Today’s News: Universal Electronics (UEIC) moves from Hold to Strong Buy; Interpublic Group of Companies (IPG) moves from Strong Buy to Hold; KLX Energy Services Holdings (KLXE) begins trading today on a when-issued basis; recent price action on GameStop (GME) and TiVo (TIVO).
Universal Electronics (UEIC) appears capable of breaking out of its recent trading range today—maybe a 70% chance that happens. A run-up could take the stock to 50 or 55, where it last traded in March. I’m moving UEIC from Hold to Strong Buy for risk-tolerant investors. UEIC is a micro-cap stock. Be prepared for volatility. Strong Buy.
Interpublic Group of Companies (IPG) - I’m moving IPG from Strong Buy to Hold as it nears its 2018 high of 25. IPG is a good, fundamentally sound company and a leader in its industry. The expected 2019 earnings growth rate is a bit too slow for my taste, so I will be retiring IPG from the Growth & Income Portfolio soon. Hold.
KLX Energy Services Holdings (KLXE) is a segment of KLX Inc. (KLXI) that will be spun off from the parent company at the close of business on September 14. Beginning today, August 29, KLXE will trade on a when-issued basis under the symbol KLXEV. Investors who buy KLXEV will have their stock positions converted to common shares of KLXE, and trade as such beginning September 17.
Please also refer to my Special Bulletin from August 27 for additional details about the KLX Inc. merger and spinoff.
I am not making any particular Buy or Sell recommendation on KLXE or KLXEV at this time. I do believe investors who Hold their KLXI shares will continue to benefit from capital gains based on the total current and future values of the pending Boeing merger, plus the KLXE spinoff. Hold.
GameStop (GME) fell 11% on Monday. There was no news. It was just traders pushing the share price around, with vague attribution toward investors’ frustration over waiting for M&A news to emerge. Based on statements from GameStop management, I continue to believe that the company will make some sort of bullish announcement pertaining to M&A activity or a new CEO in the near future. Hold.
TiVo (TIVO) rose 8% on Monday. The price action can be attributed to bullish research coverage by B. Riley FBR, compounded by investors’ excitement over a potential near-term M&A announcement. If TiVo agrees to any sort of partial or complete sale of the company, investors can reasonably expect the share price to jump significantly, anywhere from 20% to 100%. Buy TIVO now. Strong Buy.