Opportunities

Levi’s Outlook for Revenue Growth And Margin Opportunities Appear Intact: Morgan Stanley

Levi Strauss & Co, an American clothing company known worldwide for its Levi’s brand of denim jeans, warned after its net revenue plunged over 60% in the second quarter that the effect of the coronavirus would negatively impact their businesses even in the second half of this year.

Net revenue declined 62% to $497.5 million, largely due to the temporary closure of company-operated, franchise and wholesale customer retail locations as a result of the COVID-19 pandemic, partially offset by the company’s e-commerce business which grew 25% for the quarter, with sequential month-over-month acceleration to nearly 80% growth for May, the company said.

The company recorded a net loss for the quarter of $364 million and an adjusted net loss of $192 million. Gross margin decreased 19.2 percentage points on a reported basis to 34.1%. Adjusted EBIT was a loss of $206 million.

The company also said that it

Read More

Opportunities Created By COVID; 2020’s Most Profitable ETFs

This article was originally published on ETFTrends.com.

By Viktor Argonov, Senior Analyst at International Investment Firm

Exchange-traded funds (ETFs) and similar instruments such as exchange-traded notes (ETNs) have typically been the best strategies for long-term investment. Even generic funds such as SPY (which tracks the S&P 500 index) earned investors an average annual return of 10-11% since mid-20th century. An even greater revenue (around 15%) can be earned from specialized funds such as RPG, whose basket only includes stocks from companies with high growth rates.

However, COVID-19 has changed this. The indices plummeted in February and March, and, even though they have mostly recovered by now, they have not earned their investors significant profits yet. On the other hand, the pandemic has also caused the stock prices of many companies to rise, as the demand for their products increased. This was true of some ETFs as well, as they

Read More

GrubHub Got Away, But There Are Other Opportunities to Consider

Uber (UBER) might have missed out on the highly-publicized GRUB acquisition, but there are other opportunities for the ride sharing pioneer.

So believes BTIG analyst Jake Fuller, who highlights three different strategies that “could collectively be worth ~$600 million to annual EBITDA (coincidentally in line with the synergy projected with a GRUB combination).”

Fuller’s first suggestion relates to deconsolidation – basically, the removal of a subsidiary off the balance sheet. Fuller thinks Uber is willing to consider the deconsolidation of its losing self-driving car business, ATG (advanced technologies group). With an 80% stake in a business expected to report a “$400 million-plus annual loss,” wiping it off the balance sheet would require Uber to “solicit additional investment.”

“ATG would need ~$2.6 billion of new capital (UBER bearing all of the dilution) to drop ownership below 50% and deconsolidate. Given the size of the investment required, it’s unlikely

Read More

Options on Bankrupt Hertz Provide Unique Risks and Opportunities

The story at Hertz just gets more and more bizarre.

Yesterday we wrote about how millennial investors and sports gamblers might be playing a role in the extreme moves we’ve seen in the Rental Car Giant that recently filed for bankruptcy protection and almost right after that piece went up on Zacks.com, Hertz (HTZ) shares were halted amid news that they would be cancelling the sale of up to $500 million worth of equity shares primarily because of concerns raised by the SEC.

Hertz had been on the ropes even before the spread of Covid-19 and it was a poorly kept secret on the street that bondholders were bracing for a missed coupon payment as far back as the third quarter of 2019. The steep reduction in revenues that occurred starting in March as customers ceased almost all travel activities was really just the final nail in the coffin.

Bankruptcy

Read More