Under Armour Q2: What to Watch For

Under Armour has delivered over 20% topline growth for a remarkable 24 consecutive quarters. Investors will unquestionably be looking for UA to continue this streak with its upcoming earnings, and missing this mark could certainly impact the stock in the short term.

Key Segments to Watch in Q2:

-Footwear Sales Growth

-Women’s Apparel Sales Figures

-International Expansion Growth

-Curry 2 and 2.5 Shoe Line Demand and Potential Future Models Released

-Full year Guidance

While UA’s women’s apparel segment has been showing negative growth, this figures could likely be offset by Under Armour’s rapidly growing footwear business as well as international expansion the company has rolled out.

Under Armour, coming off their ‘Chef’ Curry 2 Low release that sold well despite getting heavily criticized for their style on the Internet. The company has received a similar reaction with its latest Curry release, a casual off the court shoe called the Curry ‘Lux’.

If the new model does in fact sell well amid all the negativity the product is receiving, it likely indicates that the haters opinions are irrelevant from a sales perspective, as Under Armour continues to exceed expectations.

Ways to Limit Dangerous Artificial Blue Light Exposure

The screen you are reading this article on could be harming your health.

New studies continue to highlight the effect that artificial blue light emitted from electronics, including appliance monitors and cellphone screens, have on users’ health.

Why is too much blue light seriously bad for you?
Blue light prevents the body from creating the sleep-inducing hormone, melatonin.

However, companies and entrepreneurs alike have taken a keen interest in combating these ill effects.

Apple took notice and added a night shift feature on the latest iOS update to combat this problem.

Former ESPN Achnor and Entrepreneur James Swanwick has taken this a step further and created glasses that help wearers reduce their exposure to artificial blue light.

The product is called Swannies, and it continues to gain traction on Amazon.
“People don’t realize that artificial blue light is tricking your body and brain into thinking it’s daytime. Because of this, your body is not creating melatonin needed to sleep,” Swanwick said.

As the world becomes increasingly dominated by electronic use, society often remains unaware of the effect that electronic use has on sleep and overall health. Because of the universal prevalence and reliance on electronics, the issue likely affects the vast majority of the American population.

What Other Industries Will Augmented Reality Disrupt?

Augmented reality has undoubtedly changed the world in a very short period of time.   The potential applications of this revolutionary technology are virtually endless and can influence to many different industries beyond gaming in the future.

Pokémon Go has shined such a big light on Augmented reality that nearly everyone has heard about it due to the immense media coverage this game-changing app has already had on our everyday life. Nintendo (NTDOY) stock continues to skyrocket in wild trading sessions unlike anything we’ve ever seen before. The app is changing how users are living and interacting with others.

The effects the new app has had on Nintendo’s stock and potential future ancillary businesses are enormous. Mobile gaming has changed literally overnight as other potential players such as Disney (DIS) and Time Warner (TWX) could enter the augmented reality gaming space due to their beloved franchises and arsenal of likeable characters.

We wanted to highlight other industries that this technology could potentially disrupt in the future.

Dating: Pokémon Go has already seen success linking up other users for dating purposes, as the game has gotten people out of their houses and driving them to public places like parks and beaches. Users already have common interests and the game makes for an easy opening connection. Pokémon GO has more downloads that Match’s (MTCH) Tinder accumulated in its 4 years of existence. It is somewhat of a Tinder 3D, and if a chat feature is added enabling users to communicate with players close by that would be a game changer.   Users are more likely to have success with dating through an AR game than a superficial chat that very well could not lead anywhere. Plus there’s already an activity that users have in common meaning there’s no awkward planning of potential dates and dull conversations about interests.

Real Estate: The act of holding up a phone and an augmented reality appears on the screen could ultimately play an important role in several different industries. The potential applications augmented reality could have in Real Estate is not to be discredited. By holding up a phone to any house and retrieving important details about the property ie (home values, bedrooms, and square footage, etc) would change the landscape of obtaining valuable real estate information. Big time players like Zillow (Z), Trulia (TRLA), Air bnb, and Redfin (RFNN) could certainly capitalize on this technology.

Retail: Augmented Reality could have a significant impact on the retail industry, holding up your phone to stores to see what deals they currently have, highlight new products, or see a menu to a restaurant you may want to vet out before entering. This is almost certainly what we will see in the future, and makes retail shopping unique and exciting again.

Exercise: Its no secret that Pokémon Go has done the unthinkable, gotten video game users to get outside of their houses and exercise.   We could see other exercise minded apps that ‘gamify’ life and give users incentives to get up and explore their neighborhoods by being active.

The potential is virtually endless. What other industries could you see augmented reality disrupt?

 

Netflix Makes it Hard to Chill

Netflix makes it hard to chill with the wild volatility the stock is currently experiencing. NFLX is still down sharply after getting crushed after releasing its Q2 Earnings.

EPS hare came in at .09 cents and revenue was in line at $2.1B, a 28% increase year over year.  Despite the earnings beat, share prices were down over 13% in after hours trading.

The reason for the sharp decline was concerns regarding Netflix’s subscriber numbers; the company added 1.7 million new subscribers, the lowest growth in 2 years. Total subscriber base now sits at 83.2 million worldwide.

Netflix is slowly transitioning to more original content and away from licensed content, despite a new deal with Disney content that is expected to launch in September in the US only. The streaming service will add over 600 hours of new content in 2016.

“50/50 long term that is a probable mix, original content has proven to be an efficient investments “ said Ted Sarandos, Netflix’s Chief Content Officer.

Netflix is also rolling out its international expansion strategy but taking their time in the process, suggesting that it is a learning process to see what content resonates with each localized market.

“The whole advantage of going broad in January was to increase our learning and we will continue to roll out improvements,” said Netflix CEO and Co Founder Reed Hastings.

The company still has ambitious targets to reach 100 million subscribers and feels like it is in reach with its international expansion.

 

Brazil’s Improving Investment Climate Boosts BRF SA

Key Takeaways:

  • BRF’s recent acquisition of overseas companies will enhance its vertical integration and improve profit margin in the following quarters.
  • Three top shareholders continued to add shares in the recent months.
  • The latest shift towards the Middle East and African markets will diversify its revenue stream.
  • Its stock has a strong support level at $13 and just broke above the resistance level of $15, which shows significant upside potential in the following a couple of months.

BRF S.A. (NYSE:BRFS) is the largest poultry exporter in the world and the largest food processor in Brazil, with a market cap of $12B. Brazil’s economy experience great recession last year, which caused a consumer spending contraction and Brazil’s currency Real depreciated by more than 30% vs the US Dollar. BRF generates more than half its revenue from the domestic market, meaning the Real’s decline impacted its earnings severely. BRFS slumped 40% in the late of last year, but an improving investment climate in Brazil makes this stock a compelling opportunity moving forward.

Source: Finviz

Investment Climate in Brazil

Contrary to the public view on the great recession in Brazil that was widely reported last year, the capital net inflow of investment in Brazil for the latest quarter has turned positively. It indicates Brazil’s economic recovery is well underway. (See Figure 2)

Source: trading economics

Global Diversification Strategy

BRF S.A. is making every effort to diversify its portfolio globally as soon as possible.

In 2015, the company spent $496 million to buy assets in Thailand, Argentina and the UK. BRFS expected to grow annual revenue overseas by $600 million.

In June 2016, The European Union and six countries in Southern Africa signed a free trade agreement. According to the latest SEC filing in July, BRF S.A. appointed new directors for African and Middle East subsidiaries. Now it separates Africa’s division from the Middle East’s division and has focused more on the African market. Meanwhile, the company also established a new subsidiary targeting the global Muslim market.

Increase of Institutional Ownership

The recent changes on top owners are also positive. Although the largest shareholder Singapore government group reduced some stakes, T. Rowe Price, BlackRock and Renaissance have added more shares, which lead to a net increase of institutional ownership in the recent quarter.

Conclusion:

BRF has P/E 16.8, P/B 3.1 and P/Cash Flow of 16.5 with Debt-to-Equity ratio of 1.02. Its current valuation is significantly lower than the consumer staple industry with strong positive cash flows. So far the stock trend line has formed a solid trough with strong support level around $13. The SMA 20 crossed above SMA 50, just broke above resistance level $15. The trend line has strong upside potential. (See Figure 1)

Considering profit margin improvement and global diversified strategies BRF S.A. has adopted to enhance its vertical integration and distribution capability, its earnings are expected to be significantly higher this quarter (will announce on July 28).

According to the latest news of Financial Times, BRF S.A. is projected to outperform the market in the following quarters. (See Figure 4 and Figure 5)

Using limit order around $15 to initial buy position would be a good approach to start investing in BRFS.

To read the full article click here 

Let us know what you think about investing in Brazil’s comeback, comment below.

8 Key Take Aways from Wells Fargo Q2 Earnings

Wells Fargo released their Q2 Earnings today.  Here are 5 key takeaways from WFC earnings call.

1. Wells Fargo Co. (NYSE: WFC) Q2 Net Income came in at  $5.56 B with EPS $1.01 vs  $5.46 B with EPS $0.99 in Q1, but lower than $5.72 B with EPS $1.03 of last year.

2. Revenue $22.2 B, same as Q1, up 4% from $21.3 B year over year .

3. Average loans $950.8 B, 2.5% up in Q1, and up 9 % from a year ago.

4. Average deposit $1236.7 B, up 1.4 % from Q1 and 4.3% Y/Y.

5. Charge-offs came in at $924 million, an increase of $274 million from last year, due to losses in the oil and gas portfolio.

6. Charge-offs of average loans 0.39%, up from 0.30% in Q2.

7. Reserve build of $150 million, comparing with reserve release of $350 million last year.

8. Common Equity Tier 1 Ratio – 10.6%.

The big bank said it was pleased with its performance in an environment of economic uncertainty.  WFC stock is down 3% in midday trading.

Nintendo Continues Pokemon Go Momentum with Another Big Announcement

Nintendo Co., Ltd (ADR) NTDOY 15.17% is having quite the week.  Pokémon GO has been one of the hottest news stories of the entire year, but the company’s not done yet.

The Japanese based company has managed continue its incredible momentum with its latest announcement

Nintendo managed to hit video game fans with another release, a relaunch of its beloved original console, the NES. The Nintendo Entertainment System console is one of the most iconic gaming platforms of all time, and will be released in a mini version for just $60 on November 11. Controllers will be sold for $10.

Related Link: What Pokémon GO Means For Nintendo Shareholders

While the new NES will look almost exactly like the old version, it’s so small that it will fit in your hand. The original launched in the US in 1985, which is largely credited for the rise of console gaming.

 The new NES will come with 30 games built into the system, including classics like Super Mario Bros, Donkey Kong, Pac MAN and TECMO Bowl.

NES will have a few upgrades since gamers last remembered it, including an HDMI cable to plug into high-definition TV and a way to suspend and save play without a password.

Nintendo’s stock is reacting positively, up nearly 14 percent to $30.18 in Thursday’s session.  Nintendo remains one of the most compelling long term investments in the market, with its revival coming nearly overnight.

Read more: http://www.benzinga.com/news/16/07/8218783/nintendo-follows-up-pok-mon-go-with-another-big-release#ixzz4EQFpRj5R

The Beginning of the End of the NRA?

In wake of the recent gun violence we have seen in America, Gun maker stocks Smith & Wesson (SWHC) and Sturm, Ruger & Company (RGR) have experienced quite a run up in recent weeks.

The NRA is almost synonymous with the Republican Party. Both have quite similar demographics – an aging, male dominated, racially insensitive, white base.   It’s politics are extremely defensive and unwilling to compromise and GOP candidates are almost undoubtedly aligned with the NRA if they want the nomination due to the NRA’s political pull.

The NRA power appears to be at an all time high, but that means it could be all downhill from here. The NRA demographics population is in steady decline, while Blacks and Hispanics increasingly support gun control, and both populations are growing. Extremism has been quite profitable for the NRA, but the Republican Party is learning once you go to the fringe; it’s quite difficult to come back from it.

The NRA relies on paranoia and fear, but it is their own insecurity regarding their dwindling demographic base that could ultimately be the end of their political reign. With the recent gun violence that we are seeing, gun control has never been a bigger issue.

Subprime Auto Loan Crisis Nearing?

Subprime Lending Crisis: First Homes, Now Autos? The Auto industry has been exploding, thanks to the proliferation of auto lending by the big manufacturers that have topped $1 Trillion, the US government is becoming wearier of risky auto loans.

Earlier in the year, Fitch ratings (one of the ‘Big Three’ credit ratings agencies) reported that seriously delinquent subprime auto loans have reached the highest level since 1996.

This is coming at a time when car sales hit an all time high in 2015 and are expected to top that record this year. Auto loans are up 40% since 2009, as some banks have lowered their underwriting standards for car loans to compete for market share.

Car Manufacturing Giants F and GM are trading at historically low P/E levels, 6 and 4.5 respectively, which may indicate future risk despite record auto sales.

If an auto loan bubble does occur, it is likely to have less of an impact than the mortgage crisis that we experienced in 2008, since the car industry makes up a much smaller portion of the lending industry than mortgages do. Banks are also much stronger now then they were 8 years ago.

Nintendo Skyrockets After Pokemon Go Release

Pokemon Go’s massive popularity has certainly been the hottest stock market story of the day.

Nintendo (NTDOY) stock has skyrocketed in trading after the new game has up 35% to start the week, hitting a new 52 week high and adding over $9 Billion in market cap in a very short time.

Launched on July 7 in the US, Pokemon Go’s success has sparked the conversation about the future of virtual reality and augmented reality.

Pokemon Go has shot to the top of the App Store. To put Pokemon Go’s viral popularity into perspective:

 

  • Pokemon Go has been installed on a greater number of Android devices than Tinder
  • The App is also closing in on Twitter’s daily active user rate and could soon surpass the social media app.
  • Usage on Android=43 minutes per day according to higher than Whatsapp, Snapchat, Instagram, and messanger
  • Nintendo Stock has experienced its largest single day gain since 1989, the first day the stock was available for trading in the US

 

If these facts weren’t amazing enough, Pokemon Go has done the unthinkable, getting video game users to exercise. Users are out walking more as they explore their neighborhoods and cities to find new Pokemon characters to catch.

 

Google trends have shown explosive growth in search volume for Pokemon Go.

Pokemon go

 

The capabilities of the app and augmented reality have just scratched the surface as this revolutionary new app has changed the future of mobile gaming.