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Updated: 5 hours 10 min ago

P&G sales growth shy of forecasts as slowing birthrate hurts diaper sales

Thu, 01/23/2020 - 11:12

Shares in P&G were flat in early trading. A slowing global birthrate has hit P&G and competitors like Huggies diapers maker Kimberly-Clark , particularly in China and the United States. Premium baby-care sales in China are up 20-30% so there are still opportunities despite the slow birthrate, Chief Operating Officer Jon Moeller said on a post-earnings call.


Student Lender Sallie Mae Soars on ‘Radical’ Capital Shift

Thu, 01/23/2020 - 11:05

(Bloomberg) -- Shares of SLM Corp., known as Sallie Mae, surged after its earnings report highlighted a shift in capital management, including selling loans to fund $600 million in share buybacks, that Wedbush called “radical.”Analysts hailed the moves, which they viewed as designed to goose share prices. On Thursday, the stock rallied as much as 30%, the most since 2008.Sallie Mae’s equity was likely “significantly undervalued,” while its assets were “fairly valued,” CEO Raymond Quinlan said on the company’s conference call. “We will continue to exercise our discretion in buying that stock until such time as the valuation approaches what we believe it should be.”Quinlan also said that the “need for higher education is high, it will continue, it will expand and it will evolve,” as distance learning, international, boot camp and other programs grow. “And so our outlook is that regardless of who gets elected in the United States and the election, we have a bright future.”Here’s a sample of the latest commentary:Jefferies, John Hecht“SLM announced major strategic shifts which reduce credit risk, simplify the business and enable rapid capital accumulation tied to a major capital return program,” Hecht wrote in a note.He added that fourth-quarter results showed “puts and takes,” but that the “bottom line beat and relatively consistent fundamentals are a modest positive.” Upside to Jefferies’s core earning-per-share estimate came from net interest income and expenses, while credit was in-line with Hecht’s forecast, and net interest margin, or NIM, and originations were a “tad below.”“Importantly, the company is discontinuing personal loan originations as it also pivots to a partial-loan sales strategy,” he said. “We see the quarter and strategic update as big positives.” Hecht rates the stock buy, with a Street-high price target of $16.KBW, Sanjay SakhraniSLM plans “bold moves” for 2020 with loan sales and share buybacks, Sakhrani wrote. Those moves will “in effect put pressure on the market to appropriately value its shares,” he said, adding that “the shares are cheap, the company is a leader in an attractive industry” and the company’s plans are “potentially value creating.”Even so, he sounded a note of caution: “While we like this strategy, we are concerned that investors might grow frustrated with the lack of growth and/or the transition impacts on earnings-per-share when growth resumes,” with rising provisions and a lack of gain-on-sale revenues, he said. Sakhrani rates SLM outperform, with a $12 target.Wedbush, Henry Coffey“After thoroughly digesting CECL, SLM is announcing a radical shift in capital management, earnings-per-share guidance that is significantly above the current mark, and the discontinuation of a product line we never liked (for them), installment lending,” Coffey wrote in a note.“CECL” refers to new accounting rules that analysts had anticipated would create “noise” in SLM’s reporting.Coffey rates shares outperform, with a price target of $13.Compass Point, William RyanSLM created “big headlines, but also a lot to digest,” Ryan wrote.The company’s 2020 earnings-per-share outlook topped consensus estimates because of the capital actions, he said. Ryan also flagged SLM’s shift to a “core earnings” metric in 2020, likely accounting for the impact of CECL, and noted that SLM said allowance for losses as a percentage of private education loans under CECL was now expected to be 6.7%, up from the prior 6.5% view during its third quarter earnings call and an initial 6% last summer.He added that SLM’s origination view for 2020 may be “slightly ambitious” after a year-over-year decline in the fourth quarter. Private education credit deterioration was in line with expectations, he said.Ryan rates SLM neutral, with a $10 target.(Updates share trading in the second paragraph. Adds CEO comment in third and fourth paragraphs.)To contact the reporter on this story: Felice Maranz in New York at fmaranz@bloomberg.netTo contact the editors responsible for this story: Catherine Larkin at clarkin4@bloomberg.net, Debarati RoyFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.


AFL-CIO President on Trump's trade deals

Thu, 01/23/2020 - 11:04

Yahoo Finance's Alexis Christoforous and Andy Serwer speak with AFL-CIO President Richard Trumka live at the World Economic Forum in Davos, Switzerland.


Congress might finally address the 'imminent danger' facing Social Security

Thu, 01/23/2020 - 10:53

Even as Washington focuses on impeachment hearings and a divisive election year after that, there remains those who hope that lawmakers can, you know, make new laws in 2020. One such effort is known as the TRUST Act


Bloomberg, Biden could beat Trump in November: Scaramucci

Thu, 01/23/2020 - 10:53

Yahoo Finance's Editor in Chief Andy Serwer and Alexis Christoforous speak with Anthony Scaramucci, Skybridge Capital Founder, live at the World Economic Forum in Davos, Switzerland.


PG&E Wins Support From Key Bondholders for Restructuring Plan

Thu, 01/23/2020 - 10:51

(Bloomberg) -- After spending almost a year at war with some of the biggest names in the financial world, bankrupt utility PG&E Corp. has finally got them on its side. Now it needs to win over California’s governor.Late Wednesday, PG&E reached a settlement with noteholders led by bond giant Pacific Investment Management Co. and activist investor Elliott Management Corp., who sought to derail the company’s $46 billion restructuring plan. The deal turns some of PG&E’s most formidable adversaries into backers of its turnaround proposal, bringing the company closer to gaining approval by a state deadline of June 30 and emerging from the biggest utility bankruptcy in U.S. history.There’s one problem: Governor Gavin Newsom, whose backing is crucial to PG&E’s restructuring, is still trying to block its plan. He rejected the proposal last month, raising concerns about its financing and governance. And the company has “yet to make a single modification” to ease them since, the governor said in a court filing less than two hours before PG&E announced the deal with bondholders.Read More: PG&E, Newsom Clash Over a Clause That May Allow State TakeoverCalifornia’s largest utility declared bankruptcy almost a year ago after its equipment was blamed for a series of catastrophic wildfires that killed more than 100 people and saddled the company with $30 billion in liabilities. It has since struck deals with almost every major stakeholder group, including the victims of the blazes and their insurers.Shares, which have lost almost half their value since the start of 2019, rose 4.3% at 9:47 a.m. in New York on Thursday.Elected OfficialsPG&E’s deal with bondholders is “a clear positive,” Bank of America analysts led by Julien Dumoulin-Smith said in a research note. While Newsom’s demands remain a challenge, PG&E appears willing to compromise, the analysts wrote.PG&E Chief Executive Officer Bill Johnson said in a statement that the company remains “focused on working with key stakeholders, including elected officials and our state regulator, on how PG&E will look, act, and be held accountable as we emerge from Chapter 11.”Meanwhile, Newsom said in his filing Wednesday that the company’s plan, as it stands, still doesn’t comply with state law. He accused PG&E of taking advantage of the Chapter 11 process and to force state officials into approving a “sub-optimal” plan.What Bloomberg Intelligence Says“California Governor Gavin Newsom, the last roadblock to PG&E’s planned bankruptcy exit now that bondholders have settled, could get offers addressing his concerns before the utility’s scheduled Jan. 31 regulatory filing, we believe. PG&E’s bondholder deal saves about $1 billion, reducing costs to customers -- an important consideration for regulators.”\-- Kit Konolige, senior utilities analystClick here to read the report.Newsom said the company’s plan would pay $1 billion in financing fees and continues to depend on substantial debt and short-term bridge financing that would leave the utility without the resources it needs to invest billions of dollars in safety upgrades. He has also pressed for language that would allow the state to take it over should it fail to meet future safety standards. The provision emerged as a major point of contention between the governor’s office and PG&E in negotiations.PG&E said it was aware of Newsom’s concerns and that additional changes to its plan were forthcoming. The company said in a state filing last week that it may make “material” changes to the non-financial terms of its bankruptcy exit plan, including governance, as a result of talks with the governor’s office.“We expect that the governor will also eventually reach an agreement with the company on its plan to restructure, as the alternative option of a publicly-controlled utility is not an attractive one,” Height Securities LLC analyst Clayton Allen wrote in a research note.$1 Billion SavedAs part of its deal with bondholders, PG&E said it would save about $1 billion by refinancing higher-interest debt. Bonds paying lower interest rates would be reinstated and paid as normal. The new mix of debt will “reduce the weighted average coupon of PG&E’s debt, the company said, consistent with the guidance given to the California Public Utilities Commission.”The agreement also gives the noteholders the chance to participate in any subsequent backstop equity commitments of up to $2 billion under certain circumstances.The bankruptcy case is PG&E Corp. 19-bk-30088, U.S. Bankruptcy Court, Northern District of California (San Francisco)(Updates share price in fifth paragraph, adds analysts comments in ninth and 12th.)\--With assistance from Lynn Doan, Rick Green, Scott Deveau and Joshua Fineman.To contact the reporters on this story: Mark Chediak in San Francisco at mchediak@bloomberg.net;Steven Church in Wilmington, Delaware at schurch3@bloomberg.netTo contact the editors responsible for this story: Lynn Doan at ldoan6@bloomberg.net, ;Rick Green at rgreen18@bloomberg.net, Joe Ryan, Joe RichterFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.


Beyond Meat Faces Impossible Blowback

Thu, 01/23/2020 - 10:46

By Kim Khan


When Timing the Market Works for Investors

Thu, 01/23/2020 - 10:37

Market timing has been given a bad rap with the buy-and-hold crowd. This might be due to the abundance of research suggesting timing the market is nearly impossible. Many folks may not even realize that they are already timing the market.


A Tale of 3 Healthcare Stocks – 2 to Buy, and 1 to Sell

Thu, 01/23/2020 - 10:31

When investment bank Oppenheimer talks, investors listen -- or they should.One of the 10 top performing research firms tracked by TipRanks, 61% of Oppenheimer's stock picks have "worked" historically, producing positive returns for investors. In fact, on average, these picks have generated positive returns approaching 12%, and well ahead of the stock market's long term 10% average returns.And spread across a field of nearly 11,000 stock picks over more than a decade, that's no fluke.So when Oppenheimer announced on Wednesday that it's taken a good hard look at the healthcare industry, and come up with two stocks it's confident it can recommend buying -- and one it's pretty sure should be sold -- this is advice investors should give careful consideration.Let's find out what Oppenheimer has to say, beginning with:Regeneron Pharmaceuticals (REGN)Regeneron is one of a strange breed in biotech -- a company that actually makes money. 32 years in business, Tarrytown, NY-based Regeneron develops medicines to treat a wide array of illnesses, everything from age-related macular degeneration and diabetic retinopathy (Eylea) to atopic dermatitis (Dupixent) to atherosclerotic cardiovascular disease (Praluent) and locally advanced cutaneous squamous cell carcinoma (Libtayo).Oppenheimer analyst Hartaj Singh makes the case that Regeneron -- already doing $7.6 billion in annual sales and earning in excess of $2.1 billion annually -- is preparing to advance to the "next level of commercial and R&D growth" as competition to Eylea abates and the company intensifies its focus on growing Dupixent sales -- a $10 billion potential market.At the same time, Singh is impressed with Regeneron's "burgeoning internally generated pipeline" in 2020, which the analyst calls "best-in-class," as well as with management's "renewed focus on cost control" and planned $1 billion share buyback. Combined, these two moves promise to increase profits -- then divide them up among fewer shares outstanding, accelerating growth in earnings per share.As a result, Singh rates Regeneron stock "outperform" with a $450 price target, promising better than 25% upside from current prices. (To watch Singh's track record, click here)However, Wall Street isn’t completely sold on Regeneron. TipRanks analysis of 11 analysts shows a consensus Moderate Buy rating, with 4 analysts recommending Buy, while 7 recommending Hold. The average 12-month price target on the stock is $396.33, representing about 10% increase. (See Regeneron stock analysis on TipRanks)Novavax (NVAX)Oppenheimer's second stock pick takes us back to more familiar territory: biotech stocks that aren't earning money (at least not yet). Analyst Kevin DeGeeter's pick of vaccine specialist Novavax is clearly headlines-driven, and specifically, timed to align with recent news that the coronavirus outbreak that began in Chinese provincial capital Wuhan, has now arrived in America, with the first reported U.S. infection reported in Seattle Wednesday.As DeGeeter explains, the "outbreak of potent new strain of coronavirus infections" will remind investors "of the power of NVAX's flexible vaccine development infrastructure." And yet, it's not the primary reason DeGeeter likes Novavax in 2020. This is because DeGeeter expects it will take Novavax a good six to nine months to develop a vaccine effective against the new Chinese illness -- by which time 2020 will be basically over.Rather, this analyst views the "upcoming Phase III readout in March from NanoFlu recombinant hemagglutinin (HA) protein nanoparticle for protection against seasonal influenza as the primary value driver" for Novavax stock. Strong Phase II clinical trial results have DeGeeter thinking that Phase III results will be likewise positive, and perhaps enough so to convince the U.S. Food and Drug Administration to approve NanoFlu for sale as early as 2021. Once that happens, DeGeeter sees a strong chance that Novavax will sell itself to a high bidder.For this reason, DeGeeter is positing a rise in share price from $7.20 currently, to $13 a share by early 2021. Granted, an 80% return in 12 months' time may sound optimistic, but it could actually be conservative. (To watch DeGeeter's track record, click here)On Wall Street, the average target price among analysts tracking Novavax stock is $17.38 per share -- 34% more than what Oppenheimer is promising. (See Novavax stock analysis on TipRanks)Amarin Corp (AMRN)As much as Oppenheimer's analysts like Regeneron and Novavax, they are quite bearish on Amarin, a seller of prescription-only omega-3 fatty acid capsules for treating high triglyceride levels in patients. Oppenheimer comes to its "underperform" recommendation on Amarin by an interesting route.To start with, analyst Leland Gershell notes that AstroZeneca's discontinuation of a clinical trial for a product (Epanova) that would compete with Amarin's triglycerides drug (Vascepa) is a positive for Amarin stock. Although other competing treatments exist (Acasti Pharma's CaPre for example, and Matinas BioPharma's MAT9001), the removal of Epanova from the mix implies greater market share for Vascepa -- and an increased, $13 price target for Amarin stock.That being said, Gershell warns that "AMRN's opportunity to exit through acquisition [is] diminishing," which is to say the chances of the company finding a buyer willing to acquire Amarin at a premium valuation don't look as good as they once did. For this reason, despite raising its price target on the stock, Oppenheimer's still ends up thinking that Amarin, at a share price of nearly $21 (i.e. still 60% above what it thinks the stock is worth), remains overpriced and unlikely to outperform the market from here on out.In short, despite improved prospects for its marquee drug, the fact that the prospects for the company fetching a premium buyout prices are worse means Amarin merits a sell rating.All in all, Wall Street almost evenly split between the bulls and those choosing to play it safe. Based on 10 analysts tracked in the last 3 months, 5 rate Amarin stock a Buy, 4 say Hold, while 1 issues a Sell. Notably, the 12-month average price target stands at $29.88, marking a nearly 44% in return potential for the stock. (See Novavax stock analysis on TipRanks)


‘There are a number of transformative technologies’ that will drive benefits: Deloitte U.S. CEO

Thu, 01/23/2020 - 10:28

Yahoo Finance's Editor in Chief Andy Serwer and Alexis Christoforous speak with Deloitte U.S. CEO Joe Ucuzoglu live at the World Economic Forum in Davos, Switzerland.


That letter from the IRS could be a fake. Watch out for this tax scam and others in 2020

Thu, 01/23/2020 - 10:28

Crooks want your Social Security number and other personal information to file fake returns so they can to steal tax refunds.


Tesla overtakes Volkswagen as world's second most valuable carmaker

Thu, 01/23/2020 - 10:21

Tesla's stock has more than doubled in value in the last three months, with its market capitalization piercing $100 billion on Wednesday, a first for a listed U.S. automaker. During the rally, its value has leapfrogged more established global rivals: Honda <7267.T>, BMW , General Motors and Daimler . On Wednesday, it eclipsed VW's $99.4 billion value.


Treasury Secretary Mnuchin senses a strong level of optimism from CEOs

Thu, 01/23/2020 - 10:17

Yahoo Finance's Brian Sozzi, Julia La Roche, and Max Zahn recap the press conference with Treasury Secretary Steve Mnuchin live at the World Economic Forum in Davos, Switzerland.


Wells Fargo’s Main Regulator Aims to Punish Former Managers

Thu, 01/23/2020 - 09:58

(Bloomberg) -- Wells Fargo & Co.’s main regulator is preparing civil charges against former managers related to their roles in its retail banking scandals, people familiar with the matter said.The Office of the Comptroller of the Currency has been readying so-called notices of charges against as many as 10 individuals, and may reach settlements with some, the people said, asking not to be identified because the discussions aren’t public. Carrie Tolstedt, who ran Wells Fargo’s sprawling community bank, former chief administrative officer Hope Hardison and onetime chief auditor David Julian may be among those facing the charges, the people said.An announcement hasn’t been finalized and negotiations are ongoing, the people said. An OCC spokesman declined to comment. Representatives for Tolstedt, Hardison and Julian declined to comment.The breadth of managers swept up in the OCC’s probe shows regulators are seeking to hold individuals accountable in addition to the company over one of the financial industry’s largest scandals since the 2008 crisis. Wells Fargo has been hit with an unprecedented series of punishments, including a Federal Reserve-imposed cap on assets and an order giving the OCC the right to remove some of the bank’s executives or board members.Together, the actions against Wells Fargo represent a harsher era for those accused of wrongdoing in the banking industry when compared with the widely criticized environment following the financial crisis. Cases the OCC brings against former Wells Fargo leaders would represent a rare example of individual accountability at the highest levels in bank wrongdoing. Even after the billions of dollars in fines the firms paid following the crisis, very few individuals faced such actions. Notices of charges can lead to monetary penalties and bans from working in the industry.The OCC’s move would cast another spotlight on the bank’s misconduct as new Chief Executive Officer Charlie Scharf tries to move the company beyond three years of legal and regulatory fallout that have cost billions of dollars and claimed two CEOs. The Department of Justice and the Securities and Exchange Commission also have been investigating.The scandals erupted in 2016 with the revelation that employees may have opened millions of bogus accounts to meet sales goals. Issues soon emerged in other divisions, prompting a flurry of probes and settlements. The Justice Department staff also have been scrutinizing the actions of individual executives, people familiar with the investigation have said. A spokesman for the agency declined to comment.Wells Fargo has repeatedly come under pressure from the OCC in recent years, as the regulator imposed a $500 million penalty, helped to remove Hardison and Julian from their posts in 2018, and issued a rebuke of the bank’s progress under former CEO Tim Sloan during a March hearing before Congress. Wells Fargo announced Sloan’s retirement days later. The board hired Scharf after a six-month search for an external candidate that was subject to the OCC’s sign-off.Wells Fargo’s legal troubles have weighed on its shares, which have sat out the 53% advance in the KBW Bank Index since the scandals broke in September 2016. The stock is down almost 10% this year, the worst performance in the index. Among 32 analysts tracked by Bloomberg, only six recommend buying the bank’s shares.(Updates with regulatory history beginning in fourth paragraph.)\--With assistance from David Scheer.To contact the reporter on this story: Hannah Levitt in New York at hlevitt@bloomberg.netTo contact the editors responsible for this story: Michael J. Moore at mmoore55@bloomberg.net, Daniel Taub, Steve DicksonFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.


Introducing FedEx (NYSE:FDX), The Stock That Dropped 19% In The Last Three Years

Thu, 01/23/2020 - 09:48

For many investors, the main point of stock picking is to generate higher returns than the overall market. But if you...


What investors should be worried about in 2020

Thu, 01/23/2020 - 09:45

Yahoo Finance's Brian Sozzi and Julia La Roche speak with Bridgwater Associate’s Karen Karniol-Tambour live at the World Economic Forum in Davos, Switzerland.


Q4 Earnings Outlook For Intel

Thu, 01/23/2020 - 08:17

Intel (NASDAQ: INTC ) unveils its next round of earnings this Thursday, January 23. Get prepared with Benzinga's ultimate preview for Intel's Q4 earnings. Earnings and Revenue Based on management's projections, ...


Evaluating Expedia Group, Inc.’s (NASDAQ:EXPE) Investments In Its Business

Thu, 01/23/2020 - 08:05

Today we'll look at Expedia Group, Inc. (NASDAQ:EXPE) and reflect on its potential as an investment. Specifically...


Should We Be Delighted With Edwards Lifesciences Corporation&#39;s (NYSE:EW) ROE Of 20%?

Thu, 01/23/2020 - 07:51

While some investors are already well versed in financial metrics (hat tip), this article is for those who would like...


Obscure Chinese Company Buys Vast Stock of Metals U.S. Labels ‘Critical’ to Industry

Thu, 01/23/2020 - 07:46

(Bloomberg) -- A little-known Chinese company has bought up a vast stockpile of metals that are indispensable to the electronics industry, including enough indium to satisfy six years of global demand of the material found in flat-screen TVs and cellphones the world over.Vital Materials Co.’s $600 million swoop to acquire the stockpile in a government auction is the culmination of a wild tale of speculation and market manipulation in a small, but strategically important corner of the metals markets.Almost everything bought by Vital Materials is on the list of minerals classified as “critical” by the U.S. two years ago as part of President Donald Trump’s vow to reduce America’s foreign dependence. While many of the metals are found in small quantities at mines around the world, China has come to dominate in transforming them into high-purity products needed in advanced manufacturing.Outside of the metals markets, indium’s importance largely escaped attention until the early 2010s, when thousands of investors in China caught on to its significance and bought huge volumes on a trading platform, called the Fanya Metal Exchange.The back story of Fanya dates back to 2011, when the exchange was launched with a promise of fixed high-yield income. The investment was backed by inventories of strategic metals like indium, gallium and germanium, which help power high-tech products from night-vision goggles to computer chips.But when the bourse collapsed amid suspicions of fraud in 2015, investors were left facing multibillion-dollar losses, according to media reports. Authorities impounded the colossal volumes of indium and other so-called minor metals that had accumulated on the bourse.The result was a years-long pall over the small industry as traders questioned whether the stockpiles would eventually flood back into the market.Now, with indium prices languishing at the lowest in more than a decade, China’s Vital Materials has paid more than $600 million to acquire the stockpile at auction. The deal removes the surplus of inventory from the market and helps draw a line under one of the biggest scandals to hit China’s metals industry.“The fear that the Fanya stocks might flood into the market and destroy the already very delicate balance of supply and demand has been overhanging onto the market,” Vicky Zeng, Vital’s global vice president for sourcing, said in a statement. “With all these metals being moved to Vital, people can be relieved as all the metals will be consumed and leveraged internally.”The move cements Vital’s position as a powerful force in niche markets as China and the U.S. focus on securing raw materials that are critical to their technological and military primacy.While it’s little known outside China, the company employs more than 4,000 people across eight sites in the country and several overseas plants. It’s capable of using up the entire stockpile internally over time and is likely to complete further acquisitions soon that will further underpin its growth, Zeng said by phone.To contact the reporters on this story: Mark Burton in London at mburton51@bloomberg.net;Jack Farchy in London at jfarchy@bloomberg.netTo contact the editors responsible for this story: Lynn Thomasson at lthomasson@bloomberg.net, Liezel HillFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.


 
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