Category Archives: nyse

Microsoft Stock Oversold, Gets Upgrade On Cloud Prospects

Microsoft ( MSFT ) stock is “underappreciated” by investors who are overlooking the company’s long-term prospects in cloud computing services, Cowen analyst Gregg Moskowitz said Tuesday. Moskowitz upgraded his rating on Microsoft stock to outperform from market perform, with a price target of 58. Microsoft was up over 2%, above 51, in morning trading on the stock market today . “With shares down 10% year to date on account of disappointing fiscal Q3 earnings, the market has overreacted, with an undue focus on the short term,” Moskowitz said in a research report. He sees Office 365 revenue accelerating and long-term success for Azure cloud infrastructure services. Microsoft’s Office productivity software has reached a turning point in its transition to a subscription service from licensed software, he said. Office sales returned to growth last quarter after a series of declines during the transition, Moskowitz said. Meanwhile, Azure is poised to gain higher capacity workloads from corporate customers as IT resources shift to the public cloud, he said. Cowen’s recent survey of over 300 public cloud customers gives it confidence in Microsoft’s cloud prospects, Moskowitz said. “The survey results were clearly positive for Azure, particularly at the enterprise level,” Moskowitz said. “Among those respondents who are looking to add a new public cloud service, 59% are considering Azure, which was higher than any other offering. “Further, when restricting the data to enterprise customers, Azure held a commanding 10-point advantage over the next closest vendor (53% vs. 43% for IBM ( IBM ) SoftLayer), making it the clear preference within this category of customer.” Other competitors include Alphabet ’s ( GOOGL ) Google Cloud Platform and Amazon.com ’s ( AMZN ) Amazon Web Services. RELATED: Microsoft Sheds Low-End Mobile Phone Business Microsoft Stock Rated Hold, Seen Near Full Value In Choppy Market .

Best And Worst Q2’16: All Cap Blend ETFs, Mutual Funds And Key Holdings

The All Cap Blend style ranks third out of the twelve fund styles as detailed in our Q2’16 Style Ratings for ETFs and Mutual Funds report. Last quarter , the All Cap Blend style ranked third as well. It gets our Neutral rating, which is based on aggregation of ratings of 71 ETFs and 684 mutual funds in the All Cap Blend style. See a recap of our Q1’16 Style Ratings here. Figures 1 and 2 show the five best and worst rated ETFs and mutual funds in the style. Not all All Cap Blend style ETFs and mutual funds are created the same. The number of holdings varies widely (from 4 to 3694). This variation creates drastically different investment implications and, therefore, ratings. Investors seeking exposure to the All Cap Blend style should buy one of the Attractive-or-better rated ETFs or mutual funds from Figures 1 and 2. Figure 1: ETFs with the Best & Worst Ratings – Top 5 Click to enlarge * Best ETFs exclude ETFs with TNAs less than $100 million for inadequate liquidity. Sources: New Constructs, LLC and company filings State Street SPDR S&P 5000 Buyback ETF (NYSEARCA: SPYB ), iShares Enhanced U.S. Large Cap ETF (NYSEARCA: IELG ), and ProShares Ultra Semiconductors (NYSEARCA: USD ) are excluded from Figure 1 because their total net assets are below $100 million and do not meet our liquidity minimums. Figure 2: Mutual Funds with the Best & Worst Ratings – Top 5 Click to enlarge * Best mutual funds exclude funds with TNAs less than $100 million for inadequate liquidity. Sources: New Constructs, LLC and company filings AMG Renaissance Large Cap Growth Fund ( MRLIX , MRLSX , MRLTX ), Jensen Quality Value Fund ( JNVIX , JNVSX ), and Hays U.S. Opportunity Fund (MUTF: HUOIX ) are excluded from Figure 2 because their total net assets are below $100 million and do not meet our liquidity minimums. ProShares UltraPro Dow30 (NYSEARCA: UDOW ) is the top-rated All Cap Blend ETF and Royce Special Equity Multi-Cap Fund (MUTF: RMUIX ) is the top-rated All Cap Blend mutual fund. Both earn a Very Attractive rating. ProShares Ultra Oil & Gas (NYSEARCA: DIG ) is the worst rated All Cap Blend ETF and Rydex Series Russell 2000 1.5x Strategy Fund (MUTF: RYAKX ) is the worst rated All Cap Blend mutual fund. Both earn a Very Dangerous rating. Nordstrom (NYSE: JWN ) is one of our favorite stocks held by RMUIX and earns a Very Attractive rating. Over the past decade, Nordstrom has grown after-tax profit ( NOPAT ) by 9% compounded annually. Over this time, the company has improved its return on invested capital ( ROIC ) from 9% in 2005 to 11% over the last twelve months. Nordstrom has also generated a cumulative $2.3 billion in free cash flow over the past five years. Despite the underlying fundamentals, JWN remains undervalued. At its current price of $51/share, JWN has a price-to-economic book value ( PEBV ) ratio of 0.9. This ratio means that the market expects Nordstrom’s NOPAT to permanently decline by 10%. If Nordstrom can grow NOPAT by just 5% compounded annually for the next decade , the stock is worth $94/share today – an 84% upside. Molson Coors Brewing Company (NYSE: TAP ) is one of our least favorite stocks held by VGPAX and earns a Dangerous rating. Since 2010, Molson Coors’ NOPAT has declined by 2% compounded annually. The company’s ROIC has fallen from 8% to 6% over this same time frame. Molson Coors has failed to generate positive economic earnings in any year of our model, which dates back to 1998. To justify its current price of $96/share, Molson Coors must grow NOPAT by 10% compounded annually for the next 11 years . This expectation seems overly optimistic given the company’s profit decline since 2010. Figures 3 and 4 show the rating landscape of all All Cap Blend ETFs and mutual funds. Figure 3: Separating the Best ETFs From the Worst Funds Click to enlarge Sources: New Constructs, LLC and company filings Figure 4: Separating the Best Mutual Funds From the Worst Funds Click to enlarge Sources: New Constructs, LLC and company filings D isclosure: David Trainer and Kyle Guske II receive no compensation to write about any specific stock, style, or theme. Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.

Yahoo CFO: Possible Buyers ‘Signaling’ In Media As Talks Drag On

Possible buyers of Yahoo ( YHOO ) are “signaling” in the media as they negotiate to purchase the Web portal, Yahoo’s chief financial officer said at a financial conference Tuesday. The Wall Street Journal reported last week that Verizon or private equity firms might offer as little as $2 billion to $3 billion for Yahoo, when analysts had been estimating bids in the $4 billion to $8 billion range. CNBC’s David Faber on Friday, in a tweet, declared that report “completely wrong.” Verizon Communications ( VZ ) has been viewed as the front-runner to buy Yahoo. There’s also speculation Microsoft ( MSFT ) has been in talks with private equity firms. “It is a robust process. Our collective goal is that we find a way, wherever this ends up, that ultimately Yahoo will do better,” Yahoo CFO Ken Goldman said at a JPMorgan financial conference in Boston. “I think it’s going very, very well. I sort of laugh sometimes at the press — at the signaling that people seem to try and do out there from a negotiating point of view,” he said. “But I think we’re working tirelessly to get to the right place.” Yahoo owns stakes in China e-commerce giant Alibaba Holdings ( BABA ) and in Tokyo-listed Yahoo Japan. SoftBank, which owns U.S. wireless firm Sprint ( S ) ( IBD ), is the biggest shareholder in Alibaba and in Yahoo Japan. Japan-based SoftBank might play a role in Yahoo’s expected sale, observers say. Yahoo recently added four new independent directors to its board under pressure by activist investor Starboard Value. Others in the hunt for Yahoo include big private equity firm TPG Capital and a group comprising investment firms Bain Capital and Vista Equity Partners. Berkshire Hathaway  ( BRKA ) Chairman  Warren Buffet , a noted investor who generally stays away from tech companies, might back a group led by Quicken Loans founder Dan Gilbert, if it makes a bid.