Monthly Archives: March 2017

Earnings Preview: What To Expect From Nike On Tuesday

MADRID, SPAIN – JANUARY 22: Alicia wears Nike trainers and Calzedonia tousers on January 22, 2017 in Madrid, Spain. (Photo by Pablo Cuadra/Getty Images)

Nike Inc. is scheduled to report earnings after Tuesday’s close. Nike’s stock hit a record high of $68.19/share in 2015 and is currently trading near $57/share. The stock is prone to big moves after reporting earnings and can easily gap up if the numbers are strong. Conversely, if the numbers disappoint, the stock can easily gap down. To help you prepare, here is what the Street is expecting:

Earnings Preview:

Nike is expected to earn $0.52/share on $8.45 billion in revenue. Meanwhile, the so-called Whisper number is $0.55. The Whisper number is the Street’s unofficial view on earnings.

Company Profile & Various Busines ses:

Here is a brief company profile courtesy of Thomson Reuters Eikon:

NIKE, Inc., incorporated on September 8, 1969, is engaged in the design, development, marketing and selling of athletic footwear, apparel, equipment, accessories and services. The Company’s operating segments include North America, Western Europe, Central & Eastern Europe, Greater China, Japan and Emerging Markets. The Company’s portfolio brands include the NIKE Brand, Jordan Brand, Hurley and Converse. The Company sells its products to retail accounts, through its retail stores and Internet Websites, and through a mix of independent distributors and licensees across the world. The Company’s products are manufactured by independent contractors.

As of May 31, 2016, the Company focused its NIKE brand product offerings in nine categories: Running, NIKE Basketball, the Jordan Brand, Football (Soccer), Men’s Training, Women’s Training, Action Sports, Sportswear (its sports-inspired lifes tyle products) and Golf. Men’s Training includes its baseball and American football product offerings. The Company also markets products designed for kids, as well as for other athletic and recreational uses, such as cricket, lacrosse, tennis, volleyball, wrestling, walking and outdoor activities. The Company’s athletic footwear products are designed primarily for specific athletic use. Its products are also worn for casual or leisure purposes. The Company also sells sports apparel. The Company also markets apparel with licensed college and professional team and league logos.

The Company sells a range of performance equipment and accessories under the NIKE Brand name, including bags, socks, sport balls, eyewear, timepieces, digital devices, bats, gloves, protective equipment, golf clubs and other equipment designed for sports activities. The Company also sells a range of plastic products to other manufacturers through its subsidiary, NIKE IHM, Inc. NIKE IHM, Inc. manuf actures Air-Sole cushioning components at the Company-owned facilities located near Beaverton, Oregon and in St. Charles, Missouri. The Company’s Jordan Brand designs, distributes and licenses athletic and casual footwear, apparel and accessories focused on basketball using the Jumpman trademark. The Company’s Hurley brand designs and distributes a range of action sports and youth lifestyle apparel and accessories under the Hurley trademark. The Company’s brand, Converse, designs, distributes and licenses casual sneakers, apparel and accessories under the Converse, Chuck Taylor, All Star, One Star, Star Chevron and Jack Purcell trademarks. Converse Direct to Consumer operations include e-commerce business.


The Company competes with Adidas, ASICS, Li Ning, lululemon athletica, Puma, V.F. Corporation, Under Armour, and other footwear and apparel companies.

Pay Attention To How The Stock Reacts To The News:

From where I sit, the most importa nt trait I look for during earnings season is how the market and a specific company reacts to the news. Remember, always keep your losses small and never argue with the tape.

Top Insurance Stocks To Own For 2017

Warren Buffett has a long and successful history in the insurance industry, and it has been a cornerstone of Berkshire Hathaway’s (NYSE:BRK-A) (NYSE:BRK-B) growth strategy since the 1967 acquisition of National Indemnity. In fact, Buffett specifically referred to the insurance industry as Berkshire’s “most important sector” in his latest letter to shareholders. Here’s a rundown of Berkshire’s insurance operations, and why Buffett loves the insurance business so much.

Berkshire Hathaway’s insurance businesses

Berkshire Hathaway has three main insurance subsidiaries and a collection of smaller companies that mainly write commercial coverages.

Image source: The Motley Fool.

BRK Subsidiary

2016 Float Size

2016 Underwriting Profit

Berkshire Hathaway Reinsurance

Top Insurance Stocks To Own For 2017: Principal Financial Group Inc(PFG)

Advisors’ Opinion:

  • [By Ben Levisohn]

    The twenty stocks in Worth’s basket are: Ameriprise Financial (AMP) Bank of America, Banner (BANR), Citigroup, Citizens Financial Group (CFG), East West Bancorp (EWBC), First NBC Bank Holding (FNBC), HFF (HF), KeyCorp(KEY), Legacy Texas Financial Group (LTXB), Lincoln National (LNC), Morgan Stanley, Old National Bancorp (ONB), PacWest Bancorp (PACW), PNC Financial Services Group (PNC), Principal Financial Group (PFG), Stifel Financial (SF), SVB Financial Group (SIVB), TCF Financial (TCB), and Wells Fargo.

Top Insurance Stocks To Own For 2017: American International Group Inc.(AIG)

Advisors’ Opinion:

  • [By Ben Levisohn]

    American International Group (AIG) tumbled to the bottom of the S&P 500 today after its earnings fell well short of the Street consensus.

    Agence France-Presse/Getty Images

    AIG dropped 8.9% to $60.85 today, while the S&P 500 gained 0.5% to 2,349.25.

    Yes, AIG’s earnings were bad. It reported an operating loss of $2.72 a share, missing forecasts for a profit of 42 cents, according to Bloomberg. And it didn’t help that John Paulson’s Paulson & Co. cut its stake in the insurer.

    You’ll notice the forecast is different than what it was in my earlier post on AIG–and an AIG spokesperson even reached out to tell me that the consensus, at least according to FactSet, should had been for a loss of 61 cents a share. Why the confusion? RBC’s Mark Dwelle and Scott Heleniak have your answer:

    In reporting results AIG has recast all of its business segments, transferring various pieces to a Legacy unit, reallocating corporate expenses and net investment income as well as making some changes as to what is included within operating income, the most notable of which is that loss reserve discount effects in U.S. Commercial Insurance (and the Legacy unit) are now excluded from Operating Income. Accordingly, comparisons to prior reported results, and to some extent our 4Q16 estimates, require some reconciliation.

    Macquarie’sAmit Kumar considers the bull and bear cases on AIG:

    On 2/14, after market close, AIG reported a Q4 operating loss of $2.72 per share vs. our estimate of a $0.52 loss and street consensus of a $0.54 loss. Results are not directly comparable to street consensus due to lack of unanimity in terms of reserve adjustment estimates. Results included a higher than estimated $5.6 billion or $3.56/share of adverse development. The company had previously announced the possibility of a material reserve charge in the quarter. The bulls on the stock would note that this quar

  • [By Lisa Levin]

    Some of the stocks that may grab investor focus today are:

    Wall Street expects Dr Pepper Snapple Group Inc. (NYSE: DPS) to report quarterly earnings at $1.06 per share on revenue of $1.57 billion before the opening bell. Dr Pepper Snapple shares fell 0.07 percent to close at $93.49 on Monday. Analysts expect American International Group Inc (NYSE: AIG) to post quarterly earnings at $1.01 per share on revenue of $12.87 billion after the closing bell. AIG shares gained 0.38 percent to $66.39 in after-hours trading. Flowers Foods, Inc. (NYSE: FLO) reported in-line earnings for its fourth quarter, while sales missed expectations. Flowers Foods shares fell 1.87 percent to $20.45 in the after-hours trading session. Before the markets open, Diebold Nixdorf Inc (NYSE: DBD) is projected to report its quarterly earnings at $0.32 per share on revenue of $1.31 billion. Diebold Nixdorf shares slipped 0.73 percent to close at $27.20 on Monday.

    Find out what's going on in today's market and bring any questions you have to Benzinga's PreMarket Prep.

  • [By Dan Caplinger]

    Wednesday was yet another record-setting day for the stock market, as the Dow climbed triple digits and the S&P 500 and Nasdaq Composite followed the venerable average to unprecedented heights. Economic data showing rising inflation made it more likely that the Federal Reserve will look to boost interest rates at its next Federal Open Market Committee meeting next month, and the ripples throughout the bond market sent many investors to consider stocks instead. Yet despite the substantial rally, some stocks missed out on the move higher, and American International Group (NYSE:AIG), Teck Resources (NYSE:TECK), and Movado Group (NYSE:MOV) were among the worst performers on the day. Below, we’ll look more closely at these stocks to tell you why they did so poorly.

  • [By Ben Levisohn]

    BMO’s Charles Sebaski explains why he upgraded American International Group (AIG) to Outperform from market Perform:

    Agence France-Presse/Getty Images

    AIG has been trading at discount to its tangible book given its mid-single digit return profile; however, we expect AIGs valuation to keep increasing with its improving return profile. We are now forecasting AIG to generate a 9.9% operating return on tangible common equity (ROtE) in 2018, which would be a 450 bp improvement from 2016. A double-digit return profile warrants the 1x multiple that we are applying to its tangible book value per share. While we expect AIGs return profile to benefit from lower taxes, we also expect the companys life and retirement business to improve from the rising interest rates as those spread businesses are more interest rate sensitive than the P&C business. That said, we expect continued improvement on both the loss and expense sides of the P&C as contributing factors to the ROtE improve.

    BMO also upgraded Arch Capital Group (ACGL), Brown & Brown (BRO), and Travelers (TRV).

    Shares of American International Group have declined 0.4% to $65.60 at 3:36 p.m. today, whileArch Capital Group has gained 2% to $87.90,Brown & Brown has advanced 0.5% to $44.65, andTravelers has risen 1.3% to $120.79.

Top Insurance Stocks To Own For 2017: Prudential Financial Inc.(PRU)

Advisors’ Opinion:


    Prudential Financial (PRU) is also a major provider of asset management and retirement services. It focuses is on fixed income, a major liability during the past eight years of ultra-low interest rates.


    Cramer was bearish on Prudential (PRU) , Advanced Semiconductor Engineering (ASX) and ZTO Express (ZTO) .

    Read more of Cramer’s comments about the stocks in the Lightning Round.

  • [By Chuck Saletta]

    Prudential Financial (NYSE:PRU) has long had the Rock of Gibraltar as its corporate symbol, representing its solid financial position. With more cash and equivalents than debt on its balance sheet, and a total cash hoard of over $49 billion, Prudential still looks set up to handle some downright awful insurable losses. That’s its “Rock of Gibraltar” strength showing through.

Top Insurance Stocks To Own For 2017: Aon Corporation(AON)

Advisors’ Opinion:


    We’re seeing the exact same price pattern playing out in shares of $29 billion risk and insurance consultancy firm Aon plc (AON) . Aon has been a strong performer for all of 2016, up 20% since the calendar flipped to January. But don’t worry if you’ve missed the move – an ascending triangle pattern is signaling a second leg higher here. For Aon, the breakout level to watch is resistance up at $113.

China’s Xi to meet Trump in Mar-a-Lago in April

Chinese President Xi Jinping and President Donald Trump will meet for the first time on April 6-7 at the latter’s Florida resort, China’s foreign ministry announced Thursday.

The future relationship between the world’s No. 1 and No. 2 economies has been uncertain following the election of Trump, who accused China during his campaign of unfair trade practices and threatened to raise import taxes on Chinese goods and declare Beijing a currency manipulator.

It is unclear whether Trump will follow through with either threat. He is now seeking Beijing’s help in pressuring North Korea over its nuclear weapons and missiles programs.

Chinese Foreign Ministry spokesman Lu Kang told reporters that Xi would meet with Trump at Mar-a-Lago.

It is the same Florida resort where Trump hosted and played golf with Japanese Prime Minister Shinzo Abe in February.

Before arriving in the U.S., Xi will pay a state visit to Finland from April 4-6, Lu said.

Top Undervalued Stocks To Buy For 2017

We continue to believe that financial stocks are quite undervalued as well. During the quarter we made a new investment in Ally Financial (NYSE:ALLY). Ally was founded nearly a century ago as General Motors Acceptance Corporation. Its purpose then was to provide financing to GM dealers and retail customers. Today, Ally is no longer owned by GM. It serves a wide variety of dealers (including Ford, Chrysler and Toyota), and it is carefully building a consumer franchise. In our view, investors are myopically concerned that the auto business is at a cyclical peak. U.S. auto sales are near record levels, and credit losses are below long-term averages. Some believe Ally’s earnings have nowhere to go but down. We believe cyclical pressures will be more than offset by continued internal improvements, such as funding cost reductions (low-cost online deposits grew 19% in the third quarter of 2016) and improving the capital structure. With Ally’s stock trading at roughly 68% of tangible book value, we believe Ally is a compelling addition to the Oakmark Select Fund. We didn’t eliminate any positions during the quarter and exit 2016 with 20 investments in the portfolio.

From Bill Nygren (Trades, Portfolio)’s Oakmark Select Fund fourth quarter 2016 commentary.

Top Undervalued Stocks To Buy For 2017: Lam Research Corporation(LRCX)

Advisors’ Opinion:


    Lam Research (LRCX) has consistently outgrown the overall semiconductor-equipment market due to its high exposure to 3D NAND flash memory.

    Demand for wafer-fabrication equipment is notoriously volatile. However, over the last 90 days, the consensus profit estimate for this year jumped 17%, with 95% of analysts raising their targets.


    The same case is made for Action Alerts PLUS holding Alphabet (GOOGL) and for Lam Research (LRCX) and Broadcom (AVGO) and Growth Seeker holding Amazon (AMZN) –and a host of other high-growth companies.

Top Undervalued Stocks To Buy For 2017: Hudson Pacific Properties, Inc.(HPP)

Advisors’ Opinion:

  • [By Lisa Levin]

    Here is the list of stocks going ex-dividend on Friday.

    Douglas Dynamics Inc (NYSE: PLOW) – $0.2350 dividend, 2.9183 percent yield Tiffany & Co. (NYSE: TIF) – $0.4500 dividend, 2.6758 percent yield PulteGroup, Inc. (NYSE: PHM) – $0.0900 dividend, 1.7078 percent yield Leidos Holdings, Inc. (NYSE: LDOS) – $0.3200 dividend, 3.0851 percent yield Tupperware Brands Corporation (NYSE: TUP) – $0.6800 dividend, 4.1756 percent yield Hudson Pacific Properties Inc (NYSE: HPP) – $0.2000 dividend, 2.36

Top Undervalued Stocks To Buy For 2017: Pretium Resources, Inc.(PVG)

Advisors’ Opinion:


    Pretium Resources (PVG) remains on target with its development of what will be a world-class gold mine in British Columbia. The Brucejack property is slated to begin commercial production in mid-2017.

Top Undervalued Stocks To Buy For 2017: Dunkin' Brands Group, Inc.(DNKN)

Advisors’ Opinion:

  • [By Ben Levisohn]

    Dunkin’ Brands Group (DNKN) has dropped 3.5% to $54.16 after getting cut to Sell from Neutral at Goldman Sachs.

    Morgan Stanley (MS) has risen 1.1% to $42.95 after getting upgraded to Buy from Hold at Deutsche Bank.

  • [By Ben Levisohn]

    Keurigs plight (actually, JABs) is worsening, with the K-cup market slowing to almost no growth now, and Keurig continuing to lose own brands share. Starbucks (SBUX) echoed the notion of a K-cup market slowdown at its seminar on Wednesday (and is guiding for its [consumer packaged goods, or CPG,] growth below recent trends), but it expects to increase its share of total CPG coffee to 20% from 15%. Come early February it will be a year since the closing of the Keurig deal for JAB Holdings. The pressure on JAB is more significant if we take into account the high leverage of the deal (JAB contributed one fourth of the $12Bn price tag). It is a tough predicament. On the one hand we argue that to make that deal work, they need to buy more (own) brands either from the retail channel (that can be extended to CPG: Dunkin (DNKN)? Panera (PNRA)?), or outright buy CPG brands (like the entire Kraft Heinz portfolio, and or Tata Groups Eight OClock brand). But can/h ow do they fund these deals? Maybe Mars and Warren Buffett (Mars is involved in office coffee with Starbucks), private equity, and or 3G can help? While this note is not about Positive-rated Mondelez, we have mentioned before a scenario where Kraft Heinz buys Mondelez and partly funds the deal by selling its own CPG coffee business (~$3Bn we say) to JAB as well as divests the Mondelez 20% plus stakes in Keurig (North America) and Jacobs Douwe Egberts (Western Europe), which together at this stage are worth ~$7-8Bn. But, yes, JAB will need deep-pocket partners and generous lenders. Net, JAB needs to do something soon.

  • [By John Udovich]

    While theMacys Thanksgiving Day parade sponsored by Macy’s, Inc (NYSE:M) is the most well known corporate sponsoredThanksgiving parade,Dunkin Brands Group Inc (NASDAQ:DNKN) and McDonald’s Corporation (NYSE:MCD) also sponsor parades in major USA cities that will help them grab some extra consumer attention and perhaps help the bottom line a bit.

What You Need to Know About 401(k) Taxes in 2017″

Whether you contribute to a 401(k) that’s run by your employer or are currently retired and withdrawing money from a 401(k), it’s important to understand the tax structure of these accounts. Here’s an overview of how the tax rules of 401(k)s work, and how to maximize their tax benefits for you.

Contributions to a 401(k)

In most cases, 401(k) contributions are made on a pre-tax basis. In other words, the money you contribute to your 401(k), up to the annual limit, is not subject to tax. For example, if you are paid a salary of $50,000 and contribute $5,000 to a 401(k) as a pre-tax, or traditional, contribution, your income from your job will be $45,000 in the eyes of the IRS.

Piggybank in front of chalkboard with 401(k) written on it.

Image source: Getty Images.

On the other hand, contributions to a Roth 401(k) are taxable. The money you contribute will still be included in your income when you receive your W-2, and therefore will be included in the determination of your taxable income. Unlike a Roth IRA, there is no income restriction for contributing to a Roth 401(k).

For the 2017 tax year, you can choose to defer $18,000 from your salary into your 401(k) plan, with an additional $6,000 allowed if you’re over 50.

If your employer has a matching contribution program, it doesn’t matter which type of contribution you make, traditional or Roth. All employer contributions will always be made to the traditional (pre-tax) side of your 401(k).

The Saver’s Credit

Regardless of whether your 401(k) contributions are of the pre-tax or Roth variety, if your income is below $31,000 in 2017 ($62,000 for a married couple filing jointly), there’s an additional tax break that you should be aware of.

The Retirement Savings Contributions Credit, which is also known as the Saver’s Credit, is designed to incentivize retirement savings for low- to middle-income taxpayers. Depending on your income level, you could qualify for a credit worth 50%, 20%, or 10% of your qualified retirement contributions up to $2,000 — and 401(k) contributions qualify. For married couples who qualify, each spouse can take the credit.

Taxes on 401(k) withdrawals

If you withdraw money from a 401(k), the tax implications depend on whether the contributions were made on a pre-tax or after-tax (Roth) basis.

Pre-tax contributions are far more common, especially among older workers’ and retirees’ 401(k) accounts. Withdrawals from pre-tax 401(k) accounts are considered to be taxable income, since tax was never paid on the money when you first earned it. These withdrawals will be added to any other income you’ve earned for the year, and after your deductions, exemptions, and credits are accounted for, will be applied to the 2017 tax brackets, just as if you had earned the income from a job this year.

On the other hand, any money in your 401(k) that resulted from Roth contributions can be withdrawn tax-free, provided that the withdrawal is qualified (you’re 59 1/2 or older, and the account has been open at least five years).

When you take a distribution from a 401(k), your employer is required to complete and file a Form 1099-R with the IRS, which shows the IRS how much was distributed, how much tax (if any) was withheld from the distribution, and information about whether you’re older than 59 1/2 years old or not.

What if you withdraw money from your 401(k) early?

In general, using 401(k) savings before you reach the age of 59 1/2 will trigger a 10% penalty from the IRS. There are a few exceptions to the penalty, such as the exclusion for Roth contributions, or any withdrawals after age 55 if you’re no longer working for the employer.

In addition to a possible penalty, all pre-tax (non-Roth) contributions and any investment profits you withdraw from your 401(k) early are counted as taxable income.

This can have major tax implications, especially if you’re considering cashing out your 401(k) after leaving a job. Specifically, doing so can catapult you into a higher tax bracket, which you’ll have to pay in addition to the 10% penalty, if it applies. Depending on how much you have in your account, cashing out a big 401(k) could potentially result in a marginal tax rate of nearly 50%, and that’s not including any state income taxes you’ll have to pay. For this reason, cashing out a 401(k) is rarely, if ever, a smart financial move.