Welcome to John Ransom's Stocks In The News, where the headline meets the trendline.
Stocks in the News is produced by Ransom Notes Radio and Goodfellow, LLC. Crista Huff manages Goodfellow LLC, a website that recommends outperforming stocks using fundamental and technical analysis.
Stock number one is:
U.S. Bancorp, (SYMBOL: USB) and the headline says:
U.S. Bancorp Quarterly Profit Rises 6.7%, Matches Estimates(Bloomberg)
U.S. Bancorp reported a first quarter in-line with analysts’ expectations. Morgan Stanley Research commented, “Lower fees were more than offset by lower expenses.” Expenses improved due to lower regulatory, litigation and insurance-related costs.
The company is expected to increase earnings per share between 7 and 9% over each of the next three years. The PE is 10.9, and the dividend yield is 2.34%.
U.S. Bancorp’s chart is neutral, recently trading in a tight range between $33 and $34.50. The stock has fallen below support today, and investors should be cautious. Citi Research says “expectations are too high for this stock.”
Our Ransom Note trendline says: STAY ON THE SIDELINES
Stock number two is:
Goldman Sachs Group, (SYMBOL: GS) and the headline says:
Goldman Profit Beats Estimates on Investment-Banking Gain (Bloomberg)
Global investment banker Goldman Sachs reported “first-quarter adjusted earnings of $4.29 per share, compared with an estimated $3.87,” reports Bloomberg. A reduction in compensation accrual accounted for more than half the earnings beat. Most revenues were higher than expected, but Morgan Stanley Research says, “weaker trading revenues were a disappointment.” Assets under management were down a worse-than-expected $4 billion.
Citi Research says that the quarterly comp ratio improvement “should not significantly impact our full year estimates.” Earnings per share are expected to fall 1% this year.
Goldman shares broke out in early January, rose 30 dollars, and are now in a pullback phase. Investors should watch to see if the stock holds support at $140.
Our Ransom Note trendline says: STAY ON THE SIDELINES.
Stock number three is:
BlackRock Inc., (SYMBOL: BLK) and the headline says:
Citi Research Likes BlackRock’s First Quarter Earnings Report
BlackRock Inc., the world’s largest asset manager, had earnings of $3.65 per share, compared with an estimate of $3.57. Citi Research attributed the earnings beat to a lower tax rate, “slightly higher revenues and better margins led by strong expense control.”
Wall Street expects earnings per share to increase 16%, 13% and 15% over the next three years. The PE is 16.0. BlackRock increased the dividend to $1.68 per quarter, yielding 2.65%.
The stock broke past medium-term resistance at $240 in February. Citi Research has a Buy rating on the stock, and a 12-month target price of $285.
Our Ransom Note trendline says: BUY BLACKROCK SHARES.