Tag: bullish

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Health

Wall Road is flawed to be bullish on European shares, strategist says

Wall Street is wrong to be bullish on European stocks, strategist says

A photo taken on December 29, 2020 shows the skyline of Frankfurt am Main, western Germany, with (RtoL) the Frankfurt Cathedral, the Main Tower with the Helabas head office, and the Commerzbank Tower.

DANIEL ROLAND | AFP | Getty Images

LONDON — Not everyone is bullish on Europe for the remainder of the year.

Peter Toogood, chief investment officer at financial services firm Embark Group, believes European stocks may well keep pace with U.S. stocks in the coming months, but that’s not to say he shares Wall Street’s optimism for the region.

Analysts at Morgan Stanley say Europe is well-placed to outperform all major regions this year for the first time in more than two decades. The investment bank believes U.S. markets are likely to be “choppier” in the months ahead, citing rising inflation, growing pressure on profit margins and a possible slowing of quantitative easing.

Meanwhile, there is a “compelling” case for Europe to be the best-performing region due to attractive valuations, stronger earnings-per-share growth and the launch of the EU’s massive post-Covid recovery fund.

Separately, analysts at Goldman Sachs have identified “inexpensive” stocks in Europe for the rest of the year, while JPMorgan has named “cheap” stocks to buy in the region if the market dips.

When asked whether he agreed with the view that European equities could soon decouple from the U.S., Toogood told CNBC’s “Squawk Box Europe” on Friday: “No I don’t … I’m not buying it this time.”

“I’ll happily acknowledge that we’ll keep up … There’s going to be a Covid bounce, notionally, they are getting their act together, there is the recovery coming but it is going to be very late. We are going to be into the autumn and winter soon where I’m sorry (but) Covid is not going to go away,” he continued.

“So, no, I’m not buying it. I think they have come too late to the party in terms of the vaccines; very sadly, and therefore the recovery is delayed,” Toogood said.

To date, around 33% of EU citizens have received at least one dose of a Covid vaccine, according to statistics compiled by Our World in Data. By contrast, nearly 48% of the U.S. population has received at least one vaccine dose.

‘What are you buying when you buy in Europe?’

The International Monetary Fund said last month that Europe’s economic recovery from the coronavirus pandemic was on track to return to pre-crisis levels in 2022. The forecast was conditional on the region’s Covid-19 vaccine campaign, and as uncertainty persists over how the health crisis will evolve.

“I think the second problem remains: What are you buying when you buy Europe?” Toogood said, noting possible exceptions in the region among some “very strong” consumer brands.

“The banking sector? No, not really. I don’t see interest rates going anywhere in Europe for a very long time and they’ve been withdrawing globally, if anything. Most of the Europeans, in terms of banks and activities, are heading inward.”

Read more about China from CNBC Pro

“There’s a massive discount gap but that’s because a lot of the stocks in the U.S. are priced more highly because they simply grow better. There are no FAANGs in Europe I’m afraid,” he continued, referring to the acronym for Facebook, Amazon, Apple, Netflix and Google-parent Alphabet.

“So, there is trouble for the indices in Europe and the U.K. … That’s the reality. We haven’t got the disruptors and we don’t have the exciting industries. It’s Asia and America where that action sits,” Toogood said.

— CNBC’s Lucy Handley contributed to this report.

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Business

Bullish child boomers assist gasoline purple sizzling small enterprise M&A market

Bullish baby boomers help fuel red hot small business M&A market

People enjoy a stroll down historic Annapolis Main Street in Annapolis, Maryland on April 29, 2021.

Marvin Joseph | The Washington Post | Getty Images

For Mitch Hughes, CEO of Vizz, a construction management software company he founded in 1996, the pandemic created ideal conditions for acquisitions.

Vizz, which operates a visualization platform that allows developers to create realistic virtual models, wasn’t very present on the manufacturing side. On the other hand, Manufacton had software for the modular structure, compatible software and a “dream team” of people. However, as a relatively small, young company, it didn’t have the traction needed to respond to the sudden surge in demand.

“Covid created a hurdle for them, but it created an opportunity for us,” said Hughes. At the beginning of this year, Vizz took over Manufacton and kept all employees.

While many baby boomer-owned small businesses have been hit hard by the pandemic, there is also a large cohort of boomer businesses that have taken advantage of the pandemic and are seeing low interest rates to expand.

According to a study by the New York Fed and the AARP, older entrepreneurs aged 45 and over entered the pandemic with a larger financial cushion than their younger counterparts. This pillow is more important than ever when the world is turned upside down. According to a survey by BizBuySell, an online marketplace for sale, 30% of buyers are baby boomers.

More from CNBC’s Small Business Playbook

A pandemic seems like an odd time for a booming M&A market. Many small businesses have suffered and many have failed. The data shows that government support did not flow adequately through the system either. The latest poll from CNBC | SurveyMonkey Small Business for the second quarter of 2021 found that many entrepreneurs expect better business conditions and higher revenues, despite overall negative net confidence and widespread fears of a tight labor market and rising cost of goods.

However, some business and investment experts say business owners run a huge risk of not being bullish enough after the pandemic. The brokers found that low interest rates, PPP loans, and other government support have helped fuel acquisitions for entrepreneurs able to take advantage of the terms.

“They see a way they can buy a business and get really great credit. There are just a lot of options. Lots of credit,” said Andrew Cagnetta, general manager of Transworld Business Advisors in West Palm Beach, Florida.

Main Street deal prices are rising dramatically

Prices have risen dramatically as a result of the bullish business buy. According to the NFIB Small Business Optimism Index, the net percentage of owners who increased average sales prices rose 10 points to 36%. This is the highest since April 1981 when it was 43%. In its quarterly report, BizBuySell said the median sales price for the first quarter was $ 350,000, up 30% year over year.

“It’ll sound crazy, but last year was my best year yet,” said Sheila Spangler of Murphy Business Sales in Boise, Idaho, which primarily focuses on companies less than $ 2 million worth. She adds that this year is also “super busy”.

Of course, the price fluctuations vary greatly depending on the region and industry. Cagnetta said he saw average sales prices double over the past year.

I’ve done business for other people for most of my career. I’ve always felt that if I can run a business for them, I’m pretty sure that I can run a very successful business myself.

Kevin Glass, the new Pinch a Penny Pool Patio Spa franchisee

Buyers tend to be more numerous than sellers, but the pandemic has exacerbated this. Cagnetta said he has seen growth in some categories of buyers. There are buyers from private equity and SPAC (Special Purpose Acquisition Corporation). Then there are entrepreneurs who are already doing well and who want to expand. Another emerging group is boomer buyers who were previously corporate employees. The pandemic forced many to rethink their lives – either because of layoffs or because of rethinking priorities. The same trend occurred after the Great Recession a decade ago when there was a “wave of confusion,” said Bob House, president of BizBuySell. “People are turning to business ownership for a living, rather than a kind of resetting,” said House.

Kevin Glass became a franchisee of Pinch a Penny Pool Patio Spa in Conroe, Texas after vacationing at the beginning of the pandemic. After 35 years in the oil and gas industry, Glass was already thinking about the next chapter of his career. He knew he was in a vulnerable position before the pandemic and had been looking for options. As soon as he was on leave, that search shifted into high gear.

Glass says he received a retirement benefit package when he was released but was unable to move on with his current lifestyle. He used the pension package to finance the company acquisition. Glass specifically researched franchises based on the support of an established business model. He also took into account the resale value. Pinch a Penny’s fixed income financing program further sweetened the deal.

“I’ve done business for other people for most of my career. I’ve always felt that if I can run a business for them, I’m pretty sure that I can run a very successful business myself,” said Glass.

Business areas in which business is booming

While the number of transactions has not yet reached pre-pandemic levels, it is starting to increase, especially for companies that have done well throughout the pandemic, such as: B. Liquor stores, home improvement stores, e-commerce websites, medical companies, manufacturers and distributors. Still, brokers say the expected transfer of generational wealth with boomers selling their businesses has not yet happened.

It is not necessarily the children of boomer owners who buy. Boomer entrepreneurs usually pass their businesses on to their kids, but some find that their kids don’t want the business. According to a survey by Guidant and the Small Business Alliance, boomers make up 41% of small business owners or franchisees, followed by Gen X at 44%.

“The seller’s tsunami has not yet happened,” said Cagnetta. “Business was very good until the pandemic broke out, then everyone was on hold. But I think they are coming out now to sell,” he added.

One important factor brokers have pointed out is an expected tax hike. Biden’s tax proposals would increase taxes on capital gains by more than $ 1 million. The plan provides an exemption for small businesses as long as they remain family-owned and operated. While it’s too early to say how the plan will work or if it will be implemented, brokers say it is putting pressure on business owners to sell.

Categories
Business

‘I’m extremely, extremely bullish’

'I am highly, highly bullish'

Robert Herjavec, Shark Tank co-host and founder of Herjavec Group, said the pandemic year had confirmed a fundamental lesson about speed as a key to success: small business owners need to act fast and make tough decisions to survive.

The pace of decision-making has accelerated in unprecedented ways during Covid-19, but Herjavec says while the U.S. economy is booming and states are lifting Covid restrictions, the decision that entrepreneurs now need to make quickly need not go back or carefully grow . It’s time to make a big bullish bet on the future. Companies that let fear linger will lose.

The “brutally realistic” thinking demanded by owners last year is a thing of the past, and the US is in a boom phase that entrepreneurs must embrace. “I’m very, very optimistic,” Herjavec told CNBC at its Small Business Playbook event on Tuesday. “I think we’ll see one of the greatest [periods of] Economic growth we’ve seen in our lives. “

More from CNBC’s Small Business Playbook

The youngest CNBC | SurveyMonkey Small Business survey for the second quarter of 2021 found an increase in confidence in small businesses, albeit a small one, and an overall sentiment that remains net negative for more than a year after Covid. More and more entrepreneurs are anticipating sales growth and recruitment is expected to increase in the hardest-hit sectors such as the food industry.

“People never believe it will get as bad as it will be and never recover quickly enough,” said Herjavec. “I can see that now. People are not ready for expansion, too conservative, not bullish enough.”

When optimism was the wrong emotion

The Shark Tank co-host may be known for his optimism and business confidence, but during the CNBC small business event, he didn’t hesitate to reveal how much fear and uncertainty he experienced during the pandemic and described his initial emotions from last February as “unbelievable fear”.

“Everyone said to me, ‘You are a’ shark ‘and you have a big business, a relatively big business, but fear held us up for about three days,” said Herjavec. He quoted the advice of his co-host Barbara Corcoran, who often says the difference between successful people and others is “not that they don’t pity themselves, but how long they allow themselves to wallow in misery”.

“I wallowed a lot for about a week. I’m a pretty tough guy and not a lot of things scare me, but the uncertainty in business can be very destructive. I wallowed for a while but then went into full action ahead . “

Robert Herjavec, CEO of the Herjavec Group

Scott Mlyn | CNBC

Herjavec’s core cybersecurity business was a winner from the pandemic as more people went online. However, he also deals with many portfolio investments as part of his “Shark Tank” deals, and he says one risk during the pandemic was portfolio deals holding onto “unfounded optimism.”

“It kills a business,” he said. “I’m a very optimistic guy. I wake up every day believing that tomorrow is going to be better than yesterday and all that stuff, but when you face a crisis, it’s about reality, not optimism. … Us told these companies, ‘Don’t expect the world to end, be prepared for the worst.’ “

Too many small businesses got into trouble during the pandemic because they were afraid to cut costs, because they were afraid to go too far. “We have seen a lot of small businesses get into trouble and say, ‘Maybe we just lay off a few … or don’t have to lay off … maybe things will come back.”

Herjavec made it clear to these business owners: “We have encouraged people to be a little more pessimistic because in a crisis nobody can help but you … When things are bad you need to be realistic optimism and we have seen a lot of small ones Companies just believe … things are getting better. “

But now he says that dealing with reality is completely different. A year after Herjavec and its CFO sat down and went through a “black swan” scenario to realistically assess how long they could survive, entrepreneurs have to be on “the very other end of the spectrum,” he says.

Categories
Business

Journey.com up greater than 4% in Hong Kong IPO, bullish on China journey in Might

Trip.com up more than 4% in Hong Kong IPO, bullish on China travel in May

Online travel agency Trip.com made a strong debut in Hong Kong on Monday. The shares rose by around 4.55% compared to the issue price.

The China-based company is now joining other US-listed Chinese tech heavyweights like Alibaba, JD.com and Baidu, who have moved closer to their homeland via second deals in Hong Kong. The IPO was valued at $ 268 Hong Kong per share and $ 8,478 million (US $ 1.09 billion) was raised unless the over-allotment option is exercised.

The secondary listing comes as Chinese tech companies continue to face the risk of being delisted in the US, which clouded investor sentiment.

This May vacation we already have … some of the inbound people and we’re seeing a record number of travelers in China – likely double digit growth from pre-Covid levels.

James Liang

Chairman of the Board of the Trip.com Group

James Liang, CEO of Trip.com Group, told CNBC that the “main reason” for listing the company as a secondary listing in Hong Kong was to make it easier for global investors in Asia and China to trade stocks.

“Most of our customers are in Asia. I think it’s pretty natural for us to be listed in Hong Kong,” he said in an interview with CNBC’s Street Signs Asia on Monday.

“Very optimistic” about the May vacation

Even if much of the global travel market continues to stall due to the coronavirus pandemic, Trip.com expects a “record number of travelers in China” for the long vacation ahead in May.

“This May vacation, we already have … some of the numbers that are coming in, and we’re seeing a record number of travelers in China – likely double-digit growth from pre-Covid levels,” Liang said. Labor Day holidays are May 1-5 in China.

In particular, upscale accommodations like resorts and short-haul travel are expected to see “very, very rapid growth” that could actually more than offset the decline in international travel, Liang predicted.

An employee walks through the reception area at the headquarters of Trip.com Group Ltd. on Thursday, February 4, 2021. in Shanghai, China.

Qilai Shen | Bloomberg via Getty Images

“The money people save by buying international airline tickets is what people are spending on hotels, especially high-end hotels and cars, you know, on local transport,” he said. “While the total transaction amount may not hit record levels, we are very optimistic about the number of travelers and margins.”

China was the first country to report on the coronavirus pandemic. After tight lockdown measures launched across the country weeks after the earliest Covid-19 cases occurred in Wuhan city in late 2019, the country largely managed to contain the spread of the virus and stepped as one of the few major economies in 2020 that expanded this year.

In contrast, authorities in other countries continue to struggle to vaccinate their populations in the face of increasing viral infections and potential mutations.

One example is India, which has seen a second wave of coronavirus infections since February and overtook Brazil last week to become the second worst affected country after the US, just behind the US

Categories
World News

‘Roaring Kitty’ Keith Gill defends GameStop posts, says he’s as bullish as ever on the inventory

'Roaring Kitty' Keith Gill defends GameStop posts, says he is as bullish as ever on the stock

Reddit and YouTube’s trading star known as “Roaring Kitty” defended his social media posts that led to a mania in GameStop stocks last month.

The trader, whose real name is Keith Gill, will testify before the US House of Representatives Committee on Financial Services on Thursday. Aside from defending his actions, Gill used his testimony to re-establish why he is still optimistic about GameStop.

“GameStop’s stock price may have improved a bit over the past month, but I’m more optimistic than ever about a possible turnaround. In short, I like the stock,” said Gill in the comments. “I believed – and continue to believe – that GameStop had the potential to reinvent itself as the ultimate destination for gamers in the thriving $ 200 billion gaming industry.”

Through YouTube videos and Reddit posts, Gill – who offers DeepF —— Value on Reddit and Roaring Kitty on YouTube – attracted an army of day traders who cheered each other and plunged into video-only stock and call -Options.

GameStop’s share price rose to $ 483 per share before falling more than 90% to currently around $ 46 per share.

“I felt the company was dramatically undervalued by the market. The prevailing analysis of the impending fate of GameStop was just wrong,” he said in the statement. “My investment skills had reached a level where I felt that public sharing could help others.”

In his testimonial, Gil said he started buying GameStop stock in 2019 when the share price fell on disappointing profits. Gill also liked that famous investor Michael Burry was optimistic about GameStop.

“Thinking the stock was undervalued, I bought call options on June 7, 2019. I increased my position for much of 2019 and 2020 as I became increasingly confident as I continued to analyze the company and its three perspectives. that the stock’s price has indeed been dramatically undervalued, “the testimony reads.

He said the market underestimated GameStop’s growth prospects and overestimated the likelihood that the video game company would go bankrupt. Gill believes GameStop can expand its digital capabilities and capitalize on its 60 million loyal members, the testimony reads.

The WallStreetBets star went on to say that social media platforms like YouTube, Twitter and WallStreetBets on Reddit improve the playing field for individual investors as they work together to develop investment ideas.

“I was very clear that my channel was for educational purposes only and that my aggressive investment style was likely not appropriate for most of the people who visit the channel,” said Gill. “Whether other individual investors bought the stock was irrelevant to my thesis – my focus was on the fundamentals of the business.”

Gill’s last post on Reddit said he made $ 7.8 million from GameStop. A class action lawsuit was filed against Gill in federal court in Massachusetts on Wednesday alleging he was an inexperienced trader despite being a licensed professional.

While Gill worked as a marketing and financial education clerk at MassMutual, he said he never sold stocks for the company and was not a financial advisor. MassMutual was named as a defendant in the lawsuit. “We are looking into the matter and have no comment,” said Paula Tremblay, a spokeswoman for MassMutual.

“My investment in GameStop and my social media posts have been entirely my own,” said Gill. “I have not asked anyone to buy or sell the stock for my own benefit. I did not belong to any group that tried to create movement in the stock price. I never had a financial relationship with a hedge fund. I had no information about GameStop except which was public. I didn’t know any people within the company and I never spoke to an insider. “

Gill is due to testify in front of Congress on the GameStop trade controversy at 12 p.m. ET Thursday.

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