Top Insurance Stocks To Buy For 2018

tags:AON,PRU,AIG,PFG,

This recession call is coming from inside the house.

The Bank of Canada has highlighted elevated household debt and imbalances within the nation’s real estate market as the two chief vulnerabilities to the financial system in the event of a recession.

But what could trigger such a downturn? Macquarie Capital Markets offers one simple answer: the housing market itself -- highlighting that the share of employment tied to construction as well as finance, insurance and real estate is nearly two standard deviations above its long-term average.

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Tighter mortgage rules and higher interest rates have weighed on activity in formerly high-flying Canadian housing markets, with home sales in Toronto having their worst start to the year since 2009.

Top Insurance Stocks To Buy For 2018: Aon Corporation(AON)

Advisors' Opinion:

• [By Stephan Byrd]

  US Bancorp DE raised its stake in shares of Aon (NYSE:AON) by 3.0% in the first quarter, according to the company in its most recent disclosure with the SEC. The firm owned 40,448 shares of the financial services provider’s stock after acquiring an additional 1,178 shares during the quarter. US Bancorp DE’s holdings in AON were worth $5,676,000 as of its most recent filing with the SEC.

• [By Joseph Griffin]

  AON (NYSE:AON) had its price target hoisted by Citigroup from $160.00 to $165.00 in a report issued on Tuesday morning. They currently have a buy rating on the financial services provider’s stock.

• [By Max Byerly]

  State of Wisconsin Investment Board decreased its holdings in shares of Aon (NYSE:AON) by 9.2% in the 1st quarter, Holdings Channel reports. The fund owned 384,127 shares of the financial services provider’s stock after selling 38,942 shares during the quarter. State of Wisconsin Investment Board’s holdings in AON were worth $53,905,000 at the end of the most recent quarter.

• [By Lisa Levin] Companies Reporting Before The Bell Celgene Corporation (NASDAQ: CELG) is projected to report quarterly earnings at $1.96 per share on revenue of $3.46 billion. Aon plc (NYSE: AON) is expected to report quarterly earnings at $2.8 per share on revenue of $2.93 billion. American Axle & Manufacturing Holdings, Inc. (NYSE: AXL) is estimated to report quarterly earnings at $0.81 per share on revenue of $1.75 billion. Alibaba Group Holding Limited (NYSE: BABA) is expected to report quarterly earnings at $0.88 per share on revenue of $9.27 billion. LifePoint Health, Inc. (NASDAQ: LPNT) is projected to report quarterly earnings at $1.13 per share on revenue of $1.62 billion. V.F. Corporation (NYSE: VFC) is estimated to report quarterly earnings at $0.65 per share on revenue of $2.90 billion. Newell Brands Inc. (NYSE: NWL) is expected to report quarterly earnings at $0.26 per share on revenue of $3.05 billion. Titan International, Inc. (NYSE: TWI) is projected to report quarterly earnings at $0.04 per share on revenue of $407.27 million. Boise Cascade Company (NYSE: BCC) is expected to report quarterly earnings at $0.45 per share on revenue of $1.09 billion. Cheniere Energy, Inc. (NYSE: LNG) is estimated to report quarterly earnings at $0.39 per share on revenue of $1.59 billion. Cboe Global Markets, Inc. (NASDAQ: CBOE) is projected to report quarterly earnings at $1.24 per share on revenue of $308.05 million. ITT Inc. (NYSE: ITT) is estimated to report quarterly earnings at $0.73 per share on revenue of $683.96 million. Fred's, Inc. (NASDAQ: FRED) is expected to report quarterly loss at $0.19 per share on revenue of $551.00 million. Virtu Financial, Inc. (NASDAQ: VIRT) is projected to report quarterly earnings at $0.52 per share on revenue of $288.31 million. Cheniere Energy Partners, L.P. (NYSE: CQP) is expected to report quarterly earnings at $0.57 per share on revenue of $1.38 billion. Genesis Energy, L.P

Top Insurance Stocks To Buy For 2018: Prudential Financial Inc.(PRU)

Advisors' Opinion:

• [By Max Byerly]

  Flippin Bruce & Porter Inc. grew its holdings in shares of Prudential Financial (NYSE:PRU) by 2.3% in the 1st quarter, according to its most recent disclosure with the Securities and Exchange Commission (SEC). The institutional investor owned 61,363 shares of the financial services provider’s stock after acquiring an additional 1,391 shares during the period. Flippin Bruce & Porter Inc.’s holdings in Prudential Financial were worth $6,354,000 as of its most recent SEC filing.

• [By Zacks]

  Well, given the growing demand for securitized mortgage deals, Barclays plans to package and sell these Irish loans over the next two months. The group of investors that has shown interest in buying residential mortgage backed securities includes M&G Investments, the investment management division of British insurer Prudential Plc (NYSE: PRU) and Pacific Investment Management Co. ("PIMCO").

• [By Jason Hall, Chuck Saletta, and Reuben Gregg Brewer]

  But that doesn't mean you need to make risky bets to capture solid returns, either, and buying solid companies at reasonable prices can help create a margin of safety and improve your returns, while also decreasing your risk of permanent losses. Three stocks that meet these criteria are small healthcare real-estate specialist�Caretrust REIT Inc�(NASDAQ:CTRE), financial services giant�Prudential Financial Inc�(NYSE:PRU), and energy behemoth�ExxonMobil Corporation�(NYSE:XOM).�

• [By Joseph Griffin]

  These are some of the headlines that may have effected Accern Sentiment Analysis’s analysis:

  Get Prudential Financial alerts: Prudential (PUK) Presents At 2018 Deutsche Bank Annual Global Financial Services Conference – Slideshow (seekingalpha.com) Leston Welsh joins Prudential Group Insurance as head of Disability and Absence Management (finance.yahoo.com) Contrasting Prudential Financial (PRU) & Old Mutual (ODMTY) (americanbankingnews.com) Prudential again accused with unauthorised money deduction (vir.com.vn) An Application for the Trademark ��MULLINTBG�� Has Been Filed by Prudential Insurance Company (insurancenewsnet.com)

  Prudential Financial traded down $5.05, hitting $94.97, during midday trading on Tuesday, MarketBeat Ratings reports. 2,919,216 shares of the company’s stock were exchanged, compared to its average volume of 2,144,103. The company has a current ratio of 0.12, a quick ratio of 0.12 and a debt-to-equity ratio of 0.35. The firm has a market cap of $42.01 billion, a PE ratio of 8.98, a P/E/G ratio of 0.97 and a beta of 1.52. Prudential Financial has a one year low of $94.51 and a one year high of $127.14.

• [By Chuck Saletta]

  Prudential Financial (NYSE:PRU) takes such pride in its rock-solid financial condition that it uses an actual rock -- the Rock of Gibraltar�-- as its corporate symbol. Prudential Financial backs up that claim with a balance sheet that has more cash, cash equivalents, and short-term investments�than total debt on it. It also claims a debt-to-equity ratio around 0.6 and a current ratio around 1.0�, which are further signs of a solid financial condition.

Top Insurance Stocks To Buy For 2018: American International Group Inc.(AIG)

Advisors' Opinion:

• [By Max Byerly]

  These are some of the media stories that may have effected Accern’s rankings:

  Get American International Group alerts: AIG’s loss for European business worsens in 2017 (businessinsurance.com) $1.26 EPS Expected for American International Group (AIG) This Quarter (americanbankingnews.com) UBS: Buy AIG After Earnings Estimates ‘Bottom Out’ (finance.yahoo.com) American International Group (AIG) Stock Rating Upgraded by UBS (americanbankingnews.com) American International Group (AIG) Receives Average Recommendation of “Hold” from Analysts (americanbankingnews.com)

  American International Group traded up $0.36, hitting $55.15, during mid-day trading on Friday, MarketBeat.com reports. The stock had a trading volume of 9,821,608 shares, compared to its average volume of 6,828,715. The company has a debt-to-equity ratio of 0.53, a current ratio of 0.27 and a quick ratio of 0.27. American International Group has a 1-year low of $49.57 and a 1-year high of $67.30. The firm has a market cap of $49.51 billion, a P/E ratio of 22.98, a PEG ratio of 1.01 and a beta of 1.24.

• [By ]

  Insurance company American International Group Inc. (AIG) stock fell 5.3% as harsh winter weather weighed on profits. But the company's long-term care exposure is relatively minimal.

• [By Logan Wallace]

  Sentry Investment Management LLC lessened its holdings in American International Group (NYSE:AIG) by 8.6% during the first quarter, HoldingsChannel reports. The firm owned 64,968 shares of the insurance provider’s stock after selling 6,147 shares during the quarter. Sentry Investment Management LLC’s holdings in American International Group were worth $3,536,000 at the end of the most recent reporting period.

Top Insurance Stocks To Buy For 2018: Principal Financial Group Inc(PFG)

Advisors' Opinion:

• [By WWW.GURUFOCUS.COM]

  For the details of Stilwell Value LLC's stock buys and sells, go to http://www.gurufocus.com/StockBuy.php?GuruName=Stilwell+Value+LLC

  These are the top 5 holdings of Stilwell Value LLCOFG Bancorp (OFG) - 1,614,868 shares, 14.1% of the total portfolio. Kingsway Financial Services Inc (KFS) - 3,780,889 shares, 12.63% of the total portfolio. HopFed Bancorp Inc (HFBC) - 627,128 shares, 7.62% of the total portfolio. Alcentra Capital Corp (ABDC) - 1,251,324 shares, 7.27% of the total portfolio. Shares added by 20.66%Sound Financial Bancorp Inc (SFBC) - 228,600 shares, 7.02% of th
• [By Joseph Griffin]

  KBC Group NV lowered its position in shares of Principal Financial Group Inc (NYSE:PFG) by 41.4% in the 1st quarter, according to its most recent disclosure with the SEC. The fund owned 201,808 shares of the financial services provider’s stock after selling 142,313 shares during the period. KBC Group NV’s holdings in Principal Financial Group were worth $12,292,000 as of its most recent filing with the SEC.

• [By Max Byerly]

  Shore Capital reissued their hold rating on shares of Provident Financial (LON:PFG) in a report issued on Thursday.

  PFG has been the subject of several other reports. Liberum Capital reissued a sell rating and set a GBX 483 ($6.48) price objective on shares of Provident Financial in a research note on Monday, February 26th. Peel Hunt reissued a hold rating and set a GBX 870 ($11.67) price objective on shares of Provident Financial in a research note on Tuesday, February 27th. JPMorgan Chase & Co. reduced their price objective on Provident Financial from GBX 1,100 ($14.76) to GBX 750 ($10.06) and set a neutral rating for the company in a research note on Thursday, May 10th. Barclays reissued an underweight rating and set a GBX 584 ($7.84) price objective on shares of Provident Financial in a research note on Wednesday, January 31st. Finally, Societe Generale lowered Provident Financial to a hold rating and set a GBX 1,050 ($14.09) price objective for the company. in a research note on Wednesday, February 28th. Two investment analysts have rated the stock with a sell rating, eleven have assigned a hold rating and two have assigned a buy rating to the company’s stock. Provident Financial presently has a consensus rating of Hold and a consensus price target of GBX 1,190.14 ($15.97).

• [By Shane Hupp]

  These are some of the news articles that may have impacted Accern’s scoring:

  Get Principal Financial Group alerts: Principal Financial Group (PFG) Approves New $300M Buyback (streetinsider.com) Principal Financial Group (PFG) Announces Share Repurchase Plan (americanbankingnews.com) Is Principal Large Cap Growth I Institutional (PLGIX) a Strong Mutual Fund Pick Right Now? (finance.yahoo.com) Principal Financial Group is Oversold (nasdaq.com) Principal Names New Chief Human Resources Officer (finance.yahoo.com)

  Several equities analysts have recently commented on PFG shares. Morgan Stanley decreased their target price on Principal Financial Group from $79.00 to $77.00 and set an “equal weight” rating on the stock in a research report on Thursday, April 5th. Wells Fargo reaffirmed a “market perform” rating and issued a $76.00 target price on shares of Principal Financial Group in a research report on Monday, January 8th. Credit Suisse Group started coverage on Principal Financial Group in a research report on Wednesday, April 25th. They issued a “neutral” rating and a $62.00 target price on the stock. Bank of America started coverage on Principal Financial Group in a research report on Monday, March 26th. They issued a “neutral” rating and a $65.00 target price on the stock. Finally, UBS started coverage on Principal Financial Group in a research report on Friday, March 2nd. They issued a “neutral” rating and a $69.00 target price on the stock. Two research analysts have rated the stock with a sell rating, seven have given a hold rating and three have issued a buy rating to the company. Principal Financial Group currently has an average rating of “Hold” and an average price target of $71.18.

Bitcoin Cash Ends Volatile Week With Modest Gain

&l;p&g;&l;img class=&q;dam-image shutterstock size-large wp-image-1096061096&q; src=&q;https://specials-images.forbesimg.com/dam/imageserve/1096061096/960x0.jpg?fit=scale&q; data-height=&q;640&q; data-width=&q;960&q;&g; Bitcoin Cash has enjoyed tailwinds lately. Shutterstock

Bitcoin Cash has&a;nbsp;climbed in the last few days, capping a notably volatile week by rallying following the news that mobile banking app Revolut now allows users to&a;nbsp;buy and sell the alternative protocol asset (altcoin).

This&a;nbsp;&l;a href=&q;https://blog.revolut.com/buy-xrp-bch-instantly-with-revolut-crypto/&q; target=&q;_blank&q;&g;decision&l;/a&g;&a;nbsp;has simply provided&a;nbsp;Bitcoin Cash with more validation, noted&a;nbsp;&l;span&g;Charles Hayter,&a;nbsp;co-founder and CEO of data provider&a;nbsp;&l;/span&g;&l;a href=&q;https://www.cryptocompare.com/&q; target=&q;_blank&q; rel=&q;nofollow noopener noreferrer&q; target=&q;_blank&q;&g;CryptoCompare&l;/a&g;&l;span&g;.&a;nbsp;&l;/span&g;

&q;The revolut addition is always good news for any crypto,&q; he stated.

&l;span&g;&l;/span&g;

&l;strong&g;BCH&s;s Recent Rally&l;/strong&g;

The price of Bitcoin Cash rose to as much as&a;nbsp;$1,078.36 yesterday, representing a more than 12% increase over the weekly low of&a;nbsp;$959.88 hit earlier that day, according to CoinMarketCap.

The digital currency has pulled back slightly from that point, most recently trading at&a;nbsp;$1,034.04, additional CoinMarketCap figures show.

&l;strong&g;Recent Headwinds&l;/strong&g;

This comes after a period where Bitcoin Cash fell more than 26% in less than 96 hours, &l;a href=&q;https://www.forbes.com/sites/cbovaird/2018/05/22/bitcoin-cash-tumbles-as-it-faces-multiple-headwinds/#33169c9dde59&q;&g;dropping&l;/a&g; from more than $1,300 on Sunday to less than $960 yesterday.

&l;!--nextpage--&g; When the digital currency faced those sharp declines, several analysts emphasized the ongoing competition between Bitcoin Cash and the more traditional Bitcoin, noting that both cryptocurrencies are &l;a href=&q;https://www.forbes.com/sites/cbovaird/2018/05/23/bitcoin-cash-drops-to-lowest-in-more-than-a-month/#45f94d8728c7&q;&g;vying&l;/a&g; to be the one true Bitcoin.

While developers have created many hard forks of the original Bitcoin, Bitcoin Cash is the most successful in terms of market value, as it has repeatedly ranked in the top 10 digital currencies on CoinMarketCap by market capitalization (market cap).

&l;em&g;Disclosure: I own some Bitcoin, Bitcoin Cash and Ether.&l;/em&g;&l;/p&g;

Contrasting Hilton Grand Vacations (HGV) and Norwegian Cruise Line (NCLH)

Hilton Grand Vacations (NYSE: HGV) and Norwegian Cruise Line (NASDAQ:NCLH) are both consumer discretionary companies, but which is the superior investment? We will compare the two companies based on the strength of their risk, analyst recommendations, earnings, valuation, profitability, dividends and institutional ownership.

Volatility and Risk

Get Hilton Grand Vacations alerts:

Hilton Grand Vacations has a beta of 0.96, indicating that its share price is 4% less volatile than the S&P 500. Comparatively, Norwegian Cruise Line has a beta of 1.18, indicating that its share price is 18% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent recommendations for Hilton Grand Vacations and Norwegian Cruise Line, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Hilton Grand Vacations	0	1	6	0	2.86
Norwegian Cruise Line	1	3	12	0	2.69

Hilton Grand Vacations currently has a consensus price target of $46.50, suggesting a potential upside of 16.60%. Norwegian Cruise Line has a consensus price target of $64.77, suggesting a potential upside of 19.65%. Given Norwegian Cruise Line’s higher possible upside, analysts clearly believe Norwegian Cruise Line is more favorable than Hilton Grand Vacations.

Earnings and Valuation

This table compares Hilton Grand Vacations and Norwegian Cruise Line’s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Hilton Grand Vacations	$1.71 billion	2.26	$327.00 million	$1.97	20.24
Norwegian Cruise Line	$4.87 billion	2.50	$633.08 million	N/A	N/A

Norwegian Cruise Line has higher revenue and earnings than Hilton Grand Vacations.

Profitability

This table compares Hilton Grand Vacations and Norwegian Cruise Line’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Hilton Grand Vacations	18.28%	45.63%	7.46%
Norwegian Cruise Line	13.91%	16.97%	6.16%

Institutional and Insider Ownership

88.9% of Norwegian Cruise Line shares are owned by institutional investors. 0.7% of Hilton Grand Vacations shares are owned by insiders. Comparatively, 1.0% of Norwegian Cruise Line shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Summary

Norwegian Cruise Line beats Hilton Grand Vacations on 8 of the 12 factors compared between the two stocks.

About Hilton Grand Vacations

Hilton Grand Vacations Inc., a timeshare company, develops, markets, sells, and manages timeshare resorts primarily under the Hilton Grand Vacations brand. The company operates in two segments, Real Estate Sales and Financing; and Resort Operations and Club Management. It sells vacation ownership intervals; manages resorts; operates a points-based vacation club; and finances and services loans provided to consumers for their timeshare purchases. The company also manages and operates the points-based Hilton Grand Vacations Club and Hilton Club exchange programs, which provides exchange, leisure travel, and reservation services to approximately 288,000 members, as well as engages in the rental of inventory made available due to ownership exchanges through its club programs. As of December 31, 2017, it had 48 resorts comprising 8,102 units located in the United States and Europe. Hilton Grand Vacations Inc. was founded in 1992 and is headquartered in Orlando, Florida.

About Norwegian Cruise Line

Norwegian Cruise Line Holdings Ltd. (NCLH) is a global cruise company. The Company operates the Norwegian Cruise Line, Oceania Cruises and Regent Seven Seas Cruises brands. The Company had 25 ships with approximately 50,400 Berths, as of May 1, 2017. The Company’s brands offer itineraries to various destinations around the world, including Europe, Asia, Australia, New Zealand, South America, Africa, Canada, Bermuda, Caribbean, Alaska and Hawaii. The Company’s brands offer various features, amenities, and activities, including various accommodations, multiple dining venues, bars and lounges, spa, casino and retail shopping areas and various entertainment choices. All the brands offer a selection of shore excursions at each port of call, as well as hotel packages for stays before or after a voyage. As of December 31, 2016, its Norwegian offered 14 ships that were purpose-built to deliver the Freestyle Cruising product, which offered freedom, flexibility and choice to its guests.

GreenSky Opens Below IPO Price After Raising $874 Million

GreenSky Inc. shares began trading below the $23-a-share initial public offering price after the financial technology company raised $874 million in an expand share sale.

Shares of the company opened at $22.15 Wednesday. They rose to $23.03 at 12:02 p.m. in New York trading, giving the company a market value of $4.39 billion.

The company sold 38 million shares -- almost 4 million more than previously planned -- after marketing them at a range of $21 to $23 each, according to a statement Thursday.

GreenSky made its name as a lender to help people pay for home improvement projects and expanded into helping fund elective health-care procedures, according the most recent IPO filing. The company connects customers, merchants and banks through its platform, collecting a service fee from lenders and a fee every time a seller of goods or services receives a payment.

Online lenders haven’t been much loved by investors. LendingClub Corp.’s stock has fallen more than 75 percent since its 2014 IPO after after its founder-CEO stepped down amid an internal probe into a botched loan sale. On Deck Capital Inc. has tumbled more than 70 percent since it listed the same year.

Atlanta-based GreenSky had $326 million in revenue last year, up from $264 million in 2016. About 83 percent of its revenue comes from transaction fees. GreenSky’s net income was $139 million in 2017, compared with $124 million the previous year.

Private equity firm TPG and Pacific Investment Management Co., the Newport Beach, California-based investment manager, will hold stakes giving them voting power equivalent to about 5 percent and 7 percent of its outstanding shares, respectively, after the offering, according to the filing.

Goldman Sachs Group Inc., JPMorgan Chase & Co. and Morgan Stanley are leading the offering. The shares are trading on the Nasdaq Global Select Market under the symbol GSKY.

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Apple: Still A Bargain

Rethink Technology business briefs for May 23, 2018.

Earnings assuages fears, encourages upgrades

Expected iPhone X and X Plus. Source: Mac Rumors

I wrote Apple: No Need To Panic on April 27, a few days before Apple's (AAPL) fiscal 2018 Q2 earnings release. At the time, fears of a meltdown in iPhone X sales were at a fever pitch. I could not say absolutely that the fears were unjustified, but I did critique a couple of the more negative articles that also bore on two other members of the Rethink Technology Portfolio, ASML Holding (ASML) and Taiwan Semiconductor Manufacturing Company (TSM). In retrospect, it was one of the most prescient articles I've ever written.

The fears of tanking iPhone X sales proved groundless, as Apple's CEO Tim Cook emphasized that iPhone X has outsold every other iPhone model since its introduction, something that had never happened before.

My earnings estimates, published for subscribers, came about as close as I've ever done:

Since the earnings call on May 1, Apple is up over 12% and is very close to its all-time high. Analyst coverage has turned a little more bullish, with an average price target of $195. Despite the price target, it's only natural to wonder how much upside is left.

I came away from the earnings report convinced that the answer is ��a lot,�� but I needed to revise my investment case for Apple. For each member of the RT Portfolio, I create an Investment Case Report, setting forth my analysis and expectations for a given company. The RT Portfolio reflects my personal portfolio, so I always have skin in the game. I feel this forces me to pay careful attention to the Portfolio companies and continually reevaluate them as long-term investments.

I first wrote the Investment Case for Apple over a year ago, and although I update the report monthly for subscribers, I realized that it needed to be substantially rewritten. What follows are highlights from that much revised report.

Apple's still low valuation, relative to peers

One of the things I do as part of compiling the investment case for a company is a competitive assessment. I generally look for companies that are leaders in their key market or markets. Apple's key market is mobile devices, so my competitive assessment for Apple emphasizes important technologies in the mobile device, such as the processor and the operating system.

I also consider other factors related to profitability and financial strength. My competitive assessment for Apple is shown in the table below.

In the peer group, I include companies that provide competing operating systems, such as Google (GOOG) (NASDAQ:GOOGL) and Microsoft (MSFT), as well as the most important device manufacturers, Samsung, Huawei, and BK Electronics, home of the OPPO and vivo brands.

The color coding reflects an admittedly subjective assessment of the situation of each company relative to a given criterion. Green receives 2 points, yellow, 1 point, and red, 0 points. Incidentally, following Microsoft's abandonment of Windows Phone, I had to drop its rating in the Mobile OS Ecosystem to yellow.

I've also included the TTM P/E ratios for the four publicly traded companies. Apple, of course, stands out for its very low valuation.

Growth drivers

Apple's low valuation doesn't automatically mean that it's a bargain. Apple's valuation reflects the low expectations of the market, as well as many analysts. For many years, there was a school of thought that regarded iPhone as merely a fad. The argument went that iPhone sales would collapse once it ceased to be fashionable.

That argument has kind of fallen by the wayside in favor of more directly applicable observations such as ��smartphone sales have stagnated�� and ��Apple is too dependent on iPhone.�� Both arguments are true, in the near term, but ignore factors that might make them untrue in the long term.

In iPhone X, Apple has captured many of the technologies that will drive iPhone sales growth in the next few years. These are Apple's superior mobile processors, OLED displays, and 3D sensing, both for user facing and world facing applications. The popularity of iPhone X suggests that unit volumes will increase y/y once Apple makes the features of X more affordable, which it is expected to do this September.

Another growth driver for Apple, and the entire mobile device industry, is expected to be 5G. 5G is a complex technology that will use multiple radio bands, including some in the millimeter wave region. 5G will provide greater data speeds (above 1 Gbit/sec, download) as well as greatly enhanced network capacity, which is currently the key practical limiter to real world performance.

5G also will be an enabler of the Internet of Things (IoT) and wearables of various types. The 5G standard provides for new types of low power data connections that reduce the power drain on mobile devices.

5G adoption by carriers is moving much faster than expected, even a year ago. This probably reflects the need to expand capacity (especially in the face of an expected increase in IoT devices) more than it does the desire to provide users with higher speed connections. Both AT&T and Verizon have announced plans for initial deployments this year in the U.S.

Underlying Apple's ability to grow its iPhone franchise, as well as diversify into wearables, is its expertise in designing mobile processors. Based on a conservative valuation of its systems on chip (SOCs) at $35 a piece for its iOS and watchOS devices, Apple has become one of the larger semiconductor companies in terms of equivalent revenue.

Apple's custom SOCs have been instrumental in the creation of new products such as Apple Watch and Air Pods. There's additional synergy due to the fact that Apple's operating systems developers have access to intimate knowledge about the processors that they wouldn't have if the processors were developed by a separate company. This allows its operating systems to be better optimized and integrated with its hardware.

Apple is widely expected to introduce some form of augmented reality headset in the near future. I think it likely that these will be in the form of ��smartglasses�� that allow information and graphics to be viewed as an overlay on the real world. Apple's ARKit lays the foundations for this approach, and Tim Cook has expressed his enthusiasm regarding the potential for AR.

In the chart below, I give my expectations for unit growth in Apple's major products. The numbers for fiscal 2017 are actuals.

DCF fair value

In arriving at a buy rating for a given company in the RT Portfolio, I consider a number of factors, such as the competitive ranking I give above. But certainly, one of the most important, and relevant in terms of assessing valuation, is the Discounted Cash Flow model that is maintained for each Portfolio company. The calculated fair value is used to estimate a percent upside relative to the stock's current price.

I've seen DCF models presented as if they were cast in concrete, but nothing could be further from the truth. DCF model predictions are heavily dependent on the assumed revenue profile of a given company over a long (5-10 year) time frame. Such predictions have inherently large error bars attached to them.

This is why I regard the DCF fair value prediction as only one of many inputs to a final ��grade�� for a given company. In Apple's case, I consider the DCF fair value to be a pretty good estimator of the upside Apple investors can expect.

I don't build the models from scratch, but rather download the most recent model from finbox.io. The Apple model covers a five-year period and uses the standard Gordon Growth exit. Shown below are the finbox default Revenue and EBITDA profiles:

The finbox model yields a share fair value of $193.03. In modifying the profiles, I perform a ��ground up�� estimate of revenue contributors, based on the product unit growth shown earlier, as well as other inputs.

This yields modified revenue and EBITDA profiles shown below:

The EBITDA profile reflects my expectation that Apple's margins will not decline very much over the five-year period. The resultant share fair value is $239.89. This gives an upside of about 29% compared to the current share price of about $186.

Do I think that the DCF fair value represents the limit of Apple's growth and upside? I really don't. I regard it as effectively the lower limit, a floor to growth that investors can have high confidence in.

Apple continues to invest substantial R&D in new technologies such as MicroLED displays and autonomous vehicles. It's not clear where this will lead in terms of new products, but I doubt that Apple is engaging in the research without clear product objectives in mind. Autonomous vehicles especially offer the prospect of revenue growth that can ��move the needle�� even for a company the size of Apple. I remain long Apple and rate it a strong buy.

Consider joining Rethink Technology to receive exclusive reports and RT Portfolio updates.

Disclosure: I am/we are long AAPL, TSM, ASML.

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.

Traders Buy Shares of Crown Castle International (CCI) on Weakness

Traders bought shares of Crown Castle International Corp. (NYSE:CCI) on weakness during trading on Tuesday. $144.29 million flowed into the stock on the tick-up and $26.08 million flowed out of the stock on the tick-down, for a money net flow of $118.21 million into the stock. Of all stocks tracked, Crown Castle International had the 6th highest net in-flow for the day. Crown Castle International traded down ($0.38) for the day and closed at $101.72

A number of equities analysts have commented on the company. Zacks Investment Research cut Crown Castle International from a “buy” rating to a “hold” rating in a report on Wednesday, March 28th. Goldman Sachs cut Crown Castle International from a “conviction-buy” rating to a “buy” rating in a report on Tuesday, March 13th. Guggenheim reissued a “buy” rating and set a $115.00 target price on shares of Crown Castle International in a report on Friday, January 26th. ValuEngine raised Crown Castle International from a “hold” rating to a “buy” rating in a report on Monday, April 2nd. Finally, Deutsche Bank reissued a “buy” rating and set a $120.00 target price on shares of Crown Castle International in a report on Monday, January 22nd. Nine analysts have rated the stock with a hold rating, nine have given a buy rating and one has assigned a strong buy rating to the company’s stock. The stock has an average rating of “Buy” and an average target price of $114.75.

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The company has a quick ratio of 0.90, a current ratio of 0.90 and a debt-to-equity ratio of 1.22. The firm has a market cap of $42.41 billion, a P/E ratio of 20.97, a P/E/G ratio of 1.25 and a beta of 0.29.

Crown Castle International (NYSE:CCI) last posted its quarterly earnings results on Wednesday, April 18th. The real estate investment trust reported $0.21 EPS for the quarter, missing the consensus estimate of $1.19 by ($0.98). Crown Castle International had a net margin of 8.87% and a return on equity of 4.06%. The company had revenue of $1.30 billion during the quarter, compared to analyst estimates of $1.31 billion. During the same period in the prior year, the business posted $1.11 EPS. Crown Castle International’s revenue for the quarter was up 27.9% compared to the same quarter last year. research analysts predict that Crown Castle International Corp. will post 5.26 earnings per share for the current fiscal year.

The business also recently declared a quarterly dividend, which will be paid on Friday, June 29th. Investors of record on Friday, June 15th will be issued a $1.05 dividend. The ex-dividend date of this dividend is Thursday, June 14th. This represents a $4.20 annualized dividend and a dividend yield of 4.13%. Crown Castle International’s dividend payout ratio is presently 86.60%.

In other Crown Castle International news, SVP Kenneth Jay Simon sold 693 shares of the firm’s stock in a transaction on Friday, February 23rd. The stock was sold at an average price of $108.79, for a total transaction of $75,391.47. Following the completion of the sale, the senior vice president now owns 14,869 shares of the company’s stock, valued at $1,617,598.51. The transaction was disclosed in a legal filing with the SEC, which is available through this hyperlink. Also, insider Jay A. Brown sold 18,000 shares of the firm’s stock in a transaction on Thursday, February 22nd. The stock was sold at an average price of $108.43, for a total value of $1,951,740.00. Following the sale, the insider now directly owns 162,526 shares of the company’s stock, valued at approximately $17,622,694.18. The disclosure for this sale can be found here. 0.36% of the stock is currently owned by company insiders.

Hedge funds have recently bought and sold shares of the business. Avestar Capital LLC acquired a new stake in Crown Castle International during the fourth quarter worth $112,000. Pinnacle Wealth Planning Services Inc. acquired a new stake in Crown Castle International during the fourth quarter worth $124,000. Icon Wealth Partners LLC acquired a new stake in Crown Castle International during the fourth quarter worth $126,000. Benjamin F. Edwards & Company Inc. increased its stake in Crown Castle International by 1,463.5% during the fourth quarter. Benjamin F. Edwards & Company Inc. now owns 1,157 shares of the real estate investment trust’s stock worth $128,000 after acquiring an additional 1,083 shares during the last quarter. Finally, Signaturefd LLC purchased a new position in shares of Crown Castle International during the first quarter worth $134,000. 94.60% of the stock is owned by institutional investors.

Crown Castle International Company Profile

Crown Castle owns, operates and leases more than 40,000 cell towers and approximately 60,000 route miles of fiber supporting small cells and fiber solutions across every major U.S. market. This nationwide portfolio of communications infrastructure connects cities and communities to essential data, technology and wireless service bringing information, ideas and innovations to the people and businesses that need them.

Sumitomo Mitsui Trust Holdings Inc. Trims Holdings in Piedmont Office Realty Trust (PDM)

Sumitomo Mitsui Trust Holdings Inc. reduced its holdings in shares of Piedmont Office Realty Trust (NYSE:PDM) by 2.4% in the first quarter, according to the company in its most recent disclosure with the Securities and Exchange Commission. The fund owned 131,748 shares of the real estate investment trust’s stock after selling 3,194 shares during the period. Sumitomo Mitsui Trust Holdings Inc. owned about 0.10% of Piedmont Office Realty Trust worth $2,317,000 at the end of the most recent quarter.

Other hedge funds have also made changes to their positions in the company. Dean Capital Investments Management LLC purchased a new stake in Piedmont Office Realty Trust during the fourth quarter valued at approximately $202,000. Nisa Investment Advisors LLC increased its holdings in Piedmont Office Realty Trust by 123.1% during the fourth quarter. Nisa Investment Advisors LLC now owns 11,600 shares of the real estate investment trust’s stock valued at $227,000 after buying an additional 6,400 shares during the last quarter. Pinnacle Wealth Planning Services Inc. purchased a new stake in Piedmont Office Realty Trust during the fourth quarter valued at approximately $234,000. The Manufacturers Life Insurance Company increased its holdings in Piedmont Office Realty Trust by 38.9% during the fourth quarter. The Manufacturers Life Insurance Company now owns 12,011 shares of the real estate investment trust’s stock valued at $236,000 after buying an additional 3,366 shares during the last quarter. Finally, Xact Kapitalforvaltning AB purchased a new stake in Piedmont Office Realty Trust during the fourth quarter valued at approximately $265,000. 92.63% of the stock is owned by institutional investors and hedge funds.

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Shares of Piedmont Office Realty Trust opened at $17.93 on Friday, according to Marketbeat Ratings. The company has a debt-to-equity ratio of 0.94, a current ratio of 2.28 and a quick ratio of 2.28. The firm has a market capitalization of $2.31 billion, a PE ratio of 10.25, a PEG ratio of 2.62 and a beta of 0.60. Piedmont Office Realty Trust has a 1 year low of $16.69 and a 1 year high of $21.80.

Piedmont Office Realty Trust (NYSE:PDM) last announced its quarterly earnings data on Tuesday, May 1st. The real estate investment trust reported $0.43 earnings per share (EPS) for the quarter, topping the Zacks’ consensus estimate of $0.41 by $0.02. The firm had revenue of $129.90 million during the quarter, compared to analysts’ expectations of $131.38 million. Piedmont Office Realty Trust had a net margin of 31.73% and a return on equity of 3.33%. The company’s revenue for the quarter was down 12.5% compared to the same quarter last year. During the same period in the prior year, the company posted $0.45 earnings per share. research analysts predict that Piedmont Office Realty Trust will post 1.72 earnings per share for the current fiscal year.

The company also recently disclosed a quarterly dividend, which will be paid on Friday, June 15th. Stockholders of record on Wednesday, May 23rd will be paid a $0.21 dividend. The ex-dividend date of this dividend is Tuesday, May 22nd. This represents a $0.84 dividend on an annualized basis and a dividend yield of 4.68%. Piedmont Office Realty Trust’s dividend payout ratio (DPR) is presently 48.00%.

A number of analysts have commented on PDM shares. SunTrust Banks set a $20.00 target price on shares of Piedmont Office Realty Trust and gave the company a “hold” rating in a report on Tuesday, March 6th. Robert W. Baird set a $22.00 target price on shares of Piedmont Office Realty Trust and gave the company a “buy” rating in a report on Thursday, February 8th. Stifel Nicolaus cut shares of Piedmont Office Realty Trust from a “hold” rating to a “sell” rating in a report on Tuesday, March 13th. Finally, ValuEngine cut shares of Piedmont Office Realty Trust from a “buy” rating to a “hold” rating in a report on Thursday, February 8th. Three research analysts have rated the stock with a sell rating, two have assigned a hold rating and one has given a buy rating to the stock. Piedmont Office Realty Trust presently has a consensus rating of “Hold” and a consensus price target of $21.25.

In other news, Director Kelly Hefner Barrett acquired 10,000 shares of Piedmont Office Realty Trust stock in a transaction dated Friday, May 4th. The stock was purchased at an average cost of $18.65 per share, with a total value of $186,500.00. Following the completion of the purchase, the director now directly owns 16,446 shares in the company, valued at approximately $306,717.90. The transaction was disclosed in a document filed with the SEC, which is available through the SEC website. Also, Director Jeffrey L. Swope acquired 5,700 shares of Piedmont Office Realty Trust stock in a transaction dated Tuesday, March 13th. The stock was purchased at an average cost of $17.57 per share, with a total value of $100,149.00. The disclosure for this purchase can be found here. Corporate insiders own 0.76% of the company’s stock.

Piedmont Office Realty Trust Profile

Piedmont Office Realty Trust, Inc (NYSE: PDM) is an owner, manager, developer, and operator of high-quality, Class A office properties in select submarkets located primarily within eight major U.S. office markets. Its geographically-diversified, almost $5 billion portfolio is currently comprised of approximately 17 million square feet.

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Swiss National Bank Sells 29,100 Shares of Jazz Pharmaceuticals (JAZZ)

Swiss National Bank trimmed its holdings in shares of Jazz Pharmaceuticals (NASDAQ:JAZZ) by 13.2% during the 1st quarter, according to its most recent filing with the Securities and Exchange Commission. The institutional investor owned 192,000 shares of the specialty pharmaceutical company’s stock after selling 29,100 shares during the quarter. Swiss National Bank owned 0.32% of Jazz Pharmaceuticals worth $28,990,000 at the end of the most recent reporting period.

Other hedge funds and other institutional investors have also made changes to their positions in the company. US Bancorp DE raised its position in shares of Jazz Pharmaceuticals by 49.5% during the 4th quarter. US Bancorp DE now owns 1,087 shares of the specialty pharmaceutical company’s stock valued at $147,000 after buying an additional 360 shares in the last quarter. We Are One Seven LLC purchased a new stake in Jazz Pharmaceuticals in the 4th quarter worth about $157,000. Brighton Jones LLC purchased a new stake in Jazz Pharmaceuticals in the 1st quarter worth about $205,000. Invictus RG purchased a new stake in Jazz Pharmaceuticals in the 4th quarter worth about $206,000. Finally, Macquarie Group Ltd. raised its position in Jazz Pharmaceuticals by 157.1% in the 4th quarter. Macquarie Group Ltd. now owns 1,800 shares of the specialty pharmaceutical company’s stock worth $965,000 after purchasing an additional 1,100 shares during the period. Hedge funds and other institutional investors own 90.62% of the company’s stock.

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NASDAQ JAZZ opened at $167.51 on Friday. The company has a debt-to-equity ratio of 0.55, a quick ratio of 2.88 and a current ratio of 3.00. Jazz Pharmaceuticals has a 52-week low of $128.58 and a 52-week high of $168.48. The company has a market cap of $9.90 billion, a PE ratio of 16.74, a price-to-earnings-growth ratio of 0.85 and a beta of 0.97.

Jazz Pharmaceuticals (NASDAQ:JAZZ) last released its quarterly earnings data on Tuesday, February 27th. The specialty pharmaceutical company reported $2.58 earnings per share (EPS) for the quarter, missing the Zacks’ consensus estimate of $2.73 by ($0.15). Jazz Pharmaceuticals had a net margin of 26.51% and a return on equity of 23.78%. The business had revenue of $436.40 million for the quarter, compared to the consensus estimate of $440.91 million. equities analysts predict that Jazz Pharmaceuticals will post 11.65 earnings per share for the current year.

In other news, SVP Paul Treacy sold 877 shares of the stock in a transaction that occurred on Friday, March 2nd. The shares were sold at an average price of $139.62, for a total transaction of $122,446.74. The transaction was disclosed in a filing with the SEC, which can be accessed through this link. Also, EVP Michael Patrick Miller sold 200 shares of the stock in a transaction that occurred on Wednesday, March 14th. The shares were sold at an average price of $151.12, for a total transaction of $30,224.00. Following the transaction, the executive vice president now owns 27,681 shares in the company, valued at $4,183,152.72. The disclosure for this sale can be found here. Over the last quarter, insiders have sold 20,837 shares of company stock worth $3,200,686. Insiders own 4.30% of the company’s stock.

A number of analysts recently weighed in on JAZZ shares. Seaport Global Securities set a $175.00 price objective on shares of Jazz Pharmaceuticals and gave the stock a “buy” rating in a research report on Friday, April 6th. Piper Jaffray reissued a “buy” rating and issued a $201.00 price objective on shares of Jazz Pharmaceuticals in a research report on Thursday, March 1st. Cantor Fitzgerald reissued a “buy” rating and issued a $202.00 price objective on shares of Jazz Pharmaceuticals in a research report on Monday, April 30th. Bank of America increased their price objective on shares of Jazz Pharmaceuticals from $164.00 to $170.00 and gave the stock a “buy” rating in a research report on Tuesday, February 20th. Finally, B. Riley increased their price objective on shares of Jazz Pharmaceuticals from $206.00 to $211.00 and gave the stock a “buy” rating in a research report on Thursday, May 10th. Seven investment analysts have rated the stock with a hold rating and eighteen have given a buy rating to the company’s stock. Jazz Pharmaceuticals currently has an average rating of “Buy” and a consensus price target of $181.60.

Jazz Pharmaceuticals Company Profile

Jazz Pharmaceuticals plc, a biopharmaceutical company, identifies, develops, and commercializes pharmaceutical products for various medical needs in the United States, Europe, and internationally. The company has a portfolio of products and product candidates with a focus in the areas of sleep and hematology/oncology.

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