Mark Mobius: A different outcome in Mueller report could've emboldened China

The Chinese government would have taken a tougher stance on trade with the U.S. if it thought Robert Mueller's investigation was any real risk to Donald Trump's presidency, veteran fund manager Mark Mobius told CNBC on Monday.

China "probably has done all the numbers and they realize it would be very difficult to impeach the president," the co-founder of Mobius Capital Partners said on "Squawk Box."

"If there was a possibility of him being impeached, then of course there would be a different situation" on trade.

Attorney General William Barr on Sunday released a summary of Mueller's findings in the Russia investigation and Trump's 2016 campaign. Barr said Mueller did not find sufficient evidence to establish that Trump committed obstruction of justice, or that his campaign coordinated with Russia's efforts to influence the election. U.S. stock futures initially rose after the news but struggled during Monday's session to hold those gains.

The conclusion of Muller's investigation lifts a cloud that has loomed over Trump's presidency. In response to the findings, Trump took a victory lap on Twitter, saying, "No Collusion, No Obstruction, Complete and Total EXONERATION. KEEP AMERICA GREAT!"

Barr specifically noted that Mueller did not exonerate Trump.

Mueller's report comes amid a high stakes economic battle between China and the U.S., which initially centered on the American trade deficit with China.

The White House said the president is sending U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin to Beijing on Thursday to continue U.S. talks with China as the two sides approach the finish line on a deal.

Mobius, who has more than four decades of experience in emerging markets, said he doesn't expect Mueller's findings to have an impact on Trump. Mobius has previous said he agreed with Trump "completely" when it comes to China and its trade deficit with the U.S.

For GE's Larry Culp, it's all about the art of managing expectations

General Electric Chief Executive Officer Larry Culp had a lot on his plate during the company's 2019 outlook presentation on Thursday.

Once the biggest public company in the United States, GE has shed more than $200 billion of market value since 2017. Its stock was booted from the blue-chip Dow Jones Industrial Average last year, and its accounting is under federal investigation. The formerly sprawling industrial giant is being dismantled piece by piece.

For Culp, with billions of dollars and the fate of an American crown jewel in his hands, managing investor expectations is at the top of his priority list. And it looks like it's starting to work.

Culp, on the job less than six months, has to try and win back the confidence of GE shareholders and employees and calm its detractors, and the numbers aren't helping. On Thursday, he projected 2019 earnings per share would come in between 50 cents and 60 cents, below the 70 cents Wall Street had expected. He also put details on a prediction he made last week: GE's cash flow this year will either be unchanged or or turn negative by as much as $2 billion.

But Thursday morning selling in GE shares was contained. Nobody panicked. In fact, the stock ticked lower in premarket trading but then shot back into positive territory, up 4 percent at mid-morning and adding to a 10 percent gain since last week.

Culp's step-by-step effort to keep shareholders in the loop, disclosing just as much information as he can without setting the bar too high, appears to have soothed some nerves and softened stock fluctuations. On every call he makes, there are so many constituencies," said RBC's General Electric analyst Deane Dray. "It's the investment community and it's all the internal – the employees – he needs to make sure he wins their hearts and minds, instill confidence."

"You can hear it in his voice," Dray said.

'We have work to do'

Culp took over as CEO on Oct. 1 with a long to-do list he is slowly checking off. GE recently announced the spin-off of its 111-year-old rail business as well as a sale of part of its stake in oilfield services firm Baker Hughes.

Culp's track record as CEO of the science and technology conglomerate Danaher, where he more than quintupled market value and revenue over a decade, was supposed to give investors hope, but some remain unconvinced. GE is a much larger company, with revenue north of $120 billion and almost five times as many employees.

Those with any meaningful financial stake in General Electric have likely been following headlines about its cash flow, a term used by analysts to describe any money left over after a company has paid for its normal operations. To the dismay of some investors, Culp on Thursday projected the company could burn as much as $2 billion more in cash than it makes this year.

But the situation is expected to improve next year. "We have work to do in 2019, but we expect 2020 and 2021 performance to be significantly better," Culp said in a press release. Challenges should diminish, he added, and operational improvements should yield financial results.

The relative calm in the stock after the disclosure could be because Culp had already prepared investors by saying last week the number would be negative, without specifics.

"That's the hard part," said RBC's Dray, who has a buy rating on GE shares. "Everyone wants to hear all the specifics right then and there." Instead, on the third and fourth quarter earnings calls, Culp "was trying to sensitively explain and give a road map when he clearly did not have all the specifics yet."

And remember: Culp and Dray are talking about estimates here. Investors will have to wait to see if 2019 cash is, in fact, negative.

The forecast that cash flow would turn positive in 2020 and pick up more momentum in 2021 "is the biggest positive disclosure, in our view," Dray said in a note to clients.

Not far from the tree

Culp's ability to manage expectations is far from unique.

There is perhaps no CEO better equipped or better practiced at managing steep investor expectations than Apple's Tim Cook. Between a devout customer base, a hard-to-please investor pool and a one-of-a-kind predecessor, Cook had his work cut out for him on Day One in 2011. And it hasn't gotten any easier.

Fears of plateauing smartphone sales appeared to peak on Jan. 2, when Apple lowered its first-quarter sales guidance, citing softer demand in China. Specifically, Cook et al. said Apple's revenue would be closer to $84 billion, down from the $89 billion to $93 billion it previously projected.

"If you look at our results, our shortfall is over 100 percent from iPhone and it's primarily in greater China," Cook told CNBC at the time. "It's clear that the economy began to slow there for the second half and what I believe to be the case is the trade tensions between the United States and China put additional pressure on their economy."

Despite the fact that Apple had topped Wall Street profit estimates in 19 of the last 20 quarters, shares sank nearly 10 percent the day after the disclosure and drew a deluge of worrisome analyst notes. Analysts from Jefferies and Macquarie each threw in the towel and downgraded the stock to a neutral rating from buy.

"Biggest miss in years," Jefferies said in a note to investors.

"The bottom line is that we are late (obviously), but we can no longer recommend Apple," Macquarie added.

Oppenheimer said Apple's announcement "raises more questions than answers."

Almost predictably, Apple reported both a profit and sales that were better than expected a month later, and its stock remains more than 25 percent above its Jan. 3 close.

In fact, annual revenue under Cook has more than doubled in his eight years at the helm and earnings per share have tripled. Apple's cash hoard has ballooned to $245 billion as management eases the company toward a recurring, service-based model, opening the door to M&A and other strategic moves.

The point is that it's actually easy to overlook the success Cook and Apple have had over the past several years by fixating on current iPhone sales trends, a short-term view that billionaire value investor and Apple stakeholder Warren Buffett has repeatedly criticized.

The "Oracle of Omaha," who actually owned GE preferred stock during the financial crisis, has for decades touted a strategy of buying no-nonsense stocks and long-term investments in favor of trying to time the market based on short-term outlooks. Instead, he's focused on long-term fundamentals: whether or not Apple or General Electric equity looks cheap over a five- or 10-year horizon.

"The idea that you're going to spend loads of time trying to guess how many iPhone Xs ... are going to be sold in a three-month period totally misses the point," Buffett said in a "Squawk Box " interview last year. "

"Nobody buys a farm based on whether they think it's going to rain next year," he added.

Cramer: The disrupters have been the biggest winners — Kraft Heinz take note

Innovative companies have been some of the biggest winners when the stock market rises and it's a theme that established names should take note of, CNBC's Jim Cramer said Wednesday.

All of the major markets made gains during the session—the Dow Jones Industrial Average added about 148 points, the S&P 500 increased 0.7 percent to top 2,800, the Nasdaq closed up 0.7 percent—powered by the tech and semiconductor sectors.

Facebook, Google-parent Alphabet, and Amazon with their targeted ads have disrupted traditional advertising and ad-supported media, which is getting behind subscription models and paywalls, Cramer said. Financial technology stocks like Visa, PayPal, and Square, among others, are changing the way people bank and manage their money, he added.

"Trying to reinvent your business has its risks, but standing still may be an even dicier proposition," the "Mad Money" host said. "You either disrupt or you get disrupted—the companies that do nothing have the stocks that should be sold."

Cramer also pointed to the health care sector where DexCom and Tandem Diabetes have products that have transformed diabetes treatment, changing the insulin pump market once dominated by Medtronic and Johnson & Johnson.

The companies that don't disrupt themselves first end up like Kraft Heinz, Cramer said. Their stock price tumbled just shy of 25 percent in 2019 and more than 50 percent in the past year. Kraft Heinz could end up like Campbell Soup, ConAgra, Kellogg, and Dean Foods if it doesn't make moves, he said.

Cramer recommended that the household food and beverage brand should follow the lead of famed activist investor Nelson Peltz, who sits on Procter & Gamble's board and once sat on that of Kraft Heinz. Peltz joined Aurora Cannabis as astrategic advisor on Wednesday and said he thinks the company is "poised to go to the next level across a range of industry verticals." The pot stock closed the session nearly 14 percent higher.

The host thinks cannabis could disrupt the opioid drugs, animal health, tobacco and even alcohol industries. Companies like Altria and Constellation Brands have already jumped in the marijuana game, he noted.

"That's why I think Kraft Heinz needs to move quickly. It's urgent that they sell Maxwell House and Breakstone's sour cream and cottage cheese, then take the money and move aggressively into cannabis," Cramer said. "That would prove, without a doubt, that Kraft Heinz is a growth company with a forward-looking agenda."

"Sometimes, companies need to be willing to totally reinvent themselves if they want to stay relevant or even just stay in the game," he said. "You either bite the bullet and disrupt your whole industry or you get disrupted and … end up like roadkill."

Disclosure: Cramer's charitable trust owns shares of Apple, Facebook, Alphabet, PayPal, and Johnson & Johnson.

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No One Is Afraid of Slowing Growth at Momo

Revenue growth continues to decelerate at Momo (NASDAQ:MOMO), but it's hard to be disappointed by a 50% top-line gain. The Chinese social video and online dating specialist posted fourth-quarter results on Tuesday morning, landing comfortably ahead of its earlier guidance. 

Net revenue climbed 50% to hit a record $559.1 million. It's the seventh time over the past eight quarters that the pace of the top-line increase has slowed at Momo, though it's not much of a slide compared to the 51% revenue uptick last time out. The dot-com speedster was only targeting growth of 43% to 47% at the time of its third-quarter report.

Image source: Momo.

Internet thrilled the video star

Once again, we see live video as the top driver at Momo, contributing 77% of the revenue for the quarter. The segment's top-line showing increased 36% for the period. Momo's value-added services business -- including membership subscription and virtual gift revenues -- is growing even faster, soaring 272% (and now accounting for 19% of the revenue mix). There were declines in its mobile gaming and mobile marketing segments, but they have never been needle movers here.

Momo's popularity continues to grow. There were 113.3 million monthly active users in December, up from 110.5 just three months earlier and 94.4 million a year earlier. Momo is also doing a good job of getting a larger percentage of its users to pay up for premium services, and the revenue per paying user is also on the rise. 

Unfortunately, costs are growing even faster than revenue and user counts. Adjusted earnings rose just 22% -- as it did back in the third quarter -- to hit $0.59 a share, but most investors were bracing for slower growth.

The deceleration will continue. Momo's initiated guidance calls for just 28% to 32% in revenue growth for the current quarter. 

Momo has been a volatile stock in recent years, but it's been a winner more often than not during earnings season. The stock's 12% increase on Tuesday makes this the fourth time in the past five quarters that the stock has moved at least 9% higher the day it posts its financial results. 

Momo's platform is still strong and growing. The acquisition of social dating app Tantan last year helped leverage its success with live video while providing a boost to its paying user count. Armed with more than $1.6 billion in cash, it wouldn't be a surprise if Momo goes shopping again. It's putting some of the money to use by declaring a special dividend that amounts to $0.62 per depositary share. Investors will enjoy the pocket change as they ponder what Momo will do to eventually reverse the deceleration in revenue growth. 

Top Penny Stocks To Buy Right Now

tags:III,RDC,LUNA,SORL,

There are numerous trading techniques to consider for each and every options trade, so Fred Oltarsh at Options Strategy Network details five of the ones he considers extremely vital for trying to put the percentages in the trader's favor.

The key to trading options contracts successfully (individual stocks and futures as well) is to put the percentages in your favor. This involves numerous trading techniques discussed in the Options Strategy Network options guide. Briefly, one should consider the following factors for each and every trade: 1) liquidity or the cost to initiate and liquidate the position, 2) implied volatility or the relative value of the particular option one is trading, 3) having a pre-designated point of liquidation, 4) risk/reward ratio after commissions and slippage and 5) diversification of strategies and trades.

Each analysis described above increases the likelihood of success of an individual trade. Examining the liquidity of the market that one is about to trade is the first step to increasing levels of productivity. If one is buying a stock for a long-term hold, the implications of liquidity are not as great for that trader as for the trader who intends to buy and sell stock frequently. If one is day trading, whether stocks or options, even a bid/ask spread of a penny on a low priced stock, has an impact on the bottom line. The best way to analyze it is to quickly determine the difference of the bid/ask spread as a percentage of the value of the instrument traded. Then determine what that value is per one thousand dollars invested. If the number sounds high, it's probably worth staying away from that trade.

Top Penny Stocks To Buy Right Now: Information Services Group Inc.(III)

Advisors' Opinion:

• [By Logan Wallace]

  Martingale Asset Management L P bought a new position in Information Services Group, Inc. Common Stock (NASDAQ:III) during the second quarter, Holdings Channel reports. The fund bought 110,416 shares of the business services provider’s stock, valued at approximately $453,000.

• [By Logan Wallace]

  CGI Group (NYSE: GIB) and Information Services Group (NASDAQ:III) are both computer and technology companies, but which is the better investment? We will contrast the two companies based on the strength of their profitability, earnings, dividends, analyst recommendations, risk, valuation and institutional ownership.

• [By Joseph Griffin]

  3i Group (LON:III) had its price target upped by Societe Generale from GBX 1,020 ($13.58) to GBX 1,130 ($15.04) in a research note released on Thursday. The brokerage currently has a buy rating on the stock.

• [By Joseph Griffin]

  RMR Group (NASDAQ: RMR) and Information Services Group (NASDAQ:III) are both finance companies, but which is the better investment? We will compare the two companies based on the strength of their analyst recommendations, risk, profitability, dividends, valuation, institutional ownership and earnings.

• [By Ethan Ryder]

  Get a free copy of the Zacks research report on Information Services Group, Inc. Common Stock (III)

  For more information about research offerings from Zacks Investment Research, visit Zacks.com

Top Penny Stocks To Buy Right Now: Rowan Companies Inc.(RDC)

Advisors' Opinion:

• [By Jason Hall]

  And while Ensco has taken its share of asset writedowns in recent years to decommission older, non-economical vessels, it has also been one of the biggest beneficiaries of consolidation. In 2017, it acquired Atwood Oceanics, a smaller company with a young, high-spec fleet of floating vessels, and more recently agreed to merge with Rowan Companies (NYSE:RDC), which has a high-quality fleet of jack-up rigs and a strong backlog of work for that fleet. 

• [By Jason Hall, Tyler Crowe, and Matthew DiLallo]

  At the same time, there has been a tremendous amount of consolidation (like this and this and this), leaving fewer -- stronger -- companies operating just when work is starting to pick up. Here's a look at quarterly revenue for Diamond Offshore (NYSE:DO), Transocean (NYSE:RIG), Ensco PLC (ADR) (NYSE:ESV), Noble Corp. (NYSE:NE), and Rowan (NYSE:RDC) so far this year. 

• [By Lisa Levin]

  Check out these big penny stock gainers and losers

  Losers MDC Partners Inc. (NASDAQ: MDCA) fell 23.4 percent to $5.25 in pre-market trading after a first-quarter earnings miss. Hudson Technologies Inc. (NASDAQ: HDSN) shares fell 15.1 percent to $3.48 in pre-market trading after the company reported downbeat Q1 earnings. Nuance Communications, Inc. (NASDAQ: NUAN) fell 14 percent to $13.15 in pre-market trading after the company posted downbeat Q2 earnings and lowered FY18 organic growth guidance. Myomo, Inc. (NYSE: MYO) fell 13.2 percent to $3.10 in pre-market trading after reporting downbeat quarterly results. Rowan Companies plc (NYSE: RDC) shares fell 10.7 percent to $14.13 in pre-market trading after climbing 8.50 percent on Wednesday. BT Group plc (NYSE: BT) fell 9 percent to $14.80 in pre-market trading after the company reported Q4 results and announced plans to cut 13,000 jobs over the next three years. Exelixis, Inc. (NASDAQ: EXEL) fell 8.3 percent to $19.90 in pre-market trading after the company disclosed that IMblaze370 Phase 3 pivotal trial of atezolizumab and cobimetinib in patients with heavily pretreated locally advanced or metastatic colorectal cancer did not meet primary endpoint. Infinera Corporation (NASDAQ: INFN) fell 8.2 percent to $10.80 in pre-market trading after reporting Q1 results. Synaptics, Incorporated (NASDAQ: SYNA) shares fell 7.4 percent to $43.00 in pre-market trading. Synaptics reported better-than-expected earnings for its third quarter, while sales missed estimates. Randgold Resources Limited (NASDAQ: GOLD) shares fell 7.4 percent to $76.23 in pre-market trading after reporting Q1 earnings. Integra LifeSciences Holdings Corporation (NASDAQ: IART) shares fell 7 percent to $59.36 in pre-market trading. Integra LifeSciences priced its 5.25 million share public offering of common stock at $58.50 per share. Array BioPharma Inc. (NASDAQ: ARRY) shares fell 6.9 percent to $12.75 in pre-m
• [By Travis Hoium, Jason Hall, and Matthew DiLallo]

  And while offshore still has a ways to go, I think investors should do well to buy Ensco at current prices. At recent prices, its shares trade for about 24% of tangible book value. Furthermore, it's also a 23% discount to the book value of Rowan Companies (NYSE:RDC), which will merge with Ensco sometime in the first half of the year. It's a substantial discount to more typical book value multiples these companies have carried during healthy offshore drilling environments:

• [By Ethan Ryder]

  Rowan Companies (NYSE:RDC) has been given a $20.00 price objective by stock analysts at B. Riley in a report issued on Monday. The brokerage presently has a “buy” rating on the oil and gas company’s stock. B. Riley’s target price would suggest a potential upside of 54.32% from the stock’s previous close.

Top Penny Stocks To Buy Right Now: Luna Innovations Incorporated(LUNA)

Advisors' Opinion:

• [By Shane Hupp]

  Luna Coin (CURRENCY:LUNA) traded 5.2% higher against the dollar during the 24 hour period ending at 16:00 PM Eastern on September 26th. Luna Coin has a total market capitalization of $11,480.00 and approximately $13.00 worth of Luna Coin was traded on exchanges in the last day. One Luna Coin coin can now be bought for $0.0067 or 0.00000104 BTC on major exchanges including CoinExchange and YoBit. Over the last seven days, Luna Coin has traded 20.8% lower against the dollar.

• [By Max Byerly]

  Luna Innovations Incorporated (NASDAQ:LUNA) rose 16.6% during trading on Monday . The company traded as high as $4.14 and last traded at $3.93. Approximately 651,876 shares changed hands during mid-day trading, an increase of 1,262% from the average daily volume of 47,854 shares. The stock had previously closed at $3.37.

• [By Ethan Ryder]

  Luna Coin (CURRENCY:LUNA) traded up 0.8% against the dollar during the one day period ending at 14:00 PM Eastern on September 18th. One Luna Coin coin can now be bought for about $0.0086 or 0.00000135 BTC on exchanges including CoinExchange and YoBit. Luna Coin has a market cap of $14,603.00 and approximately $2.00 worth of Luna Coin was traded on exchanges in the last day. In the last seven days, Luna Coin has traded down 6.7% against the dollar.

• [By Logan Wallace]

  PRA Health Sciences (NASDAQ: PRAH) and Luna Innovations (NASDAQ:LUNA) are both medical companies, but which is the better business? We will compare the two businesses based on the strength of their dividends, valuation, analyst recommendations, institutional ownership, profitability, risk and earnings.

• [By Ethan Ryder]

  Luna Innovations (NASDAQ:LUNA) major shareholder Clinic Carilion sold 6,100 shares of Luna Innovations stock in a transaction on Friday, May 25th. The shares were sold at an average price of $3.41, for a total transaction of $20,801.00. Following the completion of the sale, the insider now owns 2,054,385 shares of the company’s stock, valued at approximately $7,005,452.85. The transaction was disclosed in a legal filing with the SEC, which can be accessed through this link. Large shareholders that own at least 10% of a company’s shares are required to disclose their sales and purchases with the SEC.

• [By Logan Wallace]

  Get a free copy of the Zacks research report on Luna Innovations (LUNA)

  For more information about research offerings from Zacks Investment Research, visit Zacks.com

Top Penny Stocks To Buy Right Now: SORL Auto Parts Inc.(SORL)

Advisors' Opinion:

• [By Lisa Levin]

  Shares of SORL Auto Parts, Inc. (NASDAQ: SORL) got a boost, shooting up 13 percent to $5.90 after reporting upbeat Q1 results.

  Hollysys Automation Technologies Ltd. (NASDAQ: HOLI) shares were also up, gaining 24 percent to $27.3947 following Q3 results.

• [By Max Byerly]

  These are some of the news articles that may have impacted Accern Sentiment Analysis’s analysis:

  Get Innovative Industrial Properties alerts: Return on Equity (ROE) under Consideration Innovative Industrial Properties, Inc. (NYSE:IIPR), Neonode Inc … (stocksnewspoint.com) Morning Miraculous Stocks: Taseko Mines Limited (NYSE:TGB), WMIH Corp. (NASDAQ:WMIH), Innovative Industrial … (journalfinance.net) Dazzling Stocks: Innovative Industrial Properties, Inc. (NYSE:IIPR), SORL Auto Parts, Inc. (NASDAQ:SORL), ReWalk … (thestreetpoint.com) Head-To-Head Contrast: Kennedy-Wilson (KW) vs. Innovative Industrial Properties (IIPR) (americanbankingnews.com) Innovative Industrial (IIPR) versus Colliers International Group (CIGI) Financial Contrast (americanbankingnews.com)

  A number of research analysts have weighed in on the company. Zacks Investment Research raised Innovative Industrial Properties from a “sell” rating to a “hold” rating in a report on Friday, March 16th. ValuEngine raised Innovative Industrial Properties from a “hold” rating to a “buy” rating in a report on Wednesday, May 2nd.

• [By Lisa Levin] Gainers Euro Tech Holdings Company Limited (NASDAQ: CLWT) shares climbed 70.3 percent to $5.45 after reporting 2017 year-end results. MEDIGUS Ltd/S ADR (NASDAQ: MDGS) surged 39.8 percent to $1.58 in reaction to its Monday announcement of a distribution agreement. The medical device company said it reached an agreement to distribute its minimally invasive medical devices in Turkey, Azerbaijan and Georgia. Arcadia Biosciences, Inc. (NASDAQ: RKDA) gained 25.6 percent to $11.50. Arcadia Biosciences reported that Albert D. Bolles, Ph.D. has joined its board of directors. Aytu Bioscience Inc (NASDAQ: AYTU) shares jumped 21.8 percent to $0.4798 after the company late Monday reported lighter-than-expected Q1 loss. Hollysys Automation Technologies Ltd. (NASDAQ: HOLI) shares gained 21.1 percent to $26.77 following Q3 results. Pfenex Inc. (NYSE: PFNX) rose 16.8 percent to $7.1271 after the company announced the positive top-line PF708 study results in Osteoporosis patients that showed no imbalances in severity or incidence of adverse events. MEI Pharma, Inc. (NASDAQ: MEIP) rose 13.8 percent to $2.88. Red Violet, Inc. (NASDAQ: RDVT) jumped 13.1 percent to $6.41 after reporting Q1 results. SORL Auto Parts, Inc. (NASDAQ: SORL) shares gained 12 percent to $5.87 after reporting upbeat Q1 results. Bovie Medical Corporation (NYSE: BVX) gained 8.4 percent to $3.96 after reporting a first-quarter sales beat. Rosehill Resources Inc. (NASDAQ: ROSE) surged 8.4 percent to $7.90 after announcing Q1 results. LiqTech International, Inc. (NASDAQ: LIQT) rose 8.1 percent to $0.5171 following Q1 results. ProPhase Labs, Inc. (NASDAQ: PRPH) rose 7.7 percent to $5.6103 following Q1 results. Nine Energy Service, Inc. (NYSE: NINE) shares climbed 7.4 percent to $35.90. Xenon Pharmaceuticals Inc. (NASDAQ: XENE) rose 6.7 percent to $6.40 after the company presented XEN901 Phase 1 clinical update and XEN1101 TMS pharmacodynamic Phase 1 data. MYnd
• [By Lisa Levin] Gainers Red Violet, Inc. (NASDAQ: RDVT) rose 75.31 percent to close at $9.94 after reporting Q1 results. Euro Tech Holdings Company Limited (NASDAQ: CLWT) shares jumped 40.62 percent to close at $4.50 on Tuesday after reporting 2017 year-end results. MEI Pharma, Inc. (NASDAQ: MEIP) gained 34.39 percent to close at $3.40. MEDIGUS Ltd/S ADR (NASDAQ: MDGS) gained 32.74 percent to close at $1.50 in reaction to its Monday announcement of a distribution agreement. The medical device company said it reached an agreement to distribute its minimally invasive medical devices in Turkey, Azerbaijan and Georgia. Pfenex Inc. (NYSE: PFNX) surged 31.15 percent to close at $8.00 after the company announced the positive top-line PF708 study results in Osteoporosis patients that showed no imbalances in severity or incidence of adverse events. Arcadia Biosciences, Inc. (NASDAQ: RKDA) rose 21.07 percent to close at $11.09. Arcadia Biosciences reported that Albert D. Bolles, Ph.D. has joined its board of directors. Genprex, Inc. (NASDAQ: GNPX) rose 20.23 percent to close at $10.58. Turtle Beach Corporation (NASDAQ: HEAR) shares gained 17.62 percent to close at $17.82. Aptevo Therapeutics Inc. (NASDAQ: APVO) rose 17.1 percent to close at $5.82. Phoenix New Media Limited (NYSE: FENG) shares jumped 16.23 percent to close at $4.87 following Q1 earnings. Stein Mart, Inc. (NASDAQ: SMRT) rose 16.04 percent to close at $3.69. PPDAI Group Inc. (NASDAQ: PPDF) climbed 15.99 percent to close at $7.98 following Q1 results. Tyme Technologies, Inc. (NASDAQ: TYME) rose 15.93 percent to close at $3.42. LiqTech International, Inc. (NASDAQ: LIQT) gained 15.59 percent to close at $0.5532 following Q1 results. Sophiris Bio, Inc. (NASDAQ: SPHS) gained 13.92 percent to close at $3.52 on Tuesday following Q1 results. Euroseas Ltd. (NASDAQ: ESEA) jumped 13.4 percent to close at $2.37. Iteris, Inc. (NASDAQ: ITI) shares surged 13.05 percent to close
• [By Stephan Byrd]

  Icahn Enterprises LP Common Stock (NASDAQ: SORL) and Sorl Auto Parts (NASDAQ:SORL) are both multi-sector conglomerates companies, but which is the superior investment? We will compare the two businesses based on the strength of their earnings, risk, institutional ownership, profitability, analyst recommendations, valuation and dividends.

Why Taxing the Rich Isn't a Social Security Cure-All

Ready or not, Social Security is in trouble.

Although its "Judgment Day" changes frequently, the past 34 reports from the Social Security Board of Trustees, dating back to 1985, have shown that the program won't collect enough revenue over the next 75 years to cover expenditures. As of the 2018 report, there's a cash shortfall of a whopping $13.2 trillion between 2034 and 2092.

As a number of demographic changes continue to take shape, the program -- possibly beginning in 2019 -- will expend more than it collects for the first time since 1982. These net cash outflows are expected to widen with each passing year, leading to the complete exhaustion of the program's $2.9 trillion in asset reserves by 2034.

If there is a silver lining here for seniors and future generations of retirees, it's that Social Security doesn't need a dime in asset reserves to remain solvent. Recurring revenue sources that include the payroll tax on earned income, and the taxation of benefits, ensure that the program is incapable of going bankrupt. However, it won't save Social Security from an across-the-board benefit cut of up to 21% if Congress doesn't do something to raise additional revenue, reduce expenditures, or enact some combination of the two.

Image source: Getty Images.

Raising or eliminating the payroll tax cap is the most popular solution

Among the boatload of solutions on the table in Capitol Hill, none is more popular with the American public than raising or eliminating the earnings cap associated with the 12.4% payroll tax on earned income (i.e., wages and salary paid to you). An informal online poll from The Washington Post in 2014 showed that almost 70% of online readers would stand behind raising the earnings tax cap, with none of the other 11 solutions garnering more than 45% support. (Users were free to choose as many ideas as they'd stand behind.)

In 2019, all earned income between $0.01 and $132,900 is subject to the payroll tax, meaning more than nine out of 10 workers is paying into the program on every dollar they earn. Meanwhile, earned income above $132,900 is exempt from the payroll tax, allowing the rich to escape paying tax on some, or perhaps a majority, of their income. Between 1983 and 2016, the amount of earned income to be exempted each year has quadrupled from about $300 billion to $1.2 trillion.

Raising or eliminating the payroll tax cap wouldn't affect the vast majority of the population, and in a way would be viewed as a means of leveling the playing field by making all earned income taxable, which is one reason it's so popular. At the same time, it offers the potential to dramatically increase taxable revenue collection, putting Social Security on firmer ground over the long run. Some pundits have even suggested that eliminating the cap completely could resolve Social Security's long-term cash shortfall.

Image source: Getty Images.

Sorry, folks, but taxing the rich isn't a Social Security cure-all

The reality, though, is that taxing the rich isn't likely to be a cure-all for Social Security, even if it does provide an immediate lift in taxable revenue.

The first problem with taxing well-to-do workers is that ignores a trend that's persisted since Social Security was signed into law in 1935: increasing longevity. As a result of easier access to medical care, better pharmaceutical products, and improved health education, life expectancies have been on the rise over the long run. Between 1960 and today, the average individual is living about nine years longer. More specifically, as it relates to Social Security, the average 65-year-old is going to live about two more decades. The program was never designed to support retired workers for two-plus decades. Even with added revenue from the taxation of most or all earned income, increasing longevity may push expenditures well beyond collected revenue.

Second, a more recent problem that's cropped up over the past decade is the precipitous decline in fertility rates. Over the long run, the trustees project an average birth rate per woman of 2. But in 2018, fertility rates hit a 40-year low of 1.76 births per woman. If fertility rates continue to decline, or even if they maintain the existing birth rate of less than 1.8 births per woman over their lifetime, it's going to have a notably negative impact on Social Security's worker-to-beneficiary ratio, and it'll almost certain cause the program's cash shortfall to widen. As with increasing longevity, a "tax-the-rich" strategy may not account for the magnitude of cash shortfall that persistently low fertility rates could bring about.

Image source: Getty Images.

Third, and finally, we have to remember what happened when the wealthy had significantly higher marginal tax rates imposed decades ago. Despite peak marginal federal income tax rates of 70% to 90%, most rich Americans avoided an effective tax rate of anywhere near this number. Yes, tax loopholes helped, but the response by the wealthy to shift their earned income made an arguably bigger difference.

What does this have to do with payroll tax revenue? The simple answer is that there are a number of income sources that aren't subject to the payroll tax, including pretty much all types of investments and rental income. Wealthy individuals could simply repurpose their income generation to these exempt sources and retain more of their money. Not to mention, the response by the rich to higher Social Security payroll taxes may disrupt economic growth via lower reinvestment. That would be a secondary means of lowering taxable revenue collection.

Don't get me wrong: I do believe that a bipartisan approach that includes a higher tax rate on upper-income earners is needed to help shore up Social Security. But taxing the rich may not be enough by itself to fully fix Social Security.

Duality Advisers LP Buys Shares of 63,770 Nucor Co. (NUE)

Duality Advisers LP bought a new position in Nucor Co. (NYSE:NUE) in the 4th quarter, HoldingsChannel reports. The firm bought 63,770 shares of the basic materials company’s stock, valued at approximately $3,304,000.

Several other hedge funds have also recently modified their holdings of NUE. Russell Investments Group Ltd. grew its stake in Nucor by 65.5% during the third quarter. Russell Investments Group Ltd. now owns 177,419 shares of the basic materials company’s stock worth $11,232,000 after buying an additional 70,211 shares in the last quarter. Robeco Institutional Asset Management B.V. grew its stake in Nucor by 23.0% during the third quarter. Robeco Institutional Asset Management B.V. now owns 224,557 shares of the basic materials company’s stock worth $14,268,000 after buying an additional 41,917 shares in the last quarter. Victory Capital Management Inc. grew its stake in Nucor by 290.1% during the third quarter. Victory Capital Management Inc. now owns 185,401 shares of the basic materials company’s stock worth $11,764,000 after buying an additional 137,871 shares in the last quarter. Private Advisor Group LLC grew its stake in Nucor by 66.7% during the third quarter. Private Advisor Group LLC now owns 21,232 shares of the basic materials company’s stock worth $1,347,000 after buying an additional 8,495 shares in the last quarter. Finally, Commerce Bank grew its stake in Nucor by 9.5% during the third quarter. Commerce Bank now owns 10,123 shares of the basic materials company’s stock worth $642,000 after buying an additional 877 shares in the last quarter. Institutional investors and hedge funds own 76.28% of the company’s stock.

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NUE opened at $57.79 on Friday. Nucor Co. has a 1-year low of $49.79 and a 1-year high of $68.97. The company has a debt-to-equity ratio of 0.41, a quick ratio of 1.45 and a current ratio of 3.08. The company has a market capitalization of $18.26 billion, a PE ratio of 7.58, a P/E/G ratio of 0.85 and a beta of 1.51.

Nucor (NYSE:NUE) last posted its quarterly earnings results on Tuesday, January 29th. The basic materials company reported $2.07 earnings per share for the quarter, beating analysts’ consensus estimates of $1.93 by $0.14. Nucor had a net margin of 9.42% and a return on equity of 24.57%. The company had revenue of $6.30 billion for the quarter, compared to the consensus estimate of $6.29 billion. During the same period last year, the company posted $0.65 EPS. The firm’s quarterly revenue was up 23.6% compared to the same quarter last year. On average, analysts expect that Nucor Co. will post 5.98 earnings per share for the current year.

The business also recently declared a quarterly dividend, which will be paid on Friday, May 10th. Stockholders of record on Friday, March 29th will be paid a $0.40 dividend. The ex-dividend date is Thursday, March 28th. This represents a $1.60 dividend on an annualized basis and a dividend yield of 2.77%. Nucor’s payout ratio is currently 21.00%.

In other news, Chairman John J. Ferriola sold 87,719 shares of the firm’s stock in a transaction that occurred on Thursday, January 31st. The shares were sold at an average price of $60.35, for a total value of $5,293,841.65. The transaction was disclosed in a filing with the SEC, which is available through this hyperlink. Company insiders own 0.80% of the company’s stock.

A number of brokerages have issued reports on NUE. UBS Group set a $59.00 price objective on shares of Nucor and gave the stock a “hold” rating in a research note on Monday, December 10th. Zacks Investment Research downgraded shares of Nucor from a “hold” rating to a “strong sell” rating in a research note on Friday, February 1st. ValuEngine downgraded shares of Nucor from a “hold” rating to a “sell” rating in a research note on Thursday, February 14th. Cowen began coverage on shares of Nucor in a research note on Tuesday, January 8th. They set an “outperform” rating and a $62.00 price objective on the stock. Finally, KeyCorp reiterated a “buy” rating and set a $72.00 price objective on shares of Nucor in a research note on Friday, November 30th. Two research 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 currently has an average rating of “Buy” and an average price target of $71.45.

TRADEMARK VIOLATION NOTICE: This article was first reported by Ticker Report and is owned by of Ticker Report. If you are accessing this article on another website, it was illegally copied and reposted in violation of United States and international copyright law. The legal version of this article can be read at https://www.tickerreport.com/banking-finance/4209860/duality-advisers-lp-buys-shares-of-63770-nucor-co-nue.html.

Nucor Profile

Nucor Corporation manufactures and sells steel and steel products in the United States and internationally. It operates in three segments: Steel Mills, Steel Products, and Raw Materials. The Steel Mills segment produces hot-rolled, cold-rolled, and galvanized sheet steel products; hollow structural section steel tubing, steel electrical conduit, plate steel, and structural steel products; bar steel products, such as blooms, billets, concrete reinforcing and merchant bars, wire rods, and special bar quality; and tubular and plate steel products.

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GNC Holdings Inc (GNC) Q4 2018 Earnings Conference Call Transcript

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GNC Holdings Inc  (NYSE:GNC)Q4 2018 Earnings Conference CallMarch 07, 2019, 8:30 a.m. ET

Contents: Prepared Remarks Questions and Answers Call Participants Prepared Remarks:

Operator

Good day, and welcome to the GNC Fourth Quarter and Full Year 2018 Earnings Call. Today's conference is being recorded.

At this time, I would like to turn the conference over to Matt Milanovich, Head of Investor Relations. Please go ahead, sir.

Matt Milanovich -- VP-Investor Relations & Treasury

Good morning, and thank you for joining us on GNC's fourth quarter 2018 conference call. I would like to remind everyone that during this conference call, GNC management will make certain forward-looking statements about its outlook that involve risks and uncertainties. Forward-looking statements are generally preceded by words such as believe, plan, intend, expect, anticipate or similar expressions. Forward-looking statements are protected by the Safe Harbor contained in the Private Securities Litigation Reform Act of 1995. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstance that are difficult to predict and many of which are outside of the Company's control. Factors that could cause actual results to differ from expectations include, but are not limited to, those factors set forth in GNC's filings with the SEC. GNC is making these statements as of March 5th, 2019 and assumes no obligation to publicly update or revise any forward-looking statements.

In addition to the GAAP results, GNC will provide certain non-GAAP financial measures. GNC's earnings press release for the fourth quarter of 2018 can be found under the News Release link on the Investor Relations page of the Company's website at www.gnc.com. The tables attached to that earnings press release include reconciliations of the non-GAAP financial measures to the most directly comparable GAAP financial measures.

With that, I'll turn it over to our Chairman and CEO, Ken Martindale.

Kenneth A. Martindale -- Chairman and Chief Executive Officer

Thank you, Matt. Good morning, everyone. Thank you for accommodating the change in release timing. We felt it was important to communicate the details around our recently formed joint venture with International Vitamin Corporation concurrently with the results of the fourth quarter.

As you can see, we achieved some major milestones in strengthening our balance sheet and repositioning the Company during the past several weeks. We were pleased to receive the final $150 million tranche of Harbin Pharmaceutical Group's $300 million investment, culminating a yearlong effort to formalize our partnership.

With the transaction complete, we are launching two joint ventures with Harbin that will give us access to an extensive distribution network and deep manufacturing expertise in China. The Hong Kong-based China JV, which operates the existing cross-border e-commerce business, and is the largest current growth driver in China, was formed simultaneously with the closing of the Harbin investment.

Over the next few quarters, we'll complete the permitting and regulatory filing process to kick off the China JV and finalize the contribution of the existing China assets to the newly formed joint venture. The China JV will include the retail stores in China and the pharmacy distribution channel. When the China joint venture is finalized, Harbin will contribute $20 million of working capital to the newly formed entity.

This morning, we also announced in a separate press release a strategic joint venture agreement with International Vitamin Corporation, a global leader in vitamin and nutritional supplement manufacturing. Under the terms of the agreement, GNC will receive $101 million from IVC and contribute the net assets of the Nutra manufacturing facility and Anderson facility in exchange for an initial 43% ownership in the joint venture.

Over the next four years, GNC will receive an additional $75 million from IVC as IVC's ownership of the joint venture increases to 100%. The joint venture will be responsible for the manufacturing of the products currently produced by Nutra. This strategic partnership with IVC gives us access to their industry-leading experience and expertise, greatly increases our manufacturing capacity and lets us leverage the collective buying power of the two organizations. Over time, it will provide us a level of efficiency that we could not have achieved on our own while allowing our team to continue focusing on delivering high-quality, innovative products to our customers.

In addition, IVC has capacity to scale up, giving us room for future growth and supporting our global expansion plans without the need for significant future capital investment. As part of the transaction, IVC will take over manufacturing and integrate into GNC supply chain management while product development and innovation will stay in the hands of GNC's expert internal team. Quality assurance will be a shared responsibility moving forward.

IVC has exceptional in-house end-to-end manufacturing capabilities supported by an integrated ERP system and the expertise to keep GNC at the forefront of our industry. It has a stable supply of low-cost raw materials and more than 1 million square feet of manufacturing, packaging, warehousing and distribution facilities in the US as well as a growing global presence with existing facilities in Europe and China.

The IVC partnership is consistent with our emphasis on streamlining business processes and gives our team the freedom to focus on what we do best, understanding today's rapidly changing consumers and bringing innovative products to life. In the coming months, we will work closely with the IVC team to integrate our operations and continue delivering great service to all of our customers, including our franchisees.

As part of our continued efforts to strengthen and ultimately restructure our balance sheet, we use the proceeds from the China and Nutra transactions to retire the remainder of our B-1 Term Loan and further paid down the B-2 extended Term Loan.

Now, let me take a few minutes to talk about recent results. Our adjusted EBITDA performance was below our expectations, driven by both margin and SG&A impacts, which Tricia will cover in a few minutes shortly. We were however, satisfied with the underlying sales trend during the quarter. Our domestic retail comp trend improved to negative 1.4% and we continue to be encouraged by the results of our modified sales incentive program that focuses our team on increasing foundational product sales. Our e-commerce business grew even as we cycled against two years of significant growth and the anniversary of GNC products being available on Amazon Prime. The maturity of our Amazon Prime relationship will provide a headwind in 2019.

Now, let's turn to progress we're making on a go-forward strategy. In the US domestic retail business, we're making progress against our plan to increase the productivity of our retail portfolio by renegotiating lease terms, closing unproductive stores and transferring sales to stronger locations nearby. As we mentioned last quarter, we have identified 700 to 900 unproductive stores to be closed over the next three years. Our plan generally align store closures with lease terminations, resulting in minimal write-offs and cash expense as the current portfolio's average remaining lease term is less than three years.

Our store closure process is rigorous and focused on minimizing closing costs, retaining our best people and maximizing sales volume in surrounding stores. In 2018, the team closed 257 stores and exceeded their sales transfer goal of 30%. Keep in mind, our stores have high fixed cost, driven by large portion of the stores operating with one person at a time. So, transfer-related increases in volume have a positive impact on the affected stores' EBITDA.

Our international business continues to grow and posted strong results with a 12.1% year-over-year revenue increase. The results were driven by strength in China, Mexico and South Korea, and we continue to believe that the business is well-positioned as we head into 2019. More specifically in China, the world's second largest health and wellness market, our business was up 30% in the fourth quarter, driven by growth in cross-border e-commerce.

As we begin to leverage Harbin's distribution network in regulatory, operational and manufacturing experience through the JV, we expect to generate additional momentum in this business. Being relevant to consumers and delivering a constantly excellent experience, one that's personalized and aligned with your changing expectations is our path to growth and differentiation. Our loyalty program, myGNC Rewards, finished the quarter with 17 million members, including 1 million PRO Access members. The program provides opportunities to build stronger relationships with our existing customers and drive more meaningful personalized experiences.

Over the next three years, we will strategically invest in the systems and software needed to deliver a true omni-channel experience being very-targeted with our capital. In 2019, we will focus that investment on strengthening our e-commerce and mobile platforms and on improving our order management capabilities. We plan to replace our current order management system over the next year, giving us the capability to efficiently add services like buy online, pickup in store; and buy online, ship from store. Additionally, this new system will result in improved delivery service speed and cost-effective international e-commerce capabilities.

We continue to make positive strides with our own brands and in the fourth quarter, GNC branded products made up 54% of our sales. This is up from 48% at this time last year and 52% in Q3, partly driven by the introduction of our innovative Earth Genius brand in TamaFlex, which addresses unmet consumer needs.

Our wholesale division continues to represent an opportunity to increase revenues by putting our well-recognized brands in front of consumers who don't currently shop with us. New customers can engage with our products in these channels creating an opportunity to attract them back into our retail stores and GNC.com, where they can see our full product line and experience everything that GNC has to offer. We recently extended our 20-year relationship with Rite Aid for another three years and gained more flexibility to partner with retailers in different channels.

Looking ahead, I see tremendous opportunity and potential for GNC. We've made substantial progress in strengthening our balance sheet and putting ourselves in a position to succeed. We have a strong highly recognized brand and a strategy to leverage that brand across multiple channels, touching both existing and new customers. And while we still have much work to do, we feel good about the foundation that we've laid to regain momentum in the business throughout the coming year.

With that, I'll turn it over to Tricia for a closer look at the quarter.

Tricia Tolivar -- Executive Vice President and Chief Financial Officer

Thanks, Ken, and good morning, everyone. Over the past 16 months, we've reduced our debt by approximately $500 million and reduced go-forward annual interest costs by more than $30 million. As Ken mentioned, we used the proceeds from the joint venture investments to pay off our B-1 Term Loan and pay down the B-2 extended Term Loan. Additionally, we now have three strategic partners to grow the business, a Hong Kong JV, a China JV, and a manufacturing JV.

As we move into 2019, the formation of the Hong Kong and China joint ventures will result in an operating income reduction of approximately $6 million compared to 2018. The joint venture's operating performance, net of taxes, will be recorded as an adjustment to the income statement between operating income and net income. As a 35% owner of the newly formed JVs in 2019, GNC will recognize its share of the Hong Kong and China JV's profitability net of tax as a line item between GNC's operating income and net income on the income statement.

Additionally, GNC will recognize royalties in GNC's International segment operating profit. In 2019, as compared to 2018, we expect no material impact to net income as a result of the formation of the joint venture. Going forward, the joint venture will heavily invest in marketing to drive an expected $200 million in revenue for the joint venture over the next three years.

Let me give you some more specifics on the manufacturing joint venture starting with the details of the investment. In March of 2019, IVC's $101 million investment gives them 50% of our Nutra business. Over the next four years, IVC will gradually increase their stake in Nutra with four approximately $19 million annual investments, until they own the business outright in February 2023. Our joint venture with IVC gives us a level of efficiency that we cannot achieve on our own and allows us to focus on what we do best. In addition, it provides incremental capital to reduce our outstanding debt.

Now, moving on to the impacts to our financials related to this joint venture. As a reminder, the Nutra business is included in our Manufacturing and Wholesale segment. Going forward, the impact to this segment without Nutra is a decrease of approximately $25 million to $30 million in EBITDA. As a 43% owner of the JV, in 2019, GNC will recognize its share of the JV's profitability net of tax as a line item between GNC's operating income and net income on the income statement.

Turning to our Q4 financial results, our adjusted EBITDA of $35 million was below our expectations, largely driven by a $2.5 million reserve as a result of balance sheet risk associated with a third-party vendor, a $2.5 million correction related to previously recorded revenue for specialty manufacturing, and $3 million in store compensation driven by incremental store associate commissions. In 2019, much of the store compensation impact will be offset by changes to other components to the commission structure. Overall, salaries and benefits for domestic retail in 2019 is expected to be slightly higher as a percent of sales, driven by minimum wage rate increases.

Fourth quarter consolidated revenue was $547.9 million compared with $562.8 million in the fourth quarter of 2017. The decrease is primarily attributable to store closures at the end of the lease term, which is a component of our store portfolio optimization strategy. Fourth quarter same-store sales, including GNC.com, were down 0.6%. E-commerce sales were 9.3% of US and Canada revenue in the current quarter compared with 8.4% in the prior year quarter, driven by growth in revenue from both GNC.com and our Amazon Marketplace.

Our e-commerce comp sales increased 5.9% in the fourth quarter. Keep in mind that we're comparing against two years of significant growth from this channel and we've now lapped the first year of our partnership with Amazon. And as Ken mentioned, this presents a headwind for us going into 2019.

Revenue from our domestic franchise locations decreased $5 million due to a 1.3% decrease in same-store sales and a decrease in the number of franchise stores. Revenue from our international business was up 12.1%, driven by increased China cross-border e-commerce sales and strong performance from franchisees in Mexico and South Korea. As previously mentioned, the Harbin joint venture partnership unlocks our expansion into China, and we're working in key markets such as India, the Philippines and Europe.

Manufacturing and wholesale revenue, excluding intersegment sales, decreased $3.4 million, driven by the $2.5 million adjustment from the previously recorded revenue for specialty manufacturing that I mentioned earlier. This adjustment also drove the $3.3 million reduction in adjusted operating income compared to the prior year.

Fourth quarter gross profit was 31.5% compared with 32.6% in the prior year. As we discussed on our last call, the fourth quarter is our seasonally slowest quarter resulting in deleverage from occupancy and distribution, which are largely fixed costs. Margins were also negatively impacted by the $2.5 million reserve related to the risk associated with the third-party vendor and the specialty manufacturing adjustment previously noted. Excluding the one-time impact, margin rate was up 44 basis points compared to the third quarter of 2018.

At 27.1% of sales, fourth quarter adjusted SG&A was 200 basis points above last year due to one-time legal settlement benefits in the fourth quarter of 2017 and incremental associate commissions from the program introduced in August 2018 to build basket as previously mentioned.

We are encouraged by the early results of our Companywide cost optimization plan, which we will continue to expect to deliver $15 million to $20 million in savings in 2019 with an additional $25 million to $30 million in 2020. In 2018, we generated $95.9 million in net cash from operating activities, invested $19 million in capital expenditures and generated $95.7 million in free cash flow.

Fourth quarter free cash flow benefited from a $12.4 million tax refund related to 2017. For the 12-month period ended in December 31st, 2018, our total net debt to adjusted EBITDA, which includes adjustments from our credit agreement, is 4.9 times. We reiterate our long-term lease adjusted net leverage target at 3 times with rent capitalized at 5 times. As previously mentioned, we received a full $300 million investment from Harbin and $101 million from IVC that will show an additional decrease in our leverage ratio in the first quarter. In 2019, we will continue to use the majority of our free cash flow to pay down debt. In 2019, we also expect to incur a lease liability between $525 million and $575 million on our balance sheet related to the new lease accounting rules.

From a P&L standpoint, we expect in 2019 for occupancy to decrease $20 million due to this lease accounting change as well as our continued ongoing efforts to lower rent expense. The finalization of the Harbin transaction and recent IVC joint venture, along with the reduction of approximately $500 million in debt in the last 16 months, has positioned us to succeed. We're currently working with both new joint venture partners on initiatives that will enhance our long-term strategy, and we look forward to sharing more details with you later this year.

With that, let's open the call for your questions.

Questions and Answers:

Operator

Thank you. (Operator Instructions) We can now take a question from Huang Yang from Citi. Please go ahead. Please unmute your line, sir.

Huang Yang -- Citigroup -- Analyst

(technical difficulty)

Tricia Tolivar -- Executive Vice President and Chief Financial Officer

I'm sorry. I didn't catch that question.

Huang Yang -- Citigroup -- Analyst

Hi. Can you hear me?

Tricia Tolivar -- Executive Vice President and Chief Financial Officer

Yes.

Huang Yang -- Citigroup -- Analyst

I'm sorry. So, just you had nice sequential improvement in the same-store sales in the domestic stores. What's driving that? Any particular products or categories that are a standout?

Tricia Tolivar -- Executive Vice President and Chief Financial Officer

Yes. So, we introduced two new product lines, TamaFlex and Earth Genius, in the latter part of Q3, and those certainly were significant drivers to both the same-store sales as well as the improvement in our GNC brand mix to 54% in the fourth quarter.

Huang Yang -- Citigroup -- Analyst

And so then, if I look at the EBIT in your domestic store segment, what were the actual gross margins, and I'm sorry if I missed it on the on the product side?

Tricia Tolivar -- Executive Vice President and Chief Financial Officer

Yeah. So, the gross margins were impacted by a couple of one-time adjustments that we talked about earlier. So, first, there was a $2.5 million adjustment related to one of our third-party vendors and some balance sheet risks there. So that was incurred in the quarter. Additionally, in the quarter from a margin perspective on the US and Canada segment, there was an adjustment where there was an impact related to our PRO Access program. So we made some changes to that program during the year that improved the experience for the customers but also added some incremental costs. And what we've been able to do as we go into 2019 is maintain that service level but minimize the cost impacts and bring us back to a more normalized level back to 2017. So, the combination of those items as well as some impacts in SG&A related to the incentives for our commission structure, those were the biggest drivers of the reduction in EBITDA in that segment.

Huang Yang -- Citigroup -- Analyst

But, is -- is it really one-time or should we think about these margins as sort of a reset for that segment?

Tricia Tolivar -- Executive Vice President and Chief Financial Officer

Certainly, the call-outs that I made on the margin side, the $2.5 million and the other PRO Box impacts were one-time in nature.

Huang Yang -- Citigroup -- Analyst

Okay. And then, just lastly on the new JV with ICV, is it -- IVC, I'm sorry, when is the transition -- are there any risks to transitioning the business or is it really -- or the manufacturing is going be done in the same facilities so it doesn't really make a difference?

Kenneth A. Martindale -- Chairman and Chief Executive Officer

The joint venture is in the same facility, and it's one of the reasons that we've structured it the way that we have. The teams have been working together to put a transition plan together. We are anxious to start leveraging the opportunities we have to drive cost out together, but first and foremost, we want to make sure that we're really focused on the transition going smoothly. So, the teams are working together. They're down there meeting today, and we're off and running. But we're going to take it slow and steady and make sure that we manage the transition as carefully as we can.

Huang Yang -- Citigroup -- Analyst

Thank you.

Operator

(Operator Instructions) We can now take our next question from Hale Holden from Barclays. Please go ahead.

Hale Holden -- Barclays -- Analyst

Hi. Thank you for taking my call. I was just wondering if you could just give us the current outstanding balance on the B-2 post for IVC pay-down.

Tricia Tolivar -- Executive Vice President and Chief Financial Officer

The outstanding balance on the B-2 as of yesterday is $458 million. There's $275 million outstanding and as a FILO and the remaining outstanding on the converts that existed at the end of this calendar year. There's nothing outstanding -- there's nothing outstanding on the ABL.

Hale Holden -- Barclays -- Analyst

Perfect. I appreciate it. Thank you.

Operator

(Operator Instructions) There are no further questions on the line at this time. I would now like to turn the call back to the host for any additional or closing remarks.

Matt Milanovich -- VP-Investor Relations & Treasury

Great. Well, we thank you all for joining us. And again, I appreciate you accommodating the change in the call time. We look forward to talking to you guys again in another quarter. Have a great day.

Operator

Thank you. That concludes today's conference. Thank you for your participation, ladies and gentlemen. You may now disconnect.

Duration: 30 minutes

Call participants:

Matt Milanovich -- VP-Investor Relations & Treasury

Kenneth A. Martindale -- Chairman and Chief Executive Officer

Tricia Tolivar -- Executive Vice President and Chief Financial Officer

Huang Yang -- Citigroup -- Analyst

Hale Holden -- Barclays -- Analyst

More GNC analysis

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Top Biotech Stocks To Own Right Now

tags:ARQL,AMGN,ALNY,BIIB,

Cantor Fitzgerald set a $15.00 target price on Cidara Therapeutics (NASDAQ:CDTX) in a report released on Tuesday morning. The firm currently has a buy rating on the biotechnology company’s stock.

Other equities analysts also recently issued reports about the stock. Zacks Investment Research downgraded shares of Cidara Therapeutics from a buy rating to a hold rating in a research note on Monday, August 13th. Needham & Company LLC set a $14.00 price objective on shares of Cidara Therapeutics and gave the company a buy rating in a research note on Thursday, August 9th. ValuEngine upgraded shares of Cidara Therapeutics from a sell rating to a hold rating in a research note on Wednesday, July 11th. Citigroup began coverage on shares of Cidara Therapeutics in a research note on Wednesday, July 25th. They set a buy rating and a $8.00 price objective on the stock. Finally, WBB Securities upgraded shares of Cidara Therapeutics from a hold rating to a buy rating in a research note on Wednesday, May 23rd. Two equities research analysts have rated the stock with a hold rating and five have issued a buy rating to the company. Cidara Therapeutics currently has an average rating of Buy and an average price target of $11.60.

Top Biotech Stocks To Own Right Now: ArQule Inc.(ARQL)

Advisors' Opinion:

• [By Maxx Chatsko]

  Shares of ArQule (NASDAQ:ARQL) rose over 70% today after the company reported full-year 2018 operating results and provided full-year 2019 guidance. That said, investors are probably used to wild swings in the stock price by now. The development-stage pharma didn't turn in a particularly impressive performance last year. Management expects revenue to drop significantly in the year ahead as collaboration revenue dries up, which will also widen operating losses.

• [By Money Morning Staff Reports]

  But Blink and our other penny stocks to watch are unlikely to continue to lock in such spectacular gains in June. After looking at our 10 top penny stocks to watch this month, we'll show you a small-cap stock with great profit potential in its future…

  Penny Stock Current Share Price Law Month's Gain  Blink Charging Co. (Nasdaq: BLNK) $7.07 439.85% Senes Tech Inc. (Nasdaq: SNES) $1.27 175.40% Vivis Inc. (Nasdaq: VVUS) $0.77 150.41% Adomani Inc. (Nasdaq: ADOM) $1.49 137.68% NF Energy Saving Co. (Nasdaq: NFEC) $2.34 134.88% Vaalco Energy Inc. (NYSE: EGY) $2.15 109.06% Heat Biologics Inc. (Nasdaq: HTBX) $2.35 99.12% ArQule Inc. (Nasdaq: ARQL) $4.88 90.74% LiqTech International Inc. (NYSE: LIQT) $0.66 85.60% Transenterix Inc. (NYSE: TRXC) $3.46 77.84%

  While last month's gains are tremendous, they also illustrate the inherent dangers that come with investing in penny stocks.

• [By Logan Wallace]

  ValuEngine downgraded shares of ArQule (NASDAQ:ARQL) from a strong-buy rating to a buy rating in a research report sent to investors on Saturday.

  Several other brokerages also recently issued reports on ARQL. Zacks Investment Research upgraded shares of ArQule from a hold rating to a buy rating and set a $2.75 target price for the company in a research note on Tuesday, May 8th. B. Riley set a $4.00 target price on shares of ArQule and gave the company a buy rating in a research note on Monday, March 26th. Roth Capital raised their target price on shares of ArQule from $5.00 to $6.00 and gave the company a buy rating in a research note on Tuesday, April 17th. BidaskClub upgraded shares of ArQule from a hold rating to a buy rating in a research note on Saturday, May 19th. Finally, Leerink Swann upgraded shares of ArQule from a market perform rating to an outperform rating in a research note on Thursday, April 5th. One research analyst has rated the stock with a sell rating, six have issued a buy rating and one has issued a strong buy rating to the company. The company has an average rating of Buy and a consensus price target of $5.35.

• [By Stephan Byrd]

  ArQule, Inc. (NASDAQ:ARQL)’s share price rose 6.2% during trading on Thursday . The stock traded as high as $5.21 and last traded at $5.15. Approximately 955,706 shares changed hands during mid-day trading, a decline of 23% from the average daily volume of 1,244,948 shares. The stock had previously closed at $4.85.

• [By Joseph Griffin]

  ValuEngine upgraded shares of ArQule (NASDAQ:ARQL) from a buy rating to a strong-buy rating in a research report released on Tuesday.

  Several other equities analysts have also issued reports on ARQL. Zacks Investment Research upgraded ArQule from a hold rating to a buy rating and set a $2.50 price objective for the company in a research report on Tuesday, March 20th. BidaskClub upgraded ArQule from a buy rating to a strong-buy rating in a research report on Saturday, March 24th. B. Riley set a $4.00 price objective on ArQule and gave the company a buy rating in a research report on Monday, March 26th. Leerink Swann upgraded ArQule from a market perform rating to an outperform rating in a research report on Thursday, April 5th. Finally, Roth Capital boosted their price objective on ArQule from $5.00 to $6.00 and gave the company a buy rating in a research report on Tuesday, April 17th. One equities research analyst has rated the stock with a sell rating, five have assigned a buy rating and two have issued a strong buy rating to the stock. The company has a consensus rating of Buy and a consensus target price of $5.35.

• [By Lisa Levin] Gainers Melinta Therapeutics, Inc. (NASDAQ: MLNT) shares surged 20.6 percent to $6.39. WBB Securities upgraded Melinta Therapeutics from Hold to Speculative Buy. Shoe Carnival, Inc. (NASDAQ: SCVL) shares climbed 17.2 percent to $30.87 after the company reported upbeat quarterly earnings. Acorn International, Inc. (NYSE: ATV) shares rose 15.2 percent to $28.804 after the company declared a special one-time cash dividend of $14.97 per ADS. Foot Locker, Inc. (NYSE: FL) gained 15 percent to $53.35 after the company reported better-than-expected results for its first quarter. Sears Hometown and Outlet Stores, Inc. (NASDAQ: SHOS) surged 14.2 percent to $2.625. ArQule, Inc. (NASDAQ: ARQL) rose 13 percent to $5.12 after gaining 4.86 percent on Thursday. Quality Systems, Inc. (NASDAQ: QSII) gained 12.8 percent to $16.97 after the company posted better-than-expected FQ4 results. Loma Negra Compañía Industrial Argentina Sociedad Anónima (NYSE: LOMA) shares rose 12 percent to $12.94. ArQule, Inc. (NASDAQ: ARQL) shares rose 12 percent to $5.07. Mirati Therapeutics, Inc. (NASDAQ: MRTX) climbed 11.4 percent to $43.50. Zai Lab Limited (NASDAQ: ZLAB) gained 11.3 percent to $24.7000. Zymeworks Inc. (NASDAQ: ZYME) rose 9.7 percent to $19.64. Park City Group, Inc. (NASDAQ: PCYG) climbed 9 percent to $7.90. Roku, Inc. (NASDAQ: ROKU) gained 7.9 percent to $38.82 after Citron reversed previously bearish position on the stock. Sears Holdings Corporation (NASDAQ: SHLD) shares jumped 7.3 percent to $3.55. Deckers Outdoor Corp (NYSE: DECK) rose 3.5 percent to $107.27 after reporting better-than-expected results for its fiscal fourth quarter.

  Check out these big penny stock gainers and losers

Top Biotech Stocks To Own Right Now: Amgen Inc.(AMGN)

Advisors' Opinion:

• [By Trey Thoelcke]

  Amgen Inc.'s (NASDAQ: AMGN) death cross also occurred this week, after the gap between the two averages had been closing since last October. As with some of its peers, short interest in this biotech stock has waned recently. Amgen shares are down more than 4% year to date. Yet, here too analysts recommend buying shares.

• [By Chris Lange]

  Amgen Inc. (NASDAQ: AMGN) saw its short interest fall to 9.62 million shares from the previous level of 9.79 million. Shares were last seen at $178.26, in a 52-week trading range of $153.56 to $201.23.

• [By ]

  Amgen (Nasdaq: AMGN) -- Amgen is a leading global biotech developer with a diverse product portfolio and promising development pipeline. The company has special expertise in cancer research and renal failure (kidney disease) treatments. Its biggest blockbuster is the anti-inflammatory drug Enbrel, used primarily for rheumatoid arthritis, which is in the top-five worldwide with annual sales of nearly $8 billion.

• [By Todd Campbell]

  Amgen (NASDAQ:AMGN) may not be as exciting a stock to own as clinical-stage upstarts, but shares in this biotech Goliath have been mounting a rally lately that should make every investor take notice. So far in 2018, Amgen's rewarded investors with an 18% return.

Top Biotech Stocks To Own Right Now: Alnylam Pharmaceuticals Inc.(ALNY)

Advisors' Opinion:

• [By Shane Hupp]

  Get a free copy of the Zacks research report on Alnylam Pharmaceuticals (ALNY)

  For more information about research offerings from Zacks Investment Research, visit Zacks.com

• [By Cory Renauer]

  Staying on top of every new drugmaker takes a lot more time than you probably have. That said, Alnylam Pharmaceuticals (NASDAQ:ALNY) and Pfizer (NYSE:PFE) shareholders want to keep their eyes on young Eidos and its lead candidate. Here's why.

• [By Sean Williams, Chuck Saletta, and Brian Feroldi]

  So, which biotech stocks should you consider buying in June? That's a question we posed to three of our healthcare-focused investors. Interestingly enough, mid-cap biotech stocks are the clear flavor of the month. If biotech is on your radar in June, our investors suggest you consider Ionis Pharmaceuticals (NASDAQ:IONS), Spark Therapeutics (NASDAQ:ONCE), and Alnylam Pharmaceuticals (NASDAQ:ALNY).

Top Biotech Stocks To Own Right Now: Biogen Idec Inc(BIIB)

Advisors' Opinion:

• [By Trey Thoelcke]

  Biogen Inc. (NASDAQ: BIIB) also saw a death cross earlier this month, and the gap between the moving averages is now more than 9% of the share price. The stock was just downgraded by one analyst and another recently anticipated no growth in the share price. The stock is up more than 6% since the beginning of the year. The consensus recommendation remains to buy Biogen shares.

• [By Brian Orelli]

  Data source: Alkermes.

  What happened with Alkermes this quarter? Sales of opioid and alcohol-dependence drug Vivitrol increased 11% year over year as states including Michigan, Pennsylvania, California, Florida, and Kentucky increase coverage of the drug as a treatment option for patients suffering from substance-use disorder. Schizophrenia drug Aristada saw sales increase 72% year over year and 35% quarter over quarter, thanks to the launch of Aristada Initio, which helps patients get started on the drug while hospitalized. Alkermes estimates it captured 29% of new prescriptions for long-acting aripiprazole, the active ingredient in Aristada. Ampyra, which goes by Fampyra outside the U.S., brought in $38.8 million, basically flat year over year, which wasn't bad since a generic launched in the U.S. last year. Manufacturing and royalty revenues for Risperdal Consta, Invega Sustenna, and Invega Trinza were up about 4% year over year. Fourth-quarter revenue also included a one-time payment of $26.7 million, which came from the sale of certain royalty streams by Zealand Pharma to Royalty Pharma. In November, Alkermes reported positive data from a second phase-3 clinical trial for schizophrenia drug ALKS 3831 that showed patients taking the drug had lower weight gain than those taking olanzapine. In December, Alkermes and its partner Biogen (NASDAQ:BIIB) filed for Food and Drug Administration (FDA) approval of diroximel fumarate, which Biogen plans to market under the name Vumerity. In January, Alkermes got bad news from the FDA when the agency turned down the marketing application for its depression drug ALKS 5461.

  Image source: Getty Images.

• [By George Budwell]

  Shares of large-cap biotech Biogen (NASDAQ:BIIB) gained a healthy 15.2% in July, according to data from S&P Global Market Intelligence. What triggered this breakout? 

• [By Chris Lange]

  Short interest in Biogen Inc. (NASDAQ: BIIB) increased to 4.33 million shares from the previous 3.86 million. The stock recently traded at $306.68 within a 52-week range of $249.17 to $370.57.

• [By Jon C. Ogg]

  Biogen Inc. (NASDAQ: BIIB) was maintained as Market Perform and the price target was lowered to $318 from $337 (versus a $319.43 prior close) at RBC Capital Markets. The firm expects no growth in its stock price with its MS drug revenues at potential with flat or even lower sales trends ahead.

BidaskClub Lowers Community Trust Bancorp (CTBI) to Sell

Community Trust Bancorp (NASDAQ:CTBI) was downgraded by equities research analysts at BidaskClub from a “hold” rating to a “sell” rating in a report issued on Wednesday.

Several other research analysts also recently issued reports on the stock. Zacks Investment Research upgraded shares of Community Trust Bancorp from a “sell” rating to a “hold” rating in a research note on Friday, February 15th. ValuEngine downgraded shares of Community Trust Bancorp from a “hold” rating to a “sell” rating in a research note on Tuesday, January 15th.

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Shares of CTBI opened at $42.37 on Wednesday. The stock has a market capitalization of $770.14 million, a price-to-earnings ratio of 12.65 and a beta of 0.55. The company has a debt-to-equity ratio of 0.11, a quick ratio of 0.94 and a current ratio of 0.94. Community Trust Bancorp has a fifty-two week low of $35.70 and a fifty-two week high of $53.00.

Community Trust Bancorp (NASDAQ:CTBI) last announced its quarterly earnings data on Wednesday, January 16th. The financial services provider reported $0.89 earnings per share for the quarter, topping the Zacks’ consensus estimate of $0.88 by $0.01. The business had revenue of $48.52 million for the quarter, compared to analysts’ expectations of $48.80 million. Community Trust Bancorp had a net margin of 26.51% and a return on equity of 11.42%. As a group, equities analysts predict that Community Trust Bancorp will post 3.49 earnings per share for the current year.

In other news, Director Franky Minnifield bought 1,600 shares of the company’s stock in a transaction dated Thursday, December 13th. The shares were purchased at an average price of $41.74 per share, for a total transaction of $66,784.00. Following the completion of the purchase, the director now owns 3,605 shares in the company, valued at approximately $150,472.70. The transaction was disclosed in a legal filing with the SEC, which is available at the SEC website. Corporate insiders own 4.80% of the company’s stock.

Several hedge funds and other institutional investors have recently modified their holdings of CTBI. Bank of Montreal Can lifted its stake in shares of Community Trust Bancorp by 32.0% in the third quarter. Bank of Montreal Can now owns 31,261 shares of the financial services provider’s stock worth $1,449,000 after buying an additional 7,585 shares in the last quarter. Assenagon Asset Management S.A. bought a new position in Community Trust Bancorp during the third quarter valued at approximately $2,099,000. Wells Fargo & Company MN lifted its position in Community Trust Bancorp by 5.0% during the third quarter. Wells Fargo & Company MN now owns 26,732 shares of the financial services provider’s stock valued at $1,240,000 after purchasing an additional 1,271 shares during the period. Stone Ridge Asset Management LLC lifted its position in Community Trust Bancorp by 16.6% during the third quarter. Stone Ridge Asset Management LLC now owns 7,721 shares of the financial services provider’s stock valued at $358,000 after purchasing an additional 1,100 shares during the period. Finally, Bessemer Group Inc. lifted its position in Community Trust Bancorp by 13.5% during the third quarter. Bessemer Group Inc. now owns 19,400 shares of the financial services provider’s stock valued at $899,000 after purchasing an additional 2,300 shares during the period. Hedge funds and other institutional investors own 58.38% of the company’s stock.

Community Trust Bancorp Company Profile

Community Trust Bancorp, Inc operates as the bank holding company for Community Trust Bank, Inc that provides commercial and personal banking services to small and mid-sized communities. The company accepts time and demand deposits, Keogh plans, and savings certificates, as well as checking and savings, individual retirement, NOW, and money market accounts.

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Axon Enterprise (AAXN) Downgraded by Zacks Investment Research to “Hold”

Zacks Investment Research lowered shares of Axon Enterprise (NASDAQ:AAXN) from a buy rating to a hold rating in a research note published on Friday.

According to Zacks, “Axon Enterprise, Inc. engages in the development, manufacture and sale of conducted electrical weapons for the law enforcement, federal, military, corrections, private security and personal defense markets. Its operating segment consists of TASER Weapons and Axon segments. TASER Weapons segment involves in the sale of conducted electrical weapons, accessories and other products and services. Axon segment focuses on devices, wearables, applications, cloud and mobile products. Axon Enterprise Inc., formerly known as TASER International Inc., is headquartered in Scottsdale, AZ. “

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Other analysts have also recently issued reports about the company. ValuEngine upgraded Axon Enterprise from a buy rating to a strong-buy rating in a research report on Monday, February 4th. BidaskClub upgraded Axon Enterprise from a buy rating to a strong-buy rating in a research report on Thursday, January 10th. JPMorgan Chase & Co. upgraded Axon Enterprise from a neutral rating to an overweight rating and increased their price target for the stock from $66.00 to $68.00 in a research report on Thursday, November 8th. Northland Securities reiterated a buy rating and set a $70.00 price target on shares of Axon Enterprise in a research report on Wednesday, February 27th. Finally, Robert W. Baird upgraded Axon Enterprise from a neutral rating to an outperform rating in a research report on Friday, November 9th. Seven investment analysts have rated the stock with a hold rating, eight have assigned a buy rating and two have issued a strong buy rating to the company’s stock. The company presently has an average rating of Buy and an average target price of $66.27.

Shares of NASDAQ AAXN opened at $51.20 on Friday. Axon Enterprise has a 52-week low of $36.91 and a 52-week high of $76.45. The company has a market cap of $3.18 billion, a price-to-earnings ratio of 102.40, a PEG ratio of 3.62 and a beta of 0.97.

Axon Enterprise (NASDAQ:AAXN) last announced its quarterly earnings results on Tuesday, February 26th. The industrial products company reported $0.08 earnings per share for the quarter, missing analysts’ consensus estimates of $0.11 by ($0.03). The company had revenue of $114.79 million for the quarter, compared to analyst estimates of $104.03 million. Axon Enterprise had a return on equity of 10.74% and a net margin of 6.26%. The firm’s revenue for the quarter was up 21.3% compared to the same quarter last year. During the same quarter in the previous year, the company posted $0.17 earnings per share. Equities research analysts expect that Axon Enterprise will post 0.52 EPS for the current fiscal year.

In related news, Director Michael Garnreiter sold 3,000 shares of the stock in a transaction that occurred on Tuesday, February 26th. The stock was sold at an average price of $60.00, for a total value of $180,000.00. Following the completion of the transaction, the director now directly owns 33,261 shares of the company’s stock, valued at approximately $1,995,660. The sale was disclosed in a filing with the Securities & Exchange Commission, which is accessible through this link. Also, CEO Patrick W. Smith sold 107,000 shares of the stock in a transaction that occurred on Thursday, December 20th. The stock was sold at an average price of $42.27, for a total value of $4,522,890.00. Following the completion of the transaction, the chief executive officer now directly owns 632,520 shares of the company’s stock, valued at $26,736,620.40. The disclosure for this sale can be found here. Insiders sold a total of 113,100 shares of company stock valued at $4,773,725 over the last three months. Corporate insiders own 2.40% of the company’s stock.

A number of hedge funds have recently modified their holdings of AAXN. Steward Partners Investment Advisory LLC grew its holdings in Axon Enterprise by 1,515.0% in the 3rd quarter. Steward Partners Investment Advisory LLC now owns 1,615 shares of the industrial products company’s stock worth $111,000 after buying an additional 1,515 shares in the last quarter. First Mercantile Trust Co. boosted its stake in Axon Enterprise by 100.0% during the 3rd quarter. First Mercantile Trust Co. now owns 2,400 shares of the industrial products company’s stock valued at $164,000 after purchasing an additional 1,200 shares in the last quarter. LS Investment Advisors LLC boosted its stake in Axon Enterprise by 22.7% during the 4th quarter. LS Investment Advisors LLC now owns 3,829 shares of the industrial products company’s stock valued at $168,000 after purchasing an additional 708 shares in the last quarter. Zurcher Kantonalbank Zurich Cantonalbank boosted its stake in Axon Enterprise by 14.6% during the 4th quarter. Zurcher Kantonalbank Zurich Cantonalbank now owns 3,854 shares of the industrial products company’s stock valued at $169,000 after purchasing an additional 491 shares in the last quarter. Finally, Laurel Wealth Advisors LLC bought a new position in Axon Enterprise during the 4th quarter valued at $179,000. 82.86% of the stock is owned by institutional investors and hedge funds.

Axon Enterprise Company Profile

Axon Enterprise, Inc develops, manufactures, and sells conducted electrical weapons (CEWs) worldwide. The company operates through two segments, TASER Weapons, and Software and Sensors. It offers TASER X26P and TASER X2 smart weapons for law enforcement; consumer CEWs; and replacement cartridges and consumables, as well as performance power magazines.

Read More: What is a blue-chip stock?

Get a free copy of the Zacks research report on Axon Enterprise (AAXN)

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3 Embarrassingly Cheap Dividend Stocks

Income investors love the combination of income and growth that dividend stocks offer. The only thing better than a dividend stock with a healthy yield is a stock that combines strong dividends with attractive valuations.

Sometimes, investors beat down a dividend stock so far that it just gets embarrassingly cheap. Below, I'll take a closer look at Bank of Nova Scotia (NYSE:BNS), Valero Energy (NYSE:VLO), and Ford Motor (NYSE:F) -- all of which have attractive dividend yields, low valuations, and the potential to restore shareholders' faith in their long-term business prospects.

Image source: Getty Images.

Look north

U.S. investors often neglect Canadian banks, but the biggest financial players north of the border have a lot to offer. Bank of Nova Scotia (also known as Scotiabank) has a reputation for excellence, and with its current yield coming in at around 4.5%, dividends have played a key role in keeping Scotiabank's shareholders happy.

Yet Scotiabank has faced some challenges lately, with its stock down 11% over the past year. Domestic banking performance has largely been to blame, as the bank has missed earnings expectations for three straight quarters despite seeing solid growth in its international banking operations. Rising expenses and higher loan losses have become somewhat problematic, and Scotiabank is seeing pressures that many of its Canadian peers aren't seeing -- a troubling sign for the bank.

Nevertheless, Scotiabank has confidence in its future, and it's expressed that confidence through higher payouts. The bank made a 2.4% increase to its dividend in February, and despite a cooling housing market in Canada and the challenges of integrating large acquisitions to its wealth management division, Scotiabank appears primed to take advantage of recovering stock markets and concentrate on its best international opportunities. At an earnings multiple of just 11, moreover, Scotiabank's shares aren't out of line with what you'd pay for high-quality banks across North America.

Energetic dividends

Valero Energy also has a healthy dividend yield of 4.2%, but like Scotiabank, the refining giant's stock has been under pressure over the past year. Shares are down 9% since this time last year, with much of the decline coming in the last quarter of 2018. That's brought earnings multiples down considerably, into the 11 to 12 range recently.

The thing to remember about Valero is that its exposure to energy is in some ways the reverse of what most companies in the space experience. Valero likes low oil prices as long as it can sell refined products like gasoline and diesel fuel at relatively healthy prices, because crude oil is the refinery company's input rather than output. Yet the steep plunge in markets for refined products outpaced oil's drop in late 2018, and that sent the stock tumbling.

Even so, the refiner has continued to produce good results. In its most recent quarter, Valero saw operating income jump more than 50%, with strong gains in its refinery operations offsetting weakness in its ethanol business. Efforts to provide infrastructure to move cheap domestic crude to its refinery locations have paid off handsomely, and high utilization rates indicate that Valero's taking maximum advantage of current conditions. Refining is cyclical, but a high dividend and good prospects make Valero look like a bargain.

Ford revs its engines

Finally, Ford Motor has been high on the list of dividend payers for a long time. With a regular quarterly dividend of $0.15 per share, the automaker's yield has climbed to nearly 7% -- yet the stock currently fetches just 10 times trailing earnings and less than seven times what Wall Street expects Ford to earn in 2019.

The main problem for Ford is that its business has hit hard times. In 2018, operating profit for the automaker was down 28%, and revenue managed only a 2% gain. Ford shipped almost 10% fewer vehicles in 2018 than it did in 2017, and conditions were especially weak internationally, as the automaker suffered substantial losses in South America, Europe, and China. Efforts to innovate in areas like autonomous vehicles haven't yet paid dividends, and pension charges also weighed on profits.

But Ford has prospects to bounce back. The company thinks that higher steel prices, a strong dollar, and other headwinds are likely to ease up in 2019, and that should help its international results. Investors have been waiting for a turnaround to take shape, but the odds look better that Ford will make it a reality in the near future.

Put the odds in your favor

Cheap dividend stocks aren't surefire winners, as there are always things that can happen to hurt a business further. Yet given their potential for success, Ford, Valero, and Scotiabank all look embarrassingly cheap right now -- and you can get paid a handsome dividend even as you wait to see share prices go back up.