Top 10 Clean Energy Stocks To Watch Right Now

tags:ITOT,DHX,UBSI,EXTR,CSU,CERN,CGW,CNS,EVTC,CHCO, What happened 

Solar stocks took a beating Monday after China cut its national incentives to install solar projects. Shares of solar panel manufacturers Canadian Solar Inc. (NASDAQ:CSIQ) fell as much as 14.5%, JinkoSolar Holding Co. (NYSE:JKS) dropped as much as 17%, and Daqo New Energy Corp (NYSE:DQ) fell as much as 31.3% while inverter manufacturer Enphase Energy Inc (NASDAQ:ENPH) fell up to 13.5%. By early afternoon, most major stocks in the solar industry were down double digits.

So what

There were two pieces of China's solar ruling, one having to do with distributed generation (DG) and the other with utility-scale solar.

Image source: Getty Images.

On the DG side, China put a cap of 10 gigawatts (GW) for new solar projects in 2018, down from 19 GW installed in 2017. According to Asia Europe Clean Energy Advisory Co (AECEA), there may already be more than 10 GW of DG projects installed in China, so that could make it tough to build any projects in the second half of the year.

Top 10 Clean Energy Stocks To Watch Right Now: iShares Core S&P Total US Stock Mkt (ITOT)

Advisors' Opinion:

• [By Todd Shriber, ETF Professor]

  Hundreds of exchange traded funds offer investors broad market exposure and many do so with nominal fees. Among the least expensive is the iShares Core S&P Total U.S. Stock Market ETF (NYSE: ITOT).

• [By Shane Hupp]

  Traders purchased shares of iShares S&P 1500 Index Fund (BMV:ITOT) on weakness during trading hours on Wednesday. $50.39 million flowed into the stock on the tick-up and $29.44 million flowed out of the stock on the tick-down, for a money net flow of $20.95 million into the stock. Of all equities tracked, iShares S&P 1500 Index Fund had the 33rd highest net in-flow for the day. iShares S&P 1500 Index Fund traded down ($0.14) for the day and closed at $62.27

Top 10 Clean Energy Stocks To Watch Right Now: DHI Group, Inc.(DHX)

Advisors' Opinion:

• [By Joseph Griffin]

  DHI Group, Inc. (NYSE:DHX) – Analysts at B. Riley lifted their Q2 2018 earnings per share estimates for DHI Group in a research report issued to clients and investors on Wednesday, May 9th. B. Riley analyst K. Anderson now forecasts that the technology company will post earnings of $0.05 per share for the quarter, up from their prior estimate of $0.04. B. Riley currently has a “Hold” rating and a $2.00 target price on the stock. B. Riley also issued estimates for DHI Group’s Q4 2018 earnings at $0.07 EPS and FY2019 earnings at $0.15 EPS.

• [By Max Byerly]

  DHI Group (NYSE:DHX) was downgraded by research analysts at ValuEngine from a “hold” rating to a “sell” rating in a research report issued on Tuesday.

• [By Max Byerly]

  TechTarget (NASDAQ:TTGT) and DHI Group (NYSE:DHX) are both small-cap computer and technology companies, but which is the superior investment? We will compare the two companies based on the strength of their risk, institutional ownership, valuation, earnings, analyst recommendations, dividends and profitability.

• [By Joseph Griffin]

  DHI Group Inc (NYSE:DHX) – Equities researchers at B. Riley reduced their FY2018 earnings estimates for shares of DHI Group in a research report issued on Monday, June 18th. B. Riley analyst K. Anderson now expects that the technology company will post earnings per share of $0.15 for the year, down from their previous estimate of $0.17. B. Riley currently has a “Hold” rating and a $2.00 target price on the stock. B. Riley also issued estimates for DHI Group’s Q4 2018 earnings at $0.06 EPS.

• [By Shane Hupp]

  DHI Group Inc (NYSE:DHX) shares rose 5.6% during trading on Monday . The stock traded as high as $2.85 and last traded at $2.85. Approximately 793,700 shares changed hands during trading, an increase of 49% from the average daily volume of 533,969 shares. The stock had previously closed at $2.70.

• [By Lisa Levin]

  Friday afternoon, the information technology shares surged 1.83 percent. Meanwhile, top gainers in the sector included Zuora, Inc. (NYSE: ZUO), up 22 percent, and DHI Group, Inc. (NYSE: DHX) up 30 percent.

Top 10 Clean Energy Stocks To Watch Right Now: United Bankshares Inc.(UBSI)

Advisors' Opinion:

• [By Shane Hupp]

  Get a free copy of the Zacks research report on United Bankshares (UBSI)

  For more information about research offerings from Zacks Investment Research, visit Zacks.com

• [By Shane Hupp]

  Shares of United Bankshares, Inc. (NASDAQ:UBSI) have been assigned an average recommendation of “Hold” from the seven brokerages that are currently covering the firm, Marketbeat.com reports. Five investment analysts have rated the stock with a hold recommendation and one has issued a buy recommendation on the company. The average 12 month price target among analysts that have issued ratings on the stock in the last year is $39.33.

• [By Stephan Byrd]

  BidaskClub upgraded shares of United Bankshares (NASDAQ:UBSI) from a hold rating to a buy rating in a research report sent to investors on Saturday.

• [By ]

  In the Lightning Round, Cramer was bullish on Salesforce.com (CRM) , American Airlines (AAL) , Align Technology (ALGN) , Procter & Gamble (PG) , United Bankshares (UBSI) , Valeant Pharmaceuticals (VRX) and Dominion Energy (D) .

Top 10 Clean Energy Stocks To Watch Right Now: Extreme Networks Inc.(EXTR)

Advisors' Opinion:

• [By Lisa Levin]

  Check out these big penny stock gainers and losers

  Losers Extreme Networks, Inc. (NASDAQ: EXTR) fell 26 percent to $8.70 in pre-market trading after the company reported downbeat earnings for its third quarter and issued weak Q4 guidance. Caesarstone Ltd. (NASDAQ: CSTE) shares fell 12.5 percent to $16.15 in pre-market trading after the company reported downbeat Q1 results and lowered its FY18 sales forecast. MINDBODY, Inc. (NASDAQ: MB) fell 11.7 percent to $38.65 in pre-market trading following mixed Q1 results. Vivint Solar, Inc. (NYSE: VSLR) fell 10 percent to $3.60 in pre-market trading after reporting Q1 miss. Applied Optoelectronics, Inc. (NASDAQ: AAOI) shares fell 10 percent to $31.63 in pre-market trading after reporting a Q1 earnings miss at 28 cents per share, 5 cents below estimates. Monster Beverage Corporation (NASDAQ: MNST) fell 7.7 percent to $49.00 in pre-market trading after reporting downbeat quarterly earnings. MaxLinear, Inc. (NYSE: MXL) fell 6.1 percent to $22.39 in pre-market trading following Q1 earnings. Virtu Financial, Inc. (NASDAQ: VIRT) fell 5.3 percent to $31.1604 in pre-market trading after announcing a 15 million share common stock secondary offering. Papa John's International, Inc. (NASDAQ: PZZA) shares fell 4.7 percent to $56 in pre-market trading after reporting downbeat Q1 earnings
• [By Joseph Griffin]

  Extreme Networks (NASDAQ:EXTR) posted its earnings results on Wednesday. The technology company reported $0.20 earnings per share (EPS) for the quarter, beating the consensus estimate of $0.19 by $0.01, Bloomberg Earnings reports. Extreme Networks had a positive return on equity of 43.61% and a negative net margin of 3.28%. The company had revenue of $278.30 million for the quarter, compared to analyst estimates of $279.22 million. During the same quarter in the previous year, the firm earned $0.17 earnings per share. The firm’s quarterly revenue was up 55.6% compared to the same quarter last year. Extreme Networks updated its Q1 guidance to $0.00-0.07 EPS.

• [By Shane Hupp]

  Los Angeles Capital Management & Equity Research Inc. lowered its stake in Extreme Networks, Inc (NASDAQ:EXTR) by 4.9% during the 2nd quarter, according to the company in its most recent filing with the Securities & Exchange Commission. The institutional investor owned 128,102 shares of the technology company’s stock after selling 6,640 shares during the quarter. Los Angeles Capital Management & Equity Research Inc.’s holdings in Extreme Networks were worth $1,020,000 as of its most recent SEC filing.

Top 10 Clean Energy Stocks To Watch Right Now: Capital Senior Living Corporation(CSU)

Advisors' Opinion:

• [By Stephan Byrd]

  Media stories about Capital Senior Living (NYSE:CSU) have trended somewhat positive on Sunday, Accern Sentiment Analysis reports. The research firm rates the sentiment of press coverage by reviewing more than 20 million blog and news sources in real-time. Accern ranks coverage of companies on a scale of negative one to one, with scores nearest to one being the most favorable. Capital Senior Living earned a daily sentiment score of 0.01 on Accern’s scale. Accern also assigned press coverage about the company an impact score of 46.062391046142 out of 100, indicating that recent press coverage is somewhat unlikely to have an impact on the stock’s share price in the immediate future.

• [By Logan Wallace]

  Barclays reissued their average rating on shares of Capital Senior Living (NYSE:CSU) in a research note released on Monday morning.

  Several other equities analysts have also issued reports on the company. ValuEngine lowered Capital Senior Living from a strong-buy rating to a buy rating in a research note on Thursday, December 27th. JMP Securities restated an outperform rating on shares of Capital Senior Living in a research note on Monday, December 31st. Finally, Zacks Investment Research upgraded Capital Senior Living from a hold rating to a buy rating and set a $8.75 price target on the stock in a research note on Monday, January 21st. Four research analysts have rated the stock with a hold rating and two have issued a buy rating to the stock. Capital Senior Living presently has a consensus rating of Hold and an average price target of $9.38.

• [By Shane Hupp]

  $900.00 upgraded shares of Constellation Software (TSE:CSU) from a neutral rating to an outperform rating in a report issued on Tuesday morning.

  Other equities analysts have also issued reports about the stock. National Bank Financial lifted their price target on shares of Constellation Software from C$850.00 to C$875.00 and gave the stock a sector perform rating in a report on Friday, April 27th. CIBC lifted their price target on shares of Constellation Software from C$865.00 to C$900.00 in a report on Friday, April 27th. lifted their price target on shares of Constellation Software to C$980.00 in a report on Thursday, April 26th. Finally, Scotiabank lifted their price target on shares of Constellation Software from C$880.00 to C$940.00 and gave the stock an outperform rating in a report on Tuesday, April 24th. Four equities research analysts have rated the stock with a hold rating and three have issued a buy rating to the stock. The stock has an average rating of Hold and a consensus price target of C$901.88.

Top 10 Clean Energy Stocks To Watch Right Now: Cerner Corporation(CERN)

Advisors' Opinion:

• [By Logan Wallace]

  Barclays began coverage on shares of Cerner (NASDAQ:CERN) in a report published on Thursday morning, Marketbeat.com reports. The brokerage issued an equal weight rating and a $70.00 price target on the stock.

• [By Joseph Griffin]

  Quadrature Capital Ltd acquired a new stake in Cerner Co. (NASDAQ:CERN) in the first quarter, according to its most recent filing with the SEC. The fund acquired 4,557 shares of the company’s stock, valued at approximately $264,000.

• [By Joseph Griffin]

  Cerner (NASDAQ:CERN) and Asure Software (NASDAQ:ASUR) are both medical companies, but which is the superior business? We will contrast the two companies based on the strength of their earnings, risk, analyst recommendations, dividends, institutional ownership, valuation and profitability.

• [By Logan Wallace]

  Get a free copy of the Zacks research report on Cerner (CERN)

  For more information about research offerings from Zacks Investment Research, visit Zacks.com

• [By Chris Lange]

  The stock posting the largest daily percentage loss in the S&P 500 ahead of the close was Cerner Corp. (NASDAQ: CERN) which fell about 4.5% to $60.82. The stock's 52-week range is $52.05 to $73.86. Volume was 2.1 million compared to the daily average volume of 2.2 million.

• [By Keith Speights]

  Veeva Systems (NYSE:VEEV) and Cerner Corporation (NASDAQ:CERN) stand out as two of the top providers of these healthcare systems. Veeva has definitely been the bigger winner lately, with its stock soaring nearly 40% so far in 2018. Meanwhile, Cerner stock is down more than 10% year to date.

Top 10 Clean Energy Stocks To Watch Right Now: Guggenheim S&P Global Water ETF (CGW)

Advisors' Opinion:

• [By Logan Wallace]

  Jane Street Group LLC bought a new stake in shares of Invesco S&P Global Water Index ETF (NYSEARCA:CGW) during the 2nd quarter, according to its most recent disclosure with the Securities and Exchange Commission. The institutional investor bought 209,583 shares of the company’s stock, valued at approximately $7,019,000.

Top 10 Clean Energy Stocks To Watch Right Now: Cohn & Steers Inc(CNS)

Advisors' Opinion:

• [By Max Byerly]

  Shares of Cohen & Steers, Inc. (NYSE:CNS) have earned a consensus rating of “Hold” from the six research firms that are presently covering the company, MarketBeat.com reports. Two investment analysts have rated the stock with a sell recommendation, three have issued a hold recommendation and one has given a buy recommendation to the company. The average 12-month target price among brokerages that have updated their coverage on the stock in the last year is $38.33.

Top 10 Clean Energy Stocks To Watch Right Now: Evertec, Inc.(EVTC)

Advisors' Opinion:

• [By Ethan Ryder]

  Shares of Evertec Inc (NYSE:EVTC) have been assigned an average rating of “Hold” from the twelve analysts that are currently covering the company, MarketBeat.com reports. One investment analyst has rated the stock with a sell recommendation, six have assigned a hold recommendation, three have given a buy recommendation and one has assigned a strong buy recommendation to the company. The average 1-year target price among brokerages that have covered the stock in the last year is $23.20.

• [By Shane Hupp]

  Equities research analysts at Raymond James initiated coverage on shares of Evertec (NYSE:EVTC) in a report released on Friday, MarketBeat reports. The firm set a “market perform” rating on the business services provider’s stock.

• [By Matthew Cochrane]

  Which individual stocks in the ETF's portfolio have done the heaviest lifting? This year, so far, that honor belongs to First Data Corp. (NYSE:FDC), Evertec Inc. (NYSE:EVTC), and Square Inc. (NYSE:SQ). That's after screening for companies in the fund's portfolio that trade on a domestic stock exchange and have a market cap greater than $1 billion. Let's take a closer look at all three to see why these companies' stocks have appreciated so far this year.

Top 10 Clean Energy Stocks To Watch Right Now: City Holding Company(CHCO)

Advisors' Opinion:

• [By Ethan Ryder]

  Get a free copy of the Zacks research report on City (CHCO)

  For more information about research offerings from Zacks Investment Research, visit Zacks.com

• [By Logan Wallace]

  Get a free copy of the Zacks research report on City (CHCO)

  For more information about research offerings from Zacks Investment Research, visit Zacks.com

CVR Energy (CVI) Issues Quarterly Earnings Results, Misses Expectations By $0.15 EPS

CVR Energy (NYSE:CVI) issued its quarterly earnings data on Wednesday. The oil and gas company reported $0.83 EPS for the quarter, missing the Thomson Reuters’ consensus estimate of $0.98 by ($0.15), Bloomberg Earnings reports. The business had revenue of $1.74 billion for the quarter. CVR Energy had a return on equity of 11.10% and a net margin of 5.84%.

CVI stock traded down $0.40 during trading hours on Thursday, reaching $42.58. 363,133 shares of the stock were exchanged, compared to its average volume of 444,086. The stock has a market cap of $4.32 billion, a PE ratio of 19.94 and a beta of 1.25. The company has a current ratio of 2.30, a quick ratio of 1.59 and a debt-to-equity ratio of 0.63. CVR Energy has a 12 month low of $28.14 and a 12 month high of $47.67.

Get CVR Energy alerts:

Several brokerages recently commented on CVI. Wolfe Research began coverage on CVR Energy in a research note on Monday, January 28th. They set a “market perform” rating and a $38.00 price objective on the stock. Barclays started coverage on CVR Energy in a research note on Thursday, January 24th. They set an “underweight” rating and a $47.00 price objective on the stock. Tudor Pickering started coverage on CVR Energy in a report on Thursday, December 13th. They set a “hold” rating and a $40.00 target price for the company. Goldman Sachs Group cut CVR Energy from a “buy” rating to a “neutral” rating and lowered their target price for the stock from $47.00 to $45.00 in a report on Tuesday, November 6th. Finally, Citigroup started coverage on CVR Energy in a report on Wednesday, October 31st. They set a “buy” rating and a $48.00 target price for the company. One research analyst has rated the stock with a sell rating, four have assigned a hold rating and one has issued a buy rating to the company’s stock. The stock presently has an average rating of “Hold” and an average target price of $43.60.

COPYRIGHT VIOLATION WARNING: “CVR Energy (CVI) Issues Quarterly Earnings Results, Misses Expectations By $0.15 EPS” was posted by Ticker Report and is the property of of Ticker Report. If you are reading this news story on another website, it was copied illegally and republished in violation of U.S. and international trademark & copyright legislation. The legal version of this news story can be read at https://www.tickerreport.com/banking-finance/4168558/cvr-energy-cvi-issues-quarterly-earnings-results-misses-expectations-by-0-15-eps.html.

About CVR Energy

CVR Energy, Inc, through its subsidiaries, engages in petroleum refining and nitrogen fertilizer manufacturing activities in the United States. The company operates through, Petroleum and Nitrogen Fertilizer segments. The Petroleum segment refines and markets transportation fuels, such as gasoline, diesel fuel, pet coke, natural gas liquids, slurry, sulfur, gas oil, asphalt, jet fuel, and other products.

Read More: What are trading strategies for the 52-week high/low?

Kinsale Capital Group, Inc. (KNSL) Q4 2018 Earnings Conference Call Transcript

Image source: The Motley Fool.

Kinsale Capital Group, Inc.  (NASDAQ:KNSL)Q4 2018 Earnings Conference CallFeb. 22, 2019, 9:00 a.m. ET

Contents: Prepared Remarks Questions and Answers Call Participants Prepared Remarks:

Operator

Good day, ladies and gentlemen, and welcome to the Fourth Quarter 2018 Kinsale Capital Group, Inc. Earnings Conference Call. At this time, all participants are in a listen only mode. Later, we will conduct a question-and-answer session, instructions will follow at that time.

(Operator Instructions). Before we get started, let me remind everyone that through the course of the teleconference, Kinsale's management may make comments that reflect their intentions, beliefs, expectations for the future. As always, these forward-looking statements are subject to certain risk factors, which could cause actual results to differ materially.

These risk factors are listed in the Company's various SEC filings including in the 2017 annual report on Form 10-K, which should be reviewed carefully. The Company has furnished a Form 8-K with the Securities and Exchange Commission that contains the press release announcing its fourth quarter results. Kinsale's management may also reference certain non-GAAP financial measures in the call today.

A reconciliation of the GAAP to these measures can be found in the press release, which is available at the Company's website at www.kinsalecapitalgroup.com.

I would now like to turn the conference over to Kinsale's President and CEO, Mr. Michael Kehoe. Please go ahead, sir.

Michael Kehoe -- President and Chief Executive Officer

Good morning, everyone, and thank you for joining us today. With me are Bryan Petrucelli, Kinsale's Chief Financial Officer; and Brian Haney, Chief Operating Officer. After a few introductory comments by me, Bryan Petrucelli will review Kinsale's financial highlights for the quarter; and then Brian Haney is going to provide some commentary on our quarterly performance and discuss our market outlook.

After that, we'll follow up with any questions you may have. Just as a reminder, the Kinsale's strategy combines disciplined underwriting and claim handling with technology enabled low costs to deliver attractive returns and growth.

We focus on smaller and sometimes hard to place accounts within the excess and surplus lines market and unlike competitors, we maintain absolute control over the underwriting and the claim management process, and do not outsource those functions to external parties.

We believe these strategies help Kinsale drive attractive loss ratios. Further, Kinsale uses proprietary technology and automation, combined with an owner/operator business culture, to operate at a significant expense advantage over many larger competitors and the combination of disciplined underwriting with low cost is an endgame winner every time.

For the fourth quarter, Kinsale posted strong growth and profitability. With a combined ratio of 87.1% for the quarter and 85.3% for the year, we generated a 15.4% operating return on equity for the year 2018. And as a reminder, our forward guidance is a mid 80's combined ratio and a mid teens operating return on equity.

The 87.1% combined ratio for the fourth quarter was slightly elevated by the $5 million pre-tax loss on Hurricane Michael in October. You know, we had previously estimated this loss as $4 million pre-tax developed slightly higher, since we issued that estimate in early November.

Gross written premiums grew by almost 27% for the fourth quarter and by 23.5% for the full year. This strong growth rate is driven by the strength of Kinsale's business model and by the ongoing dislocation within the excess and surplus lines market, and we expect this dislocation to continue for the near-term.

And with that, I'm going to turn it over to Bryan Petrucelli.

Bryan Paul Petrucelli -- Senior Vice President, Chief Financial Officer and Treasurer

Thanks Mike. The results for the fourth quarter and the full year were strong and generally in line with expectations. We continue to generate market leading combined ratios and believe it demonstrates the strength of our low cost model irrespective of market conditions.

We reported net income of $4.5 million for the fourth quarter of 2018, down slightly from $5.9 million for the fourth quarter of last year, and that's due primarily to Hurricane Michael as Mike just mentioned and the impact from unrealized losses related to our equity securities that are now reported through the income statement as a result of the GAAP accounting rule change in 2018.

The decrease was mitigated somewhat by a lower effective tax rate in 2018 and a charge in 2017 related to the enactment of the Tax Reform Act. Net operating earnings increased by 29.8% to $10.1 million compared to $7.8 million in the fourth quarter of last year, the increase in operating earnings was largely driven by the lower effective tax rate in 2018 and at the tax charge last year that I just mentioned.

Our effective income tax rate was 16.5% for the full year of 2018, compared to 35.4% last year, and lower primarily due to the Tax Reform Act and tax benefits from the exercise of stock options and interest on our tax exempt investments.

The Company generated underwriting income of $7.7 million and a combined ratio of 87.1% compared to $8 million and 83.1% for the fourth quarter of last year. The combined ratio for the fourth quarter of 2018 included 2.2 points from net favorable prior year loss reserve development, compared to 1.1 points from net unfavorable prior year loss reserve development last year.

Cat activity this quarter contributed to 8.7 points to the combined ratio, compared to 1.8 points in the fourth quarter of 2017. The year-to-date combined ratio of 85.3% included 2.7 points from cat losses and benefited from 3.3 points of net favorable prior year loss reserve development compared to a combined ratio of 84% last year that included 5.1 points from cat losses and 6.4 points from net favorable prior year loss reserve development.

Annualized operating return on equity of 15.5% for the fourth quarter of 2018 and 15.4% for the full year of 2018 was in line with our mid-teens guidance compared to 13.2% for the fourth quarter and 11.9% for the full year last year.

Gross written premiums were $72.1 million representing a 27% over the fourth quarter of 2017 and year-to-date, as Mike mentioned written premiums have increased 23.5% over last year. Increases continue to be generated from an overall increase in underwriting activity across most lines of business and due to the reasons Mike mentioned previously including improved market conditions.

Brian Haney will get into this in a little more detail here shortly. On the investment side, no significant change in strategy and net investment income increased by 48.8% over the fourth quarter of last year to $4.6 million from $3.1 million last year and as a result of this continued growth in the investment portfolio and rising interest rates.

Gross investment returns increased to 3% from 2.4% last year, basic and diluted operating EPS were $0.20 and $0.40 per share respectively for the quarter -- fourth quarter 2018 compared to $0.27 and $0.36 per share last year.

And with that, I'll pass it over the Brian Haney.

Brian Haney -- Chief Operating Officer

Thanks Bryan. As mentioned earlier, premium grew 27% in the fourth quarter which is the highest rate of any quarter for the year and the highest growth rate in nearly five years. Our Allied Health Care Commercial Property and Management liability divisions continued to grow nicely as does our inland marine division. Our Aspera business was up (ph) 41% for the quarter.

Overall, submissions continue to increase at a strong pace. Submissions in the fourth quarter were up 23% (ph) over the fourth quarter of 2017. We look at submissions as a good leading indicator for growth rates going forward, and the vast majority of our 17 divisions have had and continue to have positive growth in submissions.

The growth rates in premium and submissions have encouraged us to be more assertive in pushing for rate increases. We have a very heterogenous mix of business, so it is difficult to boil all the various rate movement down to one single number, but if we had to do that, we'd say the rate increase was somewhere in the 3% to 5% range and gradually accelerating. Certain lines like property had much stronger rate increases.

We expect to keep pushing bigger rate increases going forward. While it is tough for us to know exactly what is driving the increased load business, I suspect that the announcement from many competitors of scaling back on certain programs or exiting certain programs altogether has had something to do with it.

As a reminder, we don't give out the pen to third parties, but when competitor programs are falling apart, we do tend to see a rush on submissions. Accounts which would previously not have been shopped due to the presence of an easily accessible, often under priced program will tend to be shopped aggressively when the cheap insurance is no longer available.

I have said in the past that I suspect we would continue to see more poor results coming out of the programs in the next few years. That's exactly what we've been seeing and I suspect we're not done seeing it.

So, we feel optimistic about the state of things. The acceleration of submission growth shows no signs of bating. Our simple yet effective business model combined with our excellent systems has well positioned us to take full advantage of the opportunities we are now seeing. We have a great team that is working hard to deliver superior returns to our investors and I think the future seems very bright for us, and with that I'll turn it over to Mike.

Michael Kehoe -- President and Chief Executive Officer

Thanks Brian. Operator, we're now ready to field any questions in the queue.

Questions and Answers:

Operator

Thank you. (Operator Instructions). And our first question comes from Mark Hughes from Suntrust. Your line is now open.

Mark Hughes -- SunTrust Robinson -- Analyst

Thank you very much. Good morning.

Bryan Paul Petrucelli -- Senior Vice President, Chief Financial Officer and Treasurer

Good morning, Mark.

Mark Hughes -- SunTrust Robinson -- Analyst

The ceded premiums this quarter were down a bit sequentially, they were kind of steady year-over-year, the ratio was and I think usually the property has higher ceded premiums if I remember correctly it sounds like you did well on the commercial property in terms of top line growth, but still your ceded premiums were down, was that more of a seasonal issue or is -- there is some other mix going on there?

Bryan Paul Petrucelli -- Senior Vice President, Chief Financial Officer and Treasurer

I think the ratio of ceded premiums is going to fluctuate almost exclusively with the mix of business. Our primary casualty business, we don't have any reinsurance on that book. The excess casualty depending on the limits we cede are a very high percentage, and the properties in the middle. So the mix of business is going to cause a little bit of a fluctuation there.

Mark Hughes -- SunTrust Robinson -- Analyst

Okay. Understood. The dislocation, does that include Lloyd's, are you seeing a movement there?

Bryan Paul Petrucelli -- Senior Vice President, Chief Financial Officer and Treasurer

Absolutely. Lloyd's and AIG, I think they've been the two big E&S (ph) writers. If you look at Lloyd's collectively, I think it was 23% market share in 2017, the 2018 statistics haven't been published yet, but AIG has always been the second largest writer of recent years and they're both going through a lot of restructuring.

But it's not limited to those two entities, I mean there's all sorts of activity that you see in the trade press of companies trying to triage their books of business to improve profitability, and so I think that's for a healthy company that's been disciplined in its underwriting, it's a pretty favorable opportunity to not just grow the business, but expand margins at the same time.

Mark Hughes -- SunTrust Robinson -- Analyst

Your current accident year loss is relatively a nice decline this quarter, I know in the past you've had a pattern of sort of being conservative upfront and seeing how the year develops, did -- when you think about 2018 did you, was this a function of a better loss experience or the better pricing kicking in that gave you that -- that gain or was that your conservatism kind of playing out for the full year.

Bryan Paul Petrucelli -- Senior Vice President, Chief Financial Officer and Treasurer

I think it's mostly attributable to just the normal variability that you're going to have in reported losses. I think we're clearly focused on being conservative in how we reserve our book of business, that's a very explicit goal for us as a Company.

We want to set our reserves in a conservative fashion so that they're likely to develop favorably in the years ahead, and if you look at our track record now over nine accident years, all of our accident years have developed favorably except for the 2011 year which was a very modest size year. It was our first full year in business. So no change in our strategy of being conservative, I think any kind of variation from quarter-to quarter or even year-to-year would just be kind of within the normal bounds of variability.

Mark Hughes -- SunTrust Robinson -- Analyst

Then final quick one, Brian, what's the best tax rate to use for 2019?

Brian Haney -- Chief Operating Officer

Yeah, Mark. It's a little tough to tell because what really drives that variability from quarter-to-quarter is the volume of stock options that are exercised on any period. I think what you typically see is that there tends to be more activity in the second half of the year than the first.

So I think the best way to look at it is to look at that annual rate and stick with that. I think it is going to bounce around from quarter-to-quarter just based on what I just said.

Mark Hughes -- SunTrust Robinson -- Analyst

Thank you very much.

Bryan Paul Petrucelli -- Senior Vice President, Chief Financial Officer and Treasurer

Thanks Mark.

Operator

Thank you. And our next question comes from Jeff Schmitt from William Blair. Your line is now open.

Jeff Schmitt -- William Blair & Company LLC -- Analyst

Hi. Good morning everyone. I believe you said growth of Aspera was 41%. Could you maybe discuss where that growth where you're seeing that growth and sort of what your outlook is for 2019?

Bryan Paul Petrucelli -- Senior Vice President, Chief Financial Officer and Treasurer

Well, we're seeing that through some geographic expansion. So we've entered a few new states recently, we're also seeing that expansion from getting into more commercial products. So the bulk of what we write now is personal lines, but we do have the capability to write commercial lines within Aspera and that is been growing as well.

So it's really a combination of geographic expansion into a few states and expansion of the commercial product line.

Jeff Schmitt -- William Blair & Company LLC -- Analyst

What type of commercial products is... I'm sorry...

Brian Haney -- Chief Operating Officer

Yeah, I was just going to say I think our -- we view that as part of our growth story. Over the years ahead, it's grown from zero to I think slightly below 5% of our total volume over the last couple of years and we would expect that trajectory to continue.

Jeff Schmitt -- William Blair & Company LLC -- Analyst

What type of commercial products are going through there?

Bryan Paul Petrucelli -- Senior Vice President, Chief Financial Officer and Treasurer

It's similar to what we write on the individual risk side within the other divisions -- I would say they're smaller there. So if you were to look at what the most -- the small business division within the rest of the Company is most similar to what Aspera writes on the commercial side.

Jeff Schmitt -- William Blair & Company LLC -- Analyst

Okay. And then cash and cash equivalents continues to be pretty high at the current $75 million. What's the strategy there, I mean are you thinking of M&A opportunities or why wouldn't that be put to work in the investment portfolio?

Bryan Paul Petrucelli -- Senior Vice President, Chief Financial Officer and Treasurer

No, I think it's just holding onto it, looking for the best investment opportunities we can have. We have no expectation of M&A in the foreseeable future.

Michael Kehoe -- President and Chief Executive Officer

Yeah. Our strategy -- this is my Mike Kehoe, Jeff, our strategy is to grow organically. We think we've got a very competitive model with our expense advantage, with our focus on a fairly defined niche, use of automation to drive kind of best in class service levels. We think we can grow at a healthy clip without any kind of a deal making.

Jeff Schmitt -- William Blair & Company LLC -- Analyst

Okay. Thank you.

Operator

Thank you. (Operator Instructions). And our next question comes from Scott Hellenic (ph) from RBC Capital Market. Your line is now open.

Scott Hellenic -- RBC Capital Market -- Analyst

Thanks. Good morning. Just the first question I want to follow up a little bit on the dislocation that you're seeing. If you could talk a little bit more about some of the specific areas, I know you mentioned Lloyd's and AIG, but is there any particular lines that come to mind that sort of stick out there and did you see a big change in that, an increase in the dislocation Q4 versus Q3?

Brian Haney -- Chief Operating Officer

I would say this is Brian Haney. I would say in our Allied Health lines we're definitely seeing an uptick in the last 12 months, I would say versus last quarter, it's similar -- versus last year I think it's much more favorable us. Commercial property I think still is continuing to benefit from the impacts of all the catastrophes. So again that's one where it's no more dislocated if you will than it was last quarter, but a lot more so than it would have been a year and a half ago. That's the one that jumped (inaudible) the biggest ones.

Bryan Paul Petrucelli -- Senior Vice President, Chief Financial Officer and Treasurer

One thing I can think of is, there was a headline a month or so ago where AIG announced they were going to discontinue about half their program book and that probably covers a whole range of different coverage and lines of business, so I think it's a broad reassessment of profitability across the industry and it's a good tailwind for a Company like Kinsale.

Scott Hellenic -- RBC Capital Market -- Analyst

Yeah. And so are you seeing -- is your appetite a little bit bigger now on the property side just given kind of the change in market conditions than it was maybe a few years ago and just on the pricing side, the dislocation that you're seeing.

Bryan Paul Petrucelli -- Senior Vice President, Chief Financial Officer and Treasurer

Yes, I would say arbitrage (ph) that any bigger it's probably smaller, just we're seeing a lot more opportunities and getting a lot more quotes out and then just writing a lot more, but yeah, we're not getting more expansive in what we were willing to write.

Scott Hellenic -- RBC Capital Market -- Analyst

Right. Okay. I mean, I wanted to follow up on a comment Bryan you made a couple of quarters ago about some opportunities to write some larger account business than you had seen before, and I was wondering if you -- you did mention it in Q3, but wondering if you saw that again in Q4 and that's some of the growth drivers is also just seeing the bigger premium accounts than maybe we had a few years ago.

Bryan Paul Petrucelli -- Senior Vice President, Chief Financial Officer and Treasurer

Yeah. Keep in mind, large accounts are a small percentage of what we do. So it's never going to -- the bread and butter of what we do is always going to be small accounts. That being said, it was -- we have seen a trend that there's just a lot more of those accounts available. We're very selective when we look at large accounts because they still tend to draw a rational competition. That all being said, fourth quarter of 2018 was better for us in terms of premium on large accounts than fourth quarter of 2017.

Scott Hellenic -- RBC Capital Market -- Analyst

Okay, that's fair. And then I guess the last question I have was just the -- so you have 17 divisions now and is there any plans to expand that into some new areas for '19 or '20, I know there's probably not anything to announce, but anything you can share on that front or just keep growing on -- in the lines you're in right now?

Bryan Paul Petrucelli -- Senior Vice President, Chief Financial Officer and Treasurer

I think part of being an E&S Company is, you're always looking for new opportunities. I mean it's a very dynamic market in which we work and focus, but given the strong top line growth across our portfolio, there's probably a little bit more of a focus on slightly more focus on just growing the business that we're already targeting.

We're also putting a lot of effort into system development and process improvement, and that's an area of emphasis that's not so much expanding the product line, it's just being more efficient and smarter about how we handle the current business. So that's kind of our near-term focus.

Scott Hellenic -- RBC Capital Market -- Analyst

Got you. Okay, that makes sense. All right. Thanks a lot.

Bryan Paul Petrucelli -- Senior Vice President, Chief Financial Officer and Treasurer

Okay. Thank you.

Operator

Thank you. And I'm are not showing any further questions. I would now like to turn the call back to President and CEO, Mr. Michael Kehoe for any further remarks.

Michael Kehoe -- President and Chief Executive Officer

Okay. Thank you, operator, and thanks everybody for joining us and we look forward to speaking with you again in few months after the first quarter. Have a good day.

Operator

Ladies and gentlemen, thank you for your participation in today's conference. This conclude today's program, you may all disconnect. Everyone, have a great day.

Duration: 24 minutes

Call participants:

Michael Kehoe -- President and Chief Executive Officer

Bryan Paul Petrucelli -- Senior Vice President, Chief Financial Officer and Treasurer

Brian Haney -- Chief Operating Officer

Mark Hughes -- SunTrust Robinson -- Analyst

Jeff Schmitt -- William Blair & Company LLC -- Analyst

Scott Hellenic -- RBC Capital Market -- Analyst

More KNSL analysis

Transcript powered by AlphaStreet

This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability.

Soybean futures expected to trade sideways to lower: Angel Commodities

Angel Commodities' report on Soybean

NCDEX Mar Soybean futures edged lower on fresh selling by the market participants. It slipped to 4-week low last week on higher production forecasts but now trend look positive. As per latest press release by SOPA, India's soybean output is likely to rise by 38% to 114.8 lakh tonnes this year due to increase in average yield across the country. Demand for Indian soymeal is growing from Europe and West Asia while Iran is emerging as one of the largest buyers. Soymeal exports up by 98% on year in January to 210,166 tonne, as per SEA press release. Overall, Soymeal exports are higher by 16% at 10.66 lakh tonnes for the Apr- Jan period compared to last year. Soymeal exports from India are expected to rise 25% on year to around 15 lakh tn in 2018-19 (Apr-Mar).

CBOT Soybean ended Wednesday with gains mainly on technical buying and support from the cut in forecast for Brazil's 2019 soy exports. Brazil is expected to export 70.2 million tonnes of soy in 2019, consultancy. The forecast for Brazil's total soybean production was revised down slightly to 116.4 mt, compared with the prior forecast earlier this month of 116.5 mt, Agroconsult said on Wednesday, cutting its previous forecast of 73 mt. US acreage estimates from Informa were trimmed by 160,000 acres to 86.044 million.

Outlook

Soybean futures expected to trade sideways to lower on expectation of more correction. However, reports of lower soy oil imports, which may need higher crushing in coming weeks.

For all commodities report, click here

Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

Read More First Published on Feb 21, 2019 11:26 am

Hot Stocks To Watch Right Now

tags:WLFC,TTC,LXP,HYG,CX, #lazy-img-328028054:before{padding-top:62.41666666666668%;}

Exports of British pork to China have almost quadrupled since the Asian nation started allowing the shipments in 2012 to meet increasing demand. The world’s biggest consumer of the meat now accounts for almost a fifth of U.K. exports, and it’s likely to become more important as the U.K. seeks new markets while Brexit talks drag on. “With Brexit uncertainty surrounding future trade between the U.K. and EU, it is crucial for the U.K. to find and exploit as many opportunities presented in the Far East,” said Jonathan Eckley, head of exports for Asia-Pacific at the Agricultural and Horticultural Development Board.

Hot Stocks To Watch Right Now: Willis Lease Finance Corporation(WLFC)

Advisors' Opinion:

• [By Stephan Byrd]

  Willis Lease Finance Co. (NASDAQ:WLFC) CEO Charles F. Iv Willis sold 4,718 shares of the firm’s stock in a transaction on Tuesday, June 26th. The shares were sold at an average price of $31.19, for a total transaction of $147,154.42. Following the sale, the chief executive officer now owns 706,058 shares in the company, valued at approximately $22,021,949.02. The transaction was disclosed in a document filed with the SEC, which is accessible through this link.

Hot Stocks To Watch Right Now: Toro Company (TTC)

Advisors' Opinion:

• [By Shane Hupp]

  Toro (NYSE:TTC) – Dougherty & Co cut their Q2 2018 earnings per share (EPS) estimates for Toro in a report issued on Tuesday, May 22nd. Dougherty & Co analyst J. Fisher now expects that the company will post earnings of $1.18 per share for the quarter, down from their previous estimate of $1.22.

• [By Ethan Ryder]

  Great West Life Assurance Co. Can cut its holdings in shares of Toro Co (NYSE:TTC) by 1.1% in the second quarter, according to its most recent filing with the Securities and Exchange Commission. The fund owned 82,377 shares of the company’s stock after selling 887 shares during the quarter. Great West Life Assurance Co. Can owned 0.08% of Toro worth $4,967,000 at the end of the most recent reporting period.

• [By Joseph Griffin]

  TTC Protocol (CURRENCY:TTC) traded 4.1% higher against the US dollar during the one day period ending at 22:00 PM ET on September 18th. TTC Protocol has a market capitalization of $11.78 million and approximately $1.68 million worth of TTC Protocol was traded on exchanges in the last 24 hours. One TTC Protocol token can currently be bought for $0.0523 or 0.00000824 BTC on cryptocurrency exchanges including UEX, Bibox, DEx.top and BitForex. Over the last seven days, TTC Protocol has traded 34.3% higher against the US dollar.

Hot Stocks To Watch Right Now: Lexington Realty Trust(LXP)

Advisors' Opinion:

• [By Ethan Ryder]

  Wells Fargo & Co upgraded shares of Lexington Realty Trust (NYSE:LXP) from a market perform rating to an outperform rating in a research note issued to investors on Thursday, MarketBeat.com reports. Wells Fargo & Co currently has $9.00 target price on the real estate investment trust’s stock, up from their prior target price of $8.50.

• [By Shane Hupp]

  Get a free copy of the Zacks research report on Lexington Realty Trust (LXP)

  For more information about research offerings from Zacks Investment Research, visit Zacks.com

• [By Stephan Byrd]

  Lexington Realty Trust (NYSE:LXP) is scheduled to be releasing its earnings data before the market opens on Tuesday, May 8th. Analysts expect Lexington Realty Trust to post earnings of $0.06 per share for the quarter. Lexington Realty Trust has set its FY18 guidance at $0.95-0.98 EPS.

• [By Stephan Byrd]

  Get a free copy of the Zacks research report on Lexington Realty Trust (LXP)

  For more information about research offerings from Zacks Investment Research, visit Zacks.com

• [By Stephan Byrd]

  Get a free copy of the Zacks research report on Lexington Realty Trust (LXP)

  For more information about research offerings from Zacks Investment Research, visit Zacks.com

Hot Stocks To Watch Right Now: iShares iBoxx $ High Yield Corporate Bd (HYG)

Advisors' Opinion:

• [By WWW.GURUFOCUS.COM]

  For the details of Virtus Investment Advisers, Inc.'s stock buys and sells, go to http://www.gurufocus.com/StockBuy.php?GuruName=Virtus+Investment+Advisers%2C+Inc.

  These are the top 5 holdings of Virtus Investment Advisers, Inc.iShares iBoxx $ Investment Grade Corporate Bond (LQD) - 11,144 shares, 51.91% of the total portfolio. New PositioniShares iBoxx $ High Yield Corporate Bond (HYG) - 8,200 shares, 28.37% of the total portfolio. New PositionSPDR Bloomberg Barclays High Yield Bond (JNK) - 13,660 shares, 19.72% of the total portfolio. Invesco Senior Loan (BKLN) - 0 shares, 0% of the total portfolio. Shares reduced by 10000%Caesars Entertainment Corp (CZR) - 0 shares, 0% of the total portfolio. Shares reduced by 10000%New Purchase:
• [By WWW.GURUFOCUS.COM]

  For the details of Nationwide Fund Advisors's stock buys and sells, go to http://www.gurufocus.com/StockBuy.php?GuruName=Nationwide+Fund+Advisors

  These are the top 5 holdings of Nationwide Fund AdvisorsiShares Core MSCI Emerging Markets (IEMG) - 4,698,924 shares, 74.25% of the total portfolio. Shares added by 119.53%iShares 20+ Year Treasury Bond ETF (TLT) - 536,574 shares, 17.7% of the total portfolio. Shares added by 79.94%iShares iBoxx $ High Yield Corporate Bond (HYG) - 347,518 shares, 8.05% of the total portfolio. Shares reduced by 20.57%
• [By Joseph Griffin]

  Traders purchased shares of iShares iBoxx $ High Yield Corporate Bond ETF (NYSEARCA:HYG) on weakness during trading hours on Monday. $192.39 million flowed into the stock on the tick-up and $84.01 million flowed out of the stock on the tick-down, for a money net flow of $108.38 million into the stock. Of all equities tracked, iShares iBoxx $ High Yield Corporate Bond ETF had the 8th highest net in-flow for the day. iShares iBoxx $ High Yield Corporate Bond ETF traded down ($0.06) for the day and closed at $85.83

• [By Stephan Byrd]

  PFS Investments Inc. decreased its position in shares of iShares iBoxx $ High Yield Corporate Bond ETF (NYSEARCA:HYG) by 11.9% during the 3rd quarter, according to the company in its most recent Form 13F filing with the Securities and Exchange Commission (SEC). The institutional investor owned 85,838 shares of the exchange traded fund’s stock after selling 11,634 shares during the period. PFS Investments Inc.’s holdings in iShares iBoxx $ High Yield Corporate Bond ETF were worth $7,420,000 at the end of the most recent quarter.

Hot Stocks To Watch Right Now: Cemex S.A.B. de C.V.(CX)

Advisors' Opinion:

• [By Paul Ausick]

  Cemex SAB de CV (NYSE: CX) traded down 4% Tuesday and posted a new 52-week low of $6.68 after closing Monday at $6.96. The stock’s 52-week high is $10.37. Volume was around 12.5 million, about 25% above the daily average of around 10.5 million. The company had no specific news.

• [By Paul Ausick]

  Cemex SAB de CV (NYSE: CX) fell by about 3.4% Monday to post a new 52-week low of $5.77 after closing at $5.96 on Friday. The 52-week high is $10.37. Volume of about 6.8 million was about 35% below the daily average of about 10.3 million. The company had no specific news.

• [By Logan Wallace]

  Shares of Cemex SAB de CV (NYSE:CX) have earned an average rating of “Hold” from the twelve analysts that are covering the company, MarketBeat Ratings reports. Two equities research analysts have rated the stock with a sell rating, five have issued a hold rating and five have issued a buy rating on the company. The average 12 month target price among brokers that have issued a report on the stock in the last year is $9.29.

• [By ]

  Cemex (NYSE: CX) has seen its shares plunge 27% over the last year as enthusiasm for an infrastructure boom waned and U.S.-Mexico relations soured. The company books a quarter of its sales from each of its three biggest markets -- Mexico, Europe, and the United States -- with another 15% from South and Central America.

• [By Jason Hall]

  It's International Week on Industry Focus! On today's Energy and Industrials episode, host Sarah Priestley and Motley Fool contributor Jason Hall walk listeners through a plethora of interesting companies to check out, from infrastructure management to an oil producer and more. Mexican cement and clinker company Cemex (NYSE:CX) is down pretty significantly after the global recession, but could be poised for great long-term growth.

Vector Group (VGR) Bonds Drop 1% During Trading

An issue of Vector Group Ltd (NYSE:VGR) debt fell 1% against its face value during trading on Monday. The high-yield issue of debt has a 6.125% coupon and will mature on February 1, 2025. The bonds in the issue are now trading at $88.13 and were trading at $88.88 last week. Price moves in a company’s debt in credit markets sometimes anticipate parallel moves in its stock price.

A number of research firms have commented on VGR. Oppenheimer restated a “hold” rating on shares of Vector Group in a research note on Wednesday, November 7th. Zacks Investment Research upgraded shares of Vector Group from a “hold” rating to a “buy” rating and set a $11.00 price objective on the stock in a research note on Wednesday, January 30th.

Get Vector Group alerts:

NYSE VGR traded up $0.24 during trading on Monday, reaching $11.88. The company’s stock had a trading volume of 1,402,037 shares, compared to its average volume of 1,059,594. The firm has a market cap of $1.67 billion, a PE ratio of 20.84 and a beta of 0.74. Vector Group Ltd has a twelve month low of $9.21 and a twelve month high of $21.43.

In other news, Director Bennett S. Lebow sold 400,000 shares of Vector Group stock in a transaction dated Wednesday, November 21st. The shares were sold at an average price of $13.83, for a total value of $5,532,000.00. The sale was disclosed in a filing with the SEC, which is available at this hyperlink. Also, major shareholder Phillip Md Et Al Frost sold 450,085 shares of Vector Group stock in a transaction dated Monday, November 26th. The shares were sold at an average price of $13.57, for a total transaction of $6,107,653.45. The disclosure for this sale can be found here. Over the last 90 days, insiders sold 2,866,420 shares of company stock worth $37,039,611. 12.50% of the stock is currently owned by company insiders.

Several large investors have recently modified their holdings of VGR. KBC Group NV purchased a new stake in shares of Vector Group in the fourth quarter valued at about $26,000. ERTS Wealth Advisors LLC purchased a new stake in shares of Vector Group in the fourth quarter valued at about $33,000. Baillie Gifford & Co. boosted its holdings in shares of Vector Group by 21.4% in the fourth quarter. Baillie Gifford & Co. now owns 5,100 shares of the company’s stock valued at $50,000 after acquiring an additional 900 shares in the last quarter. Paradigm Financial Partners LLC purchased a new stake in shares of Vector Group in the fourth quarter valued at about $103,000. Finally, Paloma Partners Management Co purchased a new stake in Vector Group during the fourth quarter worth about $116,000. 49.29% of the stock is currently owned by institutional investors and hedge funds.

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About Vector Group (NYSE:VGR)

Vector Group Ltd., through its subsidiaries, manufactures and sells cigarettes in the United States. It operates through Tobacco, E-Cigarettes, and Real Estate segments. The company produces cigarettes in 109 combinations under the PYRAMID, EAGLE 20's, GRAND PRIX, LIGGETT SELECT, and EVE brand names, as well as USA and various partner brands, and private label brands.

See Also: What is a balanced fund?

Pot Stocks Are Paying Absurd Premiums for Acquisitions, and the Data Proves It

The green flag is officially waving on the legal-cannabis industry. This past October, Canada ended nine decades of recreational-marijuana prohibition and became the first industrialized country in the world to legalize adult-use weed. Soon after, a number of U.S. states legalized medical pot or expanded its use to adult consumers. Then, in December, the groundbreaking Farm Bill was passed in the U.S., giving the green light to hemp and hemp-based cannabidiol products.

This sort of perfect storm of marijuana (and hemp) momentum has led to some very robust growth estimates for the industry. A co-authored report from Arcview Market Research and BDS Analytics that was recently released calls for 38% global sales growth in 2019, and a more than doubling in global revenue between 2018 and 2022 to $31.3 billion. Meanwhile, investment bank Cowen Group, which is arguably the biggest fan of the cannabis industry among Wall Street firms, is calling for $75 billion in worldwide sales by 2030.

Image source: Getty Images.

Marijuana buyouts could soon become commonplace

This expectation of rapid growth, coupled with extraordinary demand from consumers in Canada and in select legal U.S. states, has been the impetus behind a wave of cannabis acquisitions throughout North America. Although we're only seeing the tip of the iceberg in terms of consolidation, especially in Canada's pot-growing industry, we have seen a number of modest to large acquisitions made.

As an example, Aurora Cannabis (NYSE:ACB), Canada's projected top-tier grower by peak annual output, acquired CanniMed Therapeutics for $852 million, MedReleaf for about $2 billion, and ICC Labs for almost $200 million, last year. Aurora also announced the $132 million purchase of Whistler Medical Marijuana in January, which has yet to close. There were a handful of additional smaller transactions for Aurora as well.

Canopy Growth (NYSE:CGC), Aurora's biggest rival, at least in terms of peak production, has purchased Colorado-based hemp research company ebbu for about $330 million, Hiku Brands for just north of $200 million, and Mettrum Health in early 2017 for around $325 million. Like Aurora, Canopy Growth has made other purchases, but these are the most prominent.

As the desire for consolidation increases, deals should become more commonplace.

But there's just one problem: Pot stocks aren't very good at valuing the companies they're buying.

Image source: Getty Images.

Cannabis acquisitions are making little financial sense in the early going

When one company buys another, it's extremely common for a premium to be paid by the acquirer. In other words, the purchasing company usually needs to sweeten the pot to get the other company's management team, board of directors, and potentially shareholders, on board. The issue is that it's really difficult to value pot stocks right now because the legal industry is still in its infancy. Thus, placing a premium on a value that's nothing more than a dart throw in a pitch-black room is leading to some financial humdingers on company balance sheets.

Though it's a figure the average investor often overlooks, goodwill is telling an interesting story for weed companies that have been active in the acquisition department. Goodwill is a way of quantifying the "premium" an acquirer pays above and beyond the tangible assets acquired. A good way to think about goodwill is this: The more of it there is, the more a company potentially overpaid when making acquisitions.

Of course, things are never cut-and-dried in the investment world. Goodwill can be something worth overlooking if future growth prospects, cost synergies from a combination, or other intangible factors, such as superior branding or a tenured management team, whittle away at this premium paid over time. The question is, "Will that happen with pot stocks?" While it's possible, the sheer amount of goodwill being lugged around by some pot stocks as a percentage of total assets is mindboggling.

Image source: Getty Images.

The prime offenders

A few days ago, following Aurora Cannabis' second-quarter report, I singled the company out for its exceptionally high goodwill total as a percentage of total assets. At the end of calendar year 2018, Aurora had $3.06 billion Canadian in goodwill, which represents 63% of total assets. Some 80% of the value of the company's flagship MedReleaf deal has been recorded as goodwill, with every other recent deal being recognized with large amounts of goodwill attached.

But this isn't just an Aurora problem, even if it's the easiest pot stock to point the finger at. Canopy Growth ended the fiscal second quarter (through Sept. 30, 2018) with CA$1.11 billion in goodwill and another CA$103.9 million in intangible assets. With total assets of just shy of CA$3 billion, 37% of the company's total assets are devoted to goodwill, with this figure rising to about 41% if intangible assets are included. 

It's not even just a Canadian problem. iAnthus Capital Holdings (NASDAQOTH:ITHUF), a vertically integrated cannabis dispensary with a focus on the U.S. market, recently closed on its purchase of MPX Bioceutical. This roughly $600 million deal increases the number of states iAnthus has access to from six to 11, and lifts its retail license count to 63. But take a gander at its most recent quarterly filing and you'll see that CA$7.2 million in goodwill has not so magically transformed into CA$75.9 million in goodwill over a nine-month period, through Sept. 30, 2018. This represents 55% of the company's total assets.

Long story short, it would appear that pot stocks are so eager to consolidate that they're grossly overpaying for their acquisitions. While it's possible the value of these deals could be realized over time, it's just as likely that big writedowns and subsequent revaluations from investors could await.

HomeStreet (HMST) Raised to Hold at BidaskClub

BidaskClub upgraded shares of HomeStreet (NASDAQ:HMST) from a sell rating to a hold rating in a research report report published on Tuesday morning.

Several other research analysts also recently issued reports on the stock. TheStreet upgraded shares of HomeStreet from a c+ rating to a b- rating in a research note on Thursday, January 24th. Zacks Investment Research cut shares of HomeStreet from a hold rating to a sell rating in a report on Saturday, January 26th. ValuEngine cut shares of HomeStreet from a buy rating to a hold rating in a report on Wednesday, January 2nd. DA Davidson decreased their price objective on shares of HomeStreet to $26.00 and set a neutral rating for the company in a report on Thursday, December 20th. Finally, B. Riley set a $36.00 price objective on shares of HomeStreet and gave the company a buy rating in a report on Monday, October 15th. One research analyst has rated the stock with a sell rating, six have assigned a hold rating and one has given a buy rating to the company’s stock. HomeStreet has a consensus rating of Hold and a consensus price target of $29.33.

Get HomeStreet alerts:

Shares of NASDAQ HMST opened at $26.91 on Tuesday. The company has a market capitalization of $722.30 million, a PE ratio of 18.18, a PEG ratio of 1.89 and a beta of 0.69. HomeStreet has a 52-week low of $20.50 and a 52-week high of $31.55. The company has a debt-to-equity ratio of 0.20, a quick ratio of 0.83 and a current ratio of 0.89.

HomeStreet (NASDAQ:HMST) last issued its earnings results on Tuesday, January 22nd. The financial services provider reported $0.36 earnings per share (EPS) for the quarter, hitting the consensus estimate of $0.36. The firm had revenue of $100.00 million for the quarter, compared to the consensus estimate of $103.76 million. HomeStreet had a net margin of 7.88% and a return on equity of 5.61%. During the same quarter in the prior year, the firm posted $0.42 earnings per share. On average, research analysts anticipate that HomeStreet will post 2.02 earnings per share for the current year.

Several institutional investors and hedge funds have recently added to or reduced their stakes in HMST. Bank of Montreal Can raised its holdings in shares of HomeStreet by 110.5% during the fourth quarter. Bank of Montreal Can now owns 2,261 shares of the financial services provider’s stock valued at $48,000 after purchasing an additional 1,187 shares during the last quarter. Acadian Asset Management LLC purchased a new stake in HomeStreet during the third quarter valued at approximately $163,000. Municipal Employees Retirement System of Michigan purchased a new stake in HomeStreet during the fourth quarter valued at approximately $166,000. Metropolitan Life Insurance Co. NY increased its holdings in HomeStreet by 358.7% during the fourth quarter. Metropolitan Life Insurance Co. NY now owns 8,930 shares of the financial services provider’s stock valued at $190,000 after buying an additional 6,983 shares during the last quarter. Finally, Citadel Advisors LLC purchased a new stake in HomeStreet during the third quarter valued at approximately $212,000. 79.14% of the stock is owned by hedge funds and other institutional investors.

HomeStreet Company Profile

HomeStreet, Inc, together with its subsidiaries, provides various financial services primarily in the Pacific Northwest, California, and Hawaii. The company operates in two segments, Commercial and Consumer Banking, and Mortgage Banking. The Commercial and Consumer Banking segment offers deposit products; non-deposit investment products; and insurance products and cash management services.

See Also: Bear Market – How and Why They Occur

Hot Cheap Stocks To Buy Right Now

tags:P,DCO,GCGMF,

Sometimes, people stop for a bite at McDonald's (NYSE:MCD) not because of the quality of its food, but because it's quick and cheap. That same logic explains why people eat the meal-like offerings of convenience chains like 7-Eleven or Casey's General Store.

Fast-casual restaurants like Panera Bread and Chipotle (NYSE:CMG) may not be able to deliver your food quite as rapidly, but they've been speeding up the process by adding mobile payment and app-based ordering options. And when patronizing such chains, consumers know the trade-off they're making -- spending a bit more time to get higher-end food. It's a model that has done well by many fast-casual operations in recent years.

Still, in a market where success is driven at least partly by speed, there's room for disruption. And that disruption may not come from the restaurant or convenience store sectors. Instead, it could come from Amazon (NASDAQ:AMZN).

Amazon Go stores offer "delicious ready-to-eat breakfast, lunch, dinner, and snack options made by chefs and favorite local kitchens and bakeries," according to the company. Image source: Amazon.

Hot Cheap Stocks To Buy Right Now: Euro FX(P)

Advisors' Opinion:

• [By Steve Symington]

  Pandora Media inc. (NYSE:P) stock climbed 37.1% in August, according to data from S&P Global Market Intelligence, driven by the streaming music leader's better-than-expected second-quarter 2018 results and subsequent encouraging analyst commentary.

• [By Steve Symington]

  Shares of Pandora Media Inc. (NYSE:P) jumped 21.2% on Friday after the music-streaming specialist announced better-than-expected first-quarter 2018 results.

• [By Chris Lange]

  Pandora Media Inc. (NYSE: P) is set to release its most recent quarterly results Wednesday. The consensus forecast is for a net loss of $0.08 per share and $375.82 million in revenue. Shares ended the week at $5.16 apiece. The consensus price target is $7.85, and the 52-week range is $4.09 to $13.72.

• [By Anders Bylund]

  Shares of Pandora Media (NYSE:P) gained 28.7% in May of 2018, according to data from S&P Global Market Intelligence. First-quarter results reported in the first week of the month turned out to crush both the company's own guidance and analyst estimates, triggering a 21% share-price jump the next day.

• [By Rick Munarriz]

  It didn't take long for Sirius XM Holdings (NASDAQ:SIRI) to start leveraging its Pandora (NYSE:P) acquisition. Less than a week after closing on its purchase of the streaming-music pioneer in a roughly $3 billion deal, Sirius XM sent out an email offer to its satellite-radio subscribers for a free 14-day trial to Pandora's premium platform.

Hot Cheap Stocks To Buy Right Now: Ducommun Incorporated(DCO)

Advisors' Opinion:

• [By Ethan Ryder]

  Astronics (NASDAQ: ATRO) and Ducommun (NYSE:DCO) are both small-cap aerospace companies, but which is the better investment? We will compare the two businesses based on the strength of their dividends, risk, earnings, profitability, institutional ownership, valuation and analyst recommendations.

• [By Lisa Levin]

   

  Companies Reporting After The Bell NVIDIA Corporation (NASDAQ: NVDA) is estimated to post quarterly earnings at $1.45 per share on revenue of $2.89 billion. News Corporation (NASDAQ: NWSA) is projected to post quarterly earnings at $0.07 per share on revenue of $1.99 billion. Symantec Corporation (NASDAQ: SYMC) is estimated to post quarterly earnings at $0.39 per share on revenue of $1.19 billion. Pilgrim's Pride Corporation (NASDAQ: PPC) is projected to post quarterly earnings at $0.54 per share on revenue of $2.65 billion. Hawaiian Electric Industries, Inc. (NYSE: HE) is expected to post quarterly earnings at $0.38 per share on revenue of $556.81 million. Air Lease Corporation (NYSE: AL) is estimated to post quarterly earnings at $1.01 per share on revenue of $383.37 million. Flowserve Corporation (NYSE: FLS) is expected to post quarterly earnings at $0.27 per share on revenue of $880.89 million. Civitas Solutions, Inc. (NYSE: CIVI) is projected to post quarterly earnings at $0.12 per share on revenue of $396.25 million. The Trade Desk, Inc. (NASDAQ: TTD) is estimated to post quarterly earnings at $0.1 per share on revenue of $73.23 million. Amdocs Limited (NYSE: DOX) is projected to post quarterly earnings at $0.95 per share on revenue of $980.50 million. Yelp Inc. (NYSE: YELP) is estimated to post quarterly loss at $0.04 per share on revenue of $220.14 million. Kulicke and Soffa Industries, Inc. (NASDAQ: KLIC) is expected to post quarterly earnings at $0.43 per share on revenue of $210.01 million. TiVo Corporation (NASDAQ: TIVO) is projected to post quarterly earnings at $0.37 per share on revenue of $198.62 million. Ritchie Bros. Auctioneers Incorporated (NYSE: RBA) is expected to post quarterly earnings at $0.17 per share on revenue of $153.87 million. Uniti Group Inc. (NASDAQ: UNIT) is estimated to post quarterly earnings at $0.01 per share on revenue of $247.16 million. Jagged Peak En
• [By Money Morning Staff Reports]

  Our first defense stock to own is aerospace and defense giant Ducommun Inc. (NYSE: DCO).

  The defense contractor manufactures components used in commercial, military, and space aircraft. This list includes popular vehicles like the Boeing 737 NG and 777 airliners, the C-17 heavy lift cargo plane, the Apache, Chinook, and Blackhawk helicopters, and the Space Shuttle.

• [By Shane Hupp]

  Ducommun (NYSE:DCO) had its target price lifted by Canaccord Genuity from $36.00 to $38.00 in a report released on Monday morning. They currently have a buy rating on the aerospace company’s stock.

• [By Stephan Byrd]

  Allianz Asset Management GmbH lessened its stake in Ducommun Incorporated (NYSE:DCO) by 27.9% during the first quarter, according to its most recent Form 13F filing with the Securities & Exchange Commission. The institutional investor owned 35,623 shares of the aerospace company’s stock after selling 13,753 shares during the quarter. Allianz Asset Management GmbH owned approximately 0.31% of Ducommun worth $1,082,000 at the end of the most recent reporting period.

Hot Cheap Stocks To Buy Right Now: Great Canadian Gaming Corporation (GCGMF)

Advisors' Opinion:

• [By SEEKINGALPHA.COM]

  Clairvest Group previously initiated an investment in a partnership that involved Great Canadian Gaming Corporation (OTCPK:GCGMF) and Brookfield Business Partners LP to operate two casinos in Southern Ontario. With this announcement, we not only get the upside of a 45% ownership of "Ontario Gaming West GLA Limited Partnership," which includes four major operations, but also 2,500 slot machines, 60 table games, racing track and $450 million in gross gaming revenue. Clairvest has a history in the gambling industry and Great Canadian Gaming Corporation is a proven operator with a terrific track record.

A blueprint for trading the different trade war outcomes

Citigroup has a China trade deal strategy for all the possible outcomes from the trade negotiations between Washington and Beijing.

Sectors in the crosshairs — including technology and industrials — could see the widest stock swings depending on the success of the talks, according to the report published Tuesday. While China has already started to repurchase U.S. agricultural goods and promised to protect intellectual property rules, Citigroup global economist Cesar Rojas believes any lasting outcome is far from certain.

"The U.S. and China are still not ready for a deal, and while trade talks are scheduled to resume with high-level U.S. officials visiting China on February 14–15, the U.S. continues to set the stage for a China-containment strategy," Rojas wrote. "After President Trump noted that no deal would be announced without him meeting with President Xi, the recognition that such [a] meeting is highly unlikely to happen before the March 1 deadline increased the uncertainty around a potential escalation of trade tensions."

Rojas then laid out three separate cases for the trade talks and how each could impact the market and the varying sectors.

Bull Case (5% Probability)

Citi's bull case is characterized by a "comprehensive" trade deal with a mutual tariff rollback and a softer U.S. stance toward China. This case would include measures to reduce the trade deficit (e.g., sustained Chinese purchase of U.S. soybeans) and commitments by Beijing to safeguard intellectual property and open its markets to American investment.

The bull scenario "should be positive for markets as trade tensions between the two largest economies fade, and there should be a large boost to sentiment," Rojas wrote. "Citi strategists believe this positive scenario would have a limited overall impact, aside from benefiting industries that have been in the crosshairs thus far, as credit markets have largely discounted the risk of a breakdown in negotiations."

Citi's analysts think this scenario would be a positive for cyclical stocks and push global equities up about 10 percent by the end of 2019. Rojas added that the bull case would likely cause the U.S. Treasury yield curve to steepen and term premiums would rise. Commodities and emerging markets would be winners with gains in soybeans, grains, copper and oil.

It would also bode well for machinery stocks, said Citi analyst Timothy Thein.

"Large cap bellwethers like Caterpillar, Cummins and Eaton all trade closely on expectations for global growth, and any form of trade tension easing would help to improve sentiment," he wrote. "The major ag equipment companies (Deere, CNH Industrial, and AGCO) would benefit especially as higher U.S. soybean prices would likely trigger a knock-on rally to corn prices and carry-through to improved farmer moods and spending."

Base Case (55% Probability)

The Citigroup base case is a "veneer" of a deal, with "chances of a deadline roll-over, tariffs-limbo remains and continued China-containment strategy." This middle-ground case could include commitments by China to reduce the goods trade deficit by up to $200 billion by the end of 2020 as well as to grant greater market access for U.S. exports of agricultural and manufacturing goods. It would likely also involve some promise by Beijing to step up its intellectual property rule enforcement and downplay its Made in China 2025 plan.

The base case could serve as ground to postpone tariff escalation as the two sides work toward a permanent deal, Rojas wrote.

The base case "would be positive for markets (to the extent that such a deal is not already priced-in), but the ongoing verification process and additional restrictions may leave some doubts," the Citi economist added. "Citi strategists think there would be further vulnerabilities for industrial sectors, and that more firms would likely attempt to cascade price increases through the supply chain to avoid margin compression."

Citi strategists think that this case could buoy global equities about 5 percent by December and that U.S. Treasurys would continue to see bullish pressure amid further uncertainty. The brokerage believes the base case would be moderately positive for soybeans and some agricultural products and metals, with less impact on energy.

The base case would likely help a number of transportation companies, Citi analyst Christian Wetherbee wrote.

"In the base case trade deal, more normalized freight demand can return post air pocket and additional rounds of more consumer goods orientated tariffs would be avoided,' Wetherbee said. "This could allow general trucking rates to rebound with truckload rates benefiting more than less-than-truckload rates, as current spot market softness could potential be reversed with a pick-up in demand."

Bear Case (40% Probability)

Citi's most pessimistic case occurs if the U.S. and China fail to reach an agreement or a rollover of the March 2 deadline. Tariffs on $200 billion worth of Chinese goods would increase to 25 percent from 10 percent, it said. Citi also expects Washington would attempt to exert further downward pressure on the Chinese economy. Depending on the state of economy, Beijing could elect to retaliate with its own tariff hikes for those products already targeted in its $60 billion penalty.

China could also take "unconventional" measures like placing barriers on American investments or introducing regulatory hurdles on American companies already operating within its borders. It might also choose to reduce its holdings of U.S. securities, though that risk could be contained by potential risks to financial stability, Citi's strategists wrote.

"This scenario would have negative implications for global trade and global growth, potential for nonlinearities in U.S. inflation, and overall a negative confidence shock affecting investment decisions and market sentiment," Rojas wrote.

Citi strategists think the expected drag to global growth would be a bullish sign for Treasurys, and term premiums would remain depressed. However, the lower-term premium could be at risk if China sells its Treasury holdings. Citi strategists think that global equities could be down about 10 to 15 percent in the short term.

Consumer technology giant Apple, in particular, could be vulnerable to worsening U.S.-China relations.

"When we assess our coverage the company with the most exposure is Apple, which has approximately 15 percent of its sales into China and we note Apple's source code and IP is not open unlike the Android platform," IT hardware analyst Jim Suva wrote. "We note other large cap stocks such as IBM and Cisco have for many years de-emphasized China due to competition from Huawei and corporations which favor local China solutions."

The Best, And Worst, 8% Yields Right Now

&l;p&g;&l;img class=&q;dam-image getty size-large wp-image-858139352&q; src=&q;https://specials-images.forbesimg.com/dam/imageserve/858139352/960x0.jpg?fit=scale&q; data-height=&q;640&q; data-width=&q;960&q;&g;

Most dividend investors understandably love the idea of an 8% No Withdrawal Portfolio. It&a;rsquo;s a simple yet &a;ldquo;game changing&a;rdquo; idea that you don&a;rsquo;t hear much from mainstream pundits and advisors.

&l;i&g;Find stocks that pay safe 7%, 8% or more and you can retire comfortably, living off dividend checks while your initial capital stays intact (or even appreciates).&l;/i&g;

Now this strategy &l;i&g;is&l;/i&g; a bit more complicated than simply finding 8% yields and buying them. Granted the recent stock market pullback has benefited investors like us because we can snag more dividends for our dollar. Yields are higher overall, and that&a;rsquo;s a good thing.

Next we must smartly select the stocks that are going to pay our dividends securely &l;i&g;&a;ndash; without tapping their own shares prices to pay us&l;/i&g;.

Consider &l;b&g;Cohen &a;amp; Steers Infrastructure Fund&l;/b&g;, a closed-end fund focused on energy, water, transportation and other infrastructure-related companies. It was distributing a fat 8.8% back in February 2016 when I recommended it to my &l;i&g;Contrarian Income Report&l;/i&g; subscribers. Its healthy 9% yield helped deliver &l;i&g;70% total returns&l;/i&g; (including dividends) in just three years!

On the flipside, consider &l;b&g;Tupperware&l;/b&g;. This ubiquitous home-brands name was yielding 8.4% in late October 2018 when &l;a href=&q;https://contrarianoutlook.com/5-correction-proof-yielders-they-go-up-when-the-market-goes-down/&q; target=&q;_blank&q;&g;I warned investors about its increasingly unstable condition&l;/a&g; &a;ndash; just a few months after I wrote a cautionary note that &l;a href=&q;https://www.forbes.com/sites/brettowens/2018/02/07/5-dividends-up-to-12-2-winners-3-traps/#1daeac47558d&q;&g;TUP&a;rsquo;s dividend had been climbing for all the wrong reasons&l;/a&g;.

The good news? Fast-forward less than half a year, and Tupperware&a;rsquo;s dividend is a much more manageable-sounding 3.9%.

The bad news? Tupperware yields so much less now because it hacked its payout by roughly 60%. It also reported sinking fourth-quarter revenues and served up an ugly forecast for 2019, sending investors fleeing to the tune of -24% since my October warning.

Today, I want to examine a half-dozen high-yield picks delivering anywhere between 8.2% and 14.2% in annual income that you might be eyeballing right now. A few of them are indeed worthy of your attention &a;hellip; but a few could take your legs out.

&l;b&g;Ares Capital&l;/b&g;

&l;b&g;Dividend Yield: &l;/b&g;9.5%

Let&a;rsquo;s start with &l;b&g;Ares Capital&l;/b&g;, a business development company.

If you&a;rsquo;re not familiar with BDCs, you&a;rsquo;re not alone. This is a young business structure that Congress created back in 1980 to provide financing to small and midsize businesses that they otherwise couldn&a;rsquo;t get from bigger banks. The world of BDCs is small, and these aren&a;rsquo;t big firms &a;ndash; Ares Capital is top dog at just $7.1 billion, which, for perspective, makes it smaller than &l;b&g;GrubHub&l;/b&g;.

Ares Capital boasts more than 300 investments across the business spectrum from dental service providers to ignition interlock device manufacturers to biotech software makers. It leans heavily on floating-rate debt while borrowing at fixed rates, which means hikes to the LIBOR rate can actually help Ares&a;rsquo; profitability.

This BDC is on the right-by-a-lot track. The Small Business Credit Availability Act signed into law in 2018 will allow Ares to ramp up its leverage to juice returns. And the company not only delivered its first dividend hike in six years (in August 2018), but it&a;rsquo;s backing that payout with fatter profits. In its third quarter, the company cranked out 45 cents in core earnings &a;ndash; a 25% jump in profitability that covers its new-and-improved 39-cent payout with room to spare.

&l;b&g;Prospect Capital&l;/b&g;

&l;b&g;Dividend Yield:&l;/b&g; 10.4%

&l;strong&g;Prospect Capital&l;/strong&g; is like many BDCs in that it invests across a wide array of small to midsize companies, covering dozens of industries including consumer finance, media, internet software, energy equipment and even mining. It does so primarily through first- and second-lien senior loans, as well as mezzanine debt, and it also invests in some other high-income-producing strategies, such as collateralized loan obligations (CLOs) and marketplace lending.

Good in theory, rough in practice. PSEC&a;rsquo;s net investment income (NII, an important BDC profitability metric) has trailed off over the past couple of years, from $371 million in 2016 to $287 million in 2018. But the real concern is the tight-to-nonexistent dividend coverage that has caused it to &l;a href=&q;https://contrarianoutlook.com/these-1-click-tax-loopholes-yield-up-to-9-8/&q; target=&q;_blank&q;&g;slash its payout several times in the past&l;/a&g;. Prospect Capital not only slashed its dividend by 28% in 2017 as its NII was on the decline, but even by about 25% in 2015 while NII was actually on the rise.

In its fiscal 2018, PSEC paid out 77 cents in dividends per share on 79 cents of net investment income &a;ndash; it would have overpaid if it weren&a;rsquo;t for the dividend cut.

Even if Prospect Capital temporarily finds itself on recovery road, the company&a;rsquo;s highly aggressive (and questionable) dividend practices make it an untenable holding.

&l;b&g;Eaton Vance Tax-Advantaged Dividend Income Fund&l;/b&g;

&l;b&g;Dividend Yield:&l;/b&g; 8.2%

I mentioned Cohen &a;amp; Steer&a;rsquo;s UTF earlier, and I can&a;rsquo;t stress the importance of having a CEF or two in your portfolio.

While exchange-traded funds have grown in popularity because of their dirt-cheap fees, the best actively managed closed-end funds have managers who can better navigate complex investing environments, they can use debt to amplify their bets, and they can use other tactics such as options trading to generate higher income out of the very same holdings you&a;rsquo;d find in ETFs.

The &l;b&g;Eaton Vance Tax-Advantaged Dividend Income Fund&l;/b&g; is a blended fund that &a;ldquo;seeks to distribute a high level of dividend income that qualifies for favorable federal income tax treatment.&a;rdquo; It does so by holding mostly American dividend stocks (72% allocation) such as &l;b&g;JPMorgan Chase&l;/b&g; and &l;b&g;Johnson &a;amp; Johnson&l;/b&g;, but also junk bonds (9%), investment-grade corporates (9%) and preferred stock (6%) and a small smattering of other assets.

This exposure to high-yield assets, as well as the use of leverage, helps this fund generate an 8%-plus distribution rate &a;ndash; but more importantly, better results than widely held dividend ETFs such as the &l;b&g;Vanguard High Dividend Yield ETF &l;/b&g;and the &l;b&g;Vanguard Dividend Appreciation ETF&l;/b&g;.

&l;b&g;CenturyLink&l;/b&g;

&l;b&g;Dividend Yield:&l;/b&g; 14.2%

&l;b&g;AT&a;amp;T&l;/b&g; and &l;b&g;Verizon&l;/b&g; have long been the reasons why investors equate telecoms with high dividends. They&a;rsquo;ve been good stewards of that reputation, too, offering stable and rising dividends for some time.

However, smaller telecoms have sullied that image. &l;b&g;Windstream&l;/b&g; suspended its dividend in 2017, and &l;b&g;Frontier Communications &l;/b&g;did the same in 2018.

Now, everyone is waiting to see whether &l;b&g;CenturyLink&l;/b&g; will be the next to drop the ball.

Louisiana-based CenturyLink provides residential high-speed internet, TV and phone services, as well as business and government communications services, across 37 states. And the company expanded its horizon with the 2017 acquisition of Colorado-based Level 3 Communications &a;ndash; a move meant to stave off declines in its core business.

It&a;rsquo;s difficult to say whether CenturyLink will in fact cut its dividend. While its payout ratio as a percentage of straight-up earnings has long sat north of 100%, its cash payout ratio looks much more acceptable.

The problem is, even the bullish pros aren&a;rsquo;t ruling out the idea of a dividend cut. While Morgan Stanley analyst Simon Flannery thinks the likeliest scenario of its Feb. 13 conference call will be &a;ldquo;constructive&a;rdquo; guidance that includes maintaining a dividend, he also sees two other (less likely) scenarios that involve a cut &a;ndash; one in which the payout is cut less than expected, and another in which it&a;rsquo;s worse than feared.

It&a;rsquo;s entirely possible that CTL enjoys a relief rally following its quarterly results, but a will-it/won&a;rsquo;t-it dividend situation isn&a;rsquo;t where you should build the foundation of a buy-and-hold portfolio. Organic growth remains a problem, too, with third-quarter revenues showing a 4% decline.

Don&a;rsquo;t gamble on CenturyLink. If a true turnaround is in the cards, you won&a;rsquo;t have to get in at the absolute bottom to enjoy fat long-term total returns. This is a &a;ldquo;show me&a;rdquo; stock, so wait for it to show a little more.

&l;b&g;Starwood Property Trust&l;/b&g;

&l;b&g;Dividend Yield:&l;/b&g; 8.7%

&l;b&g;Starwood Property Trust&l;/b&g; is a mortgage REIT dealing primarily in first mortgages, but also in bridge loans, mezzanine loans, subordinate debt, preferred equity and conduit first mortgage loans in the United States and Europe. And during its most recent quarter, the company&a;rsquo;s asset base reached a record $16 billion, and its commercial loan portfolio hit an all-time high $7.5 billion.

This is a diversified mREIT, too, with exposure to offices (36%), retail (34%), multifamily residences (11%), lodging (11%), industrial (6%) and a hint of self-storage. It also has geographical balance, with double-digit exposure to every major region &a;ndash; the Southeast (38%), West (22%), Southwest (16%), Northeast (13%) and Midwest (11%).

Vital to income investors is the company&a;rsquo;s dividend coverage. While some mREITs really stretch to make their payouts work, STWD has averaged an 89% payout ratio of its core earnings. Yes, that&a;rsquo;s probably too high to expect increasing dividends going forward, but it does mean the current level of dividends is manageable.

&l;b&g;GameStop&l;/b&g;

&l;b&g;Dividend Yield:&l;/b&g; 13.4%

&l;a href=&q;https://contrarianoutlook.com/5-retail-dividends-with-an-amazon-proof-story-paying-up-to-10-4/&q; target=&q;_blank&q;&g;Three months ago&l;/a&g;, I warned &l;b&g;GameStop &l;/b&g;shareholders and potential investors alike:

&l;i&g;&a;ldquo;If GameStop can&a;rsquo;t catch a break while console sales are red-hot, it&a;rsquo;s going to be staring at an enormous problem when the console cycle slows down again, and as more game purchases are done online.&a;rdquo;&l;/i&g;

There&a;rsquo;s a problem.

The company slashed its 2018 earnings outlook in late November alongside its third-quarter earnings report, from a range of $3.00-$3.35 to a range of $2.55-$2.75 &a;ndash; this despite strong Black Friday and Cyber Monday sales.

Even at the low end of GameStop&a;rsquo;s new earnings forecast, the retailer is still paying 60% of its profits out as dividends, which on its own is far from a red flag. Still, the announcement is yet another continuation of GameStop&a;rsquo;s deteriorating business situation, and it certainly qualifies as &a;ldquo;bad enough.&a;rdquo;

Then came a new wrinkle in January. GME shares cratered by nearly 30% after it announced it was calling off its search for a buyer. That&a;rsquo;s a disconcerting statement about the value that investors saw in GameStop: namely, they weren&a;rsquo;t expecting a fundamental turnaround, but instead they were hoping for a white knight to swoop in and save the company.

GameStop is flailing right now. It didn&a;rsquo;t look good at a 10% yield, and it doesn&a;rsquo;t look good at 13%.

Disclosure: none

&l;/p&g;

How Many Vehicles Will Tesla Deliver in 2019?

With the company having recently reported its fourth-quarter and full-year results for 2018, it's a good time to start looking ahead at what electric-car company Tesla (NASDAQ:TSLA) may be able to achieve in 2019.

Last year, Tesla posted some extraordinary growth, delivering nearly as many vehicles during the year as it has in all of its prior years combined. Can the company post another year of strong growth after growing deliveries so sharply in 2018? Probably -- and here's why.

Tesla factory in Fremont, California. Image source: author.

Expect about 55% growth

Fortunately, management provided its own forecast for what to expect from vehicle deliveries in 2019. In Tesla's fourth-quarter shareholder letter, management said it expects to deliver between 360,000 and 400,000 vehicles during the year. This represents 45% to 65% year-over-year growth compared to the approximately 245,500 vehicles Tesla delivered in 2018.

But can investors trust management's guidance? After all, the company has missed key production and delivery targets in the past. Fortunately, Tesla looks like it's approaching its guidance conservatively this time.

While achieving the midpoint of Tesla's guidance range for vehicle deliveries would require 55% year-over-year growth, a significant increase in the company's production rate wouldn't be needed to pull this off. The company delivered 90,966 vehicles in its fourth quarter. This translates to an annual run rate of about 364,000 vehicles -- above the low end of management's guidance range. Put another way, to grow annual deliveries 48% year over year, all Tesla would need to do is maintain the rate of quarterly deliveries it exited 2018 with.

But is the demand there? Almost certainly. Of the 90,966 vehicles Tesla delivered in Q4, 63,359 were Model 3 -- all of which were delivered in North America. In 2019, Model 3 is expanding to Europe and China, giving demand for the vehicle a significant tailwind.

Mix in Tesla's history of rapidly increasing vehicle production and the company's recent aggressive push to sell Model 3 at lower prices, and an estimate for deliveries to increase 55% year over year to 380,000 begins to sound conservative.

What about the high end of Tesla's guidance range?

For Tesla to deliver 400,000 vehicles in 2019 or -- better yet -- exceed its guidance range, the company will likely need to bring to market its promised $35,000 version of the Model 3. A $35,000 version of the vehicle, which is $7,900 less than the cheapest Model 3 version available today, would open Tesla up to a much broader customer base, easily pushing demand for the vehicle high enough for the company to hit the high end of its guidance range.

Tesla says on its website it expects the lower-cost version of the car, which will feature a smaller battery than its current Model 3 variants, to be available in four to six months.

But investors shouldn't count on this cheaper version. When asked about the promised $35,000 Model 3 on Twitter this week, Musk responded, "We're doing everything we can to get there. It's a super hard grind."