In March of 2018, a self-driving car operated by Uber Technologies Inc. (NYSE: UBER) struck and killed a woman in Tempe, Arizona, who was walking across the road with a bicycle. The woman was not crossing at a designated crosswalk and was struck and killed by the vehicle, a 2017 Volvo XC90 that had been modified to use self-driving hardware and software.

The National Transportation Safety Board (NTSB) issued its preliminary report on the crash on Tuesday, and on Thursday, Consumer Reports issued a press release citing the NTSB report and concluding that the report “make[s] it clear that this automated driving system was tested on public streets long before it was safe to be on the road.”

Ethan Douglas, a senior policy analyst for Consumer Reports, commented, “This report reveals outrageous safety lapses by Uber that ended with a person being killed. Rather than doing everything it could to prevent a fatal collision, Uber passed the buck to a single ‘backup driver.’

The NTSB had noted in its report that the test self-driving system in the Volvo “relies on an attentive operator to intervene if the system fails to perform appropriately during testing.”

The Uber vehicle’s self-driving systems first noticed the pedestrian about six seconds before impact. It took the system nearly five seconds to classify her as a bicycle and with just 1.3 seconds remaining before impact, the self-driving system determined that emergency braking was needed to “mitigate” a collision.

Uber’s self-driving technology does not allow the vehicle to make an emergency stop while the vehicle is under computer control. Only the operator is allowed to take such action, and the Uber system is not designed to alert the operator that an emergency stop is indicated. The Volvo was equipped with a collision-avoidance system that is operable only when the car is being manually driven.

Video of the car’s interior showed that the operator was “glancing down toward the center of the vehicle several times before the crash.” The operator later told investigators that she had been “monitoring” the car’s self-driving interface. In June, Consumer Reports cited a Reuters report stating that, according to the police report, the Uber backup driver “was streaming a Hulu video at the time the car struck and killed a pedestrian.”

The Uber operator intervened by touching the steering wheel less than a second before the car struck the pedestrian. It was traveling 39 mph at the time in a 45-mph speed zone, and the brakes were applied less than a second after impact. The self-driving system was operating normally at the time of the crash and showed no faults or diagnostic messages.

In its June report on the crash, Consumer Reports cited Bryan Reimer, director of the advanced technology vehicle consortium at MIT who said, “This driver was set up to fail. You’re mindlessly looking at the road ahead of you. It’s hard to keep looking at something when nothing changes. You don’t have to make moment-to-moment decisions about how to turn the wheel.”

Consumer Reports’ Douglas concluded, “We hope Uber has cleaned up its act, but without mandatory standards for self-driving cars, there will always be companies out there that skimp on safety. We need smart, strong safety rules in place for self-driving cars to reach their lifesaving potential.”

Uber’s stock dropped about 16% after the NTSB released its report on Tuesday and traded down about 13% as of Thursday’s close at $27.38, up about 1.6% for the day. The stock’s 52-week range is $25.58 to $47.08, and the consensus price target is $45.00. The low was posted Tuesday.


​Even though the S&P 500 now sits at all-time highs after over 10 years of a bull market, the venerable index still offers a 1.9% dividend yield and 6% expected dividend growth for 2020. While many would argue that now might not be the time for a huge passive investment in the index, it does make sense to look for strategies that offer multiple ways to generate total return through its biggest and best stocks.

With the Treasury market at close to all-time low yields, and many stocks in the S&P 500 trading at very stretched valuations, Goldman Sachs may have the best strategy for investors for 2020. The firm’s Equity Enhanced Income Strategy portfolio has 23 companies that all have investment grade debt ratings, 90% of the companies have raised their dividends in the past 12 months and 80% have repurchased stocks in that time.

The strategy is to buy shares and then sell covered call options. Combining the call premium income with dividend income and the potential for capital gains gives inventors the potential for total return that may be higher than just owning the shares. With a very rich and fully valued S&P 500, selling calls makes sense, and the worst scenario is the stock is called away at a profit.

We screened the 23 stocks in the portfolio for the companies paying the highest dividends that also have a Buy rating at Goldman Sachs. We found five that look like great ideas now for investors looking to mold a 2020 plan.

Chevron

This integrated giant is a safer way for investors looking to stay or get long the energy sector, and it has big Permian Basin exposure. Chevron Corp. (NYSE: CVX) is a U.S.-based integrated oil and gas company, with worldwide operations in exploration and production, refining and marketing, transportation and petrochemicals.

The company sports a sizable dividend and has a solid place in the sector when it comes to natural gas and liquefied natural gas. Some on Wall Street estimate that the company will have a compound annual growth rate of over 5% for the next five years, though it is among the companies with the largest corporate debt.

With Permian production and asset disposals targets reset, many analysts feel Chevron can raise the dividend 20% and buyback 15% of shares. Last week, Chevron reported adjusted third-quarter earnings that were above the Wall Street consensus estimate. The beat was driven by strong production, which increased by almost 3% from the third quarter of 2018.

Chevron shareholders receive an outstanding 4.10% dividend. The Goldman Sachs analysts have a $137 price target on the shares, nearly in line with the Wall Street consensus target of $137.46. The shares closed Friday’s trading at $116.16 apiece.

Johnson & Johnson

With a diverse product base and very popular and solid brands, this is among the most conservative big pharmaceutical plays. Johnson & Johnson (NYSE: JNJ) is one of the top market cap stocks in the health care sector and will raise the dividend for shareholders this year for the 56th consecutive year. With everything from medical devices to over-the-counter health items and prescription drugs, Johnson & Johnson remains one of the most diversified health care names on Wall Street.

The health care giant also has one of the most exciting pipelines of new drugs in the sector. That combined with the solid over-the-counter product business makes the stock an outstanding holding for conservative accounts with a long-term investment outlook. The company generates a little over half of its sales in international markets, which are expected to see higher spending on health care over the next 10 years and beyond.

The company still faces the public relations nightmare of lawsuits and allegations over the firm’s talcum powder allegedly containing asbestos and causing ovarian cancer. In addition, Johnson & Johnson also faces some opioid litigation, another headline that is keeping investors away.

Shareholders receive a solid 2.90 dividend. The Goldman Sachs price target is $173, which is much higher than the consensus target of $150.24. The shares closed trading at $131.20 on Friday.



PLANS

An announcement Wednesday morning that integrated oil giant Exxon Mobil Corp. (NYSE: XOM) has signed a new two-year joint-development with FuelCell Energy Inc. (NASDAQ: FCEL) pushed the floundering fuel cell maker’s shares up by 90% to about $0.63. The agreement is worth up to $60 million, not bad for a company with a market cap of around $43.3 million at Tuesday’s closing bell.

According to the announcement, the deal “will focus efforts on optimizing the core technology, overall process integration and large-scale deployment of carbon capture solutions. ExxonMobil is exploring options to conduct a pilot test of next-generation fuel cell carbon capture solution at one of its operating sites.”

While every effort to mitigate the effects of global warming deserves to be applauded, some also need to be picked apart a bit. This is just such a one.

First of all, it’s worth asking why Exxon is supporting a technology that it plans to test at one of its own sites to capture and store carbon. The technology captures a carbon dioxide stream from “large industrial sources” and directs it to a fuel cell “which produces power while capturing and concentrating carbon dioxide for permanent storage.”

A far more effective effort to mitigate climate change would be to produce less oil. Exxon has spent nearly $22.7 billion so far in 2019 on capital and exploration expenses. The $60 million for FuelCell Energy amounts to about 0.00000026% of that.
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Exxon undoubtedly has spent more than that this year on environmentally friendly projects, but the important thing to note is that the company cannot be expected to destroy itself by finding alternative fuels. In a 2017 paper titled “Ideological obstacles to effective climate policy: The greening of markets, technology, and growth,” an admittedly Marxist analysis concludes: “Attempts to reform the very techniques and institutions that brought about the climate crisis will remain ineffective and reproduce the social order that results in climate change.”

American writer Upton Sinclair said much the same thing more pithily: “It is difficult to get a man to understand something when his salary depends on his not understanding it.” Expecting Exxon or any other company or country that depends on oil for revenues to cannibalize its oil business is like spitting into the wind. In fairness, they probably shouldn’t just call it quits but, instead, think hard about how to wind down production rather than beef it up.

The following chart from the U.S. Environmental Protection Agency gives the percentage by sector of total U.S. greenhouse gas emissions in 2017. U.S. emissions that year totaled nearly 6.5 billion metric tons of carbon dioxide equivalent.

Source: U.S. Environmental Protection Agency

Just 0.6% of all U.S. electricity generated in 2018 was fueled by oil while 92% of U.S. transportation fuel was oil-based (primarily gasoline and diesel and jet fuel). Focusing on “large industrial sources,” as Exxon and FuelCell Energy plan to do, should help drive down U.S. carbon emissions that mostly come from burning natural gas and coal to generate electricity. At the same time, carbon capture and storage completely avoids dealing with emissions from oil products burned for transportation.

The other thing about the Exxon-FuelCell Energy agreement that is worth thinking about is where technology fits into mitigating climate change. Technological solutions (typically, now, some kind of carbon capture and storage technology) have the attraction of being relatively painless, almost magic in the sense that, as writer Arthur C. Clarke observed, “Any sufficiently advanced technology is indistinguishable from magic.” All we need to do as a species is apply our technological magic to the climate change problem and then we are free to continue to consume fossil fuel in our sport utility vehicles and airplanes because we’ve done all we can.

Without question, what Exxon and FuelCell Energy are doing is valuable. Industrial carbon emissions account for nearly a quarter of all U.S. emissions, nearly all from burning natural gas and coal. Cleaning up the exhaust stream from industrial sources is worth doing.

But attacking a single-point emitter like a petrochemical or aluminum plant with a technological solution is much simpler than making a change in the fuel source for more than 272 million cars, trucks and SUVs. At some point, Americans are going to have to do the hard stuff.

​SHALE

​HOT STOCKS

​Most experts believe that the October jobs report from the U.S. Bureau of Labor Statistics showed some pressure on the economy due to trade wars, particularly with China. It was also affected by the GM strike. However, the national unemployment rate of 3.6% was still near a five-decade low. The economy added 128,000 jobs in October, above most expectations.

The bureau also reports on unemployment rates by sex, race and age. The jobless rates among black Americans was 5.4%, or 50% higher than the national figure.

The unemployment rates among that largest portions of the population in September were 3.2% for whites, 5.4% for black Americans, 4.1% for Hispanics and 2.9% for Asians. The jobless rate was 3.2% for adult men, 3.2% for adult women and 12.3% for teenagers, defined as those between 16 and 19 years old.

Among the largest gulfs between any two major groups was that between black and white Americans. The rate among blacks was 69% higher than among whites. The overall national unemployment rate has risen modestly from October a year ago, when it was 3.8%. The rate among white Americans was 3.3% in October last year. The rate among blacks that month was 6.2%.

Several theories suggest why the difference between the black and white jobless rates is so large. None is considered definitive by all experts.

Among the most frequently given reasons for the difference is that “anti-discrimination” laws are not enforced adequately. While this may be true, it has been difficult to identify, for the most part, at specific employers or in specific industries. That makes enforcement on a wide basis almost impossible.

Much easier to show is the gulf in education. According to The National Center for Education Statistics, there were large gaps in reading and math achievement between black and white children in grades 4 and 12. Data was taken in 1992 and 2015, and no significant improvement was seen between the two periods. Education is a marker of both the extent to which people are hired and the level of income for those who are employed.

Some of the differences in the level of math and reading achievement may be based on the sums school districts spend on each student. According to EdBuild, in nonwhite districts, the amount is $11,682. In mostly white districts, the figure is $13,908. The total gap nationwide means “nonwhite school districts receive $23 billion less than white districts, despite serving the same number of students.”

Another major reason for the employment gap is incarceration rates, many experts argue. According to Pew, “In 2017, blacks represented 12% of the U.S. adult population but 33% of the sentenced prison population. Whites accounted for 64% of adults but 30% of prisoners.” That means there were 1,549 prisoners per 100,000 black Americans, compared to 272 per 100,000 whites. The data was based on numbers from federal prisons. The hurdles to employment for people who have been in prison are high.

No single theory or piece of research by itself accounts for the difference in black and white unemployment. However, taken as a body, the research does show that the disadvantages for blacks are extremely substantial compared to whites. This also exists among America’s major cities and a number of congressional districts.

​ANALYST

​Stocks hit new all-time highs on the S&P 500, Dow Jones industrials and Nasdaq on Thursday on news that the United States and China were rolling back tariffs and were closer to a phase-one trade deal. All the media calls for an imminent recession are looking pretty silly at this point, and the Dow is now close to that 28,000 mark our model came up with at the start of 2019. Stocks were indicated to take a breather on Friday morning but not by enough that the day’s outcome seemed set in stone. Investors still have a lot of pressing issues and risks to consider now that the bull market is over 10 and a half years old. This is a time for investors to consider what changes they should be making for their portfolios and assets heading into late 2019 and as 2020 approaches.

24/7 Wall St. reviews dozens of analyst research reports each day of the week. Our goal is to find new ideas for traders and long-term investors alike. Some of the daily analyst calls cover stocks to buy, while some calls cover stocks to sell or to avoid.

We have provided these calls in a quick-hit summary for easy reading, and additional comments and trading data have been added on some of the calls. The consensus analyst price targets and other valuation metrics are from the Refinitiv sell-side research service.

These are the top analyst upgrades, downgrades and initiations for Friday, November 8, 2019.

Activision Blizzard Inc. (NASDAQ: ATVI) was down 3.2% at $54.55 ahead of earnings, but a light forecast for the holiday quarter had its shares down another 2.4% at $53.25 after the report. JPMorgan reiterated it as Overweight and raised the target price to $62 from $58, and Needham reiterated its Buy rating and $62 target price. Wedbush Securities reiterated its Outperform rating and raised its target to $69 from $60. Activision Blizzard had a consensus target price of $58.52, and its 52-week trading range is $39.85 to $65.40.

Apache Corp. (NYSE: APA) was downgraded to Hold from Buy at Argus, with the firm citing its own challenging outlook. Still, its shares closed up 2% at $24.09 on Thursday.

AvalonBay Communities Inc. (NYSE: AVB) was started with a Buy rating and a $244 target price at Goldman Sachs. Shares closed down about 1.5% at $209.14 ahead of the call, and the consensus target price was $225.10.

Avrobio Inc. (NASDAQ: AVRO) was reiterated as Buy with a $34 price target (versus a $14.40 prior close) at Janney. The firm noted that its programs all appear to be on track and its next update will be at the WORLD LSD Symposium in February 2020.

Beyond Meat Inc. (NASDAQ: BYND) was started with a Neutral rating and an $85 target price at UBS. It closed down 2.1% at $78.99 on Thursday, and its consensus target price was still up at $118.90.

Boston Properties Inc. (NYSE: BXP) was started with a Buy rating and a $156 target price at Goldman Sachs. Shares closed up four cents at $137.96 ahead of the call, and the consensus target price was $145.05.

Costco Wholesale Corp. (NASDAQ: COST) was started with a Neutral rating and a $300 target price at Nomura/Instinet. The stock closed up 1.2% at $305.21 on Thursday, and it has a consensus target price of $301.61 and a 52-week trading range of $189.51 to $307.34.

Gap Inc. (NYSE: GPS) traded up over 1.8% at $18.06 ahead of its report, but the fiscal 2019 forecast looked about 15% light on earnings, and the apparel retailer announced that Art Peck was stepping down as CEO and that Executive Chair Robert Fisher would serve as interim-CEO. Wells Fargo maintained its Market Perform rating but cut its target to $16 from $20. Shares of the Gap were last seen trading down about 9% at $16.37 in the premarket session. The shares have a 52-week range of $15.11 to $31.39, and the prior consensus target price was $19.21.

Hecla Mining Co. (NYSE: HL) closed down 5.9% at $2.23 on Thursday after reporting a loss and on revenues that were under expectations. BMO Capital Markets upgraded it to Market Perform from Underperform and raised the target price to $2.20 from $1.60.

Mosaic Co. (NYSE: MOS) was named as the Zacks Bear of the Day stock. The firm said that fertilizer demand continues to lag in 2019. Shares last closed at $20.74, with a consensus price target of $26.58.

Newell Brands Inc. (NASDAQ: NWL) was named as the Bull of the Day at Zacks, which said that the maker of Mr. Coffee just posted a big third-quarter beat and raised full-year guidance. Its shares most recently closed at $20.04, with a consensus price target of $20.45.

Qualcomm Inc. (NASDAQ: QCOM) was reiterated as Buy and the price target was raised to $110 from $95 at Argus. The stock closed up 6.3% at $89.98 on Thursday’s post-earnings reaction, and its consensus target price was $87.11.


SailPoint Technologies Holdings Inc. (NYSE: SAIL) was started with an Outperform rating and a $32 price target at Wedbush. This was after a 9.2% gain to $21.99 on Thursday, but Wedbush sees a big opportunity for the company’s leading identity-based solution to provide secure access to data that resides outside the corporate network in an effort to remedy a major pain point for CIOs. Its 52-week range is $16.63 to $32.25.

Slack Technologies Inc. (NYSE: WORK) closed up 1% at $20.34 on Thursday, but its shares were indicated lower by about 2% at $19.95 after Wedbush initiated coverage with an Underperform rating and assigned a mere $14 price target. While it has accumulated about 12 million daily active users and is growing its base of over 100,000 paid customers, Wedbush’s customer checks are pointing to where Slack will have a hard time further penetrating the enterprise with such a significant competitive offering from Microsoft’s TEAM product.

Square Inc. (NYSE: SQ) was maintained as Buy at UBS, but the firm lowered its target price to $77 from $81. Shares closed up 5% at $64.41 on Thursday, as several other firms also trimmed their upside expectations.

Teradata Corp. (NYSE: TDC) was up almost 3% at $31.12 ahead of earnings, but it was last seen down about 25% at $23.50 in the early Friday trading indications. Its 52-week range was $27.95 to $49.42, and its consensus target price had been $42.15. Merrill Lynch downgraded it to Neutral from Buy and slashed its price objective to $33 from $48, and Stifel downgraded it to Hold from Buy and slashed its $60 prior target to $25.

UDR Inc. (NYSE: UDR) was started as Neutral with a $53 target price (versus a $47.49 close, after a 2.4% drop) at Goldman Sachs. The consensus target price is $50.26.

Ulta Beauty Inc. (NASDAQ: ULTA) was started with a Reduce rating and a $215 target price at Nomura/Instinet. The stock closed at $243.77 ahead of the call, and it has a 52-week range of $224.43 to $368.83 and a consensus target price of $288.68.

Virtu Financial Inc. (NASDAQ: VIRT) was downgraded to Neutral from Buy and the target price was lowered to $17 from $21 at UBS. Shares closed down 2% at $16.00 on Thursday, and they were indicated down another 1.4% at $15.78 on Friday.

Walmart Inc. (NYSE: WMT) was started with a Buy rating and a $132 target price at Nomura/Instinet. Walmart closed up 0.6% at $120.23 a share on Thursday. The consensus target price is $123.05, and the 52-week trading range is $85.78 to $120.92.

Walt Disney Co. (NYSE: DIS) closed up 1.4% at $133.13 on Thursday with a strong market, and its post-earnings reaction initially had its shares up 3.7% at $138.10. Wells Fargo maintained its Outperform rating but trimmed its target to $167 from $173. Disney’s 52-week high is still up at $147.15, and its consensus target price was previously $151.04.

Yelp Inc. (NYSE: YELP) was maintained as Hold at Stifel, but the firm trimmed its target price to $35 from $38. Shares were down 7.9% at $30.12 on Thursday ahead of what was expected to be unexciting earnings, and they initially traded down 2% to $29.50 after earnings. This is against a pre-earnings consensus target price of $39.39, but the shares already had a 52-week range of $29.33 to $45.45.

Zillow Group Inc. (NASDAQ: ZG) was up 0.3% at $33.72 on Thursday ahead of its earnings, but the after-hours trading reaction initially had shares up 10.3% at $37.15. The 52-week range is $26.20 to $50.99, and the consensus target price was $45.38. Wedbush maintained its Neutral rating and its $39 price target, as it still sees a long road ahead. KeyBanc Capital Markets maintained its Overweight rating but lowered its target price to $63 from $65.

Zix Corp. (NASDAQ: ZIXI) was started with an Outperform rating and a $10 price target at Wedbush. It previously closed up 1.5% at $6.69 on Thursday, in a 52-week range of $5.25 to $11.15 and with a prior consensus target price of $12.25.


Despite a pullback in gold, and despite a sell-off in gold and gold miners, Argus sees 20% upside in two of the top gold mining companies. That said, investors were bailing out of their go-to defensive stock names as the China tariffs look to be rolled back under a phase-one trade deal allowed the stock market to hit yet even more all-time highs.

The RBC analysts are very positive on the banking stocks, and they think that the sector could be ready for a period of outperformance that was seen in the mid-1990s.

Thursday’s top analyst upgrades and downgrades included Citigroup, CommScope, CVS Health, CyberArk, Emerson Electric, Match, Mylan, Qualcomm, Roku, Square, Twitter, Vonage and many more.

.​SAFTEY CONCERNS

Daniel Cullinane CPA

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

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Daniel Cullinane CPA

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Copyright ©​ Daniel Cullinane CPA.

​Most experts believe that the October jobs report from the U.S. Bureau of Labor Statistics showed some pressure on the economy due to trade wars, particularly with China. It was also affected by the GM strike. However, the national unemployment rate of 3.6% was still near a five-decade low. The economy added 128,000 jobs in October, above most expectations.

The bureau also reports on unemployment rates by sex, race and age. The jobless rates among black Americans was 5.4%, or 50% higher than the national figure.

The unemployment rates among that largest portions of the population in September were 3.2% for whites, 5.4% for black Americans, 4.1% for Hispanics and 2.9% for Asians. The jobless rate was 3.2% for adult men, 3.2% for adult women and 12.3% for teenagers, defined as those between 16 and 19 years old.

Among the largest gulfs between any two major groups was that between black and white Americans. The rate among blacks was 69% higher than among whites. The overall national unemployment rate has risen modestly from October a year ago, when it was 3.8%. The rate among white Americans was 3.3% in October last year. The rate among blacks that month was 6.2%.

Several theories suggest why the difference between the black and white jobless rates is so large. None is considered definitive by all experts.

Among the most frequently given reasons for the difference is that “anti-discrimination” laws are not enforced adequately. While this may be true, it has been difficult to identify, for the most part, at specific employers or in specific industries. That makes enforcement on a wide basis almost impossible.

Much easier to show is the gulf in education. According to The National Center for Education Statistics, there were large gaps in reading and math achievement between black and white children in grades 4 and 12. Data was taken in 1992 and 2015, and no significant improvement was seen between the two periods. Education is a marker of both the extent to which people are hired and the level of income for those who are employed.

Some of the differences in the level of math and reading achievement may be based on the sums school districts spend on each student. According to EdBuild, in nonwhite districts, the amount is $11,682. In mostly white districts, the figure is $13,908. The total gap nationwide means “nonwhite school districts receive $23 billion less than white districts, despite serving the same number of students.”

Another major reason for the employment gap is incarceration rates, many experts argue. According to Pew, “In 2017, blacks represented 12% of the U.S. adult population but 33% of the sentenced prison population. Whites accounted for 64% of adults but 30% of prisoners.” That means there were 1,549 prisoners per 100,000 black Americans, compared to 272 per 100,000 whites. The data was based on numbers from federal prisons. The hurdles to employment for people who have been in prison are high.

No single theory or piece of research by itself accounts for the difference in black and white unemployment. However, taken as a body, the research does show that the disadvantages for blacks are extremely substantial compared to whites. This also exists among America’s major cities and a number of congressional districts.

​GROWTH IS SLOWING

AMAZON COMPETITOR


Between 2018 and 2040, global oil demand is expected to rise from 98.7 million barrels a day to 110.6 million. Oil and natural gas are forecast to continue to meet more than 50% of global demand for energy by 2040.

Annual demand growth for oil is a rather paltry 0.5% over the period, while annual demand growth for renewables is forecast at 6.9%.

By 2024, global demand for oil is expected to reach 104.8 million barrels a day at an annual average growth rate of around 1 million barrels a day. More than 72 million barrels a day of the world’s supply of liquids (oil plus condensates) in 2024 will come from non-OPEC sources, primarily the United States, but including existing producers like Brazil, Norway, Canada and, soon, Guyana.ADVERTISEMENT
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The forecasts were included in OPEC’s 2019 World Oil Outlook to 2040 released Tuesday. Demand for OPEC liquids is forecast to rise from 36.6 million barrels a day in 2018 to 44.4 million barrels by 2040, while demand for non-OPEC liquids is expected to rise by 9.9 million barrels a day to 72.6 million barrels, peaking in 2026 and gradually declining to 66.6 million barrels a day by 2040.

U.S. crude oil production is forecast to peak at around 22.8 million barrels a day, more than double the 10.8 million barrels produced daily in 2018. By 2040, the United States is expected to supply 19.5 million barrels a day. Tight (shale) oil production is forecast to peak at 17.3 million barrels a day in 2030 before dipping to 14.5 million barrels in 2040.

The investment needed to meet expected demand is estimated to be around $10.6 trillion. Of that total, about $8.1 trillion will be directed to upstream exploration and production while the rest will go toward midstream (pipelines and terminals) and downstream (refining and marketing) projects.

Global trade in oil as measured by exports is expected to remain nearly stable at around 38 million barrels a day with exports from the United States and Canada seen rising from around 3 million barrels a day to nearly 5 million in 2025. Between 2025 and 2040, OPEC expects exports to rise to nearly 42 million barrels a day, with exports from the United States and Canada reverting to 3 million barrels by 2040. Exports from the Middle East are forecast to pick up the slack, rising by some 7 million barrels a day to 23 million barrels a day by 2040.

At the same time that OPEC is forecasting two-decades of growth for the oil business at a cost of around $10.6 trillion, analysts at BloombergNEF, in June, forecast total investment of $13.3 trillion in the global electrical grid by 2050. The forecast calls for essentially no oil burning for electricity generation, while wind and solar generation alone account for nearly half of all electricity generation by 2050.

For the sake of argument, assume that renewable investment averages around $4.1 trillion in each of the next three decades. By 2040, global investment by BloombergNEF’s estimate will have hit $8.2 trillion. Added to OPEC’s $10.6 trillion, that’s nearly $19 trillion in 22 years.

According to the International Energy Agency (IEA), global capital spending on upstream oil projects is expected to rise 4% year over year to $497 billion in 2019. That’s higher than average annual upstream capex of around $368 billion, based on OPEC’s total estimate of $8.1 trillion through 2040.

Can renewables and oil both command these levels of investment over the next few decades? Does one have to lose in order for the other to win? Will public pressure on oil-producing countries and companies force changes in energy demand and consumption?ALSO READ: Jefferies Top Growth Stocks to Buy Now Are All on the Franchi

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​INVESTING

​NOVEMBER NEWSLETTER 1

​While most of Wall Street focuses on large and mega cap stocks, as they provide a degree of safety and liquidity, many investors are limited in the number of shares they can buy. Often the biggest public companies, especially the technology giants, trade in the low-to-mid hundreds, all the way up to over $1,000 per share. At those steep prices, it’s pretty hard to get any decent share count leverage.

Many investors, especially more aggressive traders, look at lower-priced stocks as a way to not only make some good money but to get a higher share count. That can really help the decision-making process, especially when you are on to a winner, as you can always sell half and keep half.

Every week, we screen our 24/7 Wall St. research database looking for stocks with Buy equivalent ratings at major firms and priced under the $10 level (last week’s picks included Aphria), and this week was no exception. We found five new stocks that could provide investors with some solid upside potential. While more suited for aggressive accounts, they could prove to be exciting additions to portfolios looking for solid alpha potential.

Cerus

Shares of this little-known health care company have been battered and offer an incredible entry point. Cerus Corp. (NASDAQ: CERS) engages in the research, development and manufacture of biomedical and surgical products. The company produces a blood system for platelets and plasma.

Cerus develops and markets the INTERCEPT Blood System and remains the only company in the blood transfusion space to earn both CE Mark and FDA approval for pathogen reduction of both platelet and plasma components. Cerus currently markets and sells the INTERCEPT Blood System in the United States, Europe, the Commonwealth of Independent States, the Middle East and selected countries in other regions around the world. The INTERCEPT Red Blood Cell system is in clinical development.

Stifel has a $7 price target on the shares, while the Wall Street consensus target is higher at $8. The shares were trading on Friday’s close at $4.64.

Nephros

This small-cap medical devices company’s stock could explode higher for investors. Nephros Inc. (NASDAQ: NEPH) engages in developing and selling liquid purification filters and an online mid-dilution hemodiafiltration system. The company operates in two segments. The Water Filtration segment includes both the medical device and commercial filtration product lines.

The Renal Products segment is comprised of SRP, which is focused on the development of medical device products for patients with renal disease, including a second-generation HDF system for the treatment of patients with ESRD. Its ultrafilters are used in dialysis centers for the removal of biological contaminants from water, bicarbonate concentrate and blood.

Benchmark recently started coverage with a $16 price target, and the posted consensus target was last seen at $14. The stock was trading at $8.85 a share on Friday’s close.


Northern Oil & Gas

Stifel analysts remain very positive on this small-cap energy play. Northern Oil & Gas Inc. (NYSE: NOG) is engaged in the acquisition, exploration, development and production of oil and natural gas properties, primarily in the Bakken and Three Forks formations within the Williston Basin in North Dakota and Montana. It is the largest non-operator in that basin.

With Bakken returns continuing to improve to well above 50%, and Northern’s operating partners representing what may be as the best operators in the basin, there is upside potential.

The company pre-announced solid third-quarter production activity, and while the weather curtailed some results, the company kept 2019 final estimates intact. It was noted this week the company is expected to have free cash flow equal to almost three-quarters of the stock market capitalization over the next year.

The monster $5.70 Stifel price target compares the posted consensus target of $3.42 and the closing share price of $2.06 seen on Friday.

























































































Syros Pharmaceuticals

This small-cap biotech stock has serious upside possibilities. Syros Pharmaceuticals Inc. (NASDAQ: SYRS) engages in the development of novel gene control therapies for cancer and other diseases. It has developed a proprietary platform that is designed to systematically and efficiently analyze unexploited regions of DNA in human disease tissue to identify and drug novel targets linked to genomically defined patient populations.

The firm focuses on developing treatments for cancer and immune-mediated diseases and is building a pipeline of gene control medicines and recently presented new preclinical data for SY-5609, its highly selective and potent oral inhibitor of cyclin-dependent kinase 7 (CDK7). The data demonstrate that SY-5609 induces deep and sustained anti-tumor activity, including complete regressions, in multiple preclinical models of solid tumors at doses below the maximum tolerated dose. These data were presented at the AACR-NCI-EORTC International Conference on Molecular Targets and Cancer Therapeutics in Boston.

Oppenheimer has set its price objective at $11. The consensus target is higher at $13.50, but the stock ended the week at $5.34.

ALSO READ: Merrill Lynch Says 4 Broken 2019 IPOs May Have Huge Potential Upside

Zynga

This very aggressive tech play could have upside above the Jefferies target. Zynga Inc. (NASDAQ: ZNGA) is a leading developer of mobile and social games. In the company’s relatively short history, it has developed a broad portfolio of games that includes several on Facebook and several top-grossing mobile apps. Key franchises include FarmVille, Zynga Poker, Hit It Rich Slots and Words With Friends.

With live events growing the company’s revenues, cost-cutting should drive margin expansion, which is very positive. The company also pops up in takeover chatter, and the low price makes it even more attractive.

Zynga posted a healthy top and bottom line third-quarter beats, coupled with an above consensus fourth-quarter guide. The Jefferies analysts continue to believe investors are too focused on potential near-term M&A and are overlooking the fundamental strength in the core business. They view Zynga as the best way to play the industry tailwinds within mobile gaming.

The Jefferies price target is $7.50. The consensus target price is $7.41, and the shares were changing hands on Friday’s close at $6.35 apiece.

​With news that a phase-one trade deal with China is closer, with tariffs being rolled back, U.S. equities hit all-time highs. The major equity indexes are now less than 1% under historic milestones of 28,000 on the Dow Jones industrial average and 3,100 on the S&P 500. While investors have jumped into defensive stocks and defensive strategies for too long to easily recount, those defensive strategies are far from attractive if a trade deal with China is going to occur. The actual odds of a recession were far lower than those endless recession calls by the media this summer, but if things go the way they appear to be heading, then investors will want to have exposure to more aggressive strategies.

24/7 Wall St. has tracked the so-called defensive investment strategies for years, and many of these still include sectors that are equities. Our observation was that many of these were simply at sky-high valuations even at the end of August.

The Utilities Select Sector SPDR Fund (NYSEARCA: XLU), which includes the top utilities as defensive investments, was last seen down 1.4% at $61.97 on Thursday. That’s down from a high of $65.11 that was just seen on September 26.

NextEra Energy Inc. (NYSE: NEE) is the largest U.S. utility by market cap, and it is the only one to have ever reached a $100 billion market cap. It was down 2.5% at $221.70, and its high of $239.89 was just seen on October 22.

American Water Works Co. Inc. (NYSE: AWK), which rises on many bad days for the stock market as a whole, was down 2.5% at $118.51. That’s down from a high of $129.89, and its price-to-earnings (P/E) comparison to the market as a whole remains a difficult sell to any new investors.

Procter & Gamble Co. (NYSE: PG), the king of consumer products, was trading down 0.4% at $119.79, down from a high of $125.77 that was just seen on October 24.

McDonald’s Corp. (NYSE: MCD) had been defensive due to its ability to feed a family for very little, but it had already been selling off due to its own troubles of late. Still, it was down another 0.35% at $193.50 on Thursday. This was a $220 stock as recently as September 9.

American Tower Corp. (NYSE: AMT) is defensive because its business is likely to keep all the cell-tower traffic whether the economy is up or down. It traded down 1.77% at $204.29, and that is down from an all-time high of $242.00 from September 5.

Coca-Cola Co. (NYSE: KO) was down 1.1% at $52.21, from a recent high of $55.92. PepsiCo Inc. (NYSE: PEP) traded down 0.75% at $133.43, after a recent high of $140.45.

Altria Group Inc. (NYSE: MO) has had its share of problems recently, without considering the market, but its shares were down 0.4% at $45.72.

There is also the Invesco Defensive Equity ETF (NYSEARCA: DEF), which targets defensive investing but still has some cyclical names in its top holdings. Its shares were up just 0.1% at $54.53, in a 52-week trading range of $41.45 to $54.76.

Gold was taking it on the chin, with stocks signaling highs and with bond yields rising. Gold’s price was down almost 1.5% at $1,469.70, after peaking at about $1,500 in September. The SPDR Gold Shares (NYSEARCA: GLD), the largest of all exchange-traded gold products by far, was last seen trading down 1.7% at $138.00, compared to a recent high of $146.82.

Exchange-traded products tracking bonds were also soft. The Vanguard Total Bond Market Index Fund ETF Shares (NYSEARCA: BND) was down 0.54% at $83.45, versus a recent high of $85.30. The iShares National Muni Bond ETF (NYSEARCA: MUB) traded down 0.34% at $113.30, compared to a recent high of $115.42, and it aims to track the tax-free municipal bonds.

​DEMAND IS INCREASING

​Uber Technologies Inc. (NYSE: UBER) reported third-quarter financial results after markets closed Monday. The ride-sharing firm posted a net loss of $0.68 per share and $3.81 billion in revenue, compared with consensus estimates that were calling for a net loss of $0.81 per share and $3.69 billion in revenue. The same period of last year reportedly had a net loss of $2.21 per share and $2.94 billion in revenue.

During the latest quarter, gross bookings increased 29% year over year to $16.5 billion, up 32% in constant currency. Monthly Active Platform Consumers increased by 26% to 103 million, up from 82 million.

Also, the total number of trips increased 31% year over year to 1.77 billion, compared with the same period last year when Uber reported 1.35 billion trips.ADVERTISEMENT
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Adjusted net revenue (ANR) growth accelerated to 33% year over year, or 35% on a constant currency basis as both Rides and Eats ANR take-rates improved quarter over quarter to 22.8% and 10.7%, respectively.

The company said that it is improving its full-year adjusted EBITDA guidance by $250 million, now expecting a loss in the range of $2.8 billion to $2.9 billion. Consensus estimates are calling for a net loss of $0.75 per share and $4.03 billion in revenue for the coming quarter.

CEO Dara Khosrowshahi commented:

Our results this quarter decisively demonstrate the growing profitability of our Rides segment. Rides Adjusted EBITDA is up 52% year-over-year and now more than covers our corporate overhead. Revenue growth and take rates in our Eats business also accelerated nicely. We’re pleased to see the impact that continued category leadership, greater financial discipline, and an industry-wide shift towards healthier growth are already having on our financial performance.

Shares of Uber closed Monday at $31.08, in a post-IPO range of $28.31 to $47.08. The consensus price target is $48.73. Following the announcement, the stock is down 5% at $29.46 in the after-hours session.

​Total U.S. crude oil production reached a 20-year low of around 3.8 million barrels a day in August of 2005. As of last week, U.S. production has totaled 12.6 million barrels a day. Production doubled in the eight-year period to August 2013, and the U.S. Energy Information Administration (EIA) is forecasting U.S. 2020 production at 13.2 million barrels a day. At that rate, U.S. production would nearly double again in 2021, another doubling in just eight years.

According to a new report from analytics firm IHS Markit, that doubling is not going to happen. In fact, IHS Markit is forecasting 2020 growth of 440,000 barrels a day, not quite half the increase the EIA has projected. The firm sees growth flattening in 2021 and rising modestly in 2022.

After four years of nearly unequaled growth, the U.S. exploration and production (E&P) firms have been called to account by investors. When crude prices collapsed in 2015, E&P firms focused on raising production using a combination of cheap money, high valuations and drilling first in their best prospects. That’s all changed now.

Raoul LeBlanc, IHS Markit vice-president for North American unconventionals, commented:

Going from nearly 2 million barrels per day annual growth in 2018, an all-time global record, to essentially no growth by 2021 makes it pretty clear that this is a new era of moderation for shale producers. This is a dramatic shift after several years where annual growth of more than one million barrels per day was the norm.

Investors in 2019 are focused on the return of capital, period. Further drilling faces two strong headwinds: expected continued low crude oil prices and access to capital markets. Low prices for crude lead to low valuations on reserves, which drives up the cost of capital.

As IHS Markit sees things, prices for West Texas Intermediate (WTI) crude will remain stuck around $50 a barrel for the next two years and capital spending will fall by 10% this year, another 12% in 2021, and a further 8% in 2022 from $102 billion in 2019 to $83 billion in 2022.

The tipping point for crude prices is around $55 a barrel, according to the analysts: “[That’s] the point where it remains viable to have both some production growth and deliver shareholder returns. WTI prices would have to stabilize around $65 a barrel before the E&P companies would have a chance to boost volume growth significantly while also boosting shareholder returns.”

LeBlanc also noted that the resource is there: “There is certainly ample inventory of high-quality wells out there. Shale producers are making a deliberate change to the business model in response to investor demands.”

According to the latest EIA drilling productivity report, there were 7,740 drilled but uncompleted wells in the seven major U.S. shale regions at the end of September. A year ago, there were nearly 8,400, and in January of this year, there were nearly 8,800.

Completing a well is cheaper than drilling a new one, but it won’t take long to exhaust that backlog of uncompleted wells if the number drops by 206 a month as it did last month. By 2022, the backlog would be cut in half without new drilling.

How many of those uncompleted wells meet LeBlanc’s definition of high quality remains to be seen. The EIA expects new wells to reach 802 barrels of production per rig in November for the seven major shale basins, the highest monthly number we’ve seen. But how many wells in that backlog will it take to hit that number? 200? More?

The other thing to keep in mind is that during the oil price boom days from January 2016 to September 2018, E&P companies drilled their best prospects first as crude prices more than doubled from around $32 a barrel to around $70. Since dropping to around $57 a barrel a year ago, the price has bounced around in a fairly narrow range that is generating enough profit to yield some production growth for the drillers and acceptable (barely) returns to shareholders. But it’s a delicate balancing act in an industry not known for its finesse.

​STOCK MARKET

​Amazon.com Inc. (NASDAQ: AMZN) posted poor earnings and then lost out on a major cloud deal with the U.S. Department of Defense. In the meantime, Walmart Inc. (NYSE: WMT) has slowly but surely hoisted its way into a major position in retail e-commerce. Wall Street’s perception of the different paths has shown up in the share prices of the companies so far this year.

Amazon’s shares have actually underperformed the Nasdaq this year. The index is higher by 13.5%. Amazon’s shares are higher by 8.3%. In the meantime, Walmart’s stock has risen by 25.8%.

Amazon’s shareholders have become impatient because the company has returned to an old strategy. It will spend its way to more rapid growth and better market share then its competition. Its aggressive move into one-day delivery may give it an e-commerce advantage, but at what cost? While revenue grew from $56.6 billion in the third quarter of 2018 to $70.0 billion, per-share earnings dropped from $5.81 to $4.31. Investors also were concerned that its cloud business, Amazon Web Services, has slower growth than in past quarters, even though revenue rose from $6.8 billion to $9.0 billion. The Microsoft win with the Pentagon showed that, despite its leadership in the market, Amazon is hardly invulnerable.

Walmart’s growth is snail-like compared to Amazon’s. Its revenue in the most recent quarter rose 2.9% to $131.7 billion. This may be modest, but it once again cements its position as the world’s largest retailer, and one that can grow despite its size. In its home market, it has done particularly well. When management announced numbers, it said: “Walmart U.S. comp sales increased on a two-year stacked basis by 7.3%, which is the strongest growth in more than 10 years.”

Walmart also has started to flank Amazon in some of its most important businesses. Amazon’s move into groceries via its purchase of Whole Foods was meant to challenge Walmart. However, Walmart has grown its grocery pick-up business to 2,700 locations. Its in-home grocery business delivers fresh food to people’s homes. It has a next-day delivery operation to challenge Amazon’s.SPONSORED BY ADOBE
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Amazon may well still make a comeback. It has over 100 million Prime subscribers who pay $12.99 for services that include free shipping and its streaming media service. Its portable in-home assistance devices likely lead the market in share, which puts it into millions of homes. This presence has been leveraged to improve people’s ties to Amazon’s e-commerce business. Amazon Web Services has more competition than it did five years ago, but it is still the industry leader.

For years, Amazon was the hot company and Walmart the boring one. That has changed.

Apple Inc. (NASDAQ: AAPL) shares have risen 62.18% this year to $255.82. That is the best performance of any of the 30 components of the Dow Jones industrial average, which is up 17.23% to 27,347.36. The iPhone maker’s rise comes despite months of skepticism early this year about sales of its flagship product. Apple’s latest earnings statement blew skeptics away. The company just posted earnings of $3.05 per share, up from $2.94 last year. Forecasts for the upcoming holiday quarter were strong.

Apple’s stock increase rode the back of two developments for most of the year. The new iPhone 11 has done better than expected, although the numbers are speculation by experts and not data provided by Apple. The other is that Apple’s bet on “services” as an alternative to rising hardware sales has gotten a boost from the belief of some investors in particular that its Apple TV+ streaming product will do well. Apple’s services business results crushed expectations for the latest quarter. Its revenue set a record at $12.5 billion, against total company revenue of $63 billion. “Services” as a percentage of total revenue is expected to continue to rise.

The release of the iPhone 11 in September was indeed the tonic the stock needed. It had sold down sharply in mid-summer after Apple announced its earnings for a quarter ago. The mainstay of revenue had continued to weaken as the iPhone X series did poorly, particularly in the world’s largest wireless market, China. The trade war between China and the United States also dragged on the stock, as anxiety about Apple supply chain interruptions grew. Apple sources many parts of the iPhone from companies in China. iPhone 11 sales were enough to alleviate any worry along these lines.

Apple’s management continues to make the case that its services business would replace the iPhone as the company’s growth engine. It was not an easy argument to make, up until the new figures came out yesterday

The launch of Apple TV+ is critical to the new strategy. Apple already has a huge music store. Its app store is by far the largest in the industry. By some estimates, apps downloaded since the store began total more than 130 billion. Many experts believe that app sales cannot continue to grow at rates they have over the past decade. So video streaming becomes an essential part of the growth in this multimedia business.

All this means that Apple’s bet on TV is absolutely critical. At $4.99 for the first month, after a seven-day free trial, the service is aggressively priced compared to industry leaders Amazon and Netflix, which have price points of $12.99 a month. Apple’s management has gambled that, although its library of content is limited compared to the leaders, the low price, the Apple brand, and the hundreds of millions of iPhones, iPads, and Macs in the world are a huge base to which it can market its streaming service.

Confidence has grown that Apple’s new iPhone 11 and services strategy is the right formula. Its market cap is back above $1 trillion. And it was recently named the most valuable brand in the world again.

​UNEMPLOYMENT

​HOT STOCKS

​BEST PERFORMER

​FUEL CELL

​While most of Wall Street focuses on large and mega cap stocks, as they provide a degree of safety and liquidity, many investors are limited in the number of shares they can buy. Often the biggest public companies, especially the technology giants, trade in the low-to-mid hundreds, all the way up to over $1,000 per share. At those steep prices, it’s pretty hard to get any decent share count leverage.

Many investors, especially more aggressive traders, look at lower-priced stocks as a way to not only make some good money but to get a higher share count. That can really help the decision-making process, especially when you are on to a winner, as you can always sell half and keep half.

Every week, we screen our 24/7 Wall St. research database looking for stocks with Buy equivalent ratings at major firms and priced under the $10 level (last week’s picks included EnLink Midstream and Extraction Oil and Gas), and this week was no exception. We found five new stocks that could provide investors with some solid upside potential. While more suited for aggressive accounts, they could prove to be exciting additions to portfolios looking for solid alpha potential.

Aphria

This is one of the only marijuana stocks that actually makes money. Aphria Inc. (NASDAQ: APHA) engages in the production and supply of medical cannabis. Its Cannabis Operations segment produces, distributes and sells both medical and adult-use recreational cannabis.

The Distribution Operations segment is carried out through its wholly owned subsidiaries ABP, FL Group and CC Pharma. The Distribution Under Development segment includes operations in which the firm has not received final licensing or has not commenced commercial sales from operations.

Jefferies has a Buy rating and an $8.30 price objective. No Wall Street consensus price target was available. The shares traded on Friday’s close at $5.60.SPONSORED BY AUKEYS US VESSOS
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AudioEye

This off-the-radar company has huge upside to the posted target prices. AudioEye Inc. (NASDAQ: AEYE) provides digital accessibility technology solutions. It develops patented, internet content publication and distribution software, enabling the conversion of any media into an accessible format and allowing for real-time distribution to end-users on any internet-connected device.

The company invents, manufactures and distributes mobile, advertising and internet technologies that enable users to transact, communicate and engage with products, brands and content using networked interactive voice browsing technology.

AudioEye also focuses on providing solutions to the internet, print, broadcast and other media, irrespective of an individual’s network connection, device, location or impairment. The company provides e-learning and e-commerce systems, as well as internet publishing products and services.

National Securities has a Buy rating and a massive $11 price target. The posted consensus target is even higher at $11.13, and the stock traded at $3.40 on Friday’s close.

Playa Hotels and Resorts

This is a solid vacation travel play for investors. Playa Hotels and Resorts N.V. (NASDAQ: PLYA) engages in the ownership, operation and development of all-inclusive resorts in beachfront location destinations in Mexico and the Caribbean.

Playa owns or manages a total portfolio consisting of 21 resorts (7,936 rooms) located in Mexico, Jamaica and the Dominican Republic. In Mexico, Playa owns and manages Hyatt Zilara Cancun, Hyatt Ziva Cancun, Panama Jack Resorts Cancun, Panama Jack Resorts Playa del Carmen, Hilton Playa del Carmen and others. In Jamaica, Playa owns and manages Hyatt Zilara Rose Hall and Hyatt Ziva Rose Hall, Hilton Resort & Spa Rose Hall, Jewel Dunn’s River Beach Resort, Jewel Grande Montego Bay and others.

SunTrust’s Buy rating comes with an $11 price target. The consensus target is $10.10. Shares closed trading at $8.14.24/7 Wall St.
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Target Hospitality

If you want to plan something big, this company is there to help. Target Hospitality Corp (NASDAQ: TH) engages in the provision of rental accommodations with premium catering and value-added hospitality services. Its services include catering, housekeeping and maintenance, recreation and leisure, fitness, security and transportation.

Back in the summer, the company’s board of directors approved a $75 million share buyback program. In addition, a new chief financial officer recently was brought on as the company continues to build a strong executive team.

A $15 price target accompanies the Stifel Buy rating, while the consensus target is $11.80. The shares ended the week at $5.61.

Wanda Sports

This Chinese company has a massive footprint and its shares offer significant upside. Wanda Sports Group Co. Ltd. (NASDAQ: WSG) operates as a sports events, media and marketing platform worldwide.

The company engages in the rights distribution, broadcast hosting, digital media and entertainment, program production, event operations and licensing, and brand development and sponsorship activities. The stock has sputtered since the IPO, and is offering investors a very solid entry level.

Deutsche Bank has a Buy and an $11 price target, which is above the consensus figure of $9.32. The stock last traded at $3.53.I'm interested in the   Newsletter
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These are five stocks for aggressive accounts that look to get share count leverage on stocks that have sizable upside potential. While not suited for all investors, these are not penny stocks with absolutely no track record or liquidity, and major Wall Street firms have research coverage.