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CMCSA | Comcast CMCSA Gains But Lags Market What You Should Know | In the latest trading session Comcast CMCSA closed at 36 18 marking a 0 75 move from the previous day This move lagged the S P 500 s daily gain of 1 32 Elsewhere the Dow gained 1 38 while the tech heavy Nasdaq added 1 74
Coming into today shares of the cable provider had gained 3 73 in the past month In that same time the Consumer Discretionary sector gained 4 65 while the S P 500 gained 4 16
Investors will be hoping for strength from CMCSA as it approaches its next earnings release which is expected to be January 23 2019 On that day CMCSA is projected to report earnings of 0 62 per share which would represent year over year growth of 26 53 Our most recent consensus estimate is calling for quarterly revenue of 25 74 billion up 17 45 from the year ago period
Any recent changes to analyst estimates for CMCSA should also be noted by investors These revisions typically reflect the latest short term business trends which can change frequently As a result we can interpret positive estimate revisions as a good sign for the company s business outlook
Research indicates that these estimate revisions are directly correlated with near term share price momentum To benefit from this we have developed the Zacks Rank a proprietary model which takes these estimate changes into account and provides an actionable rating system
The Zacks Rank system which ranges from 1 Strong Buy to 5 Strong Sell has an impressive outside audited track record of outperformance with 1 stocks generating an average annual return of 25 since 1988 Over the past month the Zacks Consensus EPS estimate has moved 0 51 lower CMCSA is currently a Zacks Rank 3 Hold
Investors should also note CMCSA s current valuation metrics including its Forward P E ratio of 13 01 This valuation marks a discount compared to its industry s average Forward P E of 19 46
Also we should mention that CMCSA has a PEG ratio of 0 97 This metric is used similarly to the famous P E ratio but the PEG ratio also takes into account the stock s expected earnings growth rate The Cable Television was holding an average PEG ratio of 2 11 at yesterday s closing price
The Cable Television industry is part of the Consumer Discretionary sector This group has a Zacks Industry Rank of 93 putting it in the top 37 of all 250 industries
The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups Our research shows that the top 50 rated industries outperform the bottom half by a factor of 2 to 1
Be sure to follow all of these stock moving metrics and many more on Zacks com |
WFC | Lawsuit says Wells Fargo auto insurance charges were a fraud | By Jonathan Stempel Reuters A new lawsuit accuses Wells Fargo Co N WFC of racketeering violations and fraud after the bank admitted to charging several hundred thousand borrowers for auto insurance they did not ask for or need causing many delinquencies The proposed class action filed on Sunday in San Francisco federal court deepens the fallout from the latest bad practice uncovered at Wells Fargo It follows the scandal in which the third largest U S bank has said employees created as many as 2 1 million unauthorized customer accounts to meet sales goals Wells Fargo said late last week it would refund about 80 million to an estimated 570 000 customers who were wrongly charged for auto insurance from 2012 to 2017 including roughly 20 000 whose vehicles were repossessed The San Francisco based bank made its announcement less than three hours after The New York Times wrote about an internal report prepared for executives that detailed improper charges Wells Fargo said it halted the charges last September after customers expressed concerns But according to the lawsuit refunds to defrauded customers are not enough Wells Fargo has long lost the right to decide what is best for its customers Roland Tellis a lawyer for the plaintiffs said in an interview Refunds don t address the fraud or inflated premiums the delinquency charges and the late fees he added It will be up to a jury or court to decide the appropriate remedy Wells Fargo spokeswoman Catherine Pulley declined to comment on the lawsuit but in an email added We are very sorry for the inconvenience this caused impacted customers and we are in the process of notifying them and making things right The lawsuit is led by Paul Hancock a 34 year old marketing consultant from Indianapolis He said Wells Fargo charged him 598 for insurance though he repeatedly told the bank he had coverage from Allstate and imposed a late fee after the unnecessary policy took effect The lawsuit seeks unspecified damages which could be tripled under federal racketeering law for borrowers nationwide and in California and Indiana
If refunding premiums was just the start this could be a nine figure case Tellis said Wells Fargo s accounts scandal resulted in 185 million of regulatory penalties and a 142 million settlement of private litigation and cost former Chief Executive John Stumpf his job The case is Hancock v Wells Fargo Co et al U S District Court Northern District of California No 17 04324 |
WFC | Democrats want to grill Wells Fargo executives about auto insurance | By Patrick Rucker WASHINGTON Reuters Democratic lawmakers pushed on Tuesday for another chance to question Wells Fargo Co s N WFC leadership about sales practices after the scandal hit bank said it forced auto insurance on borrowers who did not need it Democrats on the Senate Banking Committee asked its Republican leaders in a letter to summon Wells Fargo Chairman Stephen Sanger and Chief Executive Tim Sloan That letter accompanied one sent by Representative Maxine Waters the top Democrat on the House Financial Services Committee who wants to know how Wells Fargo wrongly charged roughly 570 000 customers for auto insurance they did not ask for or need leading to unwarranted delinquencies and car repossessions Unwanted auto insurance is the latest wrinkle in a months long scandal over sales practices at Wells Fargo where employees also created as many as 2 1 million deposit and credit card accounts in customers names without their permission Members should have the opportunity to question Mr Sloan about the bank s progress in addressing the damage it did to its customers said the Senate letter signed by Democrats including ranking member Sherrod Brown A spokeswoman for Wells Fargo said the bank looked forward to answering questions from Washington Wells Fargo understands and is committed to addressing policymaker concerns said Jennifer Dunn We are committed to fixing these mistakes and earning back trust Employees have said they created unauthorized accounts to hit sales goals handed down by management The creation of fake accounts and misplaced insurance charges went on for years before the bank s management took action After Wells Fargo reached a 190 million settlement with regulators over the fake accounts in September its then Chairman and CEO John Stumpf appeared before both committees to face questions from lawmakers at heated hearings He left the bank shortly after to be replaced by Sloan and Sanger Whether Stumpf s successors will be hauled before Congress publicly is uncertain Only Republicans can summon witnesses since that party controls Congress The senate letter urged Idaho Senator Mike Crapo who chairs the banking panel to call a Wells Fargo hearing in September
Democrats want to know how the auto insurance and unauthorized accounts practices went on undetected and Wells Fargo plans to compensate customers who were wrongly charged for insurance according to the letter |
WFC | Exclusive N Y regulator subpoenas Wells Fargo over unwanted auto insurance | By Karen Freifeld NEW YORK Reuters New York state s banking and insurance regulator has issued subpoenas to two Wells Fargo NYSE WFC Co units after the bank admitted to charging several hundred thousand borrowers for auto insurance they did not ask for or need causing many delinquencies The New York Department of Financial Services is demanding Wells loan contracts with New York borrowers its financing agreements with auto dealers and agreements between Wells units and insurers according to copies of the subpoenas that were issued on Tuesday and seen by Reuters Unwanted auto insurance is the latest chapter in a months long scandal over sales practices at Wells where employees also created as many as 2 1 million deposit and credit card accounts in customers names without their permission The New York regulator is also seeking documents showing how and when Wells learned its so called collateral protection insurance may have been unnecessarily or wrongfully issued The bank has to provide the information by Aug 22 The regulator sent a separate request for information to National General Insurance Co which was identified as an underwriter of the insurance in a report into the matter prepared for Wells by consultancy Oliver Wyman The New York Times obtained a copy of the report A Wells spokeswoman declined to comment and National General did not immediately respond to a request for comment Wells first became aware of potential problems a year ago when the auto lending business began receiving an unusually high number of complaints Franklin Codel head of consumer lending said in an interview last week The bank said it would refund about 80 million to an estimated 570 000 customers who were wrongly charged for auto insurance from 2012 to 2017 including roughly 20 000 whose vehicles were repossessed The subpoenas each of which is nine pages long were sent to Wells Fargo Bank NA in Saint Louis Park Minnesota and Wells Fargo Insurance Services USA Inc in Charlotte North Carolina The subpoenas also request the Wyman consulting firm s report and any other analyses of policies issued to New York customers
Separately New York Attorney General Eric Schneiderman s office issued a subpoena to Wyman according to a person familiar with the matter A spokeswoman for the firm did not immediately respond to a request for comment |
WFC | Chesapeake fails to hold early gains as activity cutbacks cause concern | Chesapeake Energy CHK 0 8 has turned lower after a solid open that followed better than expected Q2 earnings as investors apparently turn negative on plans to cut its rig count and bring fewer wells into production this year We suspect Chesapeake may cut back activity in the relatively gassy North Eastern Appalachia Haynesville and to a lesser extent Mid continent regions Barclays LON BARC analysts say Q2 s overall production was light on natural gas with slight crude miss EPS beat and production ramping in July and expected to increase through year end after big Q2 spud totals Wells Fargo NYSE WFC writes While CHK continues to execute we still feel a transformational event acquisition is needed for shares to get sustained traction Separately CHK discloses that the Department of Justice closed an investigation into how the company accounted for oil and natural gas assets without taking any enforcement action CHK shares plunged more than 9 on Sept 29 a year ago after disclosing a Justice Department subpoena in the case Now read |
WFC | Republican U S senator looking into Wells Fargo insurance scandal | By Lisa Lambert WASHINGTON Reuters Republican Senator Jerry Moran said on Thursday he is seeking additional information on recent revelations that Wells Fargo Co N WFC enrolled unknowing borrowers in costly auto insurance putting more pressure on the bank whose reputation is already marred by previous sales practices At a hearing on insurance fraud Moran who chairs the insurance subcommittee that would be at the forefront of any congressional investigation into the issue said his staff is already in communication with Wells Fargo regarding these concerns and I plan to follow up accordingly to gather additional information on the circumstances and what is being done to address these issues Republicans control both chambers of Congress and the White House which means Moran has more power to take action on the issue than the many Democrats who expressed outrage after news broke last Friday that Wells had charged 800 000 car loan borrowers for insurance without their knowledge or consent Ten months earlier Wells paid 190 million to settle charges it had signed customers up for phony accounts and pushed them into products they did not need which led to dramatic congressional hearings and lawsuits Political leaders occasionally pay lip service to an issue and then move away from it but Moran s spokesman Tom Brandt said the senator is taking this very seriously
Wells does not comment on specific interactions with lawmakers but a spokeswoman said the bank understands and is committed to addressing policymaker concerns She added that since it discovered the problems in the middle of 2016 Wells has taken steps such as refunding fees and discontinuing the insurance program to make things right for our customers |
WFC | OCC may penalize Wells Fargo over improper auto insurance charges WSJ | NEW YORK Reuters Wells Fargo Co N WFC may face regulatory sanctions for having improperly charged customers for auto insurance they did not seek the Wall Street Journal reported on Friday The Office of the Comptroller of the Currency is considering taking action over the matter the Journal said citing unnamed sources
The bank said last week that 570 000 customers may have been wrongly charged for the insurance In an interview Wells s head of consumer lending told Reuters the bank had informed regulators of the problems last year |
WFC | Wells Fargo WFC Beats Q3 Earnings On Higher Revenues | Have you been eager to see how Wells Fargo Company NYSE WFC performed in Q3 in comparison with the market expectations Let s quickly scan through the key facts from this San Francisco based money center bank s earnings release this morning An Earnings BeatWells Fargo came out with earnings per share of 1 03 beating the Zacks Consensus Estimate of 1 02 Higher revenues were primarily responsible for this earnings beat How Was the Estimate Revision Trend You should note that the earnings estimate for Wells Fargo depicted a neutral stance prior to the earnings release The Zacks Consensus Estimate has remained stable over the last 7 days However Wells Fargo has a decent earnings surprise history Before posting earnings beat in Q3 the company delivered positive surprises in three of the prior four quarters WELLS FARGO NEW Price and EPS Surprise
Overall the company surpassed the Zacks Consensus Estimate by an average of 0 50 in the trailing four quarters Revenue Came In Higher Than ExpectedWells Fargo posted revenues of 22 3 billion higher than the Zacks Consensus Estimate of 22 billion Moreover it compared favorably with the year ago number of 21 9 billion Key Stats to Note Pre tax pre provision profit PTPP 9 1 billionROA net income to average assets 1 17 ROE net income applicable to common stock to shareholders equity 11 60 What Zacks Rank SaysThe estimate revisions that we discussed earlier have driven a Zacks Rank 3 Hold for Wells Fargo However since the latest earnings performance is yet to be reflected in the estimate revisions the rank is subject to change While things apparently look favorable it all depends on what sense the just released report makes to the analysts You can see Check back later for our full write up on this Wells Fargo earnings report later Confidential from ZacksBeyond this Tale of the Tape would you like to see Zacks best recommendations that are not available to the public Our Executive VP Steve Reitmeister knows when key trades are about to be triggered and which of our experts has the hottest hand |
CMCSA | U S mergers help bank fees spike to record highs | By Lynn Adler
NEW YORK LPC A record 1 45 trillion of US syndicated lending to companies for acquisitions leveraged buyouts dividends and refinancing in the first half of the year has propelled bank fees from arranging the loans to all time highs
The 8 1 billion earned in the first half of this year slightly topped the prior record 8 billion taken in during the second half of last year setting a new peak according to Freeman Consulting Services
The lending pace escalated in the second quarter and is seen staying heated through year end encouraged by lower US corporate tax rates and a federal judge s June endorsement of the long pursued mega merger between AT T NYSE T and Time Warner
Bankers eagerly awaited the outcome of the AT T Time Warner ruling long after the deal was first announced in October 2016 and now expect the decision to keep the chute wide open for similar mergers and acquisitions M A in coming months
For lower rated borrowers there is less onerous enforcement under this administration of leveraged lending guidelines put in place five years ago to rein in high risk practices
The market was firing on all cylinders in the second quarter said Jeff Nassof a director at Freeman Consulting There were plenty of new money loans from both corporate M A and leveraged buyouts and it looks like more to come given the relaxed regulatory environment and strong stock market
At the current pace fees will reach an annual record for banks lending to blue chip as well as to highly indebted companies according to Freeman which estimates fees based on Thomson Reuters data
Fees of nearly 6 6 billion earned by banks in the first half for extending leveraged loans to lower rated borrowers topped 5 8 billion in the same half last year by more than 14 percent roughly matching the all time high for any six month period set in the second half of last year
The mix of deals which has increasingly shifted to new funding rather than lower margin refinancing loans is also propping up fee income
Among the loans boosting the leveraged fee pool were those made to back auto parts maker Tenneco s purchase of Federal Mogul from Icahn Enterprises Amneal Pharmaceuticals merger with fellow generics drug maker Impax Laboratories and building products manufacturer Ply Gem Holdings take private by buyout firm Clayton Dubilier Rice
ALL CLEAR
For extending loans to high quality companies banks earned about 1 5 billion in the first half of the year a 44 percent spike from a year earlier and the highest half year tally on record
For investment grade companies it s still a very strong M A environment stock prices are high so sellers are willing to sell and buyers are willing to bid their stock to get assets Nassof said
At the same time interest rates have risen but remain low historically while the economy and corporate profits are growing
Debt financing is cheap so that s not really any inhibitor to financing a big deal Nassof said The AT T Time Warner decision he added is going to be a boost for deals giving potential buyers the all clear signal
Among the fee drivers in the first half in the high grade sector were loans backing Comcast NASDAQ CMCSA Corp s bid to buy Sky Plc LON SKYB Walt Disney s offer to buy Fox media assets and Conagra Brands purchase of Pinnacle Foods
Rising first half syndicated lending helped to boost the total US investment banking fee pool to an all time high for any six month period
When adding bank earnings from equity and bond underwriting as well as M A advisory to the syndicated loan arrangement fees the total US investment banking fee pool jumped 26 7 billion in the first half slightly edging out the second half of last year |
CMCSA | Fox preparing to top Comcast offer for Sky FT | Reuters Twenty First Century Fox Inc O FOXA is preparing a new bid for Sky Plc L SKYB that values it at about 25 billion pounds 33 14 billion to top the offer it has received from Comcast Corp O CMCSA the Financial Times reported on Monday Fox s offer is expected to be at a premium to Comcast s most recent bid of 12 50 pounds per share the Financial Times reported citing two people briefed on the matter The company could make the new offer as soon as this week if its earlier bid for Sky is formally approved by the UK government according to the report Rupert Murdoch s Fox had initially launched a 10 75 pound a share bid to buy all of Sky in December 2016 Fox declined to comment |
CMCSA | European shares slide as U S China trade dispute ramps up | By Kit Rees LONDON Reuters European stocks fell on Wednesday as an escalation in the U S China trade dispute looked set to bring a six session winning streak to an end The pan European STOXX 600 STOXX index was down 1 1 percent by 0905 GMT while Germany s export heavy DAX GDAXI fell 1 2 percent The Trump administration raised the stakes in the standoff with Beijing by threatening to impose 10 percent tariffs on a list of 200 billion worth of Chinese imports a move that hit risky assets globally Though investors have been looking positively toward the second quarter earnings season the increasingly uncompromising rhetoric on trade has weighed on equities recently It s getting a bit more real for markets now Ken Odeluga market analyst at City Index said referring to the United States threat of more tariffs It s more difficult to dismiss this on the basis that little has happened in real terms Odeluga added All European sectors were in negative territory with those most exposed to action on tariffs taking the most points off the STOXX Basic resources SXPP was down 3 1 percent and autos SXAP down 1 7 percent With the earnings season about to get into gear trading updates put individual stocks into focus Shares in Indivior L INDV plunged almost a third after the drugmaker said its 2018 profit would come in below its forecast hurt by the launch of generic versions of its bestselling opioid addiction treatment in the United States Micro Focus L MCRO was another large faller down 7 5 percent after the software company gave a half year update with analysts at Investec saying that they still see material challenges ahead for the business Micro Focus shares are down more than 52 percent this year Shares in Burberry L BRBY were down 3 7 percent after the luxury retailer s first quarter update failed to impress investors with no outlook hike Cost cuts and other strategic initiatives are still ongoing and should be welcomed by investors Helal Miah investment research analyst at The Share Centre said But strategies such as taking the brand even more upmarket have the potential to backfire and alienate traditional customers as we have seen with other brands in the industry Miah added UK housebuilder Barratt Developments L BDEV rose 1 4 percent after the company said that it expected profits to have risen 9 percent in 2018
In M A news shares in UK broadcaster Sky L SKYB retreated 0 8 percent after Rupert Murdoch s 21st Century Fox O FOXA said it had agreed a 32 5 billion bid for Sky trumping a rival offer from U S group Comcast O CMCSA |
CMCSA | Comcast CMCSA Reports Next Week Wall Street Expects Earnings Growth | The market expects Comcast NASDAQ CMCSA to deliver a year over year increase in earnings on higher revenues when it reports results for the quarter ended December 2018 This widely known consensus outlook is important in assessing the company s earnings picture but a powerful factor that might influence its near term stock price is how the actual results compare to these estimates
The stock might move higher if these key numbers top expectations in the upcoming earnings report which is expected to be released on January 23 On the other hand if they miss the stock may move lower
While management s discussion of business conditions on the earnings call will mostly determine the sustainability of the immediate price change and future earnings expectations it s worth having a handicapping insight into the odds of a positive EPS surprise
Zacks Consensus Estimate
This cable provider is expected to post quarterly earnings of 0 62 per share in its upcoming report which represents a year over year change of 26 5
Revenues are expected to be 25 74 billion up 17 4 from the year ago quarter
Estimate Revisions Trend
The consensus EPS estimate for the quarter has been revised 1 29 lower over the last 30 days to the current level This is essentially a reflection of how the covering analysts have collectively reassessed their initial estimates over this period
Investors should keep in mind that the direction of estimate revisions by each of the covering analysts may not always get reflected in the aggregate change
Price Consensus and EPS Surprise
Earnings Whisper
Estimate revisions ahead of a company s earnings release offer clues to the business conditions for the period whose results are coming out This insight is at the core of our proprietary surprise prediction model the Zacks Earnings ESP Expected Surprise Prediction
The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate for the quarter the Most Accurate Estimate is a version of the Zacks Consensus whose definition is subject to change The idea here is that analysts revising their estimates right before an earnings release have the latest information which could potentially be more accurate than what they and others contributing to the consensus had predicted earlier
Thus a positive or negative Earnings ESP reading theoretically indicates the likely deviation of the actual earnings from the consensus estimate However the model s predictive power is significant for positive ESP readings only
A positive Earnings ESP is a strong predictor of an earnings beat particularly when combined with a Zacks Rank 1 Strong Buy 2 Buy or 3 Hold Our research shows that stocks with this combination produce a positive surprise nearly 70 of the time and a solid Zacks Rank actually increases the predictive power of Earnings ESP
Please note that a negative Earnings ESP reading is not indicative of an earnings miss Our research shows that it is difficult to predict an earnings beat with any degree of confidence for stocks with negative Earnings ESP readings and or Zacks Rank of 4 Sell or 5 Strong Sell
How Have the Numbers Shaped Up for Comcast
For Comcast the Most Accurate Estimate is lower than the Zacks Consensus Estimate suggesting that analysts have recently become bearish on the company s earnings prospects This has resulted in an Earnings ESP of 1 08
On the other hand the stock currently carries a Zacks Rank of 3
So this combination makes it difficult to conclusively predict that Comcast will beat the consensus EPS estimate
Does Earnings Surprise History Hold Any Clue
Analysts often consider to what extent a company has been able to match consensus estimates in the past while calculating their estimates for its future earnings So it s worth taking a look at the surprise history for gauging its influence on the upcoming number
For the last reported quarter it was expected that Comcast would post earnings of 0 61 per share when it actually produced earnings of 0 65 delivering a surprise of 6 56
Over the last four quarters the company has beaten consensus EPS estimates four times
Bottom Line
An earnings beat or miss may not be the sole basis for a stock moving higher or lower Many stocks end up losing ground despite an earnings beat due to other factors that disappoint investors Similarly unforeseen catalysts help a number of stocks gain despite an earnings miss
That said betting on stocks that are expected to beat earnings expectations does increase the odds of success This is why it s worth checking a company s Earnings ESP and Zacks Rank ahead of its quarterly release Make sure to utilize our Earnings ESP Filter to uncover the best stocks to buy or sell before they ve reported
Comcast doesn t appear a compelling earnings beat candidate However investors should pay attention to other factors too for betting on this stock or staying away from it ahead of its earnings release |
WFC | Wells Fargo sues insurance unit bidder over executives poaching | By Tom Hals WILMINGTON Del Reuters Alliant Insurance Services Inc is using confidential information obtained during a failed bid for Wells Fargo Co s N WFC commercial insurance business to poach top sales executives according to a lawsuit filed by a Wells Fargo unit The lawsuit filed on Wednesday in Delaware s Court of Chancery alleges that Alliant launched an aggressive campaign to hire insurance sales executives from Wells Fargo shortly after the bank agreed to sell its business known as WFIS to USI Insurance Services in June The sale of WFIS or Wells Fargo Insurance Services USA Inc is expected to close later this year The third largest U S bank is focusing on core banking products and services as it tries to recover from a sales scandal last year As a result of Alliant s actions WFIS has already suffered and will continue to suffer irreparable harm to its business revenues and employee retention at a uniquely vulnerable period of WFIS corporate existence said the complaint Alliant which is based in Newport Beach California did not immediately respond to a request for comment WFIS is seeking an injunction to prevent Alliant from poaching its executives disgorgement of any unjustified gains from the recruitment drive and unspecified damages Alliant joined the bidding for WFIS earlier this year and signed a non disclosure agreement which prevented it from soliciting WFIS staff for 18 months according to the complaint Alliant had access to information about WFIS sales executives their employment agreements and revenue generated by its 100 largest customers among other details according to the lawsuit In addition Alliant in June hired a former WFIS executive vice president who is believed to be using confidential WFIS information to target and solicit top sales producers according to the lawsuit which did not identify the executive
Alliant s chairman and chief executive Tom Corbett is believed to be meeting with WFIS sales executives and directly participating in the recruitment drive according to the lawsuit |
WFC | Wells Fargo board not changing quickly enough NYC Comptroller | By Dan Freed Reuters Wells Fargo NYSE WFC Co needs to work more quickly to remake its board of directors following a sales scandal and public rebuke at the bank s annual meeting in April New York City Comptroller Scott Stringer said Wells Fargo last September settled with three regulators after revelations that branch staff set up as many as 2 1 million accounts without customer authorization in order to hit sales targets Since then the bank has replaced its CEO and other top executives have either resigned or been fired The bank has been hit with several regulatory inquiries and lawsuits The extent of fraud at Wells Fargo was stunning Stringer said in a statement sent to Reuters on Thursday Executives have been held responsible but now directors must answer for their part This board needs to be refreshed today Stringer oversees New York City s five public pension funds which together own roughly 600 million worth of Wells Fargo shares The funds voted their shares against 10 of 15 Wells Fargo board members ahead of the bank s annual meeting Representatives from Sard Verbinnen the public relations firm that represents Wells Fargo s board of directors did not immediately respond to a request for comment on Stringer s statement New York s comptroller would like to have seen changes to the board by now an aide said but wants at least two new board members in place before the bank s next annual proxy statement is issued likely in March Only three Wells Fargo directors received more than 90 percent support from voting shareholders in April and four directors including Chairman Steve Sanger received less than 60 percent support Six directors will reach the mandatory retirement age of 72 in the next few years and are expected to leave when they do Sanger said at the annual meeting He will hit that mark next year but would not say when he planned to retire
Wells Fargo s board and management team have taken many actions in response to its retail sales practices issues including changes in senior leadership executive accountability actions and numerous steps to ensure we make things right with our customers and other stakeholders That work continues Wells Fargo spokesman Ancel Martinez wrote in an emailed statement |
WFC | Wells Fargo to refund 80 million to customers hit by car loan insurance | Reuters Wells Fargo NYSE WFC and Co said it would reimburse about 80 million to 570 000 customers who may have been charged wrongly due to issues related to auto collateral protection insurance CPI policies Wells Fargo has been engulfed in scandal since September when it reached a 190 million settlement with regulators over complaints that its retail banking staff had opened as many as 2 1 million unauthorized client accounts The bank had fired 5 300 employees for improper sales tactics over five years but did not make much changes to policies and procedures or hold managers accountable until there was a public outcry Wells Fargo said late Thursday it would pay back 80 million to customers wrongly charged for car loan insurance in the coming months which included 64 million in cash and 16 million of account adjustments We take full responsibility for our failure to appropriately manage the CPI program and are extremely sorry for any harm this caused our customers said Franklin Codel head of Wells Fargo Consumer Lending The bank said it had started a review of the CPI program in July 2016 and discontinued the program in September based on the findings New York Times reported earlier that more than 800 000 people who took car loans from Wells Fargo were charged for auto insurance they did not need and some of the customers were still paying for it About 490 000 customers had duplicate vehicle insurance coverage and about 60 000 customers did not receive complete disclosures from vendors prior to CPI coverage Wells Fargo said
For about 20 000 customers additional costs of the CPI could have led to defaults resulting in seizure of their vehicles The bank said these customers would receive additional payments as compensation for the loss of their vehicles |
WFC | New York City Comptroller Stringer calls for new chairman at Wells Fargo | BOSTON Reuters New York City Comptroller Scott Stringer on Friday called on Wells Fargo Co N WFC to replace its chairman Stephen Sanger after the bank said customers were wrongly charged for auto loan insurance
Stringer a past critic of the bank who oversees city worker pension funds said in an emailed statement that the bank s board needs to be overhauled now |
WFC | Senator Warren calls on Fed to remove Wells Fargo board members | WASHINGTON Reuters U S Senator Elizabeth Warren called on Federal Reserve Chair Janet Yellen to remove members of Wells Fargo NYSE WFC Co s board after revelations the company improperly charged customers for auto insurance In a letter sent Friday to Yellen Warren a Democrat said the recent revelation of more improper charges at the bank indicates deep risk management problems and called for the removal of all board members who served from 2011 to 2015 when the activity reportedly occurred
The New York Times reported Friday that more than 800 000 Wells Fargo customers were charged for auto insurance they did not request |
WFC | Wells Fargo faces angry questions after new sales abuses uncovered | By Dan Freed NEW YORK Reuters New revelations that Wells Fargo Co N WFC spent years enrolling unknowing borrowers in costly auto insurance has put the bank under new pressure to answer for a months long scandal over sales practices that have harmed millions of Americans The latest news that 800 000 Wells Fargo auto borrowers were improperly charged for insurance rattled investors yet again and sent its stock down 2 6 percent on Friday Shareholders analysts lawmakers and consumer advocates demanded answers about how the situation manifested and why Wells Fargo did not disclose the problems sooner given existing turmoil over phony deposit and credit card accounts opened in customers names without their permission This is a full blown scandal again said New York City Comptroller Scott Stringer who oversees public pension funds that hold roughly 11 6 million Wells Fargo shares It s unbelievable outrageous sad and yet quintessential Wells Fargo This isn t just a corporate debacle It s caused real human harm Stringer called on the bank to install a new independent chair and immediately disclose more information Wells Fargo first became aware of potential problems a year ago when the auto lending business began receiving an unusually high number of complaints Franklin Codel head of consumer lending said in an interview The auto insurance program was quickly suspended and the problem escalated to senior management the board and regulators he said Wells Fargo planned to delay public disclosure until it could notify affected customers and reimburse them The problem with disclosing to the marketplace today or several months ago is customers start calling and asking when they re going to get their money he said It s not a great customer experience to say Yeah we ll get back to you The bank was prompted to issue a press release on Thursday evening after the New York Times reported that 800 000 of its auto borrowers were charged for insurance they did not need from January 2012 to July 2016 Wells plans to return 80 million to 570 000 customers who qualify for a refund The latest revelations echo what happened at Wells Fargo branches across the United States for years Under pressure to hit aggressive sales targets thousands of employees signed up customers for deposit and credit card accounts without their permission over a period of several years As part of a 190 million regulatory settlement in September Wells said as many as 2 1 million phony accounts were opened A class action lawsuit against Wells Fargo puts the figure at 3 5 million Matthew Preusch an attorney with Keller Rohrback which filed that lawsuit said his firm is looking into whether auto borrowers have claims against the bank It s likely to result in consumer litigation Preusch said Wells Fargo has previously said that it found no evidence of improper sales practices outside its retail banking operation An April report by the board of directors following an internal investigation did not mention auto insurance problems nor did executives discuss them during a day long investor event in May nor while presenting at conferences and hosting calls to discuss quarterly results Behind the scenes Wells Fargo s auto lending business has been going through an overhaul to improve risk management and install fresh leadership Dawn Martin Harp who headed the unit during the sales abuses retired in April Her deputy Bill Katafias also departed this year Both of those executives in my view were held accountable for their actions Codel told Reuters including from a compensation perspective Katafias did not return a call to his office at auto lender CRB Auto where he is now CEO and Martin Harp could not be reached Wall Street analysts expect the financial damage to go beyond the 80 million in reimbursements In a note on Friday Piper Jaffray s Kevin Barker predicted the true cost would be multiples of that figure with lawsuits and further customer remediation The added cost of insurance pushed 274 000 customers into delinquency and led to at least 20 000 wrongful repossessions according to the Times Since 2012 the U S Consumer Financial Protection Bureau CFPB has received 1 826 complaints about Wells Fargo vehicle loans or leases Many customer narratives in the regulator s public database detail being charged for insurance when the car was already insured elsewhere not being able to have erroneous insurance charges removed and problems with making payments One customer from 2014 called Wells immediately after realizing unneeded insurance had been added to a financing package but still was charged over several months for the guaranty When the customer asked for it to be removed Wells only promised to investigate
I feel I am being and have been scammed the car buyer wrote to the CFPB |
WFC | Wells Fargo cuts 69 executive jobs spokesman | Reuters This version of the July 28 story corrects paragraph 2 to say some executives are retiring with benefits instead of full benefits corrects paragraph 5 to say 91 executives instead of 91 regional and area presidents Wells Fargo Co N WFC said on Friday it is cutting 69 executive jobs at its retail unit as part of a restructuring in the division Some of the executives will retire with benefits while others may find positions elsewhere within the bank said Wells Fargo spokesman Paul Gomez Some of the executives may leave the bank Gomez added We have just completed the process of consolidating the Regional President and Area President roles into a new position Region Bank President Mary Mack senior executive vice president for community banking said in an internal memo seen by Reuters There will be 91 executives in the position that was newly created as part of the reorganization News of the scandal hit lender cutting senior executive jobs was earlier reported by Bloomberg Wells Fargo has been engulfed in scandal since September when it reached a 190 million settlement with regulators over complaints that its retail banking staff had opened as many as 2 1 million unauthorized client accounts
Wells Fargo shares ended down 2 6 percent on Friday |
WFC | The Best Options Trade For Wells Fargo WFC Earnings | On Friday October 14th Wells Fargo NYSE WFC will release its third quarter earnings results before the bell The company is a Zacks Rank 3 Hold and have a Value Growth and Momentum score of F
Dave will look at Wells Fargo s past earnings take a look at what is currently going on with the company and give us his thoughts on their upcoming earnings announcement
Furthermore Dave will uncover some potential options trades for investors looking to make a play on Wells Fargo ahead of earnings
Wells Fargo in Focus
Wells Fargo WFC is a diversified financial services company providing banking insurance investments mortgage and consumer finance services through stores its Internet site and other distribution channels across North America as well as internationally
Wells Fargo is expected to per share according to the Zacks Consensus Estimate Last quarter they reported an earnings miss at 1 01 per share missing the Zack s Consensus Estimate of 1 02 per share and they have an average surprise of 0 50 over the last four quarters WELLS FARGO NEW Price and EPS Surprise
Wells Fargo is trading around 45 a share and they are well off from their 52 week high of 56 34 per share
Wells Fargo is a major player within the and currently their sector is ranked in the top 42 according to the Zacks Industry Rank Having said that Wells Fargo has been front in center of a major scandal Recently the Consumer Financial Protection Bureau fined the bank 190 million for opening millions of unauthorized accounts Furthermore the bank will probably face serious legal action moving forward and their CEO had a poor showing on Capitol Hill
David poked fun at the whole scenario a couple weeks back in his You can watch the video below
Bottom Line
How should investors play Wells Fargo ahead of their earnings report For insights on the best options trades make sure to join David s Live Trader Service for future earnings announcements The Best Worst of ZacksToday you are invited to download the full up to the minute list of 220 Zacks Rank 1 Strong Buys free of charge From 1988 through 2015 this list has averaged a stellar gain of 26 per year Plus you may download 220 Zacks Rank 5 Strong Sells Even though this list holds many stocks that seem to be solid it has historically performed 11X worse than the market |
WFC | 4 Things To Watch When Wells Fargo Reports Earnings On Friday | by Clement Thibault
Wells Fargo NYSE WFC the San Francisco based financial institution which offers a variety of consumer and commercial banking and brokerage services will report Q3 2016 results on Friday October 14th before the markets open
1 Earnings and revenue
Wells Fargo is expected to report 1 01 of earnings per share on 22 06 billion in revenue From an earnings perspective Wells Fargo has been extremely stable coming in at just over 1 EPS for the past three years Revenue has steadily increased over that same period and Wells Fargo is expected to have grown about 1 this quarter as well
2 Employee fraud
Without doubt the big focus this quarter will be on the fraud committed by thousands of Wells Fargo employees over the past five years By Chairman and CEO John G Stumpf s own admission Wells Fargo employees created over 2 million illegal WFC consumer accounts in order to meet extremely aggressive corporate sales expectations Over the same five year period Wells Fargo fired approximately 1 000 employees per year or more than 5 300 employees involved in the ongoing fraud Yet until the media broke the story last month cheating appears to have continued within the company s rank and file according to since 2005 well before the official version of the ethics scandal broke
Obviously this is problematic in a variety of ways Reputation is a critical business asset Loss of reputation especially for an institution whose core business involves holding and protecting customer funds on a daily basis can be catastrophic WFC was once considered one of the US s most respected financial institutions though that s no longer necessarily the case Still a mass exodus from Wells Fargo is not expected since customers hurt by the fraud have likely already left at this point
Personal relationships are another key building block in this line of business Until recently it was easy enough for management to in order to appease customers who were satisfied overall But now that the story has been widely covered and new details of the extent and range of the fraud keep leaking out would you open a new account at Wells Fargo We believe that potential new customers will at least be wary of an ongoing relationship with the bank and suspicious of its practices for at least a few more of quarters
Then of course there s the big question of management At least five full years of ongoing fraud 2 million fraudulent accounts opened 5 300 employees fired and no one at the top took any action to stop these practices once and for all
This mishandling of the situation by the bank s management is either borderline criminal or grossly incompetent Either way it reflects very poorly on top executives And even though Wells Fargo that they would claw back CEO Stumpf s compensation of 41 million along with forcing Carrie Tolstedt the head of the bank s community banking division from which the scandal emanated to surrender 19 million worth of stock grants it s difficult to understand why this ethical lapse was allowed to continue for so long
Tolstedt has left the bank and just this past Monday WFC announced a reorganization of its top rank executives solidifying the leadership structure beneath Timothy J Sloan the current president and COO of the bank who was once the head of its wholesale banking division a unit that was not involved in the current scandal Just yesterday Stumpf announced he was leaving the bank
3 Steadily increasing numbers
Putting the fraud aside for a moment Wells Fargo is considered to be one of this country s strongest banks and is generally considered a safe investment With revenues of over 20 billion which have increased steadily during the past eight quarters indeed they ve been on an upward trajectory for well over a decade the bank keeps on growing During the past quarter net interest income grew by 66 million while the net interest margin dropped another four basis points Net interest margins fell in every one of the past five quarters yet interest income grew Over the past year Wells Fargo provided another 67 million in loans giving it an all time high 969 billion dollars in net loans assets Which means that overall Wells Fargo has not yet reached its full growth potential Put simply despite current economic conditions and ongoing low interest rates Wells Fargo is still strong
4 Buffet s Biggest Financial Sector Holding
It s difficult to talk about Wells Fargo without mentioning Warren Buffet According to CNBC s Berkshire Hathaway NYSE BRKa Buffet owns approximately 10 of Wells Fargo In addition of the Oracle of Omaha s vaunted portfolio valued at around 22 billion dollars It s Buffet s largest financial sector stake by far
In July he requested approval from the Federal Reserve asking for permission to enlarge his position in the company beyond the government s 10 threshold as regulations require On September 21st Buffett said that he will not comment on the bank s current situation claiming it will lead down too many paths One has to wonder if Buffett was aware of the unethical activities at WFC
Nevertheless the burning question is what will Buffett decide to do Any move by Buffet to divest even the smallest portion of his stake would lead to a major selloff of the stock and for good reason However Buffett is not one to give up easily nor to be influenced by short term turbulence It s likely that Buffett will ride out the storm But that s not a given at this stage
Conclusion
Is Wells Fargo a good and profitable business Yes Even in the current slow growth economic environment
And for savvy investors a positive by product of its recent negative publicity is that it s priced at a very attractive entry point Wells Fargo is currently trading at around 45 as of yesterday s close with a price to book ratio of 1 312 the lowest ratio for the bank since February 2013 Its price to earnings ratio 11 hasn t been this low since October 2013
Even under the current cloud of scandal the bank is far bigger wealthier and stronger than it was three years ago We believe the wildcard is Buffet since any single word or move he might make could have terrifying consequences for WFC shareholders Right now we think Wells Fargo is a long term buy when judged by almost every parameter but keep an eye on the Oracle of Omaha |
CMCSA | Online betting firms gamble on soccer mad Nigeria | By Alexis Akwagyiram and Didi Akinyelure LAGOS Reuters Online sports betting is booming in soccer mad Nigeria largely thanks to payment systems developed by homegrown technology firms that are starting to make online businesses more viable For years mobile payments failed to take off in Nigeria as they have in countries such as Kenya where Safaricom s M Pesa money transfers have fostered a culture of cashless payments Fear of electronic fraud and slow internet speeds have held Nigerian online consumers back but betting firms says the new fast digital payment systems underpinning their websites are changing attitudes towards online transactions We have seen significant growth in the number of payment solutions that are available All that is definitely changing the gaming space said Seun Anibaba CEO of Lagos State Lotteries Board gaming regulator in Nigeria s commercial capital The operators will go with whoever is faster whoever can connect to their platform with less issues and glitches he said adding that taxes from sports betting in Lagos State rose 30 percent to 40 percent in 2017 from 2016 That growth has been matched by a rise in web payments according to data from the Nigeria Inter Bank Settlement System NIBSS which is owned by the central bank and licensed banks In 2016 there were 14 million web payments worth a total 132 billion naira 420 million Transactions leapt to 29 million worth 185 billion in 2017 and in the first quarter of 2018 there were nearly 10 million worth 61 billion With a young population of nearly 190 million rising mobile phone use and falling data costs Nigeria has long been seen as a great opportunity for online businesses once consumers feel comfortable with electronic payments Online gambling firms say that is happening though reaching the tens of millions of Nigerians without access to banking services remains a challenge for pure online retailers British online betting firm Betway opened its first African business in Kenya in 2015 followed by Uganda Ghana and South Africa It launched in Nigeria in January There is a gradual shift to online now that is where the industry is going Betway s Nigeria manager Lere Awokoya said The growth in the number of fintechs and the government as an enabler has helped the business to thrive These technological shifts encouraged Betway to start operating in Nigeria he said FINTECH COMPETITION Betting firms cashing in on the soccer frenzy whipped up by Nigeria s participation in the World Cup say they are finding the payment systems created by local startups such as Paystack are proving popular online Paystack and another local startup Flutterwave both founded in 2016 are providing competition for Nigeria s Interswitch which was set up in 2002 and was the main platform used by businesses operating in Nigeria We added Paystack as one of our payment options without any fanfare without announcing to our customers and within a month it shot up to the number one most used payment option on the website said Akin Alabi founder of NairabBET He said NairaBET the country s second biggest betting firm now had 2 million regular customers on its website up from 500 000 in 2013 and Paystack remained the most popular payment option since it was added in late 2017 Paystack was set up by two Nigerian computer science graduates Shola Akinlade and Ezra Olubi who received early stage funding in Silicon Valley s Y Combinator programme In December 2016 it raised 1 3 million from investors including China s Tencent and Comcast NASDAQ CMCSA Ventures in the United States Paystack based in the frenetic Ikeja district of Lagos said the number of monthly transactions it processed rose from about 8 000 in early 2016 to more than 900 000 as of June 2018 In early 2016 we were processing about 3 000 a month Today we process well over 11 million every single month said Emmanuel Quartey Paystack s head of growth He said an ecosystem of developers had emerged around Paystack creating software to integrate the platform into websites We have seen a growth in that community and they have carried us along said Quartey Paystack said it enables payments for a number of betting firms but also a wide range of businesses from utility services to transport companies to insurer Axa Mansard Flutterwave co founded by Nigerian entrepreneur Iyinoluwa Aboyeji is also backed by the Y Combinator program as well as venture capitalists Greycroft Partners and Green Visor Capital and the Omidyar Network It raised 10 million last year FOREIGN INVESTMENT Shifts in Nigeria s payment culture have coincided with the arrival of foreign investors hoping to tap into sports betting Industry experts say the sector generates about 1 billion a year and is likely to grow faster than in South Africa and Kenya where the business is more developed Russia s 1XBet and Slovakia s DOXXbet have both set up in Nigeria in the last two years while Italy s Goldbet was ahead of the trend taking a 50 percent stake in market leader Bet9ja when the Nigerian firm launched in 2015 NairaBET s Alabi said its sales were split between shops and online but the ease of electronic payments cost of running shops and ability for customers to avoid the stigma of gambling in public meant online transactions would grow But despite advances in digital payments Kunle Soname chairman and co founder of Bet9ja said it was important to have a shop network not least because many customers still remain reluctant to spend online He said the company with about 60 percent of Nigeria s sports betting market had an extensive network Nigerian betting shops often act as social hubs where customers can watch soccer free of charge while placing bets At a BetKing hall deep inside the bustling Oshodi market in Lagos dozens of soccer fans gathered to watch Nigeria s final warm up game before the World Cup Richard Onuka a factory worker who earns 25 000 naira a month was fixated on a TV screen inside He said he started gambling three months ago and bets up to 1 000 naira a day Since I have been playing I have not won anything but I believe that one day I will win said Onuka |
CMCSA | Carlyle to acquire majority stake in Codorn u | US buyout firm Carlyle CG 1 4 is reportedly nearing a deal to acquire a majority stake in Codorn u a Spanish maker of sparkling wine Carlyle is expected to help family owned business expand into new markets and grow its footprint in existing ones through acquisitions The deal is expected to value the stake 390M 452M Source Financial TimesNow read |
CMCSA | Reports Comcast in nationwide service outage | The social media team at Comcast CMCSA 2 3 is acknowledging what looks more and more like a nationwide outage in its service TV and Internet are down for customers around the country with complaints spiking over the past hour The company says it s working to restore services as quickly as possible Now read |
CMCSA | TEGNA TGNA Acquires WTOL KWES Boosts Portfolio Strength | TEGNA NYSE TGNA recently announced that it has completed the acquisition of WTOL in Toledo OH and KWES in Midland Odessa TX from Gray Television NYSE GTN The all cash deal worth 105 million is expected to be accretive to free cash flow immediately after closing of the transaction and to earnings in less than a year after its closure Moreover the transaction will have no material impact on TEGNA s leverage which is a positive Further the acquisition has expanded TEGNA s market reach The company currently operates 49 TV stations in 41 markets catering to one third TV households in the United States Notably TEGNA remains the largest NBC affiliate group the second largest CBS affiliate group and the largest owner of Big 4 affiliates in the top 25 markets per Management TEGNA Inc Revenue TTM Acquisitions Solid Political Revenues to Aid Top LineTEGNA which reaches 50 million users on TV and 30 million users on digital platforms each month is seeking acquisitions to boost portfolio and drive top line growth The company is active in expanding its market reach through acquisitions The acquisitions are likely to result in efficient cost structurethereby driving profitability KWES a Comcast NASDAQ CMCSA owned NBC affiliate is expected to strengthen TEGNA s presence in the state of Texas where it currently covers 87 of TV household and owns 12 stations Moreover WTOL a CBS NYSE CBS affiliate which reaches about 380 000 TV households joined TEGNA s WKYC and WZZM to serve Ohio and Michigan users Both WTOL and KWES are strong local media brands that are well placed in their key markets per Management Prior to this acquisition TEGNA acquired the broadcasting stations of Midwest Television which include KFMB TV KFMB D2 CW KFMB AM and KFMB FM The deal expanded the company s U S television household reach by more than one million Moreover the presence of WTOL WKYC and WZZM in key political areas is expected to boost ad dollars momentum in 2019 as well owing to the upcoming U S state elections Notably solid political advertising revenues constituted one of the main contributors to top line growth Earnings were up 16 1 year over year to 538 9 million in third quarter fiscal 2018 Additionally year to date political revenues 238 million recorded an all time high including presidential election years and came well above the previous mid term election in 2014 Further for fourth quarter 2018 TEGNA expects revenues to increase in the range of 30 32 on a year over year basis primarily driven by political and subscription revenue growth TEGNA currently carries a Zacks Rank 3 Hold You can see The Hottest Tech Mega Trend of AllLast year it generated 8 billion in global revenues By 2020 it s predicted to blast through the roof to 47 billion Famed investor Mark Cuban says it will produce the world s first trillionaires but that should still leave plenty of money for regular investors who make the right trades early |
CMCSA | Why Comcast CMCSA Is Poised To Beat Earnings Estimates Again | Have you been searching for a stock that might be well positioned to maintain its earnings beat streak in its upcoming report It is worth considering Comcast CMCSA which belongs to the Zacks Cable Television industry
When looking at the last two reports this cable provider has recorded a strong streak of surpassing earnings estimates The company has topped estimates by 6 56 on average in the last two quarters
For the most recent quarter Comcast was expected to post earnings of 0 61 per share but it reported 0 65 per share instead representing a surprise of 6 56 For the previous quarter the consensus estimate was 0 61 per share while it actually produced 0 65 per share a surprise of 6 56
Price and EPS Surprise
With this earnings history in mind recent estimates have been moving higher for Comcast In fact the Zacks Earnings ESP Expected Surprise Prediction for the company is positive which is a great sign of an earnings beat especially when you combine this metric with its nice Zacks Rank
Our research shows that stocks with the combination of a positive Earnings ESP and a Zacks Rank 3 Hold or better produce a positive surprise nearly 70 of the time In other words if you have 10 stocks with this combination the number of stocks that beat the consensus estimate could be as high as seven
The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate for the quarter the Most Accurate Estimate is a version of the Zacks Consensus whose definition is related to change The idea here is that analysts revising their estimates right before an earnings release have the latest information which could potentially be more accurate than what they and others contributing to the consensus had predicted earlier
Comcast has an Earnings ESP of 0 36 at the moment suggesting that analysts have grown bullish on its near term earnings potential When you combine this positive Earnings ESP with the stock s Zacks Rank 3 Hold it shows that another beat is possibly around the corner The company s next earnings report is expected to be released on January 23 2019
When the Earnings ESP comes up negative investors should note that this will reduce the predictive power of the metric But a negative value is not indicative of a stock s earnings miss
Many companies end up beating the consensus EPS estimate though this is not the only reason why their shares gain Additionally some stocks may remain stable even if they end up missing the consensus estimate
Because of this it s really important to check a company s Earnings ESP ahead of its quarterly release to increase the odds of success Make sure to utilize our Earnings ESP Filter to uncover the best stocks to buy or sell before they ve reported |
WFC | Wells Fargo ordered to pay 575 000 reinstate whistleblower | By Dan Freed Reuters The U S Department of Labor on Friday ordered Wells Fargo NYSE WFC Co to pay 575 000 and to rehire a whistleblower the bank had dismissed in September 2011 after the former employee raised concerns over the opening of customer accounts without their knowledge the agency said in a statement The name of the whistleblower was not disclosed We take seriously the concerns of current and former team members wrote Wells Fargo spokeswoman Richele Messick in an emailed statement to Reuters This decision is a preliminary order and to date there has been no hearing on the merits of this case We disagree with the findings and will be requesting a full hearing of the matter Wells Fargo was fined last year for opening up to 2 1 million customer accounts without their knowledge over several years to meet aggressive sales targets The revelation damaged the bank s reputation spurred investors to sell its shares for several weeks and led to the resignation of its chief executive last year Despite news reports and lawsuits claiming the bank had retaliated against whistleblowers an investigative report by the bank s board of directors released on April 10 said based on a limited review completed to date outside law firm Shearman Sterling had not identified a pattern of retaliation against employees in Wells Fargo s branch banking unit who complained about sales pressure or practices In a different case the Department of Labor in April ordered Wells Fargo to reinstate a whistleblower though that former staffer s concerns related to bank mail and wire fraud things that were not at issue in the sales practices scandal
Wells Fargo still faces probes from federal state and local government agencies including the U S Department of Justice as well as a number of private lawsuits according to its quarterly securities filing in May |
WFC | Home BancShares declares 0 11 dividend | Home BancShares NASDAQ HOMB declares 0 11 share quarterly dividend 22 2 increase from prior dividend of 0 09 Forward yield 1 8 Payable Sept 6 for shareholders of record Aug 16 ex div Aug 14 Now read |
WFC | Wells Fargo asks court to require client information be returned | By Elizabeth Dilts NEW YORK Reuters Wells Fargo NYSE WFC Co has asked judges in New York and New Jersey to require a lawyer representing a former employee to immediately return reams of client information the bank mistakenly sent to the attorney a bank spokeswoman said on Monday In response to a New Jersey court case involving a dispute between ex Wells Fargo employee Gary Sinderbrand and his brother who also worked there the bank disclosed tens of thousands of client names Social Security numbers account balances and more a lawyer for Sinderbrand wrote in a letter to the court The bank wants all the information returned immediately It said it was mistakenly sent by Angela Turiano who represents Wells as an attorney at Bressler Amery Ross We take the security and privacy of our customers information very seriously said Shea Leordeanu a spokeswoman for the bank s brokerage Wells Fargo Advisors Our goals are to ensure the data is not disseminated that it is rapidly returned and that we ensure the discovery process going forward in the cases is working as it should Turiano directed Reuters inquiries to Leordeanu Sinderbrand who is involved in a parallel lawsuit against his brother and Wells Fargo in New York state court has not shared the information publicly The New York Times reported on the release of data last week The documents and spreadsheets containing client information were originally provided to Aaron Miller Sinderbrand s lawyer in the New Jersey case Miller later shared knowledge of what the documents contained to Aaron Zeisler who is representing Sinderbrand in the New York case In a letter to New York Supreme Court Judge Charles Ramos on Saturday Zeisler described Sinderbrand as the unwilling recipient of personal information belonging to thousands of clients It was not immediately clear if Wells Fargo broke any rules or laws by disclosing client information However both New York and New Jersey have ethics rules that require lawyers to notify the other party if they receive information that was inadvertently sent In his letter to Judge Ramos Zeisler wrote that he notified Turiano on July 20 about the information but that Wells Fargo s attorneys have not yet described which documents they want returned
Zeisler declined to comment Miller could not immediately be reached for comment |
WFC | Dollar hits 13 month low as Fed meeting begins euro near 2 1 2 year high | By Dion Rabouin NEW YORK Reuters The dollar fell to its lowest level since June 2016 against a basket of major currencies on Tuesday as investors grew wary of the short term U S economic outlook ahead of a meeting by the Federal Reserve and got more bullish on the euro zone The euro rose to its highest point since August 2015 and was just a hair below a 2 1 2 year high boosted by a stronger than expected German business survey The Ifo business sentiment index hit its highest level on record showing that Germans were euphoric about the country s business climate The Fed starts a two day meeting later on Tuesday with no change to interest rates expected Markets give a less than 50 percent probability of a rate increase before the end of the year according to CME s FedWatch tool With minute expectations for an increase in overnight interest rates investors will be looking for the U S central bank s outlook on trimming its 4 5 trillion in bond holdings said Eric Nelson currency strategist at Wells Fargo NYSE WFC The euro rose to a high of 1 1711 matching its high from Aug 24 2015 and just below its highest level since January 2015 That represented an important technical level Nelson said What you have is markets pushing it toward that level but just waiting on another catalyst to break through he said Whether it s the Fed or U S political developments that could be influential but for now it s just consolidating below that key level The euro was last up 0 4 percent to 1 1683 Investors will be watching the U S Senate s vote on a repeal of the 2010 Affordable Care Act which President Donald Trump and Republicans have vowed to undo Republicans have a slim majority in the Senate meaning they can withstand only a few defections within their ranks in the face of united opposition from Democrats The uncertain healthcare vote as well as an investigation into Russia s meddling in the 2016 U S election and its possible collusion with the Trump campaign has cast a cloud over the Republican president s pledges to cut taxes and ramp up spending analysts said weakening expectations for U S growth and inflation
The dollar index DXY earlier fell to its lowest level since June 2016 at 93 638 It has fallen nearly 4 percent over the last month and more than 8 percent this year It was last down 0 2 percent at 93 811 |
WFC | Wells Fargo declares 0 39 dividend | Wells Fargo NYSE WFC declares 0 39 share quarterly dividend 2 6 increase from prior dividend of 0 38 Forward yield 2 83 Payable Sept 1 for shareholders of record Aug 4 ex div Aug 2 Now read |
WFC | Fed holds rates steady expects portfolio cuts relatively soon | By Jason Lange and Lindsay Dunsmuir
WASHINGTON Reuters The Federal Reserve kept interest rates unchanged on Wednesday and said it expected to start winding down its massive holdings of bonds relatively soon in a sign of confidence in the U S economy
The Fed kept its benchmark lending rate in a target range of 1 00 percent to 1 25 percent as expected and said it was on track to continue the slow path of monetary tightening that has lifted rates by a percentage point since 2015
In a statement following a two day policy meeting the U S central bank s rate setting committee indicated the economy was growing moderately and job gains had been solid
It also noted that both overall inflation and a measure of underlying price gains had declined trends which have worried some policymakers but that it expected the economy to continue strengthening
The committee expects to begin implementing its balance sheet normalization program relatively soon the Fed said adding that it would follow a plan outlined in June to trim its holdings of U S Treasury bonds and mortgage backed securities
U S stock prices rose following the release of the policy statement while yields on U S government debt fell The dollar dropped against a basket of currencies
After pushing rates nearly to zero to fight the 2007 2009 financial crisis and recession the Fed pumped over 3 trillion into the economy in a bond buying spree to further reduce rates Its balance sheet has grown to 4 5 trillion
The statement cemented expectations the Fed will announce at its next policy meeting in September the start of its balance sheet reduction plan marking the end of a controversial tool that drew criticism from Republican lawmakers in Congress
The Fed all but told the market the balance sheet run off will start in September said Brian Jacobsen an investment strategist at Wells Fargo NYSE WFC Funds Management in Menomonee Falls Wisconsin
INFLATION JITTERS
Torsten Slok an economist at Deutsche Bank DE DBKGn said the Fed appeared keen to begin balance sheet reduction given the uncertainty over whether President Donald Trump will nominate Fed Chair Janet Yellen for another four year term
Trump told the Wall Street Journal this week that Yellen whose current term expires in February was among several candidates he would consider to lead the central bank
While Fed researchers have concluded that bond buying only modestly boosted the economy Yellen has said the central bank could turn to asset purchases again if the economy fell into a deep rut
Steady job creation in the economy has pushed the U S unemployment rate to 4 3 percent near a 16 year low
The Fed had previously signaled it would begin to trim its balance sheet this year
At the same time a slowdown in inflation has caused jitters among some Fed officials who are concerned inflation has been below the central bank s 2 percent target for five years
The Fed s preferred measure of underlying inflation dropped to 1 4 percent in May from 1 8 percent in February The Fed had described inflation as being somewhat below target in its policy statement in June but on Wednesday it simply stated that it was below 2 percent
That I think is a signal that it s a slightly more cautious tone said Omer Esiner an analyst at Commonwealth FX in Washington |
WFC | Lawyers for ex Wells Fargo broker ordered to hand over client data | By Elizabeth Dilts NEW YORK Reuters A New Jersey court on Wednesday ordered lawyers for a former Wells Fargo NYSE WFC Co employee to hand over reams of customer information that the bank s outside counsel accidentally provided the lawyers in response to a subpoena Lawyers for the former employee Gary Sinderbrand must give court authorities a disc that one of the lawyers said contains the names Social Security numbers and account balances of tens of thousands of Wells Fargo clients according to the order The New Jersey decision follows a separate ruling by a New York court on Tuesday that required Sinderbrand s lawyers to halt any review of or planned action to use or share the data and scheduled a hearing for arguments as to whether the lawyers should be required to return the disc to the bank Sinderbrand is suing his brother whom he worked with at Wells Fargo Advisors in New Jersey over the separation of their joint business and in New York for defamation Sinderbrand s lawyers have said that a lawyer for Wells Angela Turiano of law firm Bressler Amery Ross shared the data in response to a subpoena in the New Jersey case Wells Fargo is not a party to the New Jersey case although its brokerage Wells Fargo Advisors is a party to the New York case Although Turiano apparently shared the information by mistake Sinderbrand s lawyer Aaron Zeisler argued in a letter filed in the New York case that the data should not be handed over to Wells to be destroyed because disclosure of the data may have violated privacy laws The matter has embarrassed Wells Fargo which has struggled to restore trust after an unrelated sales scandal in which branch employees opened as many as 2 1 million phony deposit and card accounts in customers names without their permission Shea Leordeanu a spokeswoman for Wells Fargo Advisors said the bank takes responsibility for releasing the information This was the unfortunate result of an unintentional human error involving a spreadsheet Leordeanu said in a statement The rulings are a positive result of our ongoing efforts to make things right she added Wells Fargo has determined what went wrong and all information that is released in connection with legal matters will now undergo increased review she said The bank is now reviewing whether any client information was shared more widely and will contact clients if so The New Jersey order requires that Sinderbrand and his lawyer delete any digital file copies they made from the information disclosed in the subpoena and that they give the court the encrypted CD Turiano provided and any copies The court will safeguard the CD until a hearing on Wells requests scheduled for September The data release was first reported by The New York Times last week in a story citing one of Sinderbrand s lawyers as a source |
WFC | ETF Strategies For Q4 | The final quarter of 2016 has started on a quiet note In the last nine months the broader market remained fitful thanks to oil price volatility global growth issues Brexit referendum and indecision of the Fed regarding rate hike Still markets ushered in gains occasionally on dovish central banks in the developed world
Any good news from the oil patch and favorable U S economic data points boosted investors sentiment sporadically All these mixed forces have helped AX SPY gain over 7 7 V DIA add over 7 5 and move higher by about 4 7 in the first nine months
Against such a backdrop the stage has been set for Q4 Let s take a look at the key events that are coming up and the winning strategies to deal with each event
Fed Rate Hike
The odds of a rate hike in December spiked after the Fed stayed put but maintained an upbeat outlook on the U S economyin its September meeting Though Fed chief Yellen indicated no for a hike market watchers expect one in December as the November meeting will happen just before the presidential election a highly sensitive time for a rate hike Solid manufacturing and service sector readings and upwardly revised Q2 GDP data up 1 4 fueled the rate hike bet further
Sectors to Hit Flop Investors downplaying Wells Fargo NYSE WFC s recent sales scandal or questions over the financial health of Deutsche Bank DE DBKGn may consider investing in financial ETFs like Financial Select Sector SPDR ETF NYSE XLF or PowerShares KBW Bank ETF as these stocks perform better in a rising rate environment read
Plus consumer discretionary ETFs like Consumer Discret Select Sector SPDR ETF and tech ETFs like Technology Select Sector SPDR ETF NYSE XLK also perform well in the early rate hike cycle as per historical standard This is because a growing economy normally helps in creating the which leads consumers to spend more as their asset value rises
On the other hand high yielding sectors will likely falter in a rising rate environment So Utilities Select Sector SPDR ETF NYSE XLU and Vanguard REIT ETF could be at risk Having said this we would like to note that these are just initial blows and after a few upheavals things should settle down Investors dreading interest rate hike may also try out this rate restricted ETF PowerShares S P 500 ex Rate Sensitive Low Volatility ETF Fidelity Dividend ETF for Rising Rates can also be a good pick right now
Where Will Bond Markets Go
With Fed hike concerns doing rounds and rates rising by leaps and bounds bond ETFs started to underperform at the onset of Q4 Several niche bond ETFs may come to investors rescue in this situation
Floating rate bond ETFs like iShares Floating Rate Bond bank loan ETFs like Highland iBoxx Senior Loan ETF AX SNL inverse Treasury ETFs like Direxion Daily 20 Year Treasury Bear 3X ETF or Sit Rising Rate ETF and negative duration bond ETFs like WisdomTree Barclays LON BARC US Aggregate Bond Negative Duration Bond ETF are some of the funds to look out for read
Presidential Election
The presidential election is slated on November 8 and the gap between Democratic candidate Hillary Clinton and Republican candidate Donald Trump is close As Clinton had a 48 4 chance of winning as of October 6 2016 while Trump had 41 8 chances Since the wind is in favor of Clinton right now especially after the apparent win in the first presidential debate a few Clinton friendly investments deserve a look
We suggest medical devices ETFs like iShares US Medical Devices ETF as Clinton is viewed as the successor of Obamacare policy However thanks to her constant exasperation about the price gouging issues in the pharma sector edgy investors may stay away from pharma and biotech ETFs though the biotech space is also marching higher on increasing mergers and acquisitions
Other corners of the market that will benefit from a Clinton presidency are clean energy ETFs like PowerShares WilderHill Clean Energy Portfolio ETF and defense ETF like iShares US Aerospace Defense HN ITA read
Holiday Season
As we all know Q4 is known for its festive events As loads of retail sales boosting events Halloween Thanksgiving Cyber Monday Black Friday and Christmas fall in this quarter all eyes must be on the performance of retailers
Research agency expects holiday spending to rise 3 6 4 from this November through January in line with 2015 On the other hand Kantar Retail expects a 3 8 jump in spending higher than the 3 4 gain seen in the last holiday season also noted that online sales will surge about 16
So one can follow Amplify Online Retail ETF First Trust Dow Jones Internet ETF and VanEck Vectors Retail ETF V RTH for gains read
Oil Output Curb in November
A surprise OPEC move in September that hints at capping its oil output for the first time in eight years in the OPEC s November meeting will keep oil investors on their toes Chances are high that oil will remain steady in the meantime barring any sudden setbacks but any confusion in reaching the definitive agreement may drag oil down severely Plus are still unsure if a proposed output cut will be enough to bring oil out of the muted price range So oil ETFs including United States Oil NYSE USO V USO and United States Brent Oil AX BNO should be in focus read
Volatility to Hold Reins With so many key factors lined up for Q4 wild market swings are expected Investors can deal with this in various ways The first way out that comes to mind is the low volatility ETFs like The Legg Mason Low Volatility High Dividend ETF and PowerShares S P SmallCap Low Volatility Portfolio ETF Defensive ETFs like U S Market Neutral Anti Beta Fund and AdvisorShares Active Bear ETF should also help
However there is another option in queue the volatility ETF basket including the likes of C Tracks on Citi Volatility Index ETN and ProShares VIX Short Term Futures As the name suggests volatility products are pretty erratic in nature and thus suit investors with a short term notion
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WFC | S P 500 Snapshot A Modest Gain On A Surge In Oil | Oil surged Moday with West Texas Crude up 3 09 The S P 500 rallied at the open to its 0 74 intraday high 20 minutes into the session It then traded sideways until late morning and then gradually drifted downward to its more modest closing gain of 0 46
Here is a snapshot of past five sessions in the S P 500
This afternoon Gallup released the results of its Q3 survey of investor confidence a joint effort with Wells Fargo NYSE WFC The headline says it all the highest since July 2007 Interestingly enough the S P 500 hit its pre crash peak on October 9 2007 the ninth anniversary of which was yesterday
Here is daily chart of the SPDR S P 500 NYSE SPY ETF which gives a better sense of investor participation in today s trade Volume was 41 below its 50 day moving average In fact over the approximately five and a half month in the chart below volume has generally been light on gains and stronger on declines
A Perspective on Drawdowns
Here s a snapshot of selloffs since the 2009 trough
Here is a more conventional log scale chart with drawdowns highlighted
Here is a linear scale version of the same chart with the 50 and 200 day moving averages
A Perspective on Volatility
For a sense of the correlation between the closing price and intraday volatility the chart below overlays the S P 500 since 2007 with the intraday price range We ve also included a 20 day moving average to help identify trends in volatility |
WFC | Last Quarter Might Be A Downer For Stock Markets | The September ending quarter is now in the history books Investors will soon be receiving their quarterly portfolio reports in the mail and grinning from ear to ear over their gains for nine months The Dow Jones Industrial Average is up 5 1 for the year Both the Nasdaq and the S P 500 are up 6 1 for 2016 as of the end of September
What s not to like As long as you look in the backwards direction you may continue smiling but if you look forward you might be disturbed by what analysts even the ones that are normally positive and optimistic are saying about the last quarter of 2016
Central bankers got us into the present market mess and their banking brethren are not doing much in the way of helping either Add current events to a super nasty presidential election in the U S and you have a brewing recipe for disaster on all fronts Yes the negative crowd has finally put a pale on even the most optimistic forecast for equities over the next three months
Volatility will certainly spike as Election Day in November draws near but a potential rate hike by the Fed in late December will continue the uncertainty and according to naysayers will put a bullet in this Bull market s head
Pundits are once again pointing to the Shiller PE Ratio and its portrayal of bad times on the near term horizon
The current data point is high by any measure It suggests that a near 27 multiple of adjusted earnings for valuations of S P 500 participant stock issues is way too high for comfort The current territory was last traversed right before the Great Recession unfolded
If investors unwarily believe that the gains depicted on their current portfolio reports are an indication that more buying is in order then this chart value can only increase over time Their enthusiasm may soon however be dampened by press hysteria concerning whether the Fed will actually follow through on its rate hike plans
Make no mistake about it Bankers are not our friends
It is no mystery as to why investors have created a bubble in asset valuations the world over 2016 began with a downdraft in Chinese equities Global central bank policy of paper money value dilution coupled with near zero to negative interest rates has driven capital away from savings into whatever can produce a decent return regardless of the risk As a result equity markets have been the ultimate beneficiaries of cheap money
To compound the situation even further corporations have shunned investments for more equipment and jobs and piled available funds into stock buy back programs The reason is simple Executive management bonuses are tied to stock appreciation an easy variable to manipulate when you can reduce outstanding shares on a whim
It remains to be seen how central bankers will unravel this market mess but when asked the answer is always gradually over anywhere from five to eight years Janet Yellen recently gave her critics more ammunition when she said she might consider buying stocks as if that ploy would stall a collapse in fairytale valuations
Stock markets will not wait that long to correct 2017 has already been forecast to be rife with troubled waters but if the Fed re launches its normalization scenario in December we can only wish for some other positive December surprise to bolster stock values for a few more months at best Sooner or later the doom and gloomers will finally hit the nail on the head Stocks will fall and global liquidity will suffer in the balance
Central banks however are not the only problem in the banking community Deutsche Bank AG DE DBKGn NA O N NYSE DB and Wells Fargo NYSE WFC seem to be doing their level best to roil their own critics into a frenzy The former has been known to take on far too much risk in its growing portfolio including the largest overhang in the derivatives market of any major bank on the planet
The U S Justice Department recently fired its first round over the Deutsche Bank bow when it threatened the bank with a 14 billion fine On the other front Wells Fargo s fraudulent bank account scandal has drawn a raft of reprimands and recriminations from every quarter despite its attempts to pay fines and dismiss its bad behavior
The remainder of major banking institutions have also reeled from the onslaught of billions in fines over the past decade for its transgressions during the Great Recession and beyond including a massive scandal in fixing both foreign exchange and Libor rates for personal advantage
Despite Dodd Frank and other global legislation designed to a halt risky behaviors these banks continue to act as if they have created a new economic model the constant trading of global bond issues on the casino of their own making Prices for these obscure issues do not reflect true market forces but are determined via sophisticated academic pricing models
It might come as a surprise to many but our global bond markets are twice the size of our equity markets The S P 500 Index has been flat for months but long term interest rates have been falling An inverted yield curve is brewing just around the corner a tell tell sign of an imminent recession At some point every quantitative robot for banks and hedge funds will issue sell signals at the same time recreating the disaster from eight years ago It will be d j vu all over again Liquidity will be nowhere to be found
Are there other signs in our financial markets that liquidity might be an issue
High yield and interest rate sensitive issues took a beating in the markets yesterday entirely due to Mario Draghi hinting that the ECB might begin tapering its bond purchases in advance of the scheduled end date next year Many analysts have described this event as a wake up call for all investors that have become too enamored with securities in their respective portfolios that are delivering high returns
The message is that when the crunch comes they could easily lose most of their positive returns for this year in a single day These same analysts warned that this event was not an alarm but only a suggestion of what might transpire when interest rates begin to rise
Sooner or later investors will pay a price for the cheap money that has bolstered financial markets across the globe Has everyone forgotten about the infamous taper tantrums of 2013 the time when the Fed suggested that it had to start tapering its bond purchase in the free market The ECB is definitely a few years behind the Fed but it is a given that the tapering call to arms is also in their playbook going forward
The U S economy continues to show modest progress toward economic targets and there are glimmers from recent PMIs in other markets that we may be seeing positive signs that a global resurgence of growth is not too far away But Europe is nowhere near their targets It is too soon to wave the Euro flag and Brexit is still an issue as well
What should investors know about U S presidential election market impacts
The prevailing press narrative about the upcoming U S presidential election is that it will be disruptive both before during and after the process has concluded Uncertainty will reign as will the volatility that it generates The following chart however is a type of fact check on this general perception of what the reality of the situation truly is
The chart depicts the results for the S P 500 both one month before a presidential election and for the full year following the final vote The outcomes for the past fifty years have also been broken out for each political party as well At first glance the opposing curve traces seem to give credence to the phrase If you want to live like a Republican vote for a Democrat
The ascending gray trend line the one for Democratic presidents seems to leave its opponents in the dust Republicans have always countered that more is expected of their regimes than of their Democratic brothers the reason for the predominant sell on the news plot line in orange
I have written before about what has been called Presidential Election Cycle Theory The consensus of analysts after reviewing election year data for the past fifty years is that
the S P 500 has posted an average return of 6 5 versus 7 9 in all years Excluding 2008 presidential election years going back to 1960 have seen an average return of 9 1 versus 8 8 for all years
If we buy into a 9 forecasted gain for 2016 then compared to results as of September 30th we still have another 3 or so to go by year end Are recent articles in the press trying to create a tempest in a teapot
A macro long term view of data can often give misleading results It is prudent to dig a little deeper into the data to determine what patterns may actually be the correct ones to support predictions In this case there are marked differences that occur when a new president must be elected as opposed to rallying behind an incumbent When you make this simple distinction the data reveals a more troubling perspective
The potential for a modest 3 gain over the next three months just went out the window if the above relationship holds true this year The negative 4 figure above would imply that stocks could plummet 10 before yearend and that fall is without regard to what the Fed might or might not do
Concluding Remarks
What are investors to do Be cautious is Rule 1 For the past decade the VIX has nearly averaged a 23 reading versus its generally accepted range of 15 Volatility will naturally revisit markets over the next five weeks leading up to Election Day History has shown that it flattens out a few days before the actual voting takes place but prepare your forex trading strategies accordingly
As for those of you with stock or bond portfolios now is the time to give your positions a thorough review Uncertainty over the coming weeks related to the election and the potential for a rate hike from the Fed will definitely impact your valuations and ability to close positions quickly and effectively If you do have high risk items like sovereign bond issues or stock holdings in developing economies then you may want to reconsider your short term strategies going forward A warning shot has been fired Take heed or prepare for the consequences
Risk Statement Trading Foreign Exchange on margin carries a high level of risk and may not be suitable for all investors The possibility exists that you could lose more than your initial deposit The high degree of leverage can work against you as well as for you |
WFC | Why Royal Bank Of Scotland s Scheme Is Much Worse Than Wells Fargo | Let s make one thing clear Wells Fargo s NYSE WFC fraudulent account opening scandal was bad The company s response including its CEO s apathetic testimony in front of Congress was nothing short of a national embarrassment
Would you believe me if I said that the Wells Fargo scandal pales in comparison to the shocking story developing around the Royal Bank of Scotland TO RBS
You better
According to a set of leaked files uncovered in a recent RBS LON RBS staffers were allegedly instructed to knowingly steer healthy businesses towards the bank s troubled business unit the Global Restructuring Group GRG
The GRG profited on these businesses by deliberately hitting them with massive fees and interest rate hikes before scooping up their assets at fire sale prices
And unlike the Wells Fargo scandal the available evidence suggests that this was a top to bottom scheme
RBS managers encouraged employees to hunt for ways to boost their bonuses by forcing customers into loan restructuring in order to extract heavy fees as part of a profit drive nicknamed Project Dash for Cash the Buzzfeed News report says
Through a series of leaked internal emails and documents the Buzzfeed report revealed this detail and many more including information on firms that never missed a loan payment being pushed into the GRG the bank s property division being passed details that were not available to other bidders when it wanted to acquire assets from GRG businesses and staff being told to conceal conflicts of interest from customers
In short the company documents appear to show that RBS staff at nearly every level were privy to the business crushing techniques the company employed to force small businesses to the GRG The files also reveal that 16 000 firms were pushed into the restructuring unit following the financial crash This includes care homes farms and children s centers
The Buzzfeed leaks even include executives sending managers target lists of loans secured against properties to be used to find potential clients to force into costlier loans
The spoke to Andi Gibbs a British architect that was caught up in the GRG scheme Gibbs claims that RBS told him moving to the restructuring unit would effectively create financial security
What I ve always held on to is that I know what I m doing said a teary eyed Gibbs The bank actually secured the failure of this business just by the failure of their actions absolutely
So what s the worst part about all of this The Royal Bank of Scotland is 73 taxpayer owned After the financial disaster of 2008 the UK government set up a holding company that bailed out the bank and still holds a majority of the company
Yes the Wells Fargo scandal was bad
But just across the pond a government owned bank appears to have deliberately run small businesses into the ground in an effort to turn a profit Now that s definitely not good
You are invited to download the full up to the minute list of 220 Zacks Rank 1 Strong Buys free of charge Many of these companies are almost unheard of by the general public and just starting to get noticed by Wall Street They have been pinpointed by the Zacks system that nearly tripled the market from 1988 through 2015 with a stellar average gain of 26 per year
RBS currently has a Zacks Rank 2 Buy but this ranking is based solely on earnings estimate revisions The impact from the Buzzfeed leaks remains uncertain and it has yet to lead to analysts slashing their outlook for RBS stock Be on the lookout for that in the future but in the meantime note that RBS has a weak fundamental position already including an overall grade of D |
CMCSA | Britain happy with Murdoch s Sky News guarantees | LONDON Reuters Britain said Rupert Murdoch s Twenty First Century Fox had answered its remaining doubts about the independence of Sky News if the U S company buys all of its parent Sky paving the way for a takeover battle over the pay TV group Fox in April offered to spin off Sky News to Walt Disney Co to head off objections that Murdoch could have too much influence if he owned Sky as well as his British newspapers Media Secretary Matt Hancock had said Fox s proposal was the best remedy for the public interest concerns but he wanted some additional guarantees He said on Tuesday that Fox had secured a commitment from Disney to operate Sky News for 15 years rather than 10 years an increase in the funds available for the channel to at least 100 million pounds 132 million a year and a pledge to retain its editorial independence Hancock said the revised undertakings would help to ensure that Sky News remains financially viable over the long term free from any potential outside influence The measures which are subject to a 15 day public consultation clear the way for a straight fight for Sky between Fox and its U S pay TV rival Comcast NASDAQ CMCSA Sky welcomed the decision saying the UK approval process remained the only outstanding precondition that was stopping it putting Fox s offer to Sky shareholders Fox said it now looked forward to a final decision clearing its transaction Fox s long standing 10 75 pence a share offer was trumped by a 12 5 pounds a share bid from Comcast in April valuing Sky at 31 billion The shares were trading at 13 37 pounds on Tuesday afternoon suggesting investors think this takeover saga still has a long way to go Even if Fox wins the battle for Sky it is unlikely to own the asset for long Comcast and Disney are going head to head in the United States to buy most of Fox s TV and movie assets a deal that would include its current 39 percent stake in Sky and potentially all of Sky if Fox is successful in buying the group |
CMCSA | Hollywood producers speak out against Fox over immigration stance | LOS ANGELES Reuters Some powerful Hollywood producers and directors have criticized Twenty First Century Fox Inc over its news commentators support for the U S immigration crackdown that separates children from their parents with one award winning producer threatening to take his work elsewhere Steve Levitan the co creator of Emmy winning comedy Modern Family said on Twitter he was disgusted to work for the Fox television studio because it is owned by the same company as Fox News He tweeted on Tuesday that he would be setting up shop elsewhere after his contract with Fox for one more season of the series expires next year Levitan later backtracked expressing respect for senior Fox group executives Peter Rice Dana Walden and Gary Newman For now I will take some time to see where those people land and at that point make a decision about my future he said in a statement Levitan s criticism of Fox News was echoed by three other influential television and movie producers and creators as an outcry grew in the United States and abroad over a policy to separate immigrant children from their parents who cross the U S border illegally Conservative commentators on Fox News have spoken in support of the policy Laura Ingraham on Monday described the detention centers being used to house the separated children as essentially summer camps On Sunday author Ann Coulter appeared on Fox News show The Next Revolution and described the detained migrant children as child actors weeping and crying and urged U S President Donald Trump Do not fall for it Mr President Host Steve Hilton said in a statement later that he did not endorse Coulter s comments Representatives for Fox News and the Fox television studio declined to comment The 20th Century Fox film studio did not respond to requests for comment Family Guy creator Seth MacFarlane Bridesmaids director Paul Feig and prolific filmmaker Judd Apatow the producer behind movies and TV shows such as Girls and Trainwreck have all weighed in Apatow called on more of those who work with or for Fox to speak out Imagine if it was your kids Who has a movie TV show sporting event news show at Fox How can you remain silent when they promote these policies Apatow tweeted on Monday Feig wrote on Twitter that while he loved those working in the movie and TV divisions of Fox I too cannot condone the support their news division promotes toward the immoral and abusive policies and actions taken by this current administration toward immigrant children MacFarlane whose animated Family Guy is broadcast on Fox TV tweeted on Saturday that he was embarrassed to work for this company referring specifically to its connection with Fox News On Tuesday MacFarlane donated 2 5 million to the National Public Radio news organization Fox News and its entertainment divisions may be operated by separate companies in the future
In December 2017 Fox struck a deal to sell most of its film and television businesses to Walt Disney Co and spin off Fox News and other assets to a new company Comcast Corp NASDAQ CMCSA however has made a rival bid for the parts of Fox that Disney had planned to buy |
CMCSA | IT S A BIDDING WAR Disney boosts its offer for 21st Century Fox assets to 71 3 billion | has raised its offer for assets to 38 a share or a total of 71 3 billion in cash and stock The deal would allow 21st Century Fox shareholders to elect to receive cash or stock subject to 50 50 proration 21st Century Fox shares are up 6 and Disney shares are up 2 2 Watch and trade in real time here has raised its offer for assets to 38 a share or 71 3 billion in all According to the the terms of the deal are similar to Disney s previous offer except that the new deal would allow 21st Century Fox shareholders to elect to receive cash or stock subject to a 50 50 proration Shareholders would receive the number of shares equating to a 38 price so long as Disney s stock is trading between 93 53 and 114 32 at the deal s close The increased offer comes one week after Comcast NASDAQ CMCSA crashed Disney s attempt to buy the assets with a following the US Justice Department s approval of AT T NYSE T s merger with Time Warner Disney originally bid back in December We are extremely proud of the businesses we have built at 21st Century Fox and firmly believe that this combination with Disney will unlock even more value for shareholders as the new Disney continues to set the pace at a dynamic time for our industry 21st Century Fox s executive chairman Rupert Murdoch said in the We remain convinced that the combination of 21CF s iconic assets brands and franchises with Disney s will create one of the greatest most innovative companies in the world The bidding war however may not be over just yet Based on our merger models we think bids from CMCSA or DIS could reach as high as 80 billion John Janedis an analyst at Jefferies told clients in a recent note Shares of 21st Century Fox were up 6 on the news while Disney s were up 2 2 |
WFC | U S Bancorp s profit beats on higher rates | Reuters U S Bancorp reported a better than expected quarterly profit on Wednesday as the largest U S regional bank benefited from higher interest rates The Minneapolis based bank relies heavily on plain vanilla traditional banking and interest rate increases by the U S Federal Reserve helped boost the lender s interest income by 8 5 percent in the latest quarter The Fed has raised rates three times since the second quarter of last year with latest increase coming in June U S Bancorp s net interest income rose to 3 55 billion in the second quarter ended June 30 from 3 25 billion a year earlier However net income attributable to common shareholders was nearly flat at 1 43 billion Earnings per share rose to 85 cents beating the analysts average estimate of 84 cents according to Thomson Reuters I B E S Mortgage banking revenue fell nearly 11 percent to 212 million Mortgage banking was a dark spot for many U S banks in the latest quarter as higher interest rates kept customers away from refinancing their loans Wells Fargo NYSE WFC Co the biggest U S home lender reported a 19 percent fall in mortgage banking revenue in the quarter U S Bancorp set aside 350 million to cover bad loans up 7 percent from a year earlier Total loans rose 3 3 percent to 277 28 billion U S Bancorp s shares were marginally down in premarket trading on Wednesday |
WFC | Johnson feeling back to his best ahead of Birkdale challenge | By Simon Evans SOUTHPORT England Reuters World number one Dustin Johnson believes he is entering the British Open close to his best again after recovering from the injury he suffered prior to the U S Masters in April Johnson won three tournaments in a row ahead of Augusta But the back injury he suffered during a staircase fall at his rental home in Georgia ruled him out of the year s first major The American returned to action in early May finishing tied for second at the Wells Fargo NYSE WFC Championship in North Carolina But he failed to make the cut at the Memorial tournament in Ohio and last month s U S Open where he was the defending champion I feel like the game is starting to get back to what it was he said I m definitely hitting it a lot better I feel like the putter is starting to roll a little bit better That was really the only thing that at Muirfield The Memorial and at the U S Open I mean it was really just putting But after the injury at Augusta I spent a lot of time working on my swing and kind of not much time working on the short game So that was not by design but just kind of how it went Johnson who recently became a father for the second time will be making his debut at Royal Birkdale as he looks to go one better than his best result at a British Open a tied for second at Royal St George s in 2011 I really like the golf course Obviously it s my first time here But I got over here early I got here on Saturday So I ve gotten a lot of practise on the course And I feel like it sets up well for me he said But it s like any Open Championship you ve just got to control your golf ball If you can do that you can get around here and shoot some good scores he added The challenge of links golf is one that Johnson says he relishes
I feel like I play well over here I like this kind of golf You use a lot of imagination You ve got to use a lot of different shots I really enjoy coming over here and playing |
WFC | Investors are behaving less like casino punters in China s stock markets | By Samuel Shen and Marius Zaharia SHANGHAI HONG KONG Reuters Retired chauffeur Yao Huiliang used to spend his days trading small cap Chinese stocks trying to make quick money on sharp moves casino type behavior often seen in China s stock markets But having lost on such bets recently he is now switching into blue chip stocks such as the big banks There s not much swing in big caps so you don t make quick money But it s safe Yao said His move is in tune with what regulators in Beijing want to achieve deflating some of China s asset bubbles and building the global credibility of China s capital markets One such bubble in the eyes of many analysts and investors is the Shenzhen based tech startup heavy ChiNext which slumped to its lowest since January 2015 earlier this week following a pledge by Chinese President Xi Jinping to take stronger action to deal with financial risks Meanwhile money flowed into big caps with the blue chip CSI300 Index CSI300 powering to 18 month highs Xi s comments were followed by robust economic growth data which led to speculation that authorities now have enough leeway to tackle bubbles Larger investors welcome the switching from small caps into bigger stocks on the Chinese bourses saying this was a sign that the nation s capital markets were maturing Anthony Cragg senior portfolio manager at Wells Fargo NYSE WFC Asset Management said the character of China s stock market was changing as domestic investors focused more on whether a company had strong earnings and longer term growth prospects Trading in small caps used to be popular among retail domestic investors who could make a quick buck by speculating on which firm could become an acquisition target for bigger players or which start up could become the next unicorn A unicorn is a start up whose valuation soars above 1 billion Five years ago it was very very speculative A lot of actions were in fast moving speculative stocks with little or no earnings Cragg said But he said that has changed in the past year with higher quality companies performing better So I think the market has grown up It has become less of a casino more of a proper investment market OVERVALUED After slumping by 5 1 percent on Monday the ChiNext CHINEXTP stabilized around 30 month lows this week The index is almost 60 percent below a record high hit in June 2015 just before a sharp plunge in China s equity markets Yet despite the losses which contrast with the record highs hit by major stock markets globally some analysts and investors consider ChiNext shares still overvalued as the index trades at 46 times earnings ChiNext s woe is far from over I would not be surprised to see this market halve from the current level in two to three years said Zhou Liang fund manager at Minority Asset Management Co who manages assets worth 3 5 billion yuan 518 million and has switched into state owned banks and insurers over the past year With risk appetite decreasing investment opportunities in years to come lie in modestly priced blue chips rather than those expensive growth stocks Investors like Zhou have helped push blue chip SSE50 SSE50 dubbed China s Nifty Fifty index to a two year high this week It is trading at a price to earnings ratio of 11 6 The rotation of money into blue chips should continue investors say as Beijing accelerates the opening of its capital market to global investors U S index publisher MSCI will include 222 of China s biggest listed firms in its emerging market benchmark from next June Kaiyuan Securities analyst Yang Hai said the anticipation of foreign capital flows is supporting the local investors behavioral shift they are now looking more closely at the fundamentals of large well known companies that would benefit from a new wall of foreign cash CLAMPDOWN The clampdown by regulators on small cap speculation is already under way with authorities forcing some loss making companies to delist and fining or even jailing those found to have manipulated the market Yao the retired chauffeur was particularly aware of the 5 1 2 year jail sentence slapped on Xu Xiang a speculator who has earned nicknames such as Hedge Fund Brother No 1 and China s Carl Icahn in the local media Buying interest also cooled after a growing number of high flying start ups floundered most recently ChiNext bellwether Leshi Internet Information Corp SZ 300104 whose parent company saw a court freeze some of its assets amid a cash crunch Brokerage China Merchants Securities says it expects average earnings growth in ChiNext companies will slow to single digits from the 25 percent forecast for this year and says ChiNext will continue to seek its bottom This will be driven by a slowing economy as well as regulators tighter scrutiny over acquisitions once a key driver of revenue growth for ChiNext shares the brokerage said Private stock market investor Lu Yahu knows that well and says that in a more tightly regulated slowing economy the stronger companies will get stronger Under such circumstances the life of small firms is getting difficult said Lu who has stopped trading stocks altogether
1 6 7619 Chinese yuan renminbi |
WFC | U S attempt to limit Wall Street bonuses fizzles out quietly | This July 20 story corrects name to National Association of Federally Insured Credit Unions in paragraph ten
By Lisa Lambert
WASHINGTON Reuters The regulatory agenda released by the Trump administration on Thursday contained a signal that the U S government has halted its work on restricting Wall Street executives bonuses and other pay incentives
The 2010 Dodd Frank Wall Street reform law called for federal banking and securities regulators to create limits on incentive based compensation at big financial companies and prevent executives from receiving outsized rewards for overly risky gambles
Last year those regulators many appointed by former President Barack Obama a Democrat rolled out a 500 page rule over many weeks that would require senior executives to return bonuses earned by making decisions that materially hurt their banks
But in the biannual White House agenda on regulation the rule was listed under the heading long term action instead of one denoting regulators were making progress toward a final version In Washington speak that meant the rule was dead
The move followed President Donald Trump s campaign pledges to lighten federal regulations that hurt liquidity and strangled business
They re not even working on it said Lisa Gilbert who closely tracks Dodd Frank implementation for the liberal leaning public interest group Public Citizen
She added that the rule was labeled pending in previous agendas By law it was supposed to be completed by 2011
Agencies working on the proposed rule declined to comment
Regulators neglected last year s proposal which addressed many concerns raised about a 2011 draft even though Obama pushed them to finish it before he left office
We kind of knew it was on the back burner said Alexander Monterrubio director of regulatory affairs for the National Association of Federally Insured Credit Unions trade group The unified agenda confirmed that thought
Each agency had a different view on regulating incentive based compensation making progress difficult Monterrubio said
Congress wanted a way to hold top executives accountable after the 2007 09 financial crisis when some banks experienced major losses partly due to risky decisions made by their leaders The call for a rule was renewed when regulators rapped Wells Fargo NYSE WFC Co for an incentive method that pushed employees to open thousands of phantom accounts in customers names
But it was politics that likely proved the rule s downfall
Agencies give the White House lists of their regulatory priorities which makes changes based on the president s goals and then publishes what is called the unified agenda
Monterrubio said of the rule It wasn t going to happen under President Trump |
WFC | 5 Preferred Stock ETFs Yielding 4 Or More | Though yields on the benchmark 10 year U S Treasury note recently popped on a host of upbeat U S economic readings and the Fed rate hike speculation yields are still at subdued levels
As of October 6 2016 yield on the U S Treasury note was 1 75 Also though the major indices recovered lately these are not out of the woods Global growth issues and any weakness in the upcoming corporate earnings may still derail market momentum and keep long term interest rates low
Investors should note that even if rates rise in the future on the Fed policy tightening many may still be looking for benchmark beating yields Though there are quite a few options the current combination of relatively lower rates and higher equity risks makes investing in preferred stocks one of the most favored practices read
Preferred Stock ETFs in Focus
Not only do the preferred stocks offer considerably higher yields often exceeding 5 they also provide an opportunity for capital appreciation They are hybrid securities having the characteristics of both debt and equity The preferred stockspay stockholders a fixed agreed upon dividend at regular intervals like bonds
Preferred stocks are thus quite stable and generally have a low correlation with other income generating segments of the market like REITs MLPs corporate bonds and TIPs
Though investors can buy individual companies preferred stocks buying preferred stock ETFs can be a very convenient way of investing in a basket of diversified companies at a low cost Below we have highlighted five ETFs which not only offer substantial yields but also provide a great opportunity for capital appreciation
PowerShares Preferred ETF 5 68 Yield
The 4 76 billion fund holds a portfolio of 252 preferred stocks in its basket tracking the BofA Merrill Lynch Core Fixed Rate Preferred Securities Index It charges 50 bps in fees Financials 74 8 dominates this fund followed by utilities 8 4
PowerShares Variable Rate Preferred Portfolio ETF 4 89 Yield
The fund looks to track the performance of preferred stock as well as certain types of hybrid securities that are functionally similar to preferred stock that are issued by US based or foreign issuers and that pay a floating or variable rate dividend or coupon The 865 3 million ETF holds about 93 stocks and charges 50 bps in fees The fund could be a great option for investors in the rising rate environment read
SuperIncome Preferred ETF 6 23 Yield
As the name suggests the 233 6 million fund calls for outstanding dividend yields Wells Fargo NYSE WFC Co 5 55 Kinder Morgan NYSE KMI 5 37 and GMAC Cap Ally PFD 8 125 4 67 take the top three spots in the basket The fund charges 58 bps in fees see here
PowerShares Financial Preferred Portfolio 5 60 Yield
The fund tracks the Wells Fargo Hybrid and Preferred Securities Financial Index managing a fund size of 1 82 billion Holding 89 preferred stocks in its basket the fund provides an exposure to U S listed securities issued by financial institutions The fund charges 63 bps in fees The fund has a notable 30 day Sec yield of 5 39 and an effective duration of 4 77 years indicating moderate interest rate risks
SPDR Wells Fargo Preferred Stock ETF 5 47 Yield
The 157 securities portfolio invests 63 of the basket in the financial sector Real Estate utilities and telecom take the next three spots The fund charges 45 bps in fees
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CMCSA | British M A booms two years on from Brexit vote | By Ben Martin and Saikat Chatterjee LONDON Reuters Deal making involving UK companies has picked up in the two years since the country s decision to leave the European Union defying worries that Brexit would stifle mergers and acquisition activity data from Thomson Reuters Deals Intelligence shows The surprise referendum result in June 2016 initially stoked fears that deals involving British firms would dry up amid uncertainty about Brexit s impact on the UK economy But M A activity involving UK companies has instead boomed and led to deals with a total value of 551 billion in the 12 months to the middle of June according to the data That was the highest level since the same period between 2006 and 2007 when deal making surged before the financial crisis and compares with 467 billion in the 12 months immediately after the referendum A weaker sterling in the wake of the referendum result has made British businesses more attractive targets to overseas buyers in the aftermath of the vote That helped the level of inbound M A into the United Kingdom reach a record 262 billion in the last 12 months the data show The weakening pound has definitely made UK assets cheaper said Michael Hewson chief markets analyst at CMC Markets Against the dollar the pound remains around 12 percent below a pre Brexit referendum high of above 1 50 On a trade weighted basis against its rivals the British currency is about 12 percent cheaper than before the referendum vote Furthermore Britain has also been swept up by a global M A wave as cheap debt boardroom confidence in the global economy and high stock market valuations have made it easier for companies around the world to use equity to pay for deals
The Thomson Reuters Deals Intelligence data for the United Kingdom includes the competing bids for pay TV firm Sky L SKYB which both Twenty First Century Fox O FOXA and Comcast O CMCSA are vying to buy as well as moves by Unilever L ULVR and RELX L REL to unify their dual structures |
CMCSA | Comcast gains unconditional EU antitrust approval to buy Sky | BRUSSELS Reuters EU antitrust regulators have given the green light to U S cable company Comcast s plan to acquire European pay TV group Sky without demanding concessions The European Commission said the deal did not raise any competition concerns confirming a Reuters story last week The proposed transaction would lead to only a limited increase in Sky s existing share of the markets for the acquisition of TV content as well as in the market for the wholesale supply of TV channels in the relevant member states the EU competition agency said on Friday
Comcast NASDAQ CMCSA the world s biggest entertainment company is fighting Rupert Murdoch s Twenty First Century Fox for Sky |
WFC | Ex Wells Fargo trader wins appeal in SEC insider trading case | By Nate Raymond Reuters The U S Securities and Exchange Commission has affirmed the dismissal of an administrative case against a former Wells Fargo Co N WFC trader after two commissioners split on whether the evidence proved he engaged in insider trading The ruling on Thursday came in an appeal by the SEC s enforcement division of an administrative law judge s 2015 ruling dismissing the case against Joseph Ruggieri who was accused of trading on tips supplied by a Wells Fargo analyst It marked a rare loss for the SEC s enforcement division in a case pursued through an in house administrative proceeding Critics call such fast tracked proceedings unfair to defendants some of whom have challenged the system in court Silvia Serpe a lawyer for Ruggieri at the law firm Serpe Ryan said in a statement on Saturday that his attorneys told the SEC s enforcement division three years ago it was way off the mark charging Mr Ruggieri Now for the second time on their home turf the Commission has agreed with us she said The SEC did not respond to a request for comment The SEC alleged that Ruggieri a healthcare stock trader at Wells Fargo in New York in 2010 and 2011 traded on tips about six ratings changes made by Gregory Bolan the analyst for companies that included Athenahealth Inc O ATHN and Bruker Corp O BRKR Following a trial Patil ruled that the enforcement division had established Ruggieri traded on information Bolan supplied four times which allowed Wells Fargo to earn 75 000 But Patil ruled that the enforcement division failed to prove Bolan received anything in exchange for the information as required by a 2014 federal appeals court ruling which last December was partly supplanted by a U S Supreme Court decision In Thursday s ruling the two commissioners deciding the case deadlocked on a different issue of whether Ruggieri had indeed placed his trades while aware of non public information SEC Democratic Commissioner Kara Stein said she believed the enforcement division met its burden in proving Ruggieri had done just that SEC Republican Commissioner Michael Piwowar disagreed saying that the division had not met its burden of establishing that Bolan tipped Ruggieri SEC Chairman Jay Clayton who was sworn in in May after the enforcement division s appeal was already pending did not participate in the decision
Bolan who was charged with Ruggieri in 2014 agreed to settle the case for 75 000 without admitting or denying the allegations |
WFC | Former 2 billion private equity fund now nearly worthless WSJ | Reuters Wells Fargo N WFC and a number of other lenders are negotiating to take control of a hedge fund previously valued at more than 2 billion that is now worth close to nothing according to a report from the Wall Street Journal EnerVest Ltd a Houston private equity firm that focuses on energy investments manages the private equity fund that focused on oil investments The fund will leave clients including major pensions endowments and charitable foundations with at most pennies on the dollar WSJ reported The firm raised and started investing money beginning in 2013 when oil was trading at around 90 a barrel and added 1 3 billion of borrowed money to boost its buying power West Texas Intermediate crude prices closed at 46 54 a barrel on Friday We are not proud of the result John Walker EnerVest s co founder and chief executive wrote in an email to the Journal Only seven private equity funds worth more than 1 billion have ever lost money for investors according to data from investment firm Cambridge Associates LLC cited in the report Among those of any size to end in the red losses greater than around 25 percent are extremely rare though there are several energy focused funds in danger of doing so according to public pension records Clients included the J Paul Getty Trust John D and Catherine T MacArthur and Fletcher Jones foundations which each invested millions in the fund according to their tax filings the Journal reported Michigan State University and a foundation that supports Arizona State University also disclosed investments in the fund
The Orange County Employees Retirement System was also an investors and has reportedly marked the value of its investment down to zero |
WFC | Wells Fargo to reduce businesses following fake account scandal FT | Reuters Wells Fargo NYSE WFC is poised to eliminate a number of its smaller businesses the company s chief financial officer said in an article published Sunday The Financial Times reported that Wells Fargo will be spinning off a number of its products worth hundreds of millions of dollars according to CFO John Shrewsberry in order to focus on and emphasize more relevant ones though he did not specify what products those would be There are a handful of businesses in our mindset Shrewsberry said adding that the bank had choices to make They re not at the scale of most of our businesses not top tier providers Wells Fargo recently announced it would pay 142 million to settle a class action lawsuit over its practice of creating fake accounts and credit cards for customers without their knowledge The plan to reduce the number of businesses is part of an effort to restore investor confidence following the scandal FT reported The bank employs 273 000 people and currently operates about 90 different businesses
In the past three weeks Wells Fargo has struck deals to sell its share registration arm to Equiniti L EQN for 227 million and will sell its commercial insurance business for an undisclosed sum |
WFC | U S import prices fall but underlying inflation stabilizing | By Lucia Mutikani WASHINGTON Reuters U S import prices fell for a second straight month in June amid further declines in the cost of petroleum products suggesting inflation could remain benign in the near term Import price pressures are however likely to pick up given the recent weakness in the dollar which has declined 6 1 percent in value against the currencies of the United States main trading partners this year The focus should be on the dollar said John Ryding chief economist at RDQ Economics in New York If a stronger dollar represented tighter financial conditions and a disinflationary impulse a weaker dollar implies looser conditions and an inflationary impulse The Labor Department said on Tuesday that import prices decreased 0 2 percent last month after falling 0 1 percent in May In the 12 months through June import prices increased 1 5 percent That was the smallest gain since last November and followed May s 2 3 percent increase The year on year increase in import prices has slowed sharply since posting 4 7 percent in February which was the biggest advance in five years Import prices excluding petroleum edged up 0 1 percent after being unchanged the prior month They have stabilized since falling last October reflecting the dollar s depreciation and increased 1 4 percent in the 12 months through June The report followed data last week showing consumer prices unchanged in June and the annual CPI rate increasing 1 6 percent the smallest rise since October 2016 The dollar has been hurt by the benign inflation outlook and diminishing expectations of a fiscal stimulus from Washington after Republicans in the U S Congress struggled with healthcare reform Political scandals surrounding President Donald Trump are also seen impeding his pro growth agenda The dollar fell to a 10 month low against a basket of currencies on Tuesday while prices for U S government bonds rose Stocks on Wall Street were trading down TEMPORARY FACTORS Low oil prices are largely curbing both domestic and imported inflation pressures Other factors such as declining prices for mobile phone services have also contributed to pushing inflation below the Federal Reserve s 2 percent target Fed Chair Janet Yellen told lawmakers last week that the recent ebb in inflation was partly the result of a few unusual reductions in certain categories of prices that would eventually drop out of the calculation Expectations for a weakening U S dollar should pressure nonfuel import prices higher supportive to the Fed s projection that inflation will gradually climb in the second half of the year said Sam Bullard a senior economist at Wells Fargo NYSE WFC Securities in Charlotte North Carolina Persistently low inflation will likely have an impact on the timing of a third interest rate increase this year from the U S central bank which most economists expect would be in December Last month prices for imported petroleum fell 2 2 percent after decreasing 1 2 percent in May Imported petroleum prices have not risen since gaining 0 8 percent in February Prices for imported capital goods rose 0 2 percent the largest increase since May 2014 while motor vehicle prices fell 0 2 percent The cost of imported food increased 0 9 percent The report also showed export prices dropped 0 2 percent in June as falling vegetable soybeans and fruit prices weighed on agricultural exports after falling 0 5 percent in May
They rose 0 6 percent year on year the smallest gain since prices started rising in December curbed by lower export prices for soybeans fruit and corn Export prices gained 1 5 percent in the 12 months through May |
WFC | September ETF Asset Roundup Real Estate Rocks | True to its ill repute September was an immensely volatile month Early in the month both equities and bonds went into a tailspin on a sooner than expected rate hike prospect However while the start was rocky the end was smoother with a still dovish Fed an accommodative Bank of Japan and a surprise pre accord on an oil output curb in November All these events influenced investors as well as asset flows in the ETF world in the month read
Let s take a look at where investors poured their money in September and where they took it out from as per asset flow report till September 27 2016
Real Estate Tops the Chart
Among the key events of September one of the most notable was the real estate investment trusts or REITs which were long part of the broader financial sector getting a free status Effective September 1 the S P Dow Jones Indices and MSCI Inc formed the new Real Estate Sector under the Global Industry Classification Standard GICS read
This separation made the real estate sector even more attractive to investors and The analysts expected as much in new demand and confirming analysts optimism Real Estate Select Sector SPDR Fund attracted about 3 21 billion in assets in September A dovish Fed and lower long term bond yields also played their role in drawing investors as real estate is a high yielding sector
Value ETFs Prevail
Uncertainties relating to the Fed decision the outcome of the OPEC meeting during September 26 28 and the International Energy Agency s IEA latest forecast that a global oil supply glut will remain kept market sentiments rocky throughout September As a result iShares Russell 1000 Value ETF hoarded about 1 33 billion of assets in the month read
Gold Mining Gains
Since volatility levels flared up in September and the Fed hike bets backtracked as soon as some downbeat economic data points started flowing in gold regained its luster VanEck Vectors Gold Miners ETF NYSE GDX hauled in about 1 14 billion in assets in the month
Currency Hedging Flops
Deutsche X trackers MSCI EAFE Hedged Equity ETF shed about 1 79 billion in assets as currencies like yen and euro showed strength against the greenback in September read
This curbed demand for the currency hedged international equities ETF Another currency hedged ETF iShares Currency Hedged MSCI EAFE ETF saw about 476 9 million in assets gushing out
Financial ETFs Ended Up Losing
Both Financial Select Sector SPDR Fund XLF and Vanguard Financials Index Fund saw about 1 10 billion and 890 million of assets gushing out respectively An accommodative Fed and low levels of bond yields did not bode well for financial stocks as these perform better in a rising rate environment Also faced by Wells Fargo Company NYSE WFC weighed on these ETFs asset flows read
Europe ETFs Out of Favor
With Eurozone economic growth slowing in Q2 from the prior period investors did not seem too optimistic about iShares MSCI Eurozone ETF and Vanguard FTSE Europe ETF EZU and VGK leaked about 766 2 million and 647 8 million in assets respectively in September Also concerns over the health of the biggest bank of Germany Deutsche Bank DE DBKGn kept investors away from Europe investing read
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WFC | Forcerank Sector Rankings Week Of 10 3 | We re seeing some big moves in the Forcerank competitions this week contests of note include
Social Media Twitter NYSE TWTR surpassed Facebook NASDAQ FB for the first time since the inception of this contest in March
US Sectors After holding the 2 position last week Financials drops all the way to last place Speaking of Financials Wells Fargo NYSE WFC has fallen to 10 in Investment Banking
Commodities United States Oil NYSE USO takes 1 for the first time since the June 24 game
New contests We also started running two new contests this week Restaurants and Semiconductors
See the rest of the rankings for this week s contests broken out below
This is a new contest therefore last week s rank is unavailable
This is a new contest therefore last week s rank is unavailable
Macro
Catalyst
This contest just turned over to reflect the most heavily shorted stocks of October hence the N A s for the stocks that are new from the September game |
WFC | iFOREX Daily Analysis October 04 2016 | The dollar gained against most major currencies on Monday after data showing that U S manufacturing activity returned to expansion in September and boosted optimism over the strength of the economy The Institute for Supply Management said its index of manufacturing activity rose to 51 5 last month from August s reading of 49 4 Analysts had forecast a lesser increase to 50 3
The reports added to hopes for a U S rate hike before the end of the year following positive U S consumer sentiment data released on Friday Investing com s Fed Rate Monitor Tool shows investors estimate a 10 3 chance of a rate hike in November and a 61 6 figure for December Investors remain cautious after U K Prime Minister Theresa May said on Sunday that she would initiate the process of leaving the European Union by the end of March The dollar also gained against the yen because of a reduction in risk aversion as concerns over Deutsche Bank DE DBKGn have eased for now Tuesday is quiet in terms of financial news with the spotlight mainly on the U K construction activity data Ahead in the week investors will shift their focus on the ECB minutes and on the U S non farm payrolls
GBP USD
The pound fell on Monday reaching 31 year lows against the dollar and to a three year lows against the euro after a March deadline was set for the start of the formal process that will depart Britain from the European Union The dollar strengthened against most major currencies on a private report that showed the U S manufacturing sector returned to expansion territory in September The pound had dropped more than 1 percent against the dollar to as low as 1 2818 before trimming losses in late U S trading For today investors will be focusing on the U K construction activity data
Pivot 1 2915Support 1 2791 2761 272Resistance 1 29151 2951 298Scenario 1 short positions below 1 2915 with targets 1 2790 1 2760 in extension Scenario 2 above 1 2915 look for further upside with 1 2950 1 2980 as targets Comment as long as 1 2915 is resistance look for choppy price action with a bearish bias
Gold
Gold prices continue to trade near two week lows on Monday with market sentiment being supported as concerns over Deutsche Bank s health continued to ease Recent strength in the dollar added significant pressure on the precious metal together with reports late last week that Deutsche Bank is nearing a deal to settle mortgage securities investigation by paying a 5 4 billion fine well below the Justice Department s original proposal of 14 billion Ahead in the week gold traders will shift their focus on the ECB minutes and on the U S non farm payrolls
Pivot 1318 5Support 1304 513021300Resistance 1318 513221325Scenario 1 short positions below 1318 50 with targets 1304 50 1302 00 in extension Scenario 2 above 1318 50 look for further upside with 1322 00 1325 00 as targets Comment the RSI lacks upward momentum
WTI Oil
U S West Texas Intermediate crude oil posted a rise of 57 cents or 1 2 percent reaching 48 81 on Monday its highest since July 5 after Iranian President Hassan Rouhani expressed the need for need for other oil producers to join OPEC in supporting the market Iran s call to non OPEC members brought optimism in market sentiment and raised expectations that this deal will bring results For today markets will be focused on the American Petroleum Institute and its estimates of refined product and crude oil inventories
Pivot 47 75Support 47 7547 146 2Resistance 49 349 7550 23Scenario 1 long positions above 47 75 with targets 49 30 49 75 in extension Scenario 2 below 47 75 look for further downside with 47 10 46 20 as targets Comment the RSI lacks downward momentum
US 500
The main U S indices started off weak in the fourth quarter pulled down by financials consumer goods and utilities sectors Investors appear to be worried about the outcome of the Nov 8 election as well as the fact that big banks are extending their recent declines Market sentiment was shaken by Deutsche Bank and Wells Fargo NYSE WFC Co s handling of sales abuses adding significant pressure on the financial sector The S P 500 financial index declined 0 43 percent as Wells Fargo slid 1 02 percent to its lowest since December 2013 Investors are now shifting their focus on the ECB minutes and on the U S non farm payrolls reports that are due later in the week
Pivot 2146 Support 2146 2138 2133 Resistance 2163 2168 2172 Scenario 1 long positions above 2146 00 with targets 2163 00 2168 00 in extension Scenario 2 below 2146 00 look for further downside with 2138 00 2133 00 as targets Comment the RSI is mixed with a bullish bias |
CMCSA | Why Is TiVo TIVO Down 4 8 Since Last Earnings Report | It has been about a month since the last earnings report for TiVo NASDAQ TIVO Shares have lost about 4 8 in that time frame underperforming the S P 500
Will the recent negative trend continue leading up to its next earnings release or is TiVo due for a breakout Before we dive into how investors and analysts have reacted as of late let s take a quick look at its most recent earnings report in order to get a better handle on the important drivers TiVo s Q3 Earnings Revenues DisappointTiVo reported dismal results for third quarter 2018 wherein its top and bottom lines declined on a year over year basis The company reported loss of 19 cents per share wider than the year ago quarter s loss of 14 cents The company s non GAAP earnings per share came in at 24 cents compared with 40 cents a year ago TiVo s revenues decreased 16 8 year over year to 164 7 million and also missed the Zacks Consensus Estimate of 167 million The decline in revenues was primarily due to lower revenues from the Legacy TiVo Time Warp IP deals and the company s transition from being a seller of analog and hardware products The company s core revenues excludes revenues from Legacy TiVo Solutions IP Licenses Hardware and Other Products were 156 4 million a decline of 4 5 from the year ago quarter Quarter in DetailsThe company s revenues from the Licensing services and software division dropped 14 5 year over year to 160 8 million The division contributed 97 6 to total revenues Hardware division s revenues declined to 3 9 million from 9 9 million recorded in the year ago quarter and contributed 2 4 to total revenues In terms of business segments Product revenues were down 8 7 to 94 6 million Revenues from Platform Solutions decreased 11 1 to 73 1 million Software and Services declined 3 9 to 19 9 million However Other category grew from 0 6 million to 1 6 million Notably Product revenues were down owing to the company s shift to ASC 606 revenue standard which per management resulted in a 4 5 million decline in revenues from the company s two international MSO software customers However management remains optimistic about TiVo Experience 4 which the company is plans to enhance by adding IPTV offering TiVo also launched the TiVo BOLT OTA which received a flurry of positive reviews IP Licensing revenues declined approximately 25 7 year over year to 70 1 million due to fall in revenues from an out of license Consumer Electronics Manufacturers Notably the company also announced that this was the last quarter in which revenues from Time Warp were realized Notably agreements with Time Warp expired in July Under the IP Licensing segment on a year over year basis revenues of the U S Pay TV Providers declined 30 to 44 5 million New Media International Pay TV Providers and Other grew 8 to 16 8 million Consumer Electronics Manufacturers decreased 43 to 8 9 million due to expiration of license with a customer The company s total cost and expenses decreased 14 year over year to 172 4 million on the back of reduced hardware sales and the company s ongoing cost reduction efforts Adjusted EBITDA declined 29 from year ago quarter to 47 1 million due to lower revenues and higher spend on patent litigation The company anticipates further increase in IP litigation spends owing to investment in the ongoing Comcast NASDAQ CMCSA litigation Non GAAP pre tax income was 32 9 million compared with 54 1 million in the same period last year TiVo exited the reported quarter with cash cash equivalents and short term marketable securities of 311 8 million compared with 297 3 million at the end of the previous quarter Note The EPS data mentioned in the text of this section differs from the rest of report due to the difference in calculation or consideration of one time items
How Have Estimates Been Moving Since Then
In the past month investors have witnessed an upward trend in fresh estimates The consensus estimate has shifted 20 due to these changes
VGM Scores
Currently TiVo has a strong Growth Score of A though it is lagging a bit on the Momentum Score front with a B Following the exact same course the stock was allocated a grade of B on the value side putting it in the second quintile for this investment strategy
Overall the stock has an aggregate VGM Score of A If you aren t focused on one strategy this score is the one you should be interested in
Outlook
Estimates have been trending upward for the stock and the magnitude of these revisions looks promising It comes with little surprise TiVo has a Zacks Rank 2 Buy We expect an above average return from the stock in the next few months |
CMCSA | Why Is Amdocs DOX Down 6 3 Since Last Earnings Report | A month has gone by since the last earnings report for Amdocs DOX Shares have lost about 6 3 in that time frame underperforming the S P 500
Will the recent negative trend continue leading up to its next earnings release or is Amdocs due for a breakout Before we dive into how investors and analysts have reacted as of late let s take a quick look at its most recent earnings report in order to get a better handle on the important drivers Amdocs Reports Q4 ResultsAmdocs reported fourth quarter fiscal 2018 results wherein the bottom line beat the Zacks Consensus Estimate and the top line matched the same Quarterly non GAAP earnings came in at 99 cents per share compared with 94 cents in the year ago quarter The bottom line beat the Zacks Consensus Estimate of 98 cents Revenues in the reported quarter came in at 1 billion matching the Zacks Consensus Estimate and marking year over year improvement of 2 3 Continued flow of new customers penetration into new regions and a number of awards for projects and managed services drove revenue growth However a sequential impact of nearly 5 million in foreign currency movements was a dampener Fiscal 2018 ResultsRevenues for the full fiscal year came in at 3 97 billion compared with 3 87 billion a year ago Non GAAP earnings per share for fiscal 2018 were up 6 1 year over year to 4 03 Non GAAP Operating income was 687 million up 3 3 year over year In fiscal 2018 the company generated net cash of 557 2 million from its operating activities compared with 636 1 million in fiscal 2017 Quarter DetailsCustomer Experience Systems revenues were up 2 6 and reached 992 5 million in the reported quarter Customer Experience Directory revenues were down 15 8 year over year to 10 1 million Geographically revenues from North America 64 of total were 644 8638 2 million down 0 9 from the year ago quarter due to customer fluctuations Europe 15 recorded revenues of 150 6 million up 16 marking the best quarter in more than 10 years Rest of the World 21 generated revenues of 213 8 million up 3 9 During the quarter Amdocs bagged its first transformation award with Italian telecommunications provider TIM This further boosted its foothold in Europe Moreover it entered into a six year deal with PLDT PHI on managed IT infrastructure With this agreement Amdocs expanded its association with the telecom company with which it had already signed a 300 million managed transformation deal earlier this year Management is optimistic about the 12 month backlog that reached 3 336 billion at the end of the quarter The company continued to aid digital media and network transformations of its clients which improved its revenue growth rate The company s recent partnership with Comcast NASDAQ CMCSA which was materialized in the fourth fiscal quarter is expected to help drive software defined wide area networks SD WAN service Margins and Operating MetricsThe company reported non GAAP operating expenses of 829 98 million up 2 3 from the year ago quarter Non GAAP operating income increased 2 6 and came in at 172 61 million Operating margin of 17 2 for the quarter remained flat year over year Balance Sheet Cash FlowAs of Sep 30 2018 Amdocs had cash cash equivalents and short term interest bearing investments of 519 2 million compared with 979 6 million recorded in the prior quarter During the reported quarter the company repurchased shares worth 90 million Also its board of directors approved the payment of a quarterly dividend of 25 cents per share The dividend will be paid on Jan 18 2019 OutlookFor first quarter fiscal 2019 Amdocs expects revenues in the range of 990 1 030 million and adjusted earnings per share in the range of 95 cents to 1 01 For fiscal 2019 the company expects revenues to grow 1 5 year over year on a reported basis and 2 6 on constant currency basis This guidance takes into account the impact of foreign exchange fluctuations
How Have Estimates Been Moving Since Then
Fresh estimates followed a downward path over the past two months The consensus estimate has shifted 6 87 due to these changes
VGM Scores
Currently Amdocs has a subpar Growth Score of D however its Momentum Score is doing a lot better with a B Charting a somewhat similar path the stock was allocated a grade of C on the value side putting it in the middle 20 for this investment strategy
Overall the stock has an aggregate VGM Score of C If you aren t focused on one strategy this score is the one you should be interested in
Outlook
Amdocs has a Zacks Rank 3 Hold We expect an in line return from the stock in the next few months |
CMCSA | Tegna TGNA Up 1 4 Since Last Earnings Report Can It Continue | It has been about a month since the last earnings report for Tegna TGNA Shares have added about 1 4 in that time frame outperforming the S P 500
Will the recent positive trend continue leading up to its next earnings release or is Tegna due for a pullback Before we dive into how investors and analysts have reacted as of late let s take a quick look at its most recent earnings report in order to get a better handle on the important catalysts TEGNA s Q3 Results Benefit From Political Subscription RevenuesTEGNA reported third quarter fiscal 2018 non GAAP earnings of 40 cents per share which beat the Zacks Consensus Estimate by 3 cents The figure surged 73 9 on a year over year basis and 11 1 sequentially On a GAAP basis revenues increased 16 1 year over year to 538 9 million which came ahead of the Zacks Consensus Estimate of 537 million Top line growth was primarily driven by increase in subscription and political revenues TEGNA s adjusted revenues which exclude political advertising were up 4 year over year to 478 6 million Top Line in DetailAdvertising and Marketing Services 49 1 of total revenues The category generated 264 9 million down 4 7 on a year over year basis The year over year decline was primarily due to significant demand for political advertising Subscription 38 5 This category generated 207 5 million in the reported quarter up 16 8 from the year ago quarter This was driven by growth in contract rate hike and higher paid subscribers of both multichannel video programming distributor MVPD and new virtual MVPD services Moreover subscribers and revenues from OTT streaming services increased in the third quarter Political 11 2 This category generated 6 4 million which surged 1496 9 from the year ago period The year over year growth was primarily driven by solid political advertising revenues of 57 million Notably in the reported quarter Premion contributed to less than 10 million to political advertising Year to date political revenues totaled 238 million touching an all time high including presidential election years The figure is up 50 from the previous mid term election in 2014 Other 1 2 TEGNA generated 6 3 million of revenues from this category up 25 7 year over year Operating DetailsNon GAAP adjusted EBITDA was 180 9 million up 24 7 year over year Adjusted EBITDA margin was 33 6 up 230 bps year over year Reported GAAP operating expenses 71 4 of total revenues in third quarter were 384 7 million up 10 7 year over year primarily due to increased programming fees acquisition of KFMB expenses associated with revenue growth and Premion investments Operating margin expanded 350 basis points bps from the year ago quarter to 28 6 primarily due to strong political revenues that aided top line Balance Sheet Cash FlowAs of Sep 30 total cash was 23 8 million compared with 24 5 million as of Jun 30 Also long term debt outstanding was 3 billion compared with 3 1 billion in the last reported quarter Notably during the quarter TEGNA repaid debt of 144 million which reduced the interest cost of about 8 million per year In the third quarter TEGNA generated 178 6 million of cash from operations compared with 108 7 million in the prior year quarter Non GAAP free cash flow was 164 2 million compared with 94 6 million in the year ago period Increase in free cash flow was primarily driven by record political revenues Recent UpdatesDuring third quarter Daily Blast LIVE DBL was launched in 15 additional markets which makes DBL available in a total of 50 markets Notably DBL is a 30 minute live entertainment and trending news program which airs on TV and digital platforms across the country This October TEGNA announced that by the end of 2020 the company will roll out the next generation over the air television transmission standard ATSC 3 0 nationwide along with other leading broadcasters Additionally TEGNA announced agreements to acquire two leading local stations WTOL a CBS affiliate in Ohio and KWES a Comcast NASDAQ CMCSA owned NBC affiliate in Texas The all cash deal worth 105 million is expected to be accretive to free cash flow immediately after close and to earnings in less than a year after close Management noted that this transaction will have no material impact on leverage due to strong balance sheet Following the deal TEGNA is expected to have a market share of 87 in Ohio and Texas Premion which is helping TEGNA reach customers beyond its traditional business has expanded the company s reach to 200 markets from the earlier 39 markets Additionally Premion users have access to content from 125 branded partners nationwide per management Notably Premion won two Audience Based Buying Innovation ABBI 2018 Awards which celebrate the very best in audience based buying Premion won the third place in OTT Platform of The Year category after Hulu and Roku and second place in Audience Based Buying Platform of The Year category Management noted that it has integrated Hatch its in house creative agency G O Digital a digital marketing services provider and Premion into a single brand called TEGNA Marketing Solutions GuidanceFor fourth quarter 2018 TEGNA expects revenues to increase in the range of 30 on a year over year basis primarily driven by subscription and political revenue growth Political revenues are expected to be 144 million Non GAAP operating expenses are anticipated to increase in mid teens due to increase in programming fees and Premion reinvestments For 2018 TEGNA expects revenues to increase in mid teens on a year over basis Political revenues are expected to be 238 million Adjusted revenues excluding political advertising are anticipated to increase in mid single digits Subscription revenues are expected to be at the high end of the previously announced guidance of mid teens Management guided Premion revenues excluding political revenues to be 75 million compared with the earlier guided figure of 60 million
How Have Estimates Been Moving Since Then
In the past month investors have witnessed an upward trend in fresh estimates The consensus estimate has shifted 13 79 due to these changes
VGM Scores
Currently Tegna has an average Growth Score of C however its Momentum Score is doing a lot better with an A Following the exact same course the stock was allocated a grade of A on the value side putting it in the top quintile for this investment strategy
Overall the stock has an aggregate VGM Score of A If you aren t focused on one strategy this score is the one you should be interested in
Outlook
Estimates have been trending upward for the stock and the magnitude of these revisions looks promising It comes with little surprise Tegna has a Zacks Rank 2 Buy We expect an above average return from the stock in the next few months |
WFC | Wells Fargo falls 1 in pre market trade as Q2 revenue misses | Investing com Wells Fargo NYSE WFC reported mixed results Friday that beat on the bottom line but missed on revenue sending its shares lower in pre market trade
Wells Fargo said earnings per share came in at 1 07 in the second quarter beating expectations of 1 01 a share
The bank s revenue totaled 22 17 billion in the April to June quarter coming in under estimates for revenue of 22 47 billion
Second quarter 2017 results demonstrated the benefit of our diversified business model as we continued to generate strong financial results invest for the future and adhere to our prudent risk discipline chief executive officer Tim Sloan said in the press release
We continued to make progress this quarter in our efforts to rebuild trust and build a better Wells Fargo and while there is still more work ahead of us we are on the right track and I am confident about our future he added
Traders will now turn their attention to the bank s conference call due to start at 10 00AM ET 14 00GMT
Following the release of the report shares in Wells Fargo rose fell 0 99 in pre market trade to 55 05 by 8 11AM ET 12 11GMT The bank closed on Thursday with gains of 0 78 at 55 60
Meanwhile U S equity markets pointed to a flat open The blue chip Dow futures was unchanged the S P 500 futures edged down 1 point or 0 05 while the tech heavy Nasdaq 100 futures inched forward 1 point or 0 02 |
WFC | High expenses cast cloud over Wells Fargo earnings beat | By Dan Freed and Nikhil Subba Reuters Analysts pressed Wells Fargo Co N WFC executives about the bank s expenses on Friday after it failed to meet revenue expectations and indicated that costs may remain elevated in the near term Wells the third largest U S bank by assets spent 61 1 cents for every dollar of revenue it generated in the second quarter While that was an improvement from the first quarter Wells efficiency ratio remains above a targeted range of 55 to 59 cents in costs per dollar of revenue Operating at this level is just not acceptable Chief Executive Officer Tim Sloan said on a conference call with analysts to discuss results echoing comments on costs he made earlier this year Wells Fargo has been taking measures to cut 4 billion from its annual expenses by 2019 including branch closures curtailing travel and entertainment costs and even reducing the amount of postage it uses However it takes about a year for savings to trickle down to the bottom line once branches close said Chief Financial Officer John Shrewsberry The bank is also facing elevated costs for technology as well as legal and regulatory matters Some of that relates to a sales scandal that erupted last year involving the bank s creation of as many as 2 1 million accounts in customers names without their permission Wells had to spend an additional 110 million on third party services related to the scandal last quarter It also added to legal reserves for various matters including regulatory investigations into its residential mortgage backed securities business Four analysts brought up expenses during the call including Deutsche Bank DE DBKGn analyst Matthew O Connor who pushed executives to explain why they do not offer an absolute target for costs the way some other big banks do I think it s something worth considering he said I think it would be helpful for your stock Wells shares were down 1 9 percent at 54 54 on Friday afternoon with analysts citing high expenses and weak revenue as disappointments even though the bank managed to beat Wall Street s profit expectations Its net income rose 4 5 percent to 5 40 billion or 1 07 per share in the quarter ended June 30 topping the average analyst estimate of 1 01 according to Thomson Reuters I B E S Revenue remained flat at 22 17 billion and missed analysts average estimate of 22 47 billion with weakness in mortgages and wholesale banking Non interest expenses rose 5 percent to 13 54 billion It was not all gloom however Net interest income a measure that reflects earnings relative to funding costs rose 6 4 percent to 12 48 billion thanks to loan growth higher interest rates and keeping a lid on deposit costs Oppenheimer Co analyst Chris Kotowski called the results lackluster and questioned whether problems related to the sales scandal were hurting Wells underlying businesses The one bright spot he said was that customers delinquency and default rates looked good
While we ve said many many times over the years that credit improvement is a gift that will keep on giving it is not a substitute for core revenue growth he wrote in a note to clients |
WFC | Market Update 30 09 2016 | Currencies
EUR USD with the majority of the European data slightly worse than expected and positive data out of the US mainly GDP which was better than expected we saw us move down again to the support around the 1 12 level
USD JPY was trading up for the vast majority of the day but in the end was unable to close above the resistance around the 101 26 level With the angst creeping back to the markets though we can see a higher demand for the JPY as a safe haven
GBP USD did not succeed in breaking above the downwards trend line and subsequently moved lower to break again below the 1 30 also because of good data out of the US Today we will have the GDP data out of the UK so we can expect some more volatility here
AUD USD broke out of the wedge on the backdrop of the good US data which strengthened the USD
Indices
DAX 30 dropped sharply as the woes of Deutsche Bank DE DBKGn continues to strike fear in the markets especially the worries that this could start a domino effect
S P 500 with the DAX dropping for the reasons mentioned above the S P was quick to follow especially since the US is having its own banking issue with Wells Fargo NYSE WFC We could see again that the resistance at the 2167 level was able to hold
Commodities
Gold is moving a bit up as worries on the possible fallout from the situation surrounding the Deutsche Bank are worrying some people but on the other hand we also have a slightly stronger USD so any gains are limited for now
Oil eventually moved further up yesterday but is not doing it very convincingly yet and getting closer to the level reached back in August This is still due to the fact that OPEC was able to reach an agreement More information about this can be found
Stocks
Deutsche Bank remains under a lot of pressure as people are starting to take out money away from the bank most notably it was reported that some major hedge funds started also to limit their exposure to the bank |
WFC | How Deutsche Bank Could Take Down Germany | The first bad news broke following the third quarter of 2015 Deutsche Bank DE DBKGn reported a loss of 7 billion The news just keeps coming with low or negative earnings thanks to bad loans in Germany and abroad
In my February 19 2016 edition of The Leading Edge I issued a clear and stern warning about Deutsche Bank and about a second banking crisis looming I explicitly said
The Telegraph ran an article yesterday asking if Is there an echo in the room
Without a doubt things are coming to a head at the bank It s heavily exposed to the fracking industry in the U S which is sure to see continued rising defaults ahead It has the largest derivatives exposure of any bank at 54 7 trillion and that s not a typo out of the worldwide total of 550 trillion And now the U S Justice Department is slapping on a 14 billion fine for fraud in mortgage security sales
Deutsche s market value is now only 16 billion How can it afford to raise capital to pay this fine or to cover future large losses
Even worse the hard line that Merkel has taken against bailing out Italian banks requiring bail ins by larger depositors instead has forced her into declaring that there can be no bail out or assistance for Deutsche Bank either
She s obviously between a rock and a hard place If she helps bail out Deutsche it would damage the euro If she doesn t it could take the country down and her along with it
Evidence keeps mounting that Deutsche Bank could very well be the riskiest bank in the world something I ve been saying for months now
The table below shows that Deutsche only has capital that is 2 68 of its assets A healthy bank requires a level of 10 or more
So much for how well capitalized the banks are after 2008
The best bank of this risky bunch is Wells Fargo NYSE WFC with capital that is 8 01 of its assets But it faces fraud problems of its own
The riskiest top seven banks are all in Europe
Unsurprisingly Deutsche Bank s stock when Merkel declined aid That puts it down 92 from its 2007 all time high and 66 since August 2015
How is it possible that Deutsche Bank and most global banks for that matter have seen stock prices decline massively in the last year while the broader stock markets keep edging up
Quite frankly it isn t
If the U S large cap markets haven t already topped in early September I say they ll do so before year end most likely in early December when the Fed comes back up against raising rates or losing all credibility
And by then Italy s 18 and rising non performing loans and Deutsche Bank s 14 billion fraud fine will likely have come to a head
Deutsche Bank and Italy look to be the most likely triggers for the next crash one that will be far worse than the subprime crisis in the U S in 2008 |
CMCSA | Facebook ordering original news shows from veteran networks | Adding some detail to recent efforts to overhaul its approach to news Facebook NASDAQ FB says it will fund original news programming from established networks including ABC CNN Fox Univision and Mic Those will be exclusive to Facebook and new programming rather than pickups of programs produced for elsewhere NBC News NASDAQ CMCSA earlier announced a similar approach to new programming for an upcoming streaming service it s building The programming s set to be available this summer on Facebook s Watch video tab Now read |
CMCSA | AT T is climbing ahead of a judge s decision on its 85 billion bid for Time Warner | A decision is expected Tuesday afternoon in the government s lawsuit to block s purchase of Time Warner Shares of both companies were rising in early trading Tuesday The so called vertical merger would give AT T the ability to distribute more Time Warner content including HBO and CNN Everything s on the line for the Department of Justice a former antitrust official said A federal judge in Washington DC is expected to hand down a ruling Tuesday in the US government s antitrust suit against in its for Ahead of the ruling AT T was up about 1 in early trading while Time Warner was higher by about 0 9 The merger if permitted by Judge Richard Leon is widely considered to be a harbinger of future media mergers that could radically shift how Americans consume television and movies going forward Most notably which Comcast NASDAQ CMCSA is expected to compete against In its suit against AT T the Department of Justice alleges the merger would and fewer of the new emerging innovative options that consumers are beginning to enjoy Makan Delrahim head of the Justice Department s antitrust division said when announcing the suit last year President Donald Trump voiced opposition to the merger back in November on the day after the suit was announced by his administration He said the deal is echoing similar statements he made on the campaign trail throughout 2016 AT T rebuffed those claims made by the Justice Department and Trump saying because they benefit consumers without removing any competitor from the market The merger is considered vertical because it would combine Time Warner which makes programming with AT T a distributor of that content which Everything s on the line now for the Department of Justice Gene Kimmelman a former DOJ antitrust official who now runs a consumer advocacy group They either come out as enormous victors or they ll face an avalanche of new transactions if they lose this case |
CMCSA | Should You Invest In The First Trust Consumer Discretionary AlphaDEX Fund FXD | If you re interested in broad exposure to the Consumer Discretionary Broad segment of the equity market look no further than the First Trust Consumer Discretionary AlphaDEX Fund FXD a passively managed exchange traded fund launched on 05 08 2007
An increasingly popular option among retail and institutional investors passively managed ETFs offer low costs transparency flexibility and tax efficiency they are also excellent vehicles for long term investors
Sector ETFs are also funds of convenience offering many ways to gain low risk and diversified exposure to a broad group of companies in particular sectors Consumer Discretionary Broad is one of the 16 broad Zacks sectors within the Zacks Industry classification It is currently ranked 12 placing it in bottom 25
Index Details
The fund is sponsored by First Trust Advisors It has amassed assets over 373 18 M making it one of the larger ETFs attempting to match the performance of the Consumer Discretionary Broad segment of the equity market FXD seeks to match the performance of the StrataQuant Consumer Discretionary Index before fees and expenses
The StrataQuant Consumer Discretionary Index employs the AlphaDEX stock selection methodology to select stocks from the Russell 1000 Index
Costs
When considering an ETF s total return expense ratios are an important factor and cheaper funds can significantly outperform their more expensive counterparts in the long term if all other factors remain equal
Annual operating expenses for this ETF are 0 63 making it on par with most peer products in the space
It has a 12 month trailing dividend yield of 0 94
Sector Exposure and Top Holdings
ETFs offer a diversified exposure and thus minimize single stock risk but it is still important to delve into a fund s holdings before investing Most ETFs are very transparent products and many disclose their holdings on a daily basis
This ETF has heaviest allocation in the Consumer Discretionary sector about 75 60 of the portfolio Telecom and Industrials round out the top three
Looking at individual holdings Comcast Corporation class A NASDAQ CMCSA accounts for about 1 78 of total assets followed by Graham Holdings Company GHC and Qurate Retail Inc QRTEA
The top 10 holdings account for about 16 99 of total assets under management
Performance and Risk
So far this year FXD has added about 0 24 and is up about 10 91 in the last one year as of 11 08 2018 During this past 52 week period the fund has traded between 38 43 and 45 22
The ETF has a beta of 1 and standard deviation of 14 39 for the trailing three year period making it a medium risk choice in the space With about 110 holdings it effectively diversifies company specific risk
Alternatives
First Trust Consumer Discretionary AlphaDEX Fund holds a Zacks ETF Rank of 2 Buy which is based on expected asset class return expense ratio and momentum among other factors Because of this FXD is an outstanding option for investors seeking exposure to the Consumer Discretionary ETFs segment of the market There are other additional ETFs in the space that investors could consider as well
Vanguard Consumer Discretionary ETF VCR tracks MSCI US Investable Market Consumer Discretionary 25 50 Index and the Consumer Discretionary Select Sector SPDR Fund XLY tracks Consumer Discretionary Select Sector Index Vanguard Consumer Discretionary ETF has 2 94 B in assets Consumer Discretionary Select Sector SPDR Fund has 13 90 B VCR has an expense ratio of 0 10 and XLY charges 0 13
Bottom Line
To learn more about this product and other ETFs screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe please visit Zacks ETF Center |
CMCSA | Amdocs DOX Q4 Earnings Top Revenues Meet Increase Y Y | Amdocs Limited NASDAQ DOX reported fourth quarter fiscal 2018 results wherein the bottom line beat the Zacks Consensus Estimate and the top line matched the same Quarterly non GAAP earnings came in at 99 cents per share compared with 94 cents in the year ago quarter The bottom line beat the Zacks Consensus Estimate of 98 cents Revenues in the reported quarter came in at 1 billion matching the Zacks Consensus Estimate and marking year over year improvement of 2 3 Continued flow of new customers penetration into new regions and a number of awards for projects and managed services drove revenue growth However a sequential impact of nearly 5 million in foreign currency movements was a dampener Amdocs Limited Price Consensus and EPS Surprise Fiscal 2018 ResultsRevenues for the full fiscal year came in at 3 97 billion compared with 3 87 billion a year ago Non GAAP earnings per share for fiscal 2018 were up 6 1 year over year to 4 03 Non GAAP Operating income was 687 million up 3 3 year over year In fiscal 2018 the company generated net cash of 557 2 million from its operating activities compared with 636 1 million in fiscal 2017 Quarter DetailsCustomer Experience Systems revenues were up 2 6 and reached 992 5 million in the reported quarter Customer Experience Directory revenues were down 15 8 year over year to 10 1 million Geographically revenues from North America 64 of total were 644 8638 2 million down 0 9 from the year ago quarter due to customer fluctuations Europe 15 recorded revenues of 150 6 million up 16 marking the best quarter in more than 10 years Rest of the World 21 generated revenues of 213 8 million up 3 9 During the quarter Amdocs bagged its first transformation award with Italian telecommunications provider TIM This further boosted its foothold in Europe Moreover it entered into a six year deal with PLDT NYSE PHI on managed IT infrastructure With this agreement Amdocs expanded its association with the telecom company with which it had already signed a 300 million managed transformation deal earlier this year Management is optimistic about the 12 month backlog that reached 3 336 billion at the end of the quarter The company continued to aid digital media and network transformations of its clients which improved its revenue growth rate The company s recent partnership with Comcast NASDAQ CMCSA which was materialized in the fourth fiscal quarter is expected to help drive software defined wide area networks SD WAN service Margins and Operating MetricsThe company reported non GAAP operating expenses of 829 98 million up 2 3 from the year ago quarter Non GAAP operating income increased 2 6 and came in at 172 61 million Operating margin of 17 2 for the quarter remained flat year over year Balance Sheet Cash FlowAs of Sep 30 2018 Amdocs had cash cash equivalents and short term interest bearing investments of 519 2 million compared with 979 6 million recorded in the prior quarter During the reported quarter the company repurchased shares worth 90 million Also its board of directors approved the payment of a quarterly dividend of 25 cents per share The dividend will be paid on Jan 18 2019 OutlookFor first quarter fiscal 2019 Amdocs expects revenues in the range of 990 1 030 million and adjusted earnings per share in the range of 95 cents to 1 01 For fiscal 2019 the company expects revenues to grow 1 5 year over year on a reported basis and 2 6 on constant currency basis This guidance takes into account the impact of foreign exchange fluctuations Zacks Rank and a Key PickAmdocs currently has a Zacks Rank 3 Hold A stock worth considering in the broader Computer and Technology sector is CyberArk Software Ltd NASDAQ CYBR You can see Long term earnings growth for CyberArk is 19 83 The Hottest Tech Mega Trend of AllLast year it generated 8 billion in global revenues By 2020 it s predicted to blast through the roof to 47 billion Famed investor Mark Cuban says it will produce the world s first trillionaires but that should still leave plenty of money for regular investors who make the right trades early |
WFC | Wells Fargo trims auto loans as market cools risk overhaul kicks in | By Dan Freed NEW YORK Reuters Wells Fargo Co N WFC is scaling back and remolding its auto lending business in response to growing stress in the market as well as a bank wide push for more centralized risk controls Wells which was the No 2 U S provider of auto loans less than a year ago has already cut quarterly originations by nearly 30 percent over the nine months leading into March 31 according to a May 11 company presentation It has also begun consolidating the collections operation in a move that people familiar with the business say could eliminate hundreds of jobs after a new head of auto finance took the reins in April Wells Fargo joins other lenders in reducing exposure to the rapidly cooling U S auto market Bankers auto industry executives analysts and regulators have been warning since 2014 that the auto loan market could overheat after being fueled for years by low interest rates and easy financing terms Chasing growth some lenders including Wells Fargo began to embrace borrowers with shaky credit In late 2015 however auto default rates began creeping above other types of consumer debt according to data compiled by Cox Automotive prompting some lenders to tighten standards and edge away from the market Wells Fargo began curtailing its auto exposure beginning last year It cut the share of subprime loans in the auto portfolio to 8 over percent in the first quarter from over 11 percent a year earlier according to a company presentation Analysts expect to see higher delinquency and default rates when Wells Fargo reports results on Friday The general view which they ve been pretty clear about is that loan growth will be negative for next two to three quarters said Brian Foran an analyst at Autonomous Research He expects the auto pullback to shave roughly one percentage point off Wells Fargo s net interest income growth over time The bank s executives have acknowledged that tightening of standards comes at a price Wells Fargo is willing to give up volume and share in order to protect its balance sheet from credit risk Franklin Codel the bank s head of consumer lending told the bank s investor day in May At the same event Chief Executive Officer Tim Sloan singled out auto loans as the business with the biggest potential for a negative credit event A Wells Fargo spokeswoman declined to comment for this story beyond what executives have already said about auto lending As Wells Fargo s auto loan originations have dropped it has slipped to No 7 from No 2 among top U S auto lenders according to Experian Automotive The bank also began a revamp of its auto business early this year as part of a broad overhaul following a sales scandal that has roiled the third largest U S bank by assets In April Laura Schupbach took over management of the auto business months after her predecessor Dawn Martin Harp announced plans to leave Schupbach is a 22 year Wells Fargo veteran who most recently ran its insurance business after various roles in finance and expenses according to her corporate biography Weeks later the bank began the process of moving collections staff from 57 locations across the country to three central hubs in Raleigh North Carolina Irving Texas and Chandler Arizona according to an internal memo viewed by Reuters People with knowledge of the business say hundreds of positions will likely be eliminated A bank spokeswoman declined to say how many jobs might be lost and would not authorize an interview with Schupbach Martin Harp could not be reached LESS INDEPENDENCE The auto lending shake up some details of which were first reported by Auto Finance News is the latest indication that Wells Fargo s top management is seeking greater control over businesses that traditionally operated with much independence In interviews three people who have worked inside the auto lending operation raised questions about what impact the abandoning of the run it like you own it philosophy will have in the long term In recent years auto lending delivered nearly twice as much in revenue per dollar of expenses as the overall bank according to people familiar with the numbers They attributed the performance to tight cost controls and the operational independence that was once a source of pride for Wells Fargo But that business model has come under scrutiny after revelations that thousands of branch employees created as many as 2 1 million accounts to hit aggressive sales targets Following an internal investigation Wells Fargo s directors released a report in April recommending tighter and more centralized risk management Since then Wells has begun moving 5 200 risk employees from business units to one corporate risk division Although the changes could make businesses less nimble tighter controls were inevitable said Marty Mosby analyst at Vining Sparks
It was hard for them to give up that last piece of who they really were he said That s what made them more profitable than the other bank |
WFC | Pimco sues Wells Fargo over MBSs | Pimco OTCQX AZSEY is suing Wells Fargo NYSE WFC for withholding money allegedly owed to bond investors in a dispute that could have implications for billions of dollars still locked up in mortgage securities created before the financial crisis It s the latest twist in a legal saga that has pitted investors including Pimco against banks over their actions as the administrators or trustees appointed to manage MBSs Now read |
WFC | U S labor market strengthening producer prices creeping up | By Lucia Mutikani WASHINGTON Reuters The number of Americans filing for unemployment benefits fell last week for the first time in a month and producer prices unexpectedly rose in June likely keeping the Federal Reserve on course for a third interest rate increase this year Thursday s data from the Labor Department underscored labor market buoyancy and suggested that there was enough momentum in the economy to generate some inflation even though price pressures still remain moderate It remains hard for companies to hire skilled workers Inflation isn t slip sliding away from the Fed s goal said Chris Rupkey chief economist at MUFG in New York We expect they are on track to announce the start of the balance sheet unwind in September and go for the last of three rate hikes planned for this year in December Initial claims for state unemployment benefits dropped 3 000 to a seasonally adjusted 247 000 for the week ended July 8 the Labor Department said It was the 123rd straight week that claims remained below 300 000 a threshold associated with a healthy labor market That is the longest such stretch since 1970 when the labor market was smaller The labor market is near full employment with the jobless rate at 4 4 percent The drop in first time applications for jobless benefits followed data last week showing the economy created 222 000 jobs last month the second biggest payrolls increase this year A Fed survey of the economy published on Wednesday showed labor markets tightened further for both low and high skilled positions particularly in the construction and IT sectors Prices for U S Treasuries fell with the yield on the 30 year government bond hitting a session high Stocks on Wall Street were trading slightly higher while the dollar was little changed against a basket of currencies PRODUCER PRICES NUDGE UP In another report the Labor Department said its producer price index for final demand edged up 0 1 percent last month amid sustained increases in the cost of services that offset declining energy prices That followed an unchanged reading in May The year on year increase in the PPI however slowed to 2 0 percent from 2 4 percent in May as last year s energy driven rise dropped out of the calculation Economists had forecast the PPI being unchanged last month and rising 1 9 percent from a year ago A key gauge of underlying producer price pressures that excludes food energy and trade services increased 0 2 percent last month The so called core PPI fell 0 1 percent in May The core PPI increased 2 0 percent in the 12 months through June after climbing 2 1 percent in May Fed officials are closely watching inflation which has remained below the U S central bank s 2 percent target for five years They have largely viewed the recent retreat in price pressures as transitory We expect inflation pressures to firm in the second half of the year but any realized gains are likely to be limited said Sam Bullard a senior economist at Wells Fargo NYSE WFC Securities in Charlotte North Carolina The Fed increased borrowing costs in June for a second time this year Another rate hike is forecast in December and economists also expect the U S central bank to announce in September a plan to start reducing its 4 2 trillion portfolio of Treasury bonds and mortgage backed securities Fed Chair Janet Yellen told lawmakers on Wednesday that the economy was healthy enough for the central bank to raise rates and begin winding down its massive bond portfolio Last month prices for services gained 0 2 percent accounting for almost 80 percent of the increase in the PPI
Services were lifted by a 0 3 percent rise in the index for final demand trade services excluding transportation and warehousing It was the fourth straight monthly increase in services and followed a 0 3 percent gain in May |
WFC | Fed s Yellen prepared to act against Wells board if appropriate | By Howard Schneider and Dan Freed WASHINGTON Reuters Federal Reserve Chair Janet Yellen said on Thursday the central bank was prepared to act against directors of Wells Fargo if an investigation deems it appropriate Under questioning by Democratic Senator Elizabeth Warren of Massachusetts about the bank s creation of millions of fake accounts Yellen said she would not comment on details of the Fed s supervision of Wells Fargo N WFC But we do have the power to remove directors she said We need to conduct a thorough investigation to look at the full record We are certainly prepared to take enforcement actions The company in response noted steps they have taken to date including election of a new chief executive appointment of an independent chair and new board members and a retooling of customer service and sales practices Wells Fargo s board and management team have taken many actions in response to its retail sales practices issues including changes in senior leadership executive accountability actions and numerous steps to ensure we make things right company spokeswoman Erika Reynoso said in an e mailed statement That work continues In June Warren wrote a letter to the central bank calling for it to remove 12 members of the Wells Fargo Board of Directors Wells Fargo has been dealing with multiple lawsuits and regulatory inquiries after it created as many as 2 1 million credit card and checking accounts without customer authorization in order to meet aggressive sales targets the subject of a settlement with regulators on Sept 8 The ensuing scandal damaged the bank s reputation as a model for the industry hammered its shares for several weeks and led to the resignation of CEO and Chairman John Stumpf who also forfeited tens of millions of dollars worth of compensation On Sunday the bank got preliminary approval to pay 142 million and perhaps more to customers whose credit scores were harmed by the unauthorized accounts Still it faces probes from federal state and local government agencies including the U S Department of Justice as well as a number of private lawsuits according to its quarterly securities filing in May
Yellen last fall told lawmakers that the Fed had opened a broad based review of compliance and governance systems at the largest banks and regarded it as very important that senior management be held accountable for any wrongdoing |
WFC | Is Wells Fargo Still Warren Buffett s Favorite Buy | Recently the fact that s it s time for us to finally begin getting greedy when others are fearful as delicious bargains were popping up all over the place It s now time to take action Wells Fargo NYSE WFC the biggest retail bank by capitalisation is again on sale
Having recently sold out of my large position at its recent peak I wasn t sure if I could pick up one of Warren Buffett s as well as his long time friend Charlie Munger s favourite bank stocks again soon
But a recent 185M fine and all the bad press of bank sales staff practices have created this opportunity A 185M fine to a 232 Billion bank is literally peanuts financially
Yes its reputation has been slightly tarnished but it s highly unlikely that it s millions of customers will close their accounts and mortgages and switch over to another bank This ain t going to happen
So is it finally time to re accumulate Wells Fargo WFC at a bargain Its recent price reversal from a strong 45 price support limits our risk of catching the falling knife
The following is what makes me to want to continue adding Wells Fargo to my long term portfolio over the coming days Please note I am both a long term deep value investor as well as a medium term trader who utilizes the combination of both fundamental technical and macro analysis to form a view of every investment I make Doing so I believe leads to low risk and superior market beating returns over the long run Fundamental Factors The Bad
Wells Fargo has suffered from bad press lately due to illegal as well as immoral sales staff practices opening accounts without customers full consent and knowledge
After a recent fine of 185M although not large for a bank of its size WFC will likely now be much more scrutinized by banking regulators going forward
A weak Earnings Per Share EPS is forecast
The Good
Intrinsic valuation of 52 62 approx so WFC is currently well below intrinsic value with a margin of safety built in at current prices
Warren Buffett would always say that it is far better to pay a fair price for a great company than pay a wonderful price for a sub par company with Wells Fargo we actually get both Great company at a great price
A Return on Equity of over 12 the biggest for all the major banks
EPS have been strong over the past 5 years
Undemanding P E ratio of about 11
Strong dividend yield of about 3 3
Technical Factors The Bad
Recent 50 key price support level was broken
Price is currently below the 20 50 and 200 day moving averages
The Good
There seems to be strong price support at the 45 price level
The stock is oversold on a variety of momentum indicators and buying volume is well above average over the past week
Value seeking fund managers like myself will take advantage of this banking giant now on sale
Other Factors
For longer term investments I generally like to see who else is on board with me and where the smart money has found its home In my opinion actions always speak louder than words Wells Fargo is a widely held stock by smart money
Charlie Munger 67 3 of portfolio managed
Warren Buffett 17 5 of portfolio managed
Lou Simpson 11 66 of portfolio managed
David Abrams 6 85 of portfolio managed
Tweedy Browne 6 65 of portfolio managed
Chris David 5 06 of portfolio managed
And many more
Conclusion
Just over a week ago I was fortunate enough to sell out of my entire large Wells Fargo position and lock in a sizable capital gain at close to its recent peak I have been waiting to hopefully again pick up one of my favourite stocks
Fortunately this has occurred much earlier than expected As long as strong buying volume continues I will be personally adding more Wells Fargo into our long term portfolio over the coming days You may want to check out Wells Fargo too |
WFC | The End Of Another Quarter What Have We Learned | Friday September 30 2016Oil prices still matter Americans may be disgruntled about the level of work they currently have but at least they re working Election 2016 is no slam dunk for Hillary Clinton These are the things we ve learned during calendar Q3 which ends today Personal Income and Spending was at 0 2 exactly as expected in August Consumer spending was unched in the month Wages were up an additional 0 1 from the notable 0 5 in July The Savings Rate rose a notch from 5 6 to 5 7 All of this is more or less in line with expectations Deutsche Bank NYSE DB is making headlines again hitting record lows around 10 50 per share in the pre market after a group of hedge funds have reduced exposure to the German bank major In fact if there is a too big to fail bank in Germany it would be Deutsche Bank The U S Justice Department has levied a 14 billion fine on Deutsche Bank which is now in question that the bank can pay The fine relates back to the mortgage crisis in the U S that caused the Great Recession 8 years ago and has led speculators to relate the fortunes of DB to those of Lehman Brothers the U S investing institution that went belly up one month prior to the bottom falling out of the U S economy Germany has felt the stress of bearing the burdens of the Eurozone and especially the euro monetary unit That Deutsche Bank has now been hit with these major fines questions are rife that the nearly 150 year old institution may not survive this latest episode But if Wells Fargo NYSE WFC can survive its fraud scandal DB should be able to weather this storm Because Germany stands at the apex of Eurozone cohesiveness that s what all this worry is about That said after a 1 sell off in American indices yesterday we re seeing modest positives in the S P 500 3 the Dow 30 and the Nasdaq 2 So what have we learned in Q3 Apparently not a ton Mark VickerySenior Editor |
WFC | Oil And Deutsche Bank In Focus | Oil prices still matter Americans may be disgruntled about the level of work they currently have but at least they re working Election 2016 is no slam dunk for Hillary Clinton These are the things we ve learned during calendar Q3 which ends today
Personal Income and Spending was at 0 2 exactly as expected in August Consumer spending was unched in the month Wages were up an additional 0 1 from the notable 0 5 in July The Savings Rate rose a notch from 5 6 to 5 7 All of this is more or less in line with expectations
Deutsche Bank is making headlines again hitting record lows around 10 50 per share in the pre market after a group of hedge funds have reduced exposure to the German bank major In fact if there is a too big to fail bank in Germany it would be Deutsche Bank DE DBKGn
The U S Justice Department has levied a 14 billion fine on Deutsche Bank which is now in question that the bank can pay The fine relates back to the mortgage crisis in the U S that caused the Great Recession 8 years ago and has led speculators to relate the fortunes of DB to those of Lehman Brothers the U S investing institution that went belly up one month prior to the bottom falling out of the U S economy
Germany has felt the stress of bearing the burdens of the Eurozone and especially the euro monetary unit That Deutsche Bank has now been hit with these major fines questions are rife that the nearly 150 year old institution may not survive this latest episode
But if Wells Fargo NYSE WFC can survive its fraud scandal DB should be able to weather this storm Because Germany stands at the apex of Eurozone cohesiveness that s what all this worry is about
That said after a 1 sell off in American indices yesterday we re seeing modest positives in the S P 500 3 the Dow 30 and the Nasdaq 2 So what have we learned in Q3 Apparently not a ton |
WFC | Financial ETFs In Focus On Wells Fargo s Sales Scandal | Shares of Wells Fargo Company NYSE WFC took a hit recently after the Consumer Financial Protection Bureau CFPB fined the bank for opening millions of unauthorized accounts In addition to the 190 million fine the bank might also face a series of legal actions by its ex employees and shareholders ETFs that invest a notable portion of their assets in Wells Fargo are also getting affected by the scandal
Unauthorized Sales Scandal
The banking giant was recently of illegally opening 1 5 million deposit accounts in the name of customers who did not authorize the same Moreover the employees have also been alleged of applying for 565 000 credit cards which were not permitted by customers Also debit cards were requested and issued without the consumers knowledge or consent and the employees went as far as creating PINs
Out of the combined fine of 190 million the bank will pay 100 million to the Consumer Financial Protection Bureau the largest in the agency s history given the severity of the violations Also Wells Fargo will be paying 35 million and 50 million to the Office of Comptroller of the Currency and City and County of Los Angeles respectively The rest of the amount will be paid in customer remediation read
Lawsuits by Ex Employees Shareholders
The situation has worsened further with the company facing a couple of lawsuits by former employees and shareholders Two of the bank s ex employees Alexander Polonsky and Brian Zaghi filed a in California Superior Court in Los Angeles County accusing that the bank s rigorous and illegal sales practices pushed employees to the verge of breaking point
These ex employees who were dismissed or demoted over the past 10 years demanded at least 2 6 billion in damages According to the complaint The biggest victims of Wells Fargo s scam are the class of victims that were fired because they did not meet these cross sell quotas by engaging in the fraudulent scam that would line the CEO s pockets read
Separately law firm Robbins Geller Rudman Dowd LLP filed a lawsuit in San Francisco federal court targeting on behalf of all shareholders of the bank who bought the company s stock between Feb 26 2014 and Sep 15 2016 The lawsuit was filed against John Stumpf Chairman and CEO of Wells Fargo Chief Financial Officer John Shrewsberry and Carrie L Tolsted along with the bank It accused that the bank s cross selling efforts to retail customers were the product of a carefully designed system and were not meant to fulfill customers need and satisfaction
Impact of the Scam
As an immediate response 5 300 employees were fired by the bank Wells Fargo refunded 2 6 million to customers for any charges associated with the products which they may not have requested Notably the accounts refunded represented just 1 of the accounts reviewed by a third party consulting firm and refunds averaged 25 The bank also stated that it s making efforts for improved customer satisfaction while maintaining loyalty and ethics read
Separately John Stumpf is set to all of his outstanding unvested stock awards of around 41 million He has also agreed to forgo his salary during the investigation Also Carrie Tolstedt who headed the company s community banking unit will forfeit all of her outstanding unvested equity awards of around 19 million Additionally both Stumpf and Tolstedt will not be awarded bonus for 2016
Financial ETFs to Watch
Shares of Wells Fargo witnessed a significant decline in recent times mostly led by its unauthorized sales scam The bank lost 2 9 and 12 4 over the past five sessions and in the trailing one month respectively as of Sep 29 2016 The financial ETFs that have a significant exposure to this banking behemoth were also negatively impacted by the scam read
iShares US Financial Services Financial Services Select Sector SPDR and PowerShares KBW Bank ETF declined 2 4 2 3 and 2 respectively over the past five sessions IYG XLFS and KBWB have 9 6 8 9 and 7 3 of their assets invested in Wells Fargo respectively While IYG and KBWB have a Zacks ETF Rank 4 Sell XLFS has a Zacks ETF Rank 3 Hold with a High risk outlook
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WFC | Canadian Dollar Lower As OPEC Deal Questioned | The Canadian dollar depreciated on Thursday erasing the gains from a day earlier when the Organization of the Petroleum Exporting Countries OPEC announced an oil output cut surprising the market who was expecting a freeze Doubts about the details of the agreement are keeping the price of oil from rising higher and have put pressure on the CAD that awaits Friday s Canadian GDP figures for the month of July
Comments all week from U S Federal Reserve members have made an interest rate hike this year very likely Fed Presidents Loretta Mester and Dennis Lockhart both made comments supporting an interest rate with Philadelphia President Patrick Harker focusing more on the impact of trade Fed Chair Janet Yellen testimony in Washington continued to include no new information on the rate hike cycle but understandably was concerned with regulation and oversight after the Wells Fargo NYSE WFC scandal
The Final U S GDP data for the second quarter delivered positive news for the USD with a higher than expected 1 4 percent growth beating the forecast of 1 3 percent based on the two previous estimates Unemployment claims rose last week by 3 000 for a 254 000 claims but still under the anticipated 260 000 The job market has been the strongest pillar of the U S economic recovery but as the market gets closer to full employment there are more questions about the quality and wages of the jobs that have replaced those lost after the 2008 crisis
The USD CAD lost 0 428 percent in the last 24 hours The pair is trading at 1 3155 after the CAD rally ran out of steam at the 1 3050 level Doubts on the OPEC strategy and its execution and vigilance of production quotas slowed down the appreciation of oil and reversed most of the gains for the Canadian currency versus the dollar
The Bank of Canada BoC has stood on the sidelines for most of 2016 opting for the Federal government to try and do the heavy lifting to spark economic growth with fiscal stimulus Announced in March and with an update expected in November the fiscal stimulus package has not been enough to spark growth and is now facing revenue challenges The Finance department conducted a survey of economists that forecast a 50 billion drop in nominal output A new round of stimulus is needed to help the Canadian economy overcome the drop of natural resource prices but it might prove to be a difficult political proposition The BoC has said it is ready to act but the runway is small on the interest rate front with 0 50 and with other options like negative rates and quantitative easing mentioned
West Texas rose 1 654 percent in the last 24 hours The price of crude is trading at 47 13 after the OPEC announced an oil production cut in their meeting in Algiers There are question marks about the finer details of the agreement and they will be addressed in the official November meeting of the organization in Vienna
Now although producers have agreed to agree avoiding the fate of the Doha meeting it seems Saudi Arabia has had to compromise and is losing its unquestioned leadership of the group Iraq apparently was not happy with the agreement and has become the number two crude producer as Iran was under sanctions for its nuclear program Another factor limiting the impact of the announcement is that part of the strategy in achieving market share through record high levels production would keep shale producers out of the market and if OPEC s plan starts rising prices it will also do it for competitors Supply continues to be disconnected from the global demand for crude which has shown unusual patterns during the summer
Market events to watch this week
Friday September 30 4 30am GBP Current Account 8 30am CAD GDP m m 9 00pm CNY Manufacturing PMI |
CMCSA | TiVo goes ex dividend tomorrow | TiVo NASDAQ TIVO had declared 0 18 share quarterly dividend in line with previous Payable June 20 for shareholders of record June 6 ex div June 5 Now read |
CMCSA | Disney Stock Hits Two Year Peak Before Earnings | Walt Disney Co NYSE DIS stock is up 2 at 116 42 in afternoon trading and just off a two year high of 116 84 as investors await the media powerhouse s impending earnings report which is slated for after the close tomorrow Aug 7 Below we will take a look at what the options market is pricing in for Disney after earnings and how the stock has been faring on the charts following Comcast s NASDAQ CMCSA bid withdrawal for Twenty First Century Fox FOXA assets
Disney stock has been on an uptrend since early May a time that coincides with the 30 day moving average transitioning from a ceiling of resistance to a line of support for the shares DIS has picked up 10 in just the past month and is set to mark its highest close since November 2015
Digging into the blue chip s earnings history DIS has closed flat or lower the day after the company reports in four of the last eight quarters including a 2 2 decline in May 2017 Looking back eight quarters the shares have moved 1 9 the day after earnings on average regardless of direction This time around however the options market is pricing in a much larger than usual 6 2 move for Wednesday s trading
Switching gears per data from the International Securities Exchange ISE Chicago Board Options Exchange CBOE and NASDAQ OMX PHLX PHLX DIS options traders have been leaning bearishly ahead of the company s highly anticipated report Disney stock s 10 day put call ratio of 1 09 stands in the 71st percentile of its annual range In other words puts have been bought over calls at a faster than usual clip
Analyst sentiment has also been pessimistic with nine of the 13 firms in coverage on DIS sporting a tepid hold recommendation Further the stock s average 12 month price target of 117 57 is a discount to current trading levels Should Disney surprise to the upside after earnings an exodus of option bears or a wave of upbeat analyst attention could propel the blue chip even higher |
WFC | Pension funds ask U S regulators to expand companies workforce disclosures | By Sarah N Lynch WASHINGTON Reuters A coalition that includes some of the largest U S pension funds want federal regulators to force big banks and other public companies to disclose details on how they manage compensate and incentivize their employees In a rulemaking petition seen by Reuters a coalition of 25 institutional investors including the California Public Employees Retirement System CalPERS and the California State Teachers Retirement System CalSTRS has called on the U S Securities and Exchange Commission to craft regulations requiring public companies to provide details they see as material to investors These would include details about worker demographics skillsets safety productivity human rights compensation and incentives the petition shows Under current rules companies are only required to provide investors with an employee headcount The way you structure and pay a sales force can definitely affect the business performance said Meredith Miller the chief corporate governance officer with UAW Retiree Medical Benefits Trust a leading coalition member Effective management of human capital can really boost the bottom line for a company and at the same time poor management of workforce issues like training and development or health and safety or diversity can create liability The 29 page petition seen by Reuters lays out an argument for why so called human capital management disclosures would be material to investors though it does not prescribe how those disclosures should be presented and defers that decision to the SEC The demand for additional information on how companies treat their workers comes less than a year after Wells Fargo NYSE WFC Co was fined by U S regulators who found that its compensation structure and unrealistic sales goals led employees to open some two million unauthorized accounts The petition cites a series of studies about how workforce issues can impact companies bottom lines as evidence for why new disclosure rules are needed For instance one study cited in the petition found that cutting work hours a common practice among retailers was found to harm a company s profitability The SEC typically receives a handful or more of public rulemaking petitions each year from interested stakeholders such as trade groups and good governance non profits But the SEC is not required to take up the proposals A 2011 petition calling for companies to disclose their political spending for instance was never formally proposed by the agency despite receiving a record number of comments and signatures |
WFC | New rule requires U S banks to allow consumer class actions | By Lisa Lambert
WASHINGTON Reuters U S banks and credit card companies could be prevented from blocking customers from banding together to sue them under a rule released by the country s consumer finance agency on Monday
In releasing the rule which goes into full effect in eight months the Consumer Financial Protection Bureau fired the first shot in a likely brutal political battle between Republicans and Democrats over regulators reach into banks workings and customer rights
Banks blasted the rule which bars financial firms from forcing customers to agree to settle disputes only through arbitration as a condition of opening new accounts but consumer advocates said it will make sure wronged customers have their day in court
Mandatory arbitration clauses that block customers from filing or joining a class action lawsuit appear in contracts for a wide variety of products
The rule was proposed last year under former President Barack Obama a Democrat who appointed the current director of the CFPB Richard Cordray Republicans now control both Congress and the White House and are already looking into stopping it in its tracks
Just before the CFPB unveiled the final rule Acting Comptroller of the Currency Keith Noreika wrote Cordray to raise safety and soundness concerns with a draft version he had read and asked the CFPB to share data it used in crafting the rule according to a copy of the letter obtained by Reuters
The CFPB did not share the final rule with him ahead of the announcement according to an Office of the Comptroller of the Currency spokesman
In the letter Noreika appointed by Republican President Donald Trump cited a section of the Dodd Frank Wall Street reform law that allows his office to set aside possibly unsafe CFPB rules
Eliminating mandatory arbitration could result in less effective consumer protection and remedies while simply enriching class action lawyers he wrote adding the rule may potentially decrease the products and services offered to consumers while increasing their costs
In the final rule the bureau requires financial companies to give customers the option of arbitration or of banding together to sue in class actions Companies must also provide redacted records of claims and awards reached through arbitration which the CFPB will post on its website beginning in July 2019
Rule critics say class actions are costly suck up time and result in lower awards for consumers In recent months they have worked to undo regulations barring the fine print from contracts for nursing homes and for profit colleges
Supporters say Americans have the right to take complaints to court and group lawsuits are effective in publicly correcting bad corporate behavior They say arbitrations are secretive and rigged in favor of companies
California may soon allow state residents to sue financial institutions after clauses inserted into Wells Fargo NYSE WFC account opening agreements blocked customers from suing over the bank s creation of unauthorized accounts in their names
OPPOSITION IN CONGRESS THE COURTS
Calling the new CFPB rule anti consumer the Republican chair of the House Financial Services Committee Representative Jeb Hensarling said Congress should reject it under the Congressional Review Act CRA which gives lawmakers power to kill newly minted regulations
The Consumer Bankers Association has already begun lobbying lawmakers to use the CRA on the rule said its president Richard Hunt
Cordray too told reporters on a call he expects Congress to look into nullifying the rule but questioned the level of support for the move Congress has already banned mandatory arbitration clauses for mortgages and contracts involving members of the military he said
Meanwhile one of Washington s most powerful lobby groups and CFPB critics the Chamber of Commerce said it will consider every approach to address our concerns which many interpreted as a threat to sue |
WFC | U S job openings fall from record peak quits rate rises | By Lucia Mutikani WASHINGTON Reuters U S job openings fell in May from a record high amid a surge in hiring but an increase in the number of Americans voluntarily quitting their jobs suggested the labor market remained robust Job openings a measure of labor demand decreased 301 000 to a seasonally adjusted 5 7 million the Labor Department said in its monthly Job Openings and Labor Turnover Survey JOLTS on Tuesday The drop pushed the jobs openings rate to 3 7 percent the lowest reading this year from a nine month high of 3 9 percent in April Hiring jumped to 5 47 million from 5 04 million the prior month There were broad increases in hiring from manufacturing to retail and professional and business services That narrowed the gap between job openings and hiring which had raised concerns of a troubling skills mismatch in the economy The hiring rate climbed two tenths of a percentage point to 3 7 percent Economists shrugged off the dive in job openings which they attributed to the rise in hiring The job openings plunge in May shows further evidence that the economy is hitting the wall of full employment said Chris Rupkey chief economist at MUFG in New York As the economy ages there s going to be fewer available jobs out there simply because companies have hired all the workers they need for now The so called JOLTS report is among the data watched by Federal Reserve officials to get a pulse on both the labor market and inflation Pointing to labor market strength 3 2 million Americans voluntarily quit their jobs in May lifting the quits rate to 2 2 percent from 2 1 percent in April This rate which the Fed looks at as a measure of job market confidence has rebounded from a low of 1 3 percent in late 2009 Despite the labor market nearing full employment with the jobless rate at 4 4 percent wage growth has remained frustratingly sluggish Average hourly earnings have failed to break above 2 5 percent on a year over year basis Economists say a growth rate of between 3 and 3 5 percent in wages is needed to bring inflation near the Fed s 2 percent target We look to quits rate to gauge workers willingness to leave current positions in search of higher wages said Sarah House an economist at Wells Fargo NYSE WFC Securities in Charlotte North Carolina Coupled with increased hiring across sectors the equally broad based increase in the quit rate should bode well for wage gains
Layoffs were little changed at 1 7 million in May holding the layoffs rate at 1 1 percent for an eighth straight month |
WFC | Wells Fargo beats Cincinnati appeal in public nuisance lawsuit | By Jonathan Stempel Reuters A federal appeals court on Tuesday rejected Cincinnati s effort to hold Wells Fargo NYSE WFC Co liable for creating a public nuisance by letting properties it owned including through foreclosure fall into disrepair because the upkeep cost too much The 6th U S Circuit Court of Appeals in Cincinnati said the Ohio city of roughly 299 000 people failed to show that higher police and fire expenses to combat crime and blight and a drop in its property tax base were the direct result of misconduct by Wells Fargo It also said Cincinnati failed to show that the third largest U S bank intended to cause harm or that the hundreds of properties it has owned including in distressed neighborhoods endangered the public s health or safety The city may use nuisance law to address an actual nuisance Circuit Judge Jeffrey Sutton wrote for a 2 1 majority But alleged bad intent or alleged code violations by themselves do not suffice in the absence of an unsafe or unsanitary condition associated with an identifiable property Cincinnati s city solicitor Paula Boggs Muething expressed disappointment with the decision saying it frees banks to continue privatizing economic benefit and socializing economic loss in Ohio The city of Cincinnati will continue to aggressively protect its neighborhoods from out of town problem property owners but today s decision that banks may ignore the city s laws without consequence has dealt a blow to that effort she said in a statement Wells Fargo did not immediately respond to requests for comment Cincinnati is one of many large U S cities to accuse banks following the 2008 financial crisis of causing harm by letting properties deteriorate conducting predatory lending or both The city claimed that San Francisco based Wells Fargo disregarded state and local property maintenance laws with impunity including by routinely ignoring civil fines for high weeds grass and building code violations It said the bank s unlawful practices have persisted since 2006 including in more vulnerable neighborhoods where Wells Fargo appeared willing to spend on upkeep only if it stood to profit or reduce losses Cincinnati previously resolved other claims against Wells Fargo as well as nuisance and other claims in a similar lawsuit against Deutsche Bank AG DE DBKGn the appeals court said
The case is Cincinnati v Wells Fargo Bank NA et al 6th U S Circuit Court of Appeals No 16 3752 |
WFC | Republicans strike back at new U S ban on forced arbitration | By Lisa Lambert and Pete Schroeder WASHINGTON Reuters Republicans lawmakers on Tuesday started trying to kill a brand new U S rule prohibiting banks and credit card companies from requiring customers who open new accounts to sign an agreement that they will not join a group lawsuit in the event of a dispute The Consumer Financial Protection Bureau on Monday finalized the new rule banning mandatory arbitration clauses requiring consumers to forego class action suits and instead settle disputes in negotiations overseen by arbitrators frequently hired by companies The rule immediately ran into fierce opposition by Wall Street and Republicans who control both Congress and the White House They have long criticized the consumer agency which is run by a Democrat Richard Cordray Senator Tom Cotton a member of the Banking Committee has already announced he is drafting a resolution to kill the rule His fellow Republican Senator Pat Toomey chair of the subcommittee on financial institutions and consumer protection said he is considering a similar step Republican lawmakers plan to eliminate the rule using a law that allows Congress to undo new regulations with simple majority votes in both chambers and a signature from the president Analysts and consumer advocates have said the agency s rule may survive the Congressional challenge Still the U S Chamber of Commerce is contemplating a legal challenge and Trump administration officials are also looking at ways to kill the rule Isaac Boltansky a policy analyst for the investment firm Compass Point Research Trading said the rule has a slightly better than 50 percent chance of surviving in Congress Joe Valenti who tracks the issue for the liberal leaning Center for American Progress said the House of Representatives was unified against the rule which opponents have argued benefits class action lawyers not consumers It comes down to the Senate said Valenti noting that the rule would survive if only three Republicans in that chamber switched sides That is possible said Ed Mierzwinksi the consumer program director for the U S Public Interest Research Groups He noted that Senate Republicans have struggled to gather enough votes for majorities and the calendar is swollen with pressing legislation and confirmation hearings In addition Mierzwinksi said senators may be leery of appearing to side with Wall Street against consumers He noted that Wells Fargo NYSE WFC Co used clauses in its account opening agreements to block customers from suing over its phantom account scandal Supporters of the rule say mandatory arbitration denies citizens their day in court and is rigged in favor of big firms They say litigants banding together in a class action lawsuit have a better chance of getting companies to answer publicly for illegal activities and that fears of such a suit can discourage law breaking The consumer protection agency wrote the rule after conducting a lengthy multi year study of the issue Opponents of the rule say the study is flawed and that arbitration is cheaper and faster than class action lawsuits and produces better awards for consumers OTHER CHALLENGES The Chamber is exploring a prompt legal challenge to the rule said Matt Webb senior vice president for its legal reform institute Another possible challenge could come from the acting comptroller of the currency Keith Noreika He is laying groundwork to invoke an untested provision of the 2010 Dodd Frank financial reform law that allows the council of the country s top financial regulators to nullify a consumer agency rule if they decide it threatens the safety and soundness of the banking system Rohit Chopra senior fellow at the Consumer Federation of America and former CFPB assistant director said a lawsuit will probably fail because the law says the agency can restrict arbitration as long as it hews to its study He said the Dodd Frank provision that the comptroller s office is looking at was meant to keep risks to the financial system at bay
To suggest that this rule would cause a financial crisis is ridiculous on its face he said |
WFC | Wells Fargo Co Upgraded To Buy By Vetr Inc | Wells Fargo Company NYSE WFC was upgraded by from a hold rating to a buy rating in a research note issued to investors on Monday reports The firm presently has a 46 86 price target on the financial services provider s stock s price objective points to a potential upside of 4 41 from the company s previous close
A number of other equities research analysts have also weighed in on WFC Nomura restated a buy rating on shares of Wells Fargo Co in a research report on Saturday July 9th Barclays PLC reaffirmed a buy rating on shares of Wells Fargo Co in a report on Saturday July 9th FBR Co reaffirmed a buy rating and set a 63 00 target price on shares of Wells Fargo Co in a report on Wednesday June 1st Deutsche Bank AG reaffirmed a buy rating on shares of Wells Fargo Co in a report on Sunday June 26th Finally Zacks Investment Research downgraded Wells Fargo Co from a hold rating to a sell rating in a report on Wednesday June 15th Six investment analysts have rated the stock with a sell rating seven have assigned a hold rating and twenty have issued a buy rating to the company s stock The stock currently has a consensus rating of Hold and a consensus target price of 50 96
Wells Fargo Co traded down 1 88 on Monday hitting 44 88 The company had a trading volume of 30 937 973 shares The stock s 50 day moving average price is 48 17 and its 200 day moving average price is 48 53 The company has a market capitalization of 226 44 billion a P E ratio of 11 08 and a beta of 0 90 Wells Fargo Co has a one year low of 44 50 and a one year high of 56 34
Wells Fargo Co NYSE WFC last issued its quarterly earnings data on Friday July 15th The financial services provider reported 1 01 earnings per share for the quarter hitting analysts consensus estimates of 1 01 The business had revenue of 22 20 billion for the quarter Wells Fargo Co had a return on equity of 12 95 and a net margin of 24 33 The company s revenue was up 4 0 on a year over year basis During the same quarter in the prior year the firm earned 1 03 EPS On average analysts expect that Wells Fargo Co will post 4 02 EPS for the current fiscal year
The business also recently announced a quarterly dividend which was paid on Thursday September 1st Shareholders of record on Friday August 5th were given a dividend of 0 38 per share The ex dividend date was Wednesday August 3rd This represents a 1 52 annualized dividend and a dividend yield of 3 39 Wells Fargo Co s dividend payout ratio is currently 37 25
In other Wells Fargo Co news COO Timothy J Sloan sold 20 500 shares of the stock in a transaction on Monday August 8th The stock was sold at an average price of 48 92 for a total transaction of 1 002 860 00 Following the sale the chief operating officer now owns 650 815 shares in the company valued at 31 837 869 80 The transaction was disclosed in a document filed with the SEC which is available at Company insiders own 0 29 of the company s stock
Several large investors have recently bought and sold shares of the company Berkshire Hathaway Inc increased its stake in Wells Fargo Co by 2 0 in the fourth quarter Berkshire Hathaway Inc now owns 479 704 270 shares of the financial services provider s stock valued at 26 076 724 000 after buying an additional 9 411 911 shares in the last quarter Vanguard Group Inc increased its stake in Wells Fargo Co by 2 2 in the second quarter Vanguard Group Inc now owns 288 028 042 shares of the financial services provider s stock valued at 13 632 368 000 after buying an additional 6 247 583 shares in the last quarter Wellington Management Group LLP increased its stake in Wells Fargo Co by 2 7 in the first quarter Wellington Management Group LLP now owns 131 270 916 shares of the financial services provider s stock valued at 6 348 262 000 after buying an additional 3 450 553 shares in the last quarter BlackRock Fund Advisors increased its stake in Wells Fargo Co by 8 8 in the first quarter BlackRock Fund Advisors now owns 57 985 130 shares of the financial services provider s stock valued at 2 804 161 000 after buying an additional 4 695 036 shares in the last quarter Finally Norges Bank bought a new stake in Wells Fargo Co during the fourth quarter valued at about 2 695 119 000 Hedge funds and other institutional investors own 73 98 of the company s stock
Wells Fargo Co Company Profile
Wells Fargo Company NYSE WFC is a bank holding company The Company is a financial services company which offers banking insurance trust and investments mortgage banking investment banking retail banking brokerage and consumer and commercial finance It has three operating segments Community Banking Wholesale Banking and Wealth and Investment Management |
CMCSA | Britain unlikely to investigate Comcast bid for Sky says minister | LONDON Reuters Britain said it was unlikely to refer Comcast s O CMCSA bid for Sky L SKYB for a lengthy investigation after an initial review found that the 30 billion offer did not raise public concerns about media ownership Media minister Matt Hancock said however that he would give interested parties until 1700 local time on May 24 to respond before giving his final decision on whether the deal should be examined by British as well as European officials Sky is at the center of a bid battle between Comcast the world s biggest entertainment company and Rupert Murdoch s Twenty First Century Fox O FOXA which founded the British pay TV group and already owns 39 percent Unlike Comcast Fox has faced lengthy political and regulatory delays After agreeing an initial takeover in December 2016 it is still waiting for the government to say whether it should be allowed to buy Sky Hancock said on Monday that the Comcast bid was unlikely to be challenged I am minded not to issue a European Intervention Notice on the basis that the proposed merger does not raise concerns in relation to public interest considerations which would meet the threshold for intervention he said of the Comcast offer Comcast s bid for Sky is however being examined in Brussels after the company notified the European Commission of its intention to buy the group which broadcasts in Britain Ireland Germany Austria and Italy
Next month Fox will find out from the UK whether it is permitted to buy Sky while Comcast will receive a verdict from European authorities which could potentially end the regulatory uncertainty attached to the deal and pave the way for a takeover battle on price |
CMCSA | Comcast says it s considering an all cash offer for 21st Century Fox that outbids Disney | signaled a new bidding war on Wednesday as it announced it was considering an all cash offer for the assets that already agreed to buy Comcast said in a statement that it hadn t made a final proposal but that the work to finance the all cash offer and make the key regulatory filings is well advanced Disney agreed to buy most of 21st Century Fox s assets excluding Fox News Fox Business and other properties for 52 billion Comcast said Wednesday it was considering an all cash bid for most of 21st Century Fox s assets to outbid Disney s previously announced offer earlier in May indicated that Comcast was speaking with investment banks and preparing a bid to surpass Disney s 52 billion offer The assets Disney agreed to buy in December excluded the Fox News channel and Fox Business Network to avoid the regulatory scrutiny that would come with a single company owning ESPN and several other TV networks If Disney wins out it will beef up its entertainment slate with cable channels like FX The competing offer for 21st Century Fox s assets comes amid ratings declines across TV networks as more viewers opt for cheaper streaming and on demand content Comcast s announcement escalated a bidding war that was already underway in Europe for Fox s satellite business Comcast made a 22 billion 30 billion offer for the 61 stake it doesn t already own in the European pay TV group Sky Comcast said it hadn t made a final proposal but the work to finance the all cash offer and make the key regulatory filings is well advanced Earlier reports that Comcast was waiting on a US judge s ruling on AT T NYSE T s planned acquisition of Time Warner before submitting an offer for Fox Comcast shares fell by as much as 2 in premarket trading and 21st Century Fox gained more than 1 |
CMCSA | Is Away The Luggage Startup Of Investors Dreams | A company that started out with a storybook and preorder code because their product wasn t ready has just landed a 50 million investment into their already growing and successful brand Stephanie Korey and Jen Rubio founded a company called Away in 2015
Prior to launching this startup Korey and Rubio both worked at D2C store Warby Parker They thought they could use the same direct to consumer approach with their own company When they first started Away the main idea behind it was to minimize any headaches that a flier may have and maximize a carry on s potential
When travelling people pay most attention to what they wear or where they are going What s lacking is the need for a good piece of luggage In an interview with Bond Street Rubio mentioned that there isn t a luggage brand out there that talks about the way we travel or wants to connect with people about their experiences That s why they wanted to create a product that was more than just a suitcase
So What Exactly is Away
Away is a NYC based startup company that sells luggage through the direct to consumer approach The brand launched its first and only product in February 2016 a 225 hard shell carry on Since then due to customer demand and continued success the company has expanded its line to different sized carry ons kids suitcases and even travels bags Much like Warby Parker s idea of try at home glasses customers can try out the suitcases for 100 days and if they are not satisfied they can easily return them Not only are these suitcases guaranteed for life but they come with cool features like built in USB ports combination locks and a built in laundry bag
Today the company has sold more than half a million suitcases and just landed a multi million dollar investment from existing investors Forerunner Ventures Global Founders Capital and Comcast NASDAQ CMCSA Ventures to continue its growth trajectory According to with this new money Away may potentially be able to open six new stores by the end of the year As well as opening new stores and landing an investment the company will move into a 56 000 square foot office in New York and plans to add 249 jobs in the next five years
Even though most of Away s products are sold online they have started to open physical stores in New York Los Angeles and Austin while also making its debut in foreign markets like London Berlin and Milan By opening these physical stores Away has the opportunity to give its customers the real experience as they get to try their products in stores and potentially create a connection with them which is what they strive to do
One big part of Away is that they focus on storytelling as part of their marketing strategy By finding stories they can feed to the press and social media not only are they enhancing their brand image but they are creating a storyline for their company Consumers pay attention to what a company posts on its social media or what the media has to say about it so by creating an experience that is worthwhile consumers are bound to buy a suitcase that is more personalized to them and their story
Looking into the Future
With its recent 50 million investment Away is on the right track to a successful business Being in the market for more than two years now it has the potential to keep growing and attracting more and more consumers Not only has this woman led startup sparked creativity and ingenuity in the market but it is creating experiences for their consumers to keep coming back to them
5 Medical Stocks to Buy Now
Zacks names 5 companies poised to ride a medical breakthrough that is targeting cures for leukemia AIDS muscular dystrophy hemophilia and other conditions New products in this field are already generating substantial revenue and even more wondrous treatments are in the pipeline Early investors could realize exceptional profits |
WFC | Wells Fargo says closer to reaching 142 million phony accounts settlement | Reuters A California judge has granted a preliminary approval for Wells Fargo NYSE WFC Co s agreement to pay 142 million and perhaps more to customers whose credit scores were harmed by its employees creating fake accounts in their names the bank said on Sunday Wells Fargo has set aside that money to compensate customers who are part of a class action lawsuit involving claims regarding consumer or small business bank accounts credit cards or loans as well as identity theft protection between May 2002 and April of this year It plans to begin reaching out to those affected customers soon In the unlikely event that there are so many claims and there is not 25 million left over to distribute across all customers involved in the lawsuit Wells Fargo said it will pay more The bank reached the settlement in April according to a regulatory filing but the judge s preliminary approval moves the deal to the next step Wells Fargo has previously said thousands of branch employees created as many as 2 1 million bank and credit card accounts in individuals names without their permission to artificially hit sales goals Lawyers representing the claimants said 3 5 million accounts were created according to a May 12 story by the Los Angeles Times If U S District Judge Vince Chhabria grants final approval to the deal it could help Wells Fargo chip away at a bevy of legal and regulatory issues stemming from the scandal which erupted in September after it reached a 185 million settlement with a Los Angeles prosecutor and the Consumer Financial Protection Bureau Wells still faces probes from federal state and local government agencies including the U S Department of Justice as well as a number of private lawsuits according to its quarterly securities filing in May In a statement the bank s chief executive Tim Sloan said he was pleased that the court approved the preliminary settlement and considered it a major milestone in our efforts to make things right for our customers
If the agreement receives final approval the bank expects it will close out the vast majority of claims in 10 class action lawsuits related to the one it is trying to settle |
WFC | China s LeEco crisis to cost listed unit 2 5 billion in market value funds estimate | SHANGHAI Reuters Struggling Chinese conglomerate LeEco could see the market value of its listed unit fall around 2 5 billion should its shares resume trading showed estimates from three mutual fund investors as the unit extended a trading suspension In separate revaluation statements Harvest Fund Management Co Ltd China Post Capital Fund Management Co Ltd and E Fund Management Co Ltd said they expect shares of Leshi Internet Information Technology Corp Beijing to fall nearly 30 percent once investors get the chance to react to latest developments Leshi could not be reached for comment LeEco founder Jia Yueting resigned as chairman of Leshi on Thursday hours after making a public plea for patience He had previously said LeEco had grown too quickly from video streaming into consumer electronics and electric vehicles leading to a cash crunch that has seen a court freeze some assets Jia also resigned as Leshi s chief executive during the trading suspension which Leshi requested from April 17 due to possible restructuring On Friday the firm said it would extend the suspension for as long as another three months The revaluation illustrates the impact on investors of China s lengthy trading suspensions a major concern of foreign investors One thing portfolio managers hate is suspension of trade Anthony Cragg senior portfolio manager at Wells Fargo NYSE WFC Asset Management and China veteran told Reuters on Wednesday You can tolerate losing money but you cannot tolerate not being able to trade Suspending a stock is a big no no Harvest Fund and China Post both with heavy exposure to Leshi in separate statements on Friday said they would adjust their valuation of Leshi shares to 22 37 yuan 27 percent lower than their last pre halt closing price of 30 68 yuan E Fund on Friday said it would revalue Leshi shares at 22 05 yuan or 28 percent lower Other major investors included Dacheng Fund Management Co Ltd Penghua Fund Management Co Ltd and Guangfa Fund Management Co as per Leshi s first quarter earnings report released at the end of April
In August Harvest Fund China Post and Caitong Fund Management Co Ltd bought 81 8 billion privately placed Leshi shares for 45 01 yuan apiece As of the last market price their investments had fallen by 32 percent |
WFC | The Zacks Stocks In The News Blog Highlights Wells Fargo Twitter E l f Beauty Maersk | For Immediate Release
Chicago IL September 23 2016 Zacks com looks back on the hottest stories of the week featured in the Stocks in the News blog where analysts and writers discuss the latest news and events impacting stocks the financial markets and the greater investing world
Here are highlights from this week s Stocks in the News blog
Tuesday wasn t a great day for Wells Fargo NYSE WFC CEO John Stumpf the man whose company is at the center of a scandal involving fraudulent account opening practices The banking chief was called to a Congressional committee hearing to answer questions about the company s fraud and several key U S senators held nothing back while grilling Stumpf
Stumpf s most vocal critic was Elizabeth Warren the senior senator from Massachusetts The Democratic senator questioned Stumpf s accountability demanded his resignation and suggested that he be criminally investigated
On Wednesday social media company Twitter NYSE TWTR announced that it has partnered with news and media company Bloomberg to live stream coverage of the upcoming presidential debates The partnership is an expansion of its deal with Bloomberg Television and it is also exclusive meaning that no other networks will be live streaming the debates on Twitter
On Thursday low priced cosmetics maker e l f Beauty Inc NYSE ELF opened up sharply higher on its first day of trading at 24 soaring 41 after pricing its IPO yesterday above the expected range The company raised 141 million on Wednesday by pricing 8 3 million shares at 17 per share above its indicated range of 14 to 16 per share
e l f Beauty said it would use the proceeds from its IPO to pay off its approximately 204 million worth of debt and for general corporate purposes
On Thursday Denmark s biggest company A P Moeller Maersk A S OTC AMKBY an oil and shipping giant announced that it will be splitting into two separate companies one a transport division and the other an energy business
Maersk plans to focus on its transport and logistics business and any oil or oil related businesses will become a new energy unit the oil businesses within the new unit may either remain part of the Maersk group or will become joint ventures mergers or a listing
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CMCSA | European shares flat investors brace for Trump s Iran deal decision | LONDON Reuters European shares opened broadly flat on Tuesday as investors prepared for Donald Trump s decision on whether to withdraw the U S from the Iran nuclear deal a move which could disrupt global oil supply At 0738 GMT the pan European STOXX 600 index was down 0 05 percent with a flurry of first quarter corporate earnings and mergers and acquisitions deals prompting sharp individual price moves Shares in Danish hearing aid maker William Demant CO WDH were the worst performer falling over 10 percent after warning that lower demand would weigh on sales German postal and logistics group Deutsche Post DHL DE DPWGn also disappointed investors by missing first quarter profit expectations and saw its shares fall 6 7 percent Among European blue chips Unilever LON ULVR posted the best performance up 1 9 percent as it announced the start of a 6 billion euro share buyback scheme In London Shire L SHP added 2 8 percent after Takeda Pharmaceutical T 4502 said it agreed to buy the group for 45 3 billion pounds 61 50 billion after it raised the cash element to secure a recommendation Sky L SKYB was down 1 1 percent after U S cable operator Comcast O CMCSA formally notified the European Commission of its intention to bid for Britain s pay TV group
Sources also told Reuters earlier that Comcast was asking investment banks to increase a bridge financing facility by as much as 60 billion so it could make an all cash offer for the media assets that Twenty First Century Fox agreed to sell to Walt Disney |
WFC | Dollar set for biggest quarterly drop in nearly seven years | By Sam Forgione NEW YORK Reuters The U S dollar recovered slightly on Friday but remained set for its biggest quarterly decline against a basket of rival currencies in nearly seven years after hawkish signals from foreign central banks this week pressured the greenback further Investors have ramped up expectations for tighter monetary policy from the European Central Bank Bank of England and Bank of Canada after hints from officials this week This has made the greenback less attractive in addition to doubts that the Federal Reserve would be able to raise interest rates again this year and that U S President Donald Trump could enact his pro growth agenda The U S dollar index which measures the greenback against a basket of six major currencies was set to decline about 4 6 DXY percent for the second quarter to mark its steepest quarterly percentage drop since the third quarter of 2010 The euro was set to gain more than 7 percent against the greenback for its biggest quarterly percentage gain since the third quarter of 2010 The euro has racked up about 2 percent of its gains and the dollar index has posted 1 6 percent of its losses this week alone What really gave the hawkish central banks extra punch was how it seemed to be a coordinated effort to signal a shift away from low rate policies said Joe Manimbo senior market analyst at Western Union Business Solutions in Washington He said improving economic growth in Europe and Canada opened the door for those comments and was a reality check how the U S isn t standing head and shoulders above everyone else The dollar index was last up 0 1 percent at 95 727 while the euro was down 0 2 percent against the dollar at 1 1412 The euro touched its strongest in nearly 14 months on Thursday of 1 1445 while the dollar index touched a roughly nine month low of 95 470 early Friday Analysts said Friday s bounce for the dollar came as some traders likely took profits on gains in the euro as well as the sterling The dollar fell against the Canadian dollar however and was last at C 1 2985 after touching a nearly 10 month low of C 1 2948 earlier
It appears as though the euro and the pound could be testing some resistance levels and that could also contribute to the profit taking said Eric Viloria currency strategist at Wells Fargo NYSE WFC Securities in New York |
WFC | Wells Fargo unit hires new head of U S portfolio solutions | Reuters Wells Fargo NYSE WFC Asset Management named Jonathan Hobbs as head of U S portfolio solutions and Kevin Kneafsey as a senior investment strategist with the multi asset client solutions group Hobbs and Kneafsey will be based in San Francisco and report to the president of the unit Nicolaas Marais the Wells Fargo Co division said on Friday Wells Fargo Asset Management is a division of Wells Fargo Wealth and Investment Management which manages top tier investment options Hobbs joins from BlackRock s multi asset team while Kneafsey served as a senior adviser for Schroders multi asset team |
WFC | The Daily Shot U S Inflation Surprises To The Upside | We begin with the United States where consumer inflation surprised to the upside
1 The chart below shows US core CPI which came in a bit above consensus
2 Other inflation measures tracked closely by the Fed the so called sticky CPI and the 16 Trimmed Mean CPI moved higher as well
3 While it s easy to get excited about these increases leading to the conclusion that the Fed must raise rates soon some caution is required here The bulk of the increase came from the medical care component of the CPI and it s not at all clear how rate hikes would cure this problem
4 The other component of inflation that remains robust is shelter CPI The chart below shows how housing costs compare with the overall core CPI over the past ten years Some suggest that a rate hike is required to cool housing costs However most of these increases come from rental expenses and there is little evidence that higher rates reduce rents In fact higher financing costs could exacerbate the shortages of rental housing by lowering new construction activity
5 The ex shelter CPI is basically flat chart below and without the medical care price jump the US is in deflation
6 Moreover US real earnings growth is stalling Once real wage increases move into negative territory it will be difficult to sustain any inflation
7 Finally the U Michigan consumer inflation expectations are at the lowest level since 2010
1 In other US economic developments Goldman points out that surprise rate hikes are rare The chart below shows the futures implied probability before each rate hike since 1994 Many of the expectations were above 100 because the markets were pricing in some likelihood of a 50bp hike vs 25bp It s difficult to imagine the Fed shocking the market when the implied probability is below 20 currently the CME calculation shows it at 12 second chart below
2 The US ECRI leading indicator continues to rise and is starting to look a bit suspect This measure is inconsistent with most other economic signals we ve been getting
3 Business Insider points out that US small business sentiment is negatively impacted by the current political climate
4 The US dollar rose sharply on Friday in response to the inflation report Will the rally continue once analysts scale back their rate hike concerns
5 The dollar denominated commercial paper market has been hit by the looming money market regulation
6 China s holdings of US Treasuries falls to the lowest level since 2013
1 Turning to the Eurozone the bloc s labor markets continue to contribute to disinflationary pressures as labor cost growth slows
2 Deutsche Bank NYSE DB is in the news again Rumors persist that Angela Merkel wants the bank to merge or be acquired in order resolve the undercapitalization problem The latest issue with the US Justice Department penalties is exacerbating the situation
Deutsche Bank shares gave up 8 5 on Friday
And the bank s CoCos see took a hit on the news of the confrontation with the US authorities
3 Another troubled Eurozone bank Banca Monte dei Paschi di Siena OTC BMDPY saw its share price give up over 9 on Friday
Switching to the UK the British pound sold off sharply With the persistent currency weakness UK s inflation expectations are rising more on this later
Separately here is the UK policy uncertainty index
1 Now on to emerging markets where the Russian central bank cut interest rate further
2 Russian bond yields rose sharply because according to the central bank this is the last cut of the year This announcement surprised the markets
3 Speaking of rising yields here is the Mexican 10 Year government bond yield
4 The Mexican peso hit record lows approaching 20 pesos to the dollar Some have suggested that this sharp decline is in part the result of Donald Trump doing better in the polls Ironically such low valuations in the peso will incentivise even more US firms to move a larger portion of their operations south of the border
5 The Philippine peso is now down 8 days in a row as the markets remain nervous about Rodrigo Duterte
6 Colombia s imports are collapsing
7 Nigeria CPI continues to rise in response to some 40 devaluation of the currency over the past few months The Central Bank of Nigeria rate hike is coming shortly
8 China s property prices continue to move higher
1 We now turn to commodities where metallurgical Coal price blasts past 200 tonne discussed last week
2 Gold and silver speculative positions remain elevated
3 A pipeline problem sent US Northeast gasoline prices sharply higher in a stark divergence from crude oil
4 Speaking of divergence here is what happened to platinum and palladium on Friday Is it once again driven by the VW diesel vs gasoline auto production catalytic converters
5 Sugar prices jumped 6 on Friday nearing a 4 year high The explanation is below
1 In US equity and credit markets corporate HY bonds continue to outperform stocks year to date
2 US homebuilders have underperformed sharply in the past few days
3 Wells Fargo NYSE WFC is under pressure
4 Finally US small caps continue to outperform year to date |
WFC | Housing Starts Permits Down In August | Tuesday September 20 2016Ahead of tomorrow s big speech from Fed Chair Janet Yellen regarding the state of the U S economy and whether the FOMC will decide to raise interest rates we saw a new read on housing starts this morning August Housing Starts fell 5 8 annualized while Building Permits were down 0 4 The Commerce Department report on housing starts showed 1 142 million seasonally adjusted new buildings started down from a slightly revised 1 21 million in July Regionally the South slipped 14 8 which is the steepest drop in the past 10 months This region has been the biggest growth driver for while but now we re seeing the South drag on the read All other regions Northeast Midwest and West showed annualized increases Building permits are a forward indicator of the housing market and they reached a total of 1 139 million in August down from 1 145 million in July Expectations were for a slight increase in building permits but a 0 4 drop is not a frightening prospect Muliti family homes which had been leading the housing market over the past several quarters look to have taken a breather in August Wells Fargo NYSE WFC CEO John Stumpf appears on Capitol Hill today to explain his bank s fabricated account scandal to a congressional panel Reports are that Stumpf will accept full responsibility for the unethical sales practices but it s unclear what repercussions can be expected following this meeting We are just a handful of weeks before the General Election however so we should probably expect some heavy political context along with the questioning Mark VickerySenior Editor |
WFC | Here s Why Investors Are Pouring Money Into REIT ETFs | Since its separation from the financial sector real estate investment trusts or REITs have attracted investors attention According to ETF com the broader real estate sector ETF Real Estate Select Sector SPDR registered a healthy inflow of 2 8 billion last week the highest among other ETFs Now let s have a look at some of the key drivers behind the growing popularity of REIT ETFs
Impressive Dividend Yield
This is one of the popular sectors best known for its potential to offer healthy dividend yields In an environment when most of the sovereign bonds throughout the globe are suffering from low and negative yields investors are turning their focus toward sectors that have a solid track record to provide steady dividend yields Traditionally REITs boast high dividend payouts as they are required per the U S laws to distribute 90 of their annual taxable income in the form of dividends read
Moreover a surge in volatility level over the past one month also played a major role in boosting the popularity of dividend yielding securities which in turn had a positive impact on REIT ETFs The fear gauge CBOE Volatility Index jumped 21 9 in the trailing one month amid concerns including uncertainty regarding rate hike and inconsistent movement in oil prices The companies that pay dividends generally act as a hedge against economic uncertainty and provide downside protection by offering outsized payouts or sizable yields on a regular basis read
Low Interest Rate Environment
Meanwhile a significant reduction in rate hike chances in this month s policy meeting which is scheduled to start today is also speculated to boost the sector further In fact it is currently expected that the Fed will not raise the key interest rate before its December meeting This means that a low rate environment is expected to last for a longer period of time which will boost sectors like REIT that require significant amount of debt as rate hike means an increase in borrowing cost
Separately the National Association of Home Builders and Wells Fargo NYSE WFC reported that builder confidence index rose to an 11 month high level of 65 points in September This also had a significant impact on REITs yesterday Moreover a steady U S economy especially in a sluggish global economic growth environment is also speculated to boost the sector read
REIT ETFs to Watch
In this backdrop we have highlighted three REIT ETFs other than XLRE which have also registered healthy inflows in recent times amid rising popularity of this sector among investors
Vanguard REIT ETF
This fund tracks the MSCI US REIT Index In total it holds 150 securities in its basket with 34 5 of its assets invested in the top 10 holdings The fund is the most popular ETF in its space with 34 1 billion AUM and a solid daily average volume of nearly 4 million shares VNQ charges only 12 bps in annual fees The fund has a Zacks ETF Rank 1 Strong Buy with a Medium risk outlook and dividend yield of 4 86 The ETF attracted 266 3 million in net inflows in the month to date time frame read
Schwab US REIT ETF
This fund tracks the Dow Jones U S Select REIT Index In total it holds 114 securities in its basket with 42 8 of its assets invested in the top 10 holdings The fund has amassed 2 8 billion AUM and sees moderate daily average volume of more than 445 000 shares SCHH charges only 7 bps in annual fees and has a Zacks ETF Rank 3 Hold with a Medium risk outlook The ETF has a dividend yield of 2 4 The ETF registered net inflow of 34 8 million this month
iShares Cohen Steers REIT TN ICF
This ETF follows the Cohen Steers Realty Majors Index In total it holds 30 securities in its basket with more than half of its assets invested in the top 10 holdings The fund has 4 1 billion AUM and sees a moderate daily average volume of more than 215 000 shares ICF has an expense ratio of 0 35 The ETF has a Zacks ETF Rank 1 with a Medium risk outlook and dividend yield of 3 57 The ETF took in 5 2 million in net inflows in the month to date time frame
Want more information on the world of ETFs
Make sure to check out the podcast below where we discuss the investing landscape with Kevin O Leary and Connor O Brien of O Shares Investments |
WFC | Wells Fargo CEO Grilled By Congress Denies Fraud By Management | Tuesday wasn t a great day for Wells Fargo NYSE WFC CEO John Stumpf the man whose company is at the center of a scandal involving fraudulent account opening practices The banking chief was called to a Congressional committee hearing to answer questions about the company s fraud and several key U S senators held nothing back while grilling Stumpf
Stumpf s most vocal critic was Elizabeth Warren the senior senator from Massachusetts The Democratic senator questioned Stumpf s accountability demanded his resignation and suggested that he be criminally investigated
Since this massive years long scam came to light you have said repeatedly I m accountable But what have you actually done to hold yourself accountable Have you resigned as CEO or chairman of Wells Fargo Warren asked
The exchange between Warren and Strumpf reached its most tense point when Senator Warren brought up the chief executive s stock based compensation during the years that the Wells Fargo fraud occurred
While this scam was going on you personally held an average of 6 75 million shares of Wells stock The share price during this time period went up by about 30 which comes out to more than 200 million in gains all for you personally Warren said after a round of contentious back and forth questioning
Other members of the committee were also unimpressed with Stumpf s prepared remarks despite his attempt to place some of the blame on himself Although Stumpf did apologize to Wells Fargo s customers and employees as well as the American public he fell short of labeling the scandal a result of systemic fraud
I do want to make very clear that there was no orchestrated effort or scheme as some have called it by the company he claimed
Stumpf also argued that the fake accounts cost the bank money and customers The company also said that it has fired 5 300 employees in response to the issue which began in 2011 including managers and managers of managers
Today s committee hearing will certainly not be the last time Stumpf or Wells Fargo will face a tough series of questions in front of regulators and the American public |
WFC | Wells Fargo Has Topped Out | I have been watching Wells Fargo NYSE WFC CEO John Stumpf getting nailed by Congress particularly by Elizabeth Warren It s clear their reputation is totally trashed These guys are toast And the bear market hasn t even started yet John Stumpf for prison |
CMCSA | Comcast s Venture Capital Arm Is Bullish On Bitcoin and Blockchain | Gil Beyda managing director of the venture capital VC arm of Comcast NASDAQ CMCSA appeared on CNBC today April 26 with a bullish outlook for Bitcoin and real world applications of blockchain technology
Comcast Ventures has already invested in blockchain startups and four of the firm s partners are focused on blockchain investments |
CMCSA | Comcast Ventures Betting on Blockchain Bitcoin | Gil Beyda managing director of Comcast s venture capital arm has said he and his team are optimistic about the future of Bitcoin CNBC he also praised the technology underpinning cryptocurrencies blockchain saying he is confident about its real world applications
According to Beyda there is real value in Bitcoin and blockchain In 2017 people tried to speculate on the bullish trend but have now paused to reflect on the real applications of these technologies However as Beyda put it we ll see another surge again as people understand the potential of the technology
Comcast NASDAQ CMCSA is the largest broadcast and cable television company in the world by revenue and its affiliate Comcast Ventures invests in innovative businesses Asked about where his venture capital firm would put money Beyda said the team was excited about cryptocurrency and blockchain
Irrespective of the price of Bitcoin if it s 10 000 or 10 we still believe that there s core technology there that has the potential to disrupt many industries he stated
Beyda listed social media content distribution e commerce and voting as areas that can benefit from blockchain adoption
He also revealed that the firm had already invested in four blockchain oriented ventures with New York based startup Blockdaemon being among them
Asked about when we could feel the impact of blockchain on a regular basis Beyda said we are still at an early stage as a regulatory framework has yet to be established Blockchain is still waiting for that killer app he said adding it will be a year or two before broader adoption
Venture capital firms find it challenging to accurately value projects in the era of initial coin offerings as there are many startups that target tens and even hundreds of millions of US dollars with only a great team and a whitepaper Beyda also pointed out
This year VC investments in cryptocurrency startups to hit a record high by exceeding the 2017 tally |
CMCSA | Disney to create live sports entertainment shows for Twitter | By Lisa Richwine Reuters Walt Disney Co will create live sports news and entertainment programming specifically for Twitter Inc s social network a move to attract online viewers and advertising revenue through digital video Comcast Corp NASDAQ CMCSA networks including NBC and MSNBC Viacom Inc s Comedy Central MTV and BET and others also are developing content for the social network according to a statement on Monday from Twitter announcing more than 30 deals for live and original programming Disney s ESPN network plans a Twitter version of its flagship SportsCenter TV show with breaking news and analysis the statement said Twitter also will live stream ESPN s Fantasy Focus Live podcast The deals will expand Twitter s streaming video offerings and help Disney and others reach audiences online while traditional television viewing wanes Video views on Twitter have doubled in the past year the company said Under the agreement Disney s ABC broadcast network the Disney Channels Freeform and the company s movie studio also will produce live programming for Twitter the statement said Shares of Twitter jumped 4 5 percent to 30 31 after the deal with Disney was announced Disney shares rose 1 1 percent to 100 33 following the record setting debut of Avengers Infinity War Other companies that will provide video for Twitter include Hearst Magazines Digital Media Will Packer Media and BuzzFeed News plus sports leagues including Major League Baseball and Major League Soccer
Twitter announced the deals in New York at the Digital Content Newfronts where companies promote upcoming programming to advertisers |
WFC | Wells Continues To Sink | Wells Fargo NYSE WFC continues to weaken even with a Gartman driven rally across the board If it breaks 43 81 that will complete a monstrous top having undone nearly three years of gains |
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