wryly termed ‘Coronaville.’

Stoltzfus’s top line sets out the most important point, that once economies reopen, life can return to normal despite being turned upside down by COVID-19. Referring to claims that life will never be the same, Stoltzfus says, “In our view technology and globalization, two key drivers of the world’s economy, challenge that premise with their capability to address the virus itself as well as the societal and economic dislocations the virus has wrought.”

He goes on, then, to note how different states (his examples are New York and Georgia) are taking different paths in response to the epidemic, paths in part determined by their differing experiences with the virus. It’s an important reminder that, in truth, there is no ‘one size fits all’ response to COVID-19. And with the combination of diversified economic responses, and diversified political paths, Stoltzfus believes “that the light at the end of the tunnel isn’t an express train bearing down upon us but instead the light of better days ahead.”

For investors, responding to the pandemic will mean finding those niches that have potential to gain when the global economy stutters. Stoltzfus points out stocks in processed foods, especially cereal makers, canned goods, and frozen foods as especially well positioned right now. His colleagues at Oppenheimer, looking at various individual stocks, expand on that, bring up interesting choices on the bullish side, and noting at least one stock that investors should steer clear of.

We’ve opened up TipRanks’ database to peek ‘under the hood’ at these stock picks from Oppenheimer’s analysts. They are a fascinating bunch, in online entertainment, organic foods, and climate control technology. Here are the details.

Madison Square Garden Entertainment (MSGE)

We’ll start in the entertainment industry. Madison Square Garden Entertainment started trading on April 20 as a spin-off from Madison Square Garden. The parent company split its sports and entertainment businesses; MSGE will focus on life-streaming a wide variety of live entertainment programs. Shareholders in the parent company (MSG) will see their holdings convert to MSGE automatically. The spun-off company has a market cap of $2.06 billion.

The split takes advantage of the surge in demand for online entertainment options, as people are stuck in their homes due to anti-coronavirus lockdown policies. Streaming companies have seen increased demand, while customers are always eager for new content.

MSGE started trading as an independent entity just 6 sessions ago. In that time, the stock has gained over 27%. It’s a small sample from which to extrapolate, but also a good beginning for a new stock ticker.

Covering the stock for Oppenheimer, Ian Zaffino treats it as the natural successor to the original parent company, inheriting an array of “world-class venues, including the MSG Arena and the Chicago Theatre, and leases several other iconic venues, including Radio City Music Hall and the Beacon Theatre.” Zaffino sees these assets as a net strength, and a solid foundation on which to build a live streaming entertainment business. Regarding future growth, Zaffino writes, “Once COVID-19 passes, we believe the company can refocus on growth. Construction of the ~$1.66B Las Vegas Sphere is under way, but was temporarily halted owing to COVID-19. We expect the Sphere to achieve double-digit returns…”

Zaffino rates MSGE a Buy, with a $105 price target, which implies 22% upside from current levels. (To watch Zaffino’s track record, click here)

With only 13 trading days behind it, MSGE is too new to have accumulated many reviews -- only two other analysts have thrown the hat in with a view on the entertainment stock. The two additional Buy ratings provide MSGE with a Strong Buy consensus rating. With an average price target of $110, investors stand to take home an 28% gain, should the target be met over the next 12 months. (See MSGE stock analysis on TipRanks)

Sprouts Farmers (SFM)

And now we move on to the supermarket sector, where Sprouts Farmers is a consistently profitable name in the organic grocery segment. Sprouts offers a wide selection of brand name and private label products, including meats, dairy and cheese, bulk foods, bakery products, and beer and wine. The company boasts a market cap of $2.45 billion, has over 300 stores, and operates in 20 states.

SFM showed a sequential gain in earnings from Q3 to Q4, gaining 22%. Projections for Q1 – the first calendar quarter is normally the company’s strongest – are for 49 cents EPS, or 6.5% year-over-year growth.

The gains in earnings should not come as a surprise. Despite the lockdowns nationwide, people still have to eat, and grocery stores are among the retailers considered essential. Supply chain disruptions are a bigger threat than lack of consumer demand. And consumer demand has been strong enough that SFM is opening new stores and hiring new workers at existing stores.

Oppenheimer’s 5-star analyst Rupesh Parikh writes of SFM and its earnings potential, “On the EPS side, we believe SFM has potentially the most attractive upside potential among leading grocers due to top-line strength and improved merchandise margins associated with the recent sales lift.” The analyst added, "We overall look favorably upon the early efforts by the SFM management team in stabilizing margins with Q4 being an example. In Q4, operating margins expanded 20 bps to 3.4% from 3.2%."

In line with his bullish outlook, Parikh has upgraded his rating on Sprouts from Neutral to Buy, and set a price target of $25. His target implies an upside of 20%. (To watch Parikh’s track record, click here)

All in all, Sprouts Farmers gets a Moderate Buy from the analyst consensus. Out of 9 reviews, 5 say Buy, 4 say Hold, and no one is saying to sell this stock. Shares are priced at $20.92, and the $22.44 average price target reflects a modest 7.5% upside. (See Sprouts stock analysis on TipRanks)

Johnson Controls (JCI)

Our last stock is Oppenheimer’s bearish review. Johnson Controls is an old name in the HVAC industry, originally founded in the late nineteenth century, and brings in over $30 billion annually through its production of HVAC, fire control, and security systems for large buildings. Johnson operates world-wide, and gained notoriety a few years ago when it moved its headquarters to Ireland as a tax inversion maneuver – the third largest in US corporate history.

As a leader in its industry, JCI should be in a strong position to weather the coronavirus storm. It provides a service necessary to keep modern office space in compliance with regulatory codes, and it has deep enough pockets to maintain a 3.6% dividend payment – a much higher yield than the average found on the S&P 500  - without difficulty.

While calendar Q4 (fiscal Q1) earnings were disappointing, and a showed a steep sequential drop, that was actually in line with the company’s long-term reporting pattern. Looking forward, the calendar Q1 projection is for 39 cents EPS; if that holds, it will be a 21% yoy gain.

At the same time, Johnson also shows vulnerabilities. A large part of its business is based on installations during construction – and construction activity is depressed due to the COVID-19 pandemic. Construction industry analysts are uncertain weather or not the pace of activity will resume, or how quickly and completely it will do so. That uncertainty trickles down to contractors like Johnson Controls.

The uncertainty, in Oppenheimer’s view, is the important factor. Analyst Noah Kaye writes, “While we believe COVID-19 will increase the value of JCI’s HVAC/IR, building automation and security offerings to support public health requirements, we believe a lower growth trajectory for commercial building space construction and utilization could also manifest from the crisis, and are [downgrading JCI to Perform.]”

That downgrade moves JCI from Buy to Neutral, and Kaye has also rescinded his price target on the stock. While Kaye doesn’t believe in selling off JCI shares – he’s definitely cautious here and wants to see how growth returns going forward. (To watch Kaye’s track record, click here)

All in all, Johnson Controls has 10 analyst reviews, split three ways: 3 Buys, 1 Sell, and 6 Holds. Overall, the consensus view is to Hold here, to wait and see. Wall Street is taking the cautious stance, understanding that JCI has the resources to recover, but that such recovery will depend in part on conditions beyond the company’s immediate control. (See Johnson 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.

The post Oppenheimer: 2 Compelling Stocks to Bet on (And 1 to Avoid) appeared first on TipRanks Financial Blog.

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Are Voters Recoiling Against Disorder?

Are Voters Recoiling Against Disorder?

Authored by Michael Barone via The Epoch Times (emphasis ours),

The headlines coming out of the Super…



Are Voters Recoiling Against Disorder?

Authored by Michael Barone via The Epoch Times (emphasis ours),

The headlines coming out of the Super Tuesday primaries have got it right. Barring cataclysmic changes, Donald Trump and Joe Biden will be the Republican and Democratic nominees for president in 2024.

(Left) President Joe Biden delivers remarks on canceling student debt at Culver City Julian Dixon Library in Culver City, Calif., on Feb. 21, 2024. (Right) Republican presidential candidate and former U.S. President Donald Trump stands on stage during a campaign event at Big League Dreams Las Vegas in Las Vegas, Nev., on Jan. 27, 2024. (Mario Tama/Getty Images; David Becker/Getty Images)

With Nikki Haley’s withdrawal, there will be no more significantly contested primaries or caucuses—the earliest both parties’ races have been over since something like the current primary-dominated system was put in place in 1972.

The primary results have spotlighted some of both nominees’ weaknesses.

Donald Trump lost high-income, high-educated constituencies, including the entire metro area—aka the Swamp. Many but by no means all Haley votes there were cast by Biden Democrats. Mr. Trump can’t afford to lose too many of the others in target states like Pennsylvania and Michigan.

Majorities and large minorities of voters in overwhelmingly Latino counties in Texas’s Rio Grande Valley and some in Houston voted against Joe Biden, and even more against Senate nominee Rep. Colin Allred (D-Texas).

Returns from Hispanic precincts in New Hampshire and Massachusetts show the same thing. Mr. Biden can’t afford to lose too many Latino votes in target states like Arizona and Georgia.

When Mr. Trump rode down that escalator in 2015, commentators assumed he’d repel Latinos. Instead, Latino voters nationally, and especially the closest eyewitnesses of Biden’s open-border policy, have been trending heavily Republican.

High-income liberal Democrats may sport lawn signs proclaiming, “In this house, we believe ... no human is illegal.” The logical consequence of that belief is an open border. But modest-income folks in border counties know that flows of illegal immigrants result in disorder, disease, and crime.

There is plenty of impatience with increased disorder in election returns below the presidential level. Consider Los Angeles County, America’s largest county, with nearly 10 million people, more people than 40 of the 50 states. It voted 71 percent for Mr. Biden in 2020.

Current returns show county District Attorney George Gascon winning only 21 percent of the vote in the nonpartisan primary. He’ll apparently face Republican Nathan Hochman, a critic of his liberal policies, in November.

Gascon, elected after the May 2020 death of counterfeit-passing suspect George Floyd in Minneapolis, is one of many county prosecutors supported by billionaire George Soros. His policies include not charging juveniles as adults, not seeking higher penalties for gang membership or use of firearms, and bringing fewer misdemeanor cases.

The predictable result has been increased car thefts, burglaries, and personal robberies. Some 120 assistant district attorneys have left the office, and there’s a backlog of 10,000 unprosecuted cases.

More than a dozen other Soros-backed and similarly liberal prosecutors have faced strong opposition or have left office.

St. Louis prosecutor Kim Gardner resigned last May amid lawsuits seeking her removal, Milwaukee’s John Chisholm retired in January, and Baltimore’s Marilyn Mosby was defeated in July 2022 and convicted of perjury in September 2023. Last November, Loudoun County, Virginia, voters (62 percent Biden) ousted liberal Buta Biberaj, who declined to prosecute a transgender student for assault, and in June 2022 voters in San Francisco (85 percent Biden) recalled famed radical Chesa Boudin.

Similarly, this Tuesday, voters in San Francisco passed ballot measures strengthening police powers and requiring treatment of drug-addicted welfare recipients.

In retrospect, it appears the Floyd video, appearing after three months of COVID-19 confinement, sparked a frenzied, even crazed reaction, especially among the highly educated and articulate. One fatal incident was seen as proof that America’s “systemic racism” was worse than ever and that police forces should be defunded and perhaps abolished.

2020 was “the year America went crazy,” I wrote in January 2021, a year in which police funding was actually cut by Democrats in New York, Los Angeles, San Francisco, Seattle, and Denver. A year in which young New York Times (NYT) staffers claimed they were endangered by the publication of Sen. Tom Cotton’s (R-Ark.) opinion article advocating calling in military forces if necessary to stop rioting, as had been done in Detroit in 1967 and Los Angeles in 1992. A craven NYT publisher even fired the editorial page editor for running the article.

Evidence of visible and tangible discontent with increasing violence and its consequences—barren and locked shelves in Manhattan chain drugstores, skyrocketing carjackings in Washington, D.C.—is as unmistakable in polls and election results as it is in daily life in large metropolitan areas. Maybe 2024 will turn out to be the year even liberal America stopped acting crazy.

Chaos and disorder work against incumbents, as they did in 1968 when Democrats saw their party’s popular vote fall from 61 percent to 43 percent.

Views expressed in this article are opinions of the author and do not necessarily reflect the views of The Epoch Times or ZeroHedge.

Tyler Durden Sat, 03/09/2024 - 23:20

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Veterans Affairs Kept COVID-19 Vaccine Mandate In Place Without Evidence

Veterans Affairs Kept COVID-19 Vaccine Mandate In Place Without Evidence

Authored by Zachary Stieber via The Epoch Times (emphasis ours),




Veterans Affairs Kept COVID-19 Vaccine Mandate In Place Without Evidence

Authored by Zachary Stieber via The Epoch Times (emphasis ours),

The U.S. Department of Veterans Affairs (VA) reviewed no data when deciding in 2023 to keep its COVID-19 vaccine mandate in place.

Doses of a COVID-19 vaccine in Washington in a file image. (Jacquelyn Martin/Pool/AFP via Getty Images)

VA Secretary Denis McDonough said on May 1, 2023, that the end of many other federal mandates “will not impact current policies at the Department of Veterans Affairs.”

He said the mandate was remaining for VA health care personnel “to ensure the safety of veterans and our colleagues.”

Mr. McDonough did not cite any studies or other data. A VA spokesperson declined to provide any data that was reviewed when deciding not to rescind the mandate. The Epoch Times submitted a Freedom of Information Act for “all documents outlining which data was relied upon when establishing the mandate when deciding to keep the mandate in place.”

The agency searched for such data and did not find any.

The VA does not even attempt to justify its policies with science, because it can’t,” Leslie Manookian, president and founder of the Health Freedom Defense Fund, told The Epoch Times.

“The VA just trusts that the process and cost of challenging its unfounded policies is so onerous, most people are dissuaded from even trying,” she added.

The VA’s mandate remains in place to this day.

The VA’s website claims that vaccines “help protect you from getting severe illness” and “offer good protection against most COVID-19 variants,” pointing in part to observational data from the U.S. Centers for Disease Control and Prevention (CDC) that estimate the vaccines provide poor protection against symptomatic infection and transient shielding against hospitalization.

There have also been increasing concerns among outside scientists about confirmed side effects like heart inflammation—the VA hid a safety signal it detected for the inflammation—and possible side effects such as tinnitus, which shift the benefit-risk calculus.

President Joe Biden imposed a slate of COVID-19 vaccine mandates in 2021. The VA was the first federal agency to implement a mandate.

President Biden rescinded the mandates in May 2023, citing a drop in COVID-19 cases and hospitalizations. His administration maintains the choice to require vaccines was the right one and saved lives.

“Our administration’s vaccination requirements helped ensure the safety of workers in critical workforces including those in the healthcare and education sectors, protecting themselves and the populations they serve, and strengthening their ability to provide services without disruptions to operations,” the White House said.

Some experts said requiring vaccination meant many younger people were forced to get a vaccine despite the risks potentially outweighing the benefits, leaving fewer doses for older adults.

By mandating the vaccines to younger people and those with natural immunity from having had COVID, older people in the U.S. and other countries did not have access to them, and many people might have died because of that,” Martin Kulldorff, a professor of medicine on leave from Harvard Medical School, told The Epoch Times previously.

The VA was one of just a handful of agencies to keep its mandate in place following the removal of many federal mandates.

“At this time, the vaccine requirement will remain in effect for VA health care personnel, including VA psychologists, pharmacists, social workers, nursing assistants, physical therapists, respiratory therapists, peer specialists, medical support assistants, engineers, housekeepers, and other clinical, administrative, and infrastructure support employees,” Mr. McDonough wrote to VA employees at the time.

This also includes VA volunteers and contractors. Effectively, this means that any Veterans Health Administration (VHA) employee, volunteer, or contractor who works in VHA facilities, visits VHA facilities, or provides direct care to those we serve will still be subject to the vaccine requirement at this time,” he said. “We continue to monitor and discuss this requirement, and we will provide more information about the vaccination requirements for VA health care employees soon. As always, we will process requests for vaccination exceptions in accordance with applicable laws, regulations, and policies.”

The version of the shots cleared in the fall of 2022, and available through the fall of 2023, did not have any clinical trial data supporting them.

A new version was approved in the fall of 2023 because there were indications that the shots not only offered temporary protection but also that the level of protection was lower than what was observed during earlier stages of the pandemic.

Ms. Manookian, whose group has challenged several of the federal mandates, said that the mandate “illustrates the dangers of the administrative state and how these federal agencies have become a law unto themselves.”

Tyler Durden Sat, 03/09/2024 - 22:10

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Low Iron Levels In Blood Could Trigger Long COVID: Study

Low Iron Levels In Blood Could Trigger Long COVID: Study

Authored by Amie Dahnke via The Epoch Times (emphasis ours),

People with inadequate…



Low Iron Levels In Blood Could Trigger Long COVID: Study

Authored by Amie Dahnke via The Epoch Times (emphasis ours),

People with inadequate iron levels in their blood due to a COVID-19 infection could be at greater risk of long COVID.


A new study indicates that problems with iron levels in the bloodstream likely trigger chronic inflammation and other conditions associated with the post-COVID phenomenon. The findings, published on March 1 in Nature Immunology, could offer new ways to treat or prevent the condition.

Long COVID Patients Have Low Iron Levels

Researchers at the University of Cambridge pinpointed low iron as a potential link to long-COVID symptoms thanks to a study they initiated shortly after the start of the pandemic. They recruited people who tested positive for the virus to provide blood samples for analysis over a year, which allowed the researchers to look for post-infection changes in the blood. The researchers looked at 214 samples and found that 45 percent of patients reported symptoms of long COVID that lasted between three and 10 months.

In analyzing the blood samples, the research team noticed that people experiencing long COVID had low iron levels, contributing to anemia and low red blood cell production, just two weeks after they were diagnosed with COVID-19. This was true for patients regardless of age, sex, or the initial severity of their infection.

According to one of the study co-authors, the removal of iron from the bloodstream is a natural process and defense mechanism of the body.

But it can jeopardize a person’s recovery.

When the body has an infection, it responds by removing iron from the bloodstream. This protects us from potentially lethal bacteria that capture the iron in the bloodstream and grow rapidly. It’s an evolutionary response that redistributes iron in the body, and the blood plasma becomes an iron desert,” University of Oxford professor Hal Drakesmith said in a press release. “However, if this goes on for a long time, there is less iron for red blood cells, so oxygen is transported less efficiently affecting metabolism and energy production, and for white blood cells, which need iron to work properly. The protective mechanism ends up becoming a problem.”

The research team believes that consistently low iron levels could explain why individuals with long COVID continue to experience fatigue and difficulty exercising. As such, the researchers suggested iron supplementation to help regulate and prevent the often debilitating symptoms associated with long COVID.

It isn’t necessarily the case that individuals don’t have enough iron in their body, it’s just that it’s trapped in the wrong place,” Aimee Hanson, a postdoctoral researcher at the University of Cambridge who worked on the study, said in the press release. “What we need is a way to remobilize the iron and pull it back into the bloodstream, where it becomes more useful to the red blood cells.”

The research team pointed out that iron supplementation isn’t always straightforward. Achieving the right level of iron varies from person to person. Too much iron can cause stomach issues, ranging from constipation, nausea, and abdominal pain to gastritis and gastric lesions.

1 in 5 Still Affected by Long COVID

COVID-19 has affected nearly 40 percent of Americans, with one in five of those still suffering from symptoms of long COVID, according to the U.S. Centers for Disease Control and Prevention (CDC). Long COVID is marked by health issues that continue at least four weeks after an individual was initially diagnosed with COVID-19. Symptoms can last for days, weeks, months, or years and may include fatigue, cough or chest pain, headache, brain fog, depression or anxiety, digestive issues, and joint or muscle pain.

Tyler Durden Sat, 03/09/2024 - 12:50

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