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- Insider Activity: Carnival Corp (CCL)
- Morgan Stanley Cuts Bank Stock Estimates
- Rosenblatt Cuts Apple Shares to Sell
- Unusual Options Activity: Apple (AAPL)
| Insider Activity: Carnival Corp (CCL) Posted: 09 Jul 2019 03:00 AM PDT
Director buys over $900,000 in shares. Insiders have been a bit more active in the leisure space lately. Besides some of the insider buys we've seen in the casino industry, we're now seeing insiders buy in the leisure travel space. On Wednesday July 3rd, director Randall Weisenburger bought 20,000 shares of the company he sits on the board of, Carnival Corp (CCL). This is a 20 percent increase in his stake, and he paid about $930,000 to make the deal. Weisinburger's buy comes after a buy from President and CEO Arnold Donald in June, who bought just over 22,000 shares and paid about $1 million. Carnival operates cruise ships around the world, including the Caribbean, Alaska, Asia, and European cruises. It operates tour groups, and operates hotels, loges, and even glass-domed railcars. Action to take now: With both a CEO and a director buy, shares look attractive here. Shares have traded much higher year-to-date, and insiders have been sellers on average in the high $50 range, making today's buys in the mid $40's good for a trade with a 20 percent return or more in the next few months. With shares at 10 times earnings, and with a dividend yield north of 4.3 percent at today's prices, the valuation is worth buying shares as opposed to a call option.  |
| Morgan Stanley Cuts Bank Stock Estimates Posted: 09 Jul 2019 03:00 AM PDT
End of stress tests and cycle change are the key catalysts. Bank stocks helped lead the market down on Monday, in part due to a downgrade for the big banks by Morgan Stanley. Citing the end of the Fed's stress tests, the bank sees few upside catalysts ahead. With a higher possibility of interest rates going down, banks are in a position that "looks tougher." In addition to those factors, slow global GDP growth and low inflation expectations are likely to weigh on banks as well. Traditional banks borrow money from depositors at a low rate and lend it out at a higher rate, making a profit on the spread between the two rates. If interest rates aren't going up, and are instead going down, the spread will likely narrow, impacting profitability. Banks have looked attractive immediately following the Fed's stress tests, as many banks were approved to increase dividends or buy back shares. Action to take: Investors with a holding in big bank names may want to look at hedging with covered calls, or existing the stake entirely. Financial companies like the credit card providers or insurance companies are less susceptible to changes in interest rates than the banks, and could be a better place to invest in going forward.  |
| Rosenblatt Cuts Apple Shares to Sell Posted: 09 Jul 2019 03:00 AM PDT
Investment firm sees 25 percent downside in tech giant's shares. Investment firm Rosenblatt has cut shares of Apple to sell from neutral. The company cited "fundamental deterioration" of the underlying business over the next 6-12 months as the culprit. Looking at the specific product lines, expectations are for disappointing sales in iPhones and iPad growth. New products like the Apple Watch and AirPods are too small relative to the company to impact revenue growth. Shares of Apple dropped about 2.6 percent on the day, to around $200 per share. The $150 price target that Rosenblatt put on shares indicates 25 percent downside from shares, about where shares traded in late December 2018 during the market's largest pullback in a decade. Most other analysts on the company are bullish. Apple has frequently been written off as a has-been trade in the past few years, only to surprise on sales, revenue, or profit margins time and again. And with a program in space to use the company's prodigious cash flow to buy back shares and pay a dividend, any downside may be limited. With the total valuation of the company near $1 trillion dollars, Apple is one of the most widely-held stocks both individually and in terms of fund ownership. Even passive investors with a stake in the S&P 500 index have Apple as one of their largest positions.  |
| Unusual Options Activity: Apple (AAPL) Posted: 09 Jul 2019 03:00 AM PDT
Big bearish bet on tech giant in the next month. Shares of Apple (AAPL) sold off Monday on a major downgrade, citing the company's "fundamental deterioration." Naturally, some traders saw that as an opportunity to sell shares—at least in the short-term. That explains the 100-fold increase in volume on the August 2nd $185 puts on the company. With shares of Apple trading just under $200, this is a bet on about a 7.5 percent decline between now and expiration in 25 days. Apple is a widely held company, due to its size and success. And while the company has pushed to improve its suite of high-value, high-margin products, the company has received much criticism for its lack of innovation. The company's last major new product, the iPad, was nearly a decade old, and consumers are owning products like iPods and iPhones for much longer than in the past. Action to take: None, unless you have a large position and need to hedge it. Most investors, even those passively in the market, have a stake in the company, so this may sound painful. However, the big downgrade on Monday offered no new insight into any fundamental change with Apple. Shares are fairly valued near here at 17 times still-growing earnings, and the company's large cash flow and large share buyback program will limit how far shares will decline. This option, trading for about $1.94, could even expire worthless.  |
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