ECONOMIC DATA PUTS PRESSURE ON INTEREST RATES…IN BOTH DIRECTIONS
First-quarter flooding in the Midwest, accompanied by ongoing poor weather, is serving to decrease corn and soybean production. Earlier this year, it was widely believed that the lower demand for soybeans from African Swine Fever (ASF) would negatively affect U.S. crop prices, and that has turned out to be untrue. The decimation of China’s hog population has been unprecedented, with the previous count of 440 million animals now reduced by as much as 200 million. The virus has spread to Mongolia, Russia, Cambodia and Vietnam. Soybeans are a dietary staple for hogs; thus, the decrease in hog population leads to a decrease in soybean demand.
However, the decrease in soybean production due to wet weather is significantly larger than the lower demand from ASF. These dramatic changes in the availability of various crops and livestock will invariably affect consumer food prices in the coming years. And remember, it wasn’t just crops that were affected by this year’s flooding in the Midwest. Tremendous numbers of livestock were also lost.
As reported by Vox, “[Pork] prices are still at acceptable levels because China still has inventories of frozen pork,” says Christine McCracken, an animal protein expert at Rabobank (a Dutch multinational financial company). “But eventually those inventories will be worked down later this year and prices will move higher. It will be global.”
Investors should expect food price inflation to affect several industries (e.g. restaurants, supermarkets and packaged food companies). Generally speaking, increases in the cost of food inputs will either serve to raise consumer prices, or to decrease profit margins at companies that decide to absorb the increased costs. A resulting increase in the Consumer Price Index (CPI) can contribute to interest rate hikes by the Federal Reserve Board.
The Fed lowers interest rates when the economy is soft or suffering, in order to encourage people and businesses to borrow and spend money, thereby stimulating the economy. The Fed increases interest rates when the economy is booming – especially in tandem with rising inflation numbers – in order to slow spending. (Keep in mind that as interest rates rise, it becomes more expensive for people and businesses to borrow money. So in that sense, when the economy is growing rapidly and inflation is rising, it’s the Fed’s goal to cause people to think twice and thrice before borrowing money. Thus, an ensuing slowdown in demand can bring economic growth and inflation back down to normalized levels.)
Economic data has been mixed in recent weeks. A surprisingly-low increase in monthly employment got investors all excited about a potential drop in interest rates. But stronger economic data was also reported. According to the Equipment Leasing and Finance Association (ELFA), U.S. companies’ borrowing rose 11% year-over-year in April and rose 7% vs. March borrowing levels. “Continued low interest rates, a strong labor market and solid economic fundamentals all contribute to healthy demand by U.S. businesses - both large and small - for financed assets to run their business operations,” said ELFA CEO Ralph Petta. Real and perceived effects of trade disputes will likely dampen May borrowing results as some companies hold off on purchases pending trade outcomes.
In summary, we’re looking at economic data that could push interest rates upward (rising food price inflation and business expansion) and we’re also looking at economic data that could push rates downward (GDP potentially falling due to China tariffs, and slowing employment numbers).
Interest rates remain historically low. And yes, interest rate trends date back further than your college years. In fact, between the years 1963 and 2000, at no point in time was the fed funds rate as low as it is today! Fed Chairman Jerome Powell might be experiencing different pressures to move interest rates up or down, but rates being too high in 2019 is not one of those pressures.
MORE COMMENTS ON RETAIL STOCKS
American Eagle Outfitters (AEO) reported a good first-quarter earnings beat last week, with EPS, revenue and same-store sales all coming in higher than the market expected. The company emphasized success in its jeans business, and continues to experience stronger growth in its Aerie stores than in its American Eagle stores. The company guided Wall Street lower on second quarter EPS expectations, which are not yet reflected in consensus earnings estimates. Like other apparel retailers, American Eagle expects to be impacted by tariffs on imports from China.
MORE COMMENTS ON TARIFFS
Here’s a fascinating article full of projected vs. real outcomes of U.S. trade actions that date back to 1994: Why Economic Forecasts of the Effects of Trade Action Are Consistently Wrong.
A NEW GROWTH STOCK RECOMMENDATION
Need more undervalued growth stock ideas? Read my June 7 article about Alaska Air Group (ALK). We already have two airline stocks in the Cabot Undervalued Stocks Advisor portfolios, so for diversification purposes, I can’t add a third. I like ALK at least as well as I like Southwest Airlines (LUV) and Delta Air Lines (DAL).
Send questions and comments to Crista@CabotWealth.com.
BUY-RATED STOCKS MOST LIKELY TO RISE MORE THAN 5% NEAR-TERM*
Adobe Systems (ADBE)
Apple (AAPL)
Axis Capital Holdings Ltd. (AXS)
Blackstone Group LP (BX)
Carlyle Group LP (CG)
Designer Brands (DBI)
Universal Electronics (UEIC)
Voya Financial (VOYA)
TODAY’S PORTFOLIO CHANGES
Universal Electronics (UEIC) moves from Hold to Strong Buy.
LAST WEEK’S PORTFOLIO CHANGES
CIT Group (CIT) moved from Strong Buy to Hold.
Corteva Inc. (CTVA) spun off from DowDuPont (DWDP) and joined the S&P 500 index.
DowDuPont (DWDP) changed its name to DuPont de neMours (DD) and executed a 1:3 reverse stock split.
Guess? (GES) moved from Buy to Hold.
Sanmina (SANM) moved from Strong Buy to Hold.
Southwest Airlines (LUV) moved from Buy to Hold.
Supernus Pharmaceuticals (SUPN) moved from Strong Buy to Hold.
UPDATES ON GROWTH PORTFOLIO STOCKS
Adobe Systems (ADBE) is a software company that’s changing the world through digital experiences. Adobe is reimagining Customer Experience Management (CXM) with Adobe Experience Cloud, the industry’s only end-to-end solution for experience creation, marketing, advertising, analytics and commerce. Wall Street is expecting Adobe to report second-quarter results of $1.78 EPS and $2.7 billion revenue (November year end), tentatively to be announced on the afternoon of June 18.
ADBE is a large-cap growth stock, and a great stock for risk-tolerant growth investors and for buy-and-hold equity portfolios. Full-year consensus estimates point toward EPS increasing aggressively by 42.2% in 2019 and 23.9% in 2020. Those are much bigger earnings growth rates than are typically found within the software industry. The high P/E of 35.6 is the only reason that I am not giving ADBE a Strong Buy recommendation.
ADBE recently began reaching all-time highs, then the price chart exhibited a rapid shakeout & recovery during the May pullback in the broader market. That’s a bullish pattern on the price chart, which could easily be followed by a retracement to the all-time high of 290 in April, and then additional new highs. Buy ADBE now. Buy.
CF Industries Holdings (CF – yield 2.8%) is one of the world’s largest producers of nitrogen products, serving customers on six continents. The company operates nine nitrogen production facilities in Canada, the U.K. and the U.S. CF Industries expects strong nitrogen demand through the current quarter, and to continue benefiting from low natural gas prices throughout 2019. The Henry Hub price of natural gas dropped to a three-year low last week at $2.35 MMbtu. Monitor natural gas prices here. CF Industries was featured in the June issue of Cabot Undervalued Stocks Advisor.
The company is expected to grow full-year EPS by 65% and 29% in 2019 and 2020, with corresponding P/Es of 20.5 and 15.9. CF is a cyclical mid-cap aggressive growth stock, trading between 39-45 since mid-November. Strong Buy.
CIT Group (CIT – yield 2.8%) operates both a bank holding company with $30 billion in consumer deposits and a financial holding company. CIT Group provides financing, leasing and advisory services to small and middle market businesses, consumer markets, and the real estate and railroad industries. CEO Ellen Alemany will present at the Morgan Stanley 10th Annual Financials Conference on June 11.
CIT is an undervalued growth stock with an attractive dividend yield. Wall Street expects EPS to increase 19.6% and 14.3% in 2019 and 2020. The P/E is 10.1. I’m pleased that CIT did not suffer nearly as much as many other stocks during the May downturn in the broader market. I will likely return CIT to a Buy recommendation soon. Hold.
Knight-Swift Transportation Holdings (KNX – yield 0.8%) – Hold.*** (last review June 4)
Marathon Petroleum (MPC – yield 4.4%) – Hold.*** (last review June 4)
Sanmina Corp. (SANM) – Hold.*** (last review June 4)
Southwest Airlines (LUV – yield 1.4%) is the largest U.S. domestic air carrier, transporting over 120 million customers annually to over 100 locations in the U.S., Central America and the Caribbean. LUV is an undervalued large-cap stock. Wall Street expects full-year EPS to grow 6.6% and 15.5% in 2019 and 2020. I will likely give LUV a Buy recommendation after the share price stabilizes and strengthens. Hold.
Supernus Pharmaceuticals (SUPN) focuses on the development and commercialization of products for the treatment of central nervous system diseases and psychiatric disorders, including epilepsy and migraine. Supernus has five pipeline products, in various phases of clinical trials, which aim to treat ADHD, impulsive aggression, bipolar disorder, depression and severe epilepsy. Three of those pipeline drugs are expected to launch in 2020, 2021 and 2023. SUPN is an undervalued small-cap growth stock. I will give SUPN a Buy recommendation after the share price stabilizes and strengthens. Hold.
Voya Financial (VOYA – yield 0.1%) is a retirement, investment and insurance company serving millions of individuals and 49,000 institutional customers in the United States. Voya has $547 billion in total assets under management and administration.
VOYA is an undervalued aggressive growth stock. Analysts expect full-year EPS to grow 36.6% and 14.3% in 2019 and 2020, and the current P/E is 9.8. The company intends to increase the dividend yield to about 1% in the third quarter. There’s a decent chance that VOYA could promptly surpass its April all-time high of 55 and begin a new run-up. Buy VOYA now. Strong Buy.
UPDATES ON GROWTH & INCOME PORTFOLIO STOCKS
Blackstone Group LP (BX – yield 5.1%*) is the world’s largest and most diversified alternative asset manager with $512 billion in client assets. The company deploys capital into private equity, lower-rated credit instruments, public debt and equity, real assets, secondary funds and real estate, all on a global basis.
BX is a growth & income stock. I expect BX to be added to the S&P 500 index following its July 1 C-corp conversion, which will immediately spur buying activity among index-oriented institutional portfolios. In addition, since Blackstone is unquestionably the high-quality leader within its industry group, I expect a large number of actively-managed institutional portfolios to also take positions in BX.
The stock is climbing in all-time high territory. I believe all types of equity investors should own BX right now. Strong Buy.
*The payout varies each quarter with the total of the last four announced payouts equaling $2.17 and yielding 5.1%.
Commercial Metals Company (CMC – yield 3.3%) is a recycler and manufacturer of steel and metal products, including rebar and fence posts. Commercial Metals derives 60% of revenue from rebar products.
CMC is an undervalued growth stock with an attractive dividend yield. The company is expected to report third-quarter EPS of $0.64, within a range of $0.52-$0.88, and $1.6 billion revenue, within a range of $1.4-$1.8 billion, on the morning of June 20 (August year end). Analysts expect full-year EPS to increase 28.9% and 16.7% in fiscal 2019 and 2020. The 2019 P/E is low at 7.5. CMC is rebounding from the May pullback. Hold off on purchases until the price stabilizes and strengthens. Hold.
Corteva (CTVA – yield approx. 2.0%) spun off from DowDuPont (DWDP) on June 3, with the remaining portion of DowDuPont renamed DuPont de neMours (DD). Each DowDuPont stockholder received one share of Corteva common stock for every three shares of DowDuPont common stock they held. Corteva (pronounced kor-TEH-vuh) now joins the S&P 500, displacing Fluor (FLR) from the index.
Corteva is an agricultural sciences company with a robust innovation pipeline that should drive long-term value for shareholders. Analysts** currently expect Corteva to report EPS of $1.21 and $1.50 in 2019 and 2020.
The company plans to initially spend $400 million on annual dividends. The first dividend has not yet been declared, and will likely yield approximately 2.0%.
Thus far through June 10, I located two Buy/Outperform recommendations and seven Hold/Equal Weight/Neutral recommendations from various investment firms, with price targets ranging 28-38. I would like to see earnings estimates solidify before adjusting my stock recommendation. Hold.
Delta Air Lines (DAL – yield 2.5%) is a U.S. and international passenger and cargo airline that serves nearly 200 million people every year, flying to more than 300 destinations in over 50 countries. DAL is an undervalued growth & income stock. Wall Street’s earnings estimates have been climbing since early March. Delta is now expected to achieve 18.8% EPS growth in 2019, and the P/E is 8.2. The stock is rebounding from the May pullback, with short-term price resistance at 58. Strong Buy.
Dow Inc. (DOW – yield 5.4%) is the materials science division of the former DowDuPont (DWDP) that began trading as a separate company on April 2. Investors may access CEO Jim Fitterling’s May 30 presentation at Bernstein’s 35th Annual Strategic Decisions Conference. Analysts** currently expect Dow to report EPS of $4.40 and $5.36 in 2019 and 2020. I’m very pleased with the profit projections, the dividend yield and the P/E (11.7). The stock is rebounding from the May pullback. Expect volatility. Strong Buy.
DuPont de neMours (DD – yield approx. 1.6%) is a specialty chemicals company, and the remaining portion of DowDuPont (DWDP) after the June 3 spinoff of Corteva Inc. (CTVA). DowDuPont was then renamed DuPont de neMours and underwent a reverse stock split in which investors received one share of DD for every three shares of DWDP they held. The company also announced a $2 billion share repurchase authorization.
DuPont created a new non-core business segment, made up of businesses that generate $2 billion in annual revenue – about 10% of total company revenue. These are the businesses that DuPont intends to divest.
DuPont intends to pay $900 million in dividends during the first year. With a diluted share count of 750 million shares, that gives investors an approximate annual dividend payout of $1.20, and an approximate current yield of 1.6%. The company is targeting an ongoing dividend payout ratio of 30-40% of net income.
With regard to investors’ post-spinoff adjusted cost basis, DuPont will post a Form 8937 on their website, which is not yet available.
During the June 10 investor webcast, the DuPont CFO offered the following earnings guidance:
- 2Q19 adjusted EPS: $0.80-$0.85
- FY19 adjusted EPS: $3.70-$3.85
- Targeted 2Q19 earnings release date: August 1
At a share price of $74.54, that gives DD an approximate 2019 P/E of 19.8.
Thus far through June 9, I located four Buy recommendations and one Hold from various investment firms, with price targets ranging 76-95, the mode being 79.
DD is recovering from its May pullback, with price resistance at 83. I would like to see earnings estimates solidify before adjusting my stock recommendation. Hold.
Guess?, Inc. (GES – yield 3.1%) is a global apparel manufacturer, selling its products through wholesale, retail, ecommerce and licensing agreements. On June 6, Guess reported a slight first-quarter 2020 earnings beat of ($0.25) vs. the expected ($0.26), and revenue came in on target at $536.7 million (January year end). In the press release, CEO Carlos Alberini commented, “I am pleased with our progress this period, as we had another quarter of solid performance with strong revenue growth, improved gross margins and well managed expenses. We reported a revenue increase of 3% in U.S. dollars and 8% in constant currency. Our business in the Americas and Europe posted strong revenue growth, which was partially offset by weakness in Asia. During the quarter we were also able to complete a convertible debt transaction at very favorable terms to deploy funds to buy back Company shares.”
Guess and other retail apparel, department and discount stores were featured in the June issue of Cabot Undervalued Stocks Advisor.
The company lowered second-quarter EPS guidance to a range of $0.27-$0.30 and raised full-year EPS guidance to a range of $1.19-$1.30. Analysts had been expecting $1.18, and subsequently raised their full-year consensus earnings estimate to $1.25. Current Wall Street projections now reflect EPS growth of 27.6% and 15.2% in fiscal 2020 and 2021. The 2020 P/E is comparatively low at 11.5. The company repurchased $201.6 million of stock during the quarter.
GES is an undervalued, small-cap growth stock. Despite the company’s expectation of even-stronger earnings growth this year, the stock continued to fall as investors worried about the state of retail stores in the U.S. and the effect of tariffs on China imports into the U.S. In my opinion, GES continues to offer the best growth & value opportunity of any U.S.-based apparel retailer. Don’t buy low until the price stabilizes. Hold.
Royal Caribbean Cruises (RCL – yield 2.3%) is a cruise vacation company that delivers travelers to desirable and exotic destinations on all seven continents. The company operates a total of 61 ships, with 15 on order, under the brand names Royal Caribbean International, Celebrity Cruises, Azamara Club Cruises and Silversea Cruises, and partnerships with German and Spanish cruise companies.
Last week, Reuters reported, “The State Department said the United States will no longer permit visits to Cuba via passenger and recreational vessels, including cruise ships and yachts, as well as private and corporate aircraft.” The travel ban originates from foreign policy aimed at mitigating powers and human suffering associated with communist governments. Royal Caribbean plans to change the itineraries on excursions to Cuba, and to provide full refunds to passengers who cancel trips.
RCL is an undervalued, large-cap growth & income stock, and a great stock for a high quality, buy-and-hold equity portfolio. Wall Street expects EPS to grow 10.7% and 8.5% in 2019 and 2020. The 2019 P/E is 12.3. An industrywide problem of overcapacity is impacting RCL via falling 2020 earnings estimates. I will likely Retire the stock from the portfolio quite soon. Hold.
Schlumberger NV (SLB – yield 5.6%) – Hold.*** (last review June 4)
Total S.A. (TOT – yield 5.6%) – Hold.*** (last review June 4)
UPDATES ON BUY LOW OPPORTUNITIES PORTFOLIO STOCKS
Abercrombie & Fitch (ANF – yield 5.2%) is a specialty retailer of Abercrombie & Fitch, abercrombie kids and Hollister brand apparel and accessories for men, women and kids. The company operates 857 stores globally. Consensus earnings estimates project EPS to fall 10.4% in 2019, then to rise 40.8% in 2020. The 2019 P/E is 15.2. The company remains on track toward its multi-year goals of improving revenue, profits, expense-control, data analytics and global store expansion.
ANF is a small-cap stock. The share price suffered disproportionately during the last five weeks due to poor first-quarter results at other retailers, investor worries over China tariffs, a slow start for retailers in May and news of Abercrombie’s downward 2019 earnings guidance related to the expense of two store closures. Wait for the share price to stabilize before buying low. Hold.
Alexion Pharmaceuticals (ALXN) is a biopharmaceutical company that researches and manufactures treatments of severe and rare health disorders. ALXN is an undervalued large-cap growth stock. The 2020 EPS estimate has been consistently rising since early February. Analysts now expect EPS to grow 19.1% and 14.2% in 2019 and 2020, and the P/E is 12.6 – rather low for a profitable biopharmaceutical company. The stock fell in recent weeks along with the pullback in the broader market. Bargain hunters can buy now, and cautious investors should wait for the share price to stabilize. Buy.
Apple Inc. (AAPL – yield 1.6%) is a manufacturer and provider of many popular technology devices and services, including the iPhone, iPad, Mac, App Store, Apple Care, iCloud and more. Five new services will roll out in the coming months: Apple News+, Apple TV+, Apple TV Channels, Apple Arcade and Apple Card. There are over 1.4 billion active Apple devices globally, which provide a strong and growing revenue base for Apple Services.
AAPL is a great stock for a high-quality, buy-and-hold equity portfolio. Wall Street expects EPS to fall 3.9% in fiscal 2019 (September year end), then to rise 10.5% in 2020. Potential tariffs on U.S. imports from China continue to plague Apple and technology stocks. AAPL rose rapidly last week, and could reach 210 before resting again – although that would be quite a short-term feat. Strong Buy.
Axis Capital Holdings Ltd. (AXS – yield 2.6%) is a global provider of specialty lines insurance and treaty reinsurance with shareholders’ equity of $5.3 billion and locations in Bermuda, the United States, Europe, Singapore, Middle East, Canada and Latin America. AXS is an undervalued, small-cap stock. Axis reported full-year 2018 EPS of $1.92 in 2018, and is expected to report $4.96 and $5.56 in 2019 and 2020. The stock is actively rising toward its March 2017 all-time high of 66. Buy AXS now. Strong Buy.
Baker Hughes, a GE Co. (BHGE – yield 3.1%) – Hold.*** (Last review June 4.)
Designer Brands Inc. (DBI – yield 5.4%) operates DSW Warehouses and other retail stores with over 1,000 locations in 44 U.S. states and Canada, and ecommerce. DSW was the #1 omnichannel retailer in the U.S. in 2017 and 2018, and has delivered 27 consecutive years of sales growth.
Investors may listen to the webcast of CEO Roger Rawlins’ June 6 presentation at the William Blair Annual Growth Stock Conference. The presentation emphasized how management is drawing upon the most successful individual aspects of DSW Warehouses, The Shoe Company, and Camuto Group, and applying those profit-generating processes to each of these three divisions of the company in order to escalate revenue and gross margin growth. For example, Designer Brands recently acquired Camuto Group, which is the leader in private brand footwear in the U.S. Private brand footwear carries about 10 percentage points of higher gross margin than branded footwear, so Designer Brands plans to use Camuto’s expertise to provide new brands to DSW Warehouses that will then boost total-store gross margins.
DBI is an undervalued growth stock with a hefty dividend yield. After reporting a first-quarter earnings and revenue beat, management raised full-year 2019 EPS guidance to a range of $1.87-$1.97 vs. their previous guidance of $1.80-$1.90 per diluted share. Thereafter, the 2019 analysts’ consensus earnings estimate rose from $1.86 to $1.91. Expected EPS growth rates are now 15.1% and 13.6% in 2019 and 2020. The current P/E is moderate at 9.9.
Weakness in the broader market and poor results at other retailers have pushed the DBI price down to support at 18 that was established in late 2017 and early 2018. Income investors and risk-tolerant growth stock investors should buy DBI now. Expect volatility. Strong Buy.
The Mosaic Company (MOS – yield 0.9%) – Hold.*** (last review June 4)
Synchrony Financial (SYF – yield 2.5%) – Hold.*** (last review June 4)
TiVo Corp. (TIVO – yield 4.6%) – will spin off its Product business from its Intellectual Property Licensing business in a tax-free transaction to shareholders during the first half of 2020. Dave Shull joined the company as President and CEO on May 31.
On June 4, TiVo announced that they received a favorable determination by Administrative Law Judge MaryJoan McNamara of the International Trade Commission (ITC) that Comcast’s X1 platform infringes Rovi’s patents. (TiVo is the parent company of Rovi.) Additionally, on May 23, the ITC instituted a third investigation into Comcast for infringing six Rovi patents.
I continue to believe that TiVo offers excellent technology to the communications industry. Approximately 22 million subscriber households around the world use TiVo’s advanced television experiences. Nevertheless, I plan to remove the stock from the Buy Low Opportunities Portfolio. Investors should continue paring back their positions in this micro-cap stock. Hold.
Universal Electronics (UEIC) is a manufacturer and world leader of wireless and voice remote control products, software and audio-video accessories for the smart home; with over 400 patents and a strong pipeline of new products in the areas of safety and security, climate control and lighting. Investors may view management’s June 4 presentation at the Baird 2019 Global Consumer, Technology and Services Conference. The full-year 2019 analysts’ earnings estimate now reflects 31.0% growth, and the P/E is low at 11.7.
On May 3, I moved UEIC to a Hold recommendation after a big run-up to 45, saying, “Traders should consider exiting, and then buying on a pullback.” The pullback arrived immediately, dragging the stock down to 36. Yesterday, UEIC jumped toward 42. The price chart appears bullish. I’m moving UEIC from Hold to a Strong Buy recommendation. UEIC is an undervalued micro-cap growth stock with very little analyst coverage, appropriate for risk-tolerant investors and traders. Expect volatility. Strong Buy.
UPDATES ON SPECIAL SITUATION STOCKS
Carlyle Group LP (CG – yield 5.9%) manages $221 billion, divided among real assets, corporate private equity, investment solutions and global credit. The company is planning to make a near-term decision regarding whether they will convert from a limited partnership to a corporation, as four of their industry peers have announced since early 2018. A conversion to a corporation would newly allow a large number of institutional investors to consider buying CG shares, thus potentially boosting the share price both immediately and over a multi-year period. The stock is rising toward 24 where it repeatedly peaked in recent years. Buy CG now. Strong Buy.
*The payout varies each quarter with the total of the last four announced payouts equaling $1.26 and yielding 5.9%.
**Earnings projections for companies that have recently undergone major M&A activity (including post-merger companies, post-spinoff companies and IPOs) are relatively tentative until the companies have reported several quarters of earnings results. At that time, analysts can develop projections based on recent corporate results. They can also get a better feel for the reliability of corporate statements regarding the business outlook. (Some CEOs would naturally be conservative when estimating business trends to analysts, while others would be overly optimistic, and yet others perhaps devious or oblivious!)
*** In order to focus attention on newsworthy changes in our portfolio stocks, I’m eliminating descriptions of Hold-rated stocks during weeks when there are no significant news announcements or changes in consensus earnings estimates. As a reminder, Hold does not mean Sell. Hold means that I am not recommending additional purchases of the stock today, either due to price chart action, earnings outlook, or stock valuation. I expect Hold-rated stocks to perform well in the coming months.
