Wednesday, August 29, 2018
Morning Matters Portfolio Sees A New Buy
Pullbacks allow us to pick up new buy at great discounts. This morning we will add AT&T (T) to our Morning Matter Portfolio. We are really excited to add this name to the portfolio given that is has never been on our list. Telecommunications and Media companies have lagged the market returns and we think this is coming to an end.
AT&T was one of the top players in Telecommunications space and now the Media space as it acquired Time Warner. Earnings are due October 24th. The company will be at the Box Works 2018 Conference that starts tomorrow.
The Justice Department is still fighting the deal but it is a waste of time as the Judge told Justice not to bother with an appeal.
The stock is at $32.67 and our old price target is $41.72 so the discount to the price target is $8.15 or 16.44%. The upper bound is much higher at $48.08, 41.62% upside, and that is what we are aiming for with our price goal.
The price target does not reflect the merger with Time Warner. It is going to take a while for data services to merge the Time Warner data into AT&T.
Beta is 0.42 so this is an ideal name to add the portfolio with the market at an all time high and its beta is well below the market. Beta is a measure of risk and 1 equals the risk of the S&P 500. Therefore, risk is a below average which is a great benefit of this name.
Estimates for this year are $1.856 and $3.68 for next year. We think these numbers will be adjusted higher through the year. The next earnings estimate is $0.95 in October. There is a great dividend of $2.00 or 6.12%.
Currently, the average rating is a hold. There is ample room for upgrades. Technically, the stock is trying to work back above $35. Hint as the stock gets above this get number then technical buyers will emerge as well.
Buy at the market AT&T (T) at 9:45 a.m. EDT.
Futures Modestly Higher
IPOs on deck none of note. Secondaries none of note .
Filings after close SYY RLJ WMGI
In After Hours Trading: SURPRISES HEI +.04 PAHC +.04. FLAT: MISSED: .
Lower Guidance: .
Mixed Guidance: PAHC.
Positive Guidance: HEI.
Gold,silver and copper higher. WTI Crude and Brent Oil Futures higher. Natural Gas is lower. $ is lower vs Euro, lower vs. Pound and lower vs. Yen. US 10 year Treasury price 120.34 with yields slightly higher since last week. Prices as of 7:50 a.m. EDT.
Top Sectors on Monday Industrials, Materials, Technology and Financials.
Weak Sectors on Monday Utilities.
One month winners Healthcare,Consumer Goods, Services and Technology.
Three Month Winners Healthcare, Consumer Goods, Services and Technology.
Six Month Winners Conglomerates, Services and Technology.
One Year Winners All except for Utilities.
Year To Date Conglomerates, Healthcare and Services.
Earnings due Wednesday morning: BFB EV AEO DKS CHS XCRA MOV EXPR.
Trump orders flags re-lowered for Senator John McCain. (CNBC)
Toyota (TM) to invest $500 million in Uber for driverless cars. Values Uber at $72 billion. (Bloomberg)
Trump tax cuts have not hit housing prices. (NYT)
Paul Manafort sought a deal in second trial but talks failed. (WSJ)
Lower Guidance: .
Current Morning missing: .
Mixed Guidance: DSW TIF BBY BJ.
Positive Guidance: .
Yesterday saw 1774 stocks rise and 1101 fall on the NYSE. NASDAQ saw 1777 rise and 1208 fall.
The SP 500 is above its 50 day exponential moving average and is above its 200 day exponential moving average. The Russell 2000 is above its 50 day moving exponential average and is above 200 day exponential moving average.
The 10 day spread moving average of breadth is now a buy. The Madison Market Timing Indicator is still invested.
YTD 53% of stocks are higher and 47% are lower. Updated 8/24/18 close.
August Consumer Confidence due out at 10:00 a.m. EDT and expected to fall to 126.5 from 127.4.
5 Year Note Auction at 1:00 p.m. EDT with $37 billion to be placed.
Jefferies Chicago Semiconductor, Hardware & Communications Infrastructre Summit and Conference.
|Morgan Stanley||EL COTY|
|Citigroup CC Merrill Lynchp|
|Merrill Lynch||LRCX AMAT|
|Banc of America|
|Robert W. Baird|
|Sun Trust RH|
|Jesup & Lamont|
MORGAN STANLEY (MS)
by Superstock Investor
S&P 500 Tests 2900
The S&P 500 tested 2900 and came back from a weak day to finish slightly higher and put in a new high. Meanwhile, the NASDAQ Composite also posted a new high.
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