President-elect Donald J. Trump’s decision to pick Steven Mnuchin, a former Goldman Sachs partner, as the next Treasury Secretary is driving hopes on Wall Street that government sponsored mortgage giants Fannie Mae and Freddie Mac will be privatized in the new administration. “We’ve got to get them out of government control,” Mnuchin told Fox Business News on Wednesday morning as he was picked by Trump to be his Treasury Secretary.
Fannie Mae and Freddie Mac were bailed out to the tune of $188 billion during the financial crisis and put into government conservatorship as their portfolios of home loans soured during the credit crunch. Since the crisis, both firms have sat in a legal limbo.
FILE – This Monday, Aug. 8, 2011, file photo shows the Fannie Mae headquarters in Washington.(AP Photo/Manuel Balce Ceneta, File)
what is an investment: Francesca's Holdings Corporation(FRAN)
- [By Ben Levisohn]
Francesca’s Holdings (FRAN) has jumped 5.4% to $11.00 after beating earnings forecasts.
Restoration Hardware (RH) has tumbled 20% to $28.92 after slashing its full-year guidance. Restoration Hardware was also cut to Market Perform from Outperform at Telsey Advisory Group.
what is an investment: GigaMedia Limited(GIGM)
- [By Jim Robertson]
Today, our Under the Radar Moversnewsletter suggested small cap online gaming and cloud computing GigaMedia Limited (NASDAQ: GIGM) as a bullish long trade:
what is an investment: Infinera Corporation(INFN)
- [By Lisa Levin]
Infinera Corp. (NASDAQ: INFN) shares were also up, gaining 27 percent to $11.92 after the company reported stronger-than-expected Q4 results.
Equities Trading DOWN
- [By Tracey Ryniec]
Infinera isn’t in a glamorous part of the technology business, as it provides fiber optic connection gear, but as companies like Amazon and Facebook need and use ever more data, it’s Infinera which paves the way. Earnings are expected to grow 31% in 2016.
- [By Brian Feroldi]
Investing in the tech sector can be tricky. Competition tends to be fierce, which makes it difficult to stay one step ahead. Two companies that have a strong history of maintaining their edge are Skyworks Solutions(NASDAQ:SWKS)and Infinera(NASDAQ:INFN). Both of these businesses have been taking market share in their industries for years, which is impressive. But which of these two tech companies is the better investment today? Let’s review the bull thesis for each company so we can make an informed decision.
what is an investment: Signet Jewelers Limited(SIG)
- [By Ben Levisohn]
Tiffany (TIF) is having trouble. Signet Jewelers (SIG), a down-market competitor, is not.
SCOTT EELLS/BLOOMOBERG NEWS
Shares of Signet Jewelers have gained 3.4% to $122.10 at 11:44 a.m. today after the parent company of Zale and other mall diamond stores met earnings forecasts and offered upbeat guidance. Cowen’s Oliver Chen and team have the details:
- [By Peter Graham]
A long term performance chart shows shares of Tiffany & Co and small cap Blue Nile Inc (NASDAQ: NILE) nowback in positive territory and trending up while Signet Jewelers Ltd (NYSE: SIG) has outperformedbut that outperformancestarted falling off late last year:
- [By Cameron Saucier]
Worst-Performing S&P 500 Stocks No. 4: Signet Jewelers Ltd. (NYSE: SIG)
Signet sells jewelry and watches in the United States, Canada, and the United Kingdom. Year to date, SIG is down nearly 34% as of Oct. 7.
- [By Johanna Bennett]
Signet Jewelers (SIG) plunged more than 14% today after an investment letter took a critical look at the company.
As Bloomberg reported, James Grants, investment letter raised concerns about the jewelry retailers credit operations and mentioned a Buzzfeed story about customers complaining that their diamonds had been swapped out for lesser-quality gems.
At a recent $92, Signets share price had fallen almost 6.9% after earlier slipping below $85, a 14.1% decline
Signet shares are down nearly 26% in 2016 compared to the 2.5% gain posted by the S&P 500 index.
Cowen analyst Oliver Chen has regarded Signet as a must have stock, calling it Un-Amazon-able. But last week, Goldman downgraded Signet neutral from buy after the company said revenue and same-store sales for the fiscal first quarter missed expectations.
Signet may be getting out of the credit businesses. Last week, Signet announced it was explore strategic options for its credit book. Thats an extremely intriguing announcement given the stocks ongoing underperformance continues to be tied to the risk around their credit operations, wrote Wells Fargo analyst Ike Boruchow in a recent note.
Boruchow opines that Signet could net $1.5 billion from the sale of its credit business, and could use the funds to repurchase as much as 20% of the shares in its float.
Given that the credit quality of SIGs portfolio is likely below TGT and JWN, but better than CONN, we believe that SIG can reach a deal somewhere in the middle. Thus, we believe that they can outsource their credit function for 0.9x book value (same as CONN), or over $1.5 billion. Given the stronger credit portfolio than CONN, we also assume SIG can enter into a profit-sharing arrangement, though likely not one as favorable as JWN/TGT (we assume 40% of EBIT, or $15 million next year).
But losing control of its credit operations would cost the company between $800 mi
what is an investment: Smith & Nephew SNATS, Inc.(SNN)
- [By Charles Carlson, CEO and Portfolio Manager, Horizon Investment Services]
For investors looking for growth but also income, I especially like three health-care related stocksFresenius Medical (FMS), Novo Nordisk (NVO), and Smith & Nephew (SNN).
what is an investment: Allstate Corporation (The)(ALL)
- [By Michael Flannelly]
Wells Fargo analysts see a number of upside catalysts for The Allstate Corporation (ALL), plus a positive trend for automobile insurers as a whole. As such, the analysts upgraded the insurance provider on Thursday.
The analysts upgraded ALL from “Market Perform” to “Outperform” and boosted its valuation range from $48-$52 to $58-$62. This new valuation range suggests a 16% to 24% upside to the stock’s Wednesday closing price of $50.11.
“We are upgrading the shares of Allstate to Outperform from Market Perform on the basis of several fundamental reasons unique to the company as well as several positive, emerging structural trends for auto insurers in general,” Wells Fargo analyst John Hall stated. “We do not believe that the market has yet paid for potential unit growth within Allstate’s branded standard book of auto insurance, something we envision occurring over the next 6-12 months.”
As for some of the positive personal auto insurance sector trends, Hall noted, “These would include shifting demographics toward a safer driving population mix (more old drivers and fewer young drivers), changing driving habits particularly among millennials, a safer U.S. personal auto fleet, rising car sales pointing to positive symbol shift as well as industry conditions encouraging market share consolidation.”
Wells Fargo boosted Allstate’s 2013 EPS estimates from $4.62 to $4.85 and 2014 EPS estimates from $4.85 to $5.20.
Allstate shares were mostly flat during pre-market trading on Thursday. The stock is up 24.74% year-to-date.
- [By Shauna O’Brien]
Credit Suisse reported on Thursday that it has raised its estimates on insurance company The Allstate Corporation (ALL).
The firm has raised its price target on ALL to $62. This price target suggests a 16% upside from the stock’s current price of $52.23. Analysts currently have an “Outperform” rating on ALL.
Credit Suisse has also boosted estimates on ALL as its management is increasing returns.
Allstate shares were up 32 cents, or 0.62%, during Thursday morning trading. The stock is up 30% YTD.