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Tapping Recession-Proof Stocks to Fight the Bear (SNPS, KEGS, SAM, ABT, NEE, HD, ACN, TAP)

Fed Chair Jay Powell took a trip to Capitol Hill this week for his regular interrogation by Congress – no doubt a tough trip to take for a guy already…

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Fed Chair Jay Powell took a trip to Capitol Hill this week for his regular interrogation by Congress – no doubt a tough trip to take for a guy already under incredible pressure for missing the mark on the Fed’s policy stance where inflation risk was concerned last year. That has now blossomed into the worst inflation problem we have seen in the U.S. in over four decades. (1)

In his testimony yesterday, Powell came right out and said the Fed’s current policy path could result in a recession. (2)

In fact, it’s a bit more dire than that: last quarter already registered negative growth, and the Atlanta Fed’s GDPNow metric (3) is reading 0% growth for Q2 at this point. That means we might already be in recession right now – the standard definition is two consecutive quarters of negative GDP growth. (4)

And yet the Fed still plans on hiking rates sharply higher over its next few meetings (5).

For investors, this all adds up to the need to rotate exposure into traditionally recession proof areas. With that in mind, we take a look at a few stocks that fit the bill below.

 

Synopsys Inc. (Nasdaq:SNPS) provides a platform for the design and testing of semiconductor chip, which is widely seen as a secular growth theme not contingent on the macro business cycle given the massive and increasing demand for semiconductors around the world.

According to a recent piece on money.usnews.com, Synopsys recently reported 25% revenue growth, 47% earnings per share growth and a 5.8% operating margin expansion in the most recent quarter. Analyst John Freeman says Synopsys’ high-margin intellectual property business is booming and the company’s overall fundamentals are improving. CFRA has a “strong buy” rating and $429 price target for SNPS stock, which closed at $296.18 on June 17. (6)

Synopsys Inc. (Nasdaq:SNPS) also recently announced a new RF design flow developed with Ansys and Keysight for the TSMC N6RF process, the most advanced RF CMOS technology that offers significant performance and power efficiency boosts. The flow helps mutual customers achieve power and performance optimizations for 5G chips while also accelerating design productivity for faster time-to-market.

“Our latest collaboration with Synopsys addresses the challenges of next-generation wireless systems, enabling designers to deliver greater connectivity, higher bandwidth, lower latency and better coverage for our increasingly connected world,” said Suk Lee, vice president of the Design Infrastructure Management Division at TSMC. “With high-quality, tightly integrated solutions from Synopsys as well as Ansys and Keysight, the new TSMC RF Design Reference Flow for the TSMC N6RF process provides a modern, open approach that enhances productivity for developing these complex ICs.” (7)

The context for this announcement is a bit of a bid, with shares acting well over the past five days, up about 3% in that timeframe. SNPS shares have been relatively flat over the past month of action, with very little net movement during that period.

Synopsys Inc. (Nasdaq:SNPS) managed to rope in revenues totaling $1.3B in overall sales during the company’s most recently reported quarterly financial data — a figure that represents a rate of top line growth of 25%, as compared to year-ago data in comparable terms. In addition, the company is battling some balance sheet hurdles, with cash levels struggling to keep up with current liabilities ($1.7B against $2.5B, respectively). (8)

 

1812 Brewing Co. Inc. (OTC US:KEGS) bills itself as an operator of and investor in companies in the craft beer industry. It’s an interesting period as we see recession forecasts jump, but also see some examples of momentum returning to the OTC marketplace, which signals the potential for some subsidence of risk aversion among market participants. Recent big upside moves on the OTC include Clubhouse Media Group Inc (OTCMKTS:CMGR), Golden Developing Solutions Inc (OTCMKTS:DVLP), and Southern Home Medical (OTCMKTS:SHOM). (9)

KEGS could be lined up for similar action. The company recently expanded its production capacity significantly over recent quarters after moving its original equipment and making additions to its capacity, driving an 83% expansion in production potential. It also took advantage of underpricing in the industry during the pandemic to acquire a second brewing system that was more than 4.2x larger than its original system and added additional fermentation tanks, driving its capacity another 1,000% higher. (10)

1812 Brewing Co. Inc. (OTC US:KEGS) just announced this week that it has received correspondence from Florida’s Department of State that the Company’s Articles of Amendment to its Articles of Incorporation reducing the Company’s authorized shares by ten (10) billion shares or 50% was processed on April 20, 2022.

“As previously stated, it was hard to imagine a scenario wherein the Company would need to issue 20 billion shares, and to have the Authorized Shares at that level was counterproductive to our ongoing efforts to reduce the Company’s overall cost of capital,” stated Chairman and CEO Tom Scozzafava. He continued, “This is just one step in KEGS’ ongoing effort to clean up its balance sheet and share structure, and it will not be our last.  We have previously stated that we are looking to repay or restructure all of KEGS “floorless” convertible debentures, and from a capital structure perspective that is what we are focused on moving forward.” (11)

According to the company’s release, the reduction in Authorized Shares has an effective date of March 31, 2022.  The Company’s transfer agent has adjusted the Company’s records to reflect the reduction and has reported the new Authorized Shares number to OTC Markets’ issuer services division.

1812 Brewing Co. Inc. (OTC US:KEGS) shares have been showing some sparks over recent days, popping as much as 150% early in the week, demonstrating the potential for greater upside if momentum builds. The stock had been basing along the $0.001 area over the past two months. Given its strides in building a fresh growth story and its most recent move to cut off dilution risk, this could be an interesting story as OTC stocks start to gain some interest.

 

Abbott Laboratories (NYSE:ABT) engages in the discovery, development, manufacture, and sale of a broad and diversified line of health care products. It operates through its Established Pharmaceutical Products, Nutritional Products, Diagnostic Products, and Medical Devices segments.

The Established Pharmaceutical Products segment refers to the international sales of a line of branded generic pharmaceutical products. The Nutritional Products segment caters to the worldwide sales of adult and pediatric nutritional products. The Diagnostic Products segment markets diagnostic systems and tests for blood banks, hospitals, commercial laboratories, and alternate-care testing sites. The Medical Devices segment includes electrophysiology, heart failure, vascular and structural heart devices for the treatment of cardiovascular diseases, and diabetes care products for people with diabetes, as well as neuromodulation devices for the management of chronic pain and movement disorders.

Abbott Laboratories (NYSE:ABT) recently announced a quarterly common dividend of 47 cents per share. This marks the 394th consecutive quarterly dividend to be paid by Abbott since 1924. The cash dividend is payable Aug. 15, 2022, to shareholders of record at the close of business on July 15, 2022.

According to the company’s release, Abbott has increased its dividend payout for 50 consecutive years and is a member of the S&P 500 Dividend Aristocrats Index, which tracks companies that have increased dividends annually for at least 25 consecutive years. (12)

The chart shows 2% added to share values of the company over the past week of action. Market participants may want to pay attention to this stock. ABT has a track record that includes a number of dramatic bounces. Moreover, the company has seen interest climb, with an increase in recent trading volume of 15% above the average volume levels in play in this stock over the longer term.

Abbott Laboratories (NYSE:ABT) has a significant war chest ($8.2B) of cash on the books, which is balanced by about $12.6B in total current liabilities. ABT is pulling in trailing 12-month revenues of $44.5B. In addition, the company is seeing major top-line growth, with y/y quarterly revenues growing at 13.8%. (13)

 

Other key names in the recession proof basket include including: Boston Beer Co. (NYSE:SAM), NextEra Energy Inc. (NYSE:NEE), Home Depot Inc. (NYSE:HD), Accenture PLC (NYSE:ACN), and Molson Coors Beverage Co. (NYSE:TAP). (14)

 

References:

  1. https://apnews.com/article/key-inflation-report-highest-level-in-four-decades-c0248c5b5705cd1523d3dab3771983b4
  2. https://www.nytimes.com/live/2022/06/22/business/economy-news-inflation-stocks
  3. https://www.atlantafed.org/cqer/research/gdpnow
  4. https://www.investopedia.com/terms/r/recession.asp
  5. https://www.cmegroup.com/trading/interest-rates/countdown-to-fomc.html
  6. https://money.usnews.com/investing/slideshows/7-stocks-that-soar-in-a-recession?slide=2
  7. https://finance.yahoo.com/news/synopsys-boosts-5g-soc-development-190000520.html
  8. https://www.marketwatch.com/investing/stock/snps?mod=search_symbol
  9. https://www.otcmarkets.com/
  10. https://www.globenewswire.com/Tracker?data=MAHUoZhLpRNz_k5jWSe0ddxkT4wHZnv290m5aOod8tNxGMxGS4tqygZvLEgFpMWDhVYo-dgYJXS2u1vFIJfxooWJYyExwCaxwCntZjXTIcFSAmgUWddY4OLd3T8AT5VrFDI8CaAnqNB8du-bFQWNYR1EN9sl9PVGyQhLEUq1Wev1SGIsObzX9daLWuKHSVYbut7TsB1vIKSE-ByCMB0QnA4wX9PP1eMoJ-VoLcdp9ENDiSw5ogR0_-tGbzJ2rQdf
  11. https://www.otcmarkets.com/stock/KEGS/news/1812-Brewing-Company-Inc-Reduces-Authorized-Shares-by-50?id=362170
  12. https://finance.yahoo.com/news/abbott-declares-394th-consecutive-quarterly-152600704.html
  13. https://www.marketwatch.com/investing/stock/abt?mod=search_symbol
  14. https://money.usnews.com/investing/slideshows/7-stocks-that-soar-in-a-recession

Please make sure to read and completely understand our disclaimer at https://www.wallstreetpr.com/disclaimer. While reading this article one must assume that we may be compensated for posting this content on our website.

The post Tapping Recession-Proof Stocks to Fight the Bear (SNPS, KEGS, SAM, ABT, NEE, HD, ACN, TAP) appeared first on Wall Street PR.

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International

Beloved mall retailer files Chapter 7 bankruptcy, will liquidate

The struggling chain has given up the fight and will close hundreds of stores around the world.

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It has been a brutal period for several popular retailers. The fallout from the covid pandemic and a challenging economic environment have pushed numerous chains into bankruptcy with Tuesday Morning, Christmas Tree Shops, and Bed Bath & Beyond all moving from Chapter 11 to Chapter 7 bankruptcy liquidation.

In all three of those cases, the companies faced clear financial pressures that led to inventory problems and vendors demanding faster, or even upfront payment. That creates a sort of inevitability.

Related: Beloved retailer finds life after bankruptcy, new famous owner

When a retailer faces financial pressure it sets off a cycle where vendors become wary of selling them items. That leads to barren shelves and no ability for the chain to sell its way out of its financial problems. 

Once that happens bankruptcy generally becomes the only option. Sometimes that means a Chapter 11 filing which gives the company a chance to negotiate with its creditors. In some cases, deals can be worked out where vendors extend longer terms or even forgive some debts, and banks offer an extension of loan terms.

In other cases, new funding can be secured which assuages vendor concerns or the company might be taken over by its vendors. Sometimes, as was the case with David's Bridal, a new owner steps in, adds new money, and makes deals with creditors in order to give the company a new lease on life.

It's rare that a retailer moves directly into Chapter 7 bankruptcy and decides to liquidate without trying to find a new source of funding.

Mall traffic has varied depending upon the type of mall.

Image source: Getty Images

The Body Shop has bad news for customers  

The Body Shop has been in a very public fight for survival. Fears began when the company closed half of its locations in the United Kingdom. That was followed by a bankruptcy-style filing in Canada and an abrupt closure of its U.S. stores on March 4.

"The Canadian subsidiary of the global beauty and cosmetics brand announced it has started restructuring proceedings by filing a Notice of Intention (NOI) to Make a Proposal pursuant to the Bankruptcy and Insolvency Act (Canada). In the same release, the company said that, as of March 1, 2024, The Body Shop US Limited has ceased operations," Chain Store Age reported.

A message on the company's U.S. website shared a simple message that does not appear to be the entire story.

"We're currently undergoing planned maintenance, but don't worry we're due to be back online soon."

That same message is still on the company's website, but a new filing makes it clear that the site is not down for maintenance, it's down for good.

The Body Shop files for Chapter 7 bankruptcy

While the future appeared bleak for The Body Shop, fans of the brand held out hope that a savior would step in. That's not going to be the case. 

The Body Shop filed for Chapter 7 bankruptcy in the United States.

"The US arm of the ethical cosmetics group has ceased trading at its 50 outlets. On Saturday (March 9), it filed for Chapter 7 insolvency, under which assets are sold off to clear debts, putting about 400 jobs at risk including those in a distribution center that still holds millions of dollars worth of stock," The Guardian reported.

After its closure in the United States, the survival of the brand remains very much in doubt. About half of the chain's stores in the United Kingdom remain open along with its Australian stores. 

The future of those stores remains very much in doubt and the chain has shared that it needs new funding in order for them to continue operating.

The Body Shop did not respond to a request for comment from TheStreet.   

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Government

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…

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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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Government

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),

The…

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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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