Copyright ©​ Daniel Cullinane CPA.

 

The National Association of Realtors (NAR) reports that the seasonally adjusted annual rate of existing home sales in February jumped 11.8% to a seasonally adjusted annual rate of 5.51 million from a total of 4.94 million in January. Sales remain down 1.8% compared to January 2018 sales of 5.61 million.

The month-over-month gain was the largest since December 2015, according to the NAR. The consensus estimate called for February sales to reach 5.1 million, according to a survey of economists polled by Bloomberg.

The NAR’s chief economist, Lawrence Yun, said:

A powerful combination of lower mortgage rates, more inventory, rising income and higher consumer confidence is driving the sales rebound. It is very welcoming to see more inventory showing up in the market,” says Yun. “Consumer foot traffic consequently is rising as measured by the opening rate of [accessible] key boxes.

Existing home sales closed 2018 with a seasonally adjusted December total of 4.99 million. The seasonally adjusted number for December 2017 was 5.56 million.

Housing inventory increased by 3.2% in February to 1.63 million homes, equal to a supply of 3.5 months, down by 0.4 months compared with January. Inventory is up from 3.4 months year over year in compared to February 2018.

According to the NAR, the national median existing home price for all housing types in November was $249,500, up 3.6% compared with February 2018, the 84th consecutive month of rising home prices. In January the national median price was $247,500.

The percentage of first-time buyers increased from 29% in January to 32%, and equal to the percentage in February 2018. For all of 2018, first-time buyers accounted for 33% of sales.

Sales of single-family homes rose from a seasonally adjusted annual rate of 4.36 million in January to 4.94 million in February and are down 1.4% compared with February 2018. Sales of multifamily homes remained flat month over month at a seasonally adjusted annual rate of 570,000 units.

All homes were on the market for an average of 44 days in February, down by five days month over month and up from 37 days in February 2018. Distressed sales — foreclosures and short sales — accounted for 4% of all February sales, unchanged compared with the prior month and February 2018 distressed sales.

The NAR also reported the following regional data:

February existing home sales in the Northeast remained flat an annual rate of 690,000 and were up 1.5% compared with February 2018 sales. The median price in the Northeast was $272,900, up 3.8% compared with the same month last year.

In the Midwest, existing home sales increased by 9.5% last month to an annual rate of 1.27 million, roughly flat compared with the February 2018 rate. The median price in the Midwest was $188,800, up 5.4% from a year ago.

Existing home sales in the South jumped 14.9% in February to an annual rate of 2.39 million and were down 0.4% compared to February 2018 sales. The median price in the South was $219,300, up 2.5% from a year ago.

Existing home sales in the West popped 16% to an annual rate of 1.16 million in February and are down 7.9% compared with February 2018 totals. The median price in the West was $379,300, up 3% compared with the February 2018 median.

RECOMMENDATIONS

​All the Wall Street firms that we follow here at 24/7 Wall St. keep a list for their institutional and retail clients of high-conviction stock picks. These are generally the companies they not only like on a longer-term basis, but those that usually have solid upside to the assigned target price. Since the beginning of the year, many Wall Street firms have tweaked their lists to account for potential changes in 2019, and one company has added some outstanding stocks we feel could have outsized upside.

In a recent research note, the analysts at Goldman Sachs made a big move by adding Arista Networks Inc. (NYSE: ANET), a top technology networking company, to the firm’s well-respected Americas Conviction Buy List of stocks. The analysts see this stock as an outstanding growth play for 2019

Arista Networks develops high-performance cloud networking solutions, including switches, an advanced software defined networking (SDN) operating system and SDN applications. The company’s low latency switches lower networking costs for high-frequency trading platforms, large internet companies and cloud service providers.

The company reported strong fourth-quarter revenues of $596 million, and earnings of $2.25 per share beat the consensus estimate solidly. In addition, first-quarter guidance also topped Wall Street expectations. While some of the company’s peers have reported slowing cloud spending, Arista is bucking the trend and expects strong cloud spending to continue in 2019. Mid- to long-term growth drivers include Campus switching, routing and 400-gig solutions.

The Goldman Sachs price target for the shares is $360, while the Wall Street consensus target is $298.54. The shares closed way above that level Thursday at $315.02, up a sharp 5.5% on the day.

Here are three additional technology stocks on the Conviction Buy list with the biggest upside to the Goldman Sachs price targets.

DXC Technology

This company may be somewhat off the radar for investors, but it is well liked across Wall Street. DXC Technology Co. (NYSE: DXC) is the world’s second-largest pure-play IT services firm, behind only Accenture, and it generated around $25 billion in annual revenues.

The company has more than 170,000 employees (with an offshore mix of around 50%), services around 6,000 clients in a wide range of verticals and has a presence in over 70 countries, with the Americas representing around 50% of total revenues.

Shareholders receive a 1.14% dividend. Goldman Sachs has a $106 price target, and the consensus target is $85.44. Shares closed trading on Thursday at $66.64, so hitting the Goldman Sachs target would be almost a 60% gain.

Citrix Systems

This company has come into the spotlight as a potential takeover candidate, and it gets 10% to 15% of revenue from government spending. Citrix Systems Inc. (NASDAQ: CTXS) is leading the transition to software-defining the workplace, uniting virtualization, mobility management, networking and software as a service (SaaS) solutions to enable new ways for businesses and people to work better.

Citrix solutions power business mobility through secure, mobile workspaces that provide people with instant access to apps, desktops, data and communications on any device, over any network and cloud. Strategic mergers and acquisitions and internal development have expanded Citrix’s addressable markets beyond access to legacy Windows applications to include desktop and server virtualization, team collaboration and application networking.

Investors receive a 1.38% dividend. The $130 Goldman Sachs price objective compares with the $112.52 consensus price target. Shares ended Thursday at $101.70. Hitting the target would be a gain of almost 30%.

ALSO READ: Top Wall Street Semiconductor Analyst Says Stay With 2 Hot Sector Leaders

Netflix

This Wall Street darling and FANG constituent could offer solid upside. Netflix Inc. (NASDAQ: NFLX) is the world’s leading internet television network, with more than 120 million members in over 190 countries enjoying more than 125 million hours of TV shows and movies per day, including original series, documentaries and feature films. Members can watch as much as they want, anytime, anywhere, on nearly any internet-connected screen. Members can play, pause and resume watching, all without commercials or commitments.

Netflix is available on virtually any device with an internet connection, including personal computers, tablets, smartphones, smart TVs and game consoles, and it automatically provides the best possible streaming quality based on available bandwidth. Many titles, including Netflix original series and films, are available in high-definition with Dolby Digital Plus 5.1 surround sound and some in Ultra HD 4K. Advanced recommendation technologies with up to five user profiles help members discover entertainment they’ll love.

Goldman Sachs has set its price target at $450. The consensus target is $382.97, and shares closed most recently at $377.87. The Goldman Sachs target represents 20% upside.

SALES UP

​MARCH NEWS LETTER 4

Daniel Cullinane CPA

25 Plaza 5 25th fl Jersey City NJ                                          phone 732-516-1648 fax 732-516-9778

MBA Taxation

Daniel Cullinane CPA

2500 Plaza 5 25th fl  Jersey City NJ 07311                                                          phone 732-516-1648  fax 732-516-9778

                 MBA TAXATION