The JPMorgan Equity Income fund is sticking with quality stocks and remaining agile during coronavirus-driven market turmoil.
Charlie Munger and Warren Buffett are playing it safe during coronavirus uncertainty, in contrast to the 2008 financial crisis
Cuban, who hasn’t ruled out running for president, has weathered the selloff thanks to core holdings in Amazon and Netflix.
(Bloomberg) -- In Fargo, North Dakota, cheap fuel has never been so unwelcome.The Midwestern city is so awash in gasoline, the fuel last week sold for a record 12 cents a gallon at the rack -- its last stop before the pump. In better times, the price dip would be a boon for gas station owners looking to snag low-cost supplies. But with fewer customers every day, gas pumps are becoming little more than makeshift storage for ballooning inventories.“Our gasoline business has been cut in half,” said David Olson, general manager at family-owned RJ’s Gas Station near Fargo. Across town, Shaun Lugert estimates that sales at the station he owns have tumbled 80% in a month. “The biggest part for us that has been so hard is the unknown,” he said by phone. “It’s been kind of a roller coaster.”The slump in rack prices, which are typically stable due to intense competition among distributors, is the latest sign that the coronavirus pandemic is wreaking havoc on every aspect of the fuel market. American gasoline consumption fell to the lowest level on record last week as lockdowns take drivers off the road while gasoline stockpiles rose to a record high. That’s caused rack prices across the U.S to collapse. Milwaukee this week beat out Fargo for the lowest price in the nation.“The local racks are just inundated with material,” said Patrick De Haan, head of petroleum analysis at GasBuddy. Some refineries may even be selling gasoline “at a break even or even a loss,” he said.The price decline is especially pronounced for cities at the end of pipeline systems, such as Fargo and Milwaukee.“Those places are at the end of the line,” said DTN refined products analyst Brian Milne. “What we are seeing is that a lot of the big pipelines are being used as storage, and the product will just get pushed and pushed until it has no place else to go.”While everyone along the supply chain is getting hammered right now, gas stations may have it the worst.“When you see gasoline down around 12 cents a gallon, no one is going to be making money,” said Ron Ness, president of the North Dakota Petroleum Council. For retailers, it’s nearly impossible to turn a profit, he said.Lugert, the co-owner of Don’s Car Washes, has been forced to cut back store and worker hours, with no apparent end in sight.“You’re not going to be able to flip a switch and go back to what it was before coronavirus,” said station manager Olson. “Even with businesses opened back up again, people are going to be apprehensive.”For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
The burger chain CEO and investor said Cracker Barrel lost $133 million of shareholders’ money in a concept that “lacks any resemblance to the company’s country-cooking family dining business.”
Geico, State Farm, Progressive and others are offering car insurance relief to customers amid the COVID-19 outbreak. Here's what you need to know.
"We're like the captain of a ship when the worst typhoon that's ever happened comes," the 96-year-old Munger said in an interview with The Wall Street Journal. "Warren wants to keep Berkshire safe for people who have 90% of their net worth invested in it," Munger added. Berkshire did not immediately respond to a request for comment to Buffett's assistant.
After almost 4 weeks of bullish trading, investors are growing used to the idea that we’re in a true rally. Yes, markets are still down from their February peak; yes, the coronavirus epidemic is still going strong; and yes, the lockdowns in place to combat the virus’ spread are still wreaking havoc on the economy – but for now, at least, the stock markets are trending up.On Wall Street, Chris Harvey, Wells Fargo’s head of equity strategy, sees opportunities in current market conditions. “Destruction in stock prices has really uncovered a significant amount of value,” Harvey says, although he does add a warning that investors should avoid companies with “fundamental issues” resolvable under current conditions. He specifically points out the travel and leisure sectors as particularly hard hit right now.But within what he describes as the best risk/rewards, the Wells Fargo team believes investors can find strong returns.That in mind, what exactly is Wells Fargo recommending? We’ve used the TipRanks database to sort through the investment firm’s stock picks, and found some commonalities: at least 20% upside potential, combined with 13% dividend yields – and also one that may be too risky to try.Simon Property Group (SPG)We’ll start with a real estate investment trust, a segment well-known for high and reliable dividends. The Simon Property Group focuses on retail properties, and is known as the largest operator of shopping malls in the US. SPG has over 325 properties across 37 states, and boasts over 240 million leasable square feet of high-end retail property. The company finished 2019 on a strong note, with $1.5 billion in final quarter revenue and $7.1 billion in liquid assets.Even with the difficult quarter now, SPG has maintained its generous dividend. The quarterly payment is a $2.10, making the annualized payout an impressive $8.40 and the yield an equally impressive 13.72%. SPG has been raising the dividend steadily over recent years, and the payout ratio is now 70%, showing that the company can afford the payment – and has room to increase it again.Tamara Fique covers this stock for Wells Fargo, and sees fit to give a Buy rating. Her review includes a bullish $130 price target, implying a healthy upside potential of 112% for the coming year. (To watch Fique’s track record, click here)Backing her stance, Fique points out all of the current weaknesses in the shopping mall industry: declining customer traffic, closed shops, a halt in tourist traffic, and reduces her 2020 and 2020 FFO estimates. At the bottom line, however, she states, “The regional mall industry has consolidated into the hands of a few public REITs that benefit from their scale, access to capital, and strong tenant relationships. Those REITs with national platforms and high-quality portfolios are likely to attract the best tenants and the best personnel. Simon is the largest of these consolidators.”Overall, Simon Property boasts a Moderate Buy consensus rating with 6 recent Buy ratings vs. 7 Holds. Meanwhile the average price target of $130 indicates upside potential of 128%, with the stock down 64% year-to-date. (See Simon Property stock analysis at TipRanks)Goldman Sachs BDC (GSBD)Investment management is a core function of Wall Street’s major banks, and Goldman Sachs BDC lives squarely in that niche. The company is the specialty finance subsidiary of the eponymous investment banking firm that figured prominently in the 2008 financial crisis. GSBD focuses on closed-end management investment for middle-market companies in the US.Through 2018, and into 1H19, GSBD strongly exceeded its earnings expectation. In the last few reported quarters, however, the bank has just managed to meet those forecasts, with Q3 and Q4 earnings coming in at 47 and 48 cents respectively. Looking ahead, the Street expects to see 49 cents EPS, for another small sequential gain.Along with modest gains in earnings, GSBD offers investors a steady – and rock-solid reliable – dividend, with uninterrupted payments going back five years. The quarterly payment, 45 cents, annualizes $1.80 and gives a yield of 13.84%. This is almost 7x higher that the average dividend yield found in the broader markets, and while GSBD has kept the payment steady, rather than increasing it gradually, the reliable payout and high yield combine to make it a steady income stream for shareholders – and an attractive point for income-minded investors.Well Fargo analyst Finian O’Shea saw fit to upgrade this stock from Neutral to Buy, setting a $15.75 price target that indicates a potential upside of 21%. (To watch O’Shea's track record, click here)In supporting comments, O’Shea wrote, “We are upgrading GSBD… given attractive leverage profiles in this environment… We are increasing our target yields to account for wider market spreads, and believe the space is attractive given implied loss rates and overall funding stability.”The average price target on GSBD is $16.25, which suggests room for 24% growth from the current trading price of $13.51. The Moderate Buy analyst consensus is based on 1 Buy rating and 3 Holds set in recent weeks. But the main attraction here is the steady dividend return. (See Goldman Sachs stock analysis on TipRanks)Bed Bath & Beyond (BBBY)With the third stock on our list, we get to Wells Fargo’s Sell recommendation. Bed Bath & Beyond is a staple of the suburban retail market, with branches in shopping malls and stand-alone locations. The company specializes in homewares, sheets and towels, cooking and baking accessories, soaps, shampoos, and other hygiene products – a niche that you think might do well in today’s hygiene-conscious coronavirus epidemic, but the lockdowns have brought shopping to a near-standstill and that is the deciding factor in this case.Oddly, initial numbers might suggest otherwise. BBBY’s fiscal Q4, which ended in February of this year, showed an 80% positive surprise as EPS came in at 38 cents against a forecast of 21 cents. At the same time, quarterly earnings were down from $1.20 year-over-year, a 68% drop.However, the company’s fiscal Q1, which will cover a time frame directly impacted by the anti-coronavirus measures, is looking decidedly glum. March sales are tracking down 32%, and quarter-to-date is down 42%. The company is looking to retrench, and has suspended $600 million in share buybacks and debt reduction while pushing $150 million capital expenditures into 2021. It’s not a pretty picture, especially when all of the company’s stores are closed and it is shifting all sales to an ecommerce platform, and adjusting to changes in upper management.Even BBBY’s dividend, once considered solidly reliable, is not safe. The company paid out the 17-cent regular quarterly payment last month, but future dividends are uncertain. At current share price levels, the dividend gives a whopping 15.3% yield, impressive by any standard – but affordability is the question.All of this prompted Well Fargo’s 5-star analyst Zachary Fadem to rate BBBY a Sell, with a $4 price target that suggests a 9% downside from current levels this year. (To watch Fadem's track record, click here)Fadem opined, “Considering BBBY’s pre-COVID challenges were already steep, we’ve long viewed a turnaround requiring considerable efforts. But with management now juggling actions to reduce costs, shore up liquidity and quickly shift sales to ecommerce, we view the path ahead increasingly onerous for BBBY’s newly minted leadership team.”Overall, Wall Street appears to agree with Fadem that caution is required here. The analyst consensus on this stock is a Hold, based on 13 ratings that include 3 Buy, 8 Holds, and 2 Sells. However, the average price target of $10.11 reflects the potentially high rewards sometimes seen with high risk shares, implying a 46% upside should the economy see a V-shaped recovery. (See BBBY stock analysis on TipRanks)To find good ideas for dividend stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights.
If Americans filed a 2019 or 2018 tax return, which will be used by the agency to calculate eligibility, but did not provide direct deposit information, the tool can be used to input the necessary information.
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Now, the record-setting flood of layoffs unleashed by the viral outbreak is extending beyond the services industries that bore the initial brunt and are still suffering most. White collar employees, ranging from software programmers and legal assistants to sales associates and some health care workers, are absorbing layoffs or salary cuts. The mounting toll of job losses resulted last week in 5.2 million new applications for unemployment benefits, the Labor Department said Thursday.
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