M10 BARRON’S April 6, 2020
Research Reports
HowAnalystsSizeUpCompanies
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Apple• AAPL-Nasdaq
Outperform • Price $254.29 on April 1
by Evercore ISI
The global spread of Covid-19 has shifted
the downside case from a China supply
shock to a multiquarter demand slowdown,
but we think Apple is better positioned than
most to experience a rapid recovery after
the virus is brought under control.
Apple shares have held up better than
the broader market since the beginning of
the selloff, and it remains a hotly debated
name among investors. Bulls see demand as
pushed out, not canceled, and remain fo-
cused on long-term upside levers (wear-
ables, services, gross margins). They also
see some support from buybacks, given Ap-
ple’s $100 billion net-cash position. Bears
think Apple products are a luxury that can
be deferred and [argue that the] risk to fis-
cal 2020 numbers isn’t adequately reflected
in the consensus. (We somewhat agree, but
think buy-side expectations are lower than
consensus numbers.)
Net/net: Our bull thesis is unchanged,
and we think Apple’s unparalleled brand
and net-cash positions it to be a relative
outperformer in a severe economic downside
scenario. Price target: $325.
OKTA• OKTA-Nasdaq
Buy • Price $119.57 on April 2
by Guggenheim
OKTA [which provides program-access
management software platforms for work-
forces] reiterated its revenue guidance for
the quarter and year, in spite of the poten-
tial disruption from the Covid-19 pandemic,
which we think is pretty impressive. If we
look back at fiscal 2020, around 70% of the
[$553 million in] subscription revenue the
company recognized had been already
booked or billed by the end of fiscal 2019.
The “new” revenues that the company had
to generate on top of that were around $167
million. For fiscal 2021, OKTA already had
$592 million booked or billed at the end of
fiscal 2020. It has guided to revenue of $770
million to $780 million. Hence, the “new”
subscription revenue it needs to meet its
guidance totals $144 million—lower, year
over year, versus 2020’s level.
Veeco Instruments• VECO-Nasdaq
Buy • Price $9.57 on April 1
by Benchmark
Veeco reiterated its March-quarter guid-
ance. Due to the stay-at-home order in
northern California, the firm had previously
pulled its guidance, which called for a sales
range of $95 million to $120 million and a
corresponding non-GAAP earnings range of
breakeven to 22 cents per diluted share.
The firm now expects March-quarter sales
to range from $100 million to $105 million.
As a result, we now project March non-
GAAP earnings of five cents per diluted
share, on sales of $100 million.
While we see significantly lower sales in
the June quarter, we expect a second-half
2020 rebound as the effects of the virus sub-
side. Therefore, we remain at Buy with a
$16 target price.
Annaly Capital Management
- NLY-NYSE
Buy • Price $5.67 on March 29
by CFRA
We see revenue rebounding in 2020 by over
35% after 2019’s revenue contraction of 12%,
given expectations for a more normal yield
curve. The Federal Reserve reversed course
with its first interest-rate cuts in 2019, and
has subsequently cut rates to zero due to
coronavirus fears and volatility. While fund-
ing dislocations have emerged, we see the
Fed doing whatever it takes to backstop the
[U.S. government] agency [securities] mar-
ket and keep it liquid.
To increase its returns and growth, Annaly
[a mortgage real estate investment trust that
invests in and finances residential and com-
mercial assets] is expanding investments in
its non-agency portfolio, such as residential
credit, commercial real estate, and middle-
market lending. However, the agency portfo-
lio, still nearly 80% of its capitalization, will
remain the company’s primary growth driver.
Given NLY’s size and competitive advan-
tage of scale, there could be further acquisi-
tion opportunities. Compared to many of
NLY’s mortgage REIT peers that retain sub-
stantial credit risk, we view NLY’s leverage
levels as moderate. NLY’s economic leverage
declined to 7.2 times in the fourth quarter,
from 7.7 times in the prior year. We see NLY
increasing leverage closer to its target range
of eight to 12 times after volatility dies down.
Our 12-month target price of $8 is equal to a
price-to-book value of one, slightly below its
historical average of 1.1.
IMAX• IMAX-NYSE
Buy • Price $8.38 on April 2
by B Riley FBR
The [movie] exhibition industry is in uncer-
tain times, amid the Covid-19 pandemic and
required theater closures. With IMAX
shares off about 59% since the start of the
year (versus around 24% for the S&P 500),
we feel that IMAX typically gets lumped in
with the traditional exhibitor group even
though the company has limited, to no, fixed
assets/expenses and essentially operates as
a licensor. And with about 2.5 years of li-
quidity before any additional operational
cost cuts, IMAX has the liquidity to weather
this Covid-19 storm. We are reiterating our
Buy rating and $19 price target.
INSIDER TRANSACTIONS RATIO0102030405060A M J J A S O N D J F MRatio of Insiders Sales to Buys. Readings under 12:1 are Bullish. Those over 20:1 are Bearish.
The total top20 sales and buys are 210, 393 ,008 and 19, 831 ,117 respectively; Source: Thomson ReutersBearishBullish
Ratio = 11INSIDER TRANSACTIONS: Recent Filings
Purchases
$ Val
Company/Symbol Insiders Shares (000's)MGMResortsInternational MGM 4 416,341 4,837
AccelerateDiagnostics AXDX 2 485,000 3,891
IHSMarkit INFO 1 22,983 1,346
CasiPharmaceuticals CASI 1 531,373 1,081
HowardHughes HHC 4 17,149 865
BaxterInternational BAX 1 9,780 804
Mistras MG 6 154,213 718
Macerich MAC 4 110,000 652
EnergyTransfer ET 1 120,000 587
SunstoneHotelInvestors SHO 2 67,942 585
GeneralMotors GM 1 22,400 515
NorthernOilAndGas NOG 2 851,879 514
VornadoRealtyTrust VNO 1 10,200 497
BmcStock BMCH 2 27,500 472
SignetJewelers SIG 3 54,735 462
RevGroup REVG 6 107,600 459
NationalStorageAffiliatesTrust NSAPRA 1 20,000 403
Williams-Sonoma WSM 1 10,000 400
Eyenovia EYEN 2 164,862 374
Athenex ATNX 2 51,000 371Sales
$ Val
Company/Symbol Insiders Shares (000's)Docusign DOCU 2 359,777 30,756
ZoomVideoCommunications ZM 1 190,930 30,181
GuardantHealth GH 1 281,196 19,729
UberTechnologies UBER 1 510,000 13,543
BlackKnight BKI 1 250,000 13,393
Medallia MDLA 1 580,000 12,864
NexpointResidentialTrust NXRT 2 418,356 10,453
Salesforce.Com CRM 2 70,000 10,155
LeggMason LM 2 201,171 9,814
GooseheadInsurance GSHD 2 192,674 8,850
Splunk SPLK 5 61,362 7,810
Pagerduty PD 1 400,000 6,935
DigitalRealtyTrust DLR 2 37,500 5,250
HoulihanLokey HLI 3 97,794 4,746
Oracle ORCL 1 90,000 4,426
IrhythmTechnologies IRTC 1 53,004 4,240
Nvidia NVDA 1 15,669 4,221
Winmark WINA 1 30,000 3,972
Smartsheet SMAR 4 89,816 3,944
CadenceDesignSystems CDNS 1 50,000 3,353Aninsiderisanyofficer,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