Blue Horseshoe Loves Pinterest…Breaking $30 This Week
Baird (Outperform rating) says that “a few high-end estimates” skewed consensus for the quarter and praises PINS’ ongoing strength in U.S. ad growth and early signs of international traction.
Nomura (Buy): “Our estimates change only slightly, and we remain confident in our longer term thesis that Pinterest will be a much larger company over time as MAUs continue to ramp and the monetization gap continues to close.”
Credit Suisse (Neutral) says international MAUs and ARPUs fell short of the firm’s expectations but notes that the international sales ramp is just starting and expansion to new content verticals will likely bring on more advertisers.
Loop Capital analyst Alan Gould reiterated his upbeat view of Twitter Inc. shares (TWTR) on Friday, a day after the stock dropped on concerns about second-half comparisons and spending plans (http://www.marketwatch.com/story/analyst-now-seems-to-be-an-especially-opportune-time-to-sell-twitter-2019-06-13). “We do not view 2H comps as difficult or expectations aggressive,” Gould wrote. “We think user growth headwinds from health initiatives are softening as Twitter makes progress in identifying and deactivating suspicious accounts.”
He said that improved platform health can be a “growth driver” for Twitter, while the company faces several intriguing “enTacala Ingagement drivers” next year, including the U.S. presidential election and the Olympics in Tokyo. “While we think Twitter is not particularly event-dependent, we cannot ignore the 2020 calendar,” Gould wrote. He’s also upbeat about direct-response advertising, which could improve Twitter’s monetization strategy given that the ad format is a small part of revenue, especially relative to peers. Twitter shares are near flat in Friday trading. They’ve gained 26% so far this year, as the S&P 500 has risen 15%.
Potential Revenues Make It A Buy Opportunity
HEXO Corp. is a cannabis company with a very interesting exclusive agreement with the SQDC.
HEXO has a strategy that includes a wide range of cannabis-related products.
The merger with Newstrike Brands positions HEXO as an industry leader.
It is quite undervalued based on the fact that its revenues could reach more than $200 million in the next twelve months.
HEXO Corp. (TSE: HEXO, NYSE: HEXO) is a cannabis company that is growing revenues at a nice clip. The most distinguishable feature of this company is the exclusive distribution and supply agreements it has with Quebec, the largest agreement of the industry. Although HEXO currently serves only four provinces (pre-merger), it reaches 87 percent of the Canadian people.
Besides pure cannabis products, the company expects to develop cannabis-infused beverages, foods, and cosmetics in collaboration with larger companies, such as the partnership with Molson Coors Canada, named Truss Beverages. The Newstrike Brands’ merger will expose HEXO to four new provinces and expand production by 50%. With an enterprise value of $2.43 billion and 12-month-forward revenues in excess of $200 million, HEXO is a bit undervalued.
With a production capacity of 150,000 kg and facilities with more than 3 million sf, HEXO seems poised to generate significant revenues and grab a relevant market share in Canada and Europe. It is the preferred supplier and distributor in Quebec, which will secure it hundreds of millions in revenues in the years to come. It is also venturing in new areas like cannabis-infused beverages and foods. The company has closed a merger with Newstrike Brands that is accretive in many ways and seems approved by the market.
The management expects revenues to be more than $400 million in the fiscal years ending July 31, 2020, and according to my estimations, it could reach $200-$244 million in the 12 months from February 1, 2019 to January 31, 2020. With a forward EV/Revenues in the 10x-12x range, the stock seems quite undervalued. Remember it has been valued this way for a while although it has increased a bit and could not expand in valuation as you could expect.
U.S. equities were hit on Friday thanks to a surprise tariff tweet from President Trump toward Mexico. It’s got investors spooked about an escalating trade war. Let’s look at some top stock trades going into next week
Top Stock Trades for Tomorrow #4: AT&T
AT&T (NYSE:T) has been trading really well so far in 2019. Its series of higher lows have allowed AT&T to push new 52-week highs this year. But after a slight pullback over the past few sessions, the floor gave on Friday.
The stock tumbled over 4%, with reports suggestingAmazon (NASDAQ:AMZN) — which doesn’t look so hot itself and may well test the 200-day like we’ve been waiting for — might be interested in Boost Mobile.
It seems silly for T to fall on this, but no one wants to go against Amazon…in anything. So we’re seeing AT&T get lit up on Friday, with bulls hoping support comes into play soon. At $30.46 is the 200-day moving average, with the 38.2% retracement sitting at $30.35.
Below this area and $29.50 may be the next line in the sand — although its post-earnings lows are still north of $30.The sooner it reclaims the 50-day, the better. If not, more choppiness is to be expected.
By Bret Kenwell, InvestorPlace ContributorMay 31, 2019, 3:40 pm EDT