Bull of the Day: Alibaba Group (BABA)

Alibaba Group Holdings (BABA - Free Report) reported strong December quarter numbers on January 24 with top and bottom line beats and a whopping 54% year-over-year growth in sales.

Wall Street analysts liked that growth and the outlook going forward enough to raise estimates 23% for the current fiscal year (ending in March) from $2.15 to $2.65. And the next fiscal year also moves up 23% from $2.56 to $3.16.

Alibaba CEO Daniel Zhang highlighted "We are driving the age of 'New Retail,' which leverages big data and innovation to provide a seamless online and offline experience for nearly half a billion mobile monthly active users. This retail transformation will make it even easier and more efficient for brands and retailers to engage with these consumers anywhere, anytime."

After the conference call, my colleague Ryan McQueeney explained "Alibaba further detailed its 'New Retail' concept, saying that it will help the company tap into the entirety of China’s $4.8 trillion retail sector by breaking down the distinction between online and offline commerce. To that end, Alibaba has started partnering with several different brick-and-mortar retailers.

Wall Street Goes Gaga Over BABA

For this Bull of the Day, I thought it would be interesting to also hear from the analysts whose upward revisions to growth estimates have once again made the stock a Zacks #1 Rank. Here are 5 viewpoints on the Amazon (AMZN - Free Report) of China...

RBC Capital maintained their Outperform rating on Alibaba and kept their price target of $120 citing strong China retail sales growth and the new Cloud Computing division reaching a $1 billion revenue run rate.

Goldman Sachs analyst Piyush Mubayi raised their FY17-FY19 revenue estimates by 3-4% on better growth outlook for China online advertising and International retail, and raised EPS estimates by 5-7% due to higher operating leverage. The firm reiterated their Conviction List-Buy rating on the stock and moved their price target from $128 to $135.

Deutsche Bank raised its price target from $140 to $148 noting that the company attributed strong results to solid consumer usage, merchant spend, and impressive user growth, with mobile MAU (monthly active users) reaching 493 million, representing 25% growth. Here were some other important comments from their report...

"Online marketing services again expanded robustly, by 47%, mainly driven by paid click growth. Commission revenue accelerated to 32% yoy, reflecting Tmall GMV growth recovery. Core e-commerce margin saw continued expansion to 64%, despite investment in globalization, FMCG & rural Taobao.

"The company lifted FY17 full year guide from 48% to 53%. The new guide should be easy to achieve given BABA’s strong momentum. Alibaba's "New Retail" strategy meanwhile seeks to integrate more offline retailers (e.g. Intime) with integrated inventory, membership and services to serve both users and merchants more efficiently. Monetization should thus increase long term."

Morgan Stanley raised its price target on BABA shares from $130 to $140 and maintained their Overweight rating.

Analyst Grace Chen noted "Alibaba raised F17 sales guidance from 48% YoY growth to 53% YoY after the stronger than expected F3Q17 results. It is transforming from an eCommerce to a marketing platform, which enables it to capture more merchant spending, expanding from distribution to marketing services. For F18, the company will focus on globalization, rural China, and cloud/big data to propel
growth."

SunTrust analysts discussed 3 key points in their review of the quarter: 1) Core and organic revenue growth accelerated driven by engagement (clicks). FY revenue guidance increased to 53% YoY growth vs. 48% prior. 2) Core EBITA profitability of 64% was inline/better while investments in Lazada, Tmall Supermarket, and "New Retail" continue; and 3) Outlook for improved Cloud and Digital profitability remains positive for FY’18.

The firm reiterated their Buy rating based on strong core growth and profitability, prudent growth investments, and the portfolio of assets. Their $125 2017 price target implies a sub-25X multiple for calendar year 2018 EPS.

by Kevin Cook

Source: https://www.zacks.com/commentary/102865/bull-of-the-day-alibaba-group-baba

Wall Street Breakfast: Black Friday In Full Swing

 Includes: ALIOY, AMZN, ATSG, BA, BHP, BTI, DB, DBOEY, DLAKY, EADSY, 

Black Friday isn't as big as it once was due to earlier holiday deal hysteria, but it's still a very significant day for retail. The National Retail Federation expects 137.4M Americans to hit stores at some point over the weekend, and around 74% of that population already went shopping on Thanksgiving Day. That's about on par with last year's figures as online sales become a bigger part of the holiday. Adobe even expects Black Friday web purchases to top $3B for the first time, up 11.5% from 2015.

Economy

Despite a minor pullback overnight, the dollar continues to climb past more of last year's peaks against the euro. Only the March 2015 high of $1.0457 is now standing in the way of a push towards parity that banks are again saying is on the cards. The greenback is currently worth more than 7.5%against a basket of major trading partners than it was three months ago.

Japan's core consumer prices marked their eighth straight month of annual declines in October, illustrating the sheer scale of the BOJ's struggle to beat deflation and stagnant growth with diminishing policy options. The nationwide core consumer price index, which includes oil products but excludes volatile fresh food costs, fell 0.4% from a year earlier, keeping policymakers under pressure.

German news roundup: Business morale was unchanged in November as Ifo's business climate index remained steady at 110.4, while it was confirmed that the country's final GDP halved its growth rate to 0.2% in Q3. Meanwhile, European Parliament President Martin Schulz is stepping down in January to run in next year's elections in Germany, where he is seen as a potential rival to Chancellor Angela Merkel.

Consumers and businesses increased their spending in Q3 as the U.K. economy registered a resilient performance following the Brexit vote. Household spending rose 0.7% from the second quarter and business investment increased 0.9%, according to the Office for National Statistics. Growth overall was unrevised at 0.5%, with trade providing the strongest contribution.

Faced with a rapidly sliding currency in the wake of the U.S. presidential election, the Turkish central bank raised interest rates yesterday for the first time in almost three years. The lira bounced higher after the decision, which included a 0.5 percentage point rise in its benchmark one-week rate to 8%, but reversed course swiftly, hitting a record low. The currency now stands at 3.42 to the dollar, down 15% this year and over 9% in November alone.

"Turkey could open its gates for migrants to Europe if pushed by the EU," warned President Tayyip Erdogan, a day after European lawmakers voted for a temporary halt to EU membership talks with Ankara. MEPs overwhelmingly backed the decision citing Turkey's post-coup purges, the closure of numerous media outlets and the possible restoration of the death penalty.

A new peace accord was signed Thursday between Colombia's FARC rebels and President Juan Manuel Santos, who said he would seek congressional ratification instead of a popular referendum that was rejected in October. But his political opponents have promised a fight in congress and are considering the viability of collecting signatures for a petition calling for another plebiscite.

Crude prices are little changed as uncertainty ahead of a planned OPEC-led crude production cut and thin liquidity due to Thanksgiving kept traders from making big bets on markets. OPEC is due to meet on Nov. 30 to coordinate a cut, potentially together with non-OPEC member Russia, but there is also disagreement within the producer cartel as to which member states should cut and by how much.

Stocks

Johnson & Johnson has approached Actelion (OTCPK:ALIOY) about a potential takeover in a bid to boost its pharma business, Bloomberg reports. Europe's largest biotech firm has two pulmonary arterial hypertension drugs which J&J (NYSE:JNJ) would love to get its hands on, but deliberations are still at an early stage. Shares in Actelion are up around 13% so far this year, valuing the company at around $17B.

Nasdaq is planning a new trading option for investors to rival IEX Group, the startup that won regulatory approval in June to launch a market with a "speed bump." In a letter to the SEC, Nasdaq (NASDAQ:NDAQ) proposed a so-called extended life priority order attribute, which would benefit long-term investors who may not be monitoring minute changes in market prices.

The finance chief of Deutsche Boerse is warning that global rivals would become dominant if the German group's planned $28B merger with the London Stock Exchange (OTCPK:LNSTY) was blocked by European regulators. "The Americans will sit down together with the Chinese to regulate the market," Deutsche Boerse's (OTCPK:DBOEY) Gregor Pottmeyer said at an industry event in Frankfurt.

Wells Fargo has asked a U.S. District Court to order dozens of customers who are suing the bank over the opening of unauthorized accounts to resolve their disputes in private arbitrations instead of court. The motion is in response to the first class action lawsuit filed against Wells (NYSE:WFC) since it agreed to pay $185M in penalties and $5M to customers for opening up to 2M accounts in their names without permission.

In a letter sent to financial watchdogs, a group of U.S. lawmakers has reportedly warned that President-elect Donald Trump could provide special protection for Deutsche Bank (NYSE:DB). Some House Democrats say he will have "ample opportunity to influence policy decisions," including the DOJ's proposed $14B fine, and claim the German institution is the only major Wall Street bank that has continued to lend to Trump Inc. DB -1.5% premarket.

3 Big Stocks Everyone's Talking About -- and How to Trade Them

BALTIMORE (Stockpickr) -- Put down the 10-K filings and the stock screeners. It's time to take a break from the traditional methods of generating investment ideas. Instead, let the crowd do it for you.
From hedge funds to individual investors, scores of market participants are turning to social media to figure out which stocks are worth watching. It's a concept that's known as "crowdsourcing," and it uses the masses to identify emerging trends in the market.
Must Read: Warren Buffett's Top 10 Stock Buys
Crowdsourcing has long been a popular tool for the advertising industry, but it also makes a lot of sense as an investment tool. After all, the market is completely driven by the supply and demand, so it can be valuable to see what names are trending among the crowd.
While some fund managers are already trying to leverage social media resources like Twitter to find algorithmic trading opportunities, for most investors, crowdsourcing works best as a starting point for investors who want a starting point in their analysis.
Today, we'll leverage the power of the crowd to take a look at some of the most active stocks on the market today.
Must Read: 5 Toxic Stocks to Stay Away From



Amazon.com


Nearest Resistance: N/A¿
Nearest Support: $390¿
Catalyst: Q1 Earnings
E-commerce behemoth Amazon.com  (AMZN - Get Report) is up more than 14% on huge volume this afternoon, the end-result of strong first-quarter earnings numbers from the world's biggest online storefront. That's good enough to make Amazon the biggest single gainer on a percentage basis in the entire S&P 500. AMZN lost 12 cents per share last quarter, coming right in line with expectations, but the real pop is being driven by the double-digit top-line growth the firm achieved last quarter. That growth is continuing to accelerate, and management expects a small profit in the second quarter.
The news was good enough to send shares of AMZN to a new 52-week high. Making new highs is significant from an investor psychology standpoint because it means that everyone who has bought shares in the last year is sitting on gains. As a result, the "back to even" mentality is less of a concern than it would be for a name with a higher proportion of shareholders sitting on losses.
For traders who want to ride the bullish momentum, there's still time to build a position in AMZN now.
Must Read: 10 New Stocks Billionaire David Einhorn Loves



Pandora Media


Nearest Resistance: 19¿
Nearest Support: $17¿
Catalyst: Q1 Earnings
Internet radio stock Pandora Media  (P - Get Report) is seeing a big-volume move today, up about 2% this afternoon following the firm's first quarter numbers release. Pandora lost less money than expected during the quarter, shedding 12 cents per share versus average estimates of 17 cents.
While the reaction is pretty muted this afternoon, Pandora's chart looks solid. Shares have been in a downtrend for most of the last year, but this stock is finally showing signs of a turnaround, with a well-defined uptrend in play now. Shares touched trend line support at $17 at the open this morning, and they've been gaining steam over the course of the session. That makes now a good opportunity to be a buyer.
Must Read: 10 Stocks Carl Icahn Is Buying


Starbucks


Nearest Resistance: $52¿
Nearest Support: $48¿
Catalyst: Q2 Earnings
Last up on our list of high-volume movers is Starbucks  (SBUX - Get Report). This mega-cap coffee chain is up almost 5% in this afternoon's trading, boosted by second-quarter earnings results. Starbucks hit its earnings estimates dead-on, bringing in profits of 33 cent per share. The firm also reaffirmed its full-year earnings forecast of $1.55 to $1.57, a range that also fell in line with what Wall Street was looking for.
From a technical standpoint, SBUX has been in a textbook uptrend going back to October. Even with today's big bounce higher, shares remain squarely in that price channel right now. There isn't a lot of upside room between where SBUX sits now and $52 resistance. If you're looking for a buying opportunity, wait for a pullback to trend line support before jumping in

By Jonas Elmerraji 

Source: http://www.thestreet.com/story/13125999/1/3-big-stocks-everyones-talking-about--and-how-to-trade-them.html