Stocks To Watch: Food For Thought

Welcome to Seeking Alpha’s Stocks to Watch – a preview of key events scheduled for the next week. Follow this account and turn the e-mail alert on to receive this article in your inbox every Saturday morning.

Once again U.S.-China trade talks will be watched closely as reports filter in on a possible meeting between President Trump and Chinese President Xi Jinping in late March. Federal Reserve Chairman Jerome Powell won’t be laying low next week, with appearances scheduled before the Senate Banking Committee on February 26 and the House committee on February 27 for semiannual testimony. Economic events to keep an eye on next week include housing starts and consumer confidence on February 26 to be followed by factory orders and international trade on February 27. The headliner of the week could be the GDP report due out on February 28. Due to the government shutdown, the report is a combination of the first and second GDP releases, with only one subsequent revision to trail behind. Economists expect Q4 GDP to come in at +2.4% in a deceleration from the +3.4% growth recorded in Q3. Finally, there is the question of what to expect out of Kraft Heinz (NASDAQ:KHC) and gang. Major food companies were supposed to be on the mend in 2019, with M&A potential running up and down the sector. Kraft’s 27% plunge and drops in Campbell Soup (NYSE:CPB), Mondelez International (NASDAQ:MDLZ), J.M. Smucker (NYSE:SJM), B&G Foods (NYSE:BGS), Kellogg (NYSE:K), ConAgra Brands (NYSE:CAG), Post Holdings (NYSE:POST) and Hostess Brands (NASDAQ:TWNK) have reset that thinking. What’s next?

Notable earnings reports: Etsy (NASDAQ:ETSY), Tenneco (NYSE:TEN) and Shake Shack (NYSE:SHAK) on February 25; Home Depot (NYSE:HD), Palo Alto Networks (NYSE:PANW), Macy’s (NYSE:M), Discovery Communications (NASDAQ:DISCA), Papa John’s International (NASDAQ:PZZA), IMAX (NYSE:IMAX) and AutoZone (NYSE:AZO) on February 26; Square (NYSE:SQ), Fitbit (NYSE:FIT), Booking Holdings (NASDAQ:BKNG), Lowe’s (NYSE:LOW), Best Buy (NYSE:BBY) and Hewlett-Packard (NYSE:HPQ) on February 27; Splunk (NASDAQ:SPLK), Workday (NYSE:WDAY), VMware (NYSE:VMW), Anheuser-Busch InBev (NYSE:BUD), (NASDAQ:JD) and Nordstrom (NYSE:JWN) on February 28; Foot Locker (NYSE:FL), Portola Pharmaceuticals (NASDAQ:PTLA) and Tribune Media (NYSE:TRCO) on March 1. See Seeking Alpha’s Earnings Calendar for the complete list of earnings reporters.

IPO activity: The quiet period expiration on New Fortress Energy (NASDAQ:NFE) ends on February 25. Kaleido Biosciences (KLDO) and Super League Gaming (SLGG) are expected to price their IPOs on February 27.

Projected dividend changes (quarterly): Best Buy (BBY) to $0.51 from $0.45, Danaher (NYSE:DHR) to $0.18 from $0.16, Eaton Corp (NYSE:ETN) to $0.75 from $0.66, Home Depot (HD) to $1.13 from $1.03, Linde (NYSE:LIN) to $0.8625 from $0.825, Altria (NYSE:MO) to $0.85 from $0.80, TJX (NYSE:TJX) to $0.21 from $0.195, Willis Towers (NASDAQ:WLTW) to $0.67 from $0.60, Amerisafe (NASDAQ:AMSF) to $0.23 from $0.22, Chico’s FAS (NYSE:CHS) to $0.0875 from $0.085, Carter’s (NYSE:CRI) to $0.49 from $0.45, Dick’s Sporting (NYSE:DKS) to $0.2475 from $0.225, Havertys (NYSE:HVT) to $0.20 from $0.18, MGP Ingredients (NASDAQ:MGPI) to $0.09 from $0.08, Maiden Holdings (NASDAQ:MHLD) to $0.03 from $0.05, Nabors (NYSE:NBR) to $0.01 from $0.06, Old Republic (NYSE:ORI) to $0.1975 from $0.195, Silgan (NASDAQ:SLGN) to $0.11 from $0.10, EW Scripps (NASDAQ:SSP) to $0.55 from $0.05, Southwest Gas (NYSE:SWX) to $0.55 from $0.52, Taubman Centers (NYSE:TCO) to $0.685 from $0.655.

Oscars for Apple?: Netflix (NASDAQ:NFLX) looks to land a major win at the Academy Awards on Sunday night with Roma seen as a leading contender in the Best Picture, Best Director and Best Actress categories. While that would be a big development for the streamer, there is something even more intriguing going on in Hollywood. Media moguls like Barry Diller are calling the reign of the major studios over amid the Netflix crush just as Wall Street firms such as Wedbush are suggesting the time is right for a media acquisition by Apple (NASDAQ:AAPL). « We believe now it is crystal clear that to drive a successful content streaming service Apple needs to get aggressive on M&A and accelerate the company’s services push and ultimately enable the company to better monetize its installed base with a standalone video subscription service, » writes analyst Dan Ives. Wedbush sees studio/content plays such as A24 Studio, Lionsgate (NYSE:LGF.A), Viacom/CBS (NYSE:CBS), Sony Pictures (NYSE:SNE), MGM Studios and Netflix as the most logical acquisition candidates.

U.S. auto sales: Some automakers are scheduled to report February U.S. sales numbers on March 1. Edmunds expects sales to drop 2.2% Y/Y during the month to 1.271M units. Fleet transactions are anticipated to account for 20% of all sales. « Record-high interest rates and rising average transaction prices are what’s really putting pressure on the market and keeping car shoppers at bay so far in 2019, » according to analyst Jeremy Acevedo. Edmunds forecast by automaker – General Motors (NYSE:GM) -5.8% to 208K, Ford (NYSE:F) -0.8% to 192K, Toyota (NYSE:TM) -3.0% to 177K, Fiat Chrysler (NYSE:FCAU) -1.9% to 163K, Honda (NYSE:HMC) -1.4% to 114K, Nissan (OTCPK:NSANY) -12.9% to 113K, Hyundai/Kia (OTCPK:HYMLF) +0.6% to 87K, Volkswagen (OTCPK:VWAGY) -3.3% to 41K, Tesla (NASDAQ:TSLA) 19,644K units.

Analyst/investor meetings: JPMorgan (NYSE:JPM) will hold an Investor Day event in New York City on February 26, with presentations given by CEO Jamie Dimon and members of the executive management team. Shares of JPM are up 8% YTD. Avandgrid (NYSE:AGR) also has an investor day on February 26, while Regions Financial (NYSE:RF) has an event scheduled for February 27.

M&A tidbits: Shareholders at Western Gas Partners (NYSE:WES) and Western Gas Equity Partners (NYSE:WGP) are due to vote on their planned merger on February 27. Sparton (NYSE:SPA) shareholders will vote on the takeover offer from Cerberus on March 1. Shares of Sparton closed at $18.45 on Friday vs. the $18.50 offer price from Cerberus.

FDA watch: A meeting of the Oncologic Drugs Advisory Committee is set for February on Karyopharm Therapeutics’ (NASDAQ:KPTI) selinexor NDA. Karyopharm fell 40% on Friday after the Ad Com briefing docs were released. FDA Commissioner Scott Gottlieb testifies before a House Appropriations Committee subcommittee hearing on February 27 in an appearance that could have some relevance for Juul (JUUL) and Altria (MO). Adamis Pharmaceuticals (NASDAQ:ADMP) is expected hear on March 1 if its naloxone pre-filled syringe NDA for opioid overdose has been accepted by FDA for review.

Morgan Stanley Technology, Media & Telecom Conference: The huge TMT meeting runs in San Francisco from February 26 to March 1. Companies scheduled to present include Roku (NASDAQ:ROKU), Avalara (NYSE:AVLR), Cinemark Holdings (NYSE:CNK), Fitbit (FIT), Gopro (NASDAQ:GPRO), Garmin (NASDAQ:GRMN), Expedia (NASDAQ:EXPE), TripAdvisor (NASDAQ:TRIP), Carbon Black (NASDAQ:CBLK), Snap (NYSE:SNAP), Viacom (NYSE:VIA), Nuance (NASDAQ:NUAN), MongoDB (NASDAQ:MDB), Five9 (NASDAQ:FIVN), Lamar Advertising (NASDAQ:LAMR), AT&T (NYSE:T), TripAdvisor (TRIP), Charter Communications (NASDAQ:CHTR), Facebook (NASDAQ:FB), New York Times (NYSE:NYT), Cognizant (NASDAQ:CTSH), Nvidia (NASDAQ:NVDA), Redfin (NASDAQ:RDFN), Zynga (NASDAQ:ZNGA), Crown Castle (NYSE:CCI), Applied Materials (NASDAQ:AMAT), Vonage (NYSE:VG), Cisco (NASDAQ:CSCO), Twilio (NYSE:TWLO), FireEye (NASDAQ:FEYE), Twitter (NYSE:TWTR), Palo Alto Networks (PANW), Take-Two Interactive Software (NASDAQ:TTWO) and Western Digital (NYSE:WDC).

60 Minutes: The weekly news show is profiling the Chinese EV industry in a segment that includes Nio (NYSE:NIO). Shares of Nio raced 6.9% higher late on Friday on expectations that the EV automaker will be profiled favorably. Tesla (TSLA), which just delivered Model 3 in China, is also likely to be mentioned.

Drug data: Sarepta Therapeutics (NASDAQ:SRPT) hosts a conference call on February 27 to discuss results from the first 3-patient cohort of the phase I/IIa gene transfer clinical trial using MYO-101 to treat patients with Limb-Girdle Muscular Dystrophy Type 2E (beta-sarcoglycanopathy).

Drones: New U.S. drone regulations take effect next week. All civilian drones will have to be registered and marked with an external identifier assigned by the FAA. The new regs will be watched by GoPro (GPRO) and DJII Innovations (DJII).

Box office: Universal’s How to Train Your Dragon: The Hidden World is expected to bring in $44M during its opening weekend. The film is the first DreamWorks Animation release since the animation studio was acquired in 2016 for $3.8B. The film is already off to a strong start internationally.

Barron’s mentions: Altria (MO) is identified as the most attractive of the sin stocks due to its strong dividend. Altria has generated a compounded return of 19% over the last 30 years to top the S&P 500 Index by a full eight points. WellCare Health Plans (NYSE:WCG) is seen as a long-term earnings story due to its impressive track record of growing organically and through M&A. There is also a case made for NextEra Energy [NEE] and Duke Energy [DUK], with both companies seen as well positioned to benefit from the shift toward renewable energy. What to do with Nvidia (NVDA)? « Nvidia’s fortunes are dependent on its PC-gaming graphic-card business, which has generated the vast majority of the company’s sales and profits over the years, » observes Tae Kim. « Nvidia’s growth is unlikely to markedly improve until it releases a new round of chips, which could be two years down the line, » he adds.

Sources: CNBC, Nasdaq, EDGAR, Reuters, Box Office Mojo, Bloomberg

Editor’s Note: This article discusses one or more securities that do not trade on a major U.S. exchange. Please be aware of the risks associated with these stocks.


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