Barron\'s 03.16.2020

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March 16, 2020 BARRON’S M11


Research Reports


HowAnalystsSizeUpCompanies


Thesereports,excerptedandeditedbyBarron’s,wereissuedrecentlybyinvestment


and research firms. The reports are a sampling of analysts’ thinking; they should


notbeconsideredtheviewsorrecommendationsofBarron’s.Someofthereports’


issuers have provided, or hope to provide, investment-banking or other services to


the companies being analyzed.


To be considered for this section, material


should be sent [email protected].


United Parcel Service•UPS-NYSE


Buy•Price $87.18 on March 10


by Stifel


After the selloff in the market, one of the


names most interesting to us, due to


healthy cash generation, is UPS. While


we’re lowering estimates for the parcel


names, we believe UPS [which just an-


nounced that it will have a new CEO, effec-


tive June 1] has a steadier earnings and


cash-flow profile that investors should find


attractive in a fearful market.


Domestic Package (63% of revenue; 54%


of earnings before interest and taxes) is


where the business is growing nicely,


given the assumption of FedEx business


for Amazon.com. Margins leave something


to be desired, but as long as volume isn’t


hit too hard by the coronavirus, earnings


should be OK. We are reducing our 2020


and 2021 earnings-per-share estimates


from $7.90 and $8.35, respectively, to $7.02


and $7.71. FedEx next week will give us


the latest update on the parcel market’s


outlook, so we may revise estimates again.


Regardless, we feel UPS stock is compel-


ling enough to warrant an upgrade in the


middle of this selloff. Target price: $104.


Torm•TRMD-Nasdaq


Outperform•Price $7.10 on March 11


by Evercore ISI


Torm posted fourth-quarter 2019 EPS of 37


cents (excluding one-time items), a penny


below our forecast, but still representing its


most profitable period since first-quarter



  1. The company [a tanker concern that


transports refined-oil products] has re-es-


tablished a dividend for the period, with 10


cents a share recommended to the board


and likely to be paid on May 6. Further-


more, the board has approved the begin-


ning of a modest share-buyback program


for the first half of 2020, adding to the total


capital return. Perhaps most importantly,


first-quarter-to-date rates have come in


very strong, and with 87% of the quarter


already booked, Torm is trending toward a


more-than-doubling of its EPS for first-


quarter 2020 versus fourth-quarter 2019.


Developments in the tanker market are


fluid, with plummeting demand forecasts


offset by accelerating oil production and as-


sociated floating storage. The supply side


remains constrained, however, with uncer-


tainty keeping the order book muted. We


are maintaining our spot-rate forecasts


through 2021 for now, pointing to substan-


tial EPS expansion at Torm in 2020 and



  1. We retain our Outperform rating, but


lower our price target to $16 from $18.


Charter Communications



  • CHTR-Nasdaq


Buy•Price $476.76 on March 11


by Benchmark Research


We are upgrading our rating to Buy from


Hold, with a $573 price target, which is


ahead of our prior $541 fair value assess-


ment. We view cable stocks as good haven


candidates, given their recurring revenue


and battened-down capital structures, de-


spite Monday’s indiscriminate selloff of vir-


tually all leveraged names. Also, we are in-


creasingly confident that 5G may have only


a near-neutral effect on cable, even as mo-


bile carriers with ambitious deployment


plans (at perhaps naive cost assessments)


may be disciplined into more rational be-


havior, given possible prolonged economic


and debt-market dislocations. Our $573


price target assumes that the S&P 500 in-


dex ends 2020 at 2800 and represents a


near-17 times target multiple of earnings.


Rosetta Stone•RST-NYSE


Outperform•Price $11.60 on March 12


by Barrington Research


Last night, after the market close, Rosetta


Stone reported results of its fourth quarter


and year, ended Dec. 31, that were generally


better than expected. Guidance for 2020 was


lowered, due primarily to planned invest-


ments in sales and marketing and an abun-


dance of caution, while longer-term expecta-


tions were reaffirmed across most key


metrics.The stock fell on the reduced guid-


ance and is down 30% year to date. With the


transition to a subscription model complete,


we’d be buyers onweakness.Reiterate


Outperform rating. Suitability/Risk: specu-


lative. Our price target goes to $20 from


$25, to reflect lower multiple assumptions


and slightly lower revenue expectations.


Carnival•CCL-NYSE


Overweight•Price $18.59 on March 12


by Wells Fargo Securities


After a series of company and industry-


related Covid-19 announcements, Carnival


has announced the suspension of Prin-


cess brand operations (about 20% of its


cruise capacity) for 60 days. This will fur-


ther question the company’s near-term li-


quidity (a dividend suspension is a fore-


gone conclusion). We estimate that the loss


of Princess revenue will have about a $2-a-


share 2020 impact on Carnival.


Covid-19’s impact on the industry


will be severe. But major operators are al-


most “too big to fail” from the perspective


of European ship building. There probably


will be broad EU/U.K./North American/


Chinese/Australian government support


for the travel/tourism industry, given


Covid-19’s unusually severe impact. And


return of capital to shareholders is likely


to continue in fiscal 2020-21.


INSIDER TRANSACTIONS RATIO


0

10

20

30

40

50

60

M A M J J A S O N D J FM

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 413, 145 ,563 and 83, 503 ,288 respectively; Source: Thomson Reuters

Bearish


Bullish
Ratio = 5

INSIDER TRANSACTIONS: Recent Filings


Purchases
$Val
Company/Symbol Insiders Shares (000's)

EnergyTransferET 4 1,368,400 10,657
NewellBrandsNWL 4 707,078 10,413
SixFlagsEntertainmentSIX 1 300,000 6,595
KinderMorganKMI 1 300,000 5,854
PlanetFitnessPLNT 4 86,000 5,510

NielsenHoldingsNLSN 1 250,000 4,083
AmercoUHAL 3 13,000 4,058
TrinityIndustriesTRN 2 177,235 3,613
NorthernOilAndGasNOG 1 3,352,443 3,584
Freeport-McmoranFCX 2 335,000 3,358
AmnealPharmaceuticalsAMRX 3 850,000 3,157
QurateRetailQRTEA 1 550,000 2,995
WesternMidstreamPartnersWES 2 422,200 2,913
ProsperityBancsharesPB 5 56,300 2,880
NustarEnergyNS 5 236,000 2,585

RevolveGroupRVLV 2 196,000 2,569
PncFinancialServicesGroupPNC 1 24,415 2,500
UpworkUPWK 2 275,000 2,217
RangeResourcesRRC 2 918,128 2,014
KarAuctionServicesKAR 3 111,355 1,951

Sales
$ Val
Company/Symbol Insiders Shares (000's)

SbaCommunicationsSBAC 6 161,990 47,467
ZoetisZTS 2 307,438 43,411
Marsh&MclennanCosMMC 6 310,267 33,146
TellurianTELL 1 17,988,676 27,496
QuestDiagnosticsDGX 1 230,178 25,935
TradeDeskTTD 2 80,004 21,973
AlteryxAYX 2 148,950 21,082
BlacklineBL 1 314,798 19,407
ZoomVideoCommunicationsZM 4 172,860 19,399
BroadcomAVGO 1 75,000 18,962

AmerescoAMRC 2 805,000 17,104
ThermoFisherScientificTMO 2 49,000 15,767
TylerTechnologiesTYL 3 46,000 15,179
ExtraSpaceStorageEXR 2 130,000 14,114
Five9FIVN 5 184,134 13,414

BeyondMeatBYND 2 134,083 13,379
RealpageRP 1 200,000 12,569
Salesforce.comCRM 4 75,119 12,410
SlackTechnologiesWORK 4 349,452 10,481
QorvoQRVO 2 111,102 10,450

Aninsiderisanyofficer,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
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