Market Preview: Companies Ranging from Best Buy to Salesforce Report Earnings, and GDP Numbers

The market continued its winning ways on Friday, with the S&P and Nasdaq finishing at all time highs. Not even a firm stance on rising interests rates from Fed Chairman Powell could dampen the spirits of this aging bull market. Good economic news and even better earnings appear to be trumping political scandals and trade issues as we head into the waning days of summer. The CEO of Target may have put it best when discussing his company’s earnings earlier this week on CNBC, he said, “I think this is the healthiest environment I’ve ever seen.” The market apparently agrees.

Next week’s earnings calendar will give investors a wide range of stocks to parse. There will be additional retail numbers from Best Buy (BBY) on Tuesday, as well as a chance to check on the high end consumer when Tiffany (TIF) reports. Wednesday Salesforce (CRM) will detail their latest quarter in the customer management space, and Dick’s Sporting Goods (DKS) will step onto the earnings stage. Thursday we’ll hear from two of the biggest discount retailers when both Dollar General (DG) and Dollar Tree (DLTR) report. They’ll be joined by apparel seller lululemon (LULU). The earnings calendar is clear for the last Friday in August. 

Monday we’ll get earnings from Heico (HEI) and Bilibili (BILI). Heico recently went through a stock split, and the industrial parts supplier increased its semiannual dividend by 7%. Analysts will be keen to hear how the aircraft parts supply business is fairing in a bumpy plane market. Last quarter BILI doubled its sales and had double-digit growth in its mobile business. Analysts are looking to see if BILI is keeping the pulse of the young Chinese consumer which makes up most of its market.

The economic calendar next week is chock full of data, but the biggest focus for analysts will be the GDP number on Wednesday. We’ll also get international trade in goods and consumer confidence on Tuesday. Later in the week we’ll take a look at personal income, jobless claims, and the latest consumer sentiment numbers. Monday analysts will be focused on two Fed numbers. The Chicago Fed National Activity Index and the Dallas Fed Manufacturing Survey are both released Monday morning. The Chicago number tracks nationwide economic activity and inflation, while the Dallas Survey provides data out of Texas. Both numbers are expected to rise.

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3 Stocks to Buy If Trump Is Impeached

On Aug. 21, Michael Cohen, Donald Trump’s former personal attorney, pled guilty to two felony campaign finance violations, setting in motion a chain of events that could lead to President Donald Trump’s impeachment along with several “Trump impeachment stocks” to consider.

As far as I’m aware, if the president were removed from office by Congress, Mike Pence, the vice president, would become the new leader.

Under such a scenario, it’s possible that the White House’s economic policies wouldn’t change much, so the idea of benefitting from Donald Trump being stripped of his presidency and recommending three stocks to buy for a Trump impeachment could be a moot point.

That said, I don’t see Mike Pence being nearly as combative with America’s allies, which would mean a return to more normal diplomatic and economic relationships. That’s good news for any company currently suffering under the Trump administration’s protectionist tariffs.

America might be doing well today, but many experts suggest long-term, Trump’s trade policies are bad for business.

So, without further delay, these are the three stocks I believe are most likely to benefit from Trump’s removal from office:

Trump Impeachment Stocks: Harley Davidson (HOG)

Stocks to Buy if Trump Is Impeached: Harley-Davidson

Source: Shutterstock

I don’t think there’s any doubt that Harley Davidson (NYSE:HOG) would benefit from anybody but Donald Trump running the country.

The fact that the president would support the boycott of such an iconic brand just because the company chooses to make some of its bikes closer to its growth markets in Europe and elsewhere is evidence of the man’s failure to grasp simple business.

“Many @harleydavidson owners plan to boycott the company if manufacturing moves overseas. Great!” Trump tweeted on Aug. 12. “Most other companies are coming in our direction, including Harley competitors. A really bad move! U.S. will soon have a level playing field, or better.”

The truth of the matter is that companies who choose to manufacture in the U.S. do so, not because America makes products better than anyone else, but because they want to be closer to their customers.

It makes very little sense to sell a bike in Prague that’s made in Wisconsin. That said, if Trump hadn’t implemented the steel and aluminum tariffs, the EU wouldn’t have slapped a 31% tariff on U.S. motorcycles, and Harley likely wouldn’t have been nearly as quick to move some of its manufacturing overseas. 

I don’t know if Mike Pence understands economics any better, but I’m guessing Harley would like to find out.

Trump Impeachment Stocks: Fiat (FCAU) and the Auto Industry

Stocks to Buy if Trump Is Impeached: Fiat and Auto Stocks

Source: Shutterstock

This one isn’t so much a specific stock as it is a particular industry.

The president seems eager to undo anything that was created or achieved by the Obama administration. He loves the words, “Roll back the Obama policy,” almost as much as MAGA. To heck with the consequences. 

Recently, one of the great CEOs of modern business, Sergio Marchionne, died at the age of 66. President Trump might not like to hear this, but if it weren’t for Obama going against some of his advisors’ advice and opting for a bailoutFiat Chrysler Automobiles (NYSE:FCAU) might not exist today.

Just ask the good people of Windsor, Ontario, where they make a ton of Chrysler vehicles, what they think of Marchionne and praise is all you’ll hear. 

“There was a Great Recession, folks had lost confidence in Chrysler as a company,” said Windsor Mayor Drew Dilkens after Marchionne’s death July 25. “But he said, ‘You know what, I see a possibility.’ So, he took a leap that not many others were willing to take, and he took over Chrysler.”

The other thing people forget is that Fiat wasn’t exactly humming along when Marchionne proposed the merger. So, what does Mr. Trump want to do? He wants to slap a 25% tariff on cars coming from Canada and elsewhere.

Both Canadian and American auto parts suppliers would suffer under such a tax as would Fiat Chrysler and the rest of the Detroit automakers. And Windsor, Ontario? It would be crippled.

The entire North American auto industry benefits from a Trump impeachment.

Trump Impeachment Stocks: Amazon (AMZN)

Stocks to Buy if Trump Is Impeached: Amazon

Source: Shutterstock

The third company to benefit from a Trump impeachment would be Amazon (NASDAQ:AMZN); not that it needs any help because the president’s aggressive attacks against the e-commerce giant have put it in the spotlight for all the wrong reasons.

“Only fools, or worse, are saying that our money-losing Post Office makes money with Amazon. THEY LOSE A FORTUNE, and this will be changed,” Trump tweeted April 2. “Also, our fully tax-paying retailers are closing stores all over the country … not a level playing field!”

Hmm … Isn’t Amazon the same company that’s opening a second U.S. headquarters that will employ as many as 50,000 employees at a projected cost of $5 billion?

I’m pretty sure that the VP wouldn’t be nearly as hard on the Seattle company knowing that it employs more than 9,000 people in Pence’s home state of Indiana. And it’s adding jobs at its five fulfillment centers in the state.

I thought Trump liked companies who’re creating American jobs?

As of this writing, Will Ashworth did not hold a position in any of the aforementioned securities.

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Source: Investor Place

Buy This Profitable Tech Stock Beating the FAANGs

In my last article few articles (herehere, and here), we looked at emerging markets. I gave you the breakdown as to the markets I do not like and those that I do, in the Asia-Pacific region.

But even if you’re not a fan of emerging markets, please do not make the mistake many investors do… just because you don’t like China, for instance, do not throw out the entire Asia-Pacific region. If you do, you will be missing out on some wonderful opportunities to make money.

One of my favorite investing destinations is Australia, which is a stable, democratic country in the Asia-Pacific region. It has a number of top-quality stocks, including a technology stock that trades right here in the U.S. – Atlassian Corporation PLC (Nasdaq: TEAM). The company provides team collaboration and productivity software solutions worldwide. It offers project tracking, content creation and sharing, real-time communication, and service management products to all sizes of organizations.

What Atlassian Does

The company’s products include JIRA, a workflow management system that enables teams to plan, organize, track, and manage their work and projects; Confluence, a content collaboration platform that is used to create, share, organize, and discuss projects; HipChat that provides teams a way to communicate in real-time and share ideas, updates, codes, and files; Trello, a Web-based project management application for capturing and adding structure to fluid and fast-forming work for teams; Bitbucket, a code management and collaboration product for teams using distributed version control systems; and JIRA Service Desk, a service desk product for creating and managing service experiences for various service team providers, including IT help desks, and legal and HR teams. It also offers other tools for software developers, such as Stride, FishEye, Clover, Crowd, Crucible, Bamboo, SourceTree, and StatusPage.

The company recently entered into a strategic partnership with Slack. Atlassian currently has two offerings in the real-time communications market: Stride and Hipchat. With this partnership, Atlassian will exit the communications space. Slack has acquired the intellectual property for Stride and Hipchat Cloud, both of which will be discontinued. Atlassian will also discontinue Hipchat Server and Data Center and will be working with Slack to provide a migration path for customers of all four products.

Related: Sell These 21 Stocks About to Be Destroyed by Amazon [ad]

Microsoft Competition

Atlassian also said it has also made an equity investment in Slack to reinforce the long-term nature and significance of the partnership. The logic behind the two companies joining forces in this particular segment is that both were facing significant competition from Microsoft and its TEAMs product that is offered to its Office cloud customers. Microsoft also offers a free version to people that do not subscribe to Office 365. The deal will let Atlassian and Slack focus on the area where they lead – Slack in chat and Atlassian in project management software.

Microsoft is also trying to encroach on Atlassian’s turf with its recent $7.5 billion purchase of GitHub.

Initially, investors were fearful that Microsoft’s buy would hurt Atlassian. But it turns out the deal may actually bolster Atlassian’s Bitbucket business, which competes with GitHub in the business of storing code for companies and software developers. Immediately after the Microsoft announcement, the company’s Bitbucket enjoyed its best day ever in terms of new user sign ups.

The reason is straightforward – Atlassian offers better products at lower costs. Bitbucket prices are significantly lower than GitHub’s due to its focus on spending more on research and development rather than sales and marketing (more on this in a second).

Atlassian’s Unique History

I have been following Atlassian for a number of years because of its uniqueness among tech firms. Let me fill you in briefly on its history…

Because of its Australian roots, it was a unicorn that was valued well below its Silicon Valley peers.

Part of the reason for that was that the company did not sell much stock (only about $200 million) to private investors. So there was not the typical feeding frenzy sending valuations soaring. And the potential future valuation potential had not been already squeezed out by the venture capitalists.

Also, Atlassian was unique in that the company had always been profitable. I’m sure the investment banks on its IPO had difficulty pitching this unique asset – a technology company that had healthy revenue growth, positive cash flow and a reasonable valuation. What a contrast from what normally comes out of Silicon Valley!

 And now its most unique aspect – Atlassian does not have a sales team. Its business grows simply on word of mouth about the high quality of its products. I absolutely love that concept… letting the quality of your product speak for itself!

Atlassian Still Growing

The lack of a paid sales staff certainly has not slowed down Atlassian’s growth.

Its latest quarterly report sent the stock soaring by rose more than 23%. The company reported financial results for fiscal Q4, with earnings and revenue that topped analysts’ expectations; it also provided guidance for fiscal Q1 and full year 2019 above forecasts.

For the quarter ended June 30, Atlassian posted earnings of $0.13 per share, compared with the prior-year period’s $0.09 per share. Wall Street analysts had expected EPS of $0.12. Revenue came in at $243.8 million, up from $174.3 million in the same quarter last year. That was again above Street estimates for revenue of $233.4 million.

The company expects fiscal first quarter EPS of about $0.19 on revenue of $258 million to $260 million. Wall Street analysts had been looking for guidance of $0.15 on revenue of $252.5 million. For fiscal 2019, Atlassian forecast EPS of about $0.77 on revenue of $1.146 billion to $1.154 billion. That compares to the Street view of EPS of $0.66 on revenue of $1.11 billion.

Not surprisingly, firms such as Oppenheimer boosted their price target on Atlassian. Oppenheimer raised its stock price target to $85 from $65 while retaining its outperform rating. “Strength reflects continuing good execution, broad-based product demand, and record new customer expansion,” analyst Ittai Kidron said in a note, while viewing its exit from the communications business positively because it’s playing catch-up in the business.” We’re buyers seeing multiple growth drivers (new customers, deeper penetration, new products, pricing).”

I’m in agreement, with my expectation that Atlassian will continue to be a winner following its unique Australian model of success.

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Source: Investors Alley