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Oppenheimer: 3 “Strong Buy” Stocks With Over 30% Upside Ahead

Oppenheimer: 3 "Strong Buy" Stocks With Over 30% Upside Ahead

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Are the violent stock market movements here to stay? Investors see plenty of cause for worry, in rising coronavirus case rates that many say portend a second wave of the pandemic. In addition, some states are extending lockdown policies.  

That said, watching the markets for the past few months, Oppenheimer’s asset management chief strategist John Stoltzfus sees reasons for a bullish outlook. He believes that volatility will rule through 2H20, but that markets will start rising again at the end of the year. Stoltzfus says that when the bull comes to run, investors will jump on, arguing they are “waiting for some catalyst to cross the tape that will justify taking near-term profits without FOMO…” 

Among the catalysts that Stoltzfus sees as likely is the November election. Whatever the outcome, he believes that the resolution of uncertainty once the results are in will put investors in a buying mood. Stoltzfus has recommendations for that, too: “We like consumer discretionary. We also like industrials, because industrial stocks today use a lot more technology than ever before…” 

Stoltzfus isn’t alone at his firm in pointing out reasons for a bullish market stance. Oppenheimer’s stock analysts have been busy putting the strategist’s tips into concrete recommendations. Using the TipRanks database, we’ve pulled up the details on three of those calls. Each offers investors plenty of upside, starting at 30%; let’s find out what else makes them so compelling. 

Ulta Beauty, Inc. (ULTA) 

Stoltzfus is bullish on the consumer discretionary segment, and so, first on our list is a cosmetic company. Ulta is a chain of beauty care stores. The company boasts an $11 billion market cap – a testament to the strength of the beauty sector – and nearly 1,200 locations spread across all 50 states. As part of its response to the COVID-19 pandemic, the company offered a curbside pickup service at over 700 locations. 

Even so, the Q1 ‘corona quarter’ was tough on Ulta. The company lost $1.12 per share, and the stock price is still down 35% from its February peak. Lower sales during the period of shutdown policies and lower margins during the quarter were the main drivers of the poor performance. This is borne out by comp sales, which fell 35% during Q1 compared to a gain of 7% in the prior-year quarter. 

As a liquidity measure, Ulta drew some $800 million from its $1 billion credit facility during the corona crisis. The funds were used for general operation. In a positive note, the company has been reopening stores since mid-May, and is forecasting a positive – albeit modest – net profit for Q2. 

Oppenheimer’s Rupesh Parikh sees the current environment as a buying opportunity for investors. He writes, “With the resurgence of coronavirus infections and likely conservative planning from the ULTA management team, we are assuming a slower 2H20 recovery. Consistent with our recent views, we believe investors should take advantage of weakness in accumulating shares and not chase strength. We believe ULTA should emerge with stronger share gains driven by omni-channel investments and department store challenges post-crisis.” 

To this end, Parikh backs his Buy recommendation with a $270 price target, suggesting a 38% upside potential for the stock in the coming year. (To watch Parikh’s track record, click here

Overall, ULTA gets a Strong Buy rating from the analyst consensus, based on 12 Buys and 4 Holds given in recent weeks. The general thought is that this company is fundamentally sound despite the pandemic. Shares are selling for $195.99, and the average price target of $264.93 implies a one-year upside potential of 35%. (See Ulta stock analysis on TipRanks

WillScot Mobile Mini Holdings (WSC) 

Next up, WillScot is a holding company with subsidiaries involved in the modular office space sector. This unusual niche is probably more familiar to you than you realize; modular offices are commonly seen at construction sites, where modified containers are used as on-site office space. WillScot produces the luxury version. 

The company saw a unique opportunity arise during the coronavirus pandemic, as a sudden need arose for temporary testing sites, quarantine units, and the like. It was able to use that need to its advantage. Besting the consensus estimate, WSC reported a 9-cent per share profit. Along with the better-than-expected quarter, WillScot also completed an offer of $650 million in senior secured notes, a move that improves liquidity and gives the company flexibility in dealing with the ongoing public health crisis. 

The note offering also allowed WillScot to complete a merger with Mobile Mini during the second quarter. The deal created a combined company worth $6.6 billion, with a leading market share in the North American modular sector.  

Scott Schneeberger, a 4-star analyst with Oppenheimer, points out that WillScot’s business model lends itself to recurring revenue over the long-term, keeping the company resilient. He writes, “Its rental assets typically remain on-site through project-end even if the project were suspended a few months. WSC indicated in early-May no material COVID-19 impact to the lease duration/renewal/payment activity of its existing uniton-rent installed base.” 

In line with his positive view of the company’s business, Schneeberger rates WSC a Buy, and increases the price target to $17. This new target implies an upside potential of 38% for the coming 12 months. (To watch Schneeberger’s track record, click here

Wall Street is slightly more bullish than Schneeberger. The Strong Buy analyst consensus rating is unanimous, based on 5 Buy ratings, and the average price target comes in at $18. This suggests a one-year upside potential of 46% for the stock. (See WillScot stock analysis on TipRanks

DraftKings, Inc. (DKNG) 

Last on our list is DraftKings, the online venue for sports fantasy leagues. In a way, DraftKings has come into its own during the coronavirus crisis. Major sports have been mostly halted for now – but when they start up, they will do so without fans. This has already happened in German soccer. That will leave fantasy leagues, which are already popular, as the main outlet for fan participation. 

At least that’s the thought process behind the company’s stock surge which began in May. Despite a net loss of $74 million in Q1, DKNG shares are up 80% since February 19, dramatically outperforming the broader markets. 

In its earnings report, the company stated that it does not expect a long-term income hit from the pandemic, and has not changed its plans for 2H20. As its business is conducted entirely online, direct customer contact is not a problem. Additionally, with both the NBA and Major League Baseball planning truncated regular season play for the second half of the year, DraftKings has reason to believe that the fantasy leagues will return to play. 

5-star analyst Jed Kelly initiated coverage of DKNG for Oppenheimer with a Buy rating. He specifically cited a new niche as an opportunity for the company: legalized in-game sports betting. Kelly says, “Legalized sports betting and iGaming markets are in their very early stages of growth, and we see an $18 billion revenue opportunity at scale, that also benefits from a sophisticated in-game wagering market.” Noting that DraftKings already operates online and in-game, he sees the company as having a uniquely strong position here. 

Kelly backs his Buy rating with a $46 price target, suggesting a robust 42% upside potential for the stock. (To watch Kelly’s track record, click here

DKNG is trading at $32.43 now, and the average price target of $48 implies a 48% upside potential. The analyst consensus here is a Strong Buy, based on 11 reviews breaking down as 10 Buys and 1 Hold. (See DraftKings stock analysis on TipRanks

The post Oppenheimer: 3 "Strong Buy" Stocks With Over 30% Upside Ahead appeared first on TipRanks Financial Blog.

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License Plates Could Be Printed On McDonald’s Bags To Stop Littering

License Plates Could Be Printed On McDonald’s Bags To Stop Littering

There’s been talk about McDonald’s in southwest Great Britain could print…

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License Plates Could Be Printed On McDonald's Bags To Stop Littering

There's been talk about McDonald's in southwest Great Britain could print car license plates on drive-thru bags to prevent customers from littering. 

"It's not clear exactly how the number plate would be printed on packaging, but it could be scanned onto the brown bags that contain the food," Daily Mail noted. 

Chris Howell, Swansea Council's head of waste, parks and cleansing, told a climate change corporate delivery committee meeting: 

"The Welsh Government has explored with McDonald's, or their franchises, whether or not they could print number plates of cars collecting takeaways from their drive-throughs with a view that that would discourage people from discarding their materials (litter)."

Howell said one of the biggest hurdles with fast-food companies is that if one chain adopts the climate initiative, customers will go to competitors that don't print license plates on bags. 

"If McDonald's do it, then people will just go to Burger King instead of McDonald's, because nobody wants to have their private details printed on that packaging." He added: "I think it's a really good idea but at the minute it's fraught with some difficulties." 

The nationalist political party in Wales, Plaid Cymru, first proposed the idea more than two years ago during the pandemic lockdown when party leaders noticed a spike in fast-food trash along city streets and highways. 

Welsh Government spokesperson told MailOnline:

"There are no current plans to introduce a requirement for drive-through restaurants to add vehicle registration details to fast food drive-through packaging.

"We are continuing to support Keep Wales Tidy with other initiatives to tackle roadside litter including their No Regrets campaign and their Adopt a Highway initiative."

Now 'the cat is out of the bag'. It's only a matter of time before governments start forcing fast-food companies to print license plate numbers on drive-thru bags. The dangers of this could be more surveillance, and who knows what corporations would do with license plate data if such a system were implemented. 

Tyler Durden Sat, 11/26/2022 - 18:00

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COVID Lockdown Protests Erupt In Beijing, Xinjiang After Deadly Fire

COVID Lockdown Protests Erupt In Beijing, Xinjiang After Deadly Fire

Protests have erupted in Beijing and the far western Xinjiang region…

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COVID Lockdown Protests Erupt In Beijing, Xinjiang After Deadly Fire

Protests have erupted in Beijing and the far western Xinjiang region over COVID-19 lockdowns and a deadly fire on Thursday in a high-rise building in Urumqi that killed 10 people (with some reports putting the number as high as 40).

Crowds took to the street in Urumqi, the capitol of Xinjiang, with protesters chanting "End the lockdown!" while pumping their fists in the air, following the circulation of videos of the fire on Chinese social media on Friday night.

Protest videos show people in a plaza singing China's national anthem - particularly the line: "Rise up, those who refuse to be slaves!" Others shouted that they did not want lockdowns. In the northern Beijing district of Tiantongyuan, residents tore down signs and took to the streets.

Reuters verified that the footage was published from Urumqi, where many of its 4 million residents have been under some of the country's longest lockdowns, barred from leaving their homes for as long as 100 days.

In the capital of Beijing 2,700 km (1,678 miles) away, some residents under lockdown staged small-scale protests or confronted their local officials over movement restrictions placed on them, with some successfully pressuring them into lifting them ahead of a schedule. -Reuters

According to an early Saturday news conference by Urumqi officials, COVID measures did not hamper escape and rescue during the fire, but Chinese social media wasn't buying it.

"The Urumqi fire got everyone in the country upset," said Beijing resident Sean Li.

According to Reuters

A planned lockdown for his compound "Berlin Aiyue" was called off on Friday after residents protested to their local leader and convinced him to cancel it, negotiations that were captured by a video posted on social media.

The residents had caught wind of the plan after seeing workers putting barriers on their gates. "That tragedy could have happened to any of us," he said.

By Saturday evening, at least ten other compounds lifted lockdown before the announced end-date after residents complained, according to a Reuters tally of social media posts by residents.

Tyler Durden Sat, 11/26/2022 - 12:00

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The Doctor Who Can Rebuild Trust: Joseph Ladapo

The Doctor Who Can Rebuild Trust: Joseph Ladapo

Authored by Jeffrey Tucker via The Brownstone Institute,

If you are like me, you are exhausted…

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The Doctor Who Can Rebuild Trust: Joseph Ladapo

Authored by Jeffrey Tucker via The Brownstone Institute,

If you are like me, you are exhausted of the lies. Every day seems to bring new revelations about how our lives came to be upended. The connections are becoming clearer between the pandemic response and the growing economic crisis, the ballooning debt, the growth of the surveillance state, the corruption and scams, chilling absence of integrity in public life, and, with the failure of FTX, the way in which an outright financial scam was integral to the calamity. 

While we await new revelations, depositions, coverups, pleas for amnesty, and bad economic news, whom can we trust? Is anyone telling the truth? 

Today was Anthony Fauci’s last White House press conference, and he spoke as if life is all normal and everything is fine. It’s as if the whole disaster never happened. He never locked anyone down, he says. He has happy for any investigations, he says, because he has nothing to hide. And then he ended with a final push for everyone to get booster #5 or whatever number we are on. 

It’s like we live in two universes: our own lives in which we read true things in some places, and official life, in which shills and publicists keep repeating the same nonsense over and over without flinching or providing anything like an honest account of these last three years. 

Perhaps for this reason – and also because by any historical standard this is a tremendous autobiography – reading Dr. Joseph Ladapo’s Transcend Fear is a welcome relief from the nonsense of our times. It is brutally honest. It is emotionally affecting. It is careful and precise but also deeply radical in its observations. If what’s called the “public health world” has lost touch with both the public and health, this book provides a path to restoring it. In short, it is a beautiful and inspiring experience. 

Dr. Ladapo is the Surgeon General of the State of Florida, picked by Governor Ron DeSantis to forge and explain the state’s health decisions and priorities to the public in the midst of a grave crisis. He has faced down the national press time and time again with Zen-like wisdom. He seems emotionally unflappable while also sticking to the science as he understands it. He is the only public health official in the country who has been upfront about the limits of the vaccines and warned healthy young people that they don’t need them. 

What we learn from this book is that he has been a warrior against pseudoscience from the very beginning of this pandemic and the government response. After the lockdowns, most scientists and health professionals fell silent, fearing reputational and financial loss. Dr. Ladapo was different, On March 24, 2020, still within the window of “15 Days to Flatten the Curve,” he wrote in USA Today:

We are fretting and we are fuming. As a country, we have been caught miserably flat-footed after receiving warnings about what lay ahead when cases of Covid-19 began exploding in Wuhan, China. Messages from local and state leaders about how to respond to the pandemic change almost daily—a sure sign they have no idea what they are doing. Shutdowns are happening here in California and in New York, and will probably spread to the rest of the nation….

Here’s the problem: Because of the (understandable) fear and hysteria of the moment, few US leaders are seriously talking about the endgame. The epidemiologic models I’ve seen indicate that the shutdowns and school closures will temporarily slow the virus’ spread, but when they’re lifted, we will essentially emerge right back where we started. And, by the way, no matter what, our hospitals will still be overwhelmed. There has already been too much community spread to prevent this inevitability. 

We don’t have a totalitarian government like China, and we value our civil liberties too much to take the measures (i.e., total lockdown) that would be needed to rapidly decrease the infection rate to zero. This means that, even with shutdowns, the virus will still spread. Unfortunately, this also means that rates of “community immunity,” often referred to as “herd immunity,” will slow. As a result, we will always be vulnerable to the virus spreading rapidly again as soon as shutdown measures are lifted, unless they are immediately reimplemented—over and over and over again.

Was he the first post-lockdown voice from public health profoundly to object in a public forum of this magnitude? Perhaps so. Consider the bravery and presence of mind it required to write those sentences. The entire country was on a wartime footing with unprecedented horribles taking place. The media was screaming “Run for your lives” but most of us weren’t even allowed out of our homes to do that. 

These were utterly crazy times. The whole world was going bonkers. And yet this man kept his cool. 

This book explains where his cool comes from. You see, he is the son of an immigrant from Nigeria, born 1979. A math and science whiz, he attended Wake Forest and then entered Harvard Medical School. While he was involved in his studies, he noted the existence of the Kennedy School of Government and enrolled there too. On graduation day, he was granted a MD plus a PhD in public policy. So essentially: the highest credentials in two fields that this country offers. He became professor of medicine at New York University and then the University of California, Los Angeles. 

The trouble was that none of his training had prepared him to deal with medical issues closer to home, namely his wife’s unrelenting migraines that often landed her in the hospital and his own underlying psychological fears of social interaction. The details are very painful and told in this book with disarming detail. Long story short: his search for answers led him toward alternative medical paths that eventually fixed both issues, and burned a lesson in his mind. Health is individual, and the right path is not the same for everyone and not always found in expertise as codified in the textbooks and institutions. 

It was soon after these difficult times that the pandemic broke and, along with it, the claims that the experts had all the answers in lockdowns and eventual universal mandates for vaccination. 

Dr. Ladapo had meanwhile developed the self-confidence to speak about such matters truthfully and fearlessly. And he never stopped. He wrote for every venue he could, month after month, urging an end to the lockdowns, a focus on therapeutics, attention to the science we had, and genuine concern for the health of actual individuals, who are not lab rats but people with human rights and freedom. 

Even though Dr. Joseph Ladapo is obviously a hero (and one for the ages, so far as I’m concerned), the prose here is remarkably lucid, humble, and precise. That’s why I say that the humane concern in this book is an inspiration. Moreover, reading it is a form of therapy because he connects with a common sense that we all had in 2019 before the world descended into utter madness. 

What’s more, this book shows a path forward not only for public health but for all of us as individuals. He urges personal reflection as the first step in recovery, overcoming whatever hidden fears we had that caused too many among us to go along with the preposterous parade of dangerous nonsense that controlled our lives for so long. 

In my own view, this book is a classic of our times. Its value added is not only the author’s credentials, though he has them galore, or even how it speaks so directly to issues that have profoundly affected all our lives. Its real value is as a model of autobiography that offers lessons for all of us without exception. 

We at Brownstone are deeply honored that Dr. Ladapo will be our dinner speaker at our annual conference and gala in Miami, December 3, 2022. There is still time to attend. You can register here

I write as Dr. Fauci just finished his last press conference without offering so much as a hint of apology for what has happened. Meanwhile, I’m sure Dr. Ladapo is tending to his work in Florida where he has been charged with dealing with public health policy with honesty, truth, and wisdom. I know who gets my vote for hero of the pandemic. 

Tyler Durden Fri, 11/25/2022 - 16:00

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