M12 BARRON’S August 5, 2019
Research Reports
HowAnalystsSizeUpCompanies EditedbyRichardRescigno
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andresearchfirms.Thereportsareasamplingofanalysts’thinking;theyshouldnot
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have provided, or hope to provide, investment-banking or other services to the
companies being analyzed.
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Apple• APPL-Nasdaq
Outperform • Price $209.02 on July 30
by Evercore ISI
Apple reported an impressive June quarter
and guided the September quarterly ahead
of expectations. We think that an impres-
sive print like this highlights Apple’s plat-
form model and ability to show revenue
growth, despite double-digit iPhone sales
declines.
Key positives: 1) China showed year-over-
year growth, indicating there are levers at
Apple’s disposal to drive sales higher. (Is
this a strategy that could be scaled glob-
ally?) 2) Gross-margin guidance for the
September quarter is up, quarter over
quarter, suggesting momentum. (Upside for
fiscal 2019?) 3) Revenue diversification is
working, with services up 18% in constant
currency; “other” up 50%, Y/Y; and iPhones
accounting for sub-50% of sales for the first
time since launch. 4) Capital allocation and
buyback momentum remain strong. We are
raising our price target to $238 [from $227].
The multiple is unchanged at 18 times fis-
cal-2020 earnings per share.
Saia• SAIA-Nasdaq
Overweight • Price $76.30 on Aug. 1
by Stephens
Saia’s second-quarter 2019 results demon-
strated to us that its expansion into the
Northeast has reached an inflection point.
The [shipping and logistics] company
reported its best quarterly result since sec-
ond-quarter 1994. Saia’s geographic expan-
sion and yield initiatives are creating a
compelling and differentiated story within
the transportation sector, which we think
will warrant multiple expansion. While the
stock’s reaction of about 10% on Wednes-
day underscores that we weren’t the only
ones who appreciated the second-quarter
beat and positive go-forward commentary,
we see the potential for meaningful further
upside to our estimates and the stock price,
as long as the economy holds together. Our
new $96 price target (up from $75 previ-
ously) represents 18.5 times our updated
2020 EPS forecast.
Altice USA• ATUS-NYSE
Outperform • Price $26.12 on July 31
by Macquarie Research
Altice delivered impressive [second-quarter
key performance indicators], just above our
expectations, and raised 2019 revenue guid-
ance. We expect its industry-defying cable
trends to continue. Altice Mobile is poised
to launch any day now, and attractive pric-
ing should drive outsize growth. We model
modest revenue increases building from the
third quarter, and mobile breaking even a
year from now. Price target: $32.
United Therapeutics • UTHR-Nasdaq
Neutral • Price $79.24 on July 31
by H.C. Wainwright
The clinical development of Unituxin for
small-cell lung cancer seems to have gath-
ered [less] attention than it deserves. Uni-
tuxin [was] approved for high-risk pediatric
neuroblastoma in 2015, and is currently
generating notable sales of about $100 mil-
lion. Assuming an average price of $144,000
a year in small-cell lung-cancer treatment
(we conservatively assume once-a-month
dosing), about 20% penetration in the U.S.
and European Union should allow United
Therapeutics to add about $2.6 billion to its
product sales. [However,] we believe that
the company lacks internal expertise in on-
cology-drug development. The more we dig
around Unituxin, the less confident we are
about the anticipated data readout of [a
study of the drug scheduled] in 1H20.
New York Community Bank•
NYCB-NYSE
Market Perform • Price $11.59 on July 31
by Raymond James
We are maintaining our Market Perform
rating on the bank’s shares, following sec-
ond-quarter 2019 results that matched both
our and consensus expectations. Relative to
our model, lower revenues were offset by
lower expenses (operating and provision).
Notably, the bank’s core margin contracted
by six basis points [each equal to 1/100th of
a percentage point] sequentially, below
management’s three-basis-point guidance,
and management guided to another one to
two basis points of compression in third-
quarter 2019. That said, management now
expects margin expansion in fourth-quarter
2019 (and every quarter in 2020), as it be-
lieves that it has experienced a trough in
earning asset yields and a peak in funding
costs, which should certainly bode well for
margins in a falling-rate environment.
Advanced Micro Devices•
AMD-Nasdaq
Hold • Price $30.45 on Aug. 1
by Benchmark Research
We are initiating coverage of AMD with a
Hold rating. We expect AMD to continue
to benefit from a robust product cycle.
[But] AMD shares are trading at 29.7
times the consensus 2020 EPS estimate of
$1.03, and on an enterprise-value basis,
four times the consensus 2020 sales esti-
mate, which is close to AMD’s historical
peak EV/sales multiple of 4.7 times. On a
price/earnings basis, AMD shares are
trading at a significant premium to the
semiconductor peer-group average multi-
ple of 21.7 times.
INSIDER TRANSACTIONS RATIO
0
10
20
30
40
50
60
A S O N D J F M A M J J
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 355, 561 ,415 and 40, 002 ,984 respectively; Source: Thomson Reuters
Bearish
Bullish
Ratio = 9
INSIDER TRANSACTIONS: Recent Filings
Purchases
$ Val
Company/Symbol Insiders Shares (000's)CastleBiosciences CSTL 3 400,370 9,605
Vaccinex VCNX 2 2,023,111 8,254MirumPharmaceuticals MIRM 1 332,000 4,980
AirProductsAndChemicals APD 1 20,000 4,543Abbvie ABBV 2 40,000 2,682CrownCastleInternational CCI 1 16,300 2,075
CnxResources CNX 1 200,000 1,278
Watford WTRE 4 54,500 1,082KalvistaPharmaceuticals KALV 1 56,367 958SpiritOfTexasBancshares STXB 5 44,091 948NgmBiopharmaceuticals NGM 2 56,112 768LigandPharmaceuticals LGND 2 5,854 574
CentralPacificFinancial CPF 2 17,177 509CenturyBan CNBKA 3 5,373 448Otelco OTEL 1 18,803 278Tesla TSLA 1 1,000 233HysterYaleMaterialsHandling HY 3 3,854 208
MeritMedicalSystems MMSI 1 5,000 200
BankOfSouthCarolina BKSC 4 10,340 196AmericanNationalBankshares AMNB 2 5,282 185Sales
$ Val
Company/Symbol Insiders Shares (000's)ProsightGlobal PROS 2 3,571,430 50,000
TexasInstruments TXN 7 302,413 38,658
MeritageHomes MTH 4 437,920 27,639ElasticNv ESTC 1 273,696 27,189Sharpspring SHSP 1 1,763,454 21,602Idex IEX 4 126,179 21,212TeConnectivity TEL 2 190,050 17,762
BankOfNewYorkMellon BK 1 318,556 14,884ThermoFisherScientific TMO 1 50,000 14,241IacInteractive IAC 1 56,703 13,653Ehealth EHTH 4 125,801 13,091Transunion TRU 4 152,790 12,800
NeurocrineBiosciences NBIX 4 130,187 12,070
Raytheon RTN 2 60,000 11,350Facebook FB 1 55,000 11,044AveryDennison AVY 5 86,158 9,998
InterpublicGroupOfCompanies IPG 1 431,594 9,961M/IHomes MHO 3 302,500 9,725
Torchmark TMK 4 101,768 9,398DellTechnologies DELL 1 167,275 9,283Aninsiderisanyofficer,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