Today (11/17/2017), CBS Corporation (CBS) will spin off CBS radio and merge it with Entercom Communications (ETM). The combined company named Entercom (ETM) will have annual revenue of about $1.7 bn. An investor presentation can be found here.
Search Coverage List, Models & Reports
Search Results1-10 out of 272
Today (11/16/2017), the House is expected to vote and pass (H.R. 1), Tax Cuts and Jobs Act, an important step in sending a bill to the President’s desk by the end of year. Without a doubt, there are imperfections in the House bill that have been kicked to conference including SALT, overall individual rates, and int’l corp. provisions. We view these issues as fixable in a conference committee that could take place as soon as early December. From a markets standpoint, our long-short tax reform basket has only outperformed 1.9% YTD and our sense is that investors have priced in roughly one-third into the stock market as investors remain in wait and see mode given the Senate’s slim majority and now the Alabama Senate issue. Our strong sense is that with innumerable changes to both the House and Senate bills, many investors have tax fatigue and shifted their focus elsewhere. Nonetheless, we still place very high odds that a tax bill is enacted into law.
According to Reuters, General Electric (GE) is said to be weighing options for its aircraft leasing operations, which could include a sale or possible spin-off. GE Capital Aviation Services has a fleet of roughly 1,300 planes worth an estimated $25 billion. The news of a possible sale or spin-off is indicative of the current challenges in the leasing sector as Asian rivals force consolidation.
We track the share price performance of thematic stock baskets relative to a sector neutral benchmark. Year-to-date, companies with high international revenues, stocks with high EPS growth, our top stock idea model (SIM), companies with accelerating buybacks and high cash, and high beta stocks have been top performing themes. Year-to-date, the worst performing themes have been stocks with low P/E’s, value stocks, high short interest, recent spin-offs, and companies with low earnings quality and high short interest. In October, growth and momentum themes significantly outperformed, while value strategies lagged. Click here for more information
Wolfe Research's Senior Macro Research Analyst, Chris Senyek, hosted a Webcast to cover the implications of the new tax bill.
Two Harbors (TWO) distributed the 33.1m shares of Granite Point Mortgage Trust (GPMT) it had acquired in connection with the contribution of its commercial real estate portfolio to Granite Point. Granite Point Mortgage Trust focuses primarily on originating, investing in and managing commercial mortgage loans and other debt commercial real estate investments. Following the stock dividend, Two Harbors completed a reverse stock split.
• H.R. 1: Dead on Arrival? On Thursday (11/02/17), Ways & Means Chairman Brady released the House tax reform bill (H.R. 1), Tax Cuts and Jobs Act. Overall, the corporate provisions were generally in line with our expectations with interest non-deductibility being much less severe (still hurts private equity), but transfer pricing/income shifting provisions more severe (e.g., minimum tax on global foreign earnings) [hurts low tax rate pharma, tech, industrial co’s and inverters]. Corporate tax changes would also allow 100% expensing of U.S. cap-ex during the first 5 years (except bldg. and land) and require repatriation of foreign earnings at a 12% rate for cash and 5% rate for non-cash payable over 8 years and offset by any existing foreign tax credits. Overall, we believe that companies in the Financials and Consumer Discretionary sectors are the biggest beneficiaries from the corporate tax bill.
We track the share price performance of ~50 thematic stock baskets on an absolute and relative basis daily. In the pages that follow, we provide details of these thematic baskets’ performance over the past month and year-to-date as well as market, sector and industry long-term relative valuations. In October, growth and momentum themes significantly outperformed, while value strategies lagged.
Novartis (NVS) provided an update on Alcon, saying that a decision on whether a spin-off would occur would depend on Alcon’s financial performance over multiple quarters. If a spin were to occur, it would not likely be before first half of 2019. The pharmaceutical reported that Alcon had $1.5 bn in sales for the third quarter, up 7% from a year ago.
Late last week, the Senate passed the FY ’18 budget and we expect the House to take up its version this week and pass it later this week or early next — potentially even avoiding a conference committee (budget allows for up to $1.5T of deficit spending over 10 years). Passage of the budget would clear the way for passing tax cuts through the reconciliation process with only 51 Senate votes needed to clear a bill. In this note, we update our thoughts on the timeline and prospects for tax reform, discuss what key items could be included in the House bill, and key potential landmines ahead which could delay, if not derail, tax reform. While the budget language included last week in the Senate bill was written to appease House concerns thereby expediting approval in the House (potentially saving up to two weeks of time), there is little room for errors or delays in order to pass a bill by 2017 year-end. A more realistic if not optimistic scenario is that the House and Senate pass bills by year-end with a conference committee and signing in ‘Q1. Near-term, we believe progress is likely to continue as details from the House emerge and are debated with the House voting on its bill by the end of Nov. (before Thanksgiving a ‘stretch goal’). We expect progress to slow down in late November/December while the Senate moves and debates its own bill and as the December 8th government funding deadline nears. As we have maintained all year long, we view the prospects of a tax bill passing and signed into law as high. Our sense is that markets have priced in roughly 35% odds of tax cuts occurring.
- 1 of 28
- next →