696 followers • 8 symbols Watchlist by Yahoo Finance
This basket consists of stocks that have attracted bad press.
Opportunity zones aim to increase investment in underserved areas. The head of Goldman Sachs' Urban Investment Group said they do make a positive social impact.
Walmart’s (WMT) digital sales have grown swiftly in the past several quarters thanks to the company’s efforts to expand its digital offerings. On average, Walmart’s e-commerce sales marked ~39% growth in the past five quarters. The expanded digital fulfillment options, the addition of new brands, and value pricing have been supporting its e-commerce sales.
French retail giant Carrefour has agreed to sell an 80% stake in its China operations for ~$705 million to Suning.com, an Alibaba-backed company. While China represents a massive opportunity with its almost 1.4 billion population, it has not been an easy market for foreign companies, at least when it comes to retail and e-commerce.
JetBlue (JBLU) believes, Walmart is trying to cash in on the carrier's goodwill by using the name Jetblack for its personal shopping service.
We expect Walmart’s (WMT) revenues to continue to grow on the back of sustained momentum in comparable sales. The retailer’s comparable sales stayed strong in the past several quarters despite heightened competition in the grocery business. We expect comparable sales in its US business to continue to mark strong growth, driven by an increase in traffic and ticket size.
Walmart (WMT) stock is hitting new highs thanks to the continued momentum in its comparable sales and better-than-expected earnings performance in the past several quarters. Walmart stock is up 19.3% on a YTD basis and closed at $111.13 on June 21, which is a tad lower than its 52-week and all-time high of $112.19.
Today, Bloomberg reported that India is planning incentives such as a tax holiday and lower tax rates for companies moving out of China while the US and China are embroiled in their bitter trade war. But emulating China’s manufacturing prowess and ecosystem might not be easy.
Target stock trades at a forward PE ratio of 14.5x. Target stock is trading at a discount of 37% compared to Walmart’s forward PE ratio of 23.0x.
TJX Companies (TJX) is gaining momentum on the back of strong merchandising and brand strategies combined with effective marketing efforts.
Yesterday, India’s Economic Times reported that Walmart-owned Flipkart (WMT) will go public in the US. The newspaper said that the board has decided on a listing in 2022. Walmart bought a 77% stake in this Indian e-commerce startup last year at a whopping $16 billion.
(Bloomberg) -- Norway’s $1 trillion wealth fund revoked its more than decade-long exclusion on Walmart Inc. after the U.S. retailer tightened control over potential human rights abuses in its supply chain.Walmart has made “positive developments” in monitoring its suppliers, the fund’s Council on Ethics said in a statement released Tuesday.“Furthermore, the company engages actively in selected, high-risk areas in order to help bring about improvements in working conditions,” the council said in a letter. “There seem to be fewer reports of poor working conditions in Walmart’s supply chain now than there were before.”The fund also decided to revoke exclusions to Grupo Carso SAB de CV, General Dynamics Corp., Nutrien Ltd., Rio Tinto Ltd. and Rio Tinto Plc, as well as Wal-Mart de Mexico SAB de CV, according to a statement.General Dynamics was let in from the cold after discontinuing the production of cluster munitions while Grupo Carso is no longer involved in tobacco, according to the fund. The exclusion of Nutrien was revoked after it ceased purchases from Western Sahara and Rio Tinto was taken off the list after it agreed to sell its Grasberg mine in Indonesia, reducing the risk of “severe environmental damage.”Norway’s sovereign wealth fund, the world’s largest, takes into account ethical rules encompassing human rights, some weapons production, corruption, the environment, coal and tobacco when deciding on its investments.Runar Malkenes, a spokesman at Norway’s central bank, said the recommendations to revoke the exclusions were made over time, but the bank found it “appropriate” to publish all seven decisions at the same time. It’s part of the council’s mandate to regularly reassess exclusions, he said in an email. To contact the reporter on this story: Sveinung Sleire in Oslo at email@example.comTo contact the editor responsible for this story: Jonas Bergman at firstname.lastname@example.orgFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg) -- One of the most opaque areas of China’s credit markets involves the practice of companies buying their own bonds. That may soon get a lot tougher, contributing to financing difficulties that are already bedeviling the nation’s policy makers.At issue is a sharp increase in scrutiny by financial institutions of the collateral that their counterparties offer up in the repurchase market, a crucial channel for short-term funding. If the debt sold by issuers that indirectly purchased a portion of their own bonds -- which could account for as much as 8% of China’s corporate bonds, according to Citic Securities Co. -- is shunned, that will squeeze liquidity for a swathe of the nation’s businesses.Despite regulators’ actions to prevent any seizing up in the repo market and short-term collateralized lending between banks, some institutions still moved to avoid riskier securities. The moves have showcased the fragility of confidence toward borrowers that lack state backing in a financial system still dominated by state-sector banks.For firms that obtained funding via unorthodox methods, conditions may become particularly challenging. One of those practices is known as structured issuance, where a company will transfer cash to an asset manager to buy a slice of the bonds the company is itself selling. The manoeuvre helps give the appearance of greater demand for its securities and stronger ability to obtain funding. What could make the practice untenable is if asset managers can no longer use those securities held in custody as collateral for repos.“Since some repo transactions have defaulted recently, it is unclear whether companies can continue to borrow money from the structured issuance method, said Meng Xiangjuan, chief fixed-income analyst at SWS Research Co. in Shanghai. “If it stops, some issuers will certainly face difficulties operating their business normally, and their debt-repayment pressure will rise,” she said.CHINA DEFAULT WATCH: Three More Companies Missed PaymentsWhile the practice of self-financing a portion of bond issuance is well known among credit analysts and ratings companies, observers have been loath to name the firms involved, making this a particularly murky part of China’s debt market. Citic Securities, for its part, hazarded a total of about 1.5 trillion yuan ($218 billion) worth of securities outstanding that were sold in part via structured issuance.A shock takeover of Baoshang Bank Co., a city commercial lender linked with conglomerate Tomorrow Group, has had cascading effects. One of the readily quantifiable ramifications has been to raise the funding costs for lower-rated banks, as seen in the rates on their negotiable certificates of deposits.Another impact has been the shock to confidence after regulators warned that Baoshang’s interbank creditors might face losses. They have since had to fight a rearguard action to encourage banks to sustain their interbank and repo operations, and the People’s Bank of China has had to pump liquidity into money markets to avert any systemic upset.Concern became so great that the China Foreign Exchange Trading System, an arm of the PBOC, set up a procedure for the orderly resolution of defaulted repo transactions, pledging to conduct anonymous auctions of the bonds used as collateral -- a move that hides the name of the counterparty that defaulted.“The government has been taking measures proactively to avoid systemic risk” in the interbank market, Goldman Sachs Group Inc. economists including Zhennan Li, wrote in a note Tuesday. Even so, “in coming months, the macro environment looks set to remain complicated, and macro policy more challenging, and we think the probability of a rise of financial stress will remain relatively high,” they wrote.Regulators’ actions have averted a broader surge in premiums for lower-rated borrowers, such as local government financing vehicles that analysts say account for a portion of structured issuance. But strategists remain concerned that the days of such an unconventional fund-raising strategy may be numbered if the securities are no longer accepted as collateral for financial transactions.“In the short run, companies that rely on structured issuance definitely have to sell bonds at higher yields to attract investors,” said Brian Lou, portfolio manager from UBS Asset Management in Shanghai. “Everyone knows the funding chain is really fragile after the Baoshang Bank seizure, and the most important task for institutional investors right now is to allocate assets better and improve risk management.”(Updates the charts.)To contact Bloomberg News staff for this story: Tongjian Dong in Shanghai at email@example.com;Qingqi She in Shanghai at firstname.lastname@example.orgTo contact the editors responsible for this story: Neha D'silva at email@example.com, Christopher Anstey, Lianting TuFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Norway's $1 trillion (784 billion pounds) wealth fund can invest again in miner Rio Tinto and retailer Walmart after their exclusions from the fund's investments on ethical grounds were revoked, the board of the central bank said on Tuesday. The issue was Rio Tinto's stake in the mine, which according to the Norwegian finance ministry at the time, discharged very large amounts of tailings directly into a natural river system.
(Bloomberg) -- It’s official -- SoftBank Group Corp. is Japan’s most generous employer, at least when it comes to executive pay.Six of the country’s 10 biggest salary packages last fiscal year were offered by SoftBank, according to a report from Tokyo Shoko Research Ltd. SoftBank Group Vice Chairman Ronald Fisher topped the list with 3.27 billion yen ($31 million) in the period ended March 31. Toyota Motor Corp. director Didier Leroy, the highest-paid non-SoftBank executive, ranked No. 5, while Sony Corp. Chief Executive Officer Kenichiro Yoshida was 8th.SoftBank founder Masayoshi Son has a history of paying top dollar to attract high-profile executives. Former SoftBank President Nikesh Arora still holds Japan’s all-time record with the 10.3 billion yen package he received in fiscal 2016, according to the report. Since then, Son’s hunt for global talent accelerated as he launched a $100 billion Vision Fund to invest in the world’s biggest technology companies. SoftBank paid a total of 9.1 billion yen in compensation to six lieutenants last year.Key Insights:SoftBank Group Chief Operating Officer Marcelo Claure ranked second with 1.8 billion yen. Claure, who also heads Sprint Corp. in the U.S., was named EVP in July. He also heads SoftBank’s $5 billion technology fund focused on Latin America. Ken Miyauchi, head of SoftBank’s domestic telecom operation, was third with 1.23 billion yen, followed by Simon Segars, head of its ARM Holdings Plc chip unit, with 1.1 billion yen.Former Goldman Sachs Group Inc. executive and SoftBank Group Chief Strategy Officer Katsunori Sago earned 982 million yen in the sixth place. Rajeev Misra, who heads the Vision Fund, earned 752 million yen.Son’s own salary remained modest at 229 million yen, according to a company filing in May. The billionaire controls a roughly 22% stake in SoftBank, which alone is worth about 2.3 trillion yen.Toyota paid Leroy a little over 1 billion yen. Sony CEO Yoshida made 847 million yen, 6% less than his pay last year.Chip equipment maker Tokyo Electron Ltd. was the most frequent name on the list as nine of its executives made the top 30, earning a collective 5 billion yen. Chief Executive Officer Toshiki Kawai ranked 7th with 925 million yen.To contact the reporter on this story: Pavel Alpeyev in Tokyo at firstname.lastname@example.orgTo contact the editors responsible for this story: Edwin Chan at email@example.com, Colum MurphyFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg Opinion) -- Dan Loeb wants to split up Sony Corp. to enhance its value. The company isn’t the only household name in Japanese electronics that might benefit from the treatment.Panasonic Corp. shares have dropped more than 40% over the past 12 months after a partnership with Tesla Inc. disappointed; the company forecast earnings will decline; and a restructuring plan put forward last month failed to convince investors. The firm is trading on a multiple of 3.8 times enterprise value to Ebitda, compared with a five-year average of 4.6 times.Loeb’s Third Point LLC has called for a spinoff of Sony’s semiconductor business, aiming to reduce the stock’s so-called conglomerate discount – the situation where a company is valued at less than the sum of the different businesses it owns. It’s an analysis that could equally be applied to Panasonic.Last month, the Osaka-based company released a mid-term plan that will increase its number of divisions to seven from four. Panasonic aims to shift its focus away from the automotive business, which is struggling under the shadow cast by the difficulties in its relationship with Tesla. The electronics maker also announced a series of partnerships and alliances, and estimated restructuring costs of about 90 billion yen ($840 million), according to Goldman Sachs Group Inc.Analysts say Panasonic still doesn’t have a coherent strategy, and investors clearly want more change. So could a breakup be the solution?The answer from a sum-of-the-parts analysis is a clear: maybe. If Panasonic listed all its business segments separately and they traded at the mid-point of their peer-group ranges of between 4 times and 9 times enterprise value to Ebitda, then the combined value would be 2% higher than the company’s current market capitalization of about $20 billion. At the high end of the ranges, Panasonic could increase its value by as much as 32%. At the low end, though, there’s a similar amount of downside.(1)Analysts in Japan have questioned Loeb’s proposal for Sony. While they lauded his effort to improve the company’s valuation, they also cast doubt on whether the activist investor’s proposals were feasible or made strategic sense. A Sony split may unlock value now but, as my Bloomberg Opinion colleague Tim Culpan asked, what’s the vision for the future? As Sony analysts have pointed out, Loeb has reversed course since 2013, when he recommended that the company sell part of its film unit.This uncertainty is precisely where a breakup proposal may make sense for Panasonic, though. Pulling apart its various businesses – grouped broadly under appliances, automotive and industrial systems, connected solutions and eco solutions – would enable investors to put their money where they see value and growth prospects, without being encumbered by laggard businesses.For instance, sales for the connected solutions segment rose 6.9%(2) in the 2019 fiscal year, helped by the Tokyo Olympics in 2020 and growing demand from businesses to help automate tasks. Itochu Techno-Solutions Corp., which competes in a similar business, is trading on a forward price-earnings ratio of 23 times.Panasonic thought the automotive business would drive its profitability over the past three years. Even here, running the unit separately could create more value. Panasonic has teamed up with Toyota Motor Corp. and already has partners other than Tesla. With demand for electric cars and the pace of adoption being reassessed, the company could take time to leverage its technology advantage. In the process, the segment’s rising fixed costs won’t weigh down other more profitable businesses. In fact, investors might give a standalone battery business a higher valuation, as they’ve done with South Korean battery-makers Samsung SDI Co. and LG Chem Ltd.Analysts at Credit Suisse AG downgraded the stock on Friday, noting that they see “no signs of a rebound in earnings in the near term,” and that it was unclear how the company and its profit would look after the restructuring. Earnings at the auto business, where the analysts earlier saw potential for sales growth, is unlikely to improve over the medium term, they said.There are additional reasons why a breakup should be considered. For one, the government is incentivizing spinoffs with tax breaks. Meanwhile, domestic institutional investors are becoming more activist: The rejection rate for takeover defense measures has risen over the past six years to 80.5% from 40%, according to Goldman Sachs. That’s close to the 85% rate for foreign investors.Panasonic has some thinking to do. Loeb, meanwhile, might just have a new target. --With assistance from Elaine He. (1) Sum-of-the-parts analysis for Panasonic is based on FY2019 operating profit for each segment and used the following assumptions:1. Average enterprise value to earnings before interest, taxes, depreciation and amortization for peer group of each segment.2. A range of two times above and below average multiple.(2) Includes exchange-rate effects.To contact the author of this story: Anjani Trivedi at firstname.lastname@example.orgTo contact the editor responsible for this story: Matthew Brooker at email@example.comThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Anjani Trivedi is a Bloomberg Opinion columnist covering industrial companies in Asia. She previously worked for the Wall Street Journal. For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
(Bloomberg Opinion) -- FedEx Corp. may finally be waking up to the threat Amazon.com Inc. poses to its business model.The logistics company is offering big discounts to help fill the planes in its Express delivery network with more e-commerce shipments, according to the Wall Street Journal, which cited people familiar with the matter. The deals are being used to woo customers away from rival United Parcel Service Inc., or to convince them to switch from FedEx’s cheaper ground offerings, the newspaper said, citing people familiar with the matter. For some customers, shipping goods via FedEx’s two-day air service may now cost about the same as shipping them through the ground division.(1)A FedEx spokeswoman told the Wall Street Journal that the company hasn't changed its pricing strategy, adding that the two-day Express service “has been very successful and continues to deliver tremendous value to small and medium businesses competing in the e-commerce market.” Reports of the discounts come just weeks after FedEx said its domestic Express air-delivery unit was dropping Amazon as a customer to focus on "serving the broader e-commerce market." FedEx dropped Amazon as a customer for its Express air-delivery unit to focus on “serving the broader e-commerce market.” The charitable interpretation of that move is that FedEx had found a bit of backbone and was holding a firmer line on pricing with Amazon in an effort to bolster its profit margins. The other possibility is that FedEx recognized that Amazon’s efforts to bring more of its logistics operations in house were real, and that it may want to start the process of breaking up with Amazon before Amazon decides to break up with it. While FedEx CEO Fred Smith has repeatedly painted any notion of Amazon disrupting the logistics industry as “fantastical,” his actions increasingly suggest otherwise. The share of capacity devoted to the time-sensitive legal documents and medical supplies that the FedEx Express network was originally built for will likely continue to shrink. But it’s uneconomical for the division’s fleet – which numbered 670 leased and owned planes at the end of 2018 – to fly partially full or not at all. Meanwhile, FedEx expects U.S. e-commerce demand to grow to 100 million packages per day by 2026. It’s been adamant that Amazon only directly accounts for a small percentage of its overall sales. But Amazon has forever changed the world’s expectations around shopping and delivery. So whether or not its own sales are in the mix, FedEx will be forced to drink more deeply from the firehose of e-commerce shipments to keep its network humming along. And that will come at a cost to margins.FedEx’s decision to prioritize shipments from the likes of Walmart Inc., Target Corp. and Walgreens Boots Alliance Inc. gave some analysts hope that it would deliver a greater share of packages to higher-paying business customers and add more density to its delivery routes. But there’s some debate as to whether the Express air-delivery unit as currently constituted still makes sense. Amazon relies on a network of fulfillment and sorting centers close to metropolitan areas to rapidly complete and ship orders, a model that many rival retailers are mimicking in some shape or form as they try to stay competitive. If you’re only going to deliver a package 25 or 50 miles, you’re not going to use a plane to do that. Indeed, when FedEx’s decision to drop Amazon as a U.S. Express customer was first announced, Seaport Global Holdings analyst Kevin Sterling wondered to Bloomberg News whether it was a precursor to the Express unit eventually fading out.Planes still have a role to play: Amazon last week announced an agreement to lease 15 additional Boeing Co. 737-800 converted freighters from General Electric Co.’s jet-lessor arm, adding to an existing agreement for five planes. But FedEx’s reported need to offer discounts to keep the planes it has full calls into question the company’s decision to devote a significant amount of its capital expenditure budget to refreshing its airplane fleet. Management has been clear it’s not expanding capacity at the Express unit, but rather replacing its planes with more efficient options to improve productivity and costs. Downsizing the fleet and reallocating those resources could be a smarter move. The reported pricing cuts – coupled with FedEx’s recently announced plan to offer delivery seven days a week by 2020 and add a fleet of flexible, part-time drivers – reinforce a point both I and my colleague Shira Ovide have long argued: Amazon doesn’t need to steal customers away from FedEx and UPS en masse to be a threat. It’s already forcing both companies to rethink the way they operate. The revenue lost from removing Amazon as an Express customer is relatively minor, but the world the e-commerce giant has created isn’t a hospitable one for the package-delivery incumbents’ profit margins and capital-spending budgets. (1) News of the discounts weighed on shares Monday, as did a separate shipping issue: FedExhad to issue a second apology to Huawei Technologies over the misrouting of packages, and some reports indicate China is contemplating black-listing it.To contact the author of this story: Brooke Sutherland at firstname.lastname@example.orgTo contact the editor responsible for this story: Beth Williams at email@example.comThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Brooke Sutherland is a Bloomberg Opinion columnist covering deals and industrial companies. She previously wrote an M&A column for Bloomberg News.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.