Spirit Ether http://www.spiritether.net/ Wed, 05 May 2021 08:29:57 +0000 en-US hourly 1 https://wordpress.org/?v=5.7.1 https://www.spiritether.net/wp-content/uploads/2021/04/cropped-spirit-ether-icon-32x32.png Spirit Ether http://www.spiritether.net/ 32 32 ASX Short Sellers Reverse King Midas https://www.spiritether.net/asx-short-sellers-reverse-king-midas/ https://www.spiritether.net/asx-short-sellers-reverse-king-midas/#respond Wed, 05 May 2021 02:03:00 +0000 https://www.spiritether.net/asx-short-sellers-reverse-king-midas/

There is nothing like a profit upgrade to ruin a short seller’s day. And we’re assuming short sellers activist J Capital’s clients were simmering on Tuesday when his latest target, Nearmap, upped his 2021 finance sales forecast.

J Capital asked its clients to bypass Nearmap in a research report released on February 10, as its research clearly showed Nearmap’s U.S. business was in trouble. The main driver behind Nearmap’s forecast upgrade three months later is strong sales in the United States.

J Capital’s other high-profile ASX target is another tech player that divides WiseTech Global. But last February, WiseTech was one of the few companies able to raise its full-year EBITDA guidance thanks to better-than-expected performance.

In fairness to J Capital’s Tim murray and Anne Stevenson-Yang, Nearmap’s shares closed at $ 2.33 the day before its short controversy was released and changed hands for $ 2.36 on Wednesday just before it entered a trading halt linked to no lawsuits. disclosed. Which might have something to do with the patent issues first reported by J Capital in his short Nearmap thesis.

Meanwhile, WiseTech shares closed at $ 34.37 the day before J Cap’s first October 2019 research, and haven’t quite matched that level since, as both bulls and bears have. struggling to digest the completion of no less than 39 acquisitions by WiseTech since its initial public offering in 2016 at just $ 3.35 per share.

Elsewhere, another short-selling activist Soren Aaandahl’s Blue Orca boasted in October that its research showed that Seek’s job market share was a sell-off and was only worth $ 7.60.

The stock traded around Blue Orca’s quadruple target of $ 30.60 on Wednesday, after Seek improved its 2021 revenue and financial profit forecast after adjusting for its downward sell off of Zhaopin.

Three short choices, three profit upgrades. No one ever said short selling was easy.


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3 main dividend-paying stocks for better retirement https://www.spiritether.net/3-main-dividend-paying-stocks-for-better-retirement/ https://www.spiritether.net/3-main-dividend-paying-stocks-for-better-retirement/#respond Wed, 05 May 2021 01:04:00 +0000 https://www.spiritether.net/3-main-dividend-paying-stocks-for-better-retirement/

The right dividend security can be a fantastic addition to your retirement fund. Stable companies with high dividend yields will meet investment income requirements while still giving you a good night’s rest. These are two of the most important conditions for retiree investment portfolios.

Remember, these are not risky, high-end growth stocks that periodically experience sharp declines. These stocks are buzzing, slowly and steadily, kicking off valuable cash distributions to shareholders each quarter.

Image source: Getty Images

Illinois Tool Works

Illinois Tool Works (NYSE: ITW) is a large industrial enterprise with diverse operations in seven different segments. It produces commercial devices, automotive components, construction equipment, chemicals, food equipment and electronic measuring devices. This Fortune 200 and Dividend Aristocrat member is a leader in a broad product portfolio, creating a broad economic divide with scale and brand strength. That kind of resilience and consistency is a good start.

Illinois Tool Works had a difficult 2020 as revenue fell 10% from 2019. Results were more encouraging in the second half of the year with a return to positive growth. Management anticipates a rebound year in 2021. They call for double-digit growth in revenue and earnings per share (EPS) as well as an increase in profit margin. Importantly, they also expect free cash flow to exceed earnings, so that accounting earnings turn into cash that can be returned to shareholders. After having weathered the storm, the blue sky awaits us.

Despite these operational challenges, ITW actually increased its quarterly dividend last year from $ 1.07 to $ 1.14 per share. This is why retirees love dividend aristocrats so much; they tend to deliver good news when everything else crumbles. ITW currently pays a forward dividend yield of almost 2% with a payout ratio of 67%. Given the good outlook and the economic moat of the company, investors should expect quarterly distributions to continue to increase in the future.

MPLX

MPLX (NYSE: MPLX) is a Master Limited Partnership (MLP) that was formed to own and operate Petroleum Marathon (NYSE: MPC) intermediate assets. These assets include transportation and storage equipment, such as pipelines, terminals, reservoirs and collection systems. In general, intermediary firms are less influenced by market prices for crude oil and refined products than other parts of the energy sector.

MPLX reported a 6.4% drop in operating revenues for the full year 2020, attributable to lower volumes of crude oil and natural gas transported. Energy exploration and production companies took their capacity offline to reduce volume when oil prices fell last year. The MLP has also been working to bring capital spending under control and divest itself of some assets that were not generating strong returns on investment. The energy sector as a whole looks more stable going forward, and a return to travel this summer could prompt production volumes to restart. This would further consolidate the operations of transport and storage companies midway.

Even with the disruptions of last year, MPLX was able to maintain its quarterly dividend. The company’s distribution coverage ratio was comfortable at 1.58 in the fourth quarter of 2020, indicating that MPLX is producing more than enough cash to support its dividend. The MLP also reduced debt to income, further illustrating its focus on financial health. Retirees should prioritize financially sound actions to reduce risk.

This is a great opportunity for investors to acquire sustainable cash flow at a discount. The dividend yield of 10% of the stock is unusually high, implying that the market expects the payout to be reduced. If the worst of our economic turmoil is behind us, then it’s hard to imagine that MPLX will see its dividend drastically reduced. Even if it were halved, the return would still be well above average at 5%. This MLP produces too much income for retirees to ignore.

Snap-on

Snap-on (NYSE: SNA) designs and sells tools and storage, software and other equipment. The company sells primarily to auto mechanics, but it also targets aerospace, agriculture, construction and defense customers. Snap-on sells directly to end users through 4,800 physical stores and an online channel. It also operates a franchise network of mobile vending trucks and operates a finance business that provides loans to large buyers.

Snap-on was not spared from last year’s pandemic disruption, with sales falling 3.7%. However, things recovered with 20% year-over-year revenue growth in the first quarter of this year. Certainly better results can be expected based on the complete trade halt last March, but this latest news is still very encouraging.

Stability is the real value that Snap-on delivers to shareholders. The stock has paid back-to-back quarterly dividends in every period since 1939, which should be of interest to retirees. Snap-on’s quarterly dividend of $ 1.23 per share currently translates into a 2% dividend yield. This quarterly distribution grew rapidly by $ 0.71 per share in 2017, which is a bullish signal. A low payout ratio of 37% shows the company is pulling more cash than enough to maintain the current dividend – and maybe even increase it from here.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a premium Motley Fool consulting service. We are motley! Challenging an investment thesis – even one of our own – helps us all to think critically about investing and make decisions that help us become smarter, happier, and richer.


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United and 4 other airlines report their income this week. Here’s what to expect. https://www.spiritether.net/united-and-4-other-airlines-report-their-income-this-week-heres-what-to-expect/ https://www.spiritether.net/united-and-4-other-airlines-report-their-income-this-week-heres-what-to-expect/#respond Mon, 19 Apr 2021 11:58:00 +0000 https://www.spiritether.net/united-and-4-other-airlines-report-their-income-this-week-heres-what-to-expect/

March may have been the tipping point for airlines to return to operating profits. Travel is recovering as vaccinations increase, flights fill up, and days when bargain fares are rapidly declining.

These trends have made the sector a winning bet this year:

NYSE Arca Airline Index

is up around 26% against a gain of 11.5% for the

S&P 500.

But investors are now turning to summer bookings, and it may take bullish forecasts to push stocks up even further.

We will learn more about the financial health and outlook for the industry this week as five carriers release their first quarter results, following

Delta Airlines

‘(ticker: DAL) published last week.

United Airlines Holdings

(UAL) kicks off the week with first quarter results expected Monday after the close. United has already released preliminary figures, saying it forecast revenue of $ 3.2 billion in the quarter, down 66% from the first quarter of 2019. That revenue was below forecast by Wall Street, although United has made progress on the path to profitability, saying it turned cash-positive in March.

The airline is expected to accumulate a pre-tax loss of $ 2.8 billion and a loss of $ 7.05 in adjusted earnings per share in the quarter.

If United’s stock follows Delta’s path, however, it could sell out. While Delta’s first quarter results largely met Wall Street’s expectations, its outlook was weaker than expected, pushing its stock down 2.8% on the day it released its results.

Delta also said the recovery is being fueled by leisure travel, while business and international fares remain down more than 80% from pre-pandemic levels. This puts pressure on the economy of the airline’s unit, including its revenue per flight. Without higher margin commercial and international tariffs, total revenues may take longer to recover and operating margins may remain low. United are also a full-service operator who may face similar challenges.

Wall Street is now focusing on pricing as leverage for stocks. “We believe domestic traffic is back, but prices are lagging behind, and we want to know how they plan to raise tariffs over the summer,” Cowen analyst Helane Becker wrote in a note on Friday. .

The other large carrier on the tap is

American Airlines Group

(AAL), which is expected to release its results Thursday before the market opens.

American has also prepared Wall Street with preliminary figures, forecasting a 62% drop in revenue from the first quarter of 2019, amid its previous forecast. The company forecast a net loss of $ 2.7 billion to $ 2.8 billion (excluding tax credits and other benefits of about $ 2 billion, mostly from Cares Act funding). And he forecast a net loss of $ 4.29 to $ 4.41 per share, excluding special credits, compared to consensus forecast for a loss of $ 4.23.

The American will need to offer a healthy outlook to push his stock higher, after gaining 76% in the past six months. This may become more difficult, given its reliance on international routes. American’s operating expenses include much higher interest costs, and its number of shares has been significantly diluted through the issuance of shares.

Morgan Stanley analyst Ravi Shanker, for example, sees stock prices drop to $ 20, from recent prices of around $ 22. “We believe that AAL’s stock will increase with the wave of air traffic returning to the industry and we like its young fleet of aircraft which could limit investment pressure in the critical years to come,” he said. he wrote in a note last week. “However, with the stock up more than 50% since the start of the year, the positioning is not as negative as it used to be, which raises the bar higher.”

The last three airlines to report are

Southwest Airlines

(LUV),

Spirit Airlines

(SAVE), and

Alaska Air Group

(ALK), all scheduled for Thursday.

The trio are largely focused on the domestic leisure market and are expected to see some of the biggest clawbacks in income. None warned that the results would be lower than expected. Alaska posted a largely positive first reading for the quarter.

Wall Street expects Southwest to post revenue of $ 2.1 billion and a pre-tax loss of $ 1.3 billion. The carrier is expected to post an adjusted loss of $ 1.86 per share.

The southwest should benefit from

Boeing

(BA) MAX is returning planes to service and increasing corporate reservations now that it has joined a global reservation system. The airline’s domestic network is also at the heart of the recovery, Shanker notes. The analyst raised his stock price target to $ 80, which implies gains of nearly 30% from recent prices around $ 62.

The challenge with Southwest’s action is pricing, however. It trades at 20 times 2022 earnings and 13 times 2023 estimated earnings, at the high end of industry averages.

Spirit should be able to meet or beat expectations: it is a very low cost carrier geared towards domestic leisure and vacation travel. Wall Street is looking for a turnover of $ 459 million and a pre-tax loss of $ 329 million. Adjusted earnings are expected to result in a loss of $ 2.67 per share.

Still, Spirit’s stock has soared – up to 128% in the past six months – that it might be harder and harder to lift it from here. Raymond James’ Savanthi Syth slightly upped his 2021 EPS estimate last week, for example, but maintained a market performance rating on stocks.

“We believe Spirit is exposed to markets that are seeing strong demand and a recovery in prices as 2Q21 approaches,” she wrote. But the airline also bears higher interest charges and has issued equity, diluting earnings per share. And since Spirit already had a lean cost structure as the recession approached, it was not able to generate as much savings as other carriers.

Alaska Air, for its part, prompted investors to expect a positive quarter. The airline said in a statement last week that it was forecasting a 33% drop in revenue from the January 2019 quarter, in line with its previous forecast. It expects passenger revenue to fall 55%, which is at the high end of its previous forecast, and it expects operating cash flow of $ 150 million, beating its forecast previous $ 50 to $ 100 million.

The big hurdle for Alaskan investors could be the rise of stocks. The stock has risen 76% in the past six months to recent prices of around $ 69. Wall Street’s average price target is $ 83. This is an achievable goal, although investors may need to sit still for a while.

Write to Daren Fonda at daren.fonda@barrons.com


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Is Lowe’s stock a buy? https://www.spiritether.net/is-lowes-stock-a-buy/ https://www.spiritether.net/is-lowes-stock-a-buy/#respond Mon, 19 Apr 2021 10:30:00 +0000 https://www.spiritether.net/is-lowes-stock-a-buy/

In some ways, 2020 has been a year divided between big and small, with the COVID-19 pandemic primarily determining which side of the divide businesses fall into. But in other ways, it was a distortion of what happens in a normal year, and we can expect 2021 to be a lot different.

Many companies have experienced their best growth ever, and it will likely come back to earth, while others have suffered and are getting back on track.

Lowe’s (NYSE: LOW) had a fantastic year, beating rival and industry leader Home Depot (NYSE: HD) in sales growth. But what will happen next year and should you buy today?

Image source: Getty Images.

Reach first place

Just over a year ago, in Q4 2019, Lowe’s struggled with an outdated digital agenda and digital growth of just 3%. Comps were only 2.5%.

But the home improvement company was investing in technology to fuel higher growth as well as building new infrastructure to improve its supply chain.

These changes have helped the company achieve high sales and digital sales throughout the pandemic.

Metric (YoY) Q1 2020 Q2 2020 Q3 2020 Q4 2020
Growth comps in the United States 12.3% 35% 30% 29%
Digital growth in the United States 80% 135% 106% 121%

Data source: Lowe’s quarterly reports. YoY = year after year.

Keeping the momentum going this year

Lowe’s sees a $ 900 billion home improvement market, of which it owns about 10%, and is working on several new initiatives to keep the momentum going into 2021 and beyond.

The most urgent thing is to expand its omnichannel capabilities. This is why it has thrived throughout the pandemic, and if it has any chance of succeeding in its aftermath, adding new features is crucial. Some of the features he is developing are same day service and better in-store order processing.

The company is adding online-only products as well as a wider product assortment in general, and is focusing on productivity and improving its supply chain network to increase profitability. (The operating margin increased in the fourth quarter from 1.5% to 7.5% and for the full year from 2% to 10.8%.)

Lowe’s strengthens its professional segment with tool rentals, new professional quality brands and an expanded pro membership program. The pro segment is one of its competitive advantages, and strengthening this category is a key to driving sales.

Finally, Lowe’s is expanding its private labels, which has been a very successful strategy for retailers. Target (NYSE: TGT). Private labels can increase profitability and the company can have greater control over the supply chain. It is an evolution to watch.

The challenges along the way

The main challenge for Lowe’s in the coming year is a potential drop in home improvement product sales, which increased as people stayed in their homes and worked on home improvement projects. This should decrease as economies reopen and people start spending in areas that were limited last year, like travel.

The company has modeled three scenarios for 2021: a robust market with a 2% drop in sales; a moderate market with a drop of 5%; and a weak market with a decline of 7%. Whatever the outcome, Lowe’s expects some pressure over the next year. However, to put this in perspective, the company has already demonstrated that it is on track to gain market share and will continue to leverage its investments in technology and the supply chain.

Lowe’s is a dividend king, and he has increased his dividend over the past 57 years. Its dividend yields 1.15%. Lowe’s stock has gained 174% over the past five years.

The company is taking steps to increase its market share and support its growth, and those steps are producing results. I recommend Lowe’s as a value pick to add stability to your portfolio.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a premium Motley Fool consulting service. We are motley! Questioning an investment thesis – even one of our own – helps us all to think critically about investing and make decisions that help us become smarter, happier, and richer.


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Nestlé Q1 preview: PAT could rise up to 14% year-on-year, analysts say https://www.spiritether.net/nestle-q1-preview-pat-could-rise-up-to-14-year-on-year-analysts-say/ https://www.spiritether.net/nestle-q1-preview-pat-could-rise-up-to-14-year-on-year-analysts-say/#respond Mon, 19 Apr 2021 09:33:00 +0000 https://www.spiritether.net/nestle-q1-preview-pat-could-rise-up-to-14-year-on-year-analysts-say/

Overview of Nestlé Q1: An increase in home consumption, better demand from rural and urban India, sustainable growth of Maggi noodles and new product launches are some of the factors that analysts say will drive the growth of the goods maker fast-moving consumer market Nestlé India in the January – March 2021 quarter.

Nestlé, which is expected to release results for the March quarter on April 20, could post a 14% year-over-year (year-over-year) increase in first-quarter net profit, while revenue could rise 5-11%. The company follows the financial year from January to December.

Analysts also expect gross margins to improve, thanks to benign input prices. The EBITDA margin (earnings before interest, taxes, depreciation and amortization) is however likely to come under some pressure due to the increase in personnel costs and other expenses.

The company’s shares have fallen more than 6 percent since the start of the year. In the three months ended March 2021, they lost more than 6.5% against a 4% increase in the BSE Sensex index and 2% in the BSE FMCG index.

Here’s what the top brokers expect from their Q1FY21 numbers:

ICICI titles

The brokerage is forecasting an 11.8% yoy jump in net income for the March quarter to Rs 587.4 crore from Rs 525.43 crore posted in the same period last year. On a quarterly basis (QoQ), the figure is expected to increase to 21.5 percent. The company had posted a net profit of Rs 483.3 crore in the previous quarter.

Meanwhile, he expects Nestlé to post a 10.8% year-on-year increase in first quarter revenue to Rs 3,683.3 crore thanks to sustained growth in Maggi noodles. In addition, the launch of new products and the expansion of distribution in rural areas will also contribute to growth, he said.

The firm posted a net profit of Rs 3,325.27 crore in the corresponding quarter of last year and Rs 3,432.6 crore in the December quarter of CY20. Sequentially, the figure is expected to increase by 7.30 percent.

“We expect the company to maintain operating margins at 23.7% (11 basis points lower). The increase in milk prices was offset by cost reduction measures and rationalization of media spending. The business was able to grow at a slower pace at 7.9 percent at CY20 despite strong growth momentum in packaged food mainly due to supply constraints in the noodle segment, ”added the broker.

Narnolia Financial

Narnolia analysts have more subdued expectations of a mere 1 percent increase in profit for the March quarter to Rs 528 crore. While on a QoQ basis, the figure is expected to increase by 9 percent.

They expect income for the quarter under review to increase 5% year-on-year to Rs 3,490 crore, due to increased home consumption, better demand from rural and urban India. , traction of different channels and penetration of volume growth with secular growth in all categories. Sequentially, they expect that number to increase by almost 2 percent.

“The company’s home consumption portfolio in food and beverage categories such as Everyday Dairy Whitener, Nestle a + Milk, another milk-based portfolio, Nescafe, Ketchup & Sauces and Maggie are expected to continue their positive trajectory. “, did he declare.

Gross margin is expected to improve 240 basis points to 58.7% yoy while EBITDA margin is expected to decline 68 basis points yoy to 23.4% yoy. EBITDA margins were 24.1% and 22.1% respectively in Q1CY20 and Q4CY20.

According to analysts at Narnolia, the growth in volume and performance of the companies’ product portfolio, as well as the movement of advertising and other expenses are among the most controllable.

Financial Edelweiss

The brokerage is forecasting profit for the March quarter at Rs 6.00.6 crore, up 14.3% year-on-year and 24.3% QoQ. He also expects income for the period to grow by 7.9 percent per year to Rs 3,588.8 crore, while sequentially the figure could rise 4.6 percent.

“Nestlé will likely experience about 9 percent year-on-year growth in domestic revenues on a 10.7 percent basis. The T4CY20 grew 10.1 percent year-on-year on a 10 percent basis. Export revenue growth is expected to decline 10 percent. YoY cent on a 12.9 percent basis, “Edelweiss Financial said.

Commodity prices have started to increase slightly, however, cost optimization measures are expected to help expand the EBITDA margin by 120 basis points year-on-year, he added. The brokerage sets the EBITDA margin figure for the March quarter at 25.3%.

Prabhudas Lilladher

The brokerage expects Nestle to post adjusted earnings for the first quarter of CY21 at Rs 583.5 crore, up 9.5% year-on-year, from Rs 532.7 crore posted in Q1CY20. Adjusted profit could rise by 21.5 percent QoQ from Rs 480 crore posted in the previous quarter.

“We expect Nestlé to deliver 10.5 percent revenue growth thanks to strong traction in Maggi, Chocolates, the resumption of service quality in out-of-home consumption and an increased focus on rural growth, ”the broker said. It fixes the first quarter income at Rs 3,674.4 crore.

He plans to reduce the EBITDA margin to 23.8%, due to rising personnel costs and other expenses.


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Weibo stock is estimated to be slightly undervalued https://www.spiritether.net/weibo-stock-is-estimated-to-be-slightly-undervalued/ https://www.spiritether.net/weibo-stock-is-estimated-to-be-slightly-undervalued/#respond Mon, 19 Apr 2021 09:15:57 +0000 https://www.spiritether.net/weibo-stock-is-estimated-to-be-slightly-undervalued/

Weibo’s stock (NAS: WB, 30-year-old Financials) is estimated to be slightly undervalued, according to the GuruFocus Value calculation. GuruFocus Value is GuruFocus’s estimate of the fair value at which the stock should trade. It is calculated based on the historical multiples at which the stock has traded, past growth in business and analysts’ estimates of the company’s future performance. If a stock’s price is significantly above the GF value line, it is overvalued and its future performance is likely to be poor. On the other hand, if it is significantly lower than the GF value line, its future return will probably be higher. At its current price of $ 49.48 per share and market cap of $ 11.2 billion, Weibo stock is reportedly slightly undervalued. The GF value for Weibo is shown in the graph below.

Because Weibo is relatively undervalued, its long-term stock return is likely to be higher than its business growth, which has averaged 38.4% over the past three years and is expected to grow by 8.32% per year over the next three to five years.

Link: These companies can offer higher future returns with reduced risk.

Investing in companies with low financial strength carries a higher risk of permanent loss of capital. It is therefore important to carefully consider the financial strength of a company before deciding whether or not to buy its shares. Examining the cash-to-debt ratio and interest coverage is a great starting point for understanding the financial strength of a business. Weibo has a cash-to-debt ratio of 1.44, which is worse than 73% of companies in the interactive media industry. GuruFocus ranks Weibo’s overall financial strength as 5 out of 10, which indicates that Weibo’s financial strength is acceptable. Here is Weibo’s debt and cash flow for the past few years:

debt and cash

Investing in profitable businesses carries less risk, especially in businesses that have demonstrated consistent profitability over the long term. Typically, a business with high profit margins offers better performance potential than a business with low profit margins. Weibo has been profitable 5 years in the past 10 years. In the past 12 months, the company achieved sales of $ 1.7 billion and earnings of $ 1.37 per share. Its operating margin of 29.99% better than 86% of companies in the interactive media sector. Overall, GuruFocus ranks Weibo’s profitability as fair. Here is Weibo’s revenue and bottom line for the past few years:

Income and net income

Growth is probably the most important factor in the valuation of a business. GuruFocus research has shown that growth is closely tied to the long-term performance of a company’s stocks. The faster a company grows, the more likely it is to create shareholder value, especially if the growth is profitable. Weibo’s 3-year average annual revenue growth rate is 38.4%, which ranks better than 84% of companies in the interactive media industry. The 3-year average EBITDA growth rate is 61.4%, which ranks better than 88% of companies in the interactive media industry.

Another way to look at a company’s profitability is to compare its return on invested capital and the weighted cost of capital. Return on invested capital (ROIC) measures the extent to which a business generates cash flow relative to the capital it has invested in its business. The weighted average cost of capital (WACC) is the rate that a company is expected to pay on average to all of its security holders to finance its assets. We want the return on invested capital to be greater than the weighted cost of capital. In the past 12 months, Weibo’s return on invested capital is 21.56 and its cost of capital is 7.33. The historical comparison of ROIC versus Weibo’s WACC is shown below:

ROIC vs WACC

Overall, Weibo (NAS: WB, 30-year-old Financials) stock is showing all signs of modest undervaluation. The company’s financial position is fair and its profitability is fair. Its growth ranks better than 88% of companies in the interactive media sector. To learn more about the Weibo share, you can view its 30-year financial statements here.

To find out about high-quality companies that can deliver above-average returns, please see GuruFocus High Quality Low Capex Screener.


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FSC launches securities lending system for particular person quick sellers https://www.spiritether.net/fsc-launches-securities-lending-system-for-particular-person-quick-sellers/ https://www.spiritether.net/fsc-launches-securities-lending-system-for-particular-person-quick-sellers/#respond Mon, 19 Apr 2021 05:54:27 +0000 https://www.spiritether.net/fsc-launches-securities-lending-system-for-individual-short-sellers/

The nation’s foremost monetary regulator on Monday stated it should launch a brand new inventory lending system for retail buyers to achieve higher entry to short-selling inventory borrowing.

Quick promoting is a buying and selling method wherein buyers promote borrowed shares with the idea that the inventory worth will go down within the close to future. Quick sellers revenue in the event that they purchase again the shares at a lower cost than they offered them for.

Beneath the brand new system, a complete of 17 native brokerage homes, together with Korea Funding & Securities, NH Funding & Securities, Samsung Securities and KB Securities, will begin lending Kospi 200 and Kosdaq 150 shares as much as 2.4 trillion gained ($ 2.1 billion) as of Might. 3, the Monetary Companies Fee stated in an announcement.

Eleven different securities corporations, together with KTB Funding & Securities, Hanwha Funding & Securities and IBK Securities, will function securities lending providers by the top of this 12 months.

The most recent transfer got here after the FSC determined to permit the resumption of quick promoting from Might 3, which will likely be restricted to shares within the Kospi 200 and Kosdaq 150 indices, aimed toward growing retail investor participation available in the market. quick promoting market, largely dominated by institutional buyers. and international buyers, who’ve higher entry to the capital and knowledge they should revenue from quick promoting.

Retail buyers have lengthy criticized the dearth of shares out there for brief promoting available in the market. In February of final 12 months, solely 6 native brokerage homes – NH Funding & Securities, Kiwoom Securities, Shinhan Funding Company, Daishin Securities, SK Securities and Yuanta Securities Korea – operated inventory loans for people, which s ‘amounted to some 20 billion. gained in whole, in keeping with the info.

In the meantime, the FSC would require day merchants to take on-line coaching programs and simulate funding trials, supplied by the Korea Institute of Monetary Funding, earlier than borrowing shares for brief promoting. .

As well as, there will likely be quick promoting limits, relying on their funding experiences, to keep away from extreme losses.

Newbies could make quick gross sales of as much as 30 million gained, whereas mid-level buyers, who’ve used the buying and selling tactic greater than 5 occasions with a complete quantity of inventory borrowing amounting to 50 million gained or extra, are topic to a cap of 70 million. Gained. Skilled buyers with greater than two years of expertise briefly promoting needs to be excluded from the envisaged funding restrict.

By Choi Jae-hee (cjh@heraldcorp.com)


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Day by day Wants Launches $ 265 Million Elevate for Retail Facilities Deal https://www.spiritether.net/day-by-day-wants-launches-265-million-elevate-for-retail-facilities-deal/ https://www.spiritether.net/day-by-day-wants-launches-265-million-elevate-for-retail-facilities-deal/#respond Mon, 19 Apr 2021 04:31:00 +0000 https://www.spiritether.net/daily-needs-launches-265-million-raise-for-retail-centers-deal/

In one of many largest IPOs of the previous 12 months, the Day by day Wants REIT was separated from HomeCo. HomeCo itself was launched two years in the past with a portfolio of retail facilities drawn from the ashes of Woolworths’ failed efforts to determine the Masters model.

Since then, the platform, led by former funding banker David Di Pilla, has made clear its ambition to remodel into a bigger fund administration operation.

“HomeCo continues to execute its technique of making worth and development via recycling capital,” mentioned Mr. Di Pilla.

“Importantly, our actions right this moment clearly display the robust alignment between HMC and HDN and our skill to create worth for buyers on our platform.”

The Day by day Wants REIT individually traded contracts to amass an eighth Day by day Wants Heart in Victoria for $ 55.6 million. This acquisition doesn’t rely upon fundraising.

Final week, Residence Consortium mentioned it was aiming for an preliminary fundraising of $ 1 billion for its proposed healthcare actual property providing, to be break up between a listed actual property belief and an unlisted fund.

Macquarie analysts mentioned the acquisitions have been according to HDN’s technique to extend publicity to large-format retail and neighborhood belongings which have money circulation certainty.

“We anticipate the valuation to proceed rising from the bigger portfolio, permitting for additional deployment of the stability sheet and funds from per share operations,” they wrote in a consumer be aware.


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Birkenstock assigned a preliminary ‘B’ score to S&P following the acquisition of L Catterton https://www.spiritether.net/birkenstock-assigned-a-preliminary-b-score-to-sp-following-the-acquisition-of-l-catterton-2/ https://www.spiritether.net/birkenstock-assigned-a-preliminary-b-score-to-sp-following-the-acquisition-of-l-catterton-2/#respond Mon, 19 Apr 2021 04:28:26 +0000 https://www.spiritether.net/birkenstock-assigned-a-preliminary-b-rating-to-sp-following-the-acquisition-of-l-catterton/

S&P World Scores has assigned a preliminary score of “B” to the senior debt score of the Birkenstock group following plans introduced by L Catterton to accumulate a controlling stake within the German-based shoe maker. The outlook is secure.

The finalization of the transaction is scheduled for the primary half of 2021. Your entire acquisition transaction needs to be financed by 1,075 million euros (equal in euros) of senior time period loans, 430 million euros of different senior unsecured money owed, a vendor mortgage of 275 million euros. and an fairness contribution of round 2.0 billion euros.

S&P assigns a preliminary “ B ” score to BK LC Lux Finco 1 Sàrl (dad or mum firm of the Birkenstock group) and the proposed senior secured amenities of € 1,075 million due in 2028, and a preliminary score of “ CCC + to the 430 million euros supplied different unsecured. debt due 2029.

Secure outlook displays S&P’s view that Birkenstock has enough credit standing margin inside its credit score metrics, gradual deleveraging outlook and strong annual free working money movement (FOCF). of 120 million euros or extra.

S&P mentioned in its evaluation: “The Birkenstock model is properly established in mature markets with comparatively decrease fashion-related volatility. We consider the Birkenstock model has robust fairness energy in its area of interest class of sandals and orthopedic footwear merchandise. That is primarily as a consequence of its particular performance, lengthy model historical past and good management of the provision chain and manufacturing course of to keep up a continuing stage of product high quality. We notice that, in comparison with different clothes manufacturers, Birkenstock has a comparatively decrease threat related to trend modifications. The fundamental fashions have been available on the market for a few years and the corporate has a various and constant buyer base, with model differentiation linked to the orthopedic traits of its merchandise. Birkenstock is making an attempt to develop its buyer base, particularly via partnerships with different manufacturers, similar to Valentino, Stüssy and others. Though model consciousness exterior of Europe and North America is comparatively low, the corporate intends to extend its penetration in markets like China and India. We notice that, in comparison with the common for branded attire, Birkenstock spends a comparatively much less quantity on advertising and marketing actions, which helps robust profitability indicators.

“The corporate has a powerful observe report of income progress, with comparatively secure profitability. Between 2012 and 2020, Birkenstock’s income reached a compound annual progress charge CAGR of round 19%, vastly surpassing the worldwide footwear business. Extra not too long ago, through the fiscal 12 months ended September 30, 2020 (fiscal 2020), Birkenstock recorded year-over-year income progress of 1.2%. The group was in a position to offset the dangerous results of the pandemic on its wholesale and bodily gross sales channel primarily because of the robust momentum of on-line gross sales, which elevated by 81%. We consider the footwear business will proceed to be supported by constructive business components similar to casualization, premiumization, sustainability, and wellness traits. For these causes, we might count on a harder setting for formal footwear, whereas athletic and informal footwear may reap some long-term advantages additionally supported by the shift to make money working from home.

“We contemplate the obstacles to entry into the business to be average. The worldwide footwear business is extremely fragmented, with the highest 5 gamers accounting for lower than 25% of the market share in line with Euromonitor. Though we contemplate the business obstacles to be average, the product phase wherein Birkenstock operates is comparatively small and with particular options that aren’t the main target of consideration of most main shoe producers. The primary components in mitigating aggressive strain relate primarily to the orthopedic traits of the insoles, in addition to the power of Birkenstock’s model and the vertically built-in enterprise mannequin.

“The corporate’s distribution technique is evolving, together with an rising give attention to direct gross sales to prospects. Wholesale is Birkenstock’s largest distribution channel. In fiscal 2020, wholesaling accounted for roughly 70% of complete gross sales, e-commerce 25%, and bodily retail roughly 5%. North America is the corporate’s most superior market from a distribution perspective, with direct-to-customer (DTC) accounting for roughly 34% of regional company gross sales. One of many firm’s priorities is to streamline the wholesale enterprise with a bunch of companions higher aligned with the Birkenstock model. The group expects the DTC channel to generate an rising share of gross sales, primarily via the acceleration of e-commerce. In keeping with Euromonitor, in 2020, digital gross sales accounted for round 26% of the full world footwear business (up from 11% in 2015), which broadly matches the present contribution of e-commerce for the group. The share of income generated by the agency’s bodily retail is low by business requirements. The corporate opened flagship retail shops in Soho (New York) in 2018 and Venice Seashore (California) in 2019. As of September 2020, Birkenstock had 52 shops. As a part of model constructing and higher publicity to DTC, Birkenstock plans to open chosen new shops, primarily in Europe (excluding Germany) and america; Nonetheless, in line with the corporate’s baseline state of affairs, the principle driver of progress stays the web channel.

“Product range is proscribed, given the give attention to a distinct segment phase of the footwear business. We notice that over 70 % of annual gross sales are generated from 5 fashions – basic base – with the unique “Arizona” mannequin being a serious contributor to complete gross sales. In recent times, the corporate has expanded the Arizona mannequin (two strap sandal) to incorporate new colours, textiles and patterns. The corporate additionally desires to develop into different classes apart from sandals (similar to closed-toe footwear, youngsters phase, equipment and others), however these nonetheless symbolize a restricted share of the general enterprise. As well as, in our credit score evaluation, we take into consideration the corporate’s restricted publicity to rising markets and earnings contributions from just a few mature markets, with the highest three international locations accounting for over 60% of complete gross sales.

“The money movement translation offsets the comparatively excessive adjusted debt of S&P World Scores in opposition to EBITDA. Based mostly on our baseline state of affairs, we count on the corporate to keep up S&P World Scores adjusted debt to EBITDA of seven.0x-7.5x over the subsequent two years. We anticipate gradual deleveraging after the shut of the transaction, because of natural progress and the self-discipline of discretionary spending. In our calculation of adjusted debt, we embrace a vendor mortgage of 275 million euros associated to the deferred buy worth below the acquisition settlement. In our base case, we assume that the curiosity payable on the vendor mortgage can be in sort, as per firm pointers. As well as, now we have adjusted the corporate’s reported debt to incorporate roughly € 50 million associated to the online current worth of working leases, and now we have no internet money obtainable on the steadiness sheet on reported debt. In our baseline state of affairs, we count on the corporate to generate FOCFs (after capital expenditure, working capital, money curiosity, taxes and lease funds) of 120-150 million euros. Positively, we count on our Adjusted EBITDA curiosity protection ratio to be above 3.0x over the long run. We notice that Birkenstock has not made any acquisitions up to now and that the chance of a big leveraged acquisition is low, in our opinion.

“The secure outlook displays our view that Birkenstock will preserve S&P World Scores Adjusted EBITDA margins at 27-28%, whereas persevering with to generate a strong annual FOCF of € 120-150 million. We consider the corporate’s technique to consolidate its place in mature markets, develop in Asia and give attention to the DTC channel ought to result in gradual deleveraging, with a debt / EBITDA ratio adjusted to 7.0x -7.5x over the subsequent two years (together with provider mortgage.). In our baseline state of affairs, we count on the group to keep up EBITDA curiosity protection above 3.0x. “


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‘Litigation will take over’: US lawmakers warned of Libor chaos https://www.spiritether.net/litigation-will-take-over-us-lawmakers-warned-of-libor-chaos/ https://www.spiritether.net/litigation-will-take-over-us-lawmakers-warned-of-libor-chaos/#respond Mon, 19 Apr 2021 04:00:13 +0000 https://www.spiritether.net/litigation-will-take-over-us-lawmakers-warned-of-libor-chaos/

Final week, U.S. regulators and authorities officers appeared en masse earlier than a congressional committee to argue in opposition to the nation’s sluggish transition away from the scandal-stricken benchmark rate of interest Libor.

With out an act of Congress, they mentioned, there could possibly be chaos.

“If this transition to Libor does not go nicely, individuals could not know what their mortgage fee is that if it is tied to Libor, they might see their bank card funds halted,” mentioned Brian Smith, deputy. Assistant Secretary of Federal Funds to the Treasury. the Home Monetary Companies Committee.

“Monetary markets may be disrupted. Enterprise loans may be disrupted, ”he mentioned. “The dispute will take over.”

Hundreds of mortgage, bond and by-product contracts, totaling as much as $ 200 billion in notional worth, nonetheless use the US greenback model of the London Interbank Supplied Price to control curiosity funds. Greater than a decade after a rate-fixing scandal, this uncovered Libor loopholes and spurred efforts to shift to a greater market-based various.

In truth, the general variety of contracts referencing Libor has elevated lately, quite than decreased, in accordance with the Different Reference Charges Committee, an trade group arrange by US regulators to steer the transition.

UK regulators, who oversee the benchmark, are phasing out most forex variations of Libor by the tip of 2021, however the US greenback Libor has been granted a keep. All new contracts should use an alternate benchmark charge from subsequent 12 months, however present contracts have till mid-2023 to be traded.

The ARRC has estimated that 33% of present contracts will nonetheless be on maintain when the mid-2023 deadline arrives. A few of these contracts comprise pre-agreed language to control what occurs if the Libor goes, however the ARRC mentioned $ 1.9 billion lacked “efficient means” to maneuver to a different benchmark.

“The aim right here is to get to a spot the place debtors and lenders have certainty,” mentioned Tom Wipf, vp of institutional securities at Morgan Stanley, who chairs the ARRC. “If we do not get that, think about what number of product disputes we might have. The entire monetary system could possibly be affected to some extent. “

The ARRC has authorized an alternative choice to Libor – the Assured In a single day Funding Price, or SOFR – for sure derivatives and different monetary contracts. However its use in all contracts presently referring to Libor has proved impractical.

For the reason that charge that ultimately plugs into all of these outdated contracts may make a giant monetary distinction and the losers would certainly wish to take authorized motion, the laws may grant authorized safety to counterparties that swap to a benchmark authorized by the federal authorities.

Jay Powell, Chairman of the Fed, and Janet Yellen, Secretary of the Treasury, have already united in calling on Congress to behave. At Thursday’s monetary providers committee listening to, officers from the Securities and Alternate Fee, the Workplace of the Comptroller of the Forex and the Federal Housing Finance Company added their names to the listing.

The lengthy farewells of Libor: key dates

© PA

December 2014

The Different Benchmark Charges Committee is first convened by the Federal Reserve and the New York Fed to keep away from the transition from Libor to US greenback

June 2017

ARRC chooses SOFR, an rate of interest primarily based on short-term mortgage markets, as most well-liked various to Libor

April 2018

New York Fed begins publishing SOFR

March 2021

New York passes laws offering fallback for monetary contracts referencing Libor that don’t but specify an alternate rate of interest

finish of 2021

Deadline for shifting away from most Libor contracts. No new Libor contracts in US {dollars} to be entered into after this date

mid 2023

Deadline for shifting away from all US greenback Libor contracts

In Europe, laws was handed in February to supply a fallback resolution for Libor at rates of interest chosen by the European Fee.

The New York State Legislature additionally handed a regulation stating that alternative charges really useful by regulators can be utilized in Libor contracts that presently don’t have related tips.

The overwhelming majority of contracts below the jurisdiction of US regulators are drafted below New York regulation, however a major quantity are lined by different native legal guidelines, particularly for client merchandise like mortgages.

This makes a nationwide resolution a “requirement”, in accordance with Joseph Abate, strategist at Barclays. “[New York] supplies a template and covers numerous titles and contracts, however it doesn’t cowl all the things. ”

Many corporations “concern that all the things will occur on the final minute, which can make [an] very tough orderly transition, ”mentioned Sarah Boyce, affiliate director of the Affiliation of Company Treasurers, a UK foyer group.

Business gamers hoping for additional delays within the switchover is perhaps disenchanted. Randal Quarles, vice chairman of Fed supervision, hinted in a speech final month that entities that proceed to problem new Libor contracts after year-end could face sanctions, and the press Complete judicial overview on Congress suggests a want to resolve the difficulty as soon as and for all. all.

“We’ve lengthy suspected that US regulators would quickly step as much as the bat of Libor reform after the carrot did not mobilize adequate manufacturing away from Libor,” mentioned Daniel Krieter, director of BMO’s bond technique group. Capital markets. “It seems to be like the method has began.”

Finally week’s listening to, regulators appeared to have already satisfied some lawmakers to help a nationwide rule, with help on each side of the political aisle.

“This can be a essential transition for our monetary markets,” mentioned Steve Stivers, Republican Consultant for Ohio. “Republicans and Democrats each wish to make this transition profitable, and we’re ready to work with the administration and the SEC, FHFA, and Federal Reserve in any manner we are able to.”


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