Welcome to Seeking Alpha’s Stocks to Watch – a preview of key events scheduled for the next week. Follow this account and turn the e-mail alert on to receive this article in your inbox every Saturday morning.
Yep, there is an election next week that’s going to steal some headlines, but investors have been advised to keep their emotions in check. Reminders have been put out that the stock market has actually outperformed when Congress was divided between parties and that selling immediately after an election based on fears of the winning party has been a losing bet over the last 40 years. The consensus concerns of analysts, economists and CEOs/CFOs of multinationals are more focused on potential Federal Reserve missteps, biting margin pressures and global trade issues over the results of the U.S. election. Still, we can expect some fireworks and volatility no matter the result, especially with certain sectors like healthcare and financials. However, the biggest wildcard of all may be how the Trump-Xi meet and greet develops after the election. Next week also features a FOMC meeting on November 5-6 that won’t feature dot plots and a press conference – but will be closely analyzed after the recent string of strong economic data.
Notable earnings reports: Booking Holdings (NASDAQ:BKNG), Marriott International (NYSE:MAR), Pandora (NYSE:P) and Mylan (NASDAQ:MYL) on November 5; Bausch Health (NYSE:BHC), Zillow (NASDAQ:ZG) and Wendy’s (NYSE:WEN) on November 6; Qualcomm (NASDAQ:QCOM), Groupon (NASDAQ:GRPN), Square (NYSE:SQ) and Wynn Resorts (NASDAQ:WYNN) on November 7; Disney (NYSE:DIS), Activision Blizzard (NASDAQ:ATVI) and Yelp (NYSE:YELP) on November 8; Iconix Brand (NASDAQ:ICON), Moneygram International (NYSE:MGI) and Superior Industries (NYSE:SUP) on November 9. See Seeking Alpha’s Earnings Calendar for the complete list of earnings reporters.
IPOs expected to price: The IPO market hits a lull next week with no offerings anticipated to price. The break in the action gives us a chance to update on the ten hottest IPO debuts of 2018 by share price return over the offering price – Tilray (NASDAQ:TLRY) +458%, Goosehead Insurance (NASDAQ:GSHD) +243%, ARMO BioSciences (NASDAQ:ARMO) +194%, Allakos (NASDAQ:ALLK) +169%, Zscalar (NASDAQ:ZS) +127%, Solid Biosciences (NASDAQ:SLDB) +100%, Elastic (NYSE:ESTC) +89%, Guardent Health (NASDAQ:GH) +76%, Cactus (NYSE:WHD) +76% and Ceridian HCM Holding (NYSE:CDAY) +73%. Other notable gainers include PlayAGS (NYSE:AGS) +52%, EVO Payments (NASDAQ:EVOP) +48%, Zuora (NYSE:ZUO) +46%, DocSign (NASDAQ:DOCU) +45% and Eventbrite (NYSE:EB) +23%. Notable decliners include NIO(NYSE:NIO) -6%, Yeti (NYSE:YETI) -12%, Carbon Black (NASDAQ:CLBK) -13% and Sonos (NASDAQ:SONO) -15%.
China International Import Expo: Chinese President Xi Jinping is set to kick off a week-long expo in Shanghai that promotes his country’s status as a major consumer of the world’s goods. Economists think that China could use the event to announce trade reform without the appearance of caving in to U.S. pressure. Last year, China imported a whopping $2.1T worth of goods, a mark that the U.S. and European nations want to go higher.
Let’s talk dividends: The recent eye-popping dividend slashes at GE (NYSE:GE) and Anheuser-Busch InBev (NYSE:BUD) could be a warning sign for other companies with high payout ratios. After analyzing companies with lush dividends, MarketWatch named Six Flags Entertainment (NYSE:SIX), AstraZeneca (NYSE:AZN), Century Link (NYSE:CTL), L Brands (NYSE:LB) and Philip Morris (NYSE:PM) as five stocks to watch in particular for dividend cuts.
AMD intrigue: AMD (NASDAQ:AMD) is hosting a mysterious event called “AMD Next Horizon” on November 6. While the company’s website is barren of information on the event, in the past AMD has announced product updates at a gathering with the same title. Bank of America Merrill Lynch (Buy rating, $30 price target) expects an update on AMD’s EPYC 2/Rome serve CPU. Shares of AMD could use a boost after peeling off 27% over the last month.
Apple-picking: A dip below a $1T market cap has Apple (NASDAQ:AAPL) investors wide awake and evaluating if the company’s higher average selling prices will be enough to offset slowing iPhone shipment growth. Next week, things could get really interesting as analysts dig into valuation on Apple to set their revised price targets knowing quarterly updates on iPhones, iPads, and Macs units sold will be missing in action. Apple wants investors to think of the entire business as a service, notes Loup Ventures analyst Gene Munster. He joins other analysts in expecting the tactic to work over the long term. “Apple’s mix of loyal customers and product innovation will drive sustained revenue and earnings growth,” says Munster. As it stands now, the average price target on Apple is $236.02 vs. Friday’s closing price of $207.48 and all-time high of $233.47.
When P&G talks… : Consumer products giant Procter & Gamble (NYSE:PG) hosts an investor day event on November 8. Watch for a guidance update from P&G after the company set its FY19 outlook at organic sales growth of 2% to 3% and EPS growth of 3% to 8% just a few weeks. Shares of Procter & Gamble are up 9% over the last month and the sector as a whole is riding high after Church & Dwight (NYSE:CHD) posted organic sales growth of 4.7% volume in Q3 on higher pricing. P&G’s tone at its investor day could redirect shares of Kimberly-Clark (NYSE:KMB) and Clorox (NYSE:CLX) as well.
Novartis scramble: Novartis (NYSE:NVS) has a R&D update scheduled for November 5. The company recently announced that it dropped ~20% of its research projects to focus on the most cutting-edge and transformative medicine projects in its pipeline, but has yet to details which programs are being slashed. A little bit of an industry scramble could ensue as many of the eliminated projects could be picked up by other drugmakers through licensing arrangements.
20 days: Black Friday is sneaking up on us, and amid all the distractions in the stock market, it’s possible that investors might not be factoring in the upside for retail majors riding into the holidays with a strong economy tailwind. While Morgan Stanley sees the “big six” — Amazon.com (NASDAQ:AMZN), Walmart (NYSE:WMT), Kroger (NYSE:KR), Home Depot (NYSE:HD), Lowe’s (NYSE:LOW) and Costco (NASDAQ:COST) — posting blowout holiday sales, the firm isn’t nearly as confident about department stores and specialty retailers. However, off-price retailers TJX Companies (NYSE:TJX), Ross Stores (NASDAQ:ROST) and Burlington Stores (NYSE:BURL) are seen generating holiday same-store sales growth ahead of broad retail averages.
FDA watch: Mylan’s (MYL) resubmitted ANDA of its generic to Allergan’s (NYSE:AGN)’s Restasis dry eye treatment may see some FDA action next week. Briefing documents fare due in for Mallinckrodt’s (NYSE:MNK) MNK-812 Roxicodone reformualtion.
R&D day: BioMarin Pharmaceuticals (NASDAQ:BMRN) management and external experts will provide an update on November 7 to the investment community on the company’s development portfolio, which it says is focused on innovative therapies to treat rare and ultra-rare diseases.
Upcoming stocks splits: TJX Companies (TJX) has a 2-for-1 stock split set for November 6. The number of outstanding TJX shares will be ~1.8B share after the split. TJX will still yield ~1.42% following the split action.
M&A tidbits: The Broadcom (NASDAQ:AVGO)-CA Technologies (NASDAQ:CA) deal is expected to close on November 5. Shareholders of Barrick Gold (NYSE:ABX) and Randgold Resources (NASDAQ:GOLD) vote on the companies’ planned merger on November 6. The Israeli shareholder waiting period expires on the SodaStream (NASDAQ:SODA)-Pepsico (NYSE:PEP) deal on November 8.
Videogame check: Berenberg hosts a video gaming conference on November 7, with some under-the-radar European players making an appearance, including CD Projeckt (OTC:OTGLF), Codemasters, Frontier Developments (OTC:FRRDF), Gfnity, KeyWordStudios (OTC:KYYWF), Starbreeze Studios (OTC:STBEF), Sumo Digital, Team17Group and THQ Nordic (OTCPK:THQQF). It’s a busy week overall for the videogame sector, with Take-Two Interactive Software (NASDAQ:TTWO) and Activision Blizzard (ATVI) reporting earnings and Electronic Arts (NASDAQ:EA) trying to make the “final adjustments” to Battlefield V. Activision and Take-Two already have Call of Duty: Black Ops 4 and Red Dead Redemption 2 on the market ahead of the crucial holiday season.
Stephens Fall Investment Conference: The huge investment conference that includes fireside chat presentations from across various sectors runs from November 7-8 in New York City. Participating companies include BMC Stock Holdings (NASDAQ:BMCH), Greenbrier (NYSE:GBX), Kansas City Southern (NYSE:KSU), Matson (NYSE:MATX), MasTec (NYSE:MTZ), Quanta Services (NYSE:PWR), US Express Enterprises (NYSE:USX), Wener Enterprises, (NASDAQ:WERN), Heartland Express (NASDAQ:HTLD), J.B. Hunt Transport Services (NASDAQ:JBHT), Knight-Swift Transportation (NYSE:KNX), Norfolk Southern (NYSE:NSC), Ryder (NYSE:R), Construction Partners (NASDAQ:ROAD), Union Pacific (NYSE:UNP), BJ’s Restaurants (NASDAQ:BJRI), Habit Restaurants (NASDAQ:HABT), Healthcare Services Group (NASDAQ:HCSG), Ruth’s Hospitality (NASDAQ:RUTH), Sanderson Farms (NASDAQ:SAFM), Addus HomeCare (NASDAQ:ADUS), Endologix (NASDAQ:ELGX), Invacare (NYSE:IVC), Marchex (NASDAQ:MCHX), Proofpoint (NASDAQ:PFPT), AutoNation (NYSE:AN), FedEx (NYSE:FDX), American Airlines Group (NASDAQ:AAL), Southwest Airlines (NYSE:LUV), Domino’s Pizza (NYSE:DPZ) and QuinStreet (NASDAQ:QNST).
Box office: 20th Century Fox’s (NASDAQ:FOXA) Bohemian Rhapsody is expected to bring in $35M to $40M in the U.S. over the weekend. The Freddie Mercury biopic only cost about $55M to make before marketing costs, setting it up turn a profit. Disney’s (DIS) The Nutcracker and the Four Realms is forecast to tally $20.0M in its debut. Universal’s (NASDAQ:CMCSA) Halloween is showing some strong legs, and is seen tallying up another $15M.
Barron’s mentions: Rising tension between the U.S. and China could lead to a new arms race with a “scary” hypersonic missile on the way from Beijing, writes Jack Hough. The thought is that deep cuts in defense spending are unlikely, paving the way for Raytheon (NYSE:RTN), Northrop Grumman (NYSE:NOC) and Lockheed Martin (NYSE:LMT) to see share price bouncebacks. General Dynamics (NYSE:GD), Huntington Ingalls (NYSE:HII) and Boeing (NYSE:BA) could also benefit as spending opens up for jet fighters, submarines and aircraft carriers. Ingersoll-Rand (NYSE:IR) and Lennox International (NYSE:LII) are seen as oversold amid the housing sector slump. Finally, the publication keeps it simple by reminding that companies with small debt loads could outperform as higher interest rates clip peers. Names that make that cut include Gap (NYSE:GPS), Costco (COST), Alphabet (NASDAQ:GOOGL) and Micron Technology (NASDAQ:MU) and Southwest Airlines (LUV).
Sources: Nasdaq, CNBC, EDGAR, Financial Times, Bloomberg.
Editor’s Note: This article covers one or more microcap stocks. Please be aware of the risks associated with these stocks.