Feb 19, 2017 - Q4 Earnings - Week 6

Q4 Earnings – Week 2017-02-19

Markets are still heavily skewed to watching Trump headlines and professional investors are more and more often adding the so called “Trump factor” to their expected return calculations. Some valuations are overstretched, especially financials while the energy is on negative too with the heavy debt load and current outlook for oil.

On the other hand, the cost of protectionc and hedging is pretty low with VIX trading around 11.50. Such a low level provides us with an interesting opportunity to hedge stock portfolios in case Trump doesn’t deliver on Feb 28 when the joint committee session before US Congress takes place. Then we have Mar 15 with FOMC and G10 FinMin and central bankers meeting right after on Mar 17-18.

But what are we up to this week apart from FOMC Minutes that can provide some clues about potential Mar 15 rate hike that is priced at 40%?

Wall-Mart Stores – investors are curious about effects of pushing strongly e-commerce and consolidation of store sales with e-sales

Home Depot – expected to report better numbers as the real estate market and related sales are strong in US. As the chain is relying on imports from Mexico, any comments on Trump border tax initiative will be watched as it is the case of Wall-Mart Store as well.

First Solar – to report loss due to write-offs and restructuring

HP – market is expecting a rise in profit from increased stability in PC market, effects of job and cost cutting and strong sales of hardware

Tesla – investors are looking at increase in revenue on growing sales. What definitely, will not pass by unnoticed are the comments from Elon Musk on company plans for 2017 including update on its Gigafactory, Model 3and SolarCity developments.

Baidu – markets are expecting smaller revenue growth due to new regulation in advertising and will listen closely to upcoming projects and artificial intelligence efforts

Barclays – investors will be interested to see how the UK based banks cope with upcoming Brexit negotiations. With this respect Barclays has already put Berlin on the top of its preferred location list for its HQ covering EU activities.

Name	Exchange	Date	Estimated EPS	Estimated Revenue
Anglo American	UK	Tue	…	9,600
BHP Billiton	UK	Tue	…	15,940
First Solar	US	Tue	…	0.528
HSBC	UK	Tue	0.04	24,180
Home Depot	US	Tue	1.33	21,793
Intesa Sanpaolo	IT	Tue	…	…
Macy's	US	Tue	1.96	8,624
Medtronic	US	Tue	1.11	7,224
Wall-Mart Stores	US	Tue	1.29	131,218
Airbus Group	FR	Wed	1.35	…
Bayer	GE	Wed	0.44	13,050
Gazprom	RU	Wed	…	…
HP	US	Wed	0.37	…
Iberdola	ES	Wed	…	…
Lloyds Banking Group	UK	Thu	0.01	8,650
Tesla	US	Wed	-0.42	2,240
BAE Systems	UK	Thu	…	9,860
BASF	GE	Thu	…	…
Baidu	CN	Thu	0.90	18,660
Barclays	UK	Thu	0.01	8,560
CIBC	CA	Thu	1.92	…
Centrica	UK	Thu	…	13,570
Glencore	UK	Thu	…	79,890
Henkel	AU	Thu	…	…
Vale	US	Thu	0.26	20,680
Veolia Environment	FR	Thu	…	…
Husky Energy	CA	Fri	-0.01	4,440
Magna International	CA	Fri	1.79	9,140
RBS	UK	Fri	…	5,630
RBC	CA	Fri	1.77	…
Standard Chartered	UK	Fri	…	3,610
Telefonica	ES	Fri	…	…

Good luck Champs!

Mr Hawk

DISCLAIMER: This material was created for informational purposes only and represents the Land of Trading team’s view of the past and current economic and capital market environment. It is not an investment advice and should not be viewed that way at all, and the creators of this material cannot be held liable for any potential losses resulting from trading, where despite this disclaimer someone would consider this material as an investment advice. All rights reserved ©2016. Contact: landoftradingATgmail.com

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Feb 13, 2017 - Q4 Earnings - Week 5

Q4 Earnings – Week 2017-02-12

Based on the earnings release the Q4 season easily qualifies as the best of the last six years. Despite all turbulence in the markets, post-US elections volatility, renewed optimism above US corporate world the higher USD and lower prices of oil are having weaker impact on corporate profits and revenues. The EBITDA and revenue growth are back to black and is likely the growth trend will continue well into 2017. But let’s have a look what names report this week:

AIG – market is expecting higher profit after not very perfect 2015

PepsiCo – as for Coca-Cola the stronger USD, recent slowdown and changing underlying consumers’ behaviour effect the company results. More and more people search for healthier food and beverages and is also topped from regulation side by few changes in labelling the products and adding warnings about negative effects of sugars. On the other hand the higher prices of some of its products and better demand for healthier products can be supportive. While going into earnings release bear in mind that company is above its peers in terms of various metrics. Expectations are for revenue growth of 5% and EPS growth of 9%, both y/y.

Cisco – the company seems to have a hard time to turn the business upside down and enter new but fast growing and profitable business of datacenter and internet of things playing field, cloud and security. As it is stuck for now to its core traditional business the revenue is to decline 3% and EPS 2%, both y/y. The comparison with peers shows us the company is below the average.

Nestle – investors are curious about new CEO and his direction and focus (nutrition and pharmaceutical part). All of that will be watched apart from revenue that is expected to growth 2% y/y and EPS to decline 3% y/y.  The company is suffering from an ongoing slowdown and emerging markets may put additional pressure if the economic rebound in Q4 was not translated into higher revenue for Nestle. From a perspective of comparison with its peers, it is worth to look at the company valuation and price actions (charts) as it has underperformed lately.

GoldCorp – to report higher profit as the price of gold moved higher

Restaurant Brands International – new restaurant opening and changes to menus should prompt the profits higher. Just wondering how the owner of Burger King and Tim Hortons can lure the customers in other countries.

TMX Group – to show pick up in profits and revenue from volatile trading across Canadian equities, derivatives and energy

Teva Pharmaceutical Industries – to report by has already warned about weaker 2016/2017 results. The generic producers is under heavy load of debt (from Actavis acquisition), weak US market and some not perfect management decisions.

TransCanada Corp – markets are expecting better results on higher shipping volumes of gas and oil. What will not fly by unnoticed will be the update on XL Keystone pipeline.

Hilton Worldwide Holdings – should benefit form better bookings of more expensive rooms despite business travel decline

Deere & Co – lower commodity prices of agricultural products to have negative impact on company results

Bombardier – to report smaller loss than last year (USD 673 mln). The impact of CSeries program still present.

Name	Exchange	Date	Estimated EPS	EPS growth y/y	Estimated Revenue
Noble Energy	US	Mon	-0.10	…	1,000
TMX Group	CA	Mon	1.12	…	0.184
AIG	US	Tue	0.34	131.1%	12,871
Heineken	NL	Wed	1.99	8.3%	10,477
Credit Agricole	FR	Wed	0.22	-30.2%	4,416
Air Liquide	FR	Wed	2.73	-2.0%	10,426
Danone	FR	Wed	1.58	…	5,410
PepsiCo	US	Wed	1.16	9.2%	19,535
Cisco Systems	US	Wed	0.56	-1.6%	11,534
Kraft Heinz	US	Wed	0.88	41.8%	6,755
GoldCorp	CA	Wed	0.13	…	1,080
AirFrance-KLM	FR	Thu	…	…	…
Nestle	CH	Thu	1.74	…	24,396
Schneider Electric	FR	Thu	2.29	16.4%	12,794
TransCanada	CA	Thu	0.72	12.7%	3,480
Charter Communications	US	Thu	1.07	185.8%	10,229
Duke Energy	US	Thu	0.81	-6.7%	5,892
Allianz	GE	Fri	3.66	22.8%	27,547
Enbridge	CA	Fri	0.58	20.0%	9,584
Deere & Co	US	Fri	0.53	-34.1%	4,675

Good luck Champs!

Mr Hawk

DISCLAIMER: This material was created for informational purposes only and represents the Land of Trading team’s view of the past and current economic and capital market environment. It is not an investment advice and should not be viewed that way at all, and the creators of this material cannot be held liable for any potential losses resulting from trading, where despite this disclaimer someone would consider this material as an investment advice. All rights reserved ©2016. Contact: landoftradingATgmail.com

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Feb 6, 2017 - Q4 Earnings - Week 4

Q4 Earnings – Week 4

As we are in the middle of earnings season with US companies doing well, it is going to be interesting to see how their European counterparts will respond. Just by looking at underlying trends in revenue and EBITDA growth we can see that after two years of negative growth we are back to black numbers. For Europe, the picture is similar and European companies should be able to turn negative in 2017. Likely the Q1 earnings should prove the underlying trend.

BNP Paribas – the financial landscape is changing in Europe and more and more bank are becoming more optimistic about the future. All of that comes on the back of lower loan provisions, loan growth and increased client trading activity, what was clearly seen in in Q4 over and after US presidential elections. The banks are desperate for higher interest rates to improve their profitable margins and avoid painful cost cutting, layoffs or charging their client interest on negative cash balances. The possibility of rising interest rates not only in US but in EZ too, will have a positive effect on bank and pension manager share prices.

General Motors – readying to report top results

Rio Tinto – as the global mining industry keeps recovering form the slump over the recent years, the results of Rio Tinto will be closely watched by market participants. There are many investors who do not fully realize how well diversified activities the company has. For example, the revenue is split as follows:

42% iron ore

28% aluminium

13% copper

10% diamonds & minerals

7% energy

As the market is expecting a 100% rise in profits on y/y basis, the revenue should be up 50% y/y, thus the company performance will definitely be a good indicator of global growth.

Coca-Cola – investors expect decline in profits as company is witnessing steady declines of sales of its soda drinks despite diversifying away to vitamin or coconut waters. It is not anything new, the trend is in place for quite some time. Definitely, the stronger USD is not helping the profits either.

NVIDIA – seems to be another fast-growing company as the market is expecting the 80% y/y rise in profits and 50% rise in revenue. The company is thriving on strong trend shifts within auto self-driving, virtual reality, data center and gaming.

Time Warner – investors are eager to see better results coming from higher cable and box office revenue. What will also be of interest is the ongoing acquisition from AT&T and its impact on overall business.

Twitter – to report better profits but market is curious about the plans to sell the company

Name	Exchange	Date	Estimated EPS	EPS growth y/y	Estimated Revenue
BNP Paribas	FR	Tuesday	1.38	8.6%	10,561
Statoil	NO	Tuesday	0.18	200.2%	13,848
BP	UK	Tuesday	0.03	163.6%	48,868
General Motors	US	Tuesday	1.17	-15.8%	41,197
Gilead Sciences	US	Tuesday	2.55	-23.1%	7,154
Walt Disney	US	Tuesday	1.50	…	…
Rio Tinto	UK	Wednesday	1.79	99.9%	18,688
SoftBank Group	JP	Wednesday	101.28	…	2,301,065
Sanofi	FR	Wednesday	1.24	-5.1%	9,260
GlaxoSmithKline	UK	Wednesday	0.25	38.1%	7,485
Alergan	US	Wednesday	3.75	…	3,810
Suncor Energy	CA	Wednesday	0.30	1420.0%	7,692
Prudential Financial	US	Wednesday	2.31	19.1%	12,107
Time Warner	US	Wednesday	1.19	…	7,710
TOTAL	FR	Thursday	0.84	4.7%	31,588
Zurich Insurance Group	CH	Thursday	5.49	353.0%	…
Coca-Cola	US	Thursday	0.37	-3.4%	9,156
CVS Health Corp	US	Thursday	1.67	9.0%	46,514
NVIDIA	US	Thursday	0.94	80.0%	2,105
L'Oreal	FR	Thursday	2.85	…	6,731
Societe Generale	FR	Thursday	…	…	…
Manulife	CA	Thursday	0.51	…	16,240
Twitter	US	Thursday	0.12		151
Vestas Wind System	DK	Friday	…	…	…

  

Good luck Champs!

Mr Hawk

DISCLAIMER: This material was created for informational purposes only and represents the Land of Trading team’s view of the past and current economic and capital market environment. It is not an investment advice and should not be viewed that way at all, and the creators of this material cannot be held liable for any potential losses resulting from trading, where despite this disclaimer someone would consider this material as an investment advice. All rights reserved ©2016. Contact: landoftradingATgmail.com

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