Author: therawinformant

Japan plans to buy AstraZeneca Plc’s experimental COVID-19 vaccine and fund a local company to manufacture Novavax’s vaccine candidate, ramping up its stockpile plan as it battles surging infections. Japan will order 120 million doses of the experimental vaccine developed by the British pharmaceutical company, beginning with 30 million doses by March next year. Separately, Takeda Pharmaceutical said on Friday it would manufacture and sell up to 250 million doses of Novavax’s COVID-19 vaccine candidate every year in Japan, with funding support from the government.

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The worst result, after buying shares in a company (assuming no leverage), would be if you lose all the money you put…

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Shares of Fortinet plunged 6.6% in extended trading on Thursday after the company’s 2Q billings fell short of analysts’ expectations. The cybersecurity solution provider’s billings, a key sales growth metric, grew 14.3% to $711.5 million year-over-year but missed Street estimates of $712.1 million.Fortinet’s (FTNT) 2Q billings result reflects slowing traditional firewall market growth as corporates shift to cloud computing. During the earnings conference call, the company’s CEO Ken Xie said, “the traditional firewall [is] where we do see the growth slowdown.” As a result, the company is now focusing on expanding cloud solutions to counter the weakening firewall market, he further stated.Last month, Goldman Sachs analyst Brian Essex downgraded Fortinet to Hold from Buy stating that "expectations and multiples" of the stock are elevated at current levels. Essex said that "investors have become much more optimistic about FTNT’s ability to execute over the next several years.” However, he raised the stock’s price target to $140 (0.35% upside potential) from $129.Nonetheless, Fortinet reported better-than-expected 2Q results. Its adjusted EPS of $0.82 beat analysts’ expectations of $0.65 and improved from the year-ago quarter’s EPS of $0.58. Revenues rose 18% to $615.5 million year-over-year and surpassed Street estimates of $599 million.Overall, FTNT has a Moderate Buy analyst consensus. The average price target of $135.93 implies a downside potential of 2.6%. (See FTNT stock analysis on TipRanks)Related News: Etsy Crushes 2Q Revenue Expectations; Roth Raises Stock To Buy Roku Tops 2Q Estimates But Cautions About Ad Outlook Zynga Rises On Record 2Q Revenues Fueled By Digital Gaming Demand More recent articles from Smarter Analyst: * Zillow Surges 13% On Better-Than-Feared Earnings; Analyst Urges Caution * Booking Holdings Sees Gross Bookings Plunge 91%; Analyst Still Says Buy * Cloudflare Beats 2Q Estimates On Strong Customer Growth * Stifel Lifts EPAM Systems’ PT After Strong 2Q Results

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Cloudflare’s 2Q revenues jumped 48% to $99.7 million year-over-year and beat analysts’ expectations of $94.1 million thanks to strong growth in its paying customer base. The cloud networking and security solution provider’s paying user base increased 24% mainly driven by elevated demand for cloud-based solutions amid the coronavirus-led work-from-home wave.Cloudflare (NET) posted a 2Q loss of $0.03 per share which was also narrower than the Street estimates of $0.06 and lower than the year-ago quarter’s loss of $0.22.The company’s co-founder and CEO, Matthew Prince said, "We delivered a strong second quarter, with revenue growth up 48% year-over-year, and added a record number of both large and paying customers." He further added, "It has been incredible to see the rate of innovation that has continued, and even accelerated, as we work remotely.Ahead of its earnings, on August 4, RBC Capital analyst Matthew Hedberg raised the price target on the stock to $48 (16.1% upside potential) from $29 and maintained a Buy rating. Hedberg had anticipated a strong 2Q result and stated that “the company is well positioned post-COVID given its cloud-based platform that benefits from greater use of internet and remote work.”Overall, NET has a Strong Buy analyst consensus. The average price target of $43.67 implies an upside potential of 5.6%. (See NET stock analysis on TipRanks)Related News: Etsy Crushes 2Q Revenue Expectations; Roth Raises Stock To Buy Roku Tops 2Q Estimates But Cautions About Ad Outlook Zynga Rises On Record 2Q Revenues Fueled By Digital Gaming Demand More recent articles from Smarter Analyst: * Zillow Surges 13% On Better-Than-Feared Earnings; Analyst Urges Caution * Booking Holdings Sees Gross Bookings Plunge 91%; Analyst Still Says Buy * Stifel Lifts EPAM Systems’ PT After Strong 2Q Results * Fortinet Slips 7% After-Hours As 2Q Billings Missed Estimates

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Top news and what to watch in the markets on Friday, August 7, 2020.

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(Bloomberg) — Warren Buffett’s Berkshire Hathaway Inc. is finally showing a bit more of an appetite.Buffett’s conglomerate began putting more of its $137 billion cash pile to work after a period of relative silence during the start of the pandemic, striking a deal for natural-gas assets in July and even snapping up at least $2 billion of Bank of America Corp. stock in recent weeks through Aug. 4.Now, investors will learn Saturday whether that appetite extended to the conglomerate’s own stock, as some analysts say buybacks may have risen to a record. Berkshire is expected to report second-quarter earnings that day, results that could show that gains in the stock portfolio drove net income to the highest ever for a company in the S&P 500.The recent transactions are “a nice start,” said Jim Shanahan, an analyst at Edward Jones, adding that he hoped the Bank of America stock purchases indicated there was more investment activity by Berkshire. Still, “it’s not a tremendous amount of capital given the size of the balance sheet, size of the investment portfolio and market cap of the company.”Buffett, known for swooping in as a lender of last resort in the 2008 financial crisis, remained relatively cautious during the early days of the pandemic. The 89-year-old chief executive officer offloaded airline shares in April and failed to find deals similar to his 2008 Goldman Sachs Group Inc. and General Electric Co. preferred-stock bets — in part because of the swift action by the Federal Reserve.That’s left investors wondering whether Buffett’s cautious commentary at his annual meeting in May meant the billionaire investor would stay on the sidelines. Buffett said even Berkshire’s record cash pile at the end of March wasn’t huge when compared with the worst-case scenario for the pandemic and economic shutdown. And he said stock buybacks weren’t more compelling even after Berkshire shares fell 20% in the first quarter.A regulatory filing that detailed Buffett’s annual gifts to charities gave investors a hint that he may have found the shares more attractive in the months following his annual meeting. UBS Group AG analysts say it indicates that Berkshire bought back $5.3 billion of its stock from April 23 to July 7. A total near that level would surpass Berkshire’s record quarterly repurchases since loosening its buyback policy in 2018.“One of the biggest frustrations with Berkshire has been its minimal share buyback despite its shares trading at a significant discount to intrinsic value and its massive cash position,” UBS analyst Brian Meredith said July 28 in a note to clients. “BRK’s shares continue to look inexpensive, and we would look favorably on a continuation of large-scale share buybacks.”What Bloomberg Intelligence Says“Berkshire’s opposition to deploying capital may be thawing somewhat, and we believe share repurchases are a logical option.”\–Matthew Palazola, senior industry analyst, and Derek Han, associate analystBerkshire had to disclose its purchases of Bank of America shares already because it now holds more than a 10% stake in the lender. Saturday’s regulatory filing should give a better indication of how active Berkshire was in the broader stock market during the quarter.“The first quarter, rightly so, there was certainly a lot of uncertainty,” said Cathy Seifert, an analyst at CFRA Research. “But I also think there is going to be a continued degree of prudence as they see how some of the insurance claims play out.”Here’s other topics that could come up in the earnings report:Record IncomeNet income is expected to reach a record $37.7 billion, according to estimates from UBS’s analysts. The stock market came roaring back in the second quarter with a nearly 20% gain by the S&P 500. That should help boost Berkshire’s net income, which includes swings in its massive portfolio of stocks.Apple Inc., Berkshire’s largest common stock holding, gained more than 43% in the second quarter and has continued to surge, bringing its year-to-date increase to roughly 55% through Thursday’s close. Berkshire’s stake would have been worth $89 billion through the end of the second quarter unless it bought or sold shares. That means the Apple holding was equal to 18% of Berkshire’s market capitalization.Berkshire’s BusinessesBerkshire’s operations, ranging from its railroad BNSF to its footwear and apparel makers, are likely to continue to feel the pain of the pandemic. The conglomerate said that most businesses were hurt in March and April, with the impact ranging from “relatively minor to severe.”Some units, such as auto insurer Geico, could actually benefit as rivals including Allstate Corp. report fewer vehicle accidents. Still, some of Berkshire’s other insurance operations face the risk of Covid-19 losses, according to Keefe, Bruyette & Woods analyst Meyer Shields. The railroad probably saw declining volumes, according to UBS.“Because of their mix of businesses, they really are a microcosm for the broader economy,” CFRA’s Seifert said. “Over the weekend and over the last week or so, we’ve seen a rash of retail bankruptcies. It’ll be interesting to see if any of the smaller, retail- and consumer-oriented names within Berkshire go that route.”Charlie Munger, a Berkshire vice chairman and Buffett’s longtime business partner, warned in April of that possibility, saying that a few of Berkshire’s small businesses might not reopen once this situation is over.“An update on what that does and doesn’t include would also be very helpful,” KBW’s Shields said.Potential HitsBerkshire cautioned in its last earnings report that it had weighed taking an impairment for goodwill because of Covid-19 disruptions, but decided it wasn’t necessary. The company warned that the pandemic’s effects could be worse than estimated and require it to book impairment charges before its annual review in the fourth quarter.Kraft Heinz Co., the packaged-food giant that counts Berkshire as its largest shareholder, posted non-cash impairment charges in the second quarter. Berkshire’s carrying value for its Kraft Heinz stake exceeded the market value by $5.5 billion at the end of March. Buffett’s company has avoided an impairment so far, citing the length of time that the fair value has been less than carrying and a desire to hold the investment until it recovers.“For the sake of balance-sheet integrity, the value of Kraft Heinz on Berkshire’s balance sheet should not be what it currently is,” CFRA’s Seifert said.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

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iQ Capital Managing Partner and CEO Keith Bliss joins Yahoo Finance’s Kristin Myers to discuss the stocks he is watching as many Americans are working from home amid the coronavirus.

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(Bloomberg Opinion) — The U.S. threat to delist Chinese companies just got a lot more real. Yet businesses from Asia’s biggest economy continue to line up to sell shares on American exchanges — and are thriving. What’s going on?The President’s Working Group on Financial Markets has told U.S. exchanges to set rules that would require companies to grant American regulators access to their audit work papers, something that China has refused to allow. Firms already listed will have until Jan. 1, 2022, to comply, with removal from U.S. exchanges the ultimate penalty. Those seeking to sell shares will need to adhere to the new rules, according to the high-powered group of U.S. regulators, which includes Treasury Secretary Steven Mnuchin.You might think this ratcheting up of pressure, which reflects increasing geopolitical tensions and the fallout from accounting scandals at Chinese companies such as Luckin Coffee Inc., would put a damper on the rush of enterprises looking to go public. Anything but. Almost every day, it seems, another Chinese company announces plans to list in the U.S. — and they’re finding no shortage of takers. Late last month, Beijing-based electric-car maker Li Auto Inc. raised $1.1 billion selling shares in an initial public offering that priced above the marketed range. It was the biggest IPO by a Chinese company in New York since Shanghai-based rival NIO Inc. sold $1.15 billion of stock in September 2018. Xpeng Motors, based in Guangzhou, is poised to follow this month.Shares of U.S.-listed Chinese companies are also outperforming the broader market. The Nasdaq Golden Dragon China Index has surged 30% this year, compared with a 3.7% gain for the S&P 500.The phenomenon may be partly the product of a craze in day-trading fueled by pandemic lockdowns, which have left many Americans stuck at home looking for amusement. If the Robinhood crowd can drive shares of bankrupt companies to illogical heights, then why not Chinese stocks, too?On a more rational level, some investors may be betting that threats to delist Chinese companies are largely noise, and a compromise will eventually be worked out. Chinese listings are a gravy train for the New York Stock Exchange and Nasdaq, and both sides have a financial interest in ensuring that it doesn't get derailed.On this point, it’s worth noting that the U.S. regulators left some wiggle room. Chinese companies can hire a “co-auditor,” effectively having a second inspection performed by a U.S. accounting firm after a Chinese affiliate does the first. That would be a potential workaround for Beijing’s rules that prevent the Public Company Accounting Oversight Board from reviewing audits of U.S.-listed Chinese companies.To count on peace breaking out may be rash, though. There’s plenty of evidence that the move toward a U.S.-China decoupling is serious and tangible. Just look at the lengthening list of U.S.-traded Chinese companies that are selling shares in Hong Kong, giving them a secondary outlet into international capital markets in the event that they are forced to leave: Alibaba Group Holding Ltd., JD.com Inc. and NetEase Inc. among them.Or witness Tencent Holdings Ltd., which lost $30 billion of market value in Hong Kong on Friday after the Trump administration moved to ban U.S. residents from doing business via its WeChat app. It will be a brave investor who bets on this trend reversing itself.  This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Nisha Gopalan is a Bloomberg Opinion columnist covering deals and banking. She previously worked for the Wall Street Journal and Dow Jones as an editor and a reporter.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

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