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First-ever dividend on CURO is bullish long-termI'm uncertain what CURO will do tomorrow after its mixed earnings report, lowish sales guidance, and announcement of a share buyback and first-ever dividend. What I do believe is that the initiation of a dividend will be quite bullish for the stock in the medium-to-long-term. Stocks that initiate a dividend for the first time tend, over the next 6-12 months, to move toward a higher multiple than they've traded at in the past. CURO currently trades at about 7.5 P/E and 3.5 forward P/E, according to data from Fidelity. Its PEG ratio is an extraordinarily low 0.3, making it one of the most undervalued stocks in the entire market. On CURO, I think it's reasonable to expect forward P/E to come up into the 10-15 range, at least, over the next year. That would require roughly tripling the share price from its current extremely undervalued level. The dividend yield, by the way, is a little over 2% at the current price, so you have that to look forward to as well. CURO's share buyback should also help boost the price, and then of course there's the expected 3.5%-10.5% growth of adjusted earnings next year. All in all, I think the signs point toward a strong future for CURO, and I likely will add some January 1 calls to the shares I already own.
CLong
by ChristopherCarrollSmith
Why GGAL is ready to recoverGGAL took a big hit to its stock price back in August after the Argentinian peso plunged and Argentina raised interest rates to 60%. Investors feared that would hurt GGAL's earnings, though I've seen no evidence that it has. Now the situation has stabilized, with the peso flat against the dollar for the last few months and interest rates gradually coming down. Rates currently sit at 50%. This should be good news for GGAL, which now has a 9.7/10 average analyst rating. Analysts have been greatly raising GGAL's earnings forecasts. GGAL currently trades at an astonishingly low multiple, even as its huge dividend raise this year should have it trading at a much higher multiple than it has in the past. All signs appear to be good for this stock, and I will be closely watching its earnings report in February to see what the impact of interest rate volatility has been.
NASDAQ:GGALLong
by ChristopherCarrollSmith
Financial sector looks ready to heat upRYF has been a slow-mover lately, but it's moving up today after a blockbuster earnings report from JP Morgan. RYF today is exiting oversold relative to the S&P 500. When you look at RYF's chart in isolation, it's right below a breakout level: With attractive valuations across the entire sector, I think this fund will indeed break out on the strength of JP Morgan earnings. We should see more earnings beats in the sector this quarter, especially from investment banks, because the same logic that led to JP Morgan's success (hot stock and bond markets) should favor other firms as well.
AMEX:RSPFLong
by ChristopherCarrollSmith
Outlook improving for Eaton VanceEaton Vance has had some analyst upgrades recently and now sits at a 9.3/10 analyst summary score. Its valuation is rated 85/100 by S&P Global Intelligence. It has beaten analyst estimates on its last three earnings reports, and analyst forecasts of EV's earnings have been improving. Fair value on EV is now conservatively something like $52 per share. Plus, EV's 3%+ dividend yield makes it relatively safe in a market downturn. EV appears to be bouncing today.
ELong
by ChristopherCarrollSmith
Banks look fairly valued, but pose a lot of recession riskAlong with energy, the financial sector is one of the few sectors currently at an attractive valuation. With a P/E of 13.3 and a price-to-book ratio of 1.4, banks are quite reasonably priced. The dividend yield of 1.8% is low compared to bonds or energy, however. What worries me about banks is that I think they have a lot of bad debt on the books that will never get repaid, meaning that their assets are inflated and the price-to-book ratio isn't as good as it looks. This is especially true of the holders of student loans, but we've also seen risky mortgages skyrocket in the last few years. With private debt now far above its 2007 pre-recession levels, any significant downturn in the labor market could trigger a wave of defaults and a crash in both the banking and real estate sectors. So however attractive this sector looks on paper, it poses a lot of recession risk. I'd say add this to your portfolio if it pulls back to the "buy" zone on the reverse RSI, but keep it underweight. Exit if we see a series of bad job reports.
AMEX:RSPFLong
by ChristopherCarrollSmith
Thin market and statistical arbitrage in safe-haven assetsThe period of the Christmas holidays is traditionally characterized by low liquidity in the financial markets (so-called “thin market”). So you can increase the level of aggressiveness in trading to the maximum due to the relatively insignificant volatility. But at the same time, the probability of flash crashes and sharp inexplicable jumps in volatility during such periods is maximum. We have not noticed any flash crashes on this Christmas, however, strange movements were present. Dynamics of safe-haven assets during Christmas week, for example. Gold has been growing steadily that day and consolidated above 1510. At the same time, the Japanese yen is under pressure and buyers tried to break through the resistance level at 109.60. Well, yen rate dynamics could be explained by Trump’s announcement that an official ceremony of signing an interim trade agreement between the United States and China will be held soon. But the growth of gold, in this case, is illogical. Who is right in the end: gold or the yen - we will see. And we have a trading idea about this. This is the so-called statistical arbitrage. The correlation level between gold and the Japanese yen in 2019 was quite high. That is, statistically, they should change synchronously. Now there is a desynchronization (divergence). It can be eliminated either if gold drops sharply, and the yen remains unchanged, or the yen rises sharply with gold remains at the same level. Both of these options guarantee earnings if you simultaneously sell gold and buy the Japanese yen. And finally, another excellent trading opportunity - sale of the Russian ruble. For those who are already in the pair's purchases, we would recommend adding twice the volume.
Long
by Trade24Fx
US records, Trump irritates Sino & Johnson is ready to celebrateMost Americans, as well as financial markets, received the day off from work on Thursday, therefore, we can focus on other financial markets. In today's review, we will focus on the oil market. Recall that next week the OPEC meeting should be held, which could potentially change the existing balance of forces in the oil market. But we will talk about this meeting later. Now let's focus on the current state of affairs. Oil growth last week was highly dependent on optimistic news about the progress in negotiations between the US and China. Accordingly, traders worked out a possible increase in demand in the oil market. But, as we already noted in the previous reviews, the markets are already tired of promises and waiting for results. Accordingly, oil growth stopped. The participants in the oil market can be understood, especially considering that Trump has nevertheless signed a law to support protesters in Hong Kong. Potentially, this could cause a new round of escalation in relations between the USA and China and another breakdown of the negotiation process between the countries. At the same time, statistics from the US come out bearish. First of all, it is about the USA reaching a new record in oil production: 12.9 million barrels per day. The result was an increase in US oil reserves, which in aggregate puts pressure on oil quotes and not only does not allow the asset to grow but also pulls it down. Our position in oil is as follows: we look for points for selling the asset on the intraday basis and sell oil in the medium term (current prices are quite favourable for this). But lets back to other news and markets. According to a YouGov poll, conservatives will win and get the vast majority in the December 12 elections in the UK. This means that Johnson will have every opportunity to ratify his Brexit deal. Thus, the probability of exit without a deal has become even more insignificant. For the pound, this is undoubtedly good news. Recall that its growth potential is far from exhausted. We are talking about 500-1000 points of the possible growth of GBPUSD. So we continue to recommend buying a pair.
FX:USOILShort
by Trade24Fx
Ally Financial an undervalued stock setting up for a bounceI don't love banking stocks right now because they have so much bad debt on the books, but Ally Financial looks good for at least a short-to-mid-term play. With a P/E of 7.62 and a valuation rating of 94/100 from S&P Global Market Intelligence, Ally looks very attractively valued. It beat estimates and raised guidance on its last earnings report, its earnings grew 10% last quarter vs. the same quarter the previous year. With a 2% dividend yield, Ally offers decent quarterly cash return as well as good growth potential. Best of all, Ally is sitting on a support and looks ready for a bounce from $30 per share. This is definitely my pick of the day. For more market news, stock analysis, and educational videos for traders, check out my YouTube channel, "Wall Street Petting Zoo."
NYSE:ALLYLong
by ChristopherCarrollSmith
PAYS entry 6.90 - 8.60Paysign has been in a decline lately, despite a series of earnings beats and really strong earnings growth. With some recent analyst upgrades, the stock is rated 9.1/10 by analysts. With several recent upgrades, sentiment seems to be improving. S&P Global Intelligence scores it 85/100 for its valuation, although both the P/E of 81.55 and the forward P/E of 43.62 look high at the current price. PAYS has some support from past volume in the 6.90 - 8.60 range and should be a decent buy anywhere in this zone. Watch the trend line for signs of a bullish reversal.
NASDAQ:PAYSLong
by ChristopherCarrollSmith
FOMC protocols & stormBlack swans did not fly by, and there were no important macroeconomic statistics or news injections either on the financial markets. In general, the lull that has lately reigned in the financial markets is lingering and the silence begins to become painful. Usually, it all ends with a storm. But a storm needs a trigger. For example, Trump’s next demarche and the failure of negotiations between the US and China with a sharp intensification of trade wars. But so far, markets do not believe in such a scenario. Goldman Sachs Group analysts predict the extinction of friction between the United States and China in 2020, and the WTO predicts the intensification of global trade next year: if by the end of 2019, world trade is expected to grow at 1.2%, then in 2020 WTO experts are counting on an increase of 2.7%. The dynamics of the VIX Index (Fear Index) is located in the area of historic lows. According to Deutsche Bank estimates, the currency market volatility for the major G10 currency pairs is at its lowest level over the past 45 years. The last time this happened only twice in the past - during 2007 and 2014. Nevertheless, the calmer the financial markets look and the more optimistic the forecasts of financial analysts sound, the more worrying it becomes for us since all these are signs of an impending storm. In this regard, our confidence in the advisability of medium-term purchases of safe-haven assets is growing stronger every day. But once again, we note that within the day, gold or the Japanese yen may well decline, especially if positive news from the trade negotiations appear. Today promises to be more interesting than Tuesday. Because inflation statistics for Canada will be published, as well as FOMC protocols. Given that the next Fed’s actions are not what we can predict now, the markets will study with interest in the text of the last FOMC meeting. Our position on the dollar, meanwhile, is unchanged: we believe that the threat/opportunity balance for the dollar has now shifted towards threats and will continue to look for points for its sales in the foreign exchange market.
FX:NGASShort
by Trade24Fx
JP Morgan unwilling to match SoftBank’s perks to WeWork CEO AdamWeWork but WeDon’tGetPaid. That’s the grim reality J.P. Morgan Chase bankers are facing now that WeWork is close to accepting a deal to sell control of the office-sharing company to SoftBank in a debt and equity package. J.P. Morgan would have been the so-called “lead left” adviser on WeWork’s IPO and lead financier on an associated $6 billion credit facility, two roles that would have brought in millions in fees. J.P. Morgan is also WeWork’s third-largest external shareholder -- client money rather than bank asset capital -- behind SoftBank and Benchmark. Instead, the bank will collect a smaller fee for raising money that WeWork won’t use, according to a person familiar with the matter. In the three weeks since WeWork withdrew its IPO filing, J.P. Morgan has been trying to secure alternative financing to save WeWork, which was set to run out of cash by mid-November CNBC reported last week. The bank has held talks with more than 100 investors to try and pull together a $5 billion debt package — an alternative to SoftBank’s bailout plan. J.P. Morgan has raised the money but won’t overvalue the company by putting in more equity, according to a person familiar with the matter. The bank also refused to add in a tender offer to its bailout package that would give co-founder and ex-CEO Adam Neumann a path to sell more shares, said the person, who asked not to be named because the plan is confidential. Additionally, SoftBank is paying hundreds of millions to Neumann to leave the board of directors, give up his voting shares and support SoftBank’s takeover, according to Axios — something J.P. Morgan was also unwilling to do, the person said. CNBC’s David Faber first reported earlier Monday that WeWork is planning on rejecting J.P. Morgan’s financing plan in favor of SoftBank’s, which combines debt and equity. SoftBank is planning on investing between $1 billion and $3 billion in a tender offer, in addition to accelerating a $1.5 billion equity infusion and $5 billion in debt financing, with other syndicates, people familiar with the matter said. WeWork’s board is likely to meet on Tuesday to finalize details about selling control of the company to SoftBank, said the people, who requested anonymity because the discussions are private. J.P. Morgan CEO Jamie Dimon had worked personally with Neumann on trying to get the company into the public markets. Dimon has made a point of breaking up the Goldman Sachs-Morgan Stanley tech IPO duopoly and has touted his bank’s recent success. “We’ve made huge progress in Silicon Valley,” Dimon said at a roundtable discussion in Silicon Valley last year.
NYSE:JPM
by oussamaelgadoum
Look to grab the bounce on Ally FinancialQuite possibly Ally Financial will bounce from its current price after dropping on an earnings beat. However, I am looking for it to bounce from the high-volume node at 30.01 tomorrow, and I've got a buy order set at that price. Ally has an attractive P/E of 8 and has a 95/100 valuation score from S&P Capital IQ. It faces some political risk from a possible third interest rate cut this year, but should perform well in the long term.
NYSE:ALLYLong
by ChristopherCarrollSmith
Keeping the peace in a troubled world, IMF forecastsEven though yesterday in Japan, the USA and Canada was a day off on the financial markets we cannot but call that day like a calm one. As it was expected, a mini pound bubble burst. The lack of new positive drivers forced the most impatient to take profits of about 500 points. Plus, fears that the deal will fail again remains relevant. In particular, the EU’s chief Brexit negotiator, Michel Barnier, said that the current version of the deal lacked detail, which could lead to potential time pressure (there is too little time to discuss all the important points - the summit will be held on Thursday). Our recommendation is to buy the GBP remains relevant. Remember about stop loss, because the potential of the pound growth is far from exhausted. It can still grow by 500 or even 1000 points. Today we are waiting for statistics on the UK labour market to come out, which may well trigger a surge of volatility. This should be taken into account when making trading decisions. Safe-haven assets remain relevant yesterday and the recommendation to buy the yen proved its worth. Indeed, there are many reasons for buying safe-haven assets. It would seem that the agreements between the United States and China have somewhat relieved the tension, but if you look at what is happening from another side, facts side, then nothing has been signed, and in general, we are talking only about the first phase of the agreement. That is, mass exiting safe-haven assets on such news would be at least illogical. As for the Middle East. Turkey’s ground military operation in Syria, the attack on the Iranian tanker - although these are links of different chains, they only emphasize how explosive the region is. Against this background, reassuring investors would look very strange. So today we will not only continue to buy the Japanese yen but will also restore our recommendation to buy gold. The reason for the growth of safe-haven assets today may be the IMFforecasts publication on the growth rate of the global economy. If (when) the Fund again lowers its forecasts, the demand for safe-haven assets will have to rise as well as the prices of gold and the Japanese yen. We draw our readers' attention to excellent points for entering a short position on the EURJPY. In this light, our position on oil purchases looks problematic. However, the tension in the Middle East and concerns about the oil supply on the market may well balance the weak forecasts for the growth of the global economy and, accordingly, the fears of weak oil demand in this regard. So while oil above 51.20 we will look for points for its purchases with a target of 55-56 (WTI brand).
Long
by Trade24Fx
Long-term view: looking for an entry on TD AmeritradeAmeritrade (like the financial sector as a whole) is way down, primarily due to the Fed's July interest rate cut. In my opinion, this has been a big overreaction. Ameritrade posted an earnings beat and upward guidance revision just before the Fed announcement, but the rate cut eclipsed Ameritrade's good news. Ameritrade has significant support levels around 43 and 38. I will looking for entries at these levels, especially at 38. (I find it's usually best to be greedy and pick lower entry points, because stocks often fall 1-3 support levels further than I expect them to.) Look for MACD of -1.5 as a signal to enter.
ALong
by ChristopherCarrollSmith
1
Ameritrade CEO change casts a pall over strong earnings resultsAmeritrade this afternoon announced both earnings and revenue that beat Wall Street expectations by a significant margin. However, they also announced that their CEO intends to step down by February 2020. The stock is down slightly in after-hours trading, perhaps partly because of the CEO announcement and partly because the hourly chart is overbought. However, looking at the chart, I find it hard to believe that Ameritrade won't end the day up tomorrow. The stock broke a trendline today and ended the day right on top of high-volume support. I think it would be hard for this stock to trend down. Surprisingly, analyst ratings on the stock aren't great, although S&P Capital IQ rates it extremely undervalued and extremely high-quality in terms of fundamentals. With a P/E of 14.5 and 27% GAAP earnings growth year over year, this looks like a buy to me. I can only guess that analysts have concerns about the financial sector overall.
ALong
by ChristopherCarrollSmith