“Cut-to-the-Chase” Recommendations
- Week Beginning -
Monday, October 16, 2017

by Ian Harvey

IMPORTANT NOTE: There is no stop-loss or pre-determined sell price recommended – this is left to the discretion of the individual trader.


Option Trade - Advanced Micro Devices, Inc. (NASDAQ:AMD) Calls

Friday, October 20, 2017

** OPTION TRADE: Buy the AMD NOV 17 2017 14.000 CALL at approximately $0.85.

Sell price is left to your own judgment.

Advanced Micro Devices, Inc. (NASDAQ:AMD), a global semiconductor company, has undergone a dramatic transformation over the past couple of years. It has repositioned itself as a true leader of the design and computing world. That tactic has certainly reaped major dividends for investors, with the stock now trading at around $14 a share after hovering around $2 a share in 2016.

And AMD has given investors reason to be bullish. The financial figures show a business growing in the high double-digits across all segments and a focus on reducing the debt load.

Revenue is up 19% year-over-year and 24% quarter-over-quarter. Gross margins are reaping benefits from the new products.

Advanced Micro Devices, Inc. is scheduled to release its results after the market close October 24. Analysts, on average, expect Intel to report third-quarter earnings of 80 cents, flat with the year-ago period, on revenues of $15.73 billion, down 0.30 percent.

Meanwhile, consensus expectations for AMD call for earnings of 8 cents per share on revenues of $1.51 billion. This represents an increase from the 3 cents per share earnings and $1.31 billion revenues reported a year ago.

Influencing Factors

In part, AMD’s vast total addressable market (TAM) is encouraging. Personal computers constitute a $28 billion opportunity, gaming and consoles represent $15 billion and datacenters present a $21 billion market. At every level higher performance and performance-per-watt is being demanded and, with the debut of RYZEN, AMD now has the highest performance high-end desktop processor ever.

Compared to the Core i9, for the same price at just shy of a grand, the RYZEN Threadripper delivers “up to 38% more performance” as ranked by Cinebench nT.

On the mobile front, AMD has seen four straight quarters of mobile APU (accelerated processing unit) growth. They’ve developed the first zen-based APU with long battery life and performance that leave competitors in the dust.

Data storage looms large on the horizon. Computing is a big part of the AMD business model and will continue to be. But data centers are an area where growth is already taking off in an even bigger way.

Everyday companies are collecting massive amounts of data. All aspects of consumer data — from web browsing to spending habits to geo-location to communications — are being stored in the cloud, which still has to be stored on a physical server.

With EPYC, AMD is creating a simplified machine intelligence architecture that offers flexible configurations and optimized platforms. Single socket versus the current status quo of dual socket (80% of the server market) with 8 more total cores than Intel Corporation’s (NASDAQ:INTC) E5-2650 V4.

Looking ahead, AMD's EPYC chips could find their way into more servers given a strong partner ecosystem that includes Hewlett-Packard Enterprise, Dell, Samsung, and others.

Furthermore, AMD seems to have made significant headway into the Chinese data center space by roping in infrastructure providers such as Lenovo and Sugon. Additionally, the likes of JD.com and Tencent have also committed to using AMD's EPYC chips in their data centers. All these partnerships in China could be a big deal for AMD in the long run as the country's data center market is estimated to grow at 13% a year until 2021.

But AMD's gains in this space won't be limited to the EPYC server chips, since its server GPUs seem to be gaining traction as well. AMD recently scored a big win when cloud services leader Amazon Web Services announced that it will use the former's FirePro server GPUs and the multi-user GPU technology in the Graphics Design instance of its AppStream 2.0 service.

This is a big coup for AMD as Amazon has traditionally been a NVIDIA customer. In fact, Amazon uses the Tesla GPUs from NVIDIA to power the two other instances of the AppStream service.

This breakthrough in server GPUs could be a big deal for AMD as the server GPU accelerator market could be worth at least $4.5 billion in 2022, according to Ark Invest. This is almost equal to AMD's revenue in the past 12 months, which means that it can nicely boost its revenue going forward.

Analysts and Hedge Funds Opinions

Wells Fargo & Company reaffirmed their outperform rating on shares of Advanced Micro Devices, Inc. in a research report sent to investors recently. The brokerage currently has an $18.00 price objective on the semiconductor manufacturer’s stock.

Several other analysts have also recently commented on the company…..

  • Northland Securities reiterated a buy rating and issued a $17.50 price objective on shares of Advanced Micro Devices in a research note on Friday, June 23rd.
  • Rosenblatt Securities reiterated a buy rating and set a $22.00 price target on shares of Advanced Micro Devices in a research note on Thursday, September 21st.
  • Craig Hallum lifted their price objective on Advanced Micro Devices from $16.00 to $17.00 and gave the stock a buy rating in a report on Thursday, June 22nd.
  • Susquehanna Bancshares Inc reiterated a neutral rating and set a $15.00 price target on shares of Advanced Micro Devices in a research note on Wednesday, September 20th.
  • Finally, Canaccord Genuity reiterated a buy rating and set a $20.00 price target on shares of Advanced Micro Devices in a research note on Friday, September 8th.

Five investment analysts have rated the stock with a sell rating, sixteen have issued a hold rating, nine have assigned a buy rating and two have issued a strong buy rating to the company. The company presently has a consensus rating of Hold and a consensus price target of $16.75.

Institutional investors that have recently made a change to their positions in the stock….

  • Baillie Gifford & Co. bought a new position in shares of Advanced Micro Devices in the second quarter worth approximately $184,767,000.
  • Vanguard Group Inc. increased its position in shares of Advanced Micro Devices by 6.6% in the second quarter. Vanguard Group Inc. now owns 93,092,619 shares of the semiconductor manufacturer’s stock worth $1,161,796,000 after purchasing an additional 5,797,819 shares during the last quarter.
  • Janus Henderson Group PLC increased its position in shares of Advanced Micro Devices by 3,815.8% in the second quarter. Janus Henderson Group PLC now owns 3,833,805 shares of the semiconductor manufacturer’s stock worth $47,845,000 after purchasing an additional 3,735,900 shares during the last quarter.

Summary

AMD’ s new high end Vega GPUs are set to challenge NVIDIA, and its new Threadripper CPUs are going after Intel. The company is now enjoying substantial market share in both of these areas, which has translated into robust revenue and margin growth.

These incredible chips have been available for about one quarter now, meaning the biggest jolt they are going to have on the company’s earnings is the one we are set to see next week.


Option Trade - General Electric Company (NYSE:GE) Puts

Tuesday, October 17, 2017

** OPTION TRADE: Buy the GE NOV 17 2017 23.000 PUT at approximately $0.50.

Sell price is left to your own judgment.

The industrial conglomerate General Electric Company (NYSE:GE) is confirmed to report earnings on Friday, October 20, 2017, before the market opens. The consensus earnings estimate is expected to see EPS grow 56% to 50 cents as revenue climbs 9% to $31.92 billion. GE has announced a slew of executive and boardroom changes since John Flannery took over as CEO in August, besides cutting operational costs. But a top Wall Street analyst recently warned GE is fundamentally challenged and its prized dividend is at risk, sending GE stock to the lowest level in more than two years.

General Electric announced Friday afternoon that it would cut its dividend by 68 percent for the second half of the year. GE said it would reduce its quarterly dividend to 10 cents a share from 31 cents. It said the dividend cut would save the company $9bn a year," The New York Times wrote on 27 February 2009, only a couple of weeks before this almost nine-year-old bull market began.

The stock has drifted lower by 9.5% from its open following the earnings release to be 17.5% below its 200 day moving average of $27.86. Overall earnings estimates have been revised lower since the company's last earnings release.

GE has beat the consensus EPS estimates in 7 of the last 8 quarters; however, Q3 2017 will likely be the first earnings miss in the last 2 years. Many pundits are already calling for the company to report a kitchen-sink type of quarter.

GE's stock has fallen 26 percent this year and has made management and board changes.

Influencing Factors

John Flannery replaced Jeff Immelt as CEO in June. Earlier this month, the company made several management changes and and added Trian Partner's founding partner and chief investment officer Ed Garden to its board of directors.

The company has already fielded criticism for not adequately reassuring investors the dividend would remain intact. Earlier this month, a GE spokeswoman told CNBC "the dividend remains a top priority" in response to JPMorgan analysts saying they see "a dividend cut or 'adjustment' as 'increasingly likely."

Shareholders of this industrial conglomerate have been taken on a roller coaster ride over the last two years, and the recent trend has not been favorable for the loyal long-term holders of GE shares.

One or more of GE's major business units will likely get spun off or sold in the near future.

Accounting, which has been a concern to investors; because GE reports as many as four earnings-per-share figures, including GAAP and adjusted numbers, may enter the spotlight after the resignation this month of Chief Financial Officer Jeff Bornstein, who will be replaced on Nov. 1 by Jamie Miller, currently the head of GE Transportation. She will assume control of the finances of a global industrial conglomerate that generated $119.7 billion in sales last year.

In a June 2016 letter to GE, an SEC official said the company’s inconsistent use of EPS labels in its 10-K filing “does not appear appropriate.” The SEC again asked GE for clarity on several non-GAAP measures in a letter this year, which was released publicly Sept. 28.

On October 11, General Electric stock slid 1.5% in afternoon trading to $22.8, its lowest close in the last four years. Notably, Berkshire Hathaway sold its entire holding in General Electric in August. Clouds of speculation have still surrounded the stock. The market is expecting GE’s stock price to slump further on the possibility of a guidance cut.

Analysts and Hedge Funds Opinions

General Electric Company had its price objective lowered by Morgan Stanley from $26.00 to $25.00 in a research report released recently. Morgan Stanley currently has an equal weight rating on the conglomerate’s stock.

Several other analysts have also recently commented on the company…..

  • Stifel Nicolaus reiterated a “buy” rating and issued a $26.00 target price on shares of General Electric in a report on Thursday.
  • Vetr lowered shares of General Electric from a “buy” rating to a “hold” rating and set a $29.97 price target on the stock. in a research report on Monday, June 19th.
  • Morgan Stanley reiterated an “equal weight” rating and issued a $26.00 target price (down from $27.00) on shares of General Electric in a report on Monday, July 24th.
  • BidaskClub lowered shares of General Electric from a “sell” rating to a “strong sell” rating in a report on Wednesday, June 28th.
  • Argus decreased their price target on General Electric from $30.00 to $27.00 and set a buy rating for the company in a research note on Monday, September 18th.
  • Finally, J P Morgan Chase & Co set a $22.00 target price on shares of General Electric and gave the company a “sell” rating in a report on Monday, July 24th.

Four investment analysts have rated the stock with a sell rating, eight have given a hold rating and ten have issued a buy rating to the stock. The company has an average rating of “Hold” and a consensus target price of $28.16.

Institutional investors that has recently made a change to their position in the stock….

  • Northeast Financial Consultants Inc cut its holdings in shares of General Electric Company by 35.1% during the second quarter. The fund owned 26,633 shares of the conglomerate’s stock after selling 14,400 shares during the quarter. Northeast Financial Consultants Inc’s holdings in General Electric was worth $719,000 at the end of the most recent reporting period.
  • Private Wealth Partners LLC lessened its holdings in General Electric Company by 47.5% during the second quarter. The institutional investor owned 235,950 shares of the conglomerate’s stock after selling 213,720 shares during the quarter. Private Wealth Partners LLC’s holdings in General Electric were worth $6,373,000 at the end of the most recent quarter.

Summary

GE will likely not beat (or even meet) the consensus EPS estimate for Q3 2017.

General Electric Company’s 50-day moving average is $24.25 and its 200 day moving average is $26.74. General Electric Company has a 52 week low of $22.83 and a 52 week high of $32.38. The stock has a market capitalization of $198.96 billion, a P/E ratio of 27.99 and a beta of 1.19.


Option Trade - eBay Inc. (NASDAQ:EBAY) Calls

Tuesday, October 17, 2017

** OPTION TRADE: Buy the EBAY NOV 17 2017 39.000 CALL at approximately $0.70.

Sell price is left to your own judgment.

E-commerce company eBay Inc. (NASDAQ:EBAY) is set to report quarterly earnings after the market closes Wednesday, at a time when the company is rebuilding its online platform to draw in more buyers and sellers.

The consensus estimate looks for eBay to report revenue of $2.36 billion, up 7% from the year-ago quarter and its strongest growth in almost four years. Analysts see adjusted earnings at 48 cents per share, up 7%.

For the third quarter, management is calling for revenue to grow between 6% and 8%, or a range of $2.35 billion to $2.39 billion. eBay has been facing currency headwinds, but this will be offset by share repurchases, which leaves expectations for earnings per share between $0.46 and $0.48, or growth of 3% to 7% year over year.

Three months ago, eBay reported second-quarter earnings that matched the consensus on revenue and earnings, but provided third-quarter guidance that missed the consensus estimate on earnings per share, though management reiterated 2017 guidance.

EBay is in the process of rebuilding its online platform with listings that now use highly organized data to improve search relevancy and conversion rates, which eBay calls its structured data initiative. The effort also aims to stimulate faster user growth and lower the cost of traffic acquisition.

Expect eBay to perform well driven by strength in its marketplaces active users and net transaction revenues.

Shares of eBay have gained 28.3% year to date.

Influencing Factors

Although progress has been slow to take effect, investments to improve the user-friendliness of eBay's marketplace have started to kick in, as noted in the acceleration of GMV and revenue growth in the second quarter.

The company has been using artificial intelligence to better organize listings and personalize the browsing experience for the 171 million active buyers on its marketplace.

The company accelerated its efforts by building product catalogs on structured data, enhancing mobile platform, rolling out new browse inspired shopping journeys, rejuvenating customer-to-customer (C2C) business and strengthening its brand.

eBay also recently launched new grouped listings, which will deliver search results of the most relevant items listed for sale and eliminate results that show many of the same items, which can discourage buyers from attempting a purchase.

Overall, progress is being made to make the marketplace more shopper-friendly and management has noted improvements.

The ongoing release of new marketplace features, along with the new "Fill Your Cart with Color" advertising campaign are expected to be the key drivers of eBay's financial performance through the rest of the year.

In the second quarter, eBay added 2 million marketplaces active buyers taking the total to 171 million. Expect significant additions in the to-be-reported quarter.

The company recently accelerated its partnership deals to boost its Marketplace. eBay partnered with Spring to offer a wide range of apparel and accessories through ebay.com. The company is anticipated to benefit from added selection of luxury brands.

Moreover, the company is offering daily deals on Facebook's FB Mobile Marketplace and getting access to the latter's huge user base in return.

With Shopify, eBay has launched a new sales channel, an integrated platform that allows Shopify sellers to synchronize inventory information, sell products ordered on eBay and view eBay buyer messages directly from Shopify accounts. This is helping eBay to gain access to sellers on Shopify sellers.

eBay declared that its Board of Directors has initiated a stock repurchase plan on Thursday, July 20th that permits the company to buyback $3.00 billion in outstanding shares. This buyback authorization permits the e-commerce company to purchase up to 7.5% of its stock through open market purchases. Stock buyback plans are often an indication that the company’s board believes its shares are undervalued.

Analysts and Hedge Funds Opinions

Cowen analyst John Blackledge on Monday raised his price target on eBay to 37 from 33 and maintained a market perform rating. He based the price-target increase on expectations of improvements in foreign exchange rates that will boost revenue.

Also, Baird analyst Colin Sebastian in a research note Sunday maintained an outperform rating on eBay and a price target of 38.

"We continue to view eBay positively with (the third quarter) once again showing signs of improving growth, ahead of the key holiday shopping season," Sebastian wrote. "We view the next three months as important milestones in demonstrating the resiliency of (eBay's) platform transformation, with shares already embedding some acceleration in growth."

Several other analysts have also recently commented on the company…..

  • Wells Fargo & Company reissued an “outperform” rating and set a $45.00 price objective on shares of eBay in a research report on Tuesday, September 26th.
  • Benchmark Co. reissued a “buy” rating and set a $45.00 price objective (up from $40.00) on shares of eBay in a research report on Friday, September 22nd.
  • Robert W. Baird reiterated a “buy” rating and set a $38.00 price target on shares of eBay in a report on Monday.
  • J P Morgan Chase & Co set a $38.00 price target on shares of eBay and gave the stock a “neutral” rating in a report on Friday, July 21st.
  • Maxim Group lifted their price target on shares of eBay from $36.00 to $40.00 and gave the stock a “buy” rating in a report on Thursday, July 13th.
  • Finally, Aegis reissued a “buy” rating and set a $44.00 price objective (up from $42.00) on shares of eBay in a research report on Tuesday, September 19th.

Three investment analysts have rated the stock with a sell rating, twenty-one have given a hold rating and eighteen have issued a buy rating to the company’s stock. The company presently has a consensus rating of “Hold” and an average target price of $37.66.

Institutional investors that has recently made a change to their positions in the stock….

  • Arrowstreet Capital Limited Partnership raised its stake in eBay Inc. by 1,077.4% during the second quarter. The institutional investor owned 3,779,300 shares of the e-commerce company’s stock after buying an additional 3,458,300 shares during the period. Arrowstreet Capital Limited Partnership owned 0.35% of eBay worth $131,973,000 at the end of the most recent quarter.
  • Ameritas Investment Partners Inc.’s holdings in eBay were worth $1,470,000 at the end of the most recent reporting period.
  • Koch Industries Inc. grew its stake in eBay Inc. by 7,308.3% in the second quarter. The institutional investor owned 1,283,565 shares of the e-commerce company’s stock after purchasing an additional 1,266,239 shares during the period. Koch Industries Inc. owned approximately 0.12% of eBay worth $1,248,000.
  • Trust Co. of Vermont increased its position in shares of eBay by 0.3% during the 2nd quarter. Trust Co. of Vermont now owns 13,837 shares of the e-commerce company’s stock worth $483,000 after purchasing an additional 40 shares during the last quarter.
  • Finally, Boston Private Wealth LLC increased its position in shares of eBay by 0.7% during the 2nd quarter. Boston Private Wealth LLC now owns 16,453 shares of the e-commerce company’s stock worth $575,000 after purchasing an additional 111 shares during the last quarter. 84.85% of the stock is owned by hedge funds and other institutional investors.

Summary

eBay continues to present an attractive buying opportunity, even as it rises to fresh record highs. For one, its strong network effect is difficult to recreate by rivals, giving it a large, entrenched user base to experiment with. Additionally, StubHub, is an interesting asset in its portfolio, providing large potential overseas growth opportunities. Lastly, its capital allocation strategies are adding value to shareholders, further boosting the company's share price going forward. In total, eBay looks attractively valued for its future growth prospects.

eBay Inc. has a market capitalization of $41.03 billion, a P/E ratio of 5.75 and a beta of 1.36. eBay Inc. has a 52 week low of $27.28 and a 52 week high of $39.28. The firm’s 50 day moving average price is $37.84 and its 200 day moving average price is $35.51.


Option Trade - CSX Corporation (NASDAQ:CSX) Puts

Monday, October 16, 2017

** OPTION TRADE: Buy the CSX NOV 17 2017 50.000 PUT at approximately $0.95.

Sell price is left to your own judgment.

The railroad sector has been a hot one thus far in 2017.

Three of the The "Big Four" U.S railroad stocks have posted solid gains and the fourth, CSX Corporation (NASDAQ:CSX), has posted a massive 47.3% gain.

CSX Corporation is slated to report third-quarter 2017 earnings results tomorrow, October 17, before the market opens.

Analysts project adjusted earnings per share (or EPS) of $0.52 for CSX in 3Q17.

On a sequential basis, the adjusted EPS is expected to fall 12% in 3Q17. CSX’s EPS was $1.95 in the last four quarters.

Also, analysts are estimating that CSX will post revenues of $2.8 billion in 3Q17. Note that the company’s third quarter 2016 revenue was around $2.7 billion. This estimate means analysts are expecting a 3.8% rise year-over-year in 3Q17.

As well, analysts are expecting CSX to report an operating margin of 33.3% in 3Q17. In the same quarter last year, the company’s operating margin was 31%. So on a year-over-year basis, analysts anticipate a 2.3% rise in operational margins. Interestingly, on a sequential basis, they are projecting CSX’s operating margins to plummet 3.5% in 3Q17.

In the last four quarters, CSX’s actual revenue was $11.5 billion.

The time to buy a railroad stock is when economic growth is about to accelerate, but now that acceleration is already well underway. CSX's forward P/E of 19.6x represents a premium to the S&P 500 and a premium to the 18.8x forward multiple currently being accorded to Norfolk Southern.

It is believed that the acceleration in US economic growth has already been priced into the shares, and they are certainly not cheap.

CSX's second quarter presentation included this language about upcoming third quarter results: "Transition issues in Q3 impact operating ratio and EPS expectations." So, that's the equivalent of the CFO calling sell-side analysts (I was one for 11 years) and saying "hey, the quarter's going to be a little messy."

2017 started on a good note for CSX Corporation, with the appointment of Hunter Harrison as the Chief Executive Officer and a 25% jump in the company’s stock price. The anticipated rebound in coal shipments due to the Trump administration's proposed $1 trillion infrastructure reforms led the company’s stock to surge, reaching over $55 per share in July, almost 50% higher than its price at the beginning of the year.

However, the market's enthusiasm appears to be fading gradually. This is primarily due to soft operational performance, despite the company's efforts to roll out “Precision Scheduled Railroading” which has overhauled rail yards and train schedules. Unlike the straight and uncluttered network of Canadian railroad companies that CEO Harrison had effectively improved using this strategy, CSX’s network is a complex web of tracks that are cluttered throughout several cities, making it more difficult to efficiently implement this strategy and deliver results.

Hunter Harrison the 72-year old, now uses oxygen regularly and works from home. He’s been working in the rail industry since he was 18 years old. He has the resume, having worked turnarounds at Canadian Pacific (CP), Canadian National (CNI) and Illinois Central, but there remains plenty of skepticism of what he can do with CSX. In large part, a lot of any efficiency improvements that Harrison might bring have already been baked in. That is, CSX trades at a steep premium to other railroad companies and its operating metrics really aren't that bad. So to say that Harrison can surpass what he did at Canadian Pacific - which is now considered the industry leader - remains fool hearted.

Consequently, contrary to expectations, the company’s key performance indicators – train velocity and terminal dwell – have fared poorly over the last few months. This relative downturn in the company’s operational performance has also led to a rise in customer complaints.

Influencing Factors

Back-to-back hurricanes (Harvey and Irma) have disrupted railroad operations and CSX is not spared the catastrophe either. Also, freight costs have skyrocketed following the natural disasters. With fuel costs on the rise, CSX’s bottom line is likely to be hurt in the third quarter.

Sluggishness of the automotive unit is also a cause for worry in CSX’s case. With the automotive sector accounting for a significant chunk of revenues, softness in automotive volumes is but likely to limit the company’s bottom-line growth in this soon-to-be-reported quarter.

There’s the fact that CSX has plenty of headwinds, including the fact that coal is its largest revenue generator. And as Harrison himself has noted, fossil fuels are “dead.”

Recently encountered service disruptions by the company also do not bode well for its future and might hamper results in the quarter.

The slip in CSX’s operational performance has enabled Norfolk Southern to take advantage of the situation and attract some of CSX’s customers by providing better services. This implies that CSX has to not only solve the rising customer dissatisfaction, but will also have to put forth more effort to protect its market share from competitors.

Although CSX is actively working to get its operational metrics back on track, its performance in the third quarter forced it to revise its full year guidance. With the appointment of Harrison, the company had expected its operating ratio (operating expenses as a percentage of revenue) to come down from 70% to around 60%. However, given the transition issues in the third quarter, the company’s aim to achieve its targeted operating ratio is likely to be delayed. According to the company’s latest presentation, its ratio is expected to

Further adding to its woes; CSX surfaces as a highly leveraged company. The stock has seen the Consensus Estimate for current-quarter earnings being revised 11.9% downward over the last 90 days and this in turn reflects the stock’s surrounding negative sentiment.

Due to these headwinds, shares of the company have underperformed its industry in the last three months. The stock has declined 2.7% against the industry’s 0.6% gain.

Analysts and Hedge Funds Opinions

CSX Corporation was downgraded by investment analysts at Morgan Stanley from an “equal weight” rating to an “underweight” rating in a research note issued to investors last Monday. They currently have a $43.00 price target on the transportation company’s stock, down from their previous price target of $44.00. Morgan Stanley’s target price suggests a potential downside of 17.50% from the company’s previous close.

Several other analysts have also recently commented on the company…..

  • BidaskClub upgraded shares of CSX Corporation from a “sell” rating to a “hold” rating in a research note on Tuesday, September 12th.
  • TD Securities decreased their price objective on shares of CSX Corporation from $64.00 to $63.00 and set a “buy” rating for the company in a research note on Thursday, July 20th.
  • Finally, Stifel Nicolaus restated a “hold” rating and issued a $55.00 price objective (down previously from $57.00) on shares of CSX Corporation in a research note on Thursday, September 7th.

An institutional investor that has recently made a change to their position in the stock….

Pettyjohn Wood & White Inc. reduced its stake in shares of CSX Corporation (NASDAQ:CSX) by 11.0% during the second quarter. The fund owned 10,743 shares of the transportation company’s stock after selling 1,326 shares during the quarter. Pettyjohn Wood & White Inc.’s holdings in CSX Corporation were worth $586,000 at the end of the most recent quarter.

Summary

Currently, CSX stock seems to be the biggest gamble among the major railroad stocks in the US.

Hunter Harrison has health concerns evident from his past health record. Though Harrison has a four-year contract with the company, his health-related issues can’t be overlooked. Notably, Morgan Stanley (MS) downgraded CSX stock to “underweight” from “equal-weight.”

In addition, the recent hurricanes seem to have halted the company’s PCR implementation rate. Plus, the disruptions caused due to shifting to the new model have irked several CSX customers. In September 2017, the company’s Ohio yard had a snag that forced the rerouting of its automotive freight. Importantly, this has the potential to negatively impact its top line in the coming quarters.

CSX Corporation has a 52-week low of $30.01 and a 52-week high of $55.48. The stock has a 50 day moving average price of $51.69 and a 200-day moving average price of $51.34. The firm has a market cap of $48.48 billion, a PE ratio of 27.76 and a beta of 1.35.






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