Top Stock Reports for Berkshire Hathaway, Salesforce & Schwab

Friday, December 15, 2017

The Zacks Research Daily presents the best research output of our analyst team. Today's Research Daily features new research reports on 16 major stocks, including Berkshire Hathaway (BRK.B), Salesforce (CRM) and Schwab (SCHW). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.

You can see all of today’s research reports here >>>

Berkshire Hathaway’s shares have gained +20.6% year to date, outperforming the Zacks Property and Casualty Insurance industry which increased +16.9% during the same period. The Zacks analyst likes it inorganic story which has yielded impressive strategic acquisitions.

Continuous investment through strategic buyouts testifies confidence in business environment in the Trump era. The company’s strong cash position allows it to make earnings-accretive bolt-on acquisitions. Demand for utilities is expected to rise in the future and drive earnings growth. Continued insurance business growth also fuels increase in float. A sturdy capital level further adds impetus to the company.

However, the company’s insurance business generates maximum return on equity and thus exposure to catastrophe loss remains a concern. Huge capital expenses on account of railroad operations remain headwinds. Capital expenditure is estimated at $2.6 billion for the remainder of 2017. Also there was no earnings momentum over the last 30 days.

(You can read the full research report on Berkshire Hathaway here >>>).

Shares of Salesforce shares have handily beat the broader Tech sector this year, with the stock up almost double the Zacks Technology sector's +26.8% gain in the year-to-date period. Salesforce reported stellar Q3 results and provided a strong outlook.

The Zacks analyst is also encouraged by the company’s announcement of achieving $10 billion in sales in FY18. The company’s diverse cloud offerings and strong spending on digital marketing remain the catalysts. Additionally, strategic acquisitions and the resultant synergies are anticipated to prove conducive to growth over the long run. Furthermore, the company’s move to utilize Amazon’s data center’s geographical reach to expand its international business is commendable and will help it in achieving its targeted $20 billion sales mark in next few years as well. Nonetheless, stiff competition, currency fluctuations and an increase in investments for international expansions and data centers could negatively impact near-term profitability.

(You can read the full research report on Salesforce here >>>).

Schwab’s shares have outperformed the Zacks Investment Brokers industry over the last three months, gaining +23.5% vs +14.5%. The performance was supported by impressive earnings surprise history, as the company did not lag the Zacks Consensus Estimate in any of the trailing four quarters. The company remains well positioned to gain from the rising rate environment. Also, initiatives to strengthen trading income are likely to support its profitability in the long run despite the near-term reduction in the same. However, continuous rise in expenses (due to rise in compensation costs) remains a key concern for the company. Further, significant dependence on fee-based revenue streams is a major concern.

(You can read the full research report on Schwab here >>>).

Other noteworthy reports we are featuring today include BNY Mellon (BK), SunTrust Banks (STI) and Kellogg (K).

Investor Alert: Breakthroughs Pending

A medical advance is now at the flashpoint between theory and realization. Billions of dollars in research have poured into it. Companies are already generating substantial revenue, and even more wondrous products are in the pipeline.

Cures for a variety of deadly diseases are in sight, and so are big potential profits for early investors. Zacks names 5 stocks to buy now.

Click here to see them >>

Mark Vickery

Senior Editor

Note: Sheraz Mian heads the Zacks Equity Research department and is a well-regarded expert of aggregate earnings. He is frequently quoted in the print and electronic media and publishes the weekly Earnings Trends and Earnings Preview reports. If you want an email notification each time Sheraz publishes a new article, please click here>>>

 

Friday, December 15, 2017

The Zacks Research Daily presents the best research output of our analyst team. Today's Research Daily features new research reports on 16 major stocks, including Berkshire Hathaway (BRK.B), Salesforce (CRM) and Schwab (SCHW). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.

You can see all of today’s research reports here >>>

Berkshire Hathaway’s shares have gained +20.6% year to date, outperforming the Zacks Property and Casualty Insurance industry which increased +16.9% during the same period. The Zacks analyst likes it inorganic story which has yielded impressive strategic acquisitions. Continuous investment through strategic buyouts testifies confidence in business environment in the Trump era. The company’s strong cash position allows it to make earnings-accretive bolt-on acquisitions. Demand for utilities is expected to rise in the future and drive earnings growth. Continued insurance business growth also fuels increase in float. A sturdy capital level further adds impetus to the company. However, the company’s insurance business generates maximum return on equity and thus exposure to catastrophe loss remains a concern. Huge capital expenses on account of railroad operations remain headwinds. Capital expenditure is estimated at $2.6 billion for the remainder of 2017. Also there was no earnings momentum over the last 30 days.

(You can read the full research report on Berkshire Hathaway here >>>).

Today's Must Read

Berkshire (BRK) Gains from Insurance Business, Cat Loss Ails

Salesforce (CRM) Rides on Strong Product Portfolio & Buyouts

Rising Rates Aid Schwab (SCHW), Higher Personnel Costs a Woe

Featured Reports

Higher Rates Boost BNY Mellon (BK), Concentration Risk A Woe

Per the Zacks analyst, BNY Mellon's margins should continue to benefit from higher rates. Yet, concentration risk arising from its significant dependence on fee income for revenues remains a concern.

Cap-Ex Plans Aids PG&E Corp. (PCG), Catastrophes Hurt

Per the Zacks analyst, PG&E Corp's plan to upgrade infrastructure enhances its service reliability.

Sabina Pass Project Aids Cheniere Energy (LNG), Debt Ails

While the Zacks analyst appreciates Cheniere Energy's favorable competitive position due to solid project execution and strong production at Sabina Pass.

SunTrust Lifted by Higher Rates (STI), Risky Loan Exposure Ails

Per the Zacks analyst, rising rates continue to aid SunTrust's net interest margin. Though, the housing sector is improving, the company's significant exposure to risky loans remains a concern.

Kellogg's (K) Cost Saving Plans Impress, Weak Sales a Woe

Per the Zacks analyst, Kellogg's cost savings from its Project K and ZBB have been supporting renovation, innovation, brand support and margins.

Focus on E-Commerce & Buyouts to Drive United Natural (UNFI)

Per the Zacks analyst, solid focus on e-commerce and buyouts fueled United Natural's sales in the first quarter and are likely to remain major growth drivers.

Solid Cash Position Boosts Centene's (CNC) Growth Potential

Per the Zacks analyst, consistent generation of cash flow boosts Centene's investment capabilities, thereby propelling its long term growth.

New Upgrades

Pioneer Natural (PXD) to Gain from Oil-Rich Permian Acreage

Strong focus on the low-cost and lucrative Permian Basin will help Pioneer Natural generate significant cash flow for stockholders, according to the Zacks analyst.

Permian Basin to Drive Concho Resources (CXO) Growth

Concho Resources' large acreage position in the prolific Permian Basin and its competitive cost structure has made the Zacks analyst turn bullish on the E&P company.

Strong Cash Flows Aid Total System's (TSS) Inorganic Growth

Per the Zacks analyst the company derives growth from ample free cash flows from operations which has enabled it to make accretive acquisitions, reduce debt, increase dividend and resume sharebuyback.

New Downgrades

Nabors (NBR) Wrecked by CanRig Delays and Cancellations

With a number of clients deferring CanRig equipment deliveries scheduled for the third quarter and numerous orders being canceled, the Zacks analyst has turned bearish on Nabors Industries.

Unisys (UIS) Plagued by Significant Pension Obligations

Per the Zacks analyst, Unisys remains weighed down by significant pension obligations, while incremental investments to thwart competition increase operating expenses and erode profitability.

ABM Industries (ABM) Weighed Down by Competitive Woes

Per the Zacks analyst, strong competitive pressures limit ABM's success rate in bidding for profitable businesses and its ability to increase prices in accordance with the rising costs.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
SunTrust Banks, Inc. (STI) : Free Stock Analysis Report
 
The Charles Schwab Corporation (SCHW) : Free Stock Analysis Report
 
Kellogg Company (K) : Free Stock Analysis Report
 
Salesforce.com Inc (CRM) : Free Stock Analysis Report
 
Berkshire Hathaway Inc. (BRK.B) : Free Stock Analysis Report
 
Bank Of New York Mellon Corporation (The) (BK) : Free Stock Analysis Report
 
To read this article on Zacks.com click here.
 
Zacks Investment Research