Icons Of Impact: The CEO Making Lottery A Global Force For Impact

&l;em&g;&l;span&g;This Icon is on a mission to not just take one of the last remaining paper-based industries digital (the lottery) but turn it into an impact powerhouse. &l;/span&g;&l;/em&g;

&l;em&g;&l;span&g;First on his hit list? Ending extreme hunger &a;ndash; and he may have a shot at it. &l;/span&g;&l;/em&g;

&l;em&g;&l;span&g;Meet Tony DiMatteo, CEO of Lottery.com. The first time I met Tony we were in a garden at the Vatican. I convinced him to come join me for an impact investing forum (not a tough sell) after&a;nbsp;his work trip in Norway. It was over&a;nbsp;bucatini all&s;Amatriciana&a;nbsp;and green tea that I got to know him well and found myself moved by his style of leadership and genuine drive to do good in the world.&l;/span&g;&l;/em&g;

&l;em&g;&l;span&g;Fast forward a few months later and he joined us onstage at the Forbes Impact Summit (as a partner and sponsor) where he &l;a href=&q;https://2018diamondball.com/&q; target=&q;_blank&q;&g;launched a partnership&l;/a&g; with Rihanna&a;rsquo;s nonprofit, the &l;a href=&q;https://www.forbes.com/sites/elanagross/2018/07/24/how-rihannas-clara-lionel-foundation-is-changing-the-emergency-response-model/#133d672010f1&q;&g;Clara Lionel Foundation&l;/a&g;. &l;/span&g;&l;/em&g;

&l;em&g;&l;span&g;&a;nbsp;&l;/span&g;&l;/em&g;&l;em&g;&l;span&g;This is our most recent conversation together. &l;/span&g;&l;/em&g;

&l;strong&g;&l;span&g;Brendan Doherty:&l;/span&g;&l;/strong&g;&l;span&g; Tony it&a;rsquo;s great to see you again and really for our conversation. I&a;rsquo;d love to start somewhere near the beginning. Could you tell me a story from your younger life that influences you and your work today?&a;nbsp;&a;nbsp; &l;/span&g;

&l;strong&g;&l;span&g;Tony DiMatteo:&l;/span&g;&l;/strong&g;&l;span&g; Like most entrepreneurs, I&a;rsquo;ve failed at a lot of things. Of course, what&a;rsquo;s kept me going is that I&a;rsquo;ve managed to have a few base hits along the way. Those dramatic ups and downs are what have prepared me for the success we&a;rsquo;re having at Lottery.com.&a;nbsp; &l;/span&g;

&l;span&g;I started out life with no intention of ever being an entrepreneur, in fact I didn&a;rsquo;t even know what that word meant until I was about to graduate high school. After a very bleak and sobering conversation with my history teacher about &a;ldquo;going out into the real world after graduation&a;rdquo; I realized that model was broken. I didn&a;rsquo;t want to have a nine to five day, week after week, maybe going on vacation if I could afford it, trying to live within my means while also saving for retirement, and hoping to never have a financial disaster along the way. Is the real reward in life retirement at 65 after spending my entire youth working? Why do I need to wait 50 years to enjoy life? About half of Americans will outlive their retirement savings, and either have to go back into the workforce, or become dependent on others. I didn&a;rsquo;t like those odds. I knew I would never have the life I wanted &l;em&g;just&l;/em&g; working for someone else, and I never wanted to be dependent on anyone. I&a;rsquo;m a true believer that everyone can and should be an entrepreneur at heart.&l;/span&g;

&l;strong&g;&l;span&g;Doherty:&l;/span&g;&l;/strong&g;&l;span&g; I often talk about&a;nbsp;Teddy Roosevelt&s;s quote, that the credit always goes to the one in the arena. And that&a;rsquo;s often the entrepreneur. So what happened after that chat with your high school teacher?&l;/span&g;

&l;strong&g;&l;span&g;DiMatteo:&l;/span&g;&l;/strong&g;&l;span&g; I decided that day that I was willing to take advantage of any and all opportunities that came my way and that I&a;rsquo;d always swing for the fences, no matter how many times I struck out. I thought that even if it took me 30 years of striking out as an entrepreneur, if I learned from every experience, treated people fairly, and kept developing my network, eventually I&a;rsquo;d hit a home run and I&a;rsquo;d never have to worry about running out of money before I died. That&a;rsquo;s been my life&s;s thesis, and that&a;rsquo;s what I&a;rsquo;ve been trying to prove for twenty years. It&a;rsquo;s been painful at times along the way, but always betting on myself has lead me to where I am now.&a;nbsp;&a;nbsp; &l;/span&g;

&l;span&g;I&a;rsquo;ve been an employee, and of course there is merit to that. I learned a lot, honed some valuable skills, and developed meaningful relationships. And I don&a;rsquo;t treat my team like employees. In my mind they are all entrepreneurs like me, capable of nearly anything, and it&a;rsquo;s my obligation to encourage them to swing for the fences too, even if it means they move on to something else. The world needs more entrepreneurs.&a;nbsp; &l;/span&g;

&l;img class=&q;size-full wp-image-100&q; src=&q;http://blogs-images.forbes.com/bdoherty/files/2018/08/Tony-headshot.jpg?width=960&q; alt=&q;&q; data-height=&q;948&q; data-width=&q;948&q;&g; Tony DiMatteo, CEO, Lottery.com

&l;strong&g;&l;span&g;Doherty: &l;/span&g;&l;/strong&g;&l;span&g;Couldn&a;rsquo;t agree more. I&a;rsquo;m a fan of promoting up and out. Incredible talent always needs growth and challenge. Of course, I want them to have that in my company but sometimes it means backing someone as they pursue their next project. So for you, what drives you, why do you wake up every day to do what you do?&l;/span&g;

&l;strong&g;&l;span&g;DiMatteo:&l;/span&g;&l;/strong&g;&l;span&g; Every day I wake up knowing there is more to accomplish and more to become &a;ndash; I&a;rsquo;m intrinsically motivated. No matter what wins or losses I had yesterday, or how much I want to stay in bed, or just give up and fall flat on my face, today I commit to myself to being better and giving the day my best effort. I have a deep belief that everyone should try to live a life of perpetual advancement too. My co-founder Matt Clemenson and I are driven every day to help people and create a massive vehicle for that. Matt and I knew we had something special that would truly change the world, and he&a;rsquo;s brilliant and hungry to help everyone - that kind of devotion makes me wake up and push every single day.&l;/span&g;

&l;span&g;One of my favorite sayings is &a;ldquo;Don&a;rsquo;t believe the world owes you a living. The world owes you nothing; it was here first.&a;rdquo; So I only expect to get what I earn for myself. I actually believe that I owe the world my best work every day. It&a;rsquo;s my responsibility to give as much back to the world that I can.&a;nbsp; So when I have an opportunity to help someone, I take it as my responsibility to contribute in whatever way possible.&l;/span&g;

&l;strong&g;&l;span&g;Doherty: &l;/span&g;&l;/strong&g;&l;span&g;I watched your &l;a href=&q;https://www.youtube.com/watch?v=N9Tw0mMXJ00&a;amp;feature=youtu.be&q; target=&q;_blank&q;&g;Puerto Rico video&l;/a&g;, which was great. In it you speak about servant leadership. What does that mean to you? What&s;s hard about it?&l;/span&g;

&l;strong&g;&l;span&g;DiMatteo:&l;/span&g;&l;/strong&g;&l;span&g; Being a servant hearted leader to me means knowing that even as a leader you can&a;rsquo;t possibly know everything about your team, project, mission, or whatever it may be. I find the best way to lead is to listen to the people who are closest to the situation and understand what they need, and then give them the resources to succeed.&a;nbsp;&l;/span&g;

&l;img class=&q;size-full wp-image-102&q; src=&q;http://blogs-images.forbes.com/bdoherty/files/2018/08/Tony-PR.jpg?width=960&q; alt=&q;&q; data-height=&q;402&q; data-width=&q;948&q;&g; Kamil Rivera from Off Grid Relief bringing light and joy to a home in Puerto Rico before the Power to the Pepole concert.

&l;span&g;&a;nbsp;&l;/span&g;&l;strong&g;&l;span&g;Doherty:&l;/span&g;&l;/strong&g;&l;span&g; In my last Icons interview, I actually spoke about the Japanese management concept of &l;em&g;Genba&l;/em&g;, which essentially&l;/span&g; translates as &q;go to the source&q; or the root, which is a style of management you&a;rsquo;re describing. I like it. So take me back to Puerto Rico.

&l;strong&g;&l;span&g;DiMatteo: &l;/span&g;&l;/strong&g;&l;span&g;When we went to Puerto Rico we realized how much more work needed to be done after the hurricanes and that there were still thousands of people without power and basic necessities. We knew we could help raise awareness and funds for the island, but it would be absurd to think that as outsiders we would have the answers. &l;/span&g;&l;span&g;&a;nbsp;&l;/span&g;

&l;span&g;It&a;rsquo;s really not hard. In fact, I think it&a;rsquo;s much easier to be a leader that serves than a dictator or a boss. The two are actually diametrically opposed. A boss points at you and tells you exactly what you&a;rsquo;re going to do next, and a leader points to the mountain that needs climbing, sets the vision, and asks &a;ldquo;who&a;rsquo;s with me?&a;rdquo;&l;/span&g;

&l;img class=&q;size-full wp-image-101&q; src=&q;http://blogs-images.forbes.com/bdoherty/files/2018/08/Tony-stage.jpg?width=960&q; alt=&q;&q; data-height=&q;404&q; data-width=&q;948&q;&g; DiMatteo onstage at the Power to The People fundraising concert in Puerto Rico.

&l;strong&g;&l;span&g;Doherty: &l;/span&g;&l;/strong&g;&l;span&g;I&a;rsquo;ve got my crampons, I&a;rsquo;m in! So how would you describe the mission of Lottery.com then?&l;/span&g;

&l;strong&g;&l;span&g;DiMatteo:&l;/span&g;&l;/strong&g;&l;span&g; I think what we do and what we are, are two very different answers. What we do is let people play their local and national lotteries from their phone, helping advance one of the last remaining paper-based industries go digital. We are now expanding into global impact raffles and sweepstakes with a goal to directly raise billions of dollars for good causes. For instance, with the new tax reforms in the US, The Council on Foundations has estimated that &l;u&g;&l;a href=&q;https://www.cof.org/news/council-foundations-statement-passage-tax-cuts-and-jobs-act&q; target=&q;_blank&q;&g;$16 billion to $24 billion&l;/a&g;&l;/u&g; will be drained from charitable giving in the US every year. If people no longer have the tax deduction as an extra &a;ldquo;carrot&a;rdquo; to donate to charity, we have to give people a reason to give, which is what we do with our impact games. People can now donate to a cause and have a chance to win a large jackpot, or a VIP experience like meeting their favorite celebrity, or meeting their favorite athlete.&a;nbsp;&a;nbsp; &l;/span&g;

&l;strong&g;&l;span&g;Doherty:&l;/span&g;&l;/strong&g;&l;span&g; Given that, how would you describe your company?&l;/span&g;&l;span&g;&a;nbsp;&l;/span&g;

&l;strong&g;&l;span&g;DiMatteo:&l;/span&g;&l;/strong&g;&l;span&g; What we are is a social good company that does things that others think are impossible. From start to finish we created the entire fundraising concert in Puerto Rico in three weeks with a killer line-up and streamed it on the homepage of Reddit. We had never put on a concert before, we just thought it needed doing and we could do it. Right now we are working with some very large international charities to raise billions of dollars to end extreme hunger in the world.&l;em&g; If we are successful in that, for the first time in human history there will be no hungry people on the planet.&l;/em&g; They&a;rsquo;ll always be more work to be done but that is an achievable goal that really is within reach. I would bet that most people think it&a;rsquo;s impossible for a company like ours to even partner with these charities, let alone to tackle a goal like ending extreme hunger, but we always find a way to get impossible things done.&a;nbsp;&a;nbsp;&a;nbsp; &l;/span&g;

&l;strong&g;&l;span&g;Doherty: &l;/span&g;&l;/strong&g;&l;span&g;When I first learned about Lottery.com, I was moved by how you&s;re flipping not just the business model, but also its ability to impact our world positively. You mentioned some of it but tell me more about that? What are some myths about what you do?&l;/span&g;

&l;strong&g;&l;span&g;DiMatteo:&l;/span&g;&l;/strong&g;&l;span&g; There are a lot of myths out there about the lottery. The truth is that about 70% of all tickets in the US are bought by people with incomes greater than $75k, which is our target audience and really all lotteries benefit good causes.&l;/span&g;

&l;span&g;At the state level lottery proceeds usually go to fund education in the state that the ticket is sold.&a;nbsp;&a;nbsp; For instance, the Georgia Lottery has a program called HOPE, which has distributed more than $8 billion in college scholarships to more than 1.8 million students. With raffles and sweepstake games, we can now directly choose a beneficiary charity and create incredibly engaging content and games for their donor base. This raises more funds for them than they would with a traditional fundraising drive.&a;nbsp;&l;/span&g;

&l;img class=&q;size-full wp-image-106&q; src=&q;http://blogs-images.forbes.com/bdoherty/files/2018/08/Lottery-AKON.jpg?width=960&q; alt=&q;&q; data-height=&q;643&q; data-width=&q;948&q;&g; Akon, Ryan Scott, DiMatteo discussing the future of fundraising and the Akoin at Gabbcon 2018.

&l;strong&g;&l;span&g;Brendan: &l;/span&g;&l;/strong&g;&l;span&g;Switching gears because what&a;rsquo;s a hip conversation without using &a;ldquo;blockchain&a;rdquo; at least once &a;hellip; what does our future world look like at the intersection of blockchain, philanthropy, and impact? &l;/span&g;

&l;strong&g;&l;span&g;DiMatteo:&l;/span&g;&l;/strong&g;&l;span&g; When I talk about the future of fundraising I think of it in two meanings. The first is that I truly believe that gamifying charitable giving, as we are doing with our sweeps and raffles, is the future of impacting fundraising. It&a;rsquo;s just a better way to engage your donor base and expand it, and give them an amazing experience as well.&a;nbsp;&a;nbsp;&a;nbsp; &l;/span&g;

&l;span&g;The second meaning is raising funds through tokenized securities on the blockchain. We are going through our own STO (Security Token Offering) right now tied to our global impact raffles.&a;nbsp; For maybe the first time ever, any accredited investor can invest into an impact startup, project, or fund, and have liquidity in twelve months, whereas historically you&a;rsquo;d be looking at a five to seven year period before you&a;rsquo;d expect any ROI. This type of liquidity is a complete game changer in my opinion and will unlock billions of dollar of impact investment from investors all over the US.&l;/span&g;

&l;strong&g;&l;span&g;Doherty: &l;/span&g;&l;/strong&g;&l;span&g;That kind of liquidity could be huge. I&a;rsquo;m curious, at a time when &q;disruptor&q; is the king of buzzwords, I&a;rsquo;ve heard you say Lottery.com is not one. Tell me why?&a;nbsp; &l;/span&g;

&l;strong&g;&l;span&g;DiMatteo:&l;/span&g;&l;/strong&g;&l;span&g; We always say that we are not here to disrupt the lottery industry, we&a;rsquo;re just here to help advance it, and the same is true of impact. This isn&a;rsquo;t a zero-sum game, you don&a;rsquo;t have to lose for me to win. It&a;rsquo;s possible for everyone to win together, and that&a;rsquo;s what we always try to do and it&a;rsquo;s the lens that we see the world through. Whenever we tackle a new project we think about all of the potential stakeholders and think about how they can benefit from what we are doing. Then we seek to align our interest to theirs so that everyone in the ecosystem benefits from what we are doing.&a;nbsp;&l;/span&g;&l;span&g;&a;nbsp;&l;/span&g;

&l;strong&g;&l;span&g;Doherty: &l;/span&g;&l;/strong&g;&l;span&g;How has your life been different than you imagined?&l;/span&g;

&l;strong&g;&l;span&g;DiMatteo:&l;/span&g;&l;/strong&g;&l;span&g; I think for the first time my life is exactly as I always imagined. It took a really &l;em&g;really&l;/em&g; long time to get here, but I&a;rsquo;m lucky enough to be doing amazing things, with amazing people, while helping as many people as possible. &l;/span&g;

&l;img class=&q;size-full wp-image-103&q; src=&q;http://blogs-images.forbes.com/bdoherty/files/2018/08/Tony-Enzo.jpg?width=960&q; alt=&q;&q; data-height=&q;711&q; data-width=&q;948&q;&g; Tony and Enzo DiMatteo.

&l;span&g; &l;strong&g;Doherty: &l;/strong&g;How would you like to be remembered?&l;/span&g;

&l;strong&g;&l;span&g;DiMatteo:&l;/span&g;&l;/strong&g;&l;span&g; I try not to think too much about things like that and just do my best each day. I&a;rsquo;d hope that if I&a;rsquo;m remembered at all, I&a;rsquo;m thought of as someone that lead an advancing life and that I gave more than I took from the world. &l;/span&g;

&l;strong&g;&l;span&g;Doherty: &l;/span&g;&l;/strong&g;&l;span&g;So who do you consider an Icon of Impact?&l;/span&g;

&l;strong&g;&l;span&g;DiMatteo:&l;/span&g;&l;/strong&g;&l;span&g; Actually, someone I met through the Forbes Impact event was Petra Nemcova, who I think is doing really incredible things and is definitely an Icon of Impact. She survived the 2004 Tsunami in Thailand by holding on to a palm tree for eight hours before she was rescued. She then started a charity which is now All Hands and Hearts - Smart Response which has helped over one million people and built over 170 schools. They provide rapid emergency response when a natural disaster happens to help rebuild, and more importantly they commit to staying in affected area for years to help people not just recover but thrive. She&a;rsquo;s also one of the nicest people you&a;rsquo;ll ever meet.&l;/span&g;&l;span&g;&a;nbsp;&l;/span&g;

&l;strong&g;&l;span&g;Doherty:&l;/span&g;&l;/strong&g;&l;span&g; She is pretty spectacular and was a compelling presence on Forbes Impact stage, I&a;rsquo;ll be sure to tag her in this interview! Thanks again, Tony.&l;/span&g;

Cramer: How compounding can help you double your money in 7 years

Unless you're born with a silver spoon in your mouth, accruing wealth doesn't come easily, which is why CNBC's Jim Cramer is so passionate about helping investors find a viable financial strategy.

"Thanks to the magic of compounding, the earlier in your life you start investing in the market, the bigger your long-term gains can be," the "Mad Money" host said.

Cramer is confident that even if an investor does not have a high-paying job, as long as he saves a decent chunk of his paycheck and invests it wisely each year, he can grow his wealth and become financially independent, at the very least.

In fact, when the "Mad Money" host researched the S&P 500 going all the way back to 1928, the average annual return through the end of 2014 was about 10 percent, including dividends.

"Show me an asset class with a better average return. You can't do it! Stocks aren't just the best game in town, they are really the only game in town if your goal is to grow your wealth," Cramer said.

The 10 percent average return on the S&P 500 may not seem impressive at first, despite the fact that it is more than double what one can expect from a 30-year Treasury bond and much more than what a certificate of deposit from a bank pays.

However, if you understand the magic of compounding, the gain is impressive. For instance, if $100 is invested in the S&P 500 and it gains 10 percent in a year, that will generate $110, after another year it's $121 and after a third year it's $133.

The gains will continue to grow, because each year, money is made from the previous year's profits. With that 10 percent average annual return, an investor can double his money in about seven years, Cramer said.

"The magic of compounding works best the younger you are because that means you have more time for your money to grow," Cramer said.

For instance, if a 22-year-old is just entering the workforce, she has more than 40 years before she retires. She can invest $10,000 in an S&P index fund right now with the anticipation that the next 40 years will not be too different from the last 40 years.

In that case, if the average return remains at 10 percent, in 40 years that $10,000 investment will be worth more than $450,000. Making that money did not require any stock picking, trading or even research on individual companies.

"All you have to do after you initially save that money is let it sit on the sidelines, ideally in a 401(k) plan or an IRA so that you don't' have to pay capital gains or dividend taxes on your gains," Cramer said, with reference to Individual Retirement Accounts.

The same logic can be applied to those in different age groups, but the "Mad Money" host insists that it is best to start early to get the biggest bang for your buck.

WATCH: Cramer breaks down compounding show chapters Cramer: How compounding can help you double your money in 7 years    6:32 PM ET Fri, 22 Sept 2017 | 11:41

Questions for Cramer? Call Cramer: 1-800-743-CNBC Want to take a deep dive into Cramer's world? Hit him up! Mad Money Twitter - Jim Cramer Twitter - Facebook - Instagram - Vine Questions, comments, suggestions for the "Mad Money" website? madcap@cnbc.com

When to Cut and Run vs. When to Double Down

Underwater positions �� there is no topic that investors would rather avoid talking about.

But as I pointed out in a recent article on diversification, some positions are going to head in the opposite direction of where you want them to.

So the issue is more about when �� or IF �� you should close out any losing positions in your portfolio.

I generally go against the grain when it comes to this type of decision.

See, a lot of experts will say you should just sell a position when it reaches a particular percentage loss… the whole ��cut your losses short and let your winners run�� theory.

For more trading-oriented strategies, I think that can make a lot of sense.

It encourages you to be less emotional about your investments�� and the discipline automatically limits the amount of capital you can lose on any single trade.

But if you have a longer time horizon, or your goal is generating solid investment income, I��d tell you to reconsider creating arbitrary stop loss signals.

In fact, I have no problem sitting on a losing position because I have seen many come roaring back!

Here��s a recent example from one of my own personal portfolios.

On June 28th of last year, I purchase 428 shares of Supervalu, a grocery chain operator and food distribution company.

The stock was already very beaten down and trading at $22.45.

Unfortunately, it continued to head even lower and by October 20th it was at $14.90.

A lot of people would have simply sold by this point.

I actually bought another 500 shares.

I now had $17,058.92 invested in the stock�� no small amount of money.

So you can imagine how gut wrenching it was to see the shares go even a bit LOWER still!

But I was convinced Supervalu was still worth far more than the market price so I held firm.

Here��s a chart that shows the action with my buy points circled��

Then, a couple positive developments started happening, including a new activist investor establishing a big stake and pushing for changes…

The stock started rebounding into the $20s��

And then last Thursday, July 26th, United Natural Foods offered to buy the entire company for roughly $32.50 a share �� a 67% premium to the previous day��s closing price.

That��s the big spike you see right at the end of my chart.

End result?

I just booked a $12,740 profit in one year (actually much less on average, since more than half of my position was established when I doubled down in October).

This is hardly a fluke.

It��s actually the SECOND time I��ve seen this happen just with Supervalu.

The first time was back in 2012, when I recommended the stock for my Dad��s real-money $100,000 retirement portfolio�� the one I was sharing with tens of thousands of readers.

Just like this recent time, the grocer��s stock had already been punished pretty severely but that didn��t stop it from going MUCH lower after my Dad (and probably many readers) had bought in.

As you can see from this chart below, at one point the shares were actually down more than 60% from Dad��s original entry point in the $7 range.

Wow, talk about a gut-wrenching decline!

Once again, most investors would have certainly dumped at some point, taken a big loss, and moved on.

But nothing about my investment thesis had changed.

And ultimately, I WAS vindicated on Supervalu that time, too, because the company started turning things around like I predicted.

First, it reached an agreement to sell some of its chains �� including Albertsons, Acme, Shaw��s and Star Market �� to a consortium of investors led by Cerberus Capital Management.

Then, its results started improving and the business returned to profitability.

Just take a look at this second chart, which is the same one as above with all the subsequent action added in.

You can see how quickly the stock started bouncing back to �� and ultimately ABOVE �� the original recommendation point.

My Dad ended up booking a solid 30.8% total return on the position once it hit my short-term price target.

And anyone who bought in at lower prices as I continued to pound the table on this stock could have more than TRIPLED their initial investment.

I could keep giving you more examples beyond Supervalu but here��s the bottom line��

If you��re a long-term investor and the fundamental reasons for owning a given position haven��t changed, I believe it makes sense to continue holding … especially if you��re receiving dividends along the way.

Moreover, the better you understand those fundamental reasons for owning a stock, the more confident you��ll be in staying put while the market goes against you.

You may even consider adding more shares on serious weakness.

Because as my latest Supervalu investment just proved, it��s entirely possible to see a 67% jump in one single day �� rewarding anyone with guts, patience and conviction.

To a richer life,

Nilus Mattive
Editor, Rich Life Roadmap

Top Heal Care Stocks To Own For 2019

tags:SGMA,SUNS,AVGO,CBD,

Wall Street analysts expect Obalon Therapeutics Inc (NASDAQ:OBLN) to announce earnings of ($0.50) per share for the current fiscal quarter, Zacks Investment Research reports. Two analysts have issued estimates for Obalon Therapeutics’ earnings, with the highest EPS estimate coming in at ($0.44) and the lowest estimate coming in at ($0.56). Obalon Therapeutics reported earnings per share of ($0.46) during the same quarter last year, which suggests a negative year over year growth rate of 8.7%. The company is scheduled to report its next earnings report on Wednesday, August 1st.

On average, analysts expect that Obalon Therapeutics will report full year earnings of ($2.19) per share for the current financial year, with EPS estimates ranging from ($2.29) to ($2.09). For the next fiscal year, analysts anticipate that the firm will report earnings of ($2.03) per share, with EPS estimates ranging from ($2.06) to ($1.99). Zacks Investment Research’s EPS averages are an average based on a survey of sell-side analysts that follow Obalon Therapeutics.

Top Heal Care Stocks To Own For 2019: SigmaTron International, Inc.(SGMA)

Advisors' Opinion:

• [By Max Byerly]

  Media coverage about SigmaTron International (NASDAQ:SGMA) has been trending somewhat positive this week, according to Accern. Accern rates the sentiment of news coverage by analyzing more than 20 million news and blog sources. Accern ranks coverage of publicly-traded companies on a scale of negative one to positive one, with scores nearest to one being the most favorable. SigmaTron International earned a coverage optimism score of 0.25 on Accern’s scale. Accern also gave news coverage about the technology company an impact score of 47.5987310031013 out of 100, meaning that recent news coverage is somewhat unlikely to have an impact on the company’s share price in the near term.

Top Heal Care Stocks To Own For 2019: Solar Senior Capital Ltd.(SUNS)

Advisors' Opinion:

• [By Joseph Griffin]

  Hercules Technology Growth Capital (NYSE: HTGC) and Solar Senior Capital (NASDAQ:SUNS) are both small-cap finance companies, but which is the superior business? We will compare the two businesses based on the strength of their risk, profitability, dividends, institutional ownership, valuation, analyst recommendations and earnings.

• [By Max Byerly]

  Solar Senior Capital Ltd (NASDAQ:SUNS) announced a monthly dividend on Thursday, June 7th, Wall Street Journal reports. Investors of record on Thursday, June 21st will be paid a dividend of 0.1175 per share by the asset manager on Tuesday, July 3rd. This represents a $1.41 dividend on an annualized basis and a yield of 8.46%. The ex-dividend date of this dividend is Wednesday, June 20th. This is a boost from Solar Senior Capital’s previous monthly dividend of $0.12.

Top Heal Care Stocks To Own For 2019: Avago Technologies Limited(AVGO)

Advisors' Opinion:

• [By Ethan Ryder]

  Broadcom (NASDAQ:AVGO) had its price target trimmed by Bank of America from $300.00 to $285.00 in a report released on Tuesday morning. The firm currently has a buy rating on the semiconductor manufacturer’s stock.

• [By Logan Wallace]

  Traders sold shares of Broadcom Inc (NASDAQ:AVGO) on strength during trading hours on Wednesday. $86.14 million flowed into the stock on the tick-up and $164.35 million flowed out of the stock on the tick-down, for a money net flow of $78.21 million out of the stock. Of all equities tracked, Broadcom had the 13th highest net out-flow for the day. Broadcom traded up $2.07 for the day and closed at $240.56

• [By Chris Dier-Scalise]

  Strong balance sheets and consistent demand for discrete processors and GPUs across the board has kept the likes of Micron and semi-behemoth NVIDIA trucking past the rest of the market, both posting top and bottom line revenue results for seven consecutive quarters. Other companies like Intel and Qualcomm, whose processor sales rely mainly on the sales figures of PCs and devices they’re included in, have also surged ahead as market leaders. Intel Corporation (NASDAQ: INTC) posted record annual revenue over the course of  2017 and both Intel and Qualcomm remain leading candidates in the M&A game despite the block of latter’s deal with Broadcom Ltd. (NASDAQ: AVGO).

• [By ]

  Though not without blemishes, Google's report is (in the views of this observer) fairly encouraging overall, given that shares went into earnings trading at reasonable multiples for a company with Google's growth rates and competitive positioning in several highly valuable markets. Here are key takeaways from the Q1 report and subsequent earnings call:

  Google emphatically put to rest any concerns that its mobile search and YouTube ad momentum was about to meaningfully slow. Paid ad clicks on Google's own sites and apps (they include video ad views that technically aren't "clicks") rose 59% annually, outpacing Q4's 48% growth. This more than offset a 19% drop in cost per click (slightly worse than Q4's 16% drop), the result of mobile search and YouTube ad prices being lower on average than PC search ad prices. CFO Ruth Porat noted mobile search was once more the largest driver behind Google's ad growth, and both Porat and CEO Sundar Pichai sounded upbeat about search ad trends. Though there have been worries about Amazon.com's (AMZN) impact on Google Search, both due to the growth of Amazon's ad business and the tendency of Amazon shoppers to go straight to its site/apps, Google Search remains a one-of-a-kind online marketing vehicle -- including for many businesses that are either competing against Amazon or operate in an industry that Amazon isn't involved in. And like Amazon, Facebook (FB)  and others, Google is benefiting from the steady shift of advertising dollars towards online channels. TAC -- the ad revenue-sharing payments Google makes to the likes of phone OEMs, carriers and publishers -- remains a real headwind. For the second quarter in a row, it equaled 24% of Google's ad revenue versus 22% a year earlier. Moreover, Porat forecast TAC's share of ad revenue on Google's own sites and apps (13% in Q1) will continue rising, albeit at a slower pace starting in Q2. A revamped search ad revenue-sharing deal with Apple (AAPL)  is believ

Top Heal Care Stocks To Own For 2019: Companhia Brasileira de Distribuicao(CBD)

Advisors' Opinion:

• [By Logan Wallace]

  Companhia Brasileira de Distribuicao (NYSE: CBD) and Alimentation Couche-Tard Inc Class B (OTCMKTS:ANCUF) are both retail/wholesale companies, but which is the superior business? We will contrast the two companies based on the strength of their dividends, risk, valuation, institutional ownership, earnings, analyst recommendations and profitability.

• [By Lisa Levin] Gainers TransEnterix, Inc. (NYSE: TRXC) rose 28.8 percent to $4.03 in pre-market trading after the company disclosed that it has received the FDA clearance for expanded indications for its Senhance Surgical System. Global Eagle Entertainment Inc. (NASDAQ: ENT) rose 15.6 percent to $2.30 in pre-market trading. Companhia Brasileira de Distribuição (NYSE: CBD) rose 13.2 percent to $24.20 in pre-market trading. ZTO Express (Cayman) Inc. (NYSE: ZTO) rose 12.2 percent to $21.65 in pre-market trading. Alibaba and Cainiao agreed to make strategic investment in ZTO Express of $1.38 billion. DHI Group, Inc. (NYSE: DHX) rose 10.8 percent to $2.05 in pre-market trading. Momo Inc. (NASDAQ: MOMO) shares rose 9.6 percent to $42.68 in pre-market trading after the company reported better-than-expected results for its first quarter and issued strong sales forecast for the second quarter. Xenon Pharmaceuticals Inc. (NASDAQ: XENE) shares rose 9.1 percent to $6.00 in pre-market trading. Universal Display Corporation (NASDAQ: OLED) rose 8.4 percent to $108.00 in pre-market trading. Jupai Holdings Limited (NYSE: JP) shares rose 7 percent to $24.50 in pre-market trading after reporting Q1 results. Net 1 UEPS Technologies, Inc. (NASDAQ: UEPS) rose 5.9 percent to $10.61 in pre-market trading. Frontline Ltd. (NYSE: FRO) rose 5.9 percent to $5.04 in pre-market trading. Evogene Ltd. (NASDAQ: EVGN) rose 5.5 percent to $3.27 in pre-market trading after reporting Q1 results. Sears Holdings Corporation (NASDAQ: SHLD) rose 5.5 percent to $3.68 in pre-market trading after gaining 5.44 percent on Friday. Kitov Pharma Ltd (NASDAQ: KTOV) shares rose 5.4 percent to $2.16 in pre-market trading.

  Find out what's going on in today's market and bring any questions you have to Benzinga's PreMarket Prep.

iQiyi Stock Has Way More Problems Than Protectionism and a Trade War

iQIYI, Inc (NASDAQ:IQ) benefits from the same protection from foreign competition that other Chinese companies enjoy and for now that’s helping IQ stock a bit.

Much like the protection Baidu (NASDAQ:BIDU) enjoys from Alphabet (NASDAQ:GOOGL, NASDAQ:GOOG) or that Alibaba (NYSE:BABA) or JD.Com (NASDAQ:JD) have from the Amazon (NASDAQ:AMZN) threat, IQ stock benefits from not having to compete against Netflix (NASDAQ:NFLX).

However, with the looming U.S. trade war, the stock lost about 10% of its value since June 20, bottoming out at a little more than $29 before regaining a bit. It now sits at about $34. While I do not think a trade war poses a problem for IQ stock, the financials of this company should give investors pause.

IQ Stock Still Is Appealing

Investors can easily understand the appeal of IQ. iQiyi has become the Chinese company most closely resembling Netflix. Many investors lament the fact that they missed the meteoric rise of NFLX stock and see IQ as a second chance.

NFLX has reached a market cap of about $177 billion. In contrast, the market cap for IQ stands at around $21 billion. Prospective iQiyi investors will also like the fact that the company brings in more revenue per quarter than Netflix.

It also enjoys a larger overall subscriber base even though it only operates in one country. Netflix remains ahead of iQiyi with paid subscribers (60 million for IQ vs. 125 million for NFLX).

iQiyi had just five million paid subscribers in 2015, so this gap continues to close. When the company counts those who use the free ad-sponsored platform, the number of users tops 400 million.

Financial Statements and iQiyi

However, the higher growth numbers mask some troubling financials. Despite higher revenues, the company pays heavily to bring in that cash. Revenues only exceeded the cost of revenue by 29 million yuan ($4.37 million) in 1Q 2018.

When operating expenses are added, its reported an operating loss of over 1 billion yuan ($159.9 million). Netflix enjoyed an operating profit of $447 million in the same quarter.

The balance sheet also indicates funding issues. IQ stock’s current ratio (current assets divided by current liabilities) stands below 0.5. A current ratio below one calls into question a company’s ability to meet its current expenses.

Accounts payable alone amounts to over 8.73 billion yuan ($1.31 billion). Current assets stand at 6.05 billion yuan ($910.3 million). Hence, IQiyi lacks the resources to meet this expense, let alone its other current liabilities.

Also, this company holds 23.84 billion yuan ($3.59 billion) in what it describes as “other long-term liabilities.” The cash flow statement confirms this. iQiyi raised 6.07 billion yuan ($914.09 million) with “other financing activities” listed separately from debt issued. This leads to a stockholders’ equity of -14.36 billion yuan (-$2.16 billion).

Strategically, IQ Isn’t “Netflix of China”

Although I have disparaged NFLX stock in the past, I based that criticism on valuation. Netflix supports a solid balance sheet and has become one of the most visionary companies in tech. IQ faces more serious issue than a high price-to-earnings (PE) ratio or its lack of a PE. The company likely left billions in yuan on the table by holding on to ad-sponsored customers who bring in lower revenues.

Moreover, analysts forecast losses for iQiyi through at least 2020. This means it will likely resort to the same undisclosed funding sources that have supported IQ in the past. Many investors will try to get that second chance at the next Netflix by buying IQ stock. However, they will buy a company that lacks the strategic insight and financial stability of its non-China counterpart.

The Bottom Line on iQiyi

Investors should question the financials behind IQ before investing. Without a doubt, many will like the subscriber growth rates and higher revenues that come with iQiyi. Still, investors need to remain aware of its troubled financial statements.

The inability to cover immediate expenses as well as its mysterious funding sources should create concern.

Admittedly, just because iQiyi’s funding sources remain unknown does not mean it engages in nefarious financial activities. However, investors can also buy into other up-and-coming companies who do not bear this financial risk. Given the options available, I see no reason to risk precious capital on IQ stock.

As of this writing, Will Healy did not hold a position in any of the aforementioned stocks. You can follow Will on Twitter at @HealyWriting.

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Bourgeon Capital Management LLC Cuts Position in FireEye Inc (FEYE)

Bourgeon Capital Management LLC decreased its holdings in FireEye Inc (NASDAQ:FEYE) by 30.0% during the 2nd quarter, according to its most recent disclosure with the SEC. The firm owned 30,250 shares of the information security company’s stock after selling 12,950 shares during the period. Bourgeon Capital Management LLC’s holdings in FireEye were worth $466,000 at the end of the most recent reporting period.

Other hedge funds and other institutional investors have also bought and sold shares of the company. Point72 Asia Hong Kong Ltd raised its holdings in FireEye by 946.5% in the first quarter. Point72 Asia Hong Kong Ltd now owns 7,336 shares of the information security company’s stock valued at $124,000 after buying an additional 6,635 shares during the period. Asset Management One Co. Ltd. grew its position in FireEye by 56.9% in the first quarter. Asset Management One Co. Ltd. now owns 7,800 shares of the information security company’s stock valued at $132,000 after acquiring an additional 2,830 shares in the last quarter. Natixis Advisors L.P. acquired a new stake in FireEye in the first quarter valued at approximately $201,000. Thompson Davis & CO. Inc. acquired a new stake in FireEye in the first quarter valued at approximately $229,000. Finally, Seven Eight Capital LP acquired a new stake in FireEye in the first quarter valued at approximately $236,000. Hedge funds and other institutional investors own 65.26% of the company’s stock.

Get FireEye alerts:

Several brokerages have issued reports on FEYE. ValuEngine raised shares of FireEye from a “sell” rating to a “hold” rating in a research report on Wednesday, May 2nd. BidaskClub raised shares of FireEye from a “hold” rating to a “buy” rating in a research report on Friday, May 4th. Wedbush reaffirmed a “neutral” rating and issued a $15.00 price objective (down previously from $16.00) on shares of FireEye in a research report on Thursday, May 3rd. BMO Capital Markets increased their price objective on shares of FireEye from $17.00 to $18.00 and gave the company a “market perform” rating in a research report on Thursday, May 3rd. Finally, Citigroup increased their price objective on shares of FireEye from $15.00 to $18.00 and gave the company a “neutral” rating in a research report on Friday, May 4th. Thirteen analysts have rated the stock with a hold rating, thirteen have assigned a buy rating and one has issued a strong buy rating to the company. The company presently has an average rating of “Buy” and a consensus target price of $19.54.

Shares of FEYE stock traded up $0.02 during mid-day trading on Thursday, reaching $17.01. 95,323 shares of the company were exchanged, compared to its average volume of 3,086,759. FireEye Inc has a fifty-two week low of $13.40 and a fifty-two week high of $19.36. The company has a current ratio of 1.71, a quick ratio of 1.70 and a debt-to-equity ratio of 1.27. The company has a market capitalization of $3.25 billion, a P/E ratio of -15.64 and a beta of 0.36.

FireEye (NASDAQ:FEYE) last released its quarterly earnings results on Wednesday, May 2nd. The information security company reported ($0.04) earnings per share for the quarter, hitting analysts’ consensus estimates of ($0.04). FireEye had a negative net margin of 37.68% and a negative return on equity of 25.25%. The business had revenue of $199.07 million during the quarter, compared to the consensus estimate of $193.91 million. During the same quarter last year, the company earned ($0.05) earnings per share. The business’s quarterly revenue was up 7.7% compared to the same quarter last year. research analysts predict that FireEye Inc will post -0.81 EPS for the current year.

In other FireEye news, EVP Alexa King sold 3,190 shares of FireEye stock in a transaction on Wednesday, May 16th. The shares were sold at an average price of $17.35, for a total value of $55,346.50. Following the completion of the transaction, the executive vice president now owns 450,725 shares of the company’s stock, valued at $7,820,078.75. The transaction was disclosed in a filing with the SEC, which is accessible through the SEC website. Also, CEO Kevin R. Mandia sold 15,701 shares of FireEye stock in a transaction on Monday, June 18th. The stock was sold at an average price of $16.95, for a total transaction of $266,131.95. Following the completion of the transaction, the chief executive officer now directly owns 3,103,942 shares of the company’s stock, valued at approximately $52,611,816.90. The disclosure for this sale can be found here. Insiders have sold 19,824 shares of company stock valued at $337,666 in the last three months. Corporate insiders own 2.40% of the company’s stock.

FireEye Profile

FireEye, Inc provides cybersecurity solutions that allow organizations to prepare for, prevent, respond to, and remediate cyber-attacks. It offers vector-specific appliance, virtual appliance, and cloud-based solutions to detect and block known and unknown cyber-attacks. The company provides threat detection and prevention solutions, including network security products, email security solutions, and endpoint security solutions.

See Also: Short Selling – Explanation For Shorting Stocks

Want to see what other hedge funds are holding FEYE? Visit HoldingsChannel.com to get the latest 13F filings and insider trades for FireEye Inc (NASDAQ:FEYE).

Citigroup Earnings: A Mix of Good News and Disappointments

On a busy day for bank earnings, Citigroup (NYSE:C) was one of three big U.S. banks to report results, and despite an earnings beat, the report wasn't great. While the bank's efficiency was strong and loans and deposits grew, the bank missed expectations in several key areas, including trading revenue. Here's a rundown of the numbers and how Citigroup's earnings compare with the other big banks.

The headline numbers

Just looking at the headline numbers shows that Citigroup's second quarter was a mixed bag. The bank earned $1.63 per share for the quarter, which handily beat the $1.56 that analysts had been looking for. Furthermore, this represents impressive 27% year-over-year earnings growth.

Citigroup's earnings weren't great, but they weren't too bad, either. Image source: Getty Images.

To be fair, some of this was a result of tax reform, as the lower corporate tax rate in the Tax Cuts and Jobs Act lowered the bank's effective tax rate to 24% from 32% a year ago.

However, revenue came it a bit light. Although the bank's $18.47 billion in revenue is 2% higher than a year ago, it missed expectations by about $43 million.

Beyond the headlines: The good

To be clear, there were certainly some positive highlights in Citigroup's earnings report. Here are a few of the most important ones for investors:

Outstanding share count declined by 8% year over year thanks to aggressive buybacks. In the consumer areas of the business, Citigroup grew nicely. Loans and deposits both grew by 4% from the same quarter a year ago. Net interest margin increased by six basis points (0.06%) over the first quarter to 2.70%. Its efficiency ratio of 58% is among the best of the big four, and shows the bank is doing a solid job of controlling expenses. As we learned a couple of weeks ago, Citigroup's dividend will be increasing to $0.45 per share beginning in the third quarter, a 41% increase from the previous level. Some key misses

On the other hand, there was some disappointing news as well.

Citigroup's deposits of $996.7 billion, while representing growth, were less than the roughly $1.01 trillion analysts had been expecting. Corporate lending revenue fell by 20% year over year. Return on equity of 9.2% makes it the only one of the big four banks that is short of the 10% industry benchmark. It's also down from 9.7% during the first quarter. The bank's 0.94% return on assets also falls short of the industry standard. Trading was a big disappointment. After fellow big bank JPMorgan Chase (NYSE: JPM) reported a big trading beat earlier in the morning, Citigroup's trading revenue missed on both the fixed-income side ($3.08 billion versus $3.11 billion expected) and the equities side ($864 million versus $1.1 billion). Not the best of the early bank earnings

Three of the big four U.S. banks reported earnings on Friday morning -- Citigroup, JPMorgan Chase, and Wells Fargo (NYSE: WFC). JPMorgan Chase posted an excellent second quarter, including the excellent trading revenue performance. Wells Fargo, on the other hand, was largely a disappointment as the bank's scandal-plagued past few years are clearly still weighing on its results.

Citigroup falls in the middle of the three. As I discussed, there was certainly some good news, but there were also some key disappointments.

Seven Ways To Address The Diversity Problem In Finance

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&l;div&g;

&l;img class=&q;dam-image shutterstock size-large wp-image-1050022031&q; src=&q;https://specials-images.forbesimg.com/dam/imageserve/1050022031/960x0.jpg?fit=scale&q; data-height=&q;640&q; data-width=&q;960&q;&g; Shutterstock

The finance industry is struggling with diversity. This concern has caught the attention of many in the field, and they agree that this is a problem that warrants immediate action. Diversity will be the key to making even greater strides in finance.&l;/div&g;

We asked members of the&a;nbsp;&l;a href=&q;http://forbesfinancecouncil.com/&q; target=&q;_blank&q; rel=&q;noopener noreferrer&q; target=&q;_blank&q;&g;Forbes Finance Council&l;/a&g;&a;nbsp;how to best address this problem. The answers all pointed to not just having a more diverse work pool but also actively choosing diversity and inclusion to change the trends in the finance industry.&l;b&g;

&l;/b&g;

&l;/div&g;

&l;div class=&q;gmail_default&q;&g;

&l;img class=&q;size-large wp-image-3396&q; src=&q;http://blogs-images.forbes.com/forbesfinancecouncil/files/2018/07/Seven-Ways-To-Address-The-Diversity-Problem-In-Finance-1200x620.jpg?width=960&q; alt=&q;&q; data-height=&q;620&q; data-width=&q;1200&q;&g;&l;em&g;Members share their top tips for promoting diversity.&l;/em&g;

&l;b&g;1. Seek out different perspectives.&l;/b&g;&l;span&g;&a;nbsp;&l;/span&g;

Finance is one of the slowest industries to evolve. This is at least partially due to the lack of diversity. By proactively seeking out underrepresented groups, finance leaders will achieve two different objectives: doing the right thing and bringing valuable insight that likely comes at a challenge from a completely new angle.&a;nbsp; -&l;span&g;&a;nbsp;&l;/span&g;&l;a href=&q;https://www.linkedin.com/in/drew-cook-92804411/&q; target=&q;_blank&q; rel=&q;noopener noreferrer&q; target=&q;_blank&q;&g;Drew Cook&l;/a&g;,&l;span&g;&a;nbsp;&l;/span&g;&l;a href=&q;http://www.wearpact.com/&q; target=&q;_blank&q; rel=&q;noopener noreferrer&q; target=&q;_blank&q;&g;Pact Apparel&l;/a&g;&l;span&g;&a;nbsp;&l;/span&g;&l;b&g;

&l;/b&g;

&l;/div&g;

&l;div class=&q;gmail_default&q;&g;

&l;b&g;&l;span class=&q;il&q;&g;2&l;/span&g;. Work as a united front.&l;span&g;&a;nbsp;&l;/span&g;&l;/b&g;

Across the industry, we need to agree that there&a;rsquo;s a lack of diversity and that diversity matters. Then, as a united front, we can begin the important work of hiring and investing in a more diverse group of people. As companies in our industry that invest in diversity inevitably succeed, other companies will quickly see the value and do the same until the past cycle of homogeneity is broken. -&l;span&g;&a;nbsp;&l;/span&g;&l;a href=&q;https://twitter.com/QuickBridgeOC&q; target=&q;_blank&q; rel=&q;noopener noreferrer&q; target=&q;_blank&q;&g;Ben Gold&l;/a&g;,&l;span&g;&a;nbsp;&l;/span&g;&l;a href=&q;http://quickbridge.com/&q; target=&q;_blank&q; rel=&q;noopener noreferrer&q; target=&q;_blank&q;&g;QuickBridge Funding&l;/a&g;&l;span&g;&a;nbsp;&l;/span&g;

&l;!--nextpage--&g;

&l;/div&g;

&l;div class=&q;gmail_default&q;&g;&l;b&g;3. Invest in more than hiring practices.&l;/b&g;&l;span&g;&a;nbsp;&l;/span&g;Diversity in the finance industry can&a;rsquo;t be improved through hiring practices alone. But the new perspectives a diverse workforce brings can bestow real benefits to an industry experiencing so much disruption. This is why programs like&a;nbsp;&l;a href=&q;http://www.girlswhoinvest.org/&q; target=&q;_blank&q; rel=&q;noopener noreferrer&q; target=&q;_blank&q;&g;Girls Who Invest&l;/a&g;&a;nbsp;are essential. GWI aims to create a pipeline of talented, motivated young women dedicated to success in finance through education and mentorship. -&l;span&g;&a;nbsp;&l;/span&g;&l;a href=&q;https://twitter.com/iwrixen?lang=en&q; target=&q;_blank&q; rel=&q;noopener noreferrer&q; target=&q;_blank&q;&g;Ismael Wrixen&l;/a&g;,&l;span&g;&a;nbsp;&l;/span&g;&l;a href=&q;https://feinternational.com/&q; target=&q;_blank&q; rel=&q;noopener noreferrer&q; target=&q;_blank&q;&g;FE International&l;/a&g;&l;span&g;&a;nbsp;&l;/span&g;&l;/div&g;

&l;div class=&q;gmail_default&q;&g;

&l;b&g;4. Seek out diversity.&l;/b&g;&l;span&g;&a;nbsp;&l;/span&g;

Study after study shows the positive impacts of diversity and inclusion on the income statements of companies. We see public company research with women board members, global studies about increased performance in teams, and increases in creativity and innovation when teams are diverse versus homogenous. The key term here -- inclusion -- means having a truly collaborative culture where people with diverse backgrounds are invited and encouraged to participate.&a;nbsp; -&l;span&g;&a;nbsp;&l;/span&g;&l;a href=&q;https://twitter.com/tomhood&q; target=&q;_blank&q; rel=&q;noopener noreferrer&q; target=&q;_blank&q;&g;Tom Hood&l;/a&g;,&l;span&g;&a;nbsp;&l;/span&g;&l;a href=&q;http://www.blionline.org/&q; target=&q;_blank&q; rel=&q;noopener noreferrer&q; target=&q;_blank&q;&g;Business Learning Institute / Maryland Association of CPAs&l;/a&g;&l;span&g;&a;nbsp;&l;/span&g;&l;b&g;

&l;/b&g;

&l;/div&g;

&l;div class=&q;gmail_default&q;&g;

&l;b&g;5. Be more approachable to the general public.&l;/b&g;&l;span&g;&a;nbsp;&l;/span&g;

By engaging with the twenty-first century through social media outlets, it is much easier to engage with your audience&a;nbsp;in a variety of demographics with the right message. Try to use more educational&a;nbsp;information to empower consumers from all walks of life.&a;nbsp;It can open up horizons in the finance field for people who may not have considered such otherwise. -&l;span&g;&a;nbsp;&l;/span&g;&l;a href=&q;https://www.linkedin.com/in/smibroker&q; target=&q;_blank&q; rel=&q;noopener noreferrer&q; target=&q;_blank&q;&g;Marcus Arkan&l;/a&g;,&l;span&g;&a;nbsp;&l;/span&g;&l;a href=&q;http://www.syndicatemortgages.com/&q; target=&q;_blank&q; rel=&q;noopener noreferrer&q; target=&q;_blank&q;&g;Syndicate Mortgages&l;/a&g;&l;span&g;&a;nbsp;&l;/span&g;&l;b&g;

&l;/b&g;

&l;div style=&q;padding: 20px 0pt;margin: 20px 0pt;border-bottom: 1px solid #DDDDDD;border-top: 1px solid #DDDDDD&q;&g;&l;a href=&q;http://www.forbesfinancecouncil.com/qualify/?source=forbes-text&q; target=&q;_blank&q;&g;Forbes Finance Council&l;/a&g; is an invitation-only organization for executives in successful accounting, financial planning and wealth management firms. &l;em&g;&l;a href=&q;http://www.forbesfinancecouncil.com/qualify/?source=forbes-text&q; target=&q;_blank&q;&g;Do I qualify?&l;/a&g;&l;/em&g;&l;/div&g;

&l;/div&g;

&l;div class=&q;gmail_default&q;&g;&l;b&g;6. Prioritize diversity and inclusivity.&l;/b&g;&l;span&g;&a;nbsp;&l;/span&g;Many of us in the industry are working to diversify our workforces and leadership teams. One thing that we are learning from other industries is that, beyond diversity, inclusivity is key. Hiring is important, but it&a;rsquo;s not enough.&a;nbsp;It&a;rsquo;s critical for leaders to create a culture of inclusion and opportunity where every team member&s;s voice is heard so they, and the companies they work for, can achieve their potential. -&l;span&g;&a;nbsp;&l;/span&g;&l;a href=&q;https://twitter.com/JayShah_PC&q; target=&q;_blank&q; rel=&q;noopener noreferrer&q; target=&q;_blank&q;&g;Jay Shah&l;/a&g;,&l;span&g;&a;nbsp;&l;/span&g;&l;a href=&q;http://www.personalcapital.com/&q; target=&q;_blank&q; rel=&q;noopener noreferrer&q; target=&q;_blank&q;&g;Personal Capital&l;/a&g;&l;span&g;&a;nbsp;&l;/span&g;&l;b&g;

&l;/b&g;&l;/div&g;

&l;div class=&q;gmail_default&q;&g;

&l;b&g;7. Choose inclusion.&l;/b&g;&l;span&g;&a;nbsp;&l;/span&g;

Senior leadership within the financial industry has to be genuine in their acceptance of workflows and tactical styles that are not typical of their industry. Leadership must be open to understanding the cultural factors that impede their ability to foster a diverse workforce. The end result can be strong and resilient companies that form through diverse thought and purposeful inclusiveness. -&l;span&g;&a;nbsp;&l;/span&g;&l;a href=&q;https://twitter.com/mdvasquez&q; target=&q;_blank&q; rel=&q;noopener noreferrer&q; target=&q;_blank&q;&g;Miguel Vasquez&l;/a&g;,&l;span&g;&a;nbsp;&l;/span&g;&l;a href=&q;http://financialfitnessgroup.com/&q; target=&q;_blank&q; rel=&q;noopener noreferrer&q; target=&q;_blank&q;&g;Financial Fitness Group&l;/a&g;&l;span&g;&a;nbsp;&l;/span&g;

&l;/div&g;

AMC Entertainment (AMC) Upgraded at Wedbush

Wedbush upgraded shares of AMC Entertainment (NYSE:AMC) to a buy rating in a research note released on Tuesday morning. The brokerage currently has $25.00 target price on the stock. Wedbush also issued estimates for AMC Entertainment’s FY2018 earnings at $0.17 EPS, Q4 2019 earnings at $0.51 EPS and FY2019 earnings at $0.66 EPS.

A number of other research firms also recently weighed in on AMC. MKM Partners upped their price target on AMC Entertainment from $20.00 to $23.00 and gave the stock a buy rating in a research report on Tuesday, April 17th. B. Riley upped their price target on AMC Entertainment to $27.50 and gave the stock a buy rating in a research report on Tuesday, May 8th. Zacks Investment Research downgraded AMC Entertainment from a hold rating to a sell rating in a report on Tuesday, May 8th. ValuEngine raised AMC Entertainment from a strong sell rating to a sell rating in a report on Thursday, June 21st. Finally, Benchmark raised AMC Entertainment from a hold rating to a buy rating and set a $20.00 price objective for the company in a report on Thursday, June 21st. Two investment analysts have rated the stock with a sell rating, three have issued a hold rating and ten have issued a buy rating to the company. The company has an average rating of Buy and a consensus target price of $21.42.

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AMC Entertainment opened at $16.80 on Tuesday, Marketbeat Ratings reports. AMC Entertainment has a twelve month low of $10.80 and a twelve month high of $22.40. The company has a debt-to-equity ratio of 2.31, a current ratio of 0.60 and a quick ratio of 0.60. The company has a market cap of $2.03 billion, a price-to-earnings ratio of -18.88, a PEG ratio of 10.57 and a beta of 0.76.

AMC Entertainment (NYSE:AMC) last released its quarterly earnings results on Monday, May 7th. The company reported $0.14 earnings per share for the quarter, topping analysts’ consensus estimates of $0.02 by $0.12. AMC Entertainment had a negative return on equity of 7.13% and a negative net margin of 9.22%. The firm had revenue of $1.38 billion during the quarter, compared to the consensus estimate of $1.35 billion. During the same quarter in the prior year, the firm posted $0.07 EPS. The business’s revenue was up 8.0% on a year-over-year basis. sell-side analysts forecast that AMC Entertainment will post 0.15 earnings per share for the current fiscal year.

The firm also recently declared a quarterly dividend, which was paid on Monday, June 25th. Investors of record on Monday, June 11th were paid a $0.20 dividend. This represents a $0.80 dividend on an annualized basis and a yield of 4.76%. The ex-dividend date of this dividend was Friday, June 8th. AMC Entertainment’s dividend payout ratio (DPR) is presently -89.89%.

In related news, SVP Carla C. Sanders sold 6,000 shares of the stock in a transaction on Friday, June 1st. The stock was sold at an average price of $14.76, for a total value of $88,560.00. Following the sale, the senior vice president now owns 15,992 shares in the company, valued at approximately $236,041.92. The transaction was disclosed in a document filed with the SEC, which can be accessed through this hyperlink. Also, CMO Stephen A. Colanero sold 5,364 shares of the stock in a transaction on Monday, June 18th. The shares were sold at an average price of $15.95, for a total value of $85,555.80. Following the completion of the sale, the chief marketing officer now owns 69,536 shares in the company, valued at approximately $1,109,099.20. The disclosure for this sale can be found here. 0.80% of the stock is currently owned by corporate insiders.

A number of institutional investors and hedge funds have recently bought and sold shares of AMC. Quantbot Technologies LP bought a new stake in AMC Entertainment in the 1st quarter valued at $101,000. Advisor Group Inc. raised its stake in AMC Entertainment by 445.3% in the 4th quarter. Advisor Group Inc. now owns 9,380 shares of the company’s stock valued at $141,000 after acquiring an additional 7,660 shares during the period. Oppenheimer Asset Management Inc. bought a new stake in AMC Entertainment in the 1st quarter valued at $142,000. Gargoyle Investment Advisor L.L.C. bought a new stake in AMC Entertainment in the 1st quarter valued at $146,000. Finally, Pitcairn Co. bought a new stake in AMC Entertainment in the 4th quarter valued at $238,000. Institutional investors and hedge funds own 41.59% of the company’s stock.

AMC Entertainment Company Profile

AMC Entertainment Holdings, Inc, through its subsidiaries, operates in the theatrical exhibition business. The company owns, operates, or has interests in theatres. As of December 31, 2017, it owned, operated, or had interests in 649 theatres with a total of 8,224 screens in the United States; and 365 theatres and 2,945 screens internationally.

Tesla (TSLA) Given a $300.00 Price Target at KeyCorp

KeyCorp set a $300.00 target price on Tesla (NASDAQ:TSLA) in a research report sent to investors on Tuesday morning. The firm currently has a hold rating on the electric vehicle producer’s stock.

TSLA has been the subject of a number of other reports. Goldman Sachs Group decreased their price target on Tesla from $205.00 to $195.00 and set a sell rating for the company in a research note on Tuesday, April 10th. ValuEngine raised Tesla from a sell rating to a hold rating in a research note on Saturday, June 2nd. Zacks Investment Research raised Tesla from a hold rating to a buy rating and set a $329.00 price target for the company in a research note on Tuesday, May 8th. Berenberg Bank reissued a buy rating and set a $500.00 price target on shares of Tesla in a research note on Thursday, June 28th. Finally, Vetr lowered Tesla from a strong-buy rating to a buy rating and set a $327.47 price target for the company. in a research note on Thursday, April 5th. Eleven investment analysts have rated the stock with a sell rating, fourteen have assigned a hold rating and ten have assigned a buy rating to the stock. Tesla has an average rating of Hold and an average price target of $301.15.

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Shares of Tesla stock opened at $310.86 on Tuesday. Tesla has a one year low of $244.59 and a one year high of $389.61. The company has a debt-to-equity ratio of 1.65, a current ratio of 0.74 and a quick ratio of 0.44. The company has a market capitalization of $56.89 billion, a PE ratio of -27.08 and a beta of 0.91.

Tesla (NASDAQ:TSLA) last issued its quarterly earnings results on Wednesday, May 2nd. The electric vehicle producer reported ($3.35) earnings per share (EPS) for the quarter, missing the Zacks’ consensus estimate of ($2.40) by ($0.95). Tesla had a negative return on equity of 40.72% and a negative net margin of 18.77%. The business had revenue of $3.41 billion for the quarter, compared to the consensus estimate of $3.30 billion. During the same period in the prior year, the business posted ($1.33) earnings per share. Tesla’s revenue was up 26.4% on a year-over-year basis. research analysts forecast that Tesla will post -10.94 earnings per share for the current year.

In other news, VP John Douglas Field sold 3,000 shares of the business’s stock in a transaction on Friday, June 15th. The stock was sold at an average price of $359.27, for a total value of $1,077,810.00. Following the completion of the transaction, the vice president now directly owns 20,964 shares of the company’s stock, valued at approximately $7,531,736.28. The transaction was disclosed in a filing with the SEC, which is available at this hyperlink. Also, Director Kimbal Musk sold 1,875 shares of the business’s stock in a transaction on Thursday, April 5th. The stock was sold at an average price of $300.00, for a total value of $562,500.00. Following the completion of the transaction, the director now directly owns 150,208 shares of the company’s stock, valued at $45,062,400. The disclosure for this sale can be found here. Insiders own 22.80% of the company’s stock.

A number of hedge funds have recently made changes to their positions in TSLA. Summit Trail Advisors LLC grew its stake in Tesla by 74,343.1% during the 1st quarter. Summit Trail Advisors LLC now owns 583,634 shares of the electric vehicle producer’s stock worth $584,000 after buying an additional 582,850 shares during the last quarter. Soma Equity Partners LP purchased a new position in Tesla during the 1st quarter worth $45,242,000. Quantitative Investment Management LLC purchased a new position in Tesla during the 4th quarter worth $30,045,000. Commerzbank Aktiengesellschaft FI grew its stake in Tesla by 48.7% during the 1st quarter. Commerzbank Aktiengesellschaft FI now owns 264,732 shares of the electric vehicle producer’s stock worth $70,453,000 after buying an additional 86,684 shares during the last quarter. Finally, Natixis grew its stake in Tesla by 3,940.0% during the 1st quarter. Natixis now owns 52,439 shares of the electric vehicle producer’s stock worth $13,956,000 after buying an additional 51,141 shares during the last quarter. Hedge funds and other institutional investors own 60.68% of the company’s stock.

About Tesla

Tesla, Inc designs, develops, manufactures, and sells electric vehicles, and energy generation and storage systems in the United States, China, Norway, and internationally. The company operates in two segments, Automotive, and Energy Generation and Storage. The Automotive segment offers sedans and sport utility vehicles.

CyrusOne (CONE) Receives Daily News Impact Score of 0.18

News articles about CyrusOne (NASDAQ:CONE) have trended somewhat positive recently, according to Accern Sentiment Analysis. The research group ranks the sentiment of media coverage by monitoring more than 20 million blog and news sources in real time. Accern ranks coverage of publicly-traded companies on a scale of negative one to positive one, with scores nearest to one being the most favorable. CyrusOne earned a news impact score of 0.18 on Accern’s scale. Accern also gave media coverage about the real estate investment trust an impact score of 46.0004451298303 out of 100, indicating that recent media coverage is somewhat unlikely to have an effect on the stock’s share price in the near future.

Here are some of the media headlines that may have effected Accern Sentiment Analysis’s analysis:

Get CyrusOne alerts: Financial Review: Washington Prime Group (WPG) and CyrusOne (CONE) (americanbankingnews.com) Cloud Provider Lume to Provide Retail Colocation from CyrusOne Data Centers (finance.yahoo.com) CyrusOne Inc. (CONE): Most Popular stock: (stockquote.review) Pleasing Stocks: CyrusOne Inc., (NASDAQ: CONE), Oracle Corporation, (NYSE: ORCL) (nysetradingnews.com) Reading Analyst Financial Stock Recommendation:: CyrusOne Inc. (CONE) (nasdaqplace.com)

A number of analysts recently weighed in on CONE shares. BidaskClub downgraded CyrusOne from a “sell” rating to a “strong sell” rating in a report on Saturday, February 17th. Royal Bank of Canada restated a “buy” rating on shares of CyrusOne in a report on Thursday, March 1st. Guggenheim set a $65.00 price objective on CyrusOne and gave the company a “buy” rating in a report on Friday, February 23rd. Credit Suisse Group set a $73.00 price objective on CyrusOne and gave the company a “buy” rating in a report on Wednesday, February 21st. Finally, Moffett Nathanson started coverage on CyrusOne in a report on Monday, April 9th. They issued a “hold” rating and a $58.00 price objective for the company. Five investment analysts have rated the stock with a hold rating and thirteen have given a buy rating to the stock. CyrusOne has a consensus rating of “Buy” and a consensus target price of $67.25.

Shares of CyrusOne opened at $53.65 on Monday, Marketbeat.com reports. The company has a debt-to-equity ratio of 1.17, a current ratio of 2.07 and a quick ratio of 2.07. CyrusOne has a 1-year low of $43.49 and a 1-year high of $65.73. The stock has a market cap of $5.32 billion, a price-to-earnings ratio of 17.20, a price-to-earnings-growth ratio of 0.96 and a beta of 0.76.

CyrusOne (NASDAQ:CONE) last issued its quarterly earnings results on Wednesday, May 2nd. The real estate investment trust reported $0.85 earnings per share for the quarter, topping the Zacks’ consensus estimate of $0.75 by $0.10. CyrusOne had a negative return on equity of 0.60% and a negative net margin of 1.33%. The firm had revenue of $196.60 million during the quarter, compared to the consensus estimate of $185.86 million. During the same period last year, the business posted $0.72 EPS. The business’s revenue was up 31.7% compared to the same quarter last year. sell-side analysts forecast that CyrusOne will post 3.27 earnings per share for the current year.

The firm also recently declared a quarterly dividend, which will be paid on Friday, July 13th. Shareholders of record on Friday, June 29th will be issued a dividend of $0.46 per share. The ex-dividend date is Thursday, June 28th. This represents a $1.84 dividend on an annualized basis and a yield of 3.43%. CyrusOne’s payout ratio is currently 58.97%.

In other CyrusOne news, insider Kevin L. Timmons sold 11,465 shares of the stock in a transaction dated Tuesday, March 6th. The stock was sold at an average price of $49.39, for a total transaction of $566,256.35. Following the completion of the sale, the insider now directly owns 177,843 shares in the company, valued at approximately $8,783,665.77. The sale was disclosed in a document filed with the SEC, which is accessible through this hyperlink. Company insiders own 1.64% of the company’s stock.

About CyrusOne

CyrusOne (NASDAQ: CONE) is a high-growth real estate investment trust (REIT) specializing in highly reliable enterprise-class, carrier-neutral data center properties. The Company provides mission-critical data center facilities that protect and ensure the continued operation of IT infrastructure for approximately 1,000 customers, including 200 Fortune 1000 companies.

Comparing Verint Systems (VRNT) and VASCO Data Security International (VDSI)

Verint Systems (NASDAQ: VRNT) and VASCO Data Security International (NASDAQ:VDSI) are both computer and technology companies, but which is the superior business? We will compare the two companies based on the strength of their earnings, institutional ownership, profitability, valuation, analyst recommendations, risk and dividends.

Insider and Institutional Ownership

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94.7% of Verint Systems shares are held by institutional investors. Comparatively, 55.1% of VASCO Data Security International shares are held by institutional investors. 1.4% of Verint Systems shares are held by company insiders. Comparatively, 22.5% of VASCO Data Security International shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Earnings & Valuation

This table compares Verint Systems and VASCO Data Security International’s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Verint Systems	$1.14 billion	2.48	-$6.62 million	$1.77	24.89
VASCO Data Security International	$193.29 million	4.30	-$22.39 million	$0.43	47.91

Verint Systems has higher revenue and earnings than VASCO Data Security International. Verint Systems is trading at a lower price-to-earnings ratio than VASCO Data Security International, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a breakdown of recent ratings for Verint Systems and VASCO Data Security International, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Verint Systems	0	2	3	0	2.60
VASCO Data Security International	0	1	2	0	2.67

Verint Systems currently has a consensus target price of $48.00, suggesting a potential upside of 8.97%. VASCO Data Security International has a consensus target price of $18.50, suggesting a potential downside of 10.19%. Given Verint Systems’ higher probable upside, equities analysts clearly believe Verint Systems is more favorable than VASCO Data Security International.

Profitability

This table compares Verint Systems and VASCO Data Security International’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Verint Systems	-0.58%	10.57%	4.60%
VASCO Data Security International	-10.76%	6.71%	5.06%

Risk & Volatility

Verint Systems has a beta of 1.03, suggesting that its share price is 3% more volatile than the S&P 500. Comparatively, VASCO Data Security International has a beta of 1.32, suggesting that its share price is 32% more volatile than the S&P 500.

Summary

Verint Systems beats VASCO Data Security International on 8 of the 14 factors compared between the two stocks.

About Verint Systems

Verint Systems Inc. provides actionable intelligence solutions and value-added services worldwide. Its Customer Engagement Solutions segment provides automated quality management, automated verification, branch surveillance and investigation, case management, chat engagement, coaching/learning, compliance recording, customer communities, desktop and process analytics, digital feedback, email engagement, employee desktop, enterprise feedback, financial compliance, full-time recording, gamification, identity analytics, internal communities, knowledge management, mobile workforce, performance management, robotic process automation, social analytics, speech and text analytics, virtual assistant, voice self-service, voice self-service fraud detection, Web/mobile self-service, work manager, and workforce management solutions. The company's Cyber Intelligence Solutions segment offers cyber security solutions; intelligence fusion center and Web and social intelligence software that enables collection, fusion, and analysis of data from the Web; network intelligence suite, which generates critical intelligence of data captured from various network and open sources; and situational intelligence software enables security organizations to fuse, analyze, and report information, as well as take action on risks, alarms, and incidents. The company also offers a range of customer services, including implementation and training, consulting and managed, and maintenance support services. It sells its solutions through its direct sales team; and through indirect channels, such as distributors, systems integrators, value-added resellers, and original equipment manufacturer partners. The company was founded in 1994 and is headquartered in Melville, New York.

About VASCO Data Security International

VASCO Data Security International, Inc., together with its subsidiaries, designs, develops, and markets digital solutions for identity, security, and business productivity worldwide. The company offers DIGIPASS software authenticators; DIGIPASS for Apps, a software development kit; DIGIPASS for Mobile, a mobile authenticator that operates as a discrete mobile application; IDENTIKEY Risk Manager, an anti-fraud solution; and application shielding with runtime application self-protection that neutralizes the threat of attacks on mobile apps. It also provides eSignLive eSignature solution; and eSignLive eVault Manager, a Web-based platform that provides mortgage lenders, auto financers, equipment lessors, and other financial services organizations the means to store, assign, and service electronic mortgage notes, and secured loans and leases. In addition, the company offers VACMAN solutions; DIGIPASS hardware authenticators to support authentication and digital signatures for applications running on desktop PCs, laptops, tablets, and smart phones; and IDENTIKEY Authentication Server, an authentication server that supports the deployment, use, and administration of DIGIPASS strong user authentication. It sells its products to financial institutions, businesses, and government organizations through direct sales force, distributors, resellers, systems integrators, and original equipment manufacturers. VASCO Data Security International, Inc. was founded in 1991 and is headquartered in Chicago, Illinois.

Trump Says Kim Summit ��Could�� Still Happen on June 12

President Donald Trump pivoted from his abrupt cancellation of a planned summit with North Korean leader Kim Jong Un, saying it may still happen on the originally scheduled June 12 date.

Trump told reporters on his way to board the presidential helicopter that U.S. officials are in talks with North Korea after the country’s “very nice statement.” on Friday.

“We are talking to them now,” Trump said Friday, adding that the summit with Kim may proceed and “it could even be the 12th.”

“We would like to do it,” Trump said, and “they very much would like to do it.”

Tracking Trump: Follow the Administration’s Every Move

North Korea’s First Vice Foreign Minister Kim Kye Gwan said Friday that his country still wanted to pursue peace and said it would give Washington time to reconsider talks. He added that North Korea “inwardly highly appreciated” Trump for agreeing to the summit, and hoped the “Trump formula” would help lead to a deal between the adversaries.

‘Phased’ Solution

“The first meeting would not solve all, but solving even one at a time in a phased way would make the relations get better rather than making them get worse,” Kim said in a statement carried Friday by the state-run Korean Central News Agency. “We would like to make known to the U.S. side once again that we have the intent to sit with the U.S. side to solve problem regardless of ways at any time.”

The statement from Pyongyang appeared designed to get the summit with Kim back on track after Trump canceled their planned Singapore meeting, citing “tremendous anger and open hostility” in recent statements from North Korea.

Asked Friday if North Korea was playing games ahead of the summit, Trump responded, “Everyone plays games.”

China’s Reaction

China’s Vice President Wang Qishan found encouragement in the continuing exchanges between the U.S. and North Korea.

“Both sides still leave some maneuver for a discussion,” Wang said Friday on a panel at the St. Petersburg International Economic Forum in Russia. “So I’m confident that peace and security on the Korean peninsula can be maintained. And it’s between North Korea and the U.S. right now. And a summit is needed to achieve a breakthrough.”

At the Pentagon, U.S. Defense Secretary Jim Mattis said Friday that “the diplomats are still at work on the summit” but declined to say whether he thought the event would take place on June 12. He did say that the leaders of the two nations have had positive interactions. “I’ll let them talk all they want and then I’ll hope and pray the diplomats pull it off,” he said.

North Korea hardened its rhetoric toward the U.S. on Thursday, lashing out after remarks by Vice President Mike Pence and the White House national security adviser, John Bolton, that had linked the country to Libya. Choe Son Hui, vice-minister of foreign affairs, called Pence “stupid” and a “political dummy,” according to an English-language statement from KCNA.

Trump then issued his own threat in a letter to Kim. “You talk about your nuclear capabilities, but ours are so massive and powerful that I pray to God they will never have to be used,” Trump wrote.

— With assistance by Justin Sink, Shinhye Kang, Daniel Flatley, and John Micklethwait

(Updates with Chinese vice president’s comment in 10th paragraph.) LISTEN TO ARTICLE 2:45 Share Share on Facebook Post to Twitter Send as an Email Print

Cirrus Logic's Perfect Storm

Sometimes while experiencing life, influences align positively magnifying the in-ordinary to extraordinary. The opposite is also true. A few weeks ago, Cirrus Logic (CRUS) reported its full FY18 year and March quarter results. The headline numbers certainly didn't impress. Yet, often headline numbers deceive. Although short-term, the numbers offered no deception, the hidden reasons for the negative results were influenced significantly by inventory management from a major customer possibly because of coming products changes. The shareholder letter also included a statement many might consider a short-term death clause, "Based on our current visibility and the weaker than anticipated outlook for Q1 FY19, we now expect revenue for the full fiscal year to be down approximately 10 percent year over year." It is important to focus on the words, "current visibility."

Comparison of YoY and Financial Results

First, let us review last year's financial performance. In the shareholder letter, the company wrote, "Revenue for the year was below our expectations due to lower than anticipated smartphone unit volumes." Revenue for FY18 was basically unchanged, flat YoY; earnings were down $0.25 YoY from $4.5 in FY17, due mainly to higher R&D costs. Headcount at Cirrus increased by 150 adding approximately $12 million in employee costs or a reduction of $0.20 in earnings. In calculating the reduction, our basis was $150,000 per employee for a full year. We used half of the full year total cost of $25 million. Margins for FY18 continued to creep up reaching 49.7 versus 49.2 the prior year.

One customer contributed 79 percent of sales (Apple (AAPL)) in the March quarter for FY18 virtually unchanged with the March FY17 quarter of 78%. March's revenue for FY18 was down $20 million YoY at $305 million.

Considering the December and March quarters (YoY), Cirrus' revenue dropped by $20 million for March and $40 million for December. This revenue drop seems strange in that Cirrus now ships an additional DAC product in a slightly higher percentage for Apple iPhones. Driven by iPhone product mix, Cirrus has been enjoying a slightly higher iPhone ASP since the middle of the September quarter. Given that Apple has sold virtually the same number of phones YoY since the September quarter, this $60 million drop in revenue seems disconcerting. We note that in our belief, Apple sold 73 million units in the December 2017 quarter not its headline of 77 million.

Finally, the company purchased 1.4 million shares at an average price of $42 dropping the fully diluted share count to 64.5 million while ending the quarter with approximately $450 million in cash. The market softness left inventories higher at the end of the March quarter ($205 million) than at the end of December ($193 million).

The -10% YoY Revenue Guidance

On the surface, the lower revenue in FY18 and lower -10% FY19 guidance also seems troublesome. A possible loss of 10% in FY19 revenue over FY18 calculates to an additional drop of $150 million. A large portion of the $150 million comes in the June quarter being approximately $80 million ($240 million upper end of June 2018 guidance versus $320 million a year ago). Why the difference when analysts and Apple guidance suggest iPhones sales of 40-45 million units similar to June 2017 quarter? A first analysis of the numbers might suggest that Cirrus lost ASP. We found no evidence supporting this. In fact, while answering a question about Apple, Cirrus CEO, Jason Rhode, commented, "We don't see our opportunities there shrinking or going away in any way."

Analyzing Cirrus' June quarter last year provides insight into a large piece of the difference. The June revenue equaled $320 million of which $245 million was from Apple. Apple sold 9 million iPads equaling $17 million Cirrus revenue and 4 million Macs totally approximately $8 million. Apple sold 40 million iPhones at an approximate ASP of $4.9 or $195 million in revenue. The total products sold represents $215 million or $25 million less than Cirrus reported. It was and is our belief that Apple added some inventory during the June quarter 2017. We didn't see the same increase in inventory with Apple in this year's June guidance. In fact, we calculated the opposite. Our observations in the past suggest that when Apple makes major inventory changes with Cirrus during the June quarter, expect to see new versions of Cirrus parts coming in September. Rhode added depth to this thought, "But I mean, we've got a meaningful number of tape-outs this quarter that are all kind of [revet] zero all-in expensive, fine-line geometry processes, some of which are targeted at the next part in the product line to maintain share, and as usual, try to grow a little bit of content in the process."

To check our belief, we calculated by quarter approximate Cirrus part inventories for the last 5 quarters with the June quarter of last year being the beginning quarter. Changes in the value of Apple inventory shown in millions of dollars are listed in the following table. To calculate the results, we used ASPs for iPads and Mac Computers of $2 combined with a rounded number of unit sales from Apple reports. For the June 2018 quarter estimate, the calculation assumed 42 million iPhones sold, plus 4 million Macs, 9 million iPads, revenue of $240 million and 78% of its revenue from Apple, numbers similar to last June. With this approximate model, the beginning surplus of $25 million is the same as the ending surplus. If Apple truly sells 40-45 million iPhones in the June quarter, we expect the Cirrus' revenue to be between $240-250 million. In essence, Apple's inventory management created a huge difference of $80 million between this year's June guidance and last year's June guidance, pretty amazing.

Quarter	June 17	Sept. 17	Dec. 17	March 18	June 18 (Estimate)	Sum
Part Value Differences in Millions	25	84	16	-49	-49	25

We suspect also that the Galaxy S9 unit sales in which Cirrus provides parts might be extremely weak. In Korea, the new Galaxy volumes are at record lows. This might explain Cirrus conference comment, "Let's be mindful of slowing growth in some of the markets that we serve."

The rest of the 10% drop guided by Cirrus for the rest of the year seems to us any way to be from slightly lower iPhone ASPs with Apple no longer including the dongle with new iPhones. In recent articles, we have estimated this loss of revenue at $75 million. The total possible loss of revenue from Apple inventory management and lost dongle is $150 million or 10%. The perfect storm created from Apple inventory management, possible new part updates, weak Galaxy S9 phones, and a future temporary lower iPhone ASP seems to be creating the illusion of major structural issues for Cirrus' key businesses. We believe it is nothing more than a perfect storm of negative issues. The following comment again from the call supports our view. Rhode answered, "We don't see a turning point around optimizing around a small handful of not great quarters because there's nothing really meaningfully changed about the outlook we have for the longer term." We hope our findings help explain the validity of the company's stance.

FY19 Expected Earnings and Cash

Calculating earnings includes several factors, revenue, gross margin, operating costs, tax rates and share count. The first parameter revenue is the most difficult. Near of the end of the last conference call Jason added "And if things turn out to be more exciting, then that way, we can be positively priced." and "I think out takeaway from last year is just be conservative on modeling that sort of thing as it relates to external communication. And then if it's better than that, then we'll be positively surprised." The company views the 10% drop as worse case. In our view, a positive $25-50 million from Apple replenishing inventory with possible new parts begins our base case revenue calculation. We also believe that Cirrus has some new business coming later in the year. If iPhone sales remain flat, we believe that the base case revenue is minus $100 million or $1.4 billion for FY19.

Because gross margins have been increasing slowly, we are modeling this fiscal year at 50%. The companies guided operating costs for the following four quarters at the mid-point of the June quarter GAAP guidance of $133-139 million with $26 million in non-GAAP write offs. The operating costs for the year would be $110 million times 4 or $440 million. The company guided this year's tax rate at 17%. The base case earnings become $1.4 billion times 0.5 - $0.44 billion times .83 or $215 million. The almost $500 million in cash could generate an additional $10 million in interest bringing the total base case to $225 million.

Cirrus purchased 1.4 million shares last quarter with $200 million (5 million shares at $40) still available. We believe that the average share count for the coming year will be 2.5 million lower than the most recent count or 62 million. It could be lower. Our base earnings are $225 million divided by 62 or $3.6.

Ranging Next Year's Earnings

Several positive factors seem to make $3.6 too low. First, in the past several quarters, Cirrus operated near the middle yet lower portion of its guidance. With costs in its crosshairs, we believe that operating costs will actually average near the low end of the June guidance or at $107 million a quarter. With $12 million lower costs, earnings could be $0.15 higher.

The biggest factor is iPhone unit sales. This past year's super cycle turned into a super super super duper duper DUD. We discussed this issue in other seeking alpha articles. In our view, Apple is better managing its coming iPhone product cycle with the alleged three new phones coming in September. Apple could sell an increased number of phones with a product cycle more in tune with its ecosystem. Each 10 million phones sold adds about $0.35 in earnings. With a base case at $3.6, FY19 earnings will likely range from $3.75 to $4.25. Unless Apple throws another DUD cycle, we expect earnings at the upper end of the range.

Technical Charts

The two following self-created charts on Cirrus point out the significance of the $40 price resistance point and the 50 simple moving average. The first chart uses 30-minute bars; the second consists of day bars.

Reviewing the Company Direction

The company included some interesting statements regarding future products and direction.

"We expanded our product portfolio to span a more diverse range of solutions for flagship and mid-tier devices and continued to increase our penetration of the Android market with new and existing customers. The company also introduced innovative new technologies that we believe will drive meaningful growth opportunities in both existing and new adjacent markets, including our 28-nanometer voice biometrics component and 55-nanometer audio and haptic boosted amplifiers." With respect to haptics, "We are pleased to have secured our lead design win with first-generation haptic products which is expected to begin shipping later this year and we are engaging with customers on our second-generation component." By the way, the second-generation product includes an always on (AWO) feature.

Cirrus also added that the largest OEMs are designing both wired and wireless active noise cancelation headsets. This by itself could be a huge revenue generator.

The shareholder also contained this bit of information, "As we look further out, we recognize that our business model requires a substantial investment in future R&D efforts, and we are actively engaged in adjacent domains that we believe will provide new opportunities beyond audio and voice as we leverage our mixed-signal and low power signal processing expertise." Haptics development is one of the new businesses. We also saw an interesting job opening a few months ago for a position to work in a new instrumentation/sensor group with the first products being new advanced microphones.

We found this statement made during the conference call extremely interesting, "And while it's always nice to have a really great strategy, it's also really nice to have your primary competition, particularly in China and the rest of the Android space, it's always nice to have your competition have a bunch of, I would say, challenges pop up at the same time."

What Are We Doing?

Several indicators including short interest, resistance points, mutual fund purchases and company buying taken together give a mixed signal (pun intended). The short interest is still high almost 10 million shares up from its low several quarters ago of 3 million. The chart confirms a very significant resistance point at 40. Our included charts also confirm a reasonable bottoming of the stock near $35.

But, for us, two important factors turned positive, the mutual fund company, FMR, began purchasing last quarter adding 1.25 million shares. FMR has long been an extremely successful trader of Cirrus. Several years ago, with Cirrus trading near $10, FMR purchased selling out in the high $30's to low $40's. FMR, again some years ago, purchased Royce's near 7 million shares under $20 and recently sold most of its shares above $60. The mutual fund is once again buying. Last quarter, the company purchased 1.4 million shares commenting that it planned to continue doing so. We are buying slowly at prices under $40. We also are trading out recent purchases near $40 if we began to suspect continued resistance under $40. We are following the company and FMR. Sometimes perfect storms happen. When understood, they create buying opportunities. Still enduring them isn't fun.

Disclosure: I am/we are long CRUS.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Additional disclosure: We are long Cirrus and adding shares from time to time. We are also selling the recent share additions as we continue to sense resistance.