Top Performing Stocks To Own For 2019

tags:PCAR,INOD,AEY,ESGR,

Progressive Corp (NYSE:PGR) reported earnings-per-share of 35 cents for August 2018, rebounding from the year-ago loss of 2 cents. The figure was driven by an improved top line. Year-to-date, PGR stock has rallied 22.1%, outperforming the industry’s 9.5% increase.

This rise in Progressive stock was courtesy of the company’s consistent strong results.

PGR Stock and the Numbers in August

Progressive recorded net premiums written of $2.6 billion in the month, up 17% from $2.2 billion in the year-earlier period. Net premiums earned were about $2.5 billion, up 21% from $2 billion recorded last August.

Top Performing Stocks To Own For 2019: PACCAR Inc.(PCAR)

Advisors' Opinion:

• [By Logan Wallace]

  Hudson Capital Management LLC grew its position in shares of PACCAR Inc (NASDAQ:PCAR) by 8.5% in the 2nd quarter, according to the company in its most recent filing with the Securities and Exchange Commission (SEC). The fund owned 22,965 shares of the company’s stock after buying an additional 1,798 shares during the quarter. Hudson Capital Management LLC’s holdings in PACCAR were worth $1,423,000 as of its most recent filing with the Securities and Exchange Commission (SEC).

• [By ]

  "Companies ranging from Action Alerts PLUS holding Microsoft (MSFT)  to heavy-truck maker Paccar (PCAR)  have over the years declared so-called 'special dividends' -- one-time extra payments to shareholders. With the new U.S. tax law granting corporations a limited window to repatriate overseas profits at low tax rates, many companies might use the extra cash for special dividends. Let's discuss how this impacts income investors," writes Real Money Pro columnist Christopher Versace.

• [By Ethan Ryder]

  Get a free copy of the Zacks research report on Paccar (PCAR)

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

Top Performing Stocks To Own For 2019: Innodata Inc.(INOD)

Advisors' Opinion:

• [By Stephan Byrd]

  Media coverage about Innodata (NASDAQ:INOD) has trended somewhat positive this week, according to Accern Sentiment Analysis. The research firm scores the sentiment of press coverage by analyzing more than twenty million blog and news sources in real time. Accern ranks coverage of companies on a scale of negative one to positive one, with scores closest to one being the most favorable. Innodata earned a media sentiment score of 0.10 on Accern’s scale. Accern also gave news articles about the technology company an impact score of 47.3485759085159 out of 100, indicating that recent press coverage is somewhat unlikely to have an effect on the company’s share price in the near future.

• [By Logan Wallace]

  Luzich Partners LLC lifted its stake in shares of Innodata Inc (NASDAQ:INOD) by 4.9% during the 1st quarter, according to the company in its most recent filing with the Securities & Exchange Commission. The firm owned 1,316,550 shares of the technology company’s stock after acquiring an additional 61,944 shares during the period. Innodata accounts for approximately 1.5% of Luzich Partners LLC’s portfolio, making the stock its 12th biggest position. Luzich Partners LLC owned about 5.09% of Innodata worth $1,514,000 at the end of the most recent reporting period.

• [By Stephan Byrd]

  Innodata (NASDAQ:INOD) will be releasing its Q1 2018 earnings data before the market opens on Tuesday, May 8th.

  Innodata (NASDAQ:INOD) last announced its earnings results on Thursday, March 8th. The technology company reported ($0.02) earnings per share (EPS) for the quarter. The business had revenue of $15.66 million for the quarter. Innodata had a negative return on equity of 10.94% and a negative net margin of 8.30%.

Top Performing Stocks To Own For 2019: ADDvantage Technologies Group, Inc.(AEY)

Advisors' Opinion:

• [By Shane Hupp]

  Media coverage about ADDvantage Technologies Group (NASDAQ:AEY) has trended positive on Saturday, Accern Sentiment Analysis reports. The research firm scores the sentiment of news coverage by analyzing more than twenty million news and blog sources in real time. Accern ranks coverage of publicly-traded companies on a scale of -1 to 1, with scores closest to one being the most favorable. ADDvantage Technologies Group earned a media sentiment score of 0.47 on Accern’s scale. Accern also assigned media coverage about the technology company an impact score of 47.0561890892472 out of 100, indicating that recent news coverage is somewhat unlikely to have an impact on the stock’s share price in the next several days.

Top Performing Stocks To Own For 2019: Enstar Group Limited(ESGR)

Advisors' Opinion:

• [By Logan Wallace]

  Enstar Group (NASDAQ: ESGR) and Kemper (NYSE:KMPR) are both mid-cap finance companies, but which is the superior investment? We will compare the two companies based on the strength of their profitability, analyst recommendations, risk, institutional ownership, dividends, valuation and earnings.

• [By Stephan Byrd]

  BidaskClub cut shares of Enstar Group (NASDAQ:ESGR) from a hold rating to a sell rating in a report issued on Saturday morning.

  Several other analysts have also recently issued reports on ESGR. TheStreet cut Enstar Group from a b- rating to a c+ rating in a research note on Tuesday, May 29th. ValuEngine cut Enstar Group from a buy rating to a hold rating in a research note on Wednesday, May 2nd.

• [By Andy Pai]

  Akre capital often holds positions for over ten years. As long as a company is able to keep increasing its economic value, the firm will hold a stock. Although the firm is a long-term investor, Akre doesn't attribute its success to ‘buy and hold' investing, but to the quality of the companies they buy. Some of the companies' long-term holdings have included Markel Corporation (NYSE: MKL), Dollar Tree, Inc. (NASDAQ: DLTR) and Enstar Group Ltd. (NASDAQ: ESGR).

Altria Group Inc (MO) Position Lessened by Aua Capital Management LLC

Aua Capital Management LLC lessened its holdings in Altria Group Inc (NYSE:MO) by 50.0% during the fourth quarter, according to its most recent disclosure with the SEC. The institutional investor owned 4,750 shares of the company’s stock after selling 4,750 shares during the period. Aua Capital Management LLC’s holdings in Altria Group were worth $235,000 as of its most recent SEC filing.

Several other hedge funds have also modified their holdings of MO. Johnson Financial Group Inc. increased its stake in Altria Group by 3.7% in the third quarter. Johnson Financial Group Inc. now owns 127,333 shares of the company’s stock valued at $7,680,000 after acquiring an additional 4,572 shares during the last quarter. Regentatlantic Capital LLC increased its stake in Altria Group by 15.9% in the third quarter. Regentatlantic Capital LLC now owns 36,272 shares of the company’s stock valued at $2,188,000 after acquiring an additional 4,974 shares during the last quarter. Baugh & Associates LLC increased its stake in Altria Group by 0.6% in the fourth quarter. Baugh & Associates LLC now owns 58,985 shares of the company’s stock valued at $2,913,000 after acquiring an additional 360 shares during the last quarter. CX Institutional increased its stake in Altria Group by 45.9% in the fourth quarter. CX Institutional now owns 36,512 shares of the company’s stock valued at $1,803,000 after acquiring an additional 11,479 shares during the last quarter. Finally, Cooper Financial Group bought a new position in Altria Group in the fourth quarter valued at $265,000. Institutional investors own 65.70% of the company’s stock.

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A number of research firms recently commented on MO. Morgan Stanley cut Altria Group from an “equal weight” rating to an “underweight” rating in a research note on Tuesday, January 22nd. ValuEngine raised Altria Group from a “sell” rating to a “hold” rating in a research note on Tuesday, October 23rd. Citigroup cut Altria Group from a “neutral” rating to a “sell” rating in a research note on Friday, December 21st. Deutsche Bank reduced their target price on Altria Group from $62.00 to $55.00 and set a “buy” rating on the stock in a research note on Friday, December 21st. Finally, Barclays assumed coverage on Altria Group in a research note on Friday, December 7th. They issued an “overweight” rating and a $64.00 target price on the stock. Three equities research analysts have rated the stock with a sell rating, five have issued a hold rating and eight have issued a buy rating to the company’s stock. The company currently has a consensus rating of “Hold” and an average target price of $65.86.

Shares of NYSE:MO opened at $49.00 on Thursday. Altria Group Inc has a 12-month low of $42.40 and a 12-month high of $66.53. The stock has a market cap of $93.31 billion, a PE ratio of 12.28, a P/E/G ratio of 1.46 and a beta of 0.36. The company has a current ratio of 0.20, a quick ratio of 0.09 and a debt-to-equity ratio of 0.80.

Altria Group (NYSE:MO) last announced its quarterly earnings data on Thursday, January 31st. The company reported $0.95 earnings per share (EPS) for the quarter, meeting the Zacks’ consensus estimate of $0.95. Altria Group had a return on equity of 49.05% and a net margin of 27.45%. The firm had revenue of $4.79 billion for the quarter, compared to analysts’ expectations of $4.81 billion. During the same period last year, the firm earned $0.91 earnings per share. As a group, analysts anticipate that Altria Group Inc will post 4.2 EPS for the current year.

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Altria Group Profile

Altria Group, Inc, through its subsidiaries, manufactures and sells cigarettes, smokeless products, and wine in the United States. It offers cigarettes primarily under the Marlboro brand; cigars principally under the Black & Mild brand; and moist smokeless tobacco products under the Copenhagen, Skoal, Red Seal, and Husky brands.

Further Reading: What is a Derivative?

Want to see what other hedge funds are holding MO? Visit HoldingsChannel.com to get the latest 13F filings and insider trades for Altria Group Inc (NYSE:MO).

Do Aurora Cannabis Results Signal a Weakness in Pot Market?

When Aurora Cannabis Inc. (NYSE: ACB) reported second-quarter fiscal 2019 results after markets closed Monday evening, the marijuana grower and distributor posted a quarterly net loss per share of C$0.25 on revenues of C$54.18 million. In the same period a year ago, the company had earnings per share of $0.02 on revenue of C$11.7 million. Analysts had forecast a net loss per share of C$0.05 and revenues of C$54.56 million. At today’s conversion rate, one Canadian dollar is equal to $0.75.

The company said sales of medical cannabis products totaled C$26 million in the quarter, up from C$24 million sequentially. Total cannabis net revenue totaled C$47.58 million, up from C$24.6 in the prior quarter.

An excise tax on all Canadian sales channels went into effect on October 17, cutting into profits, but falling wholesale prices in the Canadian consumer market were the bigger problem. The company said it would continue to focus on higher margin medical patients in Canada and globally.

The average net sales price of cannabis was $10.00 per gram in the second quarter, down 18% sequentially. Total production rose 57% sequentially to 7,822 kilograms, and kilograms sold rose from 2,676 in the first fiscal quarter to 6,999 in the second quarter. Cash costs of production rose by 33%, from $1.45 per gram to $1.92.

Although the company did not discuss falling wholesale prices, it would be surprising if legal sales in Canada are not falling victim to the same kind of competition from illegal sales that has rippled through legal state-wide markets in California, Oregon and Washington. The guy on the corner who does not pay taxes or have to meet other government imposed conditions is always going to underprice the legal market.

CEO Terry Booth said:

Our brands continue to resonate extremely well in the consumer market, our patient numbers continue to increase steadily, and we have maintained our market leadership in Germany and other key international markets. We are experiencing exceptional demand for our Canadian medical and consumer products, as well as sustained strong demand internationally. With our Aurora Sky and MedReleaf Bradford facilities ramping up production as anticipated and our other licensed facilities operating at full capacity, we are reiterating our earlier guidance of achieving sustained EBITDA positive results from the second calendar quarter of this year (our fiscal Q4).

Shares traded down about 2.2% in Tuesday’s New York Stock Exchange premarket at $6.92, in a post-IPO range of $4.05 to $12.52. The 12-month consensus price target on the stock is $C11.80, compared with Monday’s closing price in Toronto of C$9.50.

ALSO READ: The 15 Best Dividend Stocks for Retirees to Own

Why Suburban Propane Partners Units Jumped 20% in January

What happened

Units of limited partnership Suburban Propane Partners (NYSE:SPH) rose 20% in January, according to data provided by S&P Global Market Intelligence. That was a nice rebound after a late-2018 swoon left the propane distributor's units down by 20%. Looking back over the trailing six months, the units were actually about breakeven at the end of January.

So what

The big driver here was market sentiment, though a winter cold snap helped as well (more on the vagaries of weather below). Investors were in a decidedly defensive stance at the end of 2018, but shifted gears in January. The big drop and recovery in Suburban Propane's units clearly display the fickle mood of the market today. The fact that the units are pretty much back where they were before investors got the jitters makes complete sense, too, since nothing really changed at the partnership.

Image source: Getty Images.

That's good and bad. Suburban has been dealing with a highly leveraged balance sheet for a number of years following a large acquisition in 2012. The company gets paid for delivering propane, not the propane itself, so its business largely avoids the risk of commodity price swings. However, it can't avoid the impact that hot weather has on demand -- propane's largest use is for heating. Warm weather, and the corresponding reduction in demand, put material pressure on the partnership's cash flows in the years following its $1.8 billion purchase of Inergy's propane business in 2012.   

Cash got so tight that Suburban was forced to trim its distribution by 33% in late 2017. The goal was to free up cash for debt repayment and to put the distribution on a more solid footing. The partnership has made good progress on both counts. It reported solid distribution coverage of 1.3 times in mid-November last year when the partnership released fiscal full-year 2018 earnings. Leverage has also improved, with its debt-to-EBITDA ratio down to around 4.5 from over 6 in mid-2016. 

Now what

Propane distributors like Suburban have been dealing with material headwinds for a few years now. That goes a long way toward explaining both the distribution cut and the still-high 10% yield despite now strong distribution coverage. Investors simply aren't convinced that Suburban (and its peers) are out of the woods, even though it has made solid progress toward its stated deleveraging goals. In the end, this isn't a sector that most investors should be considering. However, for those willing to take a hands-on approach with their portfolios, a deep dive might be in order with Suburban Propane. Just be aware that even though the partnership is largely protected from fluctuating energy prices, its units can still be very volatile.

This Is the Best Biotech Stock on the Market

There are at least 500 biotech stocks on the market. They range from big biotechs with multiple blockbuster products to tiny biotechs that are years away from even hoping to win approval for their first drug. 

Choosing the best stock out of all of these biotechs isn't easy. You could make a compelling argument for quite a few of them. But after serious consideration, I think there's one biotech stock that stands out from the pack more than any other. Here are five reasons why the best biotech stock on the market is Vertex Pharmaceuticals (NASDAQ:VRTX).

Image source: Getty Images.

1. It's tapped less than half of its current addressable market 

Vertex claims three approved cystic fibrosis (CF) drugs on the market. Two of them -- Kalydeco and Orkambi -- are already blockbusters. Vertex's newest drug, Symdeko, is likely to reach the $1 billion annual sales mark this year. 

But despite its tremendous success, Vertex still has tapped less than half of the current addressable market for its three approved drugs. Of the estimated 39,000 CF patients eligible for one of Vertex's drugs, only around 18,000 are currently on treatment. Even if Vertex didn't win approvals for any new drugs or additional indications for its existing drugs, the biotech has significant room for growth in CF.

2. It's on track to expand its addressable CF market by nearly 75%

The really good news for Vertex, though, is that it does expect to win approvals for new CF drugs and expanded labels for its current drugs. Vertex thinks that picking up approvals for treating younger patients for its existing drugs will expand the addressable patient population from 39,000 to 44,000.

Vertex is also on track to submit for approval of a triple-drug combo by the middle of 2019. The biotech believes that a triple-drug regimen will enable it to treat another 24,000 patients worldwide. Overall, Vertex should be able to expand its addressable CF market by nearly 75% over the next few years.

3. It has no real competition in CF

Most biotechs face significant competition even for their best drugs. But Vertex doesn't. The company currently enjoys a virtual monopoly in CF with the only approved drugs that treat the underlying cause of the disease.

Granted, that could change in the future. AbbVie is developing triple-drug CF therapies that it licensed from Galapagos. But the big pharma company is well behind Vertex in development and the data released so far for Galapagos' drugs don't look promising for AbbVie's chances of beating Vertex. 

4. It's developing promising drugs beyond CF

Vertex CEO Jeff Leiden stated in the biotech's Q4 conference call that Vertex "has the potential for significant revenue and earnings growth through the mid-2020s, based solely on treating more patients with our approved and future CF medicines." He's right. However, Vertex is also developing promising drugs for treating indications other than CF.

The biotech has reported positive phase 2 results for pain drug VX-150 and hopes to advance the drug into pivotal late-stage clinical studies after it completes a phase 2b dose-ranging study. Vertex already has one experimental drug targeting treatment of alpha-1 antitrypsin deficiency (AATD) in phase 1 clinical testing and expects to move another AATD drug into phase 1 this year. The company is also partnering with CRISPR Therapeutics on gene-editing therapy CTX001, which is in early stage studies for treating rare blood disorders beta-thalassemia and sickle cell disease.

In addition, Leiden has indicated that Vertex will use its rapidly growing cash stockpile to fund acquisitions of earlier-stage pipeline assets. Vertex is especially focusing on "potentially transformative drugs for serious diseases" -- similar to the successful approach the company has taken with CF.

5. Its valuation doesn't fully reflect its growth prospects

There's no question that Vertex has tremendous growth prospects. The biotech can and almost certainly will continue to achieve significant growth in treating CF. It has multiple other promising avenues for growth as well. But Vertex's current valuation doesn't fully reflect those impressive growth prospects.

Vertex shares trade at nearly 44 times expected one-year earnings. That might seem expensive. However, the biotech's real growth spurt will occur over the next several years when its triple-drug combo is expected to be on the market. Vertex's price-to-earnings-to-growth (PEG) ratio, which reflects five-year expected growth, is a very low 0.87. Only a handful of biotechs have PEG ratios that low.

Best doesn't mean perfect

I think Vertex is the best biotech stock on the market. But best doesn't mean perfect. 

Like any biotech, Vertex faces risks that its pipeline candidates won't be successful in clinical testing or win regulatory approval. The company also could run into problems securing reimbursement for its drugs -- an issue that it's dealing with now in the United Kingdom. 

Overall, though, Vertex appears to be in great shape. The stock has more than doubled over the last two years. With plenty of room to grow in CF, promising new drugs targeting other indications in the pipeline, and no legacy drugs holding it back, Vertex is arguably as good as it gets for biotech stocks.