Author Archive

• CWS Market Review – April 19, 2019
  Eddy Elfenbein, April 19th, 2019 at 7:08 am

  “Selling your winners and holding your losers is like cutting the flowers and watering the weeds.” – Peter Lynch

  First-quarter earnings season is here, and we’re getting a good idea of what the first three months of the year were like. As with any earnings season, some stocks are soaring (like Qualcomm) and others falling on hard times (Bank of New York).

  We’ve already had the first of our stock reports. Some companies have done well. Others, not so well. In this week’s issue of CWS Market Review, I’ll run down all of our Buy List earnings reports.

  Next week will be even busier as seven of our Buy List stocks are due to report. On top of that, we’ll also get our first look at the Q1 GDP report. Before I get to this week’s earnings news, let’s look at the big jump we got from Disney.

  Disney Soars to an All-Time High

  I have to apologize for only briefly discussing Disney (DIS) last week. I don’t believe I gave their investor presentation the coverage it was due. Please forgive me. I hope the 11.5% price surge helped ease some of the pain.

  Disney had a great rollout of its streaming service. I think the news on Disney has been so negative for so long that anything positive can help propel the shares. This week, the stock touched a new all-time high.

  

  The company is serious about taking Netflix on, and they have an impressive service in Disney+. It’s also very competitive price-wise: $7 per month or $70 per year. Not only did Disney’s stock surge, but it held on to its gains and even pushed a little higher.

  I supposed investor sentiment has been negative on Disney for years since it’s hard for some people to look positively on Disney. Even Disney critics have been impressed with Iger’s strategy. Content really is king, and it will be hard to compete against the Mouse House. This week, I’m raising my Buy Below on Disney to $135 per share. The next earnings report is due on May 8.

  This Week’s Buy List Earnings Reports

  Here’s a look at our Q1 Earnings Calendar so far.

  Company	Ticker	Date	Estimate	Result
  Eagle Bancorp	EGBN	17-Apr	$1.12	$1.11
  Signature Bank	SBNY	17-Apr	$2.77	$2.65
  Torchmark	TMK	17-Apr	$1.59	$1.64
  Check Point Software	CHKP	18-Apr	$1.31	$1.32
  Danaher	DHR	18-Apr	$1.01	$1.07
  Sherwin-Williams	SHW	23-Apr	$3.69
  Stryker	SYK	23-Apr	$1.84
  Moody’s	MCO	24-Apr	$1.93
  AFLAC	AFL	25-Apr	$1.06
  Cerner	CERN	25-Apr	$0.61
  Hershey	HSY	25-Apr	$1.46
  Raytheon	RTN	25-Apr	$2.47
  Fiserv	FISV	30-Apr	$0.82
  Church & Dwight	CHD	2-May	$0.66
  Cognizant Technology Solutions	CTSH	2-May	$1.04
  Continental Building Products	CBPX	2-May	$0.35
  Intercontinental Exchange	ICE	2-May	$0.90
  Disney	DIS	8-May	$1.55
  Becton, Dickinson	BDX	9-May	$2.58
  Broadridge Financial	BR	TBA	$1.50

  Now let’s dive in. Signature Bank (SBNY) kicked off earnings season for us on Wednesday morning when the New York-based bank reported Q1 earnings of $2.65 per share. That was 12 cents below Wall Street’s consensus. Traders were not pleased. The shares fell 5.9% during Wednesday’s trading.

  For the quarter, net interest margin was 2.75%. That’s down 11 basis points from a year ago. Total assets now stand at $48.55 billion. That’s an increase of 9.3% over last year’s Q1. Last quarter, the bank was hurt by a $9.4 million decline in pre-payment penalty income. Overall, this was a weak quarter for SBNY.

  During the quarter, Signature bought back 173,193 shares for $22.9 million. While I’m not happy with Signature’s results last quarter, I’m still willing to stick by them. The stock slid about 5% on Wednesday, but we’re still doing well with SBNY this year (+22.9%). Signature Bank remains a buy up to $140 per share.

  After the close on Wednesday, Eagle Bancorp (EGBN) reported adjusted earnings of $1.11 per share. That was one penny below estimates. That’s up from $1.04 per share one year ago.

  Eagle is currently going through a transition after the former CEO, Ron Paul, announced his retirement. Susan G. Riel is the interim President and CEO. About the Q1 results, she noted, “The Company’s assets ended the quarter at $8.39 billion, representing 9% growth over the first quarter of 2018. First-quarter 2019 earnings resulted in a return on average assets of 1.62% (1.85% excluding nonrecurring costs as defined above) and a return-on-average tangible common equity of 13.38% (15.26% excluding nonrecurring costs as defined above).”

  The shares pulled back some in Thursday’s trading, but nothing too severe. Eagle is a buy up to $55 per share.

  I never would have guessed that Torchmark (TMK) would be an earnings standout, but here we are. Also after the bell on Wednesday, the life-insurance company reported Q1 earnings of $1.65 per share.

  The key figure is net operating income which came in at $1.64 per diluted common share. That beat estimates by five cents per share compared with $1.47 per diluted common share from a year ago. The details look pretty good. Net income as an ROE was 12.9%. Net operating income as an ROE, excluding net unrealized gains on fixed maturities, was 14.7%.

  Last quarter, Torchmark bought back 1.1 million shares. This quiet stock is now a 19% winner for us this year. Buy up to $91 per share.

  Check Point Software (CHKP) had a decent earnings report, but poor guidance caused traders to knock 7.4% off the share price on Thursday. For Q1, the cyber-security firm earned $1.32 per share. That beat estimates by one penny per share. CEO Gil Shwed said, “We had good results in the first quarter with 13 percent growth in our security subscriptions including advanced solutions for Cloud and Mobile as well as SandBlast Zero day threat prevention.”

  For the current quarter, Check Point said it sees revenues coming in between $474 million and $500 million. The consensus on the Street was for $486 million. But for earnings, CHKP sees EPS ranging between $1.32 and $1.40. Wall Street had been expecting $1.38 per share. I know the price drop is painful, but don’t be rattled. This is a good company. Buy up to $130 per share.

  On Thursday, Danaher (DHR) reported Q1 earnings of $1.07 per share. That beat the street by six cents per share. Previously, the company had given us a range of $1 to $1.03 per share. This is an important time for Danaher. The company recently announced that it’s buying GE’s biopharma unit for $21.4 billion. The company also plans to spin off its dental business later this year.

  

  For Q2, Danaher expects earnings to range between $1.13 and $1.16 per share. Danaher lowered its full-year guidance from $4.75 – $4.85 per share to $4.72 – $4.80 per share. There’s nothing wrong. This reflects the share dilution to buy GE Biopharma. The deal should close sometime in Q4.

  Danaher’s CEO said, “During the first quarter, we achieved 5.5% core-revenue growth and believe we expanded our market-leading positions across a number of our businesses. Combined with high-single-digit adjusted-earnings-per -growth and good cash-flow generation, our performance is a testament to our team’s focused execution and the power of the Danaher Business System.”

  The shares rallied 1.5% after the earnings report. Danaher is a buy up to $136 per share.

  Next Week’s Earnings Reports

  We have several earnings reports coming our way next week. On Tuesday, Sherwin-Williams and Stryker are due to report.

  A few months ago, Sherwin-Williams (SHW) warned us that they weren’t going to have a good Q4, and they were right. The good news is that sales improved in December, but not by enough to make up the difference.

  For 2019, Sherwin sees net sales rising 4% to 7% and earnings coming in between $20.40 and $21.40 per share. That’s a pretty good forecast, and it tells me the issues they had in Q4 may be over. Wall Street’s consensus for Q1 is for $3.69 per share.

  For Q1, Stryker (SYK) sees earnings coming in between $1.80 and $1.85 per share. I think there’s a good chance for an earnings beat. Last earnings season, the orthopedics company beat earnings by three cents per share, and the stock jumped 11%. The company noted that they had the best organic growth in a decade. Stryker’s operating margins rose to 27.5%. That’s quite good. For the full year, they see earnings between $8 and $8.20 per share.

  Moody’s (MCO) is our #1 performer this year, with a 35% gain. The credit-ratings agency reports earnings on Wednesday. The Q4 report wasn’t especially good, but it wrapped up a solid 2018 for Moody’s.

  For 2019, Moody’s sees earnings of $7.85 to $8.10 per share. Wall Street had been expecting $7.94 per share. In February, the company bumped up its dividend by 14% to 50 cents per share. The company also announced that a $500 million accelerated share-repurchase program is expected to be completed during Q2. The consensus for Q1 is for $1.93 per share.

  

  We have four Buy List stocks due to report next Thursday.

  The last AFLAC (AFL) earnings report was quite good. The duck stock beat expectations and raised its dividend. That was its 36th consecutive annual dividend hike.

  For 2019, AFLAC is looking for earnings of $4.10 to $4.30 per share. That assumes the yen trades at ¥110.39 to the dollar. AFLAC didn’t provide Q1 guidance, but Wall Street expects $1.06 per share.

  I’m still enjoying the nice 10% pop we got from Cerner (CERN) last week. The company announced that it had reached an agreement with Starboard Value. As part of the agreement, Cerner will start paying a dividend. The company also increased its buyback authorization by $1.5 billion.

  For Q1, Cerner expects earnings between 60 and 62 cents per share on revenue of $1.365 billion to $1.415 billion. For all of 2019, the company is looking for earnings between $2.57 and $2.67 per share on revenue of $5.65 billion to $5.85 billion.

  Hershey’s (HSY) last earnings report wasn’t so sweet. Comparable-sales growth was flat. In North America, comparable sales fell 0.3%. Earnings came in at $1.26 per share, which was a penny below estimates. For the moment, the problem is pricing pressure. Quarterly sales rose 2.5% to $1.99 billion.

  For 2019, Hershey sees earnings ranging between $5.63 and $5.74 per share. The consensus for Q1 is $1.46 per share.

  Also on Thursday will be Raytheon (RTN). The CEO noted that Raytheon ended last year with record bookings and backlog which positions them “well for 2019 and beyond.”

  For 2019, Raytheon expects EPS of $11.40 to $11.60 on sales of $28.6 to $29.1 billion. That’s a little light; I had been expecting $11.50 to $12 per share. Still, business is going well. For Q1, the consensus on Wall Street is for earnings of $2.47 per share.

  That’s all for now. The news next week will again be dominated by earnings. Also, there will be some economic news. On Monday, the existing-home sales report comes out. That’s followed on Tuesday by the new-home sales report. Thursday is jobless claims and durable goods. Then on Friday, we get the first look at Q1 GDP. I’m expecting a number close to 2%. Be sure to keep checking the blog for daily updates. I’ll have more market analysis for you in the next issue of CWS Market Review!

  – Eddy

• Morning News: April 19, 2019
  Eddy Elfenbein, April 19th, 2019 at 7:05 am

  Some Better-Than-Expected China Data Can’t Save the World Economy

  Socialist! Capitalist! Economic Systems as Weapons in a War of Words

  D.E. Shaw Is to Buck Industry Trend With 3-and-30 Fees

  Amazon Gives Up on Chinese Domestic Shopping Business

  Amazon Launches Free Music Streaming to Juice Alexa-Device Sales

  Merger Talks of Deutsche Bank and Commerzbank Roil Emotions

  I.P.O. Day for Pinterest and Zoom Ends With Shares Sharply Higher

  National Enquirer to Be Sold to James Cohen, Heir to Hudson News Founder

  U.S. Refiners Planning Major Plant Overhauls in Second Quarter

  What This Week’s Apple-Qualcomm-Intel Dance Means for the Future of 5G

  Nissan Slams Output Cut Report as ‘Completely Incorrect’

  Ben Carlson: Recessions vs. Bear Markets & Money Made By Chance

  Jeff Carter: Some Tips on Angel Investing

  Jeff Miller: What Is Your Trading Timeframe Now?

  Be sure to follow me on Twitter.

• Morning News: April 18, 2019
  Eddy Elfenbein, April 18th, 2019 at 6:27 am

  Stocks Erase Week’s Gains After Weak Manufacturing Surveys

  Business Quietly Returns to Saudi Arabia After Khashoggi’s Murder

  Treasury Issues Rules on Tax Breaks for Opportunity Zones

  U.S. Antitrust Scrutiny Tests T-Mobile’s $26 Billion Bet on Sprint

  Pinterest Prices I.P.O. at $19 a Share, for a $12.7 Billion Valuation

  Lyft Investors Sue Over Slump, Claiming IPO Was Overhyped

  Amazon, Facing Entrenched Rivals, Says to Shut China Online Store

  First Japan-Built Airliner in 50 Years Takes on Boeing and Airbus

  The Cult Japanese Retailer Making Billions Breaking All the Rules

  Powerful New iPhone Expected After Apple’s Embarrassing Surrender

  JPMorgan Shuffles Roles at Top

  The Last Place for Traders to Earn Real Money

  Cullen Roche: Hard Truths for the Inflation Truthers

  Jeff Miller: What Is Your Trading Timeframe Now?

  Michael Batnick” Money Made By Chance

  Be sure to follow me on Twitter.

• Morning News: April 17, 2019
  Eddy Elfenbein, April 17th, 2019 at 7:09 am

  German Economy Heads for Worst Growth in Six Years

  China’s Economy Stabilizes After Beijing Opens the Bank Vaults

  China’s First-Quarter Growth Unexpectedly Steadies, But Too Early to Call Clear Recovery

  China Is Considering Stimulus Measures to Bolster Consumption

  U.S. Restrictions on Qatar Airways Could Lead to Unraveling of Aviation Agreements

  Powell Adopts an Inflation Stance Yellen Shunned

  Truck Drivers See Orders, Miles Fall in Latest U.S. Slowdown Signal

  With AT&T’s Exit, Disney Takes Firmer Control of Hulu

  Apple and Qualcomm Settle All Disputes Worldwide

  The Most Measured Person in Tech Is Running the Most Chaotic Place on the Internet

  IBM’s Mixed Q1 on Slowing Cloud Growth

  Martha Stewart Brand Finds A Buyer, But Even At Cheaper Price, There’s No Guarantee Deal Pays Off

  Nick Maggiulli: The Will to Survive

  Howard Lindzon: Momentum Monday – If The Fed….

  Ben Carlson: The Stephen A. Smiths of Personal Finance

  Be sure to follow me on Twitter.

• Morning News: April 16, 2019
  Eddy Elfenbein, April 16th, 2019 at 7:03 am

  Stocks March on as European Volatility Vanishes

  U.S. Risks Roiling Oil Markets in Trying to Tighten Sanctions

  Chevron Says Dutch Supreme Court Rejects Ecuador’s $9.5 Billion Claim

  France and Belgium Refuse Support for New Trade Talks With the U.S.

  Hulu Spends $1.43 Billion to Buy Back AT&T Stake, Values Streaming Service at $15 Billion

  Netflix Results Face New Pressures With Higher Costs, New Rivals

  The World’s Biggest Electric Vehicle Company Looks Nothing Like Tesla

  After 60,000% Rally, America’s Top Stock Has Suddenly Gone Cold

  Champion Accidentally Hit the Fashion Jackpot

  BlackRock’s Larry Fink Says Market Has Risk of ‘Melt Up’ Not Melt Down

  Goldman Offers Fresh Details on Overhaul Progress as Revenue Slides

  Deutsche Bank Is Subpoenaed for Trump Records by House Democrats

  Joshua Brown: Systems

  Lawrence Hamtil: Stocks Are Still The Better Long-Term Bet

  Michael Batnick: The Acquirer’s Podcast

  Be sure to follow me on Twitter.

• Morning News: April 15, 2019
  Eddy Elfenbein, April 15th, 2019 at 7:10 am

  U.S. Waters Down Demand China Ax Subsidies in Push for Trade Deal

  In Search for Leverage, Trump May Be Undercutting His Own Trade Deals

  Worried a Recession is Coming, U.S. Online Lenders Reduce Risk

  Trump’s Fed Attacks Cast a Chill at Global Finance Gathering

  As Fed Chief, Jerome Powell Navigates an Angry President and Turbulent Markets

  Shocked by Your Tax Refund? Next Year Could Be Worse Unless You Act Now

  In Quest for Electric Supercars, Engineers Head to Start-Ups

  Toyota Sells Electric Vehicle Technology to Chinese Startup Singulato

  ‘Experiential’ Tesla and iPhone Stores Aren’t Really Helping Struggling Malls

  Jack Ma Again Endorses Extreme Overtime as Furor Rages On

  Mass Production of iPhones to Start in India

  Publicis Surges as $4.4 Billion Epsilon Deal Deepens Data Push

  The Smart Gun Doesn’t Exist for the Dumbest Reasons

  Jeff Miller: Weighing the Week Ahead: What Will Q1 Earnings Reveal About Economic Strength?

  Ben Carlson: Prudent Risk Management or Market Timing in Disguise? & Why We’ll Never All Be Happy Again

  Be sure to follow me on Twitter.

• Disney Soars on New Plans
  Eddy Elfenbein, April 12th, 2019 at 11:57 am

  Very good morning for Disney (DIS).

  

  From Business Insider:

  Disney shares were up more than 10% Friday morning, hitting a record high of $130.90, after the company revealed details of its new streaming service Disney Plus during the company’s investor day on Thursday.

  The new service will rival Netflix, which is currently dominating the space. Disney will launch the service in November and it will be priced at $6.99 per month, a notable discount to Netflix’s pricing which ranges from $8.99 to $12.99. Content will include “Marvel,” “Star Wars,” “Pixar,” and “National Geographic” content.

  Disney anticipates the service will include 25 original series and 10 movies and specials in the first year, in addition to the more than 400 titles from its library. The entertainment giants sees 90 million households subscribing to the service, which it expects to achieve profitability in 2024.

  UBS analyst John Hodulik was positive on the platform’s subscriber outlook, but noted that questions remain on the extent of foregone licensing fees for Disney.

  “While not providing specific EPS guidance we believe management has given enough detail to help investors model near term earnings trajectory while showing confidence in the long term subscriber opportunity,” Hodulik wrote. Shares topped Hodulik’s price target of $128.

  Wall Street is generally bullish on Disney, with 70% of analysts holding a “buy” rating. The company is set to report its first-quarter results on May 8.

• CWS Market Review – April 12, 2019
  Eddy Elfenbein, April 12th, 2019 at 7:08 am

  “If markets were rational, I’d be waiting tables for a living.” – Warren Buffett

  After a seemingly endless wait, first-quarter earnings season has finally arrived, fashionably late but as dramatic as ever. Over the next few weeks, Corporate America will tell us how things went during the first three months of the year.

  This will be a key earnings season for Wall Street because we’re expecting a modest earnings decline. I should add that results have beaten expectations for the last 39 quarters in a row. (Come to think of it, shouldn’t that read: analysts have missed reality?) In any event, this will be the first time in ten years when revenues are higher but earnings are lower. In other words, margins are falling.

  

  The market’s been quite happy this week. The S&P 500 has rallied nine times in the last ten days. On Monday, the index closed at another six-month high. We’re close to erasing everything lost during last year’s unpleasantness.

  We have a few of our Buy List stocks due to report next week. In this week’s CWS Market Review, I’ll preview next week’s earnings reports. We also had great news from Cerner. Thanks to a major buyback announcement, the healthcare-IT stock jumped more than 10% for us on Tuesday. I’ll have all the details. But first, let’s see why the yield-curve hysteria has probably passed us by.

  The Best Jobless-Claims Report in 50 Years

  Last Friday, the government said the U.S. economy created 196,000 net new jobs in March. That’s a good number, and it’s a welcome relief after the lousy number from February. (By the way, the February was revised upward modestly.)

  It seems that the sluggish start we had at the beginning of the year may have already passed. I suspect that a lot of companies will take advantage of the diminished expectations for this earnings season to pass off bum accounting issues. If Wall Street isn’t expecting much, then this is a good time to book a loss on that investment that went south. We may see a lot of that.

  I think the government shutdown, combined with issues from China, put a damper on economic growth during Q1. However, that may have already passed, and we could be accelerating at this point. Let me highlight a few stats.

  On Thursday, we got the lowest initial jobless-claims report since October 1969. This is interesting because this is one of the few data series that ticked higher during the shutdown. To me, this suggests that things have gotten better.

  

  There are also signs of green shoots from China. The government there has done just about everything to get the economy back on its feet. In fact, the IMF recently bumped up its forecast for Chinese economic growth. Plus, the Chinese stock market has rallied impressively off its low. I never thought I’d see a Communist government cut taxes to spur growth, but here we are.

  I’ve also noticed the recent uptick in energy prices which could presage positive signs for the global economy.

  This is a bit of a U-turn in my thinking, but I try to follow the evidence. I recently talked about the flattening of the yield and its impact on the economy. I was surprised by the amount of bearish commentary I saw on the yield curve. Sure, an inverted curve isn’t ideal, but it’s hardly reason to panic.

  It seems that the yield curve has already backed off some. The 10-year Treasury yield is back above the three-month yield. Also, the odds of a Fed rate cut later this year have diminished. Within the next five months, the futures market thinks there’s only a 30% chance of a rate cut. Even that seems high to me.

  This week, we got the minutes from the last Fed meeting, and members are still open to raising rates. I think it’s a long shot, but it’s not unthinkable. I suspect that the Fed realizes the December hike was a mistake, and for now, they’re not going to move much in either direction.

  The key variable continues to be the economy, and that’s why earnings season is so important. Now let’s look at what we can expect next week.

  Next Week’s Earnings Reports

  Here’s a preliminary calendar of this seasons earnings reports for our Buy List stocks. Twenty of our 25 stocks report on this cycle. Not every company has said when it’ll report, but I’ve tried to have the latest info.

  Company	Ticker	Date	Estimate
  Eagle Bancorp	EGBN	17-Apr	$1.12
  Signature Bank	SBNY	17-Apr	$2.76
  Torchmark	TMK	17-Apr	$1.59
  Check Point Software	CHKP	18-Apr	$1.31
  Danaher	DHR	18-Apr	$1.01
  Sherwin-Williams	SHW	23-Apr	$3.70
  Stryker	SYK	23-Apr	$1.84
  Moody’s	MOC	24-Apr	$1.92
  AFLAC	AFL	25-Apr	$1.06
  Cerner	CERN	25-Apr	$0.61
  Hershey	HSY	25-Apr	$1.46
  Raytheon	RTN	25-Apr	$2.49
  Church & Dwight	CHD	2-May	$0.66
  Intercontinental Exchange	ICE	2-May	$0.90
  Disney	DIS	8-May	$1.59
  Becton, Dickinson	BDX	9-May	$2.58
  Broadridge Financial	BR	TBA	$1.50
  Cognizant Technology Solutions	CTSH	TBA	$1.04
  Continental Building Products	CBPX	TBA	$0.35
  Fiserv	FISV	TBA	$0.82

  Eagle Bancorp (EGBN) is due to report on Wednesday, April 17. Three months ago, the bank released an impressive earnings report. The bank earned $1.17 per share, which was four cents better than estimates. Last year was a very good year for Eagle.

  When looking at banks, there’s a key metric to watch which is called the “efficiency ratio.” It’s their overhead as a percent of revenue. Basically, the efficiency ratio tells us how well-run the bank is. The lower the number, the better. As a general rule, anything below 50% is considered good. For all of 2018, Eagle’s efficiency ratio was 37.3%. Despite the good results, shares of Eagle plunged more than 10% the day after the report came out.

  This is where it gets weird. Eagle turned around and marched up to $60 per share in February, then plunged to $48 in March. EGBN is back up to $55, and I think it’s a good value here. The consensus is for earnings of $1.12 per share.

  Signature Bank (SBNY) will also report on Wednesday. SBNY has been a big winner for us this year (+28.5%). In January, the bank reported a knockout quarter. For Q4, SBNY’s net interest margin was 2.90% and its efficiency ratio was 34.94%. Those are pretty good numbers. Interestingly, the bank also launched Signet, a “new proprietary, blockchain-based digital-payments platform.” Wall Street expects earnings of $2.76 per share. Expect to see a beat.

  Also on Wednesday, Torchmark (TMK) is due to report. Their last earnings report matched expectations. For all of 2019, TMK sees earnings of $6.50 to $6.70 per share. For the Q1 report, Wall Street expects $1.59 per share which sounds about right.

  Check Point Software (CHKP) is also due to report on Thursday, April 18. The stock looks to be a big winner for us this year. For Q1, Check Point sees revenues between $460 and $480 million and EPS between $1.28 and $1.34. For all of 2019, Check Point sees revenues ranging between $1.94 and $2.04 billion and earnings between $5.85 and $6.25 per share.

  Danaher (DHR) is also due to report on Thursday. For Q1, DHR expects $1 to $1.03 per share. Wall Street had expected $1.03 per share. For all of 2019, the company sees earnings between $4.75 and $4.85 per share. The dental spin-off is expected to happen in the second half of this year.

  Cerner Is a Buy up to $66 per Share

  On Tuesday, Cerner (CERN) said it had reached an agreement with Starboard Value, an activist shop. That’s one of those firms that takes a position in a company, and then advocates for changes. We’ve done well in recent years thanks to the work of activists. After some back and forth, Cerner and Starboard reached an agreement to make some changes at Cerner.

  Most of the details aren’t terribly important for our purposes (you can read them here), but I want to highlight two. One is that the healthcare-IT firm will initiate a dividend. The other is that Cerner’s buyback authorization has been increased by $1.2 billion. That’s a big chunk of change. The company now has approval to repurchase $1.5 billion worth of CERN stock.

  

  The stock jumped 10% on Tuesday. The company will report earnings on April 25. For Q1, Cerner expects earnings between 60 and 62 cents per share on revenue of $1.365 billion to $1.415 billion. For all of 2019, the company is looking for earnings between $2.57 and $2.67 per share on revenue of $5.65 billion to $5.85 billion. This week, I’m raising my Buy Below on Cerner to $66 per share.

  On Thursday, Disney (DIS) unveiled its new streaming service. The service will be called Disney+. It will be ad-free and will launch on November 12. The service will cost $7 per month or $70 annually. This is Disney’s plan to attack Netflix. The shares fell 56 cents on Thursday to close at $116.60. The next earnings report is due out May 8.

  That’s all for now. Next week will be dominated by earnings news. There will be a few key economic reports as well. The industrial-production report is due out on Tuesday. On Wednesday, the beige-book report comes out. The retail-sales report comes out on Thursday. Then on Friday, we get the latest report on housing starts. Be sure to keep checking the blog for daily updates. I’ll have more market analysis for you in the next issue of CWS Market Review!

  – Eddy

• Morning News: April 12, 2019
  Eddy Elfenbein, April 12th, 2019 at 7:05 am

  How China Turned 350 Million Millennials Into Day Traders

  Oil Scores Best Run in Three Years as Dollar, Stocks Tread Water

  Chevron Buys Anadarko in $33 Billion Bet on Shale Oil, LNG

  Uber, Losing $1.8 Billion a Year, Reveals I.P.O. Filing

  Costs for Boeing Start to Pile Up as 737 Max Remains Grounded

  Disney Unveils Price, Launch Date for Big Streaming Push

  Tesla Just Made It Harder to Buy Its Cheapest $35,000 Electric Car

  Mall REITs: Catch a Falling Knife

  Don’t Pay Too Much For Stocks That Pay Dividends

  The Tax Law’s Big Winner Is the Millionaire CEO

  Create a Crisis, Capture a Unicorn

  College Grads Sell Stakes in Themselves to Wall Street

  Michael Batnick: How to Improve Your Risk-Adjusted Returns

  Cullen Roche: My View On: Minsky’s Financial Instability Hypothesis

  Joshua Brown: The One Thing I’m Absolutely Certain Of & Are Things Getting Better or Worse?

  Be sure to follow me on Twitter.

• Me Podding With JC
  Eddy Elfenbein, April 11th, 2019 at 1:15 pm

  I did a podcast recently with JC Parets of All-Star Charts. I want to thank JC for having me on. It was a lot of fun. Check it out!