Following sharp declines in longer-term interest rates over the past four and a half months, including the U.S. 10-year yield falling from 3.2% to 2.4%, our sense is that many investors have a renewed interest in dividend investing strategies. Over the near-term, we expect tailwinds to remain in place for yield-focused investors, as the global economy works through the current ‘soft patch’ in economic data and central bankers remain on the sidelines.
Search Coverage List, Models & Reports
Search Results1-10 out of 1098
Over the near term, we see tailwinds in place for yield-focused investors as longer-term rates are likely to remain range bound, including the U.S. 10-year yield in a 2.4%-2.7% range, as the global economy works through the current ‘soft patch’ and the Fed remains on the sidelines. However, these tailwinds are likely to turn into headwinds as longer-term rates increase around the globe in the second half of the year on the back of a U.S.-China trade deal and as Chinese policymakers’ stimulus measures begin to take hold.
Increasingly, we’ve been focused on identifying potential short ideas and avoiding stock ‘blow-ups’. We use 10 screens, focused on metrics such as capital allocation, capital creation, earnings quality, sentiment, and valuation, to help identify future underperformers and potential ‘blow-ups’. These lists are also the backbone of the process that we use to identify potential shorts that warrant digging into deeper in order to find the most compelling short opportunities.
Twenty-First Century Fox completed the spin-off of its broadcast and cable assets into an entity called Fox Corporation (FOXA) on March 19, 2019. Following the spin-off, Twenty-First Century Fox was acquired by The Walt Disney Company (DIS). For the fiscal year ended 2018, FOX had revenues of $10.2 bn.
Yesterday (03/21/19), the IRS reported that average tax refunds (through 7 weeks of tax season) are flat y/y, consistent with the trend in the prior week, with approximately 55% of tax returns filed. Tax refunds ($) have fallen approx. 3%, while returns processed have fallen approx. 2% vs. last year. Our sense is that the numbers now reflect the most meaningful benefits of the delayed February 15th deadline to fully incorporate the tax returns with refundable credits (Earned Income Credits and Child Tax Credits). For this group of taxpayers, our detailed work suggests that refunds should be up 8-10% y/y ($24b) and the majority of this has likely been paid out to date.
While we expect some near-term disappointments on the consumer spending front into soft tax refund trends, our sense is that capital spending is poised for a pick-up. More specifically, our favorite capex forward indicators, such as capacity utilization and corporate profits, are consistent with U.S. capex growth of roughly 8% in 2019. This compares to consensus calling for 3%-4%. Additionally, we expect improving business confidence on the back of a U.S.-China trade deal and the immediate expensing of capital investments under the ‘Tax Cuts & Jobs Act’ to provide additional capital spending tailwinds.
Each month, we publish our favorite long idea stock screens. They encompass many investment styles and themes including value, growth, capital creation, cash usage, corporate actions, dividends, and financial institutions.
- 1 of 110
- next →