Tag Archives: request

JPMorgan Chase, Wells Fargo Trail These Foreign Bank Stocks In 2016

Are there any signs that emerging market economies are less sick now? One clue may be found in the positive stock market action seen in certain overseas banks. IBD ranks 197 industry groups every day in terms of six-month relative price performance (see the entire table in Monday’s paper on Page B15). Today, few finance-related groups rank in the top 40, but the foreign banks group has cracked the top 30, coming in at No. 29 vs. 47th three weeks ago and vs. 90th six weeks ago. Helping drive this progress are six stocks with an IBD Composite Rating of 85 or higher; five of these six are at 95 or better. Four are based in South America: Peru’s Credicorp ( BAP ) and three Argentine lenders, BBVA Banco Frances ( BFR ),  Banco Macro ( BMA ) and  Galicia ( GGAL ), which has gotten frequent coverage in IBD’s Global Leaders column lately. Rounding out the six are India’s  HDFC Bank ( HDB ) and Brazil’s Banco Santander ( BSBR ). Meanwhile, major U.S. lenders are struggling in the stock market. JPMorgan Chase ( JPM ) is down nearly 10% since Jan. 1, and  Wells Fargo ( WFC ) is down 8%. A bet on banks is by most accounts a wager on the overall health of an economy. That seems to be the case in Peru. In January, the country’s Finance Minister Alonso Segura told Bloomberg News in Davos that he expects economic growth to rev up to 4% this year after likely expanding 2.9% to 3% in 2015. Amid these positive numbers, the country’s central bank on Feb. 11 decided to raise interest rates. It hiked the reference rate by 25 basis points to 4.25%, marking the fourth raise in six months. Yet Angela Bouzanis, senior economist at FocusEconomics, noted that Peru’s central bank sees “GDP growth performing close to its potential in 2016.” Reflecting that view, the economic analysis firm’s “LatinFocus Consensus Forecast” sees the reference rate at 4.36% by the end of the year. A steady rise in interest rates is generally good news for large commercial banks, allowing them to boost net interest margins without killing off growth in loans. Credicorp conducts commercial and consumer lending through offices spread across not only Peru, but also Bolivia and Panama. Insurance, pension fund administration and investment banking also make up a portion of the $4.8 billion in revenue recorded in 2015. Since 2007, the bank’s earnings per share have risen every year except in 2013 and have also nearly tripled over that span (from $4.40 in 2007 to $12.03 in 2015). Wall Street sees 2016 profit up 2%. The stock sports a 95 Composite Rating, buttressed by strong revenue growth in five of the past six years, a 20% return on equity last year, and net interest margin of 5.7% in 2014. Shares crossed back above their 200-day moving average, a sign of renewed demand. Now just 19% below its 52-week peak of 157.89, the stock has the potential to form a base and break out. BBVA Banco Frances and Bancro Macro are both up for the year amid optimism that new Argentine President Mauricio Macri will carry out meaningful pro-business reforms. However, the former is expected to see falling EPS in 2016 (-24%) and 2017 (-12%). The latter should see a 17% drop in 2016 EPS to $6.94, followed by a 19% rebound in 2017 to $8.24.

Palo Alto Networks Wins ‘Bake-Offs’ Against Cisco, Check Point

Proofpoint ( PFPT ) rebuffed Wall Street concerns that tech spending has slowed this quarter, Piper Jaffray analyst Andrew Nowinski wrote Monday, following last week’s 40,000-attendance cybersecurity RSA Conference in San Francisco. Fears of a tech spending depression slugged IBD’s 25-company Computer Software-Security industry group after dismal outlooks by  Tableau Software ( DATA ) and LinkedIn ( LNKD ) last month. The group hit a 20-month low on Feb. 9 but has since risen 31%. A weak spending outlook did not play out at RSA, Nowinski and William Blair analyst Jonathan Ho wrote Monday in separate research reports. “(Proofpoint) management said they are seeing ‘absolutely no change in the buying environment,’” Nowinski wrote. “Based on our meetings at the conference, we believe demand trends in Q1 have remained strong through the first two months of the year.” Endpoint Pits Symantec, FireEye, IBM Trending buzzwords include endpoint security, internal access management and privileged account management, Nowinski wrote. Symantec ( SYMC ), FireEye ( FEYE ) and IBM ( IBM ) (via a partnership with Carbon Black) compete in the endpoint market. Industry tracker IDC sees endpoint security revenue reaching $4.6 billion in 2016, up 5.4% and accelerating from 2% year-over-year growth in 2015, Nowinski wrote. Despite a marketing refresh, Symantec will struggle against “rapidly growing next-generation endpoint vendors that have demonstrated stronger solutions,” Ho predicted. FireEye, on the other hand, bolstered its threat-prevention capabilities by adding exploit detection to its endpoint. IDC also expects internal access management revenue to reach $5.9 billion in 2016 and grow at an 8% compound annual growth rate through 2019. Within that sector, privileged account management will comprise $550 million, growing at a 10.6% CAGR over the next four years, Ho says. CyberArk Software ( CYBR ) rivals Centrify in the identity access management ring, Nowinski wrote. But Centrify’s tools for securing both privileged accounts and end-user identity give it a broader portfolio than CyberArk, he wrote. During RSA, CyberArk released a new version of its privileged threat analytics system, aimed at stopping “Golden Ticket” attacks which exploit privileged credentials in Microsoft ( MSFT ) domain-level administrator accounts, Ho wrote. Ho also noted that a platform focus continues to buoy Palo Alto Networks ( PANW ), which he says still wins “bake-offs” against Cisco Systems ( CSCO ), Check Point Software Technologies ( CHKP ) and Juniper Networks ( JNPR ). But Check Point’s software-based firewall could be a game changer, he wrote. “Check Point’s software-based firewall appears better positioned than competitors for the upcoming shift to third-party cloud architectures such as AWS ( Amazon ( AMZN ) Web Service) and (Microsoft) Azure,” he said. ‘Spending Has Not Weakened’ Ultimately, the RSA Conference quelled concerns of slowing spending and lengthening sales cycles, Ho wrote. RSA saw 70 first-time exhibitors, giving it 500 companies at the event, and more than 20% growth from 33,000 attendees in 2015. “We observed continued excitement over the space and a strong appetite for new solutions, consistent with prior years,” Ho wrote. “Our discussions with private and public companies suggest that the environment remains robust and that security spending has not weakened near term.” Overall themes included the burgeoning Internet of Things market, encryption, third-party cloud security, identity/access management as-a-service, real-time visibility, next-generation endpoint security, automation/orchestration and leveraging Big Data analytics, Ho wrote. “The conference reinforced our view that the companies best positioned to benefit from increased spending are those that offer innovative next-generation approaches that will see rapid growth in investment,” he wrote. Customers are looking at cost, manageability and vendor consolidation, Ho wrote.

Amazon.com Gets Physical, Plans To Open A Bookstore In San Diego

E-commerce leader  Amazon.com ( AMZN ) is taking another step on the road to establishing a brick-and-mortar presence in books. The San Diego Union-Tribune reported Saturday that the company plans to open a second physical bookstore — the first is in its home city of Seattle — at the Westfield UTC shopping mall, adjacent to  Tesla ( TSLA ) and Apple ( AAPL ) stores. It will be called Amazon Books. The Amazon store will likely be similar to the Seattle location and feature books that got the best reviews on the company’s website. It also will sell products from the company’s expanding hardware business, including Kindle e-book readers, Fire TV set-tops, Fire tablets and Amazon’s virtual personal assistant play, Echo. “We are excited to be bringing Amazon Books to the University Town Center Mall in San Diego, and we are currently hiring store managers and associates,” Amazon spokeswoman Sarah Gelman told the Union-Tribune . “Stay tuned for additional details down the road.” Amazon is widely cited for hastening the slow demise of the bookstore business, with the online sales king originally billing itself as the world’s biggest bookstore thanks to its endless online inventory. It has been said to use cutthroat tactics on publishers to get favorable pricing. In afternoon trading on the stock market today , Amazon stock was down 3%, near 557. Shares are up 18% since touching a six-month low of 474 in early February. The company has an IBD Composite Rating of 80, where 99 is the highest. On Monday, the U.S. Supreme Court refused to hear Apple’s appeal over allegations of e-book price-fixing. The court’s decision will mean that Apple will have to fork over $450 million to e-book purchasers. Apple was attempting to disrupt the near-monopoly held by Amazon.