Hot Value Stocks For 2018

tags:ROLL,STC,YRCW,

Gabelli Research’s Adam Trivison calls MGM Resorts International’s (MGM) purchase of Boyd Gaming’s (BYD) half of the Borgata in Atlantic City “well played.” He explains why:

On May 31, 2016, MGM Resorts (MGM) agreed to purchase Boyd Gaming��s 50% stake in Borgata for $600 million of cash with MGM assuming Borgata��s $600 million of debt, which implies an enterprise value of 9.0x our 2016 EBITDA estimate. Subsequently, MGM Growth Properties (MGP) agreed to purchase Borgata��s real estate (i.e. $100 million of annual rent payments) for $1,175 million. We think that the outcome is better for all three parties, made possible by
MGP��s low cost of capital. Our estimates have been updated to reflect the two transactions.

On net, MGM Resorts�� 2017 EBITDA attributable to Borgata increases by ~$90 million, $76 million from the addition of Borgata rent to�MGM Growth Properties and $15 million resulting from MGM��s increased stake in MGM Growth Properties.

Hot Value Stocks For 2018: RBC Bearings Incorporated(ROLL)

Advisors' Opinion:

• [By Max Byerly]

  Get a free copy of the Zacks research report on RBC Bearings (ROLL)

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

• [By Shane Hupp]

  Shares of RBC Bearings Incorporated (NASDAQ:ROLL) have earned an average rating of “Buy” from the six brokerages that are covering the firm, Marketbeat.com reports. Three investment analysts have rated the stock with a hold recommendation and three have issued a buy recommendation on the company. The average 1 year target price among brokerages that have covered the stock in the last year is $140.67.

Hot Value Stocks For 2018: Stewart Information Services Corporation(STC)

Advisors' Opinion:

• [By Ethan Ryder]

  StarChain (CURRENCY:STC) traded 8.7% lower against the US dollar during the 24-hour period ending at 20:00 PM E.T. on May 14th. StarChain has a market cap of $0.00 and approximately $5.27 million worth of StarChain was traded on exchanges in the last 24 hours. One StarChain token can now be purchased for about $0.0925 or 0.00001062 BTC on major cryptocurrency exchanges. During the last seven days, StarChain has traded down 16.3% against the US dollar.

Hot Value Stocks For 2018: YRC Worldwide Inc.(YRCW)

Advisors' Opinion:

• [By Stephan Byrd]

  Marten Transport (NASDAQ: MRTN) and YRC Worldwide (NASDAQ:YRCW) are both small-cap transportation companies, but which is the better business? We will contrast the two businesses based on the strength of their profitability, risk, dividends, earnings, institutional ownership, analyst recommendations and valuation.

• [By Lisa Levin] Gainers Euro Tech Holdings Company Limited (NASDAQ: CLWT) surged 73.3 percent to $3.90. Integrated Media Technology Limited (NASDAQ: IMTE) shares gained 51 percent to $33.1365. The nano-cap low-float stock skyrocketed over 1,300 percent on Wednesday on no company specific news which would support the surge. The move higher is consistent with what was seen in other low-float stocks over the past few months. Monaker Group, Inc. (NASDAQ: MKGI) shares jumped 34 percent to $3.00. Sharing Economy International Inc. (NASDAQ: SEII) shares rose 28.2 percent to $4.51 after gaining 9.32 percent on Wednesday. STAAR Surgical Company (NASDAQ: STAA) shares jumped 27.8 percent to $21.40 after reporting upbeat Q1 results. Boxlight Corporation (NASDAQ: BOXL) rose 20.5 percent to $8.920 after climbing 107.87 percent on Wednesday. Xspand Products Lab Inc (NASDAQ: XSPL) gained 19.5 percent to $ 5.97. Xspand Products priced its IPO at $5 per share. YRC Worldwide Inc. (NASDAQ: YRCW) rose 18.9 percent to $10.035 following upbeat quarterly earnings. ENDRA Life Sciences Inc. (NASDAQ: NDRA) gained 18.3 percent to $3.0177. ENDRA Life Sciences is expected to report Q1 results on May 15. MYR Group Inc. (NASDAQ: MYRG) rose 18.1 percent to $35.85 after the company posted strong Q1 earnings. Rudolph Technologies, Inc. (NASDAQ: RTEC) shares jumped 16 percent to $30.75 following upbeat quarterly earnings. TTM Technologies, Inc. (NASDAQ: TTMI) gained 13.7 percent to $16.53 after reporting Q1 results. Insight Enterprises, Inc. (NASDAQ: NSIT) shares surged 12 percent to $40.06 following better-than-expected Q1 earnings. TreeHouse Foods, Inc. (NYSE: THS) rose 11.8 percent to $40.93 following Q1 results. Engility Holdings, Inc. (NYSE: EGL) surged 11.2 percent to $27.36. Engility reported upbeat quarterly earnings. Synalloy Corporation (NASDAQ: SYNL) rose 10.7 percent to $19.10 following Q1 results. Logitech International S.A. (NASDAQ: LOGI)
• [By Lisa Levin]

  On Monday, the industrial shares surged 1.55 percent. Meanwhile, top gainers in the sector included Kelly Services, Inc. (NASDAQ: KELYA), up 9 percent, and YRC Worldwide Inc. (NASDAQ: YRCW) up 6 percent.

• [By Lisa Levin] Gainers Euro Tech Holdings Company Limited (NASDAQ: CLWT) shares jumped 155.56 percent to close at $5.75 on Thursday. Inspire Medical Systems, Inc. (NYSE: INSP) shares gained 56.12 percent to close at $24.98. Inspire Medical went public Thursday on the New York Stock Exchange. The company issued 6.75 million shares priced at $16 each. Presbia PLC (NASDAQ: LENS) shares rose 53.02 percent to close at $3.55. Integrated Media Technology Limited (NASDAQ: IMTE) shares rose 46.29 percent to close at $32.11. The nano-cap low-float stock skyrocketed over 1,300 percent on Wednesday on no company specific news which would support the surge. The move higher is consistent with what was seen in other low-float stocks over the past few months. Technical Communications Corporation (NASDAQ: TCCO) climbed 27.78 percent to close at $5.75. STAAR Surgical Company (NASDAQ: STAA) shares gained 26.27 percent to close at $21.15 after reporting upbeat Q1 results. Sharing Economy International Inc. (NASDAQ: SEII) shares jumped 22.16 percent to close at $4.30 on Thursday after gaining 9.32 percent on Wednesday. China Advanced Construction Materials Group, Inc. (NASDAQ: CADC) rose 20.45 percent to close at $2.65 on Thursday. YRC Worldwide Inc. (NASDAQ: YRCW) surged 18.36 percent to close at $9.99 following upbeat quarterly earnings. MYR Group Inc. (NASDAQ: MYRG) jumped 17.68 percent to close at $35.74 after the company posted strong Q1 earnings. Xspand Products Lab Inc (NASDAQ: XSPL) jumped 17.4 percent to close at $5.87. Xspand Products priced its IPO at $5 per share. Coherus BioSciences, Inc. (NASDAQ: CHRS) shares rose 17.32 percent to close at $14.90. Coherus BioSciences reported resubmission of BLA for CHS-1701. Rudolph Technologies, Inc. (NASDAQ: RTEC) shares gained 17.17 percent to close at $31.05 following upbeat quarterly earnings. The Meet Group, Inc. (NASDAQ: MEET) gained 16.02 percent to close at $2.68 following Q1 earnings. Ca
• [By Ethan Ryder]

  Get a free copy of the Zacks research report on YRC Worldwide (YRCW)

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

Qatari Lender Closes Gap on Abu Dhabi Rival in Mideast Shuffle

Qatar National Bank QPSC is no longer being punished for a boycott imposed on the country by some of its neighbors as this month’s MSCI Inc. weighting change draws passive inflows to the stock.

A 36 percent rally spurred by the decision to raise the foreign ownership limit in March means QNB now trades at a similar valuation to First Abu Dhabi Bank PJSC for the first time in more than a year. FAB had become one of the shares of choice in the United Arab Emirates after a deal that created the country’s biggest lender last year.

The estimated price-to-earnings ratio for the Emirati bank has slipped to 10.3, matching the level for QNB, the dominant stock in Qatar’s benchmark index.

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QNB and FAB are “the two biggest single security index trades” for 2018 in the Middle East and North Africa, according to Mohamad Al Hajj, an equities strategist at the research arm of EFG-Hermes Holding in Dubai.

The Qatari lender could lure inflows of $651 million after the index re-balancing, which was triggered by the country increasing the maximum foreigners can hold to 49 percent, he estimates. FAB could attract more than $300 million in passive flows after a review of its weighting in the same index, expected to be announced in November, he said.

The Abu-Dhabi based bank is the result of the merger of First Gulf Bank PJSC and National Bank of Abu Dhabi PJSC, which at completion had created a financial giant with $180 billion in assets under management.

The Emirati lender remains an interesting play following the stock’s recent dip, especially considering the “value that will be generated by the merger,” said Ali El Adou, the head of asset management at Daman Investments in Dubai.

FAB rose 4.3 percent, the most in more than a year, at the close in Abu Dhabi on Wednesday, while QNB slipped 0.1 percent in Doha. They have a market valuation of $36 billion and $40 billion, respectively.

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Novavax: All Eyes On Q1 2019

Novavax (NVAX) has experienced many ups and downs in recent years. This has largely been the product of exuberance about its adult RSV vaccine trial, which ended in failure and sent shares into penny stock territory. Since then, the company has been rebuilding with a focus on its second shot at a blockbuster RSV vaccine, this time in a Phase 3 maternal vaccine study. The market has also become enamored of a candidate deeper in the pipeline, NanoFlu, which has shown superior immunogenicity to currently available flu vaccines in both animal models and preliminary human testing. These prospects have helped to buoy Novavax of late, with shares holding steady even after a stock offering announced on April 11th.

On May 9th, Novavax reported earnings for Q1 2018. The financial results held little in the way of surprises, with revenue beating analyst estimates slightly and earnings missing by a cent a share. The immediate market reaction was slightly negative, with shares falling 1.8% in the wake of the announcement, but that is a rather minor movement for a stock that still trades under $2 per share. Closing at $1.69 May 22nd, shares are down just over 1% from the day earnings were announced.

The earnings report and conference call laid the stage for the rest of 2018, and set its sights on Q1 2019, when top-line data from a Phase 2 study of a quadrivalent NanoFlu will go head-to-head against market leader Fluzone, produced by drug giant Sanofi (SNY) and, more importantly, the interim results of the Phase 3 maternal RSV trial. The first months of 2019 will truly be the make-or-break moment for Novavax. After its beat-down in the market after the failure of the Phase 3 adult RSV trial, it is unlikely the company would survive another such disappointment. But if the interim results are good, the stock will soar. And it will fly even higher if the top-line NanoFlu data is also good.

The Boring Road to 2019

A number of small catalysts have been acting as a general tailwind for Novavax's shares over the past year, including updates on the maternal RSV vaccine trial and the acceleration of the NanoFlu program. But between now and 2019, there are precious few catalysts to look forward to. For a binary event-driven stock, that can mean a listless share price.

May 2018 marked an important turning point for the RSV program, with the Phase 3 trial having enrolled 4,600 participants, which is enough to conduct an interim data analysis. However, as mentioned above, this analysis will not be available until Q1 2019. Thus, there is not a whole lot of news in this program that could move the stock massively one way or the other.

Likewise, the NanoFlu program is not set to deliver any impressive catalysts during the remainder of 2018. There will no doubt be some attention paid as the quadrivalent NanoFlu model is tested against the latest iteration of Fluzone, but this will not involve a tremendous amount of solid data until early 2019, when the top-line data from the Phase 2 trial will be available.

So the remainder of 2018 looks to be a bit of a desert where catalysts are concerned. However, it is unlikely �� barring a general market correction downward �� that Novavax will trade violently downward. As events are concerned, things seem stacked slightly in the company��s favor. That is especially the case with the flu vaccine program, as another unpleasant flu season will likely drive positive attention toward a new alternative in the works.

Cash Position Remains Something of a Worry

Cash has been a nagging worry for some time at Novavax. In a March 22nd research note, we reflected on the mounting cash concerns after the company announced it would be presenting the interim results from the maternal RSV trial in Q1 2019 instead of Q4 2018. Novavax has allayed its immediate needs, albeit via diluting shareholders, raising $54 million in a stock offering in April. The dilutive offering sent shares down below $2, but they have stabilized far above where they were trading when market sentiment was uniformly negative.

Novavax had $164.2 million in cash and equivalents at the end of Q1 2018, after burning through $66.1 million to finance operations for the quarter. That was a substantial uptick from the same period in 2017, but newly minted CFO John Trizzino stated on the earnings call that the burn would be substantially reduced in subsequent quarters of 2018:

��We do expect to see a significant decrease over the subsequent quarters for the balance of the year. And so that's going to be attributed to the reduction, mostly of kind of R&D expenses. So I think that's enough to kind of give you an indication of what we expect our spending to be through the balance of '18.��

Assuming the cash burn falls more into line with previous recent quarters, Novavax has about three quarters of runway, comfortably speaking. It could probably stretch that to four in a pinch. But that would be cutting it mighty close, since the big data readouts from the RSV vaccine and NanoFlu trials are set to happen in the first quarter of next year. Novavax can probably stretch its resources that far. But it is an open question of whether it will take the risk. In any event, positive interim data for the maternal RSV vaccine trial will send the share price skyrocketing and would allow a share offering on much more favorable terms �� if Novavax is not snapped up by a big pharmaceutical company, that is.

Investor��s Eye View

Novavax continues to be an intriguing ��all or nothing�� stock. It continues to trade below $2 a share, which will look ridiculously cheap in the event of a positive interim data readout from the maternal RSV vaccine trial. An independent data analysis suggests that this trial will not be a repeat of the failed adult RSV vaccine trial, but nothing is certain in the biotech game. A bad result will likely mean Novavax will fold �� or at least dilute current shareholders to nothing.

That said, there is clearly a massive market and evident appetite for an RSV vaccine. Pfizer (PFE) announced on May 22nd that it has commenced a Phase 1/2 adult RSV vaccine trial. If Novavax��s maternal trial is a success, Pfizer might well decide to scoop up the developmental biotech. A proven RSV vaccine is a hugely valuable asset, so there would likely be many potential partners and buyers in the event of good news.

Q1 2019 represents the hinge of fate for Novavax. The upside is massive, but the risks persist. Investors must think carefully about their risk-to-reward appetites before taking a position. But evidence would suggest that a play on Novavax will meet with welcome rewards.

Disclosure: I am/we are long NVAX.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Why don't inflation rate and CPI match?

Inflation has gotten more attention lately�as price increases at the gas pump have taken a bite out of Americans' disposable income. For many, the personal experience of having to pay more for prescription medications, rent and food makes budgeting increasingly difficult, especially for those on fixed incomes who haven't seen much in the way of boosts to paychecks or Social Security payments lately. Yet official readings from the Consumer Price Index indicate low levels of inflation, running at around 2% per year over the past several years.

Many people jump to the conclusion that the government's inflation numbers deliberately understate true inflation for the American public overall. But the way�the Bureau of Labor Statistics measures inflation won't exactly match with any single person's own spending experience.

For instance, the most commonly cited Consumer Price Index for All Urban Consumers (CPI-U) looks at prices of key goods and services in 75 urban areas, collecting data on thousands of households and retail establishments. It captures 93% of the U.S. population and includes employed, unemployed�and retired people. As the CPI-U measures it, the typical American spends these percentages in major categories of their personal budgets:

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As you can see, the major categories Americans spend on include food, shelter, medical care, transportation, and energy. Yet these costs vary greatly from person to person. Older Americans typically incur more health care costs as they age, and many people of all ages have above-average medical needs that make up more than 7% of their spending. Those who have to drive a long way to work incur more in fuel and transportation costs than those who live nearby or can take public transportation. By contrast, while housing costs are high in many urban areas, those who live in lower-cost parts of the country can get away with spending less than a third of their money on rent or a mortgage payment.

Inflation eats away at the purchasing power of your savings, and what's most important in measuring it is how rising prices affect the things you want and need. Therefore, you shouldn't be surprised if your personal inflation rate is different from what the official CPI number suggests.

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