Superstock Investor
Morning Briefing

Wednesday, August 29, 2018

Morning Matters:

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.

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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.

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Trade Instructions

Buy at the market AT&T (T) at 9:45 a.m. EDT.


Market Matters:

Futures Modestly Higher

In After Hours Trading

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.

What's Happening This Morning

U.S. futures: S&P +3.25, Dow Jones +35, NDX +15.50 and Russell 2000 +1.30 with fair values lower improving futures. Japan lower and Europe mixed to lower.

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 Expected

Earnings due after the close (by avg. trade volume): HPE HRB LTRY BOX SCSC NCS SCVL OOMA LCI.

Earnings due Wednesday morning: BFB EV AEO DKS CHS XCRA MOV EXPR.

Rags & Mags: Inside Wall Street

U.S. tries to pressure Canada with auto tariffs. (CNBC)

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)

Reported Earnings This Morning

Reported This Morning: SURPRISES KLXI +.20 DSW +.16 TIF SFUN +.08 BBY +.08 BMO +.05 BJ +.01 BNS +.01. MISSED: . FLAT:


Lower Guidance: .

Current Morning missing: .

Mixed Guidance: DSW TIF BBY BJ.

Positive Guidance: .

Data Points

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.


S&P Case Schiller Home Price Index for June due out at 9:00 a.m. EDT with expectations of 6.4% from 6.5% in May.

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.


Conference & Analyst Meetings

Meetings, Conference Calls or Announcements of note, HSY.

Jefferies Chicago Semiconductor, Hardware & Communications Infrastructre Summit and Conference.

Conference of Note

M & A News

Key Upgrades and Downgrades

Firm Upgrades Downgrades
JP Morgan    
Goldman Sachs    
Morgan Stanley EL COTY  
Deutsche Bank    
Citigroup CC Merrill Lynchp    
Merrill Lynch   LRCX AMAT
Wachovia/Wells Fargo    
Credit Suisse    
Banc of America    
William Blair    
Key Banc    
Needham WMGI  
Raymond James    
Piper Jaffray    
Moffet Nathanson    
Robert W. Baird    
Sun Trust RH    
Sandler O'Neil    
Keefe Bruyette    
Cantor Fitzgerald    
HSBC Securities    
William Blair    
BNP Paribas    
B. Riley    
Brean Murray    
JMP Securities    
Janney Montgomery  
Think Equity    
Cantor Fitzgerlad    
BMO Capital  
Jesup & Lamont    
Canaccord Adams    
Global Hunter    



Today's Superstock Investor Stock Scorecard:

by Superstock Investor


Morgan Stanley (MS) peaked in March at $59.38. Now it is at $50. With the drop we thought it made sense to look at the price target and the new price target from our upcoming update as well as the upper bound. The new price target is $47.40 and the upper bound is $59.24.

Company Information

Sector: Diversified Financials
Industry: Investment Banking_Brokerage
Market Cap:  $71,280 (Millions)


  Price %Gain  
Current Price $23.75    
Price Target $32.82 38.2%  
Upper Bound $45.73 92.6%  
Lower Bound $24.27 2.2%  

Fundamental Variables

P/E Ratio 15.0    
Sales Growth 3.0%    

Valuation Variables

  Past Current Future
Profitability (CFROI) 3.3% 4.4% 2.4%
Growth (in Assets) -0.1% 1.2% 1.2%
Color Legend
Excellent Top 10%
Good 11- 30%
Average 31- 70%
Fair 71- 90%
Poor Bottom 10%

Stock data last updated 01/10/2017.

Data provided by QPI, Inc. All information provided "as is" for informational purposes only, not intended for trading purposes or advice. QPI, Inc. is not liable for any informational errors, incompleteness, or delays, or for any actions taken in reliance on information contained herein. By accessing this page, you agree not to redistribute the information found herein.


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