CANADA - 2025/05/26: In this photo illustration, the Oracle Corporation logo is seen displayed on a ... More smartphone screen. (Photo Illustration by Thomas Fuller/SOPA Images/LightRocket via Getty Images)SOPA Images/LightRocket via Getty Images Oracle’s (NYSE:ORCL) earnings report is set to be released on Wednesday, June 11, 2025. Historically, Oracle’s stock has experienced negative one-day returns following earnings announcements. In the last five years, the stock has declined in 60% of occurrences, wit ...

Core Viewpoint - Small-cap stocks are currently undervalued, presenting potential investment opportunities, especially those offering high dividend yields ranging from 8.3% to 17.1% [2] Group 1: Small-Cap Stocks Overview - The valuation gap between the S&P 500 and S&P 600 is at its widest since the late 1990s, suggesting small-cap stocks are significantly cheaper [2] - The article discusses five small-cap stocks with attractive dividend yields, indicating a potential for high returns despite their current low valuations [2] Group 2: Playtika Holding (PLTK) - Playtika, a mobile game developer, has a dividend yield exceeding 8% but has not raised its payout recently, indicating a decline in earnings and sales [4][5] - Analysts project a 32% increase in profits for 2024, despite the company's struggles in the competitive mobile gaming market [6] - Playtika's valuation is low at 6 times forward earnings, but there are concerns about its growth prospects [7] Group 3: Carlyle Secured Lending (CGBD) - CGBD is a business development company focused on U.S. middle-market companies, primarily investing in first-lien debt [8][9] - Recent earnings reports have shown disappointing results, with an increase in non-accrual loans and a stagnant base dividend of 40 cents per share [10][11] - CGBD shares are trading at a 16% discount to net asset value, but operational challenges raise concerns about future dividend sustainability [12] Group 4: Bain Capital Specialty Finance (BCSF) - BCSF provides financing solutions to a diverse range of companies, with a significant portion of its investments in first-lien debt [13][14] - The company has maintained its regular dividend but has introduced special dividends, raising concerns about future dividend coverage due to declining net investment income projections [16][17] - Analysts expect BCSF's dividend ratios to be high, leaving little room for error in case of operational difficulties [17] Group 5: Two Harbors Investment Corp. (TWO) - TWO operates in the mortgage REIT sector, focusing on mortgage servicing rights and agency residential mortgage-backed securities [19][22] - The company has faced significant share price declines, resulting in a high yield of over 17%, but recent litigation charges could impact its book value and dividend sustainability [24][25] - TWO's current dividend rate of 45 cents per share is at risk due to the potential impact of litigation on earnings available for distribution [25] Group 6: Franklin BSP Realty Trust (FBRT) - FBRT is a mortgage REIT focused on commercial mortgage-backed securities, with a significant portion of its portfolio in multifamily properties [26][27] - The company is trading at a 28% discount to book value, with a low P/E ratio based on 2026 earnings estimates, indicating potential value [28] - Concerns exist regarding the stability of its dividend, as the payout has not changed since 2021, and market conditions could necessitate a review of the dividend policy [29][30]

Core Insights - Lululemon's stock is currently trading at approximately $331, perceived as undervalued based on strong fundamentals despite market volatility [1] - The company reported Q1 2025 results with a 7% revenue increase to $2.37 billion and EPS of $2.60, surpassing expectations, but faced a 1% increase in same-store sales and a revised full-year outlook, leading to a 22% decline in after-hours trading [1][8] Financial Performance - Lululemon exhibits a trailing P/E ratio of about 18x and a P/FCF ratio of 19x, both below S&P 500 averages, indicating a value stock profile despite high performance [2] - The company has a three-year revenue CAGR of 19%, significantly outpacing the S&P 500's 5.5%, with annual sales reaching approximately $11 billion [3] - Operating margin stands at 23.7%, nearly double the S&P 500's 13.2%, with operating cash flow and net income margins at 21.5% and 17.1%, respectively, showcasing elite performance [4] Financial Strength - Lululemon's balance sheet is robust, with a debt-to-equity ratio of 4.9%, well below the S&P 500 average of 19.9%, and a cash-to-assets ratio of 26.1%, exceeding the market's 13.8% [5] - This strong financial position allows the company to withstand downturns and invest in growth opportunities [5] Market Behavior - Lululemon has shown significant declines during market corrections, with a 46% drop in 2022, a 47% decline during the early COVID-19 shock, and a 92% fall during the 2008 crash, indicating vulnerability to market sentiment [6] - Despite strong fundamentals, the stock's performance can be heavily influenced by market conditions [6][7] Investment Considerations - The company is characterized by strong growth, solid profitability, and a fortified balance sheet, but investors should be aware of its susceptibility to market downturns [7] - The recent Q1 results highlight immediate challenges while maintaining long-term fundamental integrity, suggesting a cautious approach for potential investors [8]

Core Viewpoint - The IRS has assessed $4 billion in taxes, penalties, and interest on Yum! Brands due to a tax-deferred reorganization in 2014, leading the company to sue the IRS to prevent collection of these funds [1][9][11]. Company Overview - Yum! Brands is the parent company of KFC, Taco Bell, Pizza Hut, and Habit Burger & Grill, having spun off from PepsiCo in 1997, and is one of the largest restaurant chains globally with over 61,000 locations in 155 countries [2][3]. Tax-Related Developments - Yum! Brands announced a relocation of its headquarters from Louisville, Kentucky to Plano, Texas, primarily due to tax considerations, as Texas has a 0% corporate income tax rate compared to Kentucky's 5% [4]. - The company has a history of tax-related issues, including the current dispute with the IRS regarding a 2014 reorganization [4][10]. 2014 Reorganization Details - In 2014, Yum! Brands underwent a corporate reorganization to focus on brand-based divisions rather than geographic ones, aiming to drive growth [5]. - The reorganization involved issuing stock in exchange for stock in previous subsidiaries, which Yum! Brands believed qualified for tax deferral under Internal Revenue Code Section 368(a)(1)(B) [6][8]. IRS Dispute - The IRS claims Yum! Brands owes $2.1 billion in taxes, $418 million in penalties, and over $1.5 billion in interest, totaling over $4 billion, which is significant compared to the company's 2024 pre-tax income of $1.9 billion and income tax payment of $414 million [9][10]. - Yum! Brands has contested the IRS's position, asserting that it met all requirements for tax deferral, but has faced unsuccessful appeals in court [10][11].

Group 1 - The next earnings date for Adobe is projected to be June 12, with earnings estimates of $4.97 per share and revenue of $5.80 billion [1] - Adobe has demonstrated impressive long-term earnings per share growth and revenue growth [4] - Earnings reports can lead to significant volatility in Adobe's stock, which may attract options traders, especially with options expiring on June 13 [5]

ToplineA pessimistic prediction for Tesla sales from Goldman Sachs added further fuel to the Tesla fire, as the unraveling relationship between Tesla CEO Elon Musk and his former close ally President Donald Trump plays out publicly, accelerating Wall Street’s concerns about the increasing exposure of Tesla to Musk’s outspoken politics.Elon Musk has alienated “multiple sides of the political spectrum” from Tesla, according to one ... More prominent Wall Street analyst.AFP via Getty ImagesKey FactsIn a late T ...

President Trump and Elon Musk have had a falling out in recent days. (Photo by Andrew Harnik/Getty ... More Images)Getty ImagesKey Takeaways Trump-Musk feud rattles markets; Tesla dives 14% as political tensions shake investor confidence Jobs report beats forecast slightly, but downward revisions temper enthusiasm and bond yields rise Tariffs, forecasts disappoint: Lululemon, DocuSign, Broadcom stocks fall sharply in premarket tradingMajor indices were relatively quiet on Thursday, the S&P 500 fell 0.5% and ...

Core Viewpoint - Tesla Inc. experienced a significant stock drop of 14% in a single day, leading to a market capitalization loss of over $150 billion, raising concerns about the sustainability of its stock price and potential further declines [2][4][14] Financial Performance - Tesla's valuation remains high with a P/E ratio of approximately 156x and a P/S ratio of 9.3x, typically associated with high-growth software companies rather than capital-intensive automakers [3] - Over the past 12 months, Tesla's revenue growth was only 1% year-over-year, while net margins declined from 7.3% to 6.7% [4] - In Q1 FY2025, Tesla's revenue decreased by 9%, and net margins fell to 2%, indicating significant stress on sales volume and pricing [4] Competitive Landscape - Increased competition from Chinese EV manufacturers like BYD and NIO is pressuring Tesla's market share, leading to price reductions that have squeezed margins [7] - Political factors, including Elon Musk's public disagreements with former President Trump, have introduced uncertainty regarding future government contracts and subsidies [5] Brand and Market Perception - Tesla's brand reputation is facing challenges, with calls for consumer boycotts and vandalism at charging stations raising concerns about potential demand decline, particularly in the U.S. [6] - The company's image as a leader in sustainable innovation is becoming increasingly politicized, which may affect consumer sentiment [6] Future Scenarios - A downside scenario suggests that if Tesla's revenue decreases by an additional 10-15% over the next two years, annual revenue could drop to approximately $82-86 billion, with EPS potentially falling below $1.00 [8][10] - In a more stable context, modest revenue growth of 5-8% and recovery of net margins to 6-8% could lead to earnings of $4-5/share, suggesting a valuation of $200-250 [11][12] - An optimistic recovery scenario could see earnings rise to $6-7/share with a P/E ratio expansion to 60x, potentially pushing Tesla's stock price back above $400 [13] Conclusion - At a current price of $285, Tesla's valuation reflects significant growth expectations despite recent cautionary signals in earnings reports, with a precarious situation indicated by declining revenue and margins [14][15] - The risk-reward balance appears increasingly uncertain, but Tesla retains long-term potential if it can navigate short-term volatility and restore margins [15]

Group 1 - Netflix has gained a 3.5% lead this week, driven by price-target increases from UBS to $1,450 and Jefferies to $1,400, with shares reaching a record high of $1,262.81 and a year-to-date increase of 40% [1] - The stock's new high coincides with historically low implied volatility, which has previously been a bullish indicator for Netflix, as its current Schaeffer's Volatility Index (SVI) is at 25%, in the 4th percentile of its 12-month range [2] - Historical data indicates that one month after similar signals, Netflix stock averaged a 7.1% increase, with an 86% chance of finishing the month higher, suggesting potential for the stock to exceed $1,300 [3] Group 2 - Despite bullish sentiment, Netflix's consensus 12-month price target is $1,167.35, representing a 6.5% discount to its current price, indicating potential for further price-target adjustments from analysts [5] - Short-term options traders are currently heavily put-skewed, with a Schaeffer's put/call open interest ratio of 1.50, which is in the 100th percentile of its annual range, suggesting that unwinding these bearish bets could sustain momentum [6]

Peloton stock soared during the pandemic but its share price has been downhill ever since. (Photo by ... More Michael Loccisano/Getty Images)Getty ImagesPeloton has launched an equipment and accessories resale marketplace called Peloton Repowered, as the company boss also slapped a ‘not for sale’ sign over the business.Speaking at a Bloomberg event today, CEO Peter Stern insisted that he had not been brought in to find a buyer for the company but instead is looking to capitalize on new and existing customer ...