Buy Cipla; target of Rs 600: JM Financial

JM Financial's research report on Cipla

Cipla disappointed in 4QFY18, in-line with previous years�� trend, with Revenues/EBITDA/PAT being 6%/28%/50% below our estimates, mainly due to negative operating leverage on account of lower sales as well as one-time costs related to sales and distribution (INR 450- 500mn), employee recruitment, disposal of Yemen subsidiary (FX loss of INR 512mn) and provisions (INR 775mn) towards ongoing DPCO overcharging litigation.

Outlook

Cipla��s targets crossing USD 1bn of domestic sales in FY19, implying an ambitious low-teen growth rate which could be difficult to achieve organically. We cut our FY19/20 EPS estimates by 12%/11% to incorporate lower revenues and slower margin expansion going forward and arrive at a Mar��19 TP of INR 600. Maintain BUY.

For all recommendations report,�click here

Disclaimer:�The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

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Analyzing Airgain (AIRG) and Superconductor Technologies (SCON)

Superconductor Technologies (NASDAQ: SCON) and Airgain (NASDAQ:AIRG) are both small-cap computer and technology companies, but which is the superior investment? We will contrast the two businesses based on the strength of their earnings, institutional ownership, risk, analyst recommendations, profitability, valuation and dividends.

Analyst Recommendations

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This is a summary of recent recommendations and price targets for Superconductor Technologies and Airgain, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Superconductor Technologies	0	0	1	0	3.00
Airgain	0	1	2	0	2.67

Superconductor Technologies currently has a consensus price target of $3.00, suggesting a potential upside of 226.09%. Airgain has a consensus price target of $14.00, suggesting a potential upside of 71.15%. Given Superconductor Technologies’ stronger consensus rating and higher possible upside, equities research analysts plainly believe Superconductor Technologies is more favorable than Airgain.

Volatility & Risk

Superconductor Technologies has a beta of 0.88, meaning that its share price is 12% less volatile than the S&P 500. Comparatively, Airgain has a beta of 2.04, meaning that its share price is 104% more volatile than the S&P 500.

Insider and Institutional Ownership

8.3% of Superconductor Technologies shares are owned by institutional investors. Comparatively, 30.0% of Airgain shares are owned by institutional investors. 1.6% of Superconductor Technologies shares are owned by insiders. Comparatively, 20.4% of Airgain shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Profitability

This table compares Superconductor Technologies and Airgain’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Superconductor Technologies	-1,317.27%	-139.63%	-121.99%
Airgain	-0.68%	1.58%	1.31%

Earnings and Valuation

This table compares Superconductor Technologies and Airgain’s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Superconductor Technologies	$450,000.00	25.19	-$9.52 million	($0.91)	-1.01
Airgain	$49.52 million	1.60	$1.14 million	$0.11	74.36

Airgain has higher revenue and earnings than Superconductor Technologies. Superconductor Technologies is trading at a lower price-to-earnings ratio than Airgain, indicating that it is currently the more affordable of the two stocks.

Summary

Airgain beats Superconductor Technologies on 11 of the 14 factors compared between the two stocks.

About Superconductor Technologies

Superconductor Technologies Inc., together with its subsidiaries, develops, produces, and commercializes high temperature superconductor materials and related technologies in the United States. It is involved in developing Conductus superconducting wire for power applications. The company was founded in 1987 and is headquartered in Austin, Texas.

About Airgain

Airgain, Inc. designs, develops, and engineers antenna products for original equipment and design manufacturers, chipset vendors, and service providers worldwide. Its products include MaxBeam embedded antennas; profile embedded antennas; profile contour embedded antennas; ultra-embedded antennas; omnimax high performance external antennas; MaxBeam carrier class antennas; and SmartMax embedded antennas, as well as automotive, fleet, public safety, and M2M antennas. The company provides embedded antenna technologies to enable high performance wireless networking across a range of home, enterprise, automotive, and Internet of Things. As of December 31, 2017, it had 131 issued patents in the United States, 23 companion patents outside the United States, and 81 patent applications on file. The company was formerly known as AM Group and changed its name to Airgain, Inc. in 2004. Airgain, Inc. was founded in 1995 and is headquartered in San Diego, California.

Anjali Sud was rejected from dozens of investment banks. Now she's the CEO of Vimeo

As a senior at the University of Pennsylvania's Wharton business school, Anjali Sud applied to dozens of jobs in investment banking. She didn't get any.

"I got rejected from every single big investment bank," Sud, now the CEO of Vimeo, told CNNMoney. "I remember leaving one of the interviews, and they told me that they didn't think I had the personality to be a banker," she recalled. "That definitely was a low point."

"It was the first time that I really felt like this was something I wanted to do and I couldn't do it," the 34-year-old recalled.

But Sud had faced challenges before. As a young teen in Flint, Michigan, she applied on a whim to a prestigious boarding school in Massachusetts. She was accepted, and left home at the age of 14. At first, Sud had a difficult time in the academically rigorous environment.

"I failed a lot in my first year," she said. "I had to work really hard to catch up. I think that was a wake-up call that most people probably don't get at 14."

Despite the negative feedback, Sud didn't give up on her search for a job in investment banking. Ultimately she took a job as the first analyst for a small firm, Sagent Advisors.

At Sagent, Sud learned the skills that would help her succeed later on.

"I found myself doing things that most investment bankers don't get to do," she said. Sud hired and trained new analysts, helped the fledgling company expand internationally and worked on partnerships. The time at Sagent "taught me that sometimes the non-traditional path can be the best one," she said.

A winding road

After spending a few years at Sagent, Sud started exploring other options. She earned a degree from Harvard Business School and held a few positions at Amazon.

"I have gotten advice to not move around so much ... and to stay focused in one path," Sud said. "I've gotten advice to stay in my lane and not be so impatient about my own career growth."

But Sud ignored that advice.

"I wanted a diversity of experiences because I thought it would make me a better leader and a better decision maker," she said. The approach paid off. Sud went from Amazon (AMZN) to Vimeo, where she started out as a leader in the global marketing department.

During her time there, she made the case that the business should focus its attention on content creators.

"That was a really valuable business opportunity, and an area no one was really focused on," Sud said. She made the case to Vimeo, and "because of that, I was given an opportunity to run the company."

She credits her speedy rise to that ability to carve out her own path. "You can create your own opportunities," she said. "It's sometimes really smart to look where others aren't looking."

Don't sweat it

Looking back, Sud wishes she had worried less about having a linear career path. "The advice I wish I had known is 'don't sweat it so much,'" she said.

Sud values the guidance she received from her parents. "Growing up, my dad would always tell me and my siblings to pursue the world," she said. "He taught us to never make decisions based on your fears, always make them based on your strengths."

That doesn't mean avoiding failure. "Failing early and often can be really empowering," she said. "Failure is essential to success."

Those early failures helped her ignore the people who told her to ask for less. "I probably don't look like, or seem like, a CEO of a company of the size of Vimeo," she said. "Don't let people tell you you're not a good fit for things."

TJX Companies Gets the Job Done in the First Quarter

Investors had been optimistic heading into�TJX Companies'�(NYSE:TJX) first-quarter earnings report this week. The leading off-price retailer of home goods and apparel had announced healthy sales growth in the prior quarter, after all, and management sounded an optimistic tone back in February that fiscal 2019 will bring new operating and financial records for the company.

TJX Companies modestly surpassed those expectations, as customer traffic held up well across its core brands of TJ Maxx, Marshall's, and Home Goods.

Let's take a look at how the headline numbers compared to the prior-year period:

�Metric

Q1 2018

Q1 2017

Change (YOY)

Revenue	$8.7 billion	$7.8 billion	12%
Net income	$716 million	$536 million	34%
Earnings per share	$1.13	$0.82	38%

Data source: TJX financial filings. YOY = year over year.

What happened with TJX Companies this quarter?

Sales growth continued its healthy pace from the holiday period and kept TJX Companies on track to expand revenue for the 23rd consecutive year in fiscal 2019. Profits held up well, too, as customers snapped up its heavily discounted merchandise.

Here are the key highlights of the quarter:�

Comparable-store sales rose in each of the company's four main retailing divisions, led by a 4% spike at the Marshalls and TJ Maxx stores. The 3% overall increase was powered by positive customer traffic in each of its segments. Gross profit margin held steady at 29% of sales, which suggests the retailer didn't have to cut prices to keep inventory moving. Operating margin ticked up to 11% of sales from 10.7% a year ago, leading to a 17% increase in adjusted earnings per share. The retailer added 71 stores to its footprint, equating to a 5% boost in square footage. TJX Companies sent $600 million to shareholders, split between $400 million in stock repurchase spending and $200 million in dividend payments. What management had to say

"We are pleased with our first quarter results," CEO Ernie Herrman noted in a press release. "Both our consolidated comp store sales growth of 3% and earnings per share exceeded our expectations," Herrman explained.

Management highlighted TJX Companies' steadily growing shopper traffic as particularly good news. "We believe that the consistency of our customer traffic increases demonstrates the strength and resiliency of our business and our ability to succeed through many types of economic and retail environments," Herrman said.

Regarding its buyers' opportunities to continue securing high-quality merchandise at discount prices, the retailer saw reason for more optimism. "[TJX Companies] is in an excellent inventory position entering the second quarter and has plenty of liquidity to take advantage of the terrific opportunities it sees in the marketplace for quality, branded merchandise," the company said.

Looking forward

The strong start to the year convinced management to boost its earnings outlook slightly, up to an increase of between 5% and 6%. Executives left their sales growth forecast unchanged at between 1% and 2%, likely due to the fact that so much of the fiscal year is still to come.

Investors can expect those returns to be supplemented by significantly higher cash payments, which are being funded by healthy cash flow and beneficial changes to U.S. tax law.�TJX Companies' dividend was recently lifted by 25% and management, consistent with its comments at the start of the year, still expects to roughly double share buyback spending to as much as $3 billion in fiscal 2019.

Best Penny Stocks To Watch For 2019

tags:MFM,LLL,DOOR,

A majority of Americans now favor legalizing marijuana, with 29 states already legalizing medicinal marijuana, making cannabis one of the most exciting new industries to invest in.

That's why today we'll show you our three best marijuana penny stocks to buy in 2018.

Now, marijuana is still illegal at the federal level, which makes investing in cannabis stocks riskier than other industries.

But make no mistake: Despite U.S. Attorney General Jeff Sessions' attempts to re-criminalize marijuana users and businesses, the marijuana market continues growing as legalization spreads to more states.

Best Penny Stocks To Watch For 2019: MFS Municipal Income Trust(MFM)

Advisors' Opinion:

• [By Ethan Ryder]

  Doliver Capital Advisors LP lessened its stake in MFS Municipal Income Trust (NYSE:MFM) by 51.6% in the 1st quarter, according to its most recent 13F filing with the Securities and Exchange Commission (SEC). The fund owned 19,505 shares of the closed-end fund’s stock after selling 20,769 shares during the period. Doliver Capital Advisors LP’s holdings in MFS Municipal Income Trust were worth $127,000 as of its most recent SEC filing.

• [By Ethan Ryder]

  News headlines about MFS Municipal Income Trust (NYSE:MFM) have been trending somewhat positive on Sunday, Accern Sentiment Analysis reports. The research group identifies negative and positive news coverage by reviewing more than twenty million news and blog sources in real time. Accern ranks coverage of publicly-traded companies on a scale of negative one to positive one, with scores closest to one being the most favorable. MFS Municipal Income Trust earned a media sentiment score of 0.02 on Accern’s scale. Accern also gave news articles about the closed-end fund an impact score of 46.4351075510345 out of 100, meaning that recent news coverage is somewhat unlikely to have an effect on the stock’s share price in the next few days.

Best Penny Stocks To Watch For 2019: L-3 Communications Holdings, Inc.(LLL)

Advisors' Opinion:

• [By Lou Whiteman]

  L-3 Technologies (NYSE:LLL) missed out on much of the rally enjoyed by other defense contractors over the last year. The reason for the lagging performance was because the company was in the middle of a transformation plan aimed at propelling it into the ranks of those larger rivals. Judging by its first-quarter results, the efforts are already beginning to show results.

• [By Max Byerly]

  Shares of L3 Technologies (NYSE:LLL) have received a consensus recommendation of “Buy” from the fourteen analysts that are presently covering the stock, MarketBeat Ratings reports. Three investment analysts have rated the stock with a hold rating, ten have issued a buy rating and one has issued a strong buy rating on the company. The average 12 month price target among brokerages that have issued a report on the stock in the last year is $223.00.

• [By Shane Hupp]

  Prudential Financial Inc. decreased its stake in L3 Technologies (NYSE:LLL) by 20.0% in the first quarter, according to the company in its most recent Form 13F filing with the Securities & Exchange Commission. The institutional investor owned 87,847 shares of the aerospace company’s stock after selling 21,981 shares during the quarter. Prudential Financial Inc. owned approximately 0.11% of L3 Technologies worth $18,272,000 as of its most recent SEC filing.

Best Penny Stocks To Watch For 2019: Masonite International Corporation(DOOR)

Advisors' Opinion:

• [By Max Byerly]

  Masonite International (NYSE:DOOR) – Wedbush dropped their Q2 2018 earnings per share (EPS) estimates for shares of Masonite International in a note issued to investors on Monday, May 7th. Wedbush analyst J. Mccanless now expects that the company will post earnings per share of $1.02 for the quarter, down from their prior forecast of $1.04. Wedbush currently has a “Neutral” rating and a $70.00 target price on the stock. Wedbush also issued estimates for Masonite International’s Q3 2018 earnings at $1.16 EPS, Q4 2018 earnings at $1.03 EPS, FY2018 earnings at $3.93 EPS, Q1 2019 earnings at $0.92 EPS, Q2 2019 earnings at $1.24 EPS, Q3 2019 earnings at $1.39 EPS, Q4 2019 earnings at $1.25 EPS and FY2019 earnings at $4.80 EPS.

• [By Ethan Ryder]

  Get a free copy of the Zacks research report on Masonite International (DOOR)

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

• [By Matt Hogan]

  Masonite International Corp (NYSE: DOOR) supplies exterior and interior doors primarily to the North American residential market. There are in a great position to profit from both new construction and the repair, renovation, and remodel ("RRR") trends of a hot real estate market.

$2.57 Billion in Sales Expected for CNA Financial (CNA) This Quarter

Wall Street analysts predict that CNA Financial (NYSE:CNA) will report $2.57 billion in sales for the current fiscal quarter, according to Zacks Investment Research. Two analysts have issued estimates for CNA Financial’s earnings. CNA Financial reported sales of $2.32 billion in the same quarter last year, which indicates a positive year-over-year growth rate of 10.8%. The business is expected to report its next quarterly earnings report on Monday, July 30th.

According to Zacks, analysts expect that CNA Financial will report full-year sales of $10.31 billion for the current fiscal year, with estimates ranging from $10.30 billion to $10.33 billion. For the next year, analysts forecast that the company will report sales of $10.74 billion per share, with estimates ranging from $10.60 billion to $10.88 billion. Zacks’ sales averages are an average based on a survey of analysts that that provide coverage for CNA Financial.

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CNA Financial (NYSE:CNA) last issued its quarterly earnings data on Monday, April 30th. The insurance provider reported $1.07 earnings per share (EPS) for the quarter, topping the Thomson Reuters’ consensus estimate of $0.91 by $0.16. The firm had revenue of $2.52 billion during the quarter, compared to the consensus estimate of $2.38 billion. CNA Financial had a net margin of 9.54% and a return on equity of 8.06%. During the same period last year, the business posted $0.87 earnings per share.

Several brokerages have issued reports on CNA. ValuEngine downgraded shares of CNA Financial from a “buy” rating to a “hold” rating in a research report on Monday, May 14th. Zacks Investment Research cut shares of CNA Financial from a “buy” rating to a “hold” rating in a report on Tuesday, April 17th.

CNA stock traded down $0.03 during mid-day trading on Thursday, hitting $49.27. 145,279 shares of the company were exchanged, compared to its average volume of 240,956. The company has a quick ratio of 0.23, a current ratio of 0.23 and a debt-to-equity ratio of 0.23. The company has a market capitalization of $13.37 billion, a PE ratio of 14.58, a price-to-earnings-growth ratio of 2.36 and a beta of 1.20. CNA Financial has a 1-year low of $43.95 and a 1-year high of $55.62.

The firm also recently announced a quarterly dividend, which will be paid on Wednesday, May 30th. Stockholders of record on Monday, May 14th will be issued a dividend of $0.30 per share. The ex-dividend date of this dividend is Friday, May 11th. This represents a $1.20 annualized dividend and a dividend yield of 2.44%. CNA Financial’s dividend payout ratio is presently 35.50%.

In other news, EVP Scott L. Weber sold 1,486 shares of the firm’s stock in a transaction that occurred on Friday, March 2nd. The shares were sold at an average price of $49.83, for a total transaction of $74,047.38. Following the transaction, the executive vice president now directly owns 2,382 shares of the company’s stock, valued at $118,695.06. The sale was disclosed in a legal filing with the Securities & Exchange Commission, which can be accessed through the SEC website. Also, EVP Douglas Worman sold 11,396 shares of the firm’s stock in a transaction that occurred on Thursday, May 3rd. The stock was sold at an average price of $47.66, for a total transaction of $543,133.36. Following the transaction, the executive vice president now directly owns 17,273 shares in the company, valued at $823,231.18. The disclosure for this sale can be found here. 0.18% of the stock is currently owned by company insiders.

A number of large investors have recently made changes to their positions in CNA. Systematic Financial Management LP bought a new position in CNA Financial in the fourth quarter valued at approximately $23,551,000. Allianz Asset Management GmbH increased its stake in CNA Financial by 43.9% in the first quarter. Allianz Asset Management GmbH now owns 657,337 shares of the insurance provider’s stock valued at $32,439,000 after acquiring an additional 200,582 shares during the last quarter. Arrowstreet Capital Limited Partnership increased its stake in CNA Financial by 110.7% in the fourth quarter. Arrowstreet Capital Limited Partnership now owns 373,588 shares of the insurance provider’s stock valued at $19,819,000 after acquiring an additional 196,288 shares during the last quarter. Mackay Shields LLC bought a new position in CNA Financial in the first quarter valued at approximately $8,700,000. Finally, Prudential Financial Inc. increased its stake in CNA Financial by 70.8% in the first quarter. Prudential Financial Inc. now owns 331,811 shares of the insurance provider’s stock valued at $16,375,000 after acquiring an additional 137,500 shares during the last quarter. 99.72% of the stock is currently owned by institutional investors and hedge funds.

CNA Financial Company Profile

CNA Financial Corporation provides commercial property and casualty insurance products primarily in the United States. It operates through Specialty, Commercial, International, Life & Group, and Corporate & Other segments. The company's property insurance products include property, marine, boiler, and machinery coverages; and casualty insurance products comprise workers compensation, general and product liability, commercial auto, and umbrella coverages.

Get a free copy of the Zacks research report on CNA Financial (CNA)

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

McDonald's Investors Need to Watch This Number After Its Solid Quarter

Intense competition for breakfast dollars has�McDonald's (NYSE:MCD) seeing lower breakfast sales, but the fast food giant still turned in a solid first-quarter earnings report that beat analyst expectations.

However, investors would be smart to keep an eye on the ability of the burger joint to continue attracting more customers. Profits rose at a higher rate than even sales, but McDonald's growth seemed to be predicated on charging higher prices in the quarter, not on improved customer traffic.

McDonald's is still having a tough time attracting customers to its U.S. stores. Image source: McDonald's.

A two-way street on traffic

Last year, McDonald's finally broke a four-year record of falling guest counts at its restaurants, during which its CEO, Steve Easterbrook, estimated the chain lost a half-million customers. By concentrating once again on the value end of its menu, McDonald's was able to woo a greater number of international customers to its stores, and it wants to keep that momentum.

Globally, comparable restaurant sales rose 5.5% with a 0.8% gain in traffic in the latest quarter, better than the 3.6% rise in comps McDonald's saw last year on a 0.6% increase in guest counts. However, in the U.S. market, customer traffic fell.

That's where investors need to keep close tabs, because while some analysts took McDonald's global comps numbers to indicate price hikes weren't scaring customers away, it seems that in the U.S., that's exactly what's happening.

The "burger wars" remain fully engaged with both Burger King and Wendy's�continuing to promote their own value menus, but there are also other chains like Taco Bell, Dunkin' Donuts, and Sonic making the competition especially intense. Even�Chipotle Mexican Grill wants to add a breakfast menu.

Consumers simply have a lot of choice when it comes to where to eat, and McDonald's raising prices may have bolstered profits at the expense of the customer base.

In January, the company launched its $1 $2 $3 Dollar Menu, which hasn't driven guest checks lower as some feared, but neither is it attracting more customers. Easterbrook recognized that and says McDonald's has the flexibility to keep finessing the menu to make it even more attractive to customers, which is hopeful for future growth and getting diners back in the door.

McDonald's stock still has plenty of upside

Although McDonald's stock has pulled back from the all-time highs it hit earlier in the year, it is not quite a bargain with a forward price-to-earnings of 21x, on par with peers like Wendy's and Restaurant Brands International.

Yet the market may be missing some opportunity with McDonald's stock. Some of the chain's newest marketing pushes are only just starting. For example, it introduced a 2-for-$4 promotion in mid-March, which represents a value deal comparable to the competition, and that's on top of the just-launched fresh beef Quarter Pounder. Although Wendy's PR department has been trying to make a lot of hay over the fact that all of its burgers are fresh beef, while McDonald's is only making the Quarter Pounder from such meat, Easterbrook says it hasn't seen any blowback from the fresh and frozen comparison.�

Having already raised prices, McDonald's may have done the hard work early, even if it drove some customers away. The new menu items, particularly at the value end, give the chain a chance to lure those customers back, which could drive sales, profits, and its stock higher.

Investors still need to watch how McDonald's guest counts trend throughout the year, particularly in the U.S. But not only can McDonald's regain those all-time highs, it could eventually break through that ceiling on its way to becoming a $200 stock a year from now.