U.S. New Home Sales Rise Sharply during July

August 23, 2016

Data released today by the U.S. Department of Commerce indicate that sales of newly-constructed homes in the United States – new home sales – rose sharply during July, as mortgage rates remained near the lowest level since at least the early 1970s.

Specifically, the Commerce Department reported that new home sales rose during July by 12.4% ... continue reading >
 
US New Home Sales
International Economic News

Japan Manufacturing Activity Improves for Second Consecutive Month

August 23, 2016

Markit Financial Information Services reported today that its latest survey of executives at Japanese manufacturing companies indicates that manufacturing activity in Japan improved for the second consecutive month during the first half of July.

Commenting on the survey results, Annabel Fiddes, and economist at Markit, said, “Japan’s manufacturing sector edged closer to stabillisation in August ... [and] ... output expanded for the first time in six months.”

Today’s report from Markit regarding economic activity in Japan’s manufacturing sector seems to confirm what we at Frazier and Mayer Research, LLC, the providers of Investors Monitor, said on August 1 – manufacturing activity in Japan appears have bottomed.

 
Earnings News

Best Buy, Toll Brothers and Kirkland's Report Fiscsal Q2 2016 Earnings

August 23, 2016

Best Buy (BBY) reported today that its net income from continuing operations rose by 11% (or 21.7% per diluted share) on a 0.1% increase in the company's revenues, as its operating expenses declined, for the company's fiscal quarter ended July 30, 2016, as compared to the same quarter a year ago.

Toll Brothers (TOL) reported that its net income rose by 58% (or 69.4% per diluted share) on a 23.5% increase in the company's revenues for its fiscal quarter ended July 31, 2016, as compared to the same period a year ago.

Kirkland's (KIRK) reported that lost $3.6 million (or $0.22 per diluted share) on a 6.7% increase in the company's revenues, as a result, primarily, of a substantial increase in the company's costs of goods sold, for its fiscal quarter ended July 30, 2016, as compared to the same period a year ago.

Click here for other Q2 Earnings >

Geopolitical News

12-Year Old Suicide Bomber Kills 51 People

August 21, 2016

A suicide bomber as young as 12 years of age killed at least 51 people yesterday at a wedding in Turkey, according to the country's President, Recep Tayyip Erdogan.

Erdogan said the blast, which occurred near Turkey’s border with Syria, "was the result of a suicide bomber aged between 12 and 14 who either detonated [the bomb] or others detonated it."

Erdogan blamed ISIS as the "likely perpetrator" of the attack that targeted a celebration attended by many of Turkey’s Kurds. He said the attack was an attempt by ISIS to create a social division between Turkey's different ethnic groups, which include Arabs, Kurds and Turkmen, and to "spread incitement along ethnic and religious lines".

Erdogan told reporters that 51 persons were killed in the attack while another 94 were injured.

Turkey's Health Minister said a large number of those injured were women and children.

 
Trading Action

Stocks Poised to Continue Trading Sideways

August 21, 2016 (Updated every Sunday)

The recent trading action in stock markets around the globe suggests that stock prices, in general, will continue to move in a narrow sideways pattern over the next few weeks.

Although the major U.S. stock market indices have continued to trade near all-time highs, the volume of trading in U.S. stocks was relatively light over the past six weeks, indicating that financial market participants, in the aggregate, have little faith that stocks will move substantially higher during the weeks ahead.

Meanwhile, statistics that illustrate the overall investment allocations of institutional investors indicate that those investors are concerned about the future direction of stocks.

While the readings on valuation metrics indicate that financial market participants are currently overvaluing U.S. stocks, there’s nothing to suggest that stocks, in general, are in danger of falling sharply during the week ahead.

Stock Candidates

Buy Candidates
Company Name Ticker Sector / Industry Frazier Grade Initial Coverage Date & Price Current Rating
Product Financial Liquidity Long-term Debt Profit Margins Sales & EPS Growth (Qtrly) PEG Ratio Institution Buys to Sells Timing
Ambarella Inc. AMBA IT: Semi-conductors A A A A A 10/28/15: 0.74 C B 01/28/14: $31.33 B
Ambarella designs and develops semiconductor processing applications for the capture and display of high-definition video. The company’s chips enable consumer electronic devices to capture both HD video and digital still photos. Its system-on-a-chip (“SoC”) technology, which enable rapid and efficient product development, deliver exceptional video and image quality. Additionally, the company’s chips enable video cameras to be smaller and to run on less power than competing products. The company’s customers include GoPro Inc., Robert Bosch GmbH, Harmonic Inc., Motorola Mobility, Inc. and LM Ericsson.
Shake Shack SHAK Restaurants A A C C B 06/15/16: 3.6 A B 01/12/16: $32.86 B
Shack Shack operates “roadside” restaurants that offer a classic American menu of freshly-made antibiotic-free Angus beef burgers, hot dogs, crinkle-cut fries, shakes, frozen custard, beer and wine. The company operates 83 restaurants around the globe, including 47 restaurants in 12 U.S. states and 36 restaurants in Japan, the Middle East, Russia, South Korea, Turkey, and the United Kingdom.
Blue Buffalo Pet Products  BUFF                   06/01/16: $25.89  
Blue Buffalo Pet Products makes natural dog and cat food using meat, fruits and vegetables with no by-products or artificial ingredients. The company also makes cat litter made from ground walnut shells. Blue Buffalo has capitalized on a popular social trend that developed over the past few years whereby persons who tend to spend considerable amounts of money on natural and wholesome food products are now also purchasing similar types of products for their pets, whom they see as members of their family. The company’s Chairman, William Bishop, founded Blue Buffalo Pet Products during 2002 after his dog, Blue, developed cancer and then recovered after eating food that William formulated.
Qualys QLYS                   06/01/16: $31.44  
Qualys is a leading provider of cloud-based security and compliance applications that enable organizations to identify security risks to their IT infrastructures, to protect their IT systems and applications from ever-evolving cyber attacks, and to achieve compliance with internal policies and external regulations. The company’s integrated suite of security and compliance applications, delivered on its QualysGuard Cloud Platform, enables its customers to identify their IT assets, collect and analyze large amounts of IT security data, discover and prioritize vulnerabilities, recommend remediation actions and verify the implementation of such actions. Qualys The company provides its applications through a software-as-a-service model, primarily with renewable annual subscriptions. Those subscriptions require customers to pay a fee to access the company’s cloud-based applications. As of December 31, 2015, the company had more than 8,800 customers in over 100 countries, including a majority of each of the Forbes Global 100 and Fortune 100. During each of the past three years, no one customer accounted for more than 10% of the company’s revenues.
 
Sell Short Candidates
Company Name Ticker Sector / Industry Frazier Grade Initial Coverage Date & Price Current Rating
Product Financial Liquidity Long-term Debt Profit Margins Sales & EPS Growth (Qtrly) PEG Ratio Institution Buys to Sells Timing
Tesla Motors, Inc. TSLA Industrial: Auto Mfg. A C C F D F C B 01/07/14: $149.36 D
Tesla Motors designs, manufactures, and markets high-performance electric cars. The company offers only two models of vehicles, the Model S sedan and the Model X Sport Utility Vehicle. The Model S is a four-door, five-passenger premium sedan, which received a 5-star safety rating from the National Highway Traffic Safety Administration, can go from 0-60 miles per hour in only 3.1 seconds and can travel up to 270 miles before needing a re-charge. The company’s Model X, which is the safest, fastest and most capable sport utility vehicle in history, and has ample seating for 7 passengers, can go from 0-60 miles per hour in only 3.8 seconds and can travel up to 257 miles before needing a re-charge.


Sign Up for a Free-Trial to Frazier's Strategic Allocator
for Our Recommendations on the Stocks Outlined Below!

U.S. New Home Sales Rise Sharply during July

08/23/16: Data released today by the U.S. Department of Commerce indicate that sales of newly-constructed homes in the United States – new home sales – rose sharply during July, as mortgage rates remained near the lowest level since at least the early 1970s.

Read more...

Philly Fed Index Rises Modestly during August

08/18/16: The Federal Reserve Bank of Philadelphia reported today that its latest survey of manufacturing executives in the Philadelphia area indicates that manufacturing activity in that area of the United States remained weak over the past four weeks.

Read more...