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Ye wanted to shave Donda Academy students' heads and lock kids in cages, ex-employee says in lawsuit 2024-04-02 16:19:00+00:00 - LOS ANGELES — The artist Ye is accused of spreading antisemitic conspiracy theories in front of the staff and children at his troubled private Christian school during a meeting in which he also allegedly expressed wanting to shave students’ heads and lock them in cages, according to a lawsuit filed Tuesday by a former employee. In a text message to the former employee, Trevor Phillips, Ye compared himself to Hitler — “minus the gas chambers” — and appeared to simulate masturbation during a one-on-one meeting in a Southern California hotel room where the musician watched “The Batman” on mute, according to the 47-page suit filed in Los Angeles Superior Court. The suit accuses Ye, formerly known as Kanye West, of calling out Black people in a discriminatory manner and praising the Nazi leader, pushing employees to do renovations without permits and telling employees they could be fired for being "fat," the suit says. He temporarily stiffed workers after Adidas cut ties with the rapper over his antisemitic comments, when bank accounts at the rapper's clothing brand, Yeezy, had been frozen, the suit says. Ye “gloated” to staff at Yeezy, his fashion brand, and Donda Academy, the rapper’s Los Angeles-area school, about using $2 million of the school’s budget for a trip to Paris, according to the suit. Representatives for Ye and attorneys for Donda Academy did not immediately respond to requests for comment. The Donda Academy in Simi Valley, Calif. Google Maps During a Sunday service at the school in May, in front of dozens of people, Ye angrily told Phillips he was fired over an apparent issue with a garden at the school, according to the suit. When a tearful Phillips told Ye that his daughter attended Donda and that he was grateful for the job because of a potentially serious medical condition, Ye allegedly responded with an expletive-laden “tantrum” in which the musician disparaged Phillips and his child, according to the suit. Ye then allegedly told Phillips: “I was going to punch you in the face.” Phillips, who was hired in November 2022 to work on a “vertical integrated crew” for the musician’s clothing brand, continued to work for the rapper until August, when Donda shut down, according to the suit. Tuesday’s complaint, filed by attorney Carney Shegerian, seeks more than $35,000 in damages and alleges discrimination, retaliation, wrongful termination and other claims. Phillips’ allegations add to a troubled and bizarre portrait of Donda, where former employees have said that students were allowed to eat only sushi for lunch, windows were empty because Ye didn’t like glass, and chairs, artwork and outside books were banned. The accusations are included in previous lawsuits from three former teachers and an ex-assistant principal who allege discrimination and wrongful termination. One of the lawsuits has also named Donda's predecessor, Yeezy Christian Academy. A trial in one of the suits is scheduled to begin in April 2025. A lawyer for the rapper has previously dismissed claims about Donda, saying the former employees' descriptions of the school as a “dystopian institution designed to satisfy Ye’s idiosyncrasies” were false. “None of it is true and the allegations do a disservice to the Donda Academy’s current staff and students and their parents who will attest to their positive experience,” the lawyer said in a 2023 filing.
Disney versus Nelson Peltz vote hinges on Vanguard, State Street, institutional investors 2024-04-02 15:39:00+00:00 - In 2015, Nelson Peltz's Trian Partners was defeated in an activist campaign against chemical firm DuPont , largely because the top three institutional shareholders voted against his slate. Nearly a decade later, those same institutional investors — Vanguard, State Street and BlackRock — are the three largest shareholders in Disney . And they could make or break Peltz's campaign against the board that's backing Disney CEO Bob Iger. BlackRock, a 4.2% Disney shareholder, is backing management, The Wall Street Journal reported Monday. T. Rowe Price and Norway's sovereign wealth fund, both smaller shareholders but well-known names, have confirmed to CNBC they're also backing the current management. Vanguard, with an 8.4% stake, has also chosen to back management over Peltz, Bloomberg News reported Tuesday. Of the three top shareholders, only State Street's position is unclear. All institutional shareholders can change their vote through Wednesday. Trian already has fighters in its corner. Former Marvel chairman Ike Perlmutter has entrusted Peltz with his 33 million Disney shares, the bulk of the activist's 1.8% stake. New York City's retirement fund, Neuberger Berman, and the California pension plan CalPERS, said they support the activist. Peltz also won the backing of proxy advisory firms ISS and Egan-Jones. The showdown between Trian Partners and Disney touches on some of the most complex issues confronting executives today, whether it is CEO succession or the role of corporations in confronting so-called "woke" social issues. Iger left the CEO post in 2020. His successor, Bob Chapek, was ousted in 2022, with Disney's board inviting Iger to take the top post once again. The succession failure has been highlighted by proxy advisory firms and Trian itself. Disney says Peltz's efforts distract from Iger's efforts to turn the company around. Trian argues that Peltz's expertise would help the company find a second successor to Iger and fix its underperforming stock. Both sides have made their case to investors for months in media appearances, conferences, one-on-one dinners, and meetings with top investors. But the institutional vote will be key at Disney. Just 33% of shareholders are considered retail, a significant amount, but they're less likely to vote than their institutional peers. Vanguard is the largest holder with 8% of outstanding Disney shares. It can punch above its weight in deciding whether to elect the dissidents to Disney's board. That's because, like in a political election, not every eligible voter will vote during Disney's shareholder meeting. In 2021, for example, 63% of Disney shareholders voted their shares, according to data analyzed by 13D Monitor. In a contested election, that number is likely to go much higher as proxy solicitors on both sides canvass shareholders, 13D Monitor's Ken Squire said. "With the introduction of the universal proxy card, you should get better turnout as well," Squire told CNBC. Disney has hired Innisfree M&A for their solicitation. Trian is splitting the load between Okapi Partners and D.F. King.
Low Interest Rates Can Help These Commercial Banks Rally Higher 2024-04-02 15:38:00+00:00 - Key Points Lower interest rates typically help bank stocks, but not all stocks are equal in this sector. Commercial banks have an advantage over investment banks this cycle based on their balance sheets. Markets are willing to pay the price for two bank names, expecting higher prices. 5 stocks we like better than iShares 20+ Year Treasury Bond ETF Every cycle brings new opportunities; now that the Federal Reserve (the Fed) is looking to cut interest rates in 2024, the market could be getting ready to shift in a new direction. Banking stocks could be the first to move, as they are tied to the financial pulse of the economy. Not all bank stocks are made equal, though. There are investment banks and commercial banks. In this new interest cycle, the market is hinting at the branch of banks that it expects to outperform the rest of the financial sector. Backed by fundamentals, investors could take a closer look at the coming wave. Get TLT alerts: Sign Up Initially, hybrid (investment and commercial) banks like J.P. Morgan Chase & Co. NYSE: JPM and Northern Trust Co. NASDAQ: NTRS are the type of institutions that the market is looking to buy, no matter the price. Overpaying for future potential returns is a trend in these stocks that starts here. Why Banks for Lower Rates? Traders bet that the Fed will cut interest rates by May or June 2024, a trend investors can follow through the FedWatch tool offered by the CME Group Inc. NASDAQ: CME. Because markets move well before the trend becomes apparent, J.P. Morgan stock is now flirting with new all-time highs. However, the train still has a long way to go, meaning investors could ride on further momentum. Northern Trust stock is breaking through its 52-week highs but has yet to recover to its 2022 high of $135 a share. Northern offers a different opportunity for those looking for a dip buying opportunity than J.P. Morgan’s momentum. Northern Trust’s upside comes from its $49 billion of debt securities, typically comprised of government bonds such as the treasury 10-year notes. J.P. Morgan also has some of these assets on its balance sheet, but the market’s excitement may come from the bank’s exposure to investment banking activity. Lower interest rates typically spark mergers and acquisitions (M&A) activity, which brings these banks a good chunk of fees and revenue. Lower interest rates set by the Fed affect bond interest rates, and when rates go down, bond prices go up. Knowing this, investors may want to gain some exposure to banks like Northern Trust, whose assets mostly comprise bonds and loans. Should Northern Trust's book value rise (because of more valuable bonds), its stock price could follow. For J.P. Morgan, the thesis could be rooted in the expectation for higher earnings per share (EPS) from its heating investment banking departments. In fact, analysts at Wells Fargo & Co. NYSE: WFC boosted their price targets for the bank to $220 a share as of March 2024, calling for an 11% upside from today’s prices. The Market Has Voted The financial sector, focused on the commercial banking industry, currently trades at a price-to-earnings (P/E) valuation of 9.8x. J.P. Morgan’s valuation today is 28% above the industry average, as the stock sells for 12.5x. Northern Trust stock is valued 43% above the industry standard in its 14x P/E multiple. The market must have a good enough reason to pay a premium valuation for these names; knowing how rates can affect these stocks, retail investors now have an insight into what Wall Street is looking for. Solidifying the momentum and dip opportunity in these stocks, investors can compare their past 12-month performance against the Financial Select Sector SPDR Fund NYSEARCA: XLF. J.P. Morgan stock outperformed the sector by as much as 23%. In contrast, other banks like Goldman Sachs—more focused on investment banking activities—have underperformed these hybrid names. J.P. Morgan stock left its competitor behind by 26.2% in the past 12 months, showing investors how these fundamentals come into play. Enough Fuel to Burn With recent hot initial public offerings (IPOs) like Reddit Inc. NYSE: RDDT, investors can gauge the underlying fuel in the economic environment. M&A activity is also on the rise, as The Home Depot Inc. NYSE: HD also realized an $18 billion acquisition in the past week. These headlines typically don’t come about during stagnant economic times, so these banking names could be set to rally in the coming quarter, fueled by economic momentum and hopes for lower interest rates. Investors can follow the price action in bond-based exchange-traded funds (ETFs) like the iShares 20+ Year Treasury Bond ETF NASDAQ: TLT to keep up with bond yields' movement and how these yields could affect banking stocks. Before you consider iShares 20+ Year Treasury Bond ETF, you'll want to hear this. MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and iShares 20+ Year Treasury Bond ETF wasn't on the list. While iShares 20+ Year Treasury Bond ETF currently has a "hold" rating among analysts, top-rated analysts believe these five stocks are better buys. View The Five Stocks Here
Biden and Xi Jinping discuss Russia-Ukraine war, Taiwan, election security and counternarcotics 2024-04-02 15:33:00+00:00 - President Joe Biden held a call with Chinese President Xi Jinping on Tuesday morning to address U.S. concerns over China’s trade with Russia amid its war with Ukraine, the issues of cyberattacks and election interference, and efforts to counter illicit narcotics traffic, among other regional and global matters, the White House said. The "check-in" call between Biden and Xi — their first discussion since November — was an opportunity for them to talk about some tough issues and try to ensure that the two countries are responsibly managing their competition with each other, a senior administration official said in a background call with reporters on Monday evening. "Intense competition requires intense diplomacy to manage tensions, address misperceptions and prevent unintended conflict, and this call is one way to do that," the official said. Xi Jinping and Joe Biden at the G20 Summit in Bali, on Nov. 14, 2022. Saul Loeb / AFP via Getty Images file China’s trade with Russia as that nation wages war against Ukraine came up, the White House said in a readout of the call — a topic that has been part of the diplomatic conversations between the U.S. and China since the start of the war, the senior administration official said. The U.S. has grown more concerned over China helping to rebuild Russia’s defense industrial base, the official said. During a White House press briefing Tuesday, national security communications adviser John Kirby said the two leaders spoke for about an hour and 45 minutes in the call, which was meant to build on their meeting in Woodside, California, in November of last year. Asked what Biden’s message to Xi was on misinformation campaigns or election interference efforts by the Chinese government or people associated with it, Kirby said the administration has been clear about its concerns over election security in the U.S. and efforts by certain foreign actors, including some from China, to influence the 2024 election. The Biden administration has undertaken a whole-of-government effort to protect elections against foreign adversaries and continues to underscore its concerns with China and other countries, the senior official said in the preview of the call, adding that it’s not enough to take the Chinese at their word when they say whether they will take action on that and other matters, but requires verification of Beijing's efforts. The administration is also committed to conveying to the Chinese government the U.S. concerns about cyberattacks that compromise critical infrastructure, the official said. The call was an opportunity for Biden to reaffirm the longtime “One China” policy that recognizes Beijing as China’s only legal government amid Xi's efforts to reunify Taiwan with mainland China, and to reiterate the importance of peace and stability across the Taiwan Strait, especially with regard to the May presidential inauguration in Taiwan, the senior administration official said. Another area for potential discussion included U.S. concerns over China’s destabilizing actions in the South China Sea, including recent actions by Chinese coast guard ships that posed dangers to routine Philippine maritime operations, the official said. China’s state news agency Xinhua reported that during their “candid and in-depth exchange” of views, Xi stressed that the issue of Taiwan is “the first insurmountable red line” in China-U.S. relations. “We will not let the separatist activities and external connivance and support of the ‘Taiwan independence’ forces go unchecked,” the news agency reported Xi said. “We hope that the U.S. will implement Mr. President’s positive statement of not supporting ‘Taiwan independence’ into action.” While Biden and Xi last spoke over the phone in July 2022, the two leaders met in Bali in November 2022 and held a summit meeting in California in November of last year, the senior administration official noted. In a readout of the call, the White House said Biden and Xi held a “candid and constructive discussion on a range of bilateral, regional and global issues, including areas of cooperation and areas of difference.” The leaders reviewed and encouraged progress on key issues, such as counternarcotics cooperation, military-to-military communication, artificial intelligence-related risks, and climate issues, the White House said. Biden also emphasized the U.S. commitment to the denuclearization of the Korean Peninsula, the White House said. Kirby added during the briefing that Biden pressed the U.S. interest in Chinese company ByteDance divesting its ownership of the popular video-sharing app TikTok, an idea U.S. lawmakers have advanced as a way to protect national security and the data security of U.S. citizens. Kirby also said Biden was “very clear” with Xi about his “significant differences of opinion and concerns over some unfair market practices” China uses that put U.S. workers at a disadvantage. According to Xinhua, Xi accused the U.S. of having “launched an endless stream of measures to suppress” China’s economy, trade and technology, and noted the U.S. has a growing list of sanctions against Chinese companies. “This is not ‘risk removal’ but creation of risk,” Xi reportedly said. “If the United States is willing to carry out mutually beneficial cooperation and share the dividends of China’s development, China’s door will always be open; if the United States insists on suppressing China’s high-tech development and depriving China of its legitimate right to development, we will not sit idly by.” The White House said Biden and Xi expressed support for keeping communication channels open through high-level diplomacy and working-level consultations in the coming weeks and months, including future visits by Treasury Secretary Janet Yellen and Secretary of State Antony Blinken.
PVH Stock Gets 25% Discount: Is Now the Time to Buy? 2024-04-02 15:25:00+00:00 - Key Points PVH Corp. had a solid quarter but guided weak; analysts think it's cautious and easily beaten. Margin strength helped to sustain earnings growth and capital returns. The share repurchase plan was increased by $2 billion or about 1/3 of the new market cap. 5 stocks we like better than PVH PVH’s NYSE: PVH quality operations, cash flow, and capital returns make the 25% discount on share prices an opportune time to buy the stock. The cause of the price implosion is the guidance, which came in below the analysts' consensus estimates. However, as weak as the guidance is compared to consensus, the whisper was that guidance was expected to be light and cautious given the uncertain economic outlook for apparel makers. The company may have surprised the market with overly cautious guidance, but the takeaway is the same. This company is well-positioned to generate cash flow in 2024 and is set up for accelerated earnings growth when economic uncertainties evaporate. That could be as early as mid-summer when the FOMC is expected to cut or indicate the first interest rate cut in years. Get PVH alerts: Sign Up PVH Has a Solid Quarter, Guides Cautious, Increases Capital Return PVH Corp. is the parent of Tommy Hilfiger and Calvin Klein, two of today's most iconic brands. The company’s brand position and lean into PVH+, including building its brand strength, led to better-than-expected revenue in Q4. The Q4 results include $2.49 billion in net revenue, which is flat compared to last year and 300 basis points better than expected. Strength was driven by International, Direct-to-Consumer, and Tommy Hilfiger, offset by weakness in Calvin Klein, North America, and Wholesale Channels. DTC, the company’s pillar, grew by 9%, with digital up 10% while wholesale fell by 10%. The decline in Wholesales is a headwind today and for 2024 but a silver lining for investors. The decline is attributed to caution among retailers and reduced inventory levels compounded by PVH's inventory management. Inventory is down 20% compared to last year, putting the company in a lean operating position, ready for the next consumer rebound. The shift to demand-driven inventory management aids the outlook because PVH should be able to ramp production as demand improves and wholesales return to growth. Margin is another area of strength in the report. The company’s strengths include pricing power, leading to better-than-expected gross and operating margins. The GAAP results include a 440 bps improvement in gross margins and earnings, nearly double last year, while adjusted earnings are up 56% and beat the consensus reported by Marketbeat by 550 bps. The weak spot is the guidance, which calls for revenue to fall by -6% to -7% or by -3% to -4%, adjusted for the extra week in 2023 and the divestiture of heritage brands. Earnings are expected to range from $10.75 to $11.00 compared to the $12.50 forecasted before the release. The upshot is that guidance is likely cautious, and cash flow remains robust. PVH Corp Increases Share Repurchases By $2 Billion PVH Corp.’s cash flow and balance sheet allow for robust share repurchases. The company bought back $550 million worth of shares in 2023 to reduce the share count by 6%, increasing the authorization for 2024. Now that share prices have corrected, the new authorization adds $2 billion, or about one-third of the market cap. The analysts’ support for the stock has been firm since the release. Several companies have come out to reiterate Outperform or equivalent ratings, although the price targets are falling. The good news is that revisions are lowering the high end of the range and are so far above consensus. The lowest new target is $138 from Wells Fargo & Company, which is $19 or 16% above the consensus, and the consensus implies a 12% upside. Takeaways from the chatter are that macroeconomics are impacting results now, but margins are healthy, and efforts to improve business quality set it up for leverage. It may take some time for PVH’s market to regain footing, but upward bias is expected, and recent highs should be retested. PVH Stock Price Falls to a Critical Support Level The price action in PVH fell hard, more than 20%, and it may fall further. However, the market price moved into a congestion band that may provide support given the outlook for repurchases and share prices. If not, this market could fall another $15 to the $90 region before finding solid support. Assuming the market takes advantage of the opportunity today, the share price should start to form a bottom at or near the current level. Before you consider PVH, you'll want to hear this. MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and PVH wasn't on the list. While PVH currently has a "Moderate Buy" rating among analysts, top-rated analysts believe these five stocks are better buys. View The Five Stocks Here
Tesla Stock Drops on Weak Delivery Numbers and it May Fall More 2024-04-02 15:25:00+00:00 - Key Points Shares of Tesla (TSLA) are down sharply after the company delivered significantly fewer cars in the first quarter than analysts expected. The miss underscores the company’s weakness in China, as well as weak demand in the United States. Investors looking to buy TSLA stock may want to wait until after the company reports earnings on April 17. If the news is bad, the stock will likely drop further. 5 stocks we like better than Tesla Shares of Tesla, Inc. NASDAQ: TSLA stock dropped nearly 6% in the pre-market after the electric vehicle (EV) giant reported lighter-than-expected delivery numbers for the first quarter. Tesla manufactured 433,000 vehicles but delivered only 387,000. The delivery miss will continue to fuel speculation that Tesla will be hard-pressed to justify its premium valuation. The company's 387,000 deliveries were far below the FactSet consensus of 457,000. But they were also below the 484,507 vehicles the company delivered in the last three quarters of 2023 and the 422, 875 deliveries it made in the first quarter of 2023. Get Tesla alerts: Sign Up That's not a trend that shareholders like to see. Particularly since Tesla continues to lose market share in China. On April 1, 2024, data from the China Passenger Car Association showed that Tesla sold 89,064 cars in the country in March, a 0.2% year-over-year increase. However, overall EV sales in China were up nearly 33%. Not surprisingly, BYD was the leader in China sales, with over 300,000 vehicles sold. That was a 46% YOY increase. The EV Market Continues to Be Under Pressure To be fair, many of the issues weighing on Tesla and the company's stock are not unique to Tesla. The industry is facing hurdles as supply far outpaces demand. There are many reasons for that. And while Tesla may be overvalued, it's the definition of the best house in a bad neighborhood. The company is not only delivering vehicles at scale, but it's profitable in a sector where companies such as Fisker Inc. NYSE: FSR and Canoo Inc. NASDAQ: GOEV face difficulties in trying to build a car company from the ground up in a rising interest rate environment. However, that doesn't change the fact that Tesla now faces competition not only in China but also domestically. For starters, more consumers are turning back to hybrid vehicles, which benefits companies like Toyota Motor Corp. NYSE: TM, whose stock is up 32% in 2024 and 70% in the last 12 months. Second, as time goes on, Tesla's cars are beginning to look dated compared to the new features being offered. However, it remains to be seen if many of these companies can turn their visions into actual deliveries. Is Tesla Entering a Buy Zone? It may be tiring for some investors to hear, but Tesla does do more than make EVs. The company is a crucial part of the EV ecosystem and is one of the leading EV charging stocks. That underscores the reality that Tesla isn't going away. But is the stock a buy? With this latest drop, TSLA stock is trying to hold support near its 52-week low. However, with the broad market selloff and concerns rising over the company's upcoming earnings report on April 17, the correction may not be over. Add in the fact that short interest in the stock is up more than 6% in the last month, and It's possible that TSLA stock could drop to near its 5-year low around $112 a share. If the stock were to plunge that low, it would be trading at nearly a 32% discount to its current price and approximately 80% lower than its 52-week high. Before you consider Tesla, you'll want to hear this. MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and Tesla wasn't on the list. While Tesla currently has a "Reduce" rating among analysts, top-rated analysts believe these five stocks are better buys. View The Five Stocks Here
Forbes has released its list of the world's billionaires. There are more than ever before — and they're wealthier. 2024-04-02 15:20:00+00:00 - Pandemic savings gone for most Americans, but wealthiest 20% have more cash, Fed data shows Forbes has released its annual list of the world's billionaires and in 2024, there are more people on the list than ever — and they're richer than ever. There are 141 more billionaires in the world than last year, with 2,781 in total. Their combined worth equals $14.2 trillion — up by $2 trillion in 2023. The 2024 list also broke records set in 2021, with 26 more billionaires on the list and their combined net worth up by $1.1 trillion. Billionaires themselves are also wealthier, with two-thirds adding to their worth. The top 20 on the list gained the most, adding $700 billion to their combined worth since 2023. And the U.S. has a record 813 billionaires — the most of any country. China has 473 billionaires and India has 200, which set a record for that country. To tally their wealth, Forbes used stock prices and exchange rates from March 8, 2024. Bernard Arnault and his family are at number one, with a net worth of $233 billion. Arnault is head of LVMH, a luxury fashion and cosmetics conglomerate in France. The family is usually in the top three of Forbes' wealthiest people in the world lists. Elon Musk, once the richest person in the world, is No. 2 on the list, with a net worth of $195 billion. Musk, the founder of Tesla and SpaceX, also bought Twitter for $44 million in 2022, renaming it X. Musk owns an estimated 74% of the social media company, which is now worth nearly 70% less than he paid, Forbes estimates. This and other factors like low Tesla earnings have lead to his net worth dipping below $200 billion several times over the last two years. Coming in at No. 3 is Amazon founder Jeff Bezos, who has a net worth of $195 billion. Then comes Facebook founder Mark Zuckerberg, who is worth $177 billion. Other famous names on the list include: 100. Fox News founder Rupert Murdoch and his family, worth $19.5 billion 137. Dallas Cowboys General Manager and President Jerry Jones, worth $13.9 billion 1,330. Jay-Z, worth $2.5 billion 1,851. Kim Kardashian, worth $1.7 billion 2,545. Taylor Swift, worth $1.1 billion The wealthiest woman on the billionaires list comes in at No. 15: Francoise Bettencourt Meyers, the granddaughter of the founder of L'Oreal. As the richest woman in the world, she is worth $99.5 billion. The top four wealthiest women after Bettencourt: 21. Alice Walton, Walmart founder Sam Walton's daughter, who is worth $72.3 billion 23. Julia Koch and her three children, who inherited a stake in Koch Industries from her husband when he died and is worth $64.3 billion 35. Jacqueline Mars, who owns one-third of candy and food company Mars, who is worth $38.5 billion 43. MacKenzie Scott
Buy the Dip in Paychex, Inc. for a Pay Check at Retirement 2024-04-02 15:07:00+00:00 - Key Points Paychex had a solid quarter with top-line growth and wider margins. The results fell short of consensus, leading the market to correct itself, but investors should consider this a buy-on-the-dip opportunity. High yield and share repurchases aid the value and will help drive total returns for long-term investors. 5 stocks we like better than Paychex Paychex, Inc.’s NASDAQ: PAYX stock price is falling into a buying opportunity that retirement-oriented income investors should heed. The only trouble with the Q3 results and guidance is that they failed to exceed expectations, and the stock valuation was high. Trading at roughly 25X earnings, the company needed to sustain outperformance and issued better-than-expected guidance to keep the share price higher today. The takeaway is that the stock price for this well-positioned, high-yielding business-services company with a fortress balance sheet has returned to trend and is setting up a great entry point. Get Paychex alerts: Sign Up Paychex Has a Solid Quarter and Widens Margin Paychex had a solid quarter despite the $1.44 billion in revenue falling short of consensus. The growth is driven by strength in both core operating segments offset by the wind-down of services related to COVID-related employee tax credits. That wind-down shaved three hundred basis points off of the top line. Management Solutions, the primary segment, which includes the closed business, grew by 2%, while PEO services grew by 8%. PEO includes payroll and insurance services and is bolstered by a 25% increase in interest income on funds held for clients. Margin is an area of strength for Paychex. Cost controls and interest income favorably impacted the margin, leaving operating income, net income, and adjusted earnings above the Marketbeat.com consensus figures. Operating income grew by 6% and adjusted earnings by 7%, outpacing the topline growth by 170 and 270 basis points, respectively. Guidance is a bitter pill for the market but aids shareholder value. The company trimmed its target for revenue growth but maintained its outlook for earnings. Earnings are expected to grow by 10% to 11% for the year, with strength projected for Q4. Because the FOMC is expected to cut rates soon and spark an economic pivot, it is likely that growth will persist into 2025 and may accelerate. Regardless, the business generates sufficient cash flow to maintain its fortress balance sheet while paying dividends, repurchasing shares, and investing in growth. Investments are centered on technology, which makes sense for the digitally-oriented business services provider. Efforts include data handling, analysis, and AI, which is being used to aid internal operations and client services. AI applications include machine learning and LLMs. Paychex Cash Flow, Balance Sheet, and Capital Returns are Attractive Paychex's cash flow, balance sheet, and capital returns explain why the post-release stock price implosion is such a good opportunity. The company maintains a fortress balance sheet and is net cash, allowing it to invest in the business while sustaining a high-yielding dividend. The nearly 3.0% payout is roughly 75% of the earnings, but this is not an issue due to the net cash position, low leverage, outlook for growth, and cash flow. The balance sheet highlights include a cash build, increased assets, and a 7.2% increase in shareholder equity, which suggests that another solid increase will come at the end of the year. As it is, the company has increased its distribution for nine years and runs a high single-digit CAGR. Analysts Sentiment is a Drag on Paychex Stock Price Analyst sentiment drags Paychex's stock price but may change soon. Over the last year, analysts' sentiment fell to Reduce from Hold, while the price target fell. However, the stock is fairly valued at current levels, trading below the consensus target, and may lead them to alter their positions. Assuming no further reductions come, the market’s move to $113 opens a significant opportunity. It puts the market at critical support with a potential for a mid-single to low-double-digit upside by later this year. In the long term, this stock could move to a new all-time high by the end of next year, supported by steady labor market growth and deepening penetration of services. Before you consider Paychex, you'll want to hear this. MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and Paychex wasn't on the list. While Paychex currently has a "Reduce" rating among analysts, top-rated analysts believe these five stocks are better buys. View The Five Stocks Here
Dutch cargo bike firm Babboe recalls 22,000 cycles over safety fears 2024-04-02 14:54:00+00:00 - The Dutch cargo bike firm Babboe is recalling 22,000 of its popular cycles over safety fears, about one-third of its bikes on the road. Babboe had already announced a recall of two models in February but said a further five models were a concern. “In total, in all countries where Babboe is sold, approximately 22,000 cargo bikes are being recalled and replaced,” the company said. The first cargo bikes will be collected in the Netherlands and Germany in mid-April, with other countries following afterwards. “All owners of these models will be offered a new (cargo) bike,” Babboe said. Cargo bikes, or “bakfiets” in Dutch, feature a large wooden crate at the front to transport children – or dogs – and are ubiquitous in the Netherlands. “The majority of our customers can get back on the road after an inspection/repair,” Gerard Feenema, the director of Babboe, said in a statement. “We understand that this is annoying for our customers, and have therefore done our best to find a suitable solution and compensate them,” he added. “Our goal is to get everyone back on the road safely.” In February, the Dutch Food and Consumer Product Safety Authority concluded there were “defects in the frame and/or other parts” on some Babboe bikes that could lead to “serious injury”.
Tesla shares fall after deliveries drop 8.5% from a year ago 2024-04-02 14:17:00+00:00 - Tesla on Tuesday published its first-quarter vehicle production and deliveries report for 2024 that showed deliveries fell 8.5% from the year-ago quarter and about 20% from the fourth quarter. Here are the key numbers: Total deliveries Q1 2024: 386,810 Total production Q1 2024: 433,371 Vehicle production declined 1.7% year over year and 12.5% sequentially for Tesla. Shares dropped about 6.5%. Tesla doesn’t break out sales by model but reported that it produced 412,376 Model 3/Y cars and delivered 369,783. It produced 20,995 of its other models and delivered 17,027. In the same period last year, the electric automaker reported 422,875 deliveries and production of 440,808 vehicles. In the fourth quarter of 2023, Tesla reported 484,507 deliveries and production of 494,989 vehicles. Deliveries are the closest approximation of sales reported by Tesla but are not precisely defined in the company’s shareholder communications. Tesla’s deliveries fell below even the lowest analyst estimate. According to a mean of 11 estimates compiled by FactSet, analysts were expecting deliveries of around 457,000 for the period ending March 31. Estimates ranged from a high of 511,000 deliveries to a low of 414,000 for the first quarter, with estimates updated in March ranging from 414,000 to 469,000 deliveries. Independent auto industry researcher Troy Teslike, whose work is closely followed by Tesla fans, had expected deliveries to come in around 409,000. Tesla’s head of investor relations Martin Viecha sent around a company-compiled consensus based on 30 analysts’ estimates over the weekend to select investors. The consensus, which was viewed by CNBC, said analysts were expecting a mean of 443,027 deliveries and a median of 431,125 deliveries for the quarter. Tesla faced numerous challenges in the first quarter. “Decline in volumes was partially due to the early phase of the production ramp of the updated Model 3 at our Fremont factory and factory shutdowns resulting from shipping diversions caused by the Red Sea conflict and an arson attack at Gigafactory Berlin,” Tesla said in a statement. Houthi militia attacks on shippers in the Red Sea disrupted Tesla’s component supply and temporarily suspended production at its German factory outside of Berlin in January. In March, environmental activists set fire to infrastructure near that same factory, depriving Tesla of sufficient operation power and again causing a pause in production. In China, Tesla faced an onslaught of competition from domestic EV makers, including BYD and newcomers such as the phone maker Xiaomi. After sluggish sales numbers for its China-made cars in January and February, Tesla reduced production of its Model 3 and Model Y at its Shanghai plant and slashed workers’ schedules to 5 days a week from 6 and a half days. In the U.S., reviews were mixed for Tesla’s newest model — an angular pickup dubbed the Cybertruck — which the EV maker only began to sell in small numbers in December last year. A series of discounts and incentives appeared to be less effective in driving sales volume than in the past for Tesla. During the final days of the first quarter, Tesla CEO Elon Musk mandated that all sales and service staff install and demo the newest version of the company’s premium driver assistance system for customers in North America before handing over their cars. The system is marketed as Full Self-Driving but doesn’t make Tesla cars autonomous. They require a human at the wheel, ready to steer or brake at any time. Shares of Tesla dropped 29% in the first quarter, the biggest decline since the end of 2022 and the third-steepest quarterly plunge since the company’s IPO in 2010. The company scheduled an earnings call for April 23 to discuss quarterly results.
Actor Angie Harmon says Instacart driver shot and killed her dog 2024-04-02 14:03:00+00:00 - Former "Law & Order" star Angie Harmon said an Instacart driver delivering groceries to her North Carolina home shot and killed her family's dog on Saturday. Harmon posted about the incident on Instagram alongside several photos of the dog named Oliver. Harmon said the male delivery driver delivered the groceries before shooting Oliver. The actor said that her family had a Ring camera, but it was inside charging and did not capture any footage of the incident. Harmon said she believed that the man noticed the Ring camera's absence. The Charlotte-Mecklenburg Police Department confirmed the incident, saying the driver told police that the dog had attacked him and he had fired in self defense. Harmon disputed that account, saying that the driver "did not have a scratch or bite on him nor were his pants torn." Police said no charges have been filed related to the incident. Instacart said in a statement that the driver will no longer be delivering for them. "We were deeply saddened and disturbed to hear about this incident," the delivery company said. "We have no tolerance for violence of any kind, and the shopper account was immediately suspended from our platform. We have been in direct contact with the customer and are cooperating with law enforcement on their investigation." Harmon said that the Instacart driver was using a woman's profile, something that police and Instacart did not address in their statements. The former "Rizzoli and Isles" star said she and her family are devastated by the incident. "We are completely traumatized & beyond devastated at the loss of our beloved boy & family member," she wrote.
‘I only had £5’: what happened to the 3.8 million people denied furlough at the start of Covid? 2024-04-02 14:01:00+00:00 - In March 2020, Mark Edwards was excited to start a new job running a venue that hosted weddings and hospitality events. Before that, the 47-year-old had been working as a general manager at an independent group of hotels for the past nine years. He was living with his partner and dog in Norwich. “My life was on track. I felt everything was in my hands, but that flipped on its head,” he says. Just as he started his new job, Covid-19 swept across the country. As the country went into lockdown – almost exactly four years ago – and the hospitality industry shut down, Edwards’ new employer sent everyone home. Most people in this situation were able to claim furlough, but Edwards was one of 300,000 “new starters” – workers who had started a job in February or March 2020, but weren’t on their company’s payroll in time to make the furlough scheme’s cut-off date. He ended up being out of work for a whole year, with a mortgage to pay and only six months of jobseeker’s allowance available. He spent £25,000 trying to support his household and keep up with mortgage payments. “It changed everything,” he says. “My entire life plan changed … I’ve recovered in terms of jobs but not recovered from losing 25k. I’ve not got it back.” According to ExcludedUK, 3.8 million taxpayers slipped through the cracks and couldn’t claim furlough Four years ago at the start of the first lockdown, as thousands like Edwards were being sent home from work, Rishi Sunak, the then chancellor, introduced the coronavirus job retention (furlough) scheme, whereby the government provided grants to employers to cover 80% of employees’ wages for workers who would have lost their job in the pandemic. About 11.7 million employees were furloughed, at a cost of £70bn. For many, this was a lifeline that kept them from destitution. But, according to the campaign group ExcludedUK, which lobbies for those excluded from financial support during the pandemic, up to 3.8 million taxpayers slipped through the cracks and couldn’t claim furlough or get money through the self-employment income support scheme. Initially, Sunak said employees had to have been on their company’s payroll by 28 February 2020 to qualify for furlough, but he later changed this to 19 March, so an extra 200,000 people were covered. Unfortunately, most employers pay on a monthly basis, so those who were waiting to be paid by their new employer at the end of March or in April didn’t qualify, simply because they started a new job at the wrong time. View image in fullscreen Rishi Sunak holding a digital Covid-19 press conference on 26 March 2020. Photograph: 10 Downing Street/Crown copyright/Pippa Fowles/PA “I tried to rationalise it,” says Edwards. “And every day I thought, is today going to be the day that somebody in government or the treasury is going to go, ‘Oh yeah. I see what we’ve done’?” . But that never happened. MPs asked questions, petitions were signed but the treasury doubled down, arguing that this arbitrary cut-off date was necessary to prevent fraudulent furlough claims for “ghost employees”, and that they simply couldn’t protect everyone. They said extending the cut-off date for furlough beyond 19 March was impossible, due to “the practical implications of monitoring such an extension”. For those who missed out, the consequences were devastating. Lisa Butler-Hart, 52, says she has worked since the age of 16. In 2020 she left her job working for English Heritage at Stonehenge to return to an old job at a garden centre when her manager asked her to come back. Her husband is chronically ill so, as well as working, Butler-Hart is also his carer. “I was trying to go from one job to another so we could have a slightly better life,” she says. But, like Edwards, she had started her new job just before lockdown and didn’t qualify for furlough. View image in fullscreen Beth Nash: ‘We had to re-mortgage to pay for the wedding.’ Photograph: Courtesy of Beth Nash Butler-Hart and her husband racked up rent arrears and tried to live off their allotment, which they also used to help feed shielding family and friends. “I was sat there with no job, no income, no nothing. I even tried to apply for universal credit and they said no. It was a kick in the teeth really because I wasn’t entitled to anything, apparently,” she says. “How were we supposed to live on the meagre benefits my husband was getting and survive? Financially, we were screwed big time. There was a point when I had to decide whether I could afford to get my prescription or have anything to eat. I spent probably three months with about £5 in my bank account.” In March 2021, the couple were offered a council house after being on the waiting list for years, but, under the council’s rules, they couldn’t move in while their existing rent was in arrears. A family member offered a loan to pay back the rent and they eventually moved in in July 2021, but, says Butler-Hart, “It’s like everything’s still on catchup … I have been under an inordinate amount of stress this entire time.” Beth Nash, 47, was booking her wedding with her partner of 17 years when the pandemic began. In 1996, when she was 19, she had joined Thomson Directories and worked there until she was made redundant in January 2020. “I always worked. Ever since I was in my teenage years I always had Saturday jobs, paper rounds, jobs after school, jobs after college,” she says. Thompson had given her a good redundancy package and she decided to put the money towards the wedding. She spent February looking for work and started a new job at the beginning of March, but was then placed on unpaid leave when Boris Johnson announced the first lockdown. The weeks between being made redundant from her old job and starting the new job were the only time Nash hadn’t been in employment for her entire working life. “That was the difference between me qualifying for furlough or not,” she says. “I could only qualify for around £75 a week in jobseeker’s allowance. The wedding money got swallowed up so we had to remortgage to pay for the wedding because everything was already booked. It’s still not been paid off because of interest rates being so high.” The worst affected are those who are also being crushed in the cost of living crisis Jennifer Griffiths, ExcludedUK Jennifer Griffiths, head of ExcludedUK, says those who were denied furlough “watched in shock, helpless and hopeless, as they realised that they were not going to receive the parity of financial support that the other 90% of UK taxpayers received. “Many are still suffering the after-effects of taking out loans or overdrafts to survive, and the worst affected are those who are also being crushed in the cost of living crisis.” Many people also found themselves struggling with their mental health at some point over the pandemic. According to the Office for National Statistics, one in five of us now experience moderate to severe symptoms of depression, compared with one in 10 before the pandemic. Studies have shown that debt can make these problems worse, and Edwards is left wondering about those who may not be here to tell their stories. “How many people actually lost their lives as a result of this?” he asks. “There would have been people homeless, there would have been people that took their lives …” Despite offering free mental healthcare, ExcludedUK says 37 people who couldn’t access the government’s financial support schemes during the pandemic killed themselves, and hundreds more are still receiving support. One man, who asked to remain anonymous, said he and his wife are still on medication for anxiety and depression after losing £24,000 and coming one step away from losing their house after missing out on furlough. “We’re doing better but we both have to be on antidepressants as we were totally lost. I didn’t let it harm the kids, but it was a struggle for sure,” he says. I decided I was not going to pay another penny in income tax to any government in this hellhole of a country Mary Orru Those affected place the blame squarely with Sunak and the Conservative government who were responsible for the furlough scheme. “I shout at my television screen whenever he comes on,” says Butler-Hart. For Mary Orru, a chef from Newcastle, the betrayal was too much. Orru, 63, was a catering manager at the start of the pandemic but was unhappy with her job and decided to leave in March. Unable to claim furlough, she signed on for benefits for the first time in her life, an experience she describes as “belittling”. She was told at the jobcentre when hospitality opened up again that she should have sold her house. “How can you sell your bloody house in lockdown? I found myself getting depressed and angry – I still am,” she says. Eventually she found work again almost a year later in January 2021, at a Covid test laboratory, but she still feels cheated: “My parents always said to me, ‘Mary, go to school, do well, get a job, pay your taxes, you’ll be looked after by the country. You retire at 60, you’ll get your pension, you’ll be fine. So long as you work.’ And I’ve done that, and I didn’t get help when I needed it. I worked for 40 years and got kicked in the teeth by the government. I never thought I’d say that about this country.” The anger Orru still feels prompted her own small protest after discussing this with her husband, who still works full-time. “I’m stubborn, so I decided I was not going to pay another penny in income tax to the coffers of any government in this hellhole of a country,” she says. “I decided I would only work as long as I stayed below the income tax threshold. “When they’ve got Covid and travel from London to Scotland, have all these parties and jump in cars to check their eyesight, you know they had one rule for them and a different one for us,” she says. “Something happened to the general public during that time, and I don’t think we’ll ever get it back. I think it’s damaged a lot of people.” In the UK and Ireland, Samaritans can be contacted on freephone 116 123, or email jo@samaritans.org or jo@samaritans.ie. In the US, you can call or text the National Suicide Prevention Lifeline on 988, chat on 988lifeline.org, or text HOME to 741741 to connect with a crisis counselor. In Australia, the crisis support service Lifeline is 13 11 14. Other international helplines can be found at befrienders.org
Look at the Thames and know the time for metaphors is over: our politics is drowning in effluent | Marina Hyde 2024-04-02 13:39:00+00:00 - Fire up a Chariots of Fire-style theme tune for the speech of the defeated Oxford captain in last Saturday’s Boat Race, beamed edifyingly around the world: “We had a few guys go down pretty badly with E coli,” declared Lenny Jenkins (the university’s boat club itself says it can’t be that specific on precisely what caused the gut-rot). Having shared a few of the nauseating details, Jenkins concluded: “It would be a lot nicer if there wasn’t as much poo in the water.” Yup, a country that once painted a quarter of the world pink now regrettably advertises itself as mostly brown – encircled by its own effluent and pumping it furiously through its river veins just to be sure. As metaphors go, it is on the nose in all senses. And so to Thames Water, steward of the river on which that internationally famous race is rowed – a firm that is £18bn in deliriously structured debt, has had to be extensively threatened to spend so much as 30p on infrastructure investment, spent years being used as a cash cow for shareholders, and has pumped human waste into the Greater London area of the river for almost 2,000 hours already this year. Despite this rapacious shareholder-facing culture, its current foreign investors have now apparently judged it to be “uninvestable”. Thames Water’s relatively new CEO, Chris Weston, must be struck by that feeling that plagued Tony Soprano. “It’s good to be in something from the ground floor,” the mobster judged. “I came too late for that – I know. But lately, I’m getting the feeling that I came in at the end. The best is over.” This isn’t the line Chris Weston is going with in public, chirping to the Sunday Times: “I think the water industry, the characteristics it has, as a regulated monopoly, is very attractive to some types of investors.” He should probably tell that to the ones walking away, even as Thames has spent much of the past five years trying to get Ofwat to let it raise bills, most recently by up to 40%. Ofwat is of course the water industry’s “regulator” – if I could do double sarcastic airquotes, I would – and perhaps the only entity more full of shit than the rivers and seas it’s supposed to give one about. Civic-minded individuals such as the campaigner Feargal Sharkey or groups including Surfers Against Sewage have made all the running and worked long and tirelessly to push this issue into the public consciousness, and from there to outrage. The part that Chris has correctly said out loud, however, is that back in 1989 the water industry wasn’t privatised in any true sense of the term – in fact, the Conservative government of the day held a sale of monopoly rights. State assets were parcelled out into private hands, and those who picked up these monopolies have spent decades doing grotesquely well for themselves at the expense of the captive nation that is stuck with them. They are in effect oligarchs, and even if they can’t boil their enemies in vats of scalding water like their Russian counterparts, they can certainly make them swim in seas of sewage. As Sun Tzu said: “If you wait by the river long enough, the turds of your enemies will float by. I say ‘long enough’ – 30 seconds should probably do it.” You hear a lot about how the water industry was privatised for ideological reasons, but surely few ideologies could be more universally shared than the one that should see them renationalised. Namely: “I strongly believe that pumping raw sewage into our seas and rivers is both literally and qualitatively shit.” Come on – this really is the great unifier. In an atomised and polarised age, you can’t knock the sheer percentage of people who would – right now – be able to put all their other differences aside and unite behind the idea of that one. The public didn’t back water privatisation at the time it happened, and they sure as Shirley back it even less now. Plenty of Conservatives will gladly tell you that privatising utilities was always madness, for reasons ranging from economic and civic to national security, and Britain is far from the only place around the world where water privatisation has demonstrably not worked. The public is also not stupid and knows very well that it’s going to be on the hook for the various firms’ massive debts, one way or another. If Thames is currently £18bn in debt and heading for collapse, the £15bn that is the estimated cost of renationalising the entire sector starts to look like long-term good value. Quite why Keir Starmer has rowed back on Labour’s previous pledge to renationalise the water industry is unclear. Presumably the best way to look like you’re responsible with money is to present yourself as the continuity candidate, letting calamitously run monopolies spray it everywhere then demand that consumers of that luxury product, water, foot the bill yet again. That said, at the current rate of malfunction, Thames Water’s crisis will be upon us sooner than any general election. Yet where is the sense of urgency? Last year the government gave the water companies until 2050 to stop dumping sewage into seas and waterways. Incredible, really, when targets are this low-bar that hitherto the companies have still failed to clear them every time. Someone – anyone! – is going to have to think what to do about this wretched wallygarchy. Those in charge ought to be long past the point of looking busy and simply holding their noses.
Tesla sales tumble nearly 9%, most in 4 years, as competition heats up and demand for EVs slows 2024-04-02 13:18:52+00:00 - DETROIT (AP) — Tesla sales fell sharply last quarter as competition increased worldwide, electric vehicle sales growth slowed, and price cuts failed to lure more buyers. The Austin, Texas, company said Tuesday that it delivered 386,810 vehicles worldwide from January through March, almost 9% below the 423,000 it sold in the same quarter of last year. It was the first year-over-year quarterly sales decline in nearly four years. Sales also fell short of even the most bearish Wall Street expectations. Auto industry analysts polled by FactSet were looking for 457,000 vehicle deliveries from Tesla Inc. That’s a shortfall of more than 15%. The company blamed the decline in part on phasing in an updated version of the Model 3 sedan at its Fremont, California, factory, plant shutdowns due to shipping diversions in the Red Sea, and an arson attack that knocked out power to its German factory. But TD Cowen Analyst Jeffrey Osborne wrote in a note to investors that weaker March sales indicate that incentives, including discounts and a free trial of “Full Self Driving” software, “did not work as demand deteriorated.” Despite the sales decline, Tesla was able to retake its global EV sales crown from China’s BYD, which sold just over 300,000 electric vehicles during the quarter, Osborne wrote. In its letter to investors in January, Tesla predicted “notably lower” sales growth this year. The letter said Tesla is between two big growth waves, one from global expansion of the Models 3 and Y, and a second coming from the Model 2, a new, smaller and less expensive vehicle with an unknown release date. “This was an unmitigated disaster 1Q that is hard to explain away,” wrote Dan Ives, an analyst with Wedbush who has been very bullish on Tesla’s stock. The drop in sales was far worse than expected, he wrote in a note to investors. The quarter is a “seminal moment” in the Tesla growth story, Ives wrote, adding that CEO Elon Musk will have to turn the company around. “Otherwise, some darker days could clearly be ahead that could disrupt the long-term Tesla narrative.” Ives maintained his Outperform rating on Tesla’s shares and cut his one-year price target from $315 to $300. Ives estimated that China sales slid 3% to 4% during the period. Shares of Tesla tumbled 4.9% to close Tuesday at $166.63, continuing an extended decline. Investors have shaved 33% off the value of the company so far this year, dumping shares after growing leery of the tremendous growth story that Tesla has been telling. “Street criticism is warranted as growth has been sluggish and (profit) margins showing compression, with China a horror show and competition increasing from all angles,” Ives wrote. Tesla dramatically lowered U.S. prices by up to $20,000 for some models last year. In March it temporarily knocked $1,000 off the Model Y, its top-selling vehicle. Those price cuts narrowed the company’s profit margins and spooked investors. Analysts polled by FactSet expected the average selling price for Model Y to be $41,000 last quarter, $5,000 less than a year ago and $15,000 lower than the peak of $56,000 in June of 2022. Tesla’s sales numbers also pulled down shares of its U.S. EV competitors. Shares of Rivian fell 5.2%, while Lucid stock dropped 3.5% on Tuesday. Deliveries of the Models 3 and Y, fell 10.3% year over year to 369,783. Sales of the company’s other models, the aging X and S and the new Cybertruck, rose almost 60% to 17,027. Tesla produced 10.7% more vehicles than it sold during the first quarter. Softer-than-expected first-quarter sales are reducing analyst expectations for Tesla’s quarterly earnings ahead of their scheduled release on April 23. Tesla’s sales come against the backdrop of a slowing market for electric vehicles in the U.S. EV sales grew 47% last year to a record 1.19 million as EV market share rose to 7.6%. But sales growth slowed toward the end of the year. In December, they rose 34%. Updated EV sales numbers will come later Tuesday when most automakers report U.S. sales. Other automakers also have had to cut electric vehicle production and reduce prices to move EVs off dealership lots. Ford, for instance, cut production of the F-150 Lightning electric pickup, and lopped up to $8,100 off the price of the Mustang Mach E electric SUV in order to sell 2023 models.
Canoo, Inc. Bites the Dust: Mullen Automotive Is a Better Bet 2024-04-02 13:15:00+00:00 - Key Points Canoo issued a going concern notice, and its share price fell more than 25%. The company needs cash quickly and may be unable to access capital markets because of existing agreements. Mullen Automotive isn't out of the woods yet but is firing on all cylinders and gaining momentum. Canoo, Inc. NASDAQ: GOEV analysts were bullish on the stock ahead of the Q4 earnings report, but that situation will likely change. The company issued a going concern notice that raises serious doubt about the company’s ability to continue, and the danger is real. The company forecasts losses will continue, and it needs more cash, something it will have a hard time finding, so there is a real possibility the company could file for bankruptcy soon. And it’s not like the short-sellers weren’t already interested. Short interest going into the report was near 20% and will likely rise now. With the company on the rocks and in danger of falling apart, the likely outcome is that short-sellers will pile into this loser and push its share prices lower. Either way, the company stock is heading down into the dollar range and could quickly move below a dime. Get alerts: Sign Up Canoo, Inc. Ramps Production, But It’s Not Enough Canoo, Inc. had a tough time in Q4 and 2023. The company narrowed its losses considerably, but losses persist and are expected to ramp up over the next few quarters. Costs are associated with R&D, 3rd party suppliers, scaling production, scaling inventory to support production, scaling SG&A to support it all, and infrastructure intended to support sales. Regular sales will commence in 2024; guidance for the year is positive, but the $500 to $100 million in net revenue is well below expectations and insufficient to alter the company’s capital needs. Cash burn in Q4 topped $54 million, with net losses for the year above $300 million. With only $6.4 million in cash, the company must do something quickly to survive. As it is, it has been leaning into debt and dilutive measures to sustain operations and is planning on the same this year. The share count is up more than 110% YOY and heading higher, reverse-split or not. The reverse stock split is among the risks faced by investors. The company issued the reverse split early in March to prop up the share price, but the effort is failing. Based on similar efforts by competitor Mullen Automotive NASDAQ: MULN, the split will likely result in share prices returning to the pre-split price levels or lower and potentially another reverse split later this year because of compliance issues. NASDAQ-listed stocks must trade above $1.00 or face delisting. Delisting will hurt already shaky investor confidence and is bearish for price action. Mullen Automotive Regains Compliance Meanwhile, competitor Mullen Automotive has regained compliance with NASDAQ listing requirements and is now fully compliant. This company has been ramping up the production of its vehicles and is already in revenue-producing mode. Its first year of production brought in over $365,000, putting it on track to sustain business with little to no additional funding. Mullen’s results in Q1 2024 are promising. Deliveries were up 660% compared to the prior year, and growth is expected sequentially through year-end. Invoicing to Randy Mario Automotive at the end of the quarter topped $17 million, suggesting 2024 will be a solid year for the company’s commercial automotive operations. Canoo Stock Is Heading Downstream Fast The price action in GOEV fell more than 25% on the delisting notice and may fall further. The move confirms an existing downtrend, and there is no reason to buy, so lower prices are the most likely result. Critical support is near $2.75, and the upper side of a downtrend line that was recently broken. If the market can not sustain support at this level, a move to the recent lows of nearly $1.40 is likely. A move below $1.40 opens the door to $1.00 and lower prices. In the unlikely event that the market can rebound from this level, critical resistance is near the 30-day EMA and will likely trigger short-selling if touched.
Are Carnival Shares Ready to Set Sail into the $20s 2024-04-02 12:00:00+00:00 - Key Points Carnival is the largest cruise ship operator on the globe, with 87 cruise ships operating under 9 brands. Carnival recorded record first-quarter 2024 revenues for $5.41 billion, hit all-time high booking volumes and recorded a $500 million bottom line improvement. However, EPS was still red, with a loss of 14 cents. Carnival expects to return to profitability in 2024 with full-year EPS of 98 cents versus $1.00 consensus analyst estimates. 5 stocks we like better than Carnival Co. & Carnival Co. & plc NYSE: CCL is the world's largest cruise line operator and leisure travel company, with an estimated 47% market share. The consumer discretionary sector giant was one of the hardest hit during the pandemic and has been trying to recover since. While most casual investors and consumers may believe Carnival offers budget-friendly namesake cruises under it Carnival Cruise Line brand, it actually operates under multiple brands catering to a wide range of budgets, vacation styles and demographics. Rival cruise ship operator Royal Caribbean Cruises Ltd. NYSE: RCL has seen its share recover to pre-pandemic levels onto all-time highs. Norwegian Cruise Line Holdings Ltd. (NLCH) shares are a fraction of its pre-COVID levels. Carnival remains the laggard as it’s still trying to return to profitability. Get Carnival Co. & alerts: Sign Up Carnival’s Portfolio of Brands Carnival operates 87 ships under 9 brands, serving over 13 million passengers annually. Its namesake, Carnival Cruise Lines, is the biggest brand, with 22 ships operating 1,500 trips annually. Its largest ship, Panorama, holds 4,008 guests. Its Seaborn cruise line provides an ultra-luxury experience for affluent cruisers. Princess Cruise Lines is an upscale premium brand catering to experienced cruisers with elegant dining options. Cunard and Holland America appeal to mature travelers and culture enthusiasts. Its Costa Cruises is a popular European line. Aida Cruises operates in Germany, and P&P Cruises serves mostly Australia and the UK. Check out the sector heatmap on MarketBeat. Still Digging Out of the Hole. Carnival reported a fiscal Q1 2024 EPS loss of 14 cents, beating consensus analyst estimates for a loss of 18 cents by 4 cents. Adjusted net loss was $180 million. Adjusted EBITDA was $871 million. Gross margins doubled in 2023, and net yields exceeded 2023 levels by more than 17%. Revenues rose 22% YoY to a record $5.41 billion versus $5.42 billion consensus estimates. Staggering Metrics being Hit Carnival experienced an early start to its wave season with booking. Bookings rose to all-time highs with considerably higher prices YoY. Strength was robust across all its brands with the NAA segment considerably higher compared to Europe YoY. Total customer deposits hit a record $7 billion, surpassing the previous record by $1.3 billion. Carnival ordered its first new builds in 5 years to be delivered in 2027 and 2028. The booked position for the rest of the year is the best on record both in terms of pricing and occupancy, which is "considerably higher" than 2023. Return to Profitability in 2024 Estimates Carnival expected Q2 2024 EPS for a loss of 3 cents, matching consensus estimates. Adjusted EBITDA is expected to rise more than 50% YoY to approximately $1.05 billion, with net yields in CC up nearly 10.5% YoY, including the unfavorable impact of the Red Sea rerouting of 0.5 percentage points. Carnival raises full-year 2024 EPS to 93 cents, short of $1.00 consensus analyst estimates. The company expects net yields to rise to 9.5% in constant currency (CC) YoY. Adjusted cruise costs, excluding fuel, are expected to improve by $35 million over December guidance. Adjusted EBITDA is expected to grow 30% YoY to around $5.63 billion despite Red Sea rerouting of nearly $130 million or 9 cents adjusted EPS impact. Baltimore Key Bridge The Francis Scott Key Bridge collapse in Baltimore, MD, caused Carnival to change its homeport temporarily. This could cause up to a $10 million impact on adjusted EBITDA and adjusted net income for the full year 2024. CEO Comments Carnival CEO Josh Weinstein commented, “Our improving operational performance coupled with excess liquidity and the lowest order book in decades leaves us well positioned to continue to opportunistically manage down debt and interest expense while reducing the complexity of our capital structure.” Weinstein continued, “This is very much aligned with our return to investment grade credit over time, and our treasury team has been quick to capitalize on this trajectory with an ongoing stream of well-executed transactions to strengthen our balance sheet.” Weinstein noted that the vast majority of the year’s business is already booked on track for delivering record revenues and EBITDA. Carnival analyst ratings and price targets are at MarketBeat. Carnival’s peers and competitor stocks can be found with the MarketBeat stock screener. Daily Ascending Triangle Pattern The daily candlestick chart for CCL illustrates a daily ascending triangle pattern. The ascending lower trendline formed at a low of $10.84 on Oct. 20, 2024. CCL made higher lows, rising towards the flat-top upper trendline resistance at $19.74. Shares are poised to either break out through the $19.74 resistance into the $20s or break down under the ascending trendline support at $16.30. The daily relative strength index (RSI) is starting to fall under the 50-band. Pullback support levels are at $15.43, $14.44, $12.83 and $12.04. Before you consider Carnival Co. &, you'll want to hear this. MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and Carnival Co. & wasn't on the list. While Carnival Co. & currently has a "Moderate Buy" rating among analysts, top-rated analysts believe these five stocks are better buys. 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Is a Children’s Place Turnaround in the Cards? 2024-04-02 12:00:00+00:00 - Key Points Iconic specialty children's apparel retailer The Children's Place operates under brands Gymboree, Baby Place, PJ Place, Place, Super & Jade and The Children's Place. Inventory glut, shrinking margins, many promotions, heavy debt financing costs, shrinking revenues, and squandering $300 million to buy back shares that lost over 60% of their value might be the match in a kerosene-soaked warehouse. Saudi family office value fund Mithaq Capital acquired a 54% stake in The Children's Place and extended interest-free loans to buy the company some time. 5 stocks we like better than Children's Place The Children's Place Inc. NASDAQ: PLCE stock has had a wild ride in 2024. Shares surged from a swing low of $8.30 on Feb. 9, 2024 to a swing high of $38.03 on Feb. 15, 2024. Since the swing high, shares have cascaded down to $11.54 on funding and bankruptcy concerns as the company breached debt covenants. The consumer discretionary sector retailer sells children's specialty apparel under the brands Gymboree, Baby Place, Sugar & Jade, PJ Place, Place, and its namesake The Children’s Place. Its competitors include Macy’s Inc. NYSE: M, Kohl’s Co. NYSE: KSS, Walmart Inc. NYSE: WMT and Target Co. NYSE: TGT. Get Children's Place alerts: Sign Up How Did The Children’s Place Fall So Low? The Children’s Place has seen revenues continue to decline since the pandemic surge. Falling revenues, surging inventories and heavy discounts lead to shrinking margins and rising debt financing, a potential matchstick lit in a kerosene-soaked warehouse situation. To add to the burden, management spent $300 million to buy back shares that continued to sink more than 60%. It didn't come as a big surprise when the company reported it could breach debt covenants in its Q4 2023 pre-release, which sank shares by 52%. This news also caused concern among its suppliers, who cut back on extending payables credit. Mithaq Capital to the Rescue? Mithaq Capital, a Saudi Arabia-based Al-Rajhi family office value fund, has scooped up nearly 54% of The Children's Place shares, taking over as the largest shareholder after the company warned of potential loan defaults. Mithaq started accumulating shares at $11 and kept buying. Mithaq also provided an interest-free loan of $78.6 million while renegotiating financing. On Feb. 29, 2024, the loan comprised an initial $30 million, with an additional $48.6 million to be issued on Mar. 29, 2024. The company also secured a non-binding $130 million loan in March 2024. Analysts believe Mithaq is planning on raising its stake to 75% through equitization. Al-Rajhi Bank is the largest bank in Saudi Arabia and the Middle East, with total assets of $213.3 billion. Mithaq has four board seats and has replaced its chairman; a new board is expected during the May shareholder meeting. Reshaping the Board Mithaq Capital replaced the Chairman of the Board with an Al-Rajhi family member and three other directors. Mithaq also requires four directors on the Board to resign and announced it has 11 new directors ready to be voted in during the May 2024 shareholder meeting. Mithaq also requested a $90 million rights registration, enabling every shareholder to purchase a pre-priced share to raise more capital directly from the shareholders without incurring more debt financing expenses. At $90 million, the company could issue $15 shares at 6 million rights. Mithaq could buy all the rights to raise its stake to nearly 75%. Is a Short Squeeze Coming? The Children's Place has a tiny 11.8 million share float with a 22.12% short interest. This has the makings of a short squeeze on bullish news. Traders will be watching earnings reactions, news relating to financing, and details on the upcoming board vote and shareholder meeting. Daily Descending Triangle The daily candlestick chart on PLCE illustrates a descending triangle pattern. The series of lower highs has been very transparent since peaking most recently at $25.50 levels on Feb. 29, 2024. The flat-bottom lower trendline awaits at $10.51 for a possible retest. As shares get closer to the apex, The Children's Place will either break out through the descending trendline or break down through the lower flat bottom trendline. The daily relative strength index (RSI) has stalled on its bounce attempt at the 34-band. Pullback supports are at $10.51, $8.30, $7.55 and $5.67. Before you consider Children's Place, you'll want to hear this. MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and Children's Place wasn't on the list. While Children's Place currently has a "Reduce" rating among analysts, top-rated analysts believe these five stocks are better buys. View The Five Stocks Here
4 Top Growth Stocks to Buy in April 2024-04-02 04:19:00+00:00 - In this video, I will talk about four interesting companies that are worth your attention, especially during these uncertain times. I chose a mix of companies in different industries that could provide significant upside for long-term investors. *Stock prices used were from the trading day of March 28, 2024. The video was published on April 1, 2024. Should you invest $1,000 in SoFi Technologies right now? Before you buy stock in SoFi Technologies, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and SoFi Technologies wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than tripled the return of S&P 500 since 2002*. See the 10 stocks *Stock Advisor returns as of April 1, 2024 Neil Rozenbaum has positions in Rocket Lab USA, SoFi Technologies, and Tesla. The Motley Fool has positions in and recommends Tesla. The Motley Fool recommends Rocket Lab USA. The Motley Fool has a disclosure policy. Neil is an affiliate of The Motley Fool and may be compensated for promoting its services. If you choose to subscribe through his link, he will earn some extra money that supports his channel. His opinions remain his own and are unaffected by The Motley Fool. 4 Top Growth Stocks to Buy in April was originally published by The Motley Fool
BigBear.ai: Is This AI Stock Set to Skyrocket Once Again? 2024-04-02 03:13:00+00:00 - Artificial intelligence (AI) and data company BigBear.ai (NYSE: BBAI) was on a roller-coaster ride over the past month. Shares surged on AI hype and news that AI chip leader Nvidia was buying stakes in emerging AI companies (it didn't buy a stake in BigBear.ai). Unfortunately, those gains evaporated after an earnings report that fell short of Wall Street's expectations. That leaves investors at a crossroads, trying to decide whether BigBear.ai's rise was just a fluke or if the stock is due for a rebound. While nobody can know for sure, there is evidence that investors should remain cautious. Here is why BigBear.ai could struggle to get back off the ground. First, what does BigBear.ai do? It's common for hot Wall Street topics to become buzzwords. AI is enjoying that level of hype, so knowing what these companies actually do is paramount to deciding which stocks to invest in. BigBear.ai is a data analytics company that uses AI to enhance organizational decision-making. Its primary focus areas include supply chain management, cybersecurity, autonomous systems, and government and military operations. The company has worked with the U.S. Department of Defense, Army, and Navy. Overall, BigBear.ai defines the government's contributions to its revenue as "significant." That's not necessarily bad; the government is a great customer, especially military-related business, which is a high priority in the federal budget. Importantly, BigBear.ai isn't unique in what it offers. It competes with companies like Palantir and C3.ai. Both are larger than BigBear.ai, which has a $480 million market cap as of this writing. The debt problem You must be lean and mean when you're the small company in a ruthlessly competitive field like enterprise software. It's not a coincidence that Palantir and C3.ai have zero debt and significant cash piles to help them invest in growth. Unfortunately, BigBear.ai is loaded with $195 million in long-term debt, which dwarfs its $32 million cash pile. Story continues BBAI Cash and Short Term Investments (Quarterly) Chart The company isn't profitable yet, but its cash burn is improving. The business reported $22 million of negative free cash flow in 2023, but that figure had shrunk to just negative $1 million by the fourth quarter. That should stop the financial bleeding, but it still handcuffs the company from dramatically investing in the business. Can BigBear.ai compete over the long term? BigBear.ai has no shot at outspending its competitors, so its technology must be so good it can win business anyway. It recently acquired Pangiam, a company specializing in facial recognition and image analysis. And as previously mentioned, it is winning contracts, especially with the military. Management is also guiding for solid growth this year with 2024 revenue of $195 million to $215 million as the company integrates Pangiam. That's up to 39% growth over 2023. However, revenue was flat from 2022 to 2023, so is this growth sustainable once the Pangiam acquisition is baked in? At the very least, BigBear.ai is a very speculative stock requiring investors to take a leap of faith based on its technology because there isn't much of a track record to stand on. Meanwhile, a company like Palantir has deeper pockets and is profitable. Given its much larger market cap, is there as much upside in Palantir? Possibly not, but investing can be as much about avoiding losses as it is about chasing gains, and BigBear.ai would be lucky to eventually scale up into a company like Palantir. Investors are better off avoiding BigBear.ai and going for an AI business already walking the walk instead. Should you invest $1,000 in BigBear.ai right now? Before you buy stock in BigBear.ai, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and BigBear.ai wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than tripled the return of S&P 500 since 2002*. See the 10 stocks *Stock Advisor returns as of April 1, 2024 Justin Pope has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Nvidia and Palantir Technologies. The Motley Fool recommends C3.ai. The Motley Fool has a disclosure policy. BigBear.ai: Is This AI Stock Set to Skyrocket Once Again? was originally published by The Motley Fool
Investor in Trump SPAC to Change Plea in Insider Trading Case 2024-04-02 02:56:00+00:00 - (Bloomberg) -- One of the three investors charged with insider trading in connection with the listing vehicle that took Donald Trump’s media company public intends to change his not-guilty plea in the case less than a month before a federal court trial is set to begin. Most Read from Bloomberg US District Judge Lewis J. Liman on Monday scheduled a hearing on the plea change later in the week, but didn’t specify in his order how Michael Shvartsman will plead. Such entries usually reflect a decision by defendants to admit guilt in at least one charge. Prosecutors and lawyers for Shvartsman didn’t respond to inquiries seeking comment. A trial is set to start April 29 for Shvartsman, the chief executive officer of Rocket One Capital LLC, his brother Gerald, and Bruce Garelick, a Rocket executive and former member of Digital World Acquisition Corp.’s board. They’re accused of making more than $22 million trading ahead on confidential information about potential targets of the SPAC, including Trump Media & Technology Group Corp. The three men were invited to invest in Digital World Acquisition and another SPAC, and they signed nondisclosure agreements that gave them access to confidential information about potential targets of the company, including Trump Media, according to the government. Digital World announced an agreement to merge with Trump Media in October 2021, sending the shares soaring and handing the three men millions of dollars in profit from trades they made beforehand, according to prosecutors. Shares of Trump’s media company debuted last week after the deal with Digital World closed, providing a much-needed cash infusion following years of delays. Story continues The three men were arrested in June and charged with securities fraud, conspiracy and other counts. If found guilty, they each face as many as 25 years in prison on the most serious fraud charges, though they would probably get less time under federal sentencing guidelines. Read More: Trump’s Meme Stock Is Skyrocketing But for How Long? The case is US v. Shvartsman, 23-cr-307, US District Court, Southern District of New York (Manhattan). Most Read from Bloomberg Businessweek ©2024 Bloomberg L.P.