The New ‘Growth’ Stocks Are Wal-Mart, Cisco Systems, General Motors; S&P 500 Futures | Stock News & Stock Market Analysis

Futures for the S&P 500 index were little changed late Thursday. The S&P 500 index and other major averages soared Thursday on strong earnings from Wal-Mart (WMT) and Cisco Systems (CSCO). Wal-Mart and Cisco, along with General Motors, are older companies that don’t show much headline growth, but they’ve been big winners on expectations for hot growth. Microsoft (MSFT) and Oracle (ORCL) are companies that are a little further along on the process.

XAutoplay: On | OffS&P 500 futures were virtually flat vs. fair value. So were Nasdaq 100 futures. Dow futures fell a fraction.

Wal-Mart, Cisco Systems and General Motors are all companies that are seeing flat to declining revenue in their main businesses, but have strategies to transition into growth markets and the resources to carry out those plans.


Wal-Mart reported a 2% earnings-per-share gain in the third quarter, defying views for a 1% drop. Revenue growth accelerated to 4%. Those numbers aren’t thrilling. But U.S. online sales surged 50%.

Investors increasingly see Wal-Mart as a worthy rival to Amazon (AMZN). While many traditional retailers are struggling just to manage the decline, Wal-Mart has moved aggressively with acquisitions and initiatives to tackle Amazon head-on. Wal-Mart may not dethrone Amazon, but there’s strong confidence that it will survive and likely thrive.

Wal-Mart shares surged 10.9% to 99.62 in Thursday’s stock market trading. Shares were already well-extended from an 82.09 buy point cleared in early October. Wal-Mart stock has spiked 44% so far in 2017, making it one of the top performers on the Dow Jones industrial average. Amazon is up nearly 52%.

Cisco Systems

Cisco late Wednesday reported its seventh straight quarter of declining revenue vs. a year earlier, while earnings were flat. But Cisco sees 1%-3% revenue growth in the current quarter. In its latest quarter, Cisco reported a 10% gain in deferred revenue, as the networking hardware giant shifts into software and services. Like fellow Dow component Wal-Mart, Cisco has used its hefty cash flow to fund acquisitions in growth areas.

Cisco shot up 5.2% to 35.88 on Thursday, hitting its best levels in nearly 17 years and gapping back above a buy point.

General Motors

General Motors earnings and sales are declining, with U.S. auto demand falling from record levels and GM exiting Europe and some other international markets.

Yet GM stock has shot up 25% in 2017, with almost all of that gain coming since late August.

GM has been faring relatively well vs. rivals, helped by its more-profitable SUVs and pickup trucks. But more important, investors believe GM will survive the transition to electric cars and autonomous vehicles. GM has poured a lot of money into both areas, with Wall Street analysts generally viewing the venerable automaker as among the leaders in those fields. General Motors aims to sell 1 million electric vehicles annually by 2026, CEO Mary Barra said Wednesday.

Tesla (TSLA) has an early lead in electric vehicles, but once again is suffering huge problems with rolling out new cars, this time the Model 3 that is supposed to be a mass-market vehicle.

Microsoft, Oracle

Microsoft and Oracle have been making a transition toward a cloud-centric world.

Microsoft revenue growth has picked up from 1% to 8% and 13% before cooling a touch to 12% in the latest period, as Microsoft Azure and other cloud-related offerings boom even in the face of industry leader Amazon Web Services. Microsoft is up 34% in 2017

Oracle’s top-line growth has accelerated for the past three quarters. Oracle stock is up 28% in 2017, but have stalled since plunging on Sept. 15 following Oracle’s last quarterly report.

Walt Disney

Meanwhile, Walt Disney (DIS) is trying to make that transition. It’s relying on blockbuster films and theme parks to keep cash flowing while touting its upcoming ESPN and Disney streaming offerings. But shares are down slightly in 2017 as investors aren’t sure if those over-the-top channels will be big winners, especially as traditional cable and broadcasting revenues come under increasing pressure.


The Big Picture: Apple Ends Slide; This Index Makes Bullish Move

Stocks To Buy And Watch: Top IPOs, Big And Small Caps, Growth Stocks

Looking For The Best Stocks To Buy And Watch? Start Here

Source link

Originally posted 2017-11-17 02:22:33.


No comments.

Leave a Reply

error: Content is protected !!