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Intelligent Investor - May 31

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Recap

Hope, Investors took advantage of the information we pointed out in our Intelligent Investor columns on May 29th and 30th. The stocks mentioned in the reports LOXO, HUBS, DPZ, CVCO, HPQ, and CRM, did fairly well.

LOXO - From $165.8 (opening price on May 29) to $173.64 (May 30 closing price) High - $174.18

HUBS - From $116.35 (opening price on May 29) to $120.25 (May 30 closing price) high - $122.25

DPZ - From $247.5 (opening price on May 30) to $251.7 (May 30 closing price) high- $253.67

CVCO - From $193.95 (opening price on May 30) to $202 (May 30 closing price) high - $206

HPQ - From $21.74 (opening price on May 29) to $22.16 (May 30 closing price) high - $22.48

CRM - From $126.75 (opening price on May 29) to $129.3 (May 30 closing price) high - $132.55

Today's Intelligence

Trending Now...

*Shares of Burlington Stores, Inc. (BURL) are trading up 5.18% at $143.61 in pre-market, after the off-price retailer raised FY18 forecast. The company now sees FY18 sales to increase 9.7% to 10.5% from previous year vs. prior forecast for a 9% to 10% increase. It now expects adjusted EPS of $5.90 to $6.00 vs. prior range of $5.73 to $5.83. Analysts are modeling EPS of $5.85 on a revenue increase of 8.7%.

*General Motors Co. (GM) is trading up nearly 10% in pre-market, after the automaker announced a $2.25 billion investment by SoftBank's Vision Fund into its self-driving unit GM Cruise.

Economic Intelligence

*The Labor Department is scheduled to release today at 8.30 AM E.T., the weekly report on jobless claims or initial claims for state unemployment benefits. Initial claims are expected around 224k for the May 26 week, a 10k decrease from last week's 234k. The four-week Moving Average level is around 219,750, close to a 49-year low. The data to be released today may reaffirm the Beige Book's findings on the strong demand for labor.

*Also expected today is the latest Personal Income and Outlays monthly report for April, compiled by the US Bureau of Economic Analysis to track closely-watched data on personal income and consumption, as well as the PCE (Personal Consumption Expenditure) measure of inflation. Today's report is expected to show Personal income rising a moderate 0.3% in April (Month-On- Month), while consumer spending, the first key input toward Q2 GDP, is seen increasing 0.4% (Month-On-Month). The core PCE price index, that excludes both food and energy, and being the most carefully-watched inflation reading, is expected to ease to 1.8% for April (YOY) vs. March's 1.9%.

*Although the Fed has announced a medium-term inflation goal of 2% year-on-year, the May meeting minutes said, "a temporary period of inflation modestly above 2 percent would be consistent with the Committee's symmetric inflation objective." The minutes also pointed to a benchmark interest rate hike at the upcoming FOMC meeting in June.

Earnings Intelligence

*Electronic measurement Technology Company Keysight Technologies, Inc. (KEYS) issued upbeat third-quarter outlook, citing strong order growth in its key focus areas including, 5G, automotive & energy and aerospace and defense. The company said it sees Q3 non-GAAP earnings of $0.72 to $0.82 per share, on GAAP revenues of $937 million to $967 million or non-GAAP revenues of $942 million to $972 million. Analysts are modeling earnings of 74 cents per share on revenues of $916.7 million.

*Tech Data Corp. (TECD) issued upbeat outlook for the second quarter. The company sees Q2 non-GAAP EPS of $1.95 to $2.25 on revenues of $8.6 billion to $8.9 billion. Analysts are modeling EPS of $2.09 on revenues of $8.58 billion.

Interesting Partnerships

Clinical-stage Biotechnology Company Five Prime Therapeutics, Inc. (FPRX) announced collaboration with Roche to develop companion diagnostics for targeted Immuno-Oncology investigational drug candidates. Financial terms were not divulged by the company. The company said the collaboration would enable it to identify patients with advanced cancers who might be eligible for treatment and clinical benefits with its targeted immuno-oncology agents.

Stocks Intelligence

Shares of TrueBlue, Inc. (TBI) may be worth taking a look, with the latest Beige Book data on labor shortage. "Many firms responded to talent shortages by increasing wages as well as the generosity of their compensation packages," the report said yesterday. TrueBlue specializes in Industrial staffing and global RPO (Recruitment Process Outsourcing) with diverse service offerings. It serves more than 100k customers annually and reported revenues of $2.5 billion and free cash flow of $78 million for 2017. A major chunk or 60% of revenues are generated from its on-demand contingent labor solutions for industrial customers. But, the true high margin business is the company's talent solutions for recruiting permanent employees, its rapid growth segment. The stock currently trades at $26.55 which is 12.2 X FY18 EPS estimates.
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