Stock Pick

  • Cloudflare sees a 50% increase in traffic, rise in hacking: CEO

    Cloudflare sees a 50% increase in traffic, rise in hacking: CEOCloudflare CEO and Founder Matthew Prince joins Yahoo Fiance’s Alexis Christoforous and Brian Sozzi to discuss a rise in cyberattacks amid the coronavirus pandemic, in addition to its preparation for the 2020 election and more.

    from Yahoo Finance https://ift.tt/2zPSjbM

  • American Airlines Is Again the Bearer of Bad News

    American Airlines Is Again the Bearer of Bad NewsAt its current price of $16.49 per share, American Airlines (NASDAQ:AAL) stock is still relatively close to its 52-week low of $8.25. Investors may be tempted to pick up AAL stock because of an assumed impending price bump as flights ramp up.Source: GagliardiPhotography / Shutterstock.com But Main street investors like you and I first need to look at the company's past history, liquidity, and valuation before that. In a beleaguered industry, facing overcapacity for some time to come, and as a laggard with a weak balance sheet, AAL stock is one of the last trades investors should be considering. Recent news only solidifies that notion. More Bad News for American AirlinesOn May 27, American Airlines released a management note outlining their continuing priorities during the pandemic. Management listed adequate cash, a reduction of cash burn rate, and restoring confidence in air travel as the three goals.InvestorPlace – Stock Market News, Stock Advice & Trading Tips * 10 Robotics Stocks on the Technological Cutting Edge The thrust of the filing is that the company feels they have adequate liquidity. But in order to reduce expenses they will be reducing staff by 39,000 through voluntary leave and early retirement. Continued Efforts to Stop the Bleeding in AAL StockThe company is attempting to streamline operations to decrease daily cash burn. AAL will prioritize fleet optimization and restructured organizational teams. The company plans to fly 100 fewer planes by next summer and will be reducing and retiring mainly widebody planes from the fleet. The company's current fleet is roughly an 80/20 percent mix of narrow body to widebody aircraft. And American currently maintains a total fleet of 871 planes.AAL's management is prioritizing restructuring will prioritize future leaders and talent. Management and support staff is to be about 30% leaner moving forward to accommodate the reduction in operations. American stresses this decision is voluntary and that thereafter, involuntary separations will be announced in July.Needless to say, the company will have a battle on its hands in trying to incentivize workers to voluntarily quit in this employment environment. Those who American will "involuntarily separate" in July will have a union acting on their behalf. American Airlines stock will react as this plays out. I don't expect it to be a boon to the share price. Underlying Cash ProblemsManagement has also stated that it expects the company to have $11 billion (page 44) in liquidity at the end of second quarter. American Airlines forecasts that their second quarter daily cash burn will average $70 million. Further, June average daily cash burn is expected to decrease to $50 million. Utilizing some quick math, we can extrapolate that AAL will burn through $6.3 billion in Q2 (90 days in a quarter x $70 million in daily average cash burn).Such sustained losses hurt the company in the short term, surely. But American Airlines has also had to push out the maturity dates on its debt as it refinances new liquidity. So even when people resume flying, American's management will struggle with finding creative ways to pay down these newly issued debts. American faces years of reckoning. Realities Facing American's StockTwo current stakeholders are most heavily footing the bill: AAL stock shareholders, and those 39,000 employees who will find themselves jobless come July.We should consider those people who are going to lose their livelihood, certainly. They are real people which too often gets glossed over in economic discussions. At the same time, it's important to consider shareholders who might have lost significant chunks of their retirement in this disaster. They are every bit as real. And none of this bodes well for AAL stock.American Airlines stock looks primed to see lean years. The company came into this pandemic with a weak balance sheet relative to its peers. American Airlines' cash burn and new debt issuance have only compounded the situation. So, despite management's rosy assurances that its plan should bear fruit come July, things look bleak.One obvious truth is that operating revenues will be earmarked for repayment of this current liquidity issuance. Investors in AAL stock are not going to be prioritized in that environment. To expect serious price appreciation or above average revenue disbursements from the stock doesn't make much sense. Final ThoughtsThe single compelling argument to buy American Airline's stock is the vague notion that it's so beleaguered that a rebound has to occur at some point. It'd be a long wait in my eyes. Investors looking to pick up still cheap airline stock should consider Southwest Airlines (NYSE:LUV) and Delta Air Lines (NYSE:DAL), who are better managed.At the time of this writing, Alex Sirois did not hold a position in any of the aforementioned stocks. More From InvestorPlace * Why Everyone Is Investing in 5G All WRONG * Top Stock Picker Reveals His Next 1,000% Winner * The 1 Stock All Retirees Must Own * Look What America's Richest Family Is Investing in Now The post American Airlines Is Again the Bearer of Bad News appeared first on InvestorPlace.

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  • Top brokers name 3 ASX 200 shares to sell next week

    ASX shares to avoid

    Once again, a large number of broker notes hit the wires last week. Some of these notes were positive and some were bearish.

    Three sell ratings that caught my eye are summarised below. Here’s why top brokers think investors ought to sell these shares next week:

    Commonwealth Bank of Australia (ASX: CBA)

    According to a note out of Morgan Stanley, its analysts have retained their underweight rating but lifted the price target on this banking giant’s shares to $61.50. The broker believes that its retail business could struggle in the near term and suspects this could lead to a sizeable dividend cut or even a deferral. The Commonwealth Bank share price ended the week at $68.68.

    InvoCare Limited (ASX: IVC)

    A note out of the Macquarie equities desk reveals that its analysts have downgraded this funerals company’s shares to an underperform rating with a reduced price target of $10.20. Macquarie believes that InvoCare’s earnings could fall short of expectations in FY 2020 due to lower average case prices and social distancing initiatives reducing winter flu deaths. In addition to this, the broker suspects that it could be losing market share. InvoCare’s shares last traded at $11.36.

    Treasury Wine Estates Ltd (ASX: TWE)

    Another note out of the Macquarie equities desk reveals that its analysts have retained their underperform rating and cut the price target on this wine company’s shares to $9.30. The broker notes that consumers are turning their attention to value wines. It feels this shift to value could weigh on its margins in FY 2021. And while the reopening of restaurants should be a boost, it is concerned that Treasury Wine may have to discount its products to support its sales. The Treasury Wine share price ended the week at $10.69.

    Those may be the shares to sell, but these are the shares that analysts have given buy ratings to…

    3 “Double Down” Stocks To Ride The Bull Market

    Motley Fool resident tech stock expert Dr. Anirban Mahanti has stumbled upon three under-the-radar stock picks he believes could be some of the greatest discoveries of his investing career.

    He’s so confident in their future prospects that he has issued “double down” buy alerts on each of these three stocks to members of his Motley Fool Extreme Opportunities stock picking service.

    See the Double Down Stocks

    *Extreme Opportunities returns as of June 5th 2020

    More reading

    Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Treasury Wine Estates Limited. The Motley Fool Australia has recommended InvoCare Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

    The post Top brokers name 3 ASX 200 shares to sell next week appeared first on Motley Fool Australia.

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