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.

CrowdStrike

Posted on by Cornelio Ash

Key points from this report:

 

  • The stock broke out of a six-week cup base on rising volume after reporting better-than-expected Q3 FY20 results. Buy.
  • Cybersecurity remains a secular growth theme. The pandemic has led to an increase in the number of phishing and ransomware attacks as hackers used COVID-19 to mislead employees, making more smartphones and computers prone to cyberattacks.
  • Growing addressable market led by innovations and acquisitions. The market for CRWD  initially began as a replacement opportunity in corporate endpoint security but has significantly increased, aided by rapid innovation and acquisitions.
  • Growing customer base. In Q3 FY21, CrowdStrike added 1,186 net new subscription customers for a total of 8,416, including 49 of the Fortune 100, 40 of the top global 100 companies, and 11 of the top 20 major banks

Global Laggards

Posted on by Cornelio Ash

Highlighted Charts

 

U.S.: Reynolds Consumer Prdcts (REYN), Hormel Foods (HRL), Cabot Oil & Gas Corporation (COG), Lending Tree (TREE), Hill-Rom (HRC), Juniper Networks (JNPR), Nortonlifelock (NLOK), Akamai (AKAM), Huya (HUYA).

 

Developed: Novozymes B (NZY.DK; NZYMB:DC), Maruichi Steel Tube (MRUS.JP; 5463:JP), Yangzijiang Shipbuilding Hldgs (YSHL.SG; YZJSGD:SP), Christian Hansen Holding (CHR.DK; CHR:DC), Nissin Foods Holding (NIFP.JP; 2897:JP), Shinsei Bank (SHBA.JP; 8303:JP), Getinge (GIND.SE; GETIB:SS), Carrefour (CRFR.FR; CA:FP), Nokia (NOK1.FI; NOKIA:FH), Trend Micro (REND.JP; 4704:JP), Scout24 (G24X.DE; G24:GR).

 

Emerging:  Nhn (ZEE.KR; 181710:KS), Wiwynn Corp. (WIW.TW; 6669:TT).

Autodesk

Posted on by Cornelio Ash

Key points from this report:

 

  • The stock is breaking out from a 13-week cup-with-handle consolidation on above average volume. Buy.
  • Strong Q3 FY21 results: Beat across all metrics. All metrics – revenue, billings, operating margin, free cash flow margin, and EPS – were comfortably above consensus.
  • Enterprise deals are re-accelerating, including Autodesk closing a three-year nine-figure deal, one of the largest in the company’s history.
  • Usage levels improving. As of November, manufacturing PMIs in both the U.S. (56.7) and the eurozone (53.6) continue to trend above 50, suggesting an expansion. In parts of Asia, activity is back to pre-COVID levels.
  • Guidance: Raised EPS and revenue for FY21, but the outlook for FY22 was conservative.
    • EPS of $3.94 (+41% y/y, up from previous guidance of $3.81) is above estimates of $3.85 and revenue of $3.76B (+15% y/y, up from previous guidance of $3.74B) is above estimates of $3.75B.
    • FY22 (introduced): Expect revenue growth in the low to mid-teens, below the street’s 16.5%.

Global Laggards

Posted on by Cornelio Ash

Highlighted Charts

 

U.S.: Reynolds Consumer Products (REYN), Prestige Consumer Healthcare (PBH), Digital Realty Trust (DLR), Becton Dickinson (BDX), The Realreal (REAL), Switch Inc. (SWCH), Zynga (ZNGA).

 

Developed: Ube Industries (UBEI.JP; 4208 JP), Yangzijiang Shipbuilding Hldgs (YSHL.SG; YZJSGD SP), Nissin Food Holdings (NIFP.JP; 2897 JP), Tryg (TRY.DK), Siemens Healthineers (SHLX.DE; SHL GR), San-A (SANA.JP; 2659 JP), Trend Micro (REND.JP; 4704 JP), Scout24 (G24X.DE; G24 GR).

 

Emerging: Studio Dragon (DRG.KR; 253450 KS), Zhen Ding Tech. Holding Ltd. (ZHE.TW; 4958 TT).

Global Laggards

Posted on by Cornelio Ash

Highlighted Charts

 

U.S.: Aerojet Rocketdyne (AJRD), New York Times (NYT), Kellog (K), Apollo Global (APO), Illumina (ILMN), Switch (SWCH), Nortonlifelock (NLOK).

 

Developed: Yangzijiang Shipbuilding (YSHL.SG; YZJSGD SP), Sharp (SH@N.JP; 6753 JP), The A2 Milk Company (A2M.AU; A2M AU), Yakult Honsha (YAHO.JP; 2267 JP), Koninklijke Vopak (VPK.NL; VPK NA), Sino Biophm (SBIO.HK; 1177 HK), Colruyt (COL.BE; COLRB EB), Avast (AVST.GB; AVST LN), Scout24 (G24X.DE; G24 GR).

 

Emerging: GIS Holding (SGH.TW; 6456 TT).

Nintendo

Posted on by Cornelio Ash

Key points from this report:

 

  • We are reiterating our buy call on Nintendo as shares are approaching a pivot of ¥61,300 from a nine-week flat base.
  • Better-than-expected Q2 FY21 results: The company reported EPS of ¥895.12 (+135% y/y), above consensus of ¥561, and revenue of ¥411.42B (+52% y/y), above consensus of ¥330B. Operating profit was ¥146.68B (+119%y/y), above consensus of ¥111B. Q2 results were better than expected due to excellent performance by key titles
  • Big increase in guidance: Management raised FY21 guidance for Switch hardware by 5M units to 24M units and software by 30M units to 170M. It also raised FY21 revenue guidance by ¥200B to ¥1.4T and operating Income by ¥150B to ¥450B.
  • Nintendo Switch Pro expected in 2021: Nintendo is planning to launch Switch Pro in 2021, which will support 4K games given the increase of games playable in 4K resolution.
  • Stay-at-home order remains a tailwind for gaming industry: According to industry reports, digital games generated $10.70B in revenue in September 2020, up 14% y/y from $9.3B in September 2019. The growth was driven by a 40% spike in revenue from console games.

Global Laggards

Posted on by Cornelio Ash

Highlighted Charts

 

U.S.: Colfax Corp (CFX), John Bean Technology (JBT), Fox Corporation (FOX), Acuity Brands Inc (AYI), Kellog (K), Aon (AON), Baxter (BAX), Avnet (AVT), Citrix Systems (CTXS).

 

Developed: Sandvik (SAND.SE; SAND SS), Aisin Seiki (ZQ@N.JP; 7259 JP), Casio Computer (CC@N.JP; 6952JP), Toronto-Dominion Bank (TD.CA; TD CN), Orpea (ORP.FR; ORPB EB), Lawson (LAWS.JP; 2651 JP), Atos (ATO.FR; ATO:FP), Stadler Rail (SRAIL.CH; SRAIL SW).

 

Emerging: Charoen Pokphand Foods (CPFT.TH; CPF TB), Coway (WJC.KR; 021240 KS), Public Bank (PBOM.MY; PBK MK), Flexium Interconnect (FXI.TW; 6269 TT).

Twilio

Posted on by Cornelio Ash

Key points from this report:

 

  • The stock has pulled back into its pivot. Support is along the 21-DMA ($296), followed by $283. Add to positions as the stock regains its 21-DMA on volume.
  • Strong Q3 FY20 results: Reported EPS of $0.04 (+33% y/y), above estimates of ($0.04), and revenue of $448M (+52%y/y), well above expectations of $406.7M.
    • Strong metrics: Active customer accounts increased 21% y/y to 208,000. Net adds were 8K. Dollar-based net expansion rate increased to 137% (+500bps q/q).
  • Weak guidance: Q4 miss was mainly due to planned investments and hiring expenses pushed to Q4 from Q3. Expects EPS loss of $0.095 (compared with $0.04 a year ago), below estimates of ($0.01), operating loss of $12.5M (-316% y/y), below the street’s ($4.4M) and implying adjusted operating margin of -2.7% (-170bps y/y), and revenue of $452.5M (+37% y/y), above estimates of $431.6M
  • COVID-19 commentary: Management suggested the digital transformation to cloud based communications is being accelerated by six years due to the COVID tailwind.