Author: Cornelio Ash

Cornelio Ash is a senior equity analyst and member of the U.S. Focus List and the Global Focus List Committees, which approves all equity recommendations for developed, emerging, and frontier markets. He is also a lead for the Technology sector and specializes in the Americas region. Cornelio joined the firm in 2005 and received his B.A. in Finance from California State University, Northridge. He holds a Series 65 securities license.

ServiceNow

Posted on by Cornelio Ash

Key points from this report:

 

  • The stock is breaking out of a six-week flat base on above average volume. Buy.
  • Strong Q3 FY21 print. Beat across all metrics. ServiceNow reported better-than-expected Q3 FY21 results, including adjusted EPS of $1.55 (+28% y/y), well above expectations of $1.39, and revenue of $1.51B (+31% y/y), including subscription revenue of $1.43B (94% of total, +31% y/y), both above expectations of $1.48B and $1.41B, respectively.
  • Growth across large deals remain robust. As of Q3, ServiceNow’s total number of deals with annual contract value (ACV) greater than $1M stands at 1,266 (+25% y/y; +5% q/q).

Global Laggards

Posted on by Cornelio Ash

Highlighted Charts

 

U.S.: International Paper (IP), Allegion (ALLE), Twitter Inc (TWTR), Dana Incorporated (DAN), Iheartmedia Inc (IHRT), Lennox International (LII), Post (POST), Core Laboratories Nv (CLB), Texas Capital Bancshares (TCBI), Globe Life Inc (GL), Quidel Corp (QDEL), Casey General Store (CASY), T D Synnex (SNX), Lithia Motors (LAD), Amkor Technology (AMKR), Verint Systems (VRNT), WIX.com (WIX), Jetblue Airways Corp (JBLU).

 

Developed: Newcrest Mining (NCM.AU; NCM AU), Giken (GIKE.JP; 6289 JP), Vifor Pharma (VIFN.CH; VIFN SW), Abc-Mart (ITCP.JP; 2670 JP), Deutsche Telekom (DTEX.DE; DTE GR), Nippon Express (NX@N.JP; 9062 JP).

 

Emerging: Hyundai Steel (INI.KR; 004020 KS), HDC (HD1.KR; 294870 KS), Arezzo (ARZ.BR; ARZZ3 BZ), Hindustan Unilever (HDL.IN; HUVR IN), Samsung Life Insurance (SFC.KR; 032830 KS), Rumo (P3M.BR; RAIL3 BZ).

Dassault

Posted on by Cornelio Ash

Key points from this report:

 

  • The stock regained its 50-DMA within a short six-week base consolidation after reporting positive Q3 results. Add to positions here.
  • Impressive Q3: Dassault reported adjusted EPS of €0.22 (+37% y/y) and revenue of €1,158.8M (+12% y/y), both above estimates of €0.19 and €1,141.6M, respectively. Organic revenue grew 12% y/y to €3,160M.
  • Adjusted operating income increased 35% y/y to €392.1M, above estimates of €347.5M, on margin expansion of 560bps y/y to 33.8%.
  • Medidata acquisition paying off: Dassault’s Life Sciences vertical now contributes 22% of total revenue, up from 4% two years ago.
  • Dassault estimates its total market opportunity to be $41B, up from $28B a few years ago. The company is the market leader in two of the three key sectors in which it operates: Manufacturing (TAM: $24B, market share: 29%) and Life Sciences ($8B; 11%).

Microsoft

Posted on by Cornelio Ash

Key points from this report:

 

  • The stock is breaking out from an eight-week flat base after reporting strong Q1 FY22 results. Buy.
  • Strong Q1 FY22. Reported adjusted EPS of $2.27 (+25% y/y), above estimates of $2.07, and revenue of $45.3B (+22% y/y), above estimates of $43.9B. Microsoft Cloud—formerly Commercial Cloud and includes Azure, Commercial Office 365, Dynamics 365 and LinkedIn Commercial—jumped 36% y/y to $20.7B. Operating income increased to $20.2B (+27% y/y), above estimates of $18.5B, and operating margin expanded 227bps to 45%.
  • Azure up 50% y/y. Growth exceeded Google Cloud (45% y/y) this quarter and is higher than AWS’s expectations (32%), indicating stronger adoption and increasing market share.
  • Margins will continue to expand given upcoming price increase on SaaS products. In August, Microsoft announced its first price increase for its Office 365 and Microsoft 365 services in a decade. The price increases will affect commercial and business users of Microsoft’s SaaS offerings next year, with no changes to pricing for education or consumers.

Global Laggards

Posted on by Cornelio Ash

Highlighted Charts

 

U.S.: Corteva (CTVA), Deere & Co (DE), Emerson Electric Co (EMR), Callaway Golf (ELY), Constellation Brands (STZ), Amyris (AMRS), Kemper Corporation (KMPR), Select Medical (SEM), Urban Outfitters (URBN), T D Synnex (SNX), Cirrus Logic (CRUS), Cognex (CGNX), Ansys Inc (ANSS), McAfee Corp (MCFE), VMware Inc (VMW), Azul (AZUL).

Global Laggards

Posted on by Cornelio Ash

Highlighted Charts

 

U.S.: Allegheny Technologies (ATI), Leidos Holdings (LDOS), Reliance Steel and Aluminium (RS), KB Home (KBH), LGI Homes (LGIH), Mohawk Industries (MHK), Hasbro (HAS), Herbalife Nutrition (HLF), Brookfield Renewable Cl A (BEPC), Globe Life Inc (GL), Brookfield Infra Corp (BIPC), Texas Capital Bancshares (TCBI), Quidel (QDEL), Teleflex (TFX), Casey’s General store (CASY), MKS Instruments (MKSI), Silicon Laboratories (SLAB), Lumentum (LITE), Health Catalyst Inc (HCAT), Twitter (TWTR), Iridium Communications (IRDM), Ansys Inc (ANSS), United Parcel Service Cl B (UPS).

Global Laggards

Posted on by Cornelio Ash

Highlighted Charts

 

U.S.: RPM (RPM), Wheaton Precious Metals (WPM), Reynolds Consumer Products (REYN), Boise Cascade Company (BCC), Nio (NIO), Norwegian Cruise Line (NCLH), Carnival (CCL), Sunnova Energy International (NOVA), Commerce Bancshares (CBSH), Inari Medical (NARI), Casey’s General store (CASY), Just Eat Takeaway.com (GRUB), Yum China (YUMC), Universal Display Corp (OLED), Ultra Clean Holdings Inc (UCTT), Qualcomm (QCOM), Go Daddy Inc (GDDY), PTC Inc (PTC), Electronic Arts Inc (EA), Clarivate Plc (CLVT), Twitter (TWTR), Union Pacific Corporation (UNP).