Stocks To Watch: Fading The Fear
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. A podcast of Stocks to Watch is also available on Sundays on Seeking Alpha, Apple Podcasts, Stitcher and Spotify (click the highlighted links).
Investors face another tough week of sizing up the economic consequences of the coronavirus outbreak that has created rippling anxiety in nearly every sector. The week ahead will see a number of investor conferences and presentations go online due to coronavirus concerns and almost certainly a wave of downward revisions to Q1 guidance. On the economic front, the latest reads on consumer prices, producer prices and consumer sentiment will be watched closely. Also of interest, OPEC will issue a monthly oil market report on March 11 and FedEx (FDX) will give its state-of-the-economy update on March 10. It won't be a shocker to hear at least some analysts pitch why long-term investors should jump into the market at bargain prices. On that note, Wedbush tech analyst Dan Ives has already set out Microsoft (MSFT), Apple (AAPL), Tesla (TSLA), Adobe (ADBE), Zscaler (ZS), Sailpoint (SAIL), Nuance (NUAN), Docusign (DOCU), Nice (NICE) and Uber (UBER) as his top picks on the theory that the coronavirus outbreak doesn't wipe out the long-term transformational bullish trends of cloud computing, 5G, EV, streaming and cyber security for the next few years. Perhaps someone has an undervalued gem of their own to share?
Notable earnings reports: Ascena Retail (ASNA), Stitch Fix (SFIX) and Greenlight Capital (GLRE) on March 9; Dick's Sporting Goods (DKS) and Korn Ferry (KFY) on March 10; United Natural Foods (UNFI) on March 11; Adobe (ADBE), Broadcom (AVGO), Dollar General (DG), Gap (GPS), Oracle (ORCL), Slack Technologies (WORK) and Ulta Beauty (ULTA) on March 12.
Go deeper: See Seeking Alpha's complete list of earnings reporters.
Spotlight on travel: While lodging, leisure and transportation stocks have been falling for six weeks on concerns over demand, selling pressure accelerated during the last week as companies started issuing earnings warnings, highlighted by Southwest Airlines (LUV) CEO Gary Kelly confirming a "precipitous decline" in bookings for the carrier. The growing list of major conference cancellations that includes Mobile World Congress, Facebook's (FB) F8 Conference, Google's (GOOGL) annual developer event, Adobe (ADBE) Summit 2020 and SWSX is expected to expand even more next week. That trend comes on top of major companies like Microsoft (MSFT), Apple (AAPL) and Amazon (AMZN) restricting business travel and an abrupt downturn in tourism in general. The eye-popping share price declines in the travel sector include Spirit Airlines (SAVE) -50%, Norwegian Cruise Line Holdings (NCLH) -48%, Eldorado Resorts (ERI) -45%, American Airlines Group (AAL) -42%, Hertz (HTZ) -40%, SeaWorld Entertainment (SEAS) -38%, MGM Resorts (MGM) -36% and United Airlines (UAL) -35%. While most analysts see the share price drops as overdone, there is also a general feeling that the coronavirus headlines haven't hit peak panic yet.
IPO watch: Imara (IMRA) is expected to price its IPO on March 11. The biotech is looking to raise up to $80M to help it develop its pipeline of drug candidates for the treatment of sickle cell disease and thalassemia. IPO share lockups expire on SmileDirectClub (SDC) and 10X Genomics (TXG) on March 10, as well as SpringWorks Therapeutics (SWTX), Satsuma Pharmaceuticals (STSA) and Alerus Financial (ALRS) on March 11. There are also quiet period expirations on Revolution Medicines (RVMD), Duos (DUOT), Huize (HUIZ) and Yunhong (ZGYHU) to track.
Go deeper: Catch up on all the latest IPO news.
Projected dividend changes (quarterly): Innovative Industrial (IIPR) to $1.30 from $1.00, Dick's Sporting Goods (DKS) to $0.325 from $0.275, TJX Companies (TJX) to $0.26 from $0.23, Applied Materials (AMAT) to $0.23 from $0.21, Dollar General (DG) to $0.35 from $0.32, Colgate-Palmolive (CL) to $0.44 from $0.43, Realty Income (O) to $0.2330 from $0.2325. Go deeper: Read the latest dividend analysis.
M&A tidbits: Shareholders with AK Steel (AKS) and Cleveland-Cliffs (CLF) are set for a merger vote on March 10. The walk date on the Mellanox Technologies (MLNX)-Nvidia (NVDA) deal is March 10. The California Public Utilities Commission is expected to make a decision on the Sprint (S)/T-Mobile (TMUS) deal by March 13. The list companies with activists getting fired up includes Big Lots (BIG), Twitter (TWTR), ViaSat (VSAT), LightInTheBox (LITB), Ring Energy (REI), Mednax (MD) and Prudential (PUK).
Analyst/investor meetings: Many companies have canceled their in-person events scheduled for next week to go with an online format for posting strategy and business updates. Farfetch (FTCH) is scheduled to host its Capital Markets Day on March 12. There are also events scheduled for Big Lots (BIG) and Hawaiian Holdings (HA) on March 9; Cerner (CERN), Wabtec (WAB) Aridis Pharmaceuticals (OTC:ARDS) on March 10; Moody's (MCO), Talos Energy (TALO) and Electrolux AB (OTCPK:ELUXF) on March 11 and both Parker Hannifin (PH) and Illinois Tool Works (ITW) on March 13
Con/Agg 2020 construction trade show: At last check, the giant Con/Agg 2020 construction trade show is still going on as planned from March 10-14 in Las Vegas. One of the highlights will be when Caterpillar CFO Andrew Bonfield participates in a fireside chat and Q&A session with institutional investors. The trade show could have a read-through that influences sentiment on names like Kaman (KAMN), Metso Corporation (OTCQX:MXCYY), Graco (GGG), John Deere (DE), Quaker Chemical (KWR), Ritchie Bros. Auctioneers (RBA), Commercial Vehicle Group (CVGI) and Manitowoc Company (MTW).
Stockpiling: The rush by consumers to buy household products could provide another boost again to retailers like Walmart (WMT), Target (TGT), Costco (COST), BJ's Wholesale Club (BJ), as well as consumer goods giants like Procter & Gamble (PG), Clorox (CLX), Colgate-Palmolive (CL) and Kimberly-Clark (KMB). Of course, Amazon (AMZN) is also in the mix to see a Q1 sales boost. Where does it end? Analysts say the stockpiling mindset could be here until summer at least.
Macau: The first anecdotal reports on March traffic at Macau casinos will come in next week. Names to watch for volatility include Wynn Macau (OTCPK:WYNMF), Wynn Resorts (WYNN), Sands China (OTCPK:SCHYY), Las Vegas Sands (LVS), MGM China (OTCPK:MCHVF), MGM Resorts (MGM), Galaxy Entertainment (OTCPK:GXYEF), SJM Holdings (OTCPK:SJMHF), Melco Resorts & Entertainment (MLCO) and Studio City International (MSC).
Business updates: FedEx (FDX) is due to post an economic update on March 10. The shipper's forecast for 2020 U.S. and global GDP will be closely watched with the coronavirus more widespread than a month ago. Tractor Supply Company (TSCO) has a CEO Meet & Greet webcast planned for March 10.
Healthcare watch: OPKO Health (OPK) and Quest Diagnostics (DGX) are both launching coronavirus testing services next week, while Enzo Biochem (ENZ) will start taking respiratory specimens for its own in-house test. There could also be some news on the LabCorp (LH) coronavirus test that's already available. The FDA action date for Bristol-Myers Squibb's (BMY) Opdivo + Yervoy is March 10.
JPMorgan Industrials Conference: The event originally scheduled for New York City on March 10-12 is expected to now consist of online presentations. A wide variety of companies are due to give talks, including Norfolk Southern (NSC), Mercury Systems (MRCY), Canadian National Railway (CNI), Kratos (KTOS), Albemarle (ALB), Honeywell (HON), Canadian Pacific (CP), Ryder (R), Union Pacific (UNP), Cubic (CUB), 3M (MMM), Southwest Airlines (LUV), JetBlue (JBLU), LyondellBasell (LYB), Johnson Controls (JCI), CSX (CSX) and Delta Air Lines (DAL),
Barclays Global Healthcare Conference: The timing seems relevant for a healthcare conference. Companies due to be at the Barclays event in Miami from March 10-11 include BioCryst Pharmaceuticals (BCRX), Anthem (ANTM), Inter Pharma (NTEC), Regeneron (REGN), Cooper Companies (COO), Phibro Animal Health (PAHC), AMAG Pharmaceuticals (AMAG), Hologic (HOLX), Cigna (CI), Centene (CNC), Retrophin (RTRX), IGM Biosciences (IGMS), Revance (RVNC), ICON (ICLR), Evolus (EOLS), Clovis Oncology (CLVS), Spectrum Pharmaceuticals (SPPI), BioCryst (BCRX), LabCorp (LH) and Sangamo Therapeutics (SGMO), Masimo (MASI), AngioDynamics (ANGO), Molecular Templates (MTEM), Roche (OTCQX:RHHBY), AMAG Pharmaceuticals (AMAG), CVS Health (CVS), Integer Holdings (ITGR) and MeiraGTx (MGTX).
BofA Securities 2020 Consumer & Retail Technology Conference: The BofA conference scheduled for New York City on March 10 includes presentations from Dick's Sportings Goods (DKS), Sysco (SYY), Sanderson Farms (SAFM), Aramark (ARMK), Levi Strauss (LEVI) and Lowe's (LOW).
Movies on the marquee: The U.S. box office weekend tally will be closely watched to see what kind of an impact coronavirus anxiety has on traffic. Expectations are pretty low with Disney's Onward expected to rack up $45M across over 4.3K U.S. theaters. Universal's (CMCSA) The Invisible Man is forecast to churn up $14.2M and Paramount's (VIAC) Sonic the Hedgehog is seen bringing in $8.2M. As for the exhibitor sector, the last four weeks have been brutal. AMC Entertainment (AMC) is down 30% and Cinemark (CNK) is off 26%. The share price drop for Reading International (RDI) is 30%, while Marcus (MCS) is 20% lower and IMAX (IMAX) is showing a 14% decline.
Barron's mentions: The publication highlights 12 companies in the S&P 500 offering dividend yields of over 5.0% and that also look appealing on a valuation comparison. The list of dividend plays consists of Altria Group (MO), Dow (DOW), Exxon Mobil (XOM), Valero Energy (VLO), Prudential Financial (PRU), Comerica (CMA), AT&T (T), Chevron (CVX), Wells Fargo (WFC), AbbVie (ABBV), Seagate Tech (STX) and Kinder Morgan (KMI). If hedging against systemic financial risk is suddenly your thing, Barron's has a golden answer for that as well. SPDR Gold Trust (GLD), iShares Gold Trust (IAU),VanEck Vectors Gold Miners (GDX), VanEck Vectors Junior Gold Miners (GDXJ), VanEck International Investors Gold (INIVX), Fidelity Select Gold (FSAGX), Sprott Gold Equity (SGDLX), Barrick Gold (GOLD) and Newmont (NEM) are offered up as investment alternatives. Finally, CymaBay Therapeutics (CBAY) and InflaRx (IFRX) are singled out as smaller biotechs with significant upside in a volatile, risk-off environment.
Sources: CNBC, Bloomberg, Reuters, The Hollywood Reporter, South China Morning Post
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Comments (342)
possibly trigger the major stock market correction that was predicted.From the look's of it, I would not be surprised
to see a 25% - %40 market correction in
many sectors.If some think, this is almost over think again ! 25% is a minimum drop
that's going to take place, the question his, what happens after?
are we going to see a V shape recuperation afterwards,
or a very slow 1-2% grind up that will take months..., years to recuperate our losses.
The point is to NOT have a health crisis. You have to head it off at the pass so to speak. Really the only way to do that with this pandemic is to be very strong and draconian. Look you are going to have a little financial hurt now, and lots of people say the market needed correction ANYWAY, but would you rather have Millions dead, health care overload etc AND a financial crisis, a depression, not a little pain?
This thing is 10 times more lethal than regular flu and among certain demographics 20 per cent. Yes people panic, but... I guess that is a sorry side effect.
As in any conflict, intelligence on the enemies strength and disposition is critical. It is by means of the COVID 19 tests that we gain this information.
How shall we marshal our resources if we do not know the where and how to supply?
The only recourse will be an all out offensive of quarantine that denies the enemy its sustenance...us. Quite the analogy of scorched earth tactics used favorably against the invading Nazis in the Ukraine theater of WW2.Good luck and Happy Trails...
How did you get to be a geologist when you didnt pass 8th grade algebra?
Look, I ll do the first problem for you. As of Sunday March 8 2020 3802 people have died of 109648 infected with Corona Virus. You divide 3802 by 109 648 and multiply by 100 and get 3.46 per cent died of those infected. Now regular flu. 18 000 divided by 32 000 000 is...... .056 per cent.
Now you do the second equation. If 32 000 000 million are infected with corona virus at 3.46 per cent rate of death how many are going to die?? A lot more than 18 000 friend. Get it?
oh man people today on SA... You know Nick, that is what they said about AIDS, "oh it only affects gays and junkies, what do i care. It aint me"
More folks can get insurance, which will reduce those hyper-expensive ER visits. Might everyone be happier and healthier?Well, almost everyone, except the trump troop.
Trump's plan is for those folks to go to work sick.
Even the staff at Mar-a-Lago.
We can't cure the flue either or the cold, We can reduce affects and fight it off with a lucky guess of vacine and we treat the symptoms. get the facts right.
I live in Lucca italy
GILD's Remdesivir has been allowed to jump to Phase 3, and is already being used in other countries. That drug was originally developed for Ebola, against which it was not very effective.However, Remdesivir went through all trials and is safe, virtually without side effects. The FDA should get off their constipated arses, and simply approve it.What you state in your own post works against your thesis."the number of confirmed cases in the U.S. is well over 300 — 19 of whom have died, mostly in Washington state. At least 14 people who died were associated with one nursing home near Seattle"Wow! 300 people in the entire US, with 19 deaths, mostly in Seattle metro area, because of all the tourists leftist Washington State that has allowed endless immigration.from China for decades.And I would place a big bet that when the Corona virus broke out in Wuhan, they were immediately flying to Seattle for supposed safety, when if was THEY who brought the virus into Washington. Further point. The majority that died, who were in ONE nursing home.where so much contact between employees and the residents were like a breeding ground, spreading the virus to these poor, aging people with a lowered immune response due to their age and illnesses. Pity those poor seniors whose lives were ended because of a leftist Governor, Mayor and the liberal political figures behind them, who should be yanked out of office, as THEY and their leftist ideology provided the pathway to the US.You state that US confirmed cases are over 300, with 19 deaths. Did you bother to research how many people are infected with yearly influenza and have died? The numbers are staggering and make the number of Corona cases here look like a few crumbs. And illustrate how out-of-touch with reality so many in the US and the world areThe US lets in more immigrants than ANY country in the world, and dwarf the number of immigrants allowed in to all other countries in the world combined. Our borders should be sealed, and NO planes should be allowed to travel to the US from a large number of countries. If something that sensible had been followed, we would not have any cases here.Ponder over that.
