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BioTelemetry (Nasdaq: (BEAT - Free Report) – Free Report) is a $1 billion provider of cardiac monitoring equipment and services with an emphasis on mobile and wireless capabilities.
The company is focused on advancing mobile and wireless health services by providing leading technology and services that help healthcare providers monitor and diagnose patients and clinical research subjects in a more efficient, accurate, and cost-effective manner.
The stock has been a Zacks #1 Rank Strong Buy several times this year due to steadily rising sales and EPS growth estimates.
After the company's second-quarter report in early August where they beat the consensus and raised guidance, Wall Street analysts raised this year's profit projection 19% from $0.88 to $1.05, representing 24% annual growth.
And next year's EPS target climbed 18% from $1.24 to $1.46, for a whopping 39% growth trajectory.
The profit outlooks are driven primarily by strong sales growth of 37% this year and nearly 36% projected for next year.
How Does BEAT Make Money?
Speaking of top line growth, those sales totals for this year and next are $286 million and $388 million, respectively.
The company's primary source of revenue is not in devices, but in the service fees charged for wireless and remote healthcare monitoring. Currently, BioTelemetry estimates that the market for its services is between $1.5 and $2 billion.
Royal Gold (Nasdaq: (RGLD - Free Report) – Free Report)is a $5.6 billion gold miner that has rallied 38% this year while its chosen metal has notched a 10% gain, as measured by the SPDR Gold ETF.
But the stock has fallen to a Zacks #5 Rank Strong Sell this month based on declining earnings estimates.
In the past 60 days, the current fiscal year (which just began in July) saw analysts drop their EPS profit projections from $1.61 to $1.45.
Now that might not seem so bad on the surface, but it spells -6% "growth" for the year.
Okay, even that might not bother you as a gold-mining investor.
But it always pays to consider two major elements of the gold trade that I have been pointing out for the past 10 years:
1) Gold is NOT the inflation hedge that investors thought it was decades ago. In a world where fiat currencies and central bank hegemony have proven they can stabilize and foster the global economy, gold has become nearly irrelevant as a hedge.
This is not a theory. The behavior of thousands of institutional investors controlling trillions in wealth has validated that they believe and act on the fungibility of central bank monetary policy and liquidity management (bonds and rates).
And I'm not talking about speculators acting on "money printing bubbles."
The US economy is part of a global ecosystem of "bonds and rates" liquidity.
And... when it comes to the currencies we use for global econ measuring sticks, it's all relative.
2) Which brings me to the other major element that most wanna-be global-macro analysts miss: Currencies ONLY move in relation to each other.
The logical conclusion: If you believe that an inflation threat will significantly drive the US dollar DOWN, then you would clearly benefit by shifting assets to the other major economies/currencies like Europe and Asia.
But you have to ask yourself... Do you really believe that the US economy and stock market are going to "hell in hand-basket?"
If your answer is "No," then why would you be so eager (or crazy) to focus your attention on hedging your "dollar inflation risk" by buying gold?
While some investors spend all their time listening to gold bugs like Peter Schiff or Jim Rickards, the rest of us are TROUNCING their returns in the stock market where earnings growth can absolutely clobber any gold-currency hedge you might construct -- no matter what the USD does!
If you doubt what I'm saying, just look at multi-year chart of gold vs the US dollar.
What you'll see is the ebb and flow of gold, as it gains value on dollar weakness and then swings back to weakness on dollar strength.
And you might notice that year-to-date in 2017, while gold is up 10%, the US dollar may have just bottomed in September at -10%.
If there's any trend of interest rates heading higher, the US dollar is sure to follow.
And that means gold is headed lower.
If I'm wrong, your best course would be to buy the euro currency. You could make a lot more on some insane inflation burst like we saw in 2007 when oil went to $150 and the euro to $1.60.
But don't buy gold or gold stocks. You will do much better in equites, or a simple "It's All Relative Cooker Says" currency hedge.
The Barbarous Relic
I could be wrong. And I should reveal my bias in all this macro-monetary analysis...
I believe, as John Maynard Keynes taught us nearly a century ago, there is no place for the yellow metal in the global monetary system where central banks have proven FIAT RULES and IT'S ALL RELATIVE.
Disclosure: I maintain net short positions in gold derivatives, including futures, options, ETFs and selected equities.
Additional content:
Here’s Why Microsoft Was Up Thursday
On Thursday, shares of tech giant Microsoft Corp. (Nasdaq: (MSFT - Free Report) – Free Report) were gaining in afternoon trading, up over 1.7% to $76.01 by 2:00 PM EST after the company was upgraded earlier the day.
Canaccord Genuity analyst Richard Davis upgraded Microsoft stock to ‘Buy’ from ‘Hold,’ as well as raised his price target to $86 from $76 per share.
"Our analysis suggests that investors have underestimated the virtuous cycles that Microsoft has created by assembling four compelling growth drivers in: (1) office productivity; (2) gaming; (3) marketing, and (4) Azure's platform as a service," Davis said. "Our model teardown suggests that these drivers set the firm up for a sustained period of accelerating growth."
In particular, Davis points out Microsoft’s gaming division, noting that the company, which makes the popular Xbox gaming system, could potentially become a big player in the e-sports industry. This industry is known for its huge video game tournaments, and already brings in thousands of participants and viewers, notes CNBC. Microsoft is set to release the latest version of Xbox, called the Xbox One X, in November, just in time for the holidays.
Davis also highlights the financial benefits Microsoft is seeing from moving its customers from continuous license versions of its trademark Office software to Office 365, the software-as-a-service (SaaS) cloud model. And combined with its Azure cloud computing platform and infrastructure, Microsoft presents a formidable competitor against Amazon’s (Nasdaq: (AMZN - Free Report) – Free Report) Amazon Web Services.
Meanwhile, Davis projects Microsoft’s revenue growth could increase from 6% in fiscal 2017 to the range of 11%-15% by fiscal 2022. And, MSFT stock could reach $115 to $120 per share by the end of 2020 if “growth drivers play out as expected.”
Currently, MSFT is a #3 (Hold) on the Zacks Rank, with a VGM score of ‘C.’ Year-to-date, shares of the company has gained over 19% in value.
4 Stocks to Watch after the Massive Equifax Hack
Cybersecurity stocks spiked on recent news of a data breach affecting 143 million Americans. But which stocks are the best buy candidates right now? And what does the future hold for the cybersecurity industry?
Equifax is just the most recent victim. Computer hacking and identity theft are more common than ever. Zacks has just released Cybersecurity! An Investor’s Guide to inform Zacks.com readers about this $170 billion/year space. More importantly, it highlights 4 cybersecurity picks with strong profit potential.
Every day, the analysts at Zacks Equity Research select two stocks that are likely to outperform (Bull) or underperform (Bear) the markets over the next 3-6 months.
About Zacks Equity Research
Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.
Continuous analyst coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.
Strong Stocks that Should Be in the News
Many are little publicized and fly under the Wall Street radar. They're virtually unknown to the general public. Yet today's 220 Zacks Rank #1 "Strong Buys" were generated by the stock-picking system that has nearly tripled the market from 1988 through 2015. Its average gain has been a stellar +26% per year. See these high-potential stocks free >>.
Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.
Zacks.com provides investment resources and informs you of these resources, which you may choose to use in making your own investment decisions. Zacks is providing information on this resource to you subject to the Zacks "Terms and Conditions of Service" disclaimer. www.zacks.com/disclaimer.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performancefor information about the performance numbers displayed in this press release.
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BioTelemetry, Royal Gold, Microsoft and Amazon highlighted as Zacks Bull and Bear of the Day
For Immediate Release
Chicago, IL – October 6, 2017 – Zacks Equity Research BioTelemetry (Nasdaq: (BEAT - Free Report) – Free Report) as the Bull of the Day, Royal Gold (Nasdaq: (RGLD - Free Report) – Free Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Microsoft Corp. (Nasdaq: (MSFT - Free Report) – Free Report) and Amazon (Nasdaq: (AMZN - Free Report) – Free Report).
Here is a synopsis of all four stocks:
Bull of the Day:
BioTelemetry (Nasdaq: (BEAT - Free Report) – Free Report) is a $1 billion provider of cardiac monitoring equipment and services with an emphasis on mobile and wireless capabilities.
The company is focused on advancing mobile and wireless health services by providing leading technology and services that help healthcare providers monitor and diagnose patients and clinical research subjects in a more efficient, accurate, and cost-effective manner.
The stock has been a Zacks #1 Rank Strong Buy several times this year due to steadily rising sales and EPS growth estimates.
After the company's second-quarter report in early August where they beat the consensus and raised guidance, Wall Street analysts raised this year's profit projection 19% from $0.88 to $1.05, representing 24% annual growth.
And next year's EPS target climbed 18% from $1.24 to $1.46, for a whopping 39% growth trajectory.
The profit outlooks are driven primarily by strong sales growth of 37% this year and nearly 36% projected for next year.
How Does BEAT Make Money?
Speaking of top line growth, those sales totals for this year and next are $286 million and $388 million, respectively.
The company's primary source of revenue is not in devices, but in the service fees charged for wireless and remote healthcare monitoring. Currently, BioTelemetry estimates that the market for its services is between $1.5 and $2 billion.
Bear of the Day:
Royal Gold (Nasdaq: (RGLD - Free Report) – Free Report)is a $5.6 billion gold miner that has rallied 38% this year while its chosen metal has notched a 10% gain, as measured by the SPDR Gold ETF.
But the stock has fallen to a Zacks #5 Rank Strong Sell this month based on declining earnings estimates.
In the past 60 days, the current fiscal year (which just began in July) saw analysts drop their EPS profit projections from $1.61 to $1.45.
Now that might not seem so bad on the surface, but it spells -6% "growth" for the year.
Okay, even that might not bother you as a gold-mining investor.
But it always pays to consider two major elements of the gold trade that I have been pointing out for the past 10 years:
1) Gold is NOT the inflation hedge that investors thought it was decades ago. In a world where fiat currencies and central bank hegemony have proven they can stabilize and foster the global economy, gold has become nearly irrelevant as a hedge.
This is not a theory. The behavior of thousands of institutional investors controlling trillions in wealth has validated that they believe and act on the fungibility of central bank monetary policy and liquidity management (bonds and rates).
And I'm not talking about speculators acting on "money printing bubbles."
The US economy is part of a global ecosystem of "bonds and rates" liquidity.
And... when it comes to the currencies we use for global econ measuring sticks, it's all relative.
2) Which brings me to the other major element that most wanna-be global-macro analysts miss: Currencies ONLY move in relation to each other.
The logical conclusion: If you believe that an inflation threat will significantly drive the US dollar DOWN, then you would clearly benefit by shifting assets to the other major economies/currencies like Europe and Asia.
But you have to ask yourself... Do you really believe that the US economy and stock market are going to "hell in hand-basket?"
If your answer is "No," then why would you be so eager (or crazy) to focus your attention on hedging your "dollar inflation risk" by buying gold?
While some investors spend all their time listening to gold bugs like Peter Schiff or Jim Rickards, the rest of us are TROUNCING their returns in the stock market where earnings growth can absolutely clobber any gold-currency hedge you might construct -- no matter what the USD does!
If you doubt what I'm saying, just look at multi-year chart of gold vs the US dollar.
What you'll see is the ebb and flow of gold, as it gains value on dollar weakness and then swings back to weakness on dollar strength.
And you might notice that year-to-date in 2017, while gold is up 10%, the US dollar may have just bottomed in September at -10%.
If there's any trend of interest rates heading higher, the US dollar is sure to follow.
And that means gold is headed lower.
If I'm wrong, your best course would be to buy the euro currency. You could make a lot more on some insane inflation burst like we saw in 2007 when oil went to $150 and the euro to $1.60.
But don't buy gold or gold stocks. You will do much better in equites, or a simple "It's All Relative Cooker Says" currency hedge.
The Barbarous Relic
I could be wrong. And I should reveal my bias in all this macro-monetary analysis...
I believe, as John Maynard Keynes taught us nearly a century ago, there is no place for the yellow metal in the global monetary system where central banks have proven FIAT RULES and IT'S ALL RELATIVE.
Disclosure: I maintain net short positions in gold derivatives, including futures, options, ETFs and selected equities.
Additional content:
Here’s Why Microsoft Was Up Thursday
On Thursday, shares of tech giant Microsoft Corp. (Nasdaq: (MSFT - Free Report) – Free Report) were gaining in afternoon trading, up over 1.7% to $76.01 by 2:00 PM EST after the company was upgraded earlier the day.
Canaccord Genuity analyst Richard Davis upgraded Microsoft stock to ‘Buy’ from ‘Hold,’ as well as raised his price target to $86 from $76 per share.
"Our analysis suggests that investors have underestimated the virtuous cycles that Microsoft has created by assembling four compelling growth drivers in: (1) office productivity; (2) gaming; (3) marketing, and (4) Azure's platform as a service," Davis said. "Our model teardown suggests that these drivers set the firm up for a sustained period of accelerating growth."
In particular, Davis points out Microsoft’s gaming division, noting that the company, which makes the popular Xbox gaming system, could potentially become a big player in the e-sports industry. This industry is known for its huge video game tournaments, and already brings in thousands of participants and viewers, notes CNBC. Microsoft is set to release the latest version of Xbox, called the Xbox One X, in November, just in time for the holidays.
Davis also highlights the financial benefits Microsoft is seeing from moving its customers from continuous license versions of its trademark Office software to Office 365, the software-as-a-service (SaaS) cloud model. And combined with its Azure cloud computing platform and infrastructure, Microsoft presents a formidable competitor against Amazon’s (Nasdaq: (AMZN - Free Report) – Free Report) Amazon Web Services.
Meanwhile, Davis projects Microsoft’s revenue growth could increase from 6% in fiscal 2017 to the range of 11%-15% by fiscal 2022. And, MSFT stock could reach $115 to $120 per share by the end of 2020 if “growth drivers play out as expected.”
Currently, MSFT is a #3 (Hold) on the Zacks Rank, with a VGM score of ‘C.’ Year-to-date, shares of the company has gained over 19% in value.
4 Stocks to Watch after the Massive Equifax Hack
Cybersecurity stocks spiked on recent news of a data breach affecting 143 million Americans. But which stocks are the best buy candidates right now? And what does the future hold for the cybersecurity industry?
Equifax is just the most recent victim. Computer hacking and identity theft are more common than ever. Zacks has just released Cybersecurity! An Investor’s Guide to inform Zacks.com readers about this $170 billion/year space. More importantly, it highlights 4 cybersecurity picks with strong profit potential.
Get the new Investing Guide now>>
About the Bull and Bear of the Day
Every day, the analysts at Zacks Equity Research select two stocks that are likely to outperform (Bull) or underperform (Bear) the markets over the next 3-6 months.
About Zacks Equity Research
Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.
Continuous analyst coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.
Strong Stocks that Should Be in the News
Many are little publicized and fly under the Wall Street radar. They're virtually unknown to the general public. Yet today's 220 Zacks Rank #1 "Strong Buys" were generated by the stock-picking system that has nearly tripled the market from 1988 through 2015. Its average gain has been a stellar +26% per year. See these high-potential stocks free >>.
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Zacks.com provides investment resources and informs you of these resources, which you may choose to use in making your own investment decisions. Zacks is providing information on this resource to you subject to the Zacks "Terms and Conditions of Service" disclaimer. www.zacks.com/disclaimer.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performancefor information about the performance numbers displayed in this press release.