Category Archives: stocks

Cogent Stock Buybacks Loom, As Regulatory Outlook Improves

Cogent Communications Group ( CCOI ) might bring back a stock buyback program later this year, analysts say, and regulatory developments could also work in its favor. Cogent late Thursday reported Q1 earnings and revenue that modestly beat views. Cogent stock was up nearly 3% in late-afternoon trading in the stock market today , above 39. The provider of Internet communications services to small and midsize businesses has an IBD Composite Rating of 91 out of a possible 99, and it broke out of a cup-with-handle base at a 36.85 buy point on Feb. 26. Cogent stock has climbed 13% in 2016. Cogent told analysts on its earnings call after the close Thursday that it could bring back a share repurchase program if its debt-to-EBITDA (earnings before interest, taxes, depreciation and amortization) ratio improves. “As EBITDA should trend higher in the subsequent quarters, Cogent management intimated that it will re-implement a capital return program to complement the regular dividend,” Jim Breen, an analyst at William Blair, said in a research report. At Cowen & Co., analyst Colby Synesael wrote that “we have updated our model to reflect what we think will be a stock buyback of equal size to its current recurring dividend, starting in Q3.” There might be upside for Cogent from Internet video, also called over-the-top (OTT) services, some analysts say. On the regulatory front, the Federal Communications Commission has proposed to regulate prices in the $20 billion market for business data services , drawing criticism from AT&T ( T ) and cable TV rivals. The proposal could help companies such as Level 3 Communications ( LVLT ) and Cogent, which sometimes lease lines from bigger telecom firms to serve their own customers. Cogent reported Q1 profit of 8 cents per share, swinging from a 4-cent per-share loss in the year-earlier period. Revenue rose 11% to $108.3 million. Analysts had modeled profit of 7 cents and revenue of $107.6 million.

Huawei P9 Imitates Apple: ‘New Dog With Old iPhone Tricks’

Chinese Huawei’s P9 is a “new dog with old iPhone tricks,” beating Apple ( AAPL ) to the smooth-backed punch, but including the usual chip suspects — Broadcom ( AVGO ), NXP Semiconductors ( NXPI ), Skyworks Solutions ( SWKS ) and Texas Instruments ( TXN ). But the iFixit teardown of the P9 smartphone did little for Broadcom stock was down a fraction in late-afternoon trading Friday, while NXP and Skyworks were both up a fraction. Texas Instruments stock, however, was up 1% on the stock market today . The Huawei P9 looks familiar , iFixit wrote, wondering, “just how far did Huawei go to imitate, and perhaps surpass, the iPhone?” IFixit notes the Huawei P9 camera is embedded within the body — as opposed to the bump in the iPhone 6S. Apple suppliers fill the inside of the Huawei P9, but their functions can vary from the iPhone 6S. Samsung supplies both — but it has a flash-memory chip inside the P9 as opposed to a RAM (random access memory) offering within the 6S, says iFixit. Huawei tapped SK Hynix for its RAM. Apple used Toshiba for its 6S flash memory. Texas Instruments supplied a fast-charging chip for the Huawei P9 vs. a power-management chip for the Apple 6S. And Huawei’s audio codec by HiSilicon is mirrored by Cirrus Logic ‘s ( CRUS ) chip inside the Apple flagship. Broadcom provides two chips for Huawei as opposed to a single chip for Apple. NXP, a single chip for the P9 and two chips for the 6S. The Huawei phone has three Skyworks chips vs. two Skyworks power amplifiers within the iPhone 6S. Huawei’s and Apple’s flagship phones both scored a 7 out of 10 on iFixit’s scale of repairability.

Solid Q1 Earnings Fail To Boost Pharma ETFs

Like the past several quarters, the healthcare sector has impressed with strong Q1 earnings. This is especially true as total earnings for 79.2% of the sector’s total market capitalization are up 8.8% on revenue growth of 11.2%, with earnings and revenue beat ratios of 80% and 70%, respectively. In fact, healthcare is the fourth best performing sector in terms of earnings growth trailing autos, construction, and consumer discretionary. Among the most notable players, Johnson & Johnson (NYSE: JNJ ) was the first major drug company to report earnings on April 19, followed by Eli Lilly and Company (NYSE: LLY ) and Bristol-Myers Squibb Company (NYSE: BMY ) on April 26 and April 28, respectively. Two other major U.S. drug companies – Pfizer (NYSE: PFE ) and Merck (NYSE: MRK ) – reported on May 3 and May 5, respectively. These industry primes posted solid results raising their full-year outlook that boosted investors’ confidence in the space. Notably, Eli Lilly missed our earnings estimates while Merck lagged on the revenue front. Johnson and Johnson Earnings in Focus The world’s biggest maker of healthcare products continued its long streak of earnings beat and beat our estimate on the top line buoyed by strong prescription drug revenues and a weakening dollar. Earnings per share came in at $1.68, four cents ahead of the Zacks Consensus Estimate and 7.7% higher than the year-ago earnings. Revenues inched up 0.6% year over year to $17.5 billion and edged past the Zacks Consensus Estimate of $17.42 billion (read: Healthcare ETFs to Buy on Blockbuster J&J Q1 Results ). Johnson & Johnson raised its guidance for fiscal 2016. The company now expects revenues in the range of $71.2-$71.9 billion compared with the previous forecast of $70.8-$71.5 billion. Additionally, the earnings per share guidance has been raised from $6.43-$6.58 to $6.53-$6.68. The Zacks Consensus Estimate at the time of the earnings release was pegged at $71.5 billion for revenues and $6.52 for earnings per share. These were higher than the mid-point of the company’s projection. JNJ has gained 0.2% to date since its earnings announcement. Pfizer Earnings in Focus The U.S. drug giant also topped the Zacks Consensus Estimate for both the top and the bottom lines, and raised the guidance for fiscal 2016. Earnings per share of 67 cents and revenues of $13.0 billion were ahead of our estimates by 12 cents and $1.0 billion, respectively. Notably, earnings per share grew 32% while revenues jumped 20% year over year. For fiscal 2016, Pfizer upped its revenue guidance to $51-53 billion from $49-$51 billion and earnings per share guidance to $2.38-$2.48 from $2.20-$2.30. The mid-points were much higher than the Zacks Consensus Estimate of $51.3 billion for revenues and $2.29 for earnings per share at the time of the earnings release. Shares of PFE are down 0.4% since the earnings announcement. Merck Earnings in Focus Earnings per share came in at 89 cents, four cents ahead of the Zacks Consensus Estimate and 4.7% higher than the year-ago earnings. Revenues slipped 1.2% year over year to $9.3 billion, and were slightly below the Zacks Consensus Estimate of $9.5 billion. Merck now expects earnings per share in the range of $3.65-$3.77 and revenues in the band of $39.0-$40.2 billion for 2016. This is in contrast with the previous guidance of $3.60-$3.75 and $38.7-$40.2 billion, respectively. The Zacks Consensus Estimate at the time of the release was pegged at $3.71 for earnings per share and $40.1 billion for revenues. The stock has lost about 1.3% following its earnings announcement. Bristol-Myers Earnings in Focus Bristol-Myers reported earnings per share of 74 cents, outpacing our estimate by 8 cents and increasing 4% from the year-ago quarter. Also, revenues rose 9% to $4.39 billion and edged past the Zacks Consensus Estimate of $4.24 billion. Like the other drug makers, the company also revised its earnings per share outlook upward to $2.50-$2.60 from $2.30-$2.40 for fiscal 2016. The low end was much higher than our estimate of $2.42 at the time of the earnings announcement. Revenues are expected to grow in the low double-digit range. Shares of BMY are down 1.5% to date since the earnings announcement. Eli Lilly Earnings in Focus Earnings of 83 cents at Eli Lilly missed the Zacks Consensus Estimate by a couple of cents and came in 5% lower than the year-ago earnings. Revenues grew 5% to $4.86 billion but fell short of our estimate of $4.87 billion. However, Eli Lilly raised its 2016 earnings per share guidance to $3.50-$3.60 from $3.45-$3.55 and revenue guidance to $20.6-$21.1 billion from $20.2-$20.7 billion. The Zacks Consensus Estimate at the time of the earnings release was pegged at $3.55 for earnings and $20.7 billion for revenues. Shares of LLY have tumbled 3.41% since the earnings release. ETF Angle The string of earnings beat and upbeat outlook failed to boost pharma stocks and ETFs as the industry is grappling with drug pricing issues. Below, we have highlighted the ETFs in detail: PowerShares Dynamic Pharmaceuticals Portfolio ETF (NYSEARCA: PJP ) This is by far the most popular choice in the pharma space that follows the Dynamic Pharmaceuticals Intellidex Index. The product has AUM of about $1.1 billion and sees good volume of around 192,000 shares a day. The fund charges 56 bps in fees and expenses from investors. Holding 23 stocks, the fund invests over 5% share each in the in-focus five firms. The ETF shed about 7.4% over the past 10 days and has a Zacks ETF Rank of 3 or ‘Hold’ rating with a High risk outlook. iShares U.S. Pharmaceuticals ETF (NYSEARCA: IHE ) This ETF provides exposure to 42 pharma stocks by tracking the Dow Jones U.S. Select Pharmaceuticals Index. The in-focus firms occupy the top five holdings in the basket accounting for combined 40.6% of total assets, suggesting heavy concentration. The product has $607.8 million in AUM and charges 45 bps in fees and expense. Volume is moderate as it exchanges about 52,000 shares a day. The fund has lost 7.9% over the past 10 days and has a Zacks ETF Rank of 3 with a Medium risk outlook. SPDR S&P Pharmaceuticals ETF (NYSEARCA: XPH ) This fund provides exposure to the pharma companies by tracking the S&P Pharmaceuticals Select Industry Index. With AUM of over $465.9 million, it trades in moderate volume of around 190,000 shares a day and charges 35 bps in fees a year. In total, the product holds 40 securities with the in-focus five firms taking nearly 5% share each. The product was down 9.73% in the same period and has a Zacks ETF Rank of 3 with a Medium risk outlook. Market Vectors Pharmaceutical ETF (NYSEARCA: PPH ) This ETF follows the MVIS US Listed Pharmaceutical 25 Index and holds 26 stocks in its basket. Pfizer, Bristol-Myers, Johnson & Johnson and Merck make up for over 5% share each while Eli Lilly accounts for 4.7% of assets. The product has amassed $261.3 million in its asset base and trades in a moderate volume of about 105,000 shares a day. Expense ratio came in at 0.36%. The fund has lost 5.3% over the past 10 days. It has a Zacks ETF Rank of 2 or ‘Buy’ rating with a Medium risk outlook. Link to the original post on Zacks.com