Communications giants? Check.
Indexing companies? Got them (or at least one).
Fashionable athleticwear with a side of potential SEC violations? Always.
What do all of these things have in common? They’ve made Q.ai’s Top Trending list for Wednesday, 13 May. Let the analysis commence.
Q.ai runs factor models daily to get the most up-to-date reading on stocks and ETFs. Our deep-learning algorithms use Artificial Intelligence (AI) technology to provide an in-depth, intelligence-based look at a company – so you don’t have to do the digging yourself.
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MSCI, Inc (MSCI)
Index giant MSCI, Inc
MSCI closed down 2.6% Wednesday on the news to $460.18 per share, ending the day with over 420,000 trades. This continues the stock’s two-week downward trend from their 10-day price average of $479.54, though they remain up over 3% YTD.
MSCI had a fairly productive year last year, with increased market interest on the back of the pandemic sending revenues up over 3.6% in the last fiscal year to almost $1.7 billion. Their operating income comprised over $883 million of their revenue, with forward-facing revenue expected to grow about 2.4% over the next twelve months.
Their EPS grew substantially over the last year as well, up 8.8% to $7.12 in per-share earnings, with almost 37% improvement from $5.66 three years ago. However, there’s some indication that the stock may be heading into overvaluation territory – supported by their falling prices – as the company’s forward 12-month P/E sits at 47.3.
All that said, our AI sees MSCI as a potentially promising investment, and has rated the company A in Quality Value and B in Technicals, Growth, and Low Volatility Momentum.
Under Armour, Inc (UAA)
Under Armour, Inc., the popular athleticwear brand, spent last week trading up after fiscal Q1 2021 results reported revenues inline with Wall Street estimates, while the company’s earnings beat the consensus on a thin margin.
Though the company’s cost-cutting initiatives have helped boost their numbers throughout the last year, along with increased interest in health and exercise as a result of the pandemic, supply chain disruptions, lower wholesale revenues, and retail store closures, remain factors to contend with. (And then there’s renewed interest in that pesky lawsuit against former CEO Kevin Plank to address, as well.)
Under Armour, Inc. closed down almost 4.4% on Wednesday to $22.03 per share, with over 5.9 million trades on the docket. This brings the company down significantly from the 10-day, $24-price average, though the stock is up over 28.3% YTD.
Throughout the pandemic, many exercise brand saw surprising profits as consumers renewed their New Year’s Resolutions to lose that last 15 pounds. Under Armour itself saw increased revenue of 7.3% to $4.47 billion and operating income growth of 27.6% to $7.5 million.
However, their revenue still fell below their three-year $5.2 billion profits, while their operating income plunged dramatically from $178 million three years ago. The company is projected to see forward 12-month revenue around 1.8%. Still, their EPS rose from $0.10 three years ago to $1.21 last year in per-share earnings, with ROE up significantly from 2.3% to over 28.7%.
All that said, the company is trading with an astronomically high forward 12-month P/E of 63.5, and our AI suspects this is a sign of an overvalued company on the verge of a plunge. Under Armour has earned ratings of C in Technicals and Growth and D in Quality Value and Low Volatility Momentum.
United States Steel Corporation (X)
After a 15% rise last week on overall positive sentiment, and with the legacy steel company continuing to generate market returns over the last six months, analysts this week upgraded U.S. Steel, sending the stock into trending territory. Morgan Stanley
Despite this good news, U.S. Steel closed down 8.5% on Wednesday, ending at $26.35 with almost 39.5 million trades in the bank. However, the stock is still up from its 22-day price average of $24 and change and totals up 57% YTD.
U.S. Steel saw increased revenue of 9.4% last year to $9.74 billion, though this is significantly lower than its $14.2 billion earnings three years ago, with operating income falling to $712 million. And though steel prices are at a stable high, forward 12-month revenue is expected to inch up by less than 1%.
Currently, U.S. Steel is trading with a forward 12-month P/E of 3.44x, suggesting sluggish growth that doesn’t quite match the optimistic outlook on Wall Street. And our AI agrees: something is off, as the company rates C in Low Volatility Momentum, D in Quality Value, and F’s in Growth and Technicals.
GATX Corporation (GATX)
GATX is making the rounds this week after upgrading to “Hold” status from six research firms currently covering the stock. The company traded down 4% Wednesday to $99.59 – higher than the 22-day average of $98, though lower than the 10-day average of $100.60. The railcar leasing conglomerate remains up almost 20% YTD.
GATX Corporation’s revenue ticked up marginally in the last fiscal year, with 0.5% gains bringing their revenue from $1.175 billion to $1.2 billion. Their operating income expanded by 1.3% to $285 million, with per-share earnings sitting around $4.27. However, their ROE has fallen in the last three years from 10.6% to 7.9%.
Currently, GATX Corporation is expected to see 3.2% revenue growth over the next 12 months and is trading with a forward 12-month P/E of 23.17x. Our AI sees GATX as an investment with slight above-average prospects, with B’s in Technicals and Low Volatility Momentum and C’s in Growth and Quality Value.
Verizon Communications (VZ)
And with predictions that the communications giant will service up to 15 million homes with 5G in the U.S. by the end of 2021, the company is certainly counting on this year to be as fruitful as the last.
Verizon Communications closed up 0.22% on Wednesday to $58.41 per share with 14.7 million trades on the docket. All told, the company is down 0.58% for the year after dropping significantly in the first quarter, though the last two months have seen the communications giant make something of a comeback against its sudden January plunge.
In the last fiscal year, Verizon saw revenue increase by almost 1% to $128.3 billion, though this is down from over $130.8 billion three years ago. Their operating income also grew by over 0.9% to $31.4 billion in the last year, coming in just under their $31.7 billion operating income three years ago. At the same time, the company’s EPS expanded 6.1% to $4.30 in per-share earnings, while their ROE settled to 27.8%.
A company this large has difficulty growing in any year, and between the onset of the pandemic, massive expansion operations, and a forward 12-month revenue projection of 0.8%, the company isn’t expected to see much in the way of gains in the next few months. Still, Verizon is trading with a forward 12-month P/E of 11.59, with Q.ai ratings of A in Low Volatility Momentum, B in Quality Value, C in Growth, and F in Technicals.
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