July22,2019 BARRON’S M11
Research Reports
HowAnalystsSizeUpCompanies EditedbyRichardRescigno
Thesereports,excerptedandeditedbyBarron’s,wereissuedrecentlybyinvestmentand
research firms. The reports are a sampling of analysts’ thinking; they should not be
considered the views or recommendations of Barron’s. Some of the reports’ issuers have
provided,orhopetoprovide,investment-bankingorotherservicestothecompaniesbeing
analyzed.
To be considered for this section, material
should be sent to [email protected].
Taylor Morrison Home• TMHC-NYSE
Outperform • Price $21.46 on July 18
by RBC Capital Markets
We raise our fiscal year ’19 EPS by 6%, to
$2.71 from $2.55, following TMHC’s pre-
announcement of much stronger than ex-
pected 2Q orders, closings, and gross mar-
gins.
The company announced that it expects
to report 2Q orders +20% Y/Y, versus our
+10% estimate, deliveries +30%, versus
our +14% estimate (and guidance of
+12-22%), and gross margin at the high
end of its mid-to-high 17% range guidance
(versus our 17.6% estimate).
We recently upgraded TMHC on our ex-
pectation for improving pricing trends to
support margins, accelerating order growth,
and attractive valuation. These pre-an-
nounced results are supportive, and we con-
tinue to view TMHC as a compelling oppor-
tunity, trading at less than 1.0 times year-
end ’19E TBV [tangible book value]..
Raising price target to $26 from $25.
Signature Bank• SBNY-Nasdaq
Buy • Price $125.66 on July 18
by Maxim Group Research
SBNY reported 2Q ’19 EPS of $2.72, ver-
sus consensus of $2.71. We regard the re-
sults as strong: The net interest margin
(NIM) was stable (per guidance); loan
growth was 2.1% (excluding loan sales),
and deposit growth was 2.5%, both driven
by strategic initiatives; and nonperforming
assets were down 45%. In our view, the
net interest margin has bottomed out, the
negative impact of taxi medallion loans is
gone, and the potential negative credit im-
pact of loans on rent-controlled multifam-
ily buildings has not materialized.
We are lowering our 2020 EPS estimate
to $12.00, from $12.50, based on a lag in
NIM expansion and on slower growth in
multifamily loans. We are lowering our
price target to $180, from $190, based on
our new 2020 EPS estimate. Our $180
price target equates to 15.0 times our new
2020 EPS estimate (versus 15.2 times for
our previous price target), which is in line
with other best-in-class mid-cap banks.
SBNY currently trades at only 10.5
times our new 2020 EPS estimate: We re-
gard the shares as very undervalued. Over
the next four quarters, we expect stock
price appreciation of about 43.2%, plus a
dividend yield of 1.8%, for a total return of
about 45%.
Zebra Technologies• Zebra-Nasdaq
Hold • Price $187 on July 18
by Wellington Shields & Co.
We are lowering our rating on Zebra, the
leader in mobile computers, scanners, and
specialty printers, to Hold (from Gradually
Accumulate). This morning, Zebra’s main
competitor, Honeywell (HON, not rated)
reported sales in 2Q19 off 4%, year over
year organically, in its Safety and Produc-
tivity Solutions segment, which includes
products and services such as mobile com-
puters, scanners, and printers that com-
pete with Zebra’s. Honeywell indicated in-
ventory destocking and fewer large project
rollouts in the mobility space. The sales de-
cline follows four consecutive quarters of
double-digit organic growth. In 1Q19, Ze-
bra did show outperformance as Honeywell
indicated lower scanning volumes, while
Zebra’s scanner business was strong. How-
ever, the significant decline in performance
of Honeywell, along with recent concerns
over reseller inventories, and Zebra facing
its toughest comp of the year in 3Q19 (or-
ganic growth of 15%), all give us con-
cern....Zebra will report results July 30.
SM Energy• SM-NYSE
Outperform2 • Price $8.95 on July 18
by Raymond James
We are updating our 2019/2020 estimates
after SM’s operational update this morning.
Strong well results reported last month
drove SM to raise full-year guidance, and
the preliminary 2020 outlook screens favor-
able to prior Street expectations.
Our thesis on SM Energy focuses on
the company’s high-quality Howard
County [Texas] assets that have yielded
some of the best results in the area to
date in the highest oil-cut county in the
Midland Basin.
Further, SM’s continued outperformance
in the oily Midland Basin positions it to re-
alize much of the upside to our bullish oil
call. We are lowering our price target from
$20 to $15 (~4 times 2019 Ebitda) to reflect
recent weakness in commodity pricing, rela-
tive to our prior bullish forecast.
BB&T• BBT-NYSE
Hold • Price $49.64 on July 18
by Sandler O’Neill Partners
BB&T posted strong 2Q results, and
growth trends remain positive for the fran-
chise on a standalone basis and for the com-
bined franchise [to be formed through a
merger with Suntrust]. That said, the net
interest margin will remain pressured, as-
suming four rate cuts [by the Federal Re-
serve]. After the closing of the deal, we con-
tinue to believe that there will be some
noise around the balance sheet and the loan
portfolio and think that our Hold rating re-
mains proper as we wait for greater clarity
into 2021.
Our 12-Month Price Target: $52.00.
INSIDER TRANSACTIONS RATIO
0
10
20
30
40
50
60
J A S O N D J F M A M JJ
Ratio of Insiders Sales to Buys. Readings under 12:1 are Bullish. Those over 20:1 are Bearish.
The total top20 sales and buys are 328, 898 ,483 and 9, 171 ,939 respectively; Source: Thomson Reuters
Bearish
Bullish
Ratio = 36
INSIDER TRANSACTIONS: Recent Filings
Purchases
$ Val
Company/Symbol Insiders Shares (000's)Healthequity HQY 4 40,000 2,440
NgmBiopharmaceuticals NGM 2 103,944 1,436G-IiiApparel Ltd GIII 1 40,000 1,059
W&TOffshore WTI 1 215,300 997HysterYaleMaterialsHandling HY 38 16,363 882Eyenovia EYEN 3 287,769 800
Inuvo INUV 2 2,317,000 695
CenturyBancorp CNBKA 3 2,511 219HlAcquisitions HCCH 1 16,880 171Fedex FDX 1 600 101Otelco OTEL 1 4,874 71PathfinderBancorp PBHC 1 4,600 66
AxcellaHealth AXLA 1 5,796 48AptevoTherapeutics APVO 1 44,985 38Aspen ASPU 3 7,830 37YorkWater YORW 15 1,004 34Unit UNT 1 3,000 22
EliLilly LLY 1 185 20
MerrimackPharmaceuticals MACK 1 3,500 20Greif GEF 1 500 17Sales
$ Val
Company/Symbol Insiders Shares (000's)Workday WDAY 7 467,294 94,928
DellTechnologies DELL 5 552,024 29,361
GarminLtd GRMN 1 354,299 28,713Docusign DOCU 1 541,532 27,901Inseego INSG 1 3,900,000 18,720ShakeShack SHAK 1 212,927 15,928FactsetResearchSystems FDS 2 43,073 12,556
RossStores ROST 2 115,238 12,110AresManagement ARES 1 402,112 11,207Cargurus CARG 5 263,338 9,692Okta OKTA 2 70,000 9,449VarianMedicalSystems VAR 3 69,348 9,228
Ringcentral RNG 2 61,789 7,561
Cdw CDW 2 60,874 7,028MarvellTechnology Ltd MRVL 1 265,000 6,896Broadcom AVGO 1 20,000 5,843
Smartsheet SMAR 5 105,700 5,632AltairEngineering ALTR 4 132,500 5,565
Oracle ORCL 1 90,000 5,357Hubspot HUBS 2 29,341 5,222Aninsiderisanyofficer,directororownerof10%ormoreofaclassofacompany'ssecurities.Inmostcases,aninsidermustreportanytradeto
theSECwithintwobusinessdays.ThetableshighlightcompaniesthatfiledwiththeSECthroughlastWednesday.Thetablesdonotinclude
pension-planoremployeestock-optionactivity,tradesbybeneficialownersof10%ormore,tradesunder$2pershareortradesunder100
shares.The"Purchases"columnincludesonlyopen-marketandprivatepurchases;the"Sales"columnincludesonlyopen-marketandprivatesales,
andexcludestradesprecededbyoptionexerciseinthe12monthspriortothereportedevent. Source:ThomsonReuters