Archive for November, 2018

• Morning News: November 27, 2018
  Eddy Elfenbein, November 27th, 2018 at 7:17 am

  What Oil at $50 a Barrel Means for the World Economy

  ‘Sleepwalking’ Markets Woke Up This Year. That’s a Good Thing.

  Pre-I.P.O. Deals Add to Exodus From Public Markets

  The U.S. Housing Boom Is Coming to an End, Starting in Dallas

  Trump Signals U.S. Likely to Go Ahead With China Tariff Increase

  G.M. to Idle Plants and Cut Thousands of Jobs as Sales Slow

  Amazon Says Cyber Monday Was the Biggest Shopping Day in Company History

  Little Known to Many Investors, Cryptocurrency Reviews Are For Sale

  United Technologies to Split Into 3 Companies, Each With a Sharper Focus

  Tesla China Sales Plunge 70% in October

  Don’t Look Now, But Microsoft Is Overtaking Apple

  The Ghosn Inquisition

  Michael Batnick: The Nifty Fifty

  Ben Carlson: When Cash Outperforms Everything

  Jeff Carter: Crypto Breakdown; Crypto Regulation

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• Morning News: November 26, 2018
  Eddy Elfenbein, November 26th, 2018 at 7:10 am

  How Cheap Labor Drives China’s A.I. Ambitions

  Venezuela Settles $1.2 Billion Creditor Claim to Protect Citgo

  Bitcoin, Ripple (XRP), And Ethereum Got Roasted Over Thanksgiving – Here’s Why

  Pay Taxes With Bitcoin? Ohio Says Sure

  Goldman Predicts Commodities Will Soar in 2019

  Buy Emerging Markets, Avoid Credit: Morgan Stanley’s 2019 Plan

  The Plug-In Hybrid Car Hits Its Stride, Just in Time to Die

  In China’s Hinterland, Car Market Growth Engine Sputters

  VW, Ford Alliance Borne Out of Need to Adapt to Fragmented Markets

  GM Plans Closure of Canada Plant With 2,200 Workers

  Carlos Ghosn Is Removed As Chairman of Mitsubishi Motors

  Campbell Soup and Third Point Near Deal to Settle Proxy Fight

  Jeff Miller: Weighing the Week Ahead: Do Plummeting Oil Prices Signal a Weak Economy?

  The Economics of Le’Veon Bell’s Gamble

  Joshua Brown: The Year No One Made Money & The End of the Beginning

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• Morning News: November 23, 2018
  Eddy Elfenbein, November 23rd, 2018 at 7:52 am

  Big Oil Digs North Sea’s ‘Final Frontier’

  India and Australia Move to Tighten Bonds to Counter China’s Rise

  China Wants Trade Talks with United States to Be Equal, Mutually Beneficial

  A Creator of the U.K.’s Libor Replacement Says It’s Still Too Complex

  Holiday Looks Set to Be a Shopping Blowout: Black Friday Update

  Black Friday is Starting Earlier Than Ever — and Companies Like Walmart and Lululemon Weren’t Ready

  Trump’s Tariffs Haven’t Really Transformed Trade. Yet.

  Apple to Defend iPhone App Fees at U.S. Supreme Court

  Washington Asks Allies to Drop Huawei

  Ghosn Arrest Exposes Stress in Japanese-French Auto Marriage

  Amazon Workers Strike in Germany, Spain on Black Friday

  German Court Rules Volkswagen Must Reimburse Owner Full Price of Car

  D&G’s Racism Row Shows the Worst of Fashion

  Howard Lindzon: Nasdaq 5,000? …Nasdaq 10,000 Still Inevitable

  Ben Carlson: Ben’s Holiday Spending Tips

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• Morning News: November 22, 2018
  Eddy Elfenbein, November 22nd, 2018 at 8:41 am

  Markets Are Revealing the Sum of All Risks

  With Central Banks Out of Ammo, Governments Urged to Ready Stimulus for Next Downturn

  Majestic Plans to Build Brexit Stockpile of European Wines

  China Says U.S. Accusations of Unfair Trade Practices ‘Groundless’

  China’s Christmas Village Isn’t Worried About Trump’s Trade War

  Holiday Spending Should Be Strong. And Then?

  U.S. Weighs Steel Quotas, Instead of Tariffs, on Canada and Mexico

  Americans’ Shopping Habits are Fundamentally Changing, and It’s Killing Cyber Monday

  Nissan Ousts Ghosn, Moves to Assuage Concerns Over Alliance

  Tesla Cuts China Car Prices to Absorb Hit From Trade War Tariffs

  How Facebook’s P.R. Firm Brought Political Trickery to Tech

  Chinese E-Commerce Sites Ditch Dolce & Gabbana in Ad Backlash

  Goldman Sachs Sued Over ‘Central Role’ in 1MDB Scandal

  Joshua Brown: Yards After Contact

  Roger Nusbaum: Aaaaand An Options Selling Fund Blows Up

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• Morning News: November 21, 2018
  Eddy Elfenbein, November 21st, 2018 at 7:10 am

  Sweden’s Push to Get Rid of Cash Has Some Saying, ‘Not So Fast’

  Moneyball in Switzerland: A Bidding War for Private Bankers

  Beijing to Judge Every Resident Based on Behavior by End of 2020

  What Could Go Wrong With the Economy? The Markets Are Offering Hints.

  Texas Is About to Create OPEC’s Worst Nightmare

  USTR Says China Has Failed to Alter ‘Unfair, Unreasonable’ Trade Practices

  Harvesting In A Trade War: U.S. Crops Rot as Storage Costs Soar

  Carlos Ghosn’s Arrest Rocks Auto Empire

  Cuomo and de Blasio Saw the Amazon Deal as a Winner. Now Comes the Backlash.

  Apple’s Biggest iPhone Assembler Planning Deep Cost Cuts

  GE Could Be a $41 Billion Problem for Big Banks

  Walmart, Target, Best Buy Take Steps to Curb Gift Card Fraud

  Nick Maggiulli: Four Things Leonardo da Vinci Can Teach Us About Investing

  Ben Carlson: Surveying the Damage in Stocks

  Michael Batnick: Animal Spirits: How to Ask the Right Questions

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• Hedge Fund Manager Apologizes to Clients
  Eddy Elfenbein, November 20th, 2018 at 9:38 pm

  This is painful. James Cordier, a hedge fund manager, apologizes to his clients for blowing up his fund. It’s believed he managed $150 million. He apparently lost it all on a wrong-headed bet on natural gas.

  A Florida-based hedge fund manager is tearfully apologizing to his 290 clients after losing their money.

  In a video made public earlier this week, James Cordier of Optionsellers.com blamed recent volatility in the oil and gas markets for wiping out his fund — and his clients’ savings.

  “The events of this past week have been incredibly devastating for our clients — who I rarely call clients,” Cordier said in the 10-minute video, noting that he often refers to them as “family.”

  Cordier — who is believed to have managed $150 million, according to a Bloomberg report — went on to address some of his 290 clients personally.

  Here’s the chart of natural gas:

  

• AdvisorShares Focus Equity ETF (CWS)
  Eddy Elfenbein, November 20th, 2018 at 9:30 am

  

  I want to wish everyone a happy Thanksgiving!

  I also want to remind you that the end of the year is approaching, and that’s when we’ll make changes to the Buy List. That’s the only time we touch the portfolio. As we’ve done for the past 13 years, five new stocks will go in, and five old stocks will go out.

  If you’re a shareholder of the AdvisorShares Focus Equity ETF (CWS), there’s no need to worry; the changes will happen automatically inside each of your shares.

  If you’re not a shareholder yet, this is also a great time to consider CWS for your portfolio. The ETF is designed to mimic our Buy List, and it’s been doing well lately, but we need your support. The net value is now up to $14.3 million which is nearly halfway to our goal of $30 million. For those who have joined us, thank you!

  We’re still a small rowboat in the ocean of Wall Street, but we’re clearly making a difference. We were the first ETF to use a fulcrum fee, and now the big fund families are following our lead. It’s about time Wall Street put the interests of shareholders first.

  CWS is now in its third year of operations. We started at $25 per share, and a few weeks ago, we got as high as $34.75 per share. Plus, we’ve been holding up well during the market’s recent turmoil.*

  A few things to remember.

  First, CWS is completely transparent. Just 25 stocks, and you know what’s in it all the time.

  Second, we have low turnover. We trade just once a year.

  Finally, the newsletter keeps you abreast of important news regarding the Buy List.

  There’s no product quite like this on all of Wall Street. Please continue to support CWS and help us change the investing world for the better!

  Eddy

  * Performance data quoted represents past performance and is no guarantee of future results. Current performance may be lower or higher than the performance data quoted. Investment return and principal value will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than original cost. For the standardized performance and most recent month end performance, click https://www.advisorshares.com/fund/cws.

  Before investing you should carefully consider the Fund’s investment objectives, risks, charges and expenses. This and other information is in the prospectus, a copy of which may be obtained by visiting the Fund’s website at www.AdvisorShares.com. Please read the prospectus carefully before you invest.

  Foreside Fund Services, LLC, distributor.

  There is no guarantee that the Fund will achieve its investment objective. An investment in the Fund is subject to risk, including the possible loss of principal amount invested. The prices of equity securities rise and fall daily. These price movements may result from factors affecting individual issuers, industries or the stock market as a whole. Shares of the Fund may trade above or below their net asset value (“NAV”). The trading price of the Fund’s shares may deviate significantly from their NAV during periods of market volatility. There can be no assurance that an active trading market for the Fund’s shares will develop or be maintained. In addition, equity markets tend to move in cycles which may cause stock prices to fall over short or extended periods of time. Other Fund risks include market risk, liquidity risk, large cap, mid cap, and small cap risk. Please see prospectus for details regarding risk.

  Shares are bought and sold at market price not net asset value (NAV) and are not individually redeemed from the Fund. Market price returns are based on the midpoint of the bid/ask spread at 4:00 pm Eastern Time (when NAV is normally determined) and do not represent the return you would receive if you traded at other times.

• Ross Stores Earned 91 Cents per Share for Q3
  Eddy Elfenbein, November 20th, 2018 at 9:00 am

  This morning, Ross Stores (ROST) reported fiscal Q3 earnings of 91 cents per share. Sales rose 7% to $3.5 billion. The important metric, same-store sales, rose by 3%. Going into this quarter, Ross told us to expect earnings between 84 and 88 cents per share, and same-store sales growth of 1% to 2%. Wall Street had been expecting 90 cents per share.

  Barbara Rentler, Chief Executive Officer, commented, “Both sales and earnings for the quarter were ahead of our forecast, despite being up against very strong multi-year comparisons. Though above plan, operating margin of 12.4% was down from last year as higher merchandise margin was more than offset by increases in freight costs and this year’s wage investments.”

  Ms. Rentler continued, “During the third quarter and first nine months of fiscal 2018, we repurchased 2.9 million and 9.4 million shares of common stock, respectively, for an aggregate price of $278 million in the quarter and $807 million year-to-date. We remain on track to buy back a total of $1.075 billion in common stock during fiscal 2018.”

  For Q4, which is the important holiday quarter, Ross projects same-store sales growth of 1% to 2%. For EPS, they see that ranging between $1.09 and $1.14 per share. That’s the same as the previous guidance but it now includes a gain of seven cents per share due to the resolution of a tax matter. For the entire year, Ross sees earnings of $4.15 to $4.20 per share.

  This is basically what I expected. Their Q3 guidance was low, but that’s what they often do. Wall Street wasn’t fooled. The outlook for Q4 is the same as before. Still, the stock gapped down more than 7% at the open. This was on top of a pronounced slide over the last seven days. At today’s low, Ross was down nearly 9%. From the low, the stock was off more than 20% from its high of just eight trading days ago. All of this happened, even though the company did exactly what they said they’d do.

  Update: Ross lost 9.38% today to close at $82.64 per share. The stock dropped at the open, then rallied, but gradually pulled back at the end of the day.

• Hormel Foods Earns 51 Cents per Share
  Eddy Elfenbein, November 20th, 2018 at 8:16 am

  Hormel Foods (HRL), a leading global branded food company, today reported results for the fourth quarter of fiscal 2018. All comparisons are to the fourth quarter of fiscal 2017 unless otherwise noted.

  EXECUTIVE SUMMARY – FISCAL 2018

  Record diluted earnings per share of $1.86, up 18% from 2017 EPS of $1.57
  Excluding a non-cash impairment, adjusted diluted earnings per share1 of $1.89, up 20%
  Record cash flow from operations of $1.24 billion, up 20%
  Volume of 4.80 billion lbs., up 1%; organic volume1 down 1%
  Record net sales of $9.55 billion, up 4%; organic net sales1 down 1%
  Operating margin of 12.6% compared to 14.0% last year
  Effective tax rate of 14.3% compared to 33.7% last year

  EXECUTIVE SUMMARY – FOURTH QUARTER

  Record diluted earnings per share of $0.48, up 17% from 2017 EPS of $0.41
  Adjusted diluted earnings per share1 of $0.51, up 24%
  Volume of 1.27 billion lbs., down 1%; organic volume1 down 3%
  Net sales of $2.52 billion, up 1%; organic net sales1 down 3%
  Operating margin of 12.8% compared to 13.2% last year
  Effective tax rate of 18.7% compared to 33.8% last year

  FISCAL 2019 OUTLOOK

  “Fiscal 2019 is a continuation of our long-term evolution as a global branded food company,” said Jim Snee, chairman of the board, president, and chief executive officer. “Our focus on building brands, delivering meaningful innovation to the marketplace, making strategic acquisitions, and creating intentional balance will ensure we are able to meet our growth goals. We are confident in our plan to deliver growth in each business segment in 2019.”

  “We anticipate another year of strong cash flows. We plan to reinvest to expand capacity for branded value-added products while returning cash back to shareholders through a 12 percent dividend increase,” Snee said. “This coming year will require strong execution from every business unit in order to manage through commodity market volatility and global trade uncertainty. I know our team is up to the challenge.”

  “Growth from leading brands such as Wholly Guacamole®, Applegate®, Jennie-O®, and SPAM® will be important to our success in 2019,” Snee said. “We expect continued growth from our many new innovative items such as Herdez® guacamole salsa, Hormel® Bacon 1™ fully cooked bacon, Hormel® Natural Choice® products, and Hormel® Fire Braised™ meats.”

  Fiscal 2019 Outlook

  Net Sales Guidance (in billions)

  $9.70 – $10.20

  Earnings per Share Guidance

  $1.77 – $1.91

  The following items are included in the company’s guidance range. The company plans to deliver $75 million in cost reductions in 2019 which excludes any planned synergies from recent acquisitions. The company will use the savings to help offset inflation, reinvest into key brands, and contribute to earnings growth. The company also expects to complete the Fremont divestiture in December 2018, incurring approximately $12 million in expenses. This transaction reduces earnings volatility and decreases the company’s reliance on commodity profits.

  DIVIDENDS

  “This morning we announced a 12 percent increase to our annual dividend, making the new dividend $0.84 per share,” Snee said. “This is the 53rd consecutive year in which we’ve increased our dividend and the 10th consecutive year of double-digit increases. This demonstrates the confidence we have in our business going forward.”

  Effective November 15, 2018, the company paid its 361st consecutive quarterly dividend at the annual rate of $0.75 per share.

  COMMENTARY – FOURTH QUARTER

  “Our team delivered a record quarter of earnings,” Snee said. “Refrigerated Foods had a particularly solid quarter led by value-added growth in retail, deli, and foodservice channels which offset a continued decline in commodity profits.”

  “We reached many milestones this quarter including the startup of two new lines to support growth of Hormel® Fire Braised™ products and Hormel® Bacon 1™ fully cooked bacon,” Snee said. “We also announced expansions at our Burke manufacturing facility in Nevada, Iowa, and our Fontanini plant in McCook, Ill. These expansions will allow us to continue growing our pizza toppings business as well as our line of authentic premium Italian meats and sausages. These strategic investments reinforce the strength we are seeing in our value-added businesses.”

• Morning News: November 20, 2018
  Eddy Elfenbein, November 20th, 2018 at 7:12 am

  Oil Prices Slide As Russia Says Wait And See on Production Cuts

  No End in Sight for Crypto Sell-Off as Bitcoin Breaches $4,500

  Bitcoin-Rigging Criminal Probe Focused on Tie to Tether

  FAANG Stocks Drop a Combined $728 Billion — More Than Saudi Arabia’s GDP — in 6-Week Pummeling

  Goldman Says It’s Time for Equity Investors to Boost Their Cash

  Walmart’s Black Friday 2018 Sale Has A New Nasty Surprise

  Societe Generale to Pay $1.4 Billion to Settle Cases in the U.S.

  Founder’s Big Idea to Revive BuzzFeed’s Fortunes? A Merger With Rivals

  Lowe’s to Get Rid of Mexico Stores in Further Restructuring

  David’s Bridal Files For Bankruptcy But Brides Will Get Their Dresses

  Ghosn Downfall Ripples From Tokyo to Paris as Allegations Grow

  Facebook Deserves Criticism. The Country Deserves Solutions.

  Roger Nusbaum: Cryptopocalypse 2018!

  Joshua Brown: Okay Here’s What’s Going On

  Jeff Carter: Projections Are Never Right

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