U.S. Dividend Stock: Commercial Metals Company (CMC)

Commercial Metals Company (NYSE:CMC) share price jumped at US$ 22.12 before falling back to end the trade at US$ 20.56 a share. The dividend stock is -16.08% off a 52-week high stock price of US$ 24.64 but is up 56.25% since hitting the US$ 14.28. Investors are buying the stock with a trailing-twelve-month price-to-earnings (P/E) ratio of 44.12.

After a -6.2% fall from previous close of US$ 21.92, Commercial Metals Company (CMC) has a US$ 2.42 Billion market cap. The company pays a US$ 0.12-cent-per-share quarterly dividend, giving it a 2.33% yield. That brings its full year payout to US$ 0.48 and 153.4% annual payout ratio based on EPS. According to FT, Year on year, growth in dividends per share remained flat while earnings per share excluding extraordinary items fell by -25.99%. Additionally when measured on a five year annualized basis, dividend per share growth is in-line with the industry average relative to its peers, while earnings per share growth is above the industry average.

The CMC has tumbled -5.06% year-to-date. The equity has slowed down in recent weeks, with shares lower about -2.51% in the past three months. It added -11.15%, climbed -0.34% and jumped 29.29% in the week, one month and six months, respectively. Revenue growth rate was recorded at -9.7% and net income per share was seen moving at a 44.9% rate in the past five years.

Commercial Metals Company (NYSE:CMC) is over -1% above analysts’ consensus price target of US$ 20.8. The stock has blown through analysts’ low price target of US$ 14, but is still below the high US$ 27 target. On a price appreciation basis over the past 12 months, the stock returned 50.79%.

Financial Times data shows, In 2016, Commercial Metals Co reported a dividend of 0.48 USD, equaling last years dividend. The 11 analysts covering the company expect dividends of 0.48 USD for the upcoming fiscal year, maintaining dividends from this year. The most recent short interest data show 7.71% of the company’s stock are short sold. It would take about 4.4 days to cover all short positions. In terms of volatility, it has a beta coefficient of 1.5 and technical analysis volatility indicator called Average True Range or ATR around 0.75.

Commercial Metals Company (NYSE:CMC) closed 13.15% above its 200-day moving average which many technicians use as a guide to the long-term trend, so stocks above the line are considered to be in longer-term uptrends, while those below it are considered to be in downtrends. The stock is -5.38% below another chart threshold, its 50-day moving average and -5.01% below its 20-day simple moving average.

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U.S. Dividend Stock: Commercial Metals Company (CMC)

Chinese Tire Companies Win U.S. Trade Case

The U.S. International Trade Commission (ITC) yesterday determined by a 3-2 vote that the domestic U.S. tire industry was not injured or threatened with injury by imports of truck and bus tires from China. Although the U.S Department of Commerce last month in its concurrent investigations had determined that Chinese truck and bus tires were dumped and subsidized, the ITC’s negative determination means no more antidumping or countervailing duties (AD/CVD) will be collected on imported Chinese truck and bus tires.

The ITC’s negative determination is a good indication that for all the protectionist rhetoric and trade saber rattling from the Trump administration, the ITC is not just going to rubber stamp every case filed by a petitioning domestic industry. The ITC will still decide its AD/CVD cases based on the extensive amount of industry data collected from its investigations and will not rely just on the alternative facts offered by petitioners.

This tires case was weak from the outset. First, it was brought only by the United Steel Workers (which represents the workers at the big U.S. tire factories) and not by the tire companies themselves. Unlike virtually all other AD/CVD cases, the domestic producers in this case did not want to sign their name to the petition. Some have speculated that the Steel Workers filed this and other tire AD/CVD cases to obtain negotiating leverage to try to extract production and wage concessions from the U.S. tire industry management.

Although the U.S. market for truck and bus tires in 2015 was about $ 6 billion dollars, U.S. producers supplied only 60 percent of that demand. U.S. truck and bus tire producers already are operating at full capacity, so even with new U.S. tire factories opening, imports are still clearly needed to meet U.S. demand. China was the leading import source of truck and bus tires with about $ 1.2 billion imported in 2015.

All the U.S. produced tires were of premium brands, whereas most of the Chinese tires were sold under lesser known or private label brands. Because consumers generally associate producers’ brand names such as Goodyear or Bridgestone or Michelin with quality and performance, Chinese tires not surprisingly were priced lower when sold under a private label. This price difference associated with the different brands reflects the distinct market segments; the higher priced premium U.S. brands did not really compete with the no-name generics or private label Chinese tires. Moreover, though tire prices declined between 2013 to 2015, this was due primarily to declines in raw material costs, primarily natural rubber.  Prices of U.S. tires sold to OEM customers fell at the same rate as prices for U.S. aftermarket sales, even though very few Chinese tires were sold to OEM customers. Chinese tires thus cannot be blamed for the price declines that were occurring.

The domestic tire industry also was performing quite well and thus had a hard time demonstrating it had been injured. The domestic industry was healthy as production, capacity utilization, shipments were all higher in 2015 compared with 2013. Employment, wages and productivity indicators also showed improvement. The domestic producers had high and rising profits (operating income = 20.7%; net income = 18.3%), even though prices had fallen. So, even as Chinese imports were increasing, U.S. tire producers were thriving.

Despite all of these facts, this case could have resulted in an affirmative injury or threat of injury determination based on the increasing volumes of low-priced Chinese import tires that reducing the domestic producers’ market share. An argument can also be made that the significant volume of Chinese tires caused the domestic industry to lose revenue and be less profitable than it would have been without the Chinese imports.

In its preliminary investigation, the ITC made an affirmative determination by a 4-2 vote that the domestic industry was injured or threatened with injury, but two of the six Commissioners changed their positions in the final investigation. Vice Chairman David S. Johanson had found a threat of injury in the preliminary investigation, but switched to a negative injury/ threat determination in the final. Commissioner Dean A. Pinkert voted affirmative in the preliminary determination but then abstained and did not participate in the final investigation. If either of these two votes had stayed affirmative, a 3-3 tie vote would have resulted in AD/CVD duty orders being issued. Given the closeness of the vote, I expect the United Steel Workers will appeal the ITC’s negative determination to the U.S. Court of International Trade

Ultimately, this ITC negative determination was not only a huge victory for the Chinese tire industry and for U.S. importers of those tires, but also for anyone who wants U.S. trade cases to be determined on the facts and the law  and legal arguments presented and not just on a protectionist trade policy. The vast majority of petitions filed have resulted in AD/CVD orders being issued, and it likely will continue this way for the foreseeable future.  Given the current political climate, however, it’s nice to see a negative ITC determination just to be reassured that the ITC still recognizes its obligation under U.S. trade laws to conduct investigations fairly and that not all AD/CVD petitions are deserving of trade remedy relief.

Chinese Tire Companies Win U.S. Trade Case

U.S. Dividend Stock: Coty Inc. (COTY)

Coty Inc. (NYSE:COTY) share price jumped at US$ 19.27 before falling back to end the trade at US$ 18.84 a share. The dividend stock is -39.38% off a 52-week high stock price of US$ 31.6 but is up 5.73% since hitting the US$ 17.94.

After a -1.67% fall from previous close of US$ 19.16, Coty Inc. (COTY) has a US$ 13.93 Billion market cap. The company pays a US$ 0.125-cent-per-share quarterly dividend, giving it a 2.65% yield. That brings its full year payout to US$ 0.5. According to FT, © Thomson Reuters Click for restrictions

The COTY has soared 2.89% year-to-date. The equity has gained steam in recent weeks, with shares up about 1.16% in the past three months. It added -2.23%, climbed 0.43% and jumped -34.39% in the week, one month and six months, respectively. Revenue growth rate was recorded at 16.5% and net income per share was seen moving at a 9.1% rate in the past five years.

Coty Inc. (NYSE:COTY) is over 8% above analysts’ consensus price target of US$ 20.64. The stock has blown through analysts’ low price target of US$ 17.5, but is still below the high US$ 25 target. On a price appreciation basis over the past 12 months, the stock returned -33.33%.

Financial Times data shows, In 2016, Coty Inc reported a dividend of 0.25 USD, which represents a 25.00% increase over last year. The 5 analysts covering the company expect dividends of 0.47 USD for the upcoming fiscal year, an increase of 88.00%. The most recent short interest data show 7.66% of the company’s stock are short sold. It would take about 5.31 days to cover all short positions. In terms of volatility, it has a beta coefficient of 0.27 and technical analysis volatility indicator called Average True Range or ATR around 0.57.

Coty Inc. (NYSE:COTY) closed -18.37% below its 200-day moving average which many technicians use as a guide to the long-term trend, so stocks above the line are considered to be in longer-term uptrends, while those below it are considered to be in downtrends. The stock is -0.31% below another chart threshold, its 50-day moving average and -1.6% below its 20-day simple moving average.

The Wellesleys News

U.S. Dividend Stock: Coty Inc. (COTY)

Gains in U.S. Payrolls Slow Down During April

The labor market in the U.S. decelerated during April, a new sign that employers might be becoming cautious after the slowdown in the economy earlier this year. During April nonfarm payrolls increased 160,000, said the Labor Department on Friday. It was the country’s weakest gain in seven months. The rate of unemployment remained the same […]
Corporate News – The Cerbat Gem

Gains in U.S. Payrolls Slow Down During April

Is Now the Time to Take Your U.S. Judgment to China?

 

Just read a post over at the China Law Prof Blog on what Professor Clarke rightly calls “an interesting case in which a Chinese court (the Nanjing Intermediate-Level People’s Court) enforced a Singapore court judgment.”

Professor Clarke then goes on to explain how Chinese courts “may enforce foreign judgments that are not fundamentally offensive in some way under two circumstances: (1) there is a treaty with the foreign country calling for mutual enforcement of judgments; or (2) on the basis of reciprocity, which has been interpreted to mean that the foreign country has a practice of enforcing Chinese judgments, or at least has done so before.” This has been the law in China for quite some time.

Clarke then states that there is no Singapore-China treaty calling for mutual recognition and enforcement of judgments, which is my understanding as well. But — and this is the kicker — the Nanjing court nonetheless decided to recognize and enforce the Singapore judgment because in 2014 a Singapore court had enforced a Chinese judgment. And get this: the judgment the Chinese court enforced was a default judgment against a Chinese corporate defendant. I say “get this” because courts everywhere are far more reluctant to enforce default judgments (typically given out because the defendant failed to appear or defend) than to enforce a judgment on the merits of the case.

Professor Clarke does not know if this is the first foreign judgment Chinese courts have enforced on the basis of reciprocity and I too do not know whether that is the case. Professor Clarke does add though that he thinks “it’s fair to say that such cases are pretty thin on the ground.” To which I will add, yes that is for sure.

Now here’s the million (actually probably billions) dollar question this case raises: does this mean China will start enforcing U.S. judgments? I mean U.S. courts have enforced Chinese judgments (my law firm haas secured such an enforcement order) so does this mean Chinese courts might do so if the case is right? Professor Clarke has this to say on this question:

But if I were trying to enforce a US judgment in a Chinese court, I’d certainly bring it up. To the best of my knowledge, Chinese courts have not yet enforced a contested US money judgment. (I’m attaching those qualifications because they may, for example, have recognized a US divorce decree for some purpose.)

Just a few months ago, in Enforcing US Judgments in China. Not Yet, I said “no way”:

At least once a month, one of our China lawyers will get a call or an email from a U.S. lawyer seeking our help in taking a U.S. judgment (usually a default judgment) to China to enforce. The thinking of the U.S. lawyer is that all we need do is go to a China court and ask it to convert the U.S. judgment into a Chinese judgment and then send out the Chinese equivalent of a sheriff to the Chinese company and start seizing its assets until it pays.

As we have consistently written, nope, nope, nope.

I then went on to talk about how my firm’s China lawyers are often called upon to conduct research on this very issue (oftentimes for lawyers or companies wanting to prove to their insurance company or to a court that it would be futile for them to pursue enforcement of their United States judgment in China) and I pulled a large section from the latest of our memoranda on that topic, and I do so again below.

Article 282 of the PRC Civil Procedure Law, requires all of the following conditions be met for enforcement of a foreign judgment to be recognized in China:

The foreign judgment has taken legal effect in the jurisdiction in which it was rendered.

The country where the deciding court is located has a treaty with China or is a signatory to an international treaty to which China is also a signatory or there is reciprocity between the countries.
The foreign judgment does not violate any basic principles of Chinese law, national sovereignty, security, or social public interest.

Though China is a signatory to the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards, it is not a signatory to any international treaty on the recognition and enforcement of foreign court judgments. There is no bilateral treaty between China and the U.S. on recognition and enforcement of foreign court judgments. There also is no bilateral treaty between the two countries on civil or commercial judicial assistance.

Even judgments from countries that have an enforcement treaty with China, are oftentimes not enforced in China. For example, China and Australia entered into an agreement on reciprocal encouragement and protection of investments in 1988 that mandates both countries promulgate laws recognizing and enforcing each other’s judgments. But in response to a 2007 request by the Guangdong Province High People’s Court for instructions regarding an application by an Australian plaintiff for recognition and enforcement of an Australian court judgment, the Supreme People’s Court of China (the “SPC”) rejected enforcement since there was no international treaty to which China was a signatory nor any treaty between China and Australia on mutual recognition and enforcement of court judgments, nor any reciprocity between the two countries, the application should be rejected.

Since China is not a signatory to any international treaty on recognition and enforcement of foreign court judgments nor is there any treaty between China and the U.S. regarding judgment enforcement, the only possible way to get a U.S. judgment enforced in China would be if there were reciprocity between the two countries, but there isn’t.

In considering the question of reciprocity, a Chinese court will consider whether there is any precedent indicating reciprocity. In other words, the court will seek to determine whether there are any prior cases where a U.S. court recognized or enforced a Chinese court’s decision. If there are no examples of a U.S. court having enforced a Chinese judgment, the Chinese court will almost certainly rule against enforcing the U.S. judgment because the reciprocity

Is Now the Time to Take Your U.S. Judgment to China?

Top Challenges Facing U.S. Small Businesses in 2017 [Infographic]

WaspBarcode has published their annual State of Small Business Report for 2017. This is their third annual survey analysis of over 1,100 small business owners and executive leaders across a number of fields. See the full report with visuals at the link above.

Small businesses are more optimistic going into 2017 and expanding hiring and marketing spend. I am highlighting the above image from their research because businesses are making their plans now.

52% of small businesses plan to hire in 2017Click To Tweet

I find it interesting that hiring new employees ranked above increasing profit, employee healthcare and growing revenue. This could indicate a shortage of digital marketing experts or workers with other specialized skills. I wish we had more details about what kind of new employees they are concerned about.

See the State of Small Business Report highlights in the infographic below and extensive details in the full report. Click To Tweet

Topics covered by their research include:

• Revenue Expectations for 2017
• Strategies to Improve Revenue Growth
• Employee and Staffing Plans
• How much they invest in marketing and where they spend it
• Inventory and Asset Management

Annual WaspBarcode State of Small Business Report 2017 [Infographic]

State of Small Business Infographic Highlights:

Revenue Growth

• 69% of SMBs predict revenue growth during 2017
• 31% of SMBs predict revenue growth of 1-4%
• 26% of SMBs predict revenue growth of 5-10%
• 12% of SMBs predict revenue growth of 11% or more

Confidence in the 2017 Economy

• 42% of companies with 11-50 employees believe the economy is better now than in 2016
• 39% of companies with 51-100 employees believe this
• 47% of the largest small businesses with 101-500 employees are confident in the 2017 economy

Top Strategies to Drive Growth

40% improve customer experience and retention
36% launch new products or services
32% invest in new customer acquisition
30% expand into new markets

Who’s hiring?

52% of all SMBs plan to hire in 2017
57% plan to hire 1-5 employees
39% plan to hire 6 or more employees

IT Spending in 2016

42% of all smbs plan to increase IT spending
36% of companies with 5-10 employees plan IT spending increases
42% of businesses with 11-50 employees
54% of businesses with 51-100 employees
49% of businesses with 101-499 employees

IT Priorities

29% upgrade wireless infrastructure
33% upgrade network
33% upgrade server infrastructure
37% upgrade network security
38% replace computer hardware

Their full research is worth reviewing. You can see their post summarizing the report and review the full report here. There is no cost and you don’t have to provide any personal information.

The post Top Challenges Facing U.S. Small Businesses in 2017 [Infographic] appeared first on Growmap.

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Top Challenges Facing U.S. Small Businesses in 2017 [Infographic]

Carrier Corp. Offered $7M In Incentives To Retain U.S. Jobs

Carrier Corp. will receive a $ 7 million incentive package as part of a deal to keep some of its workers in the United States. Carrier will receive $ 5 million in tax credits over 10 years in exchange for keeping 1,069 jobs at its Indianapolis plant. The company also will receive $ 1 million in training grants […]
Corporate News – The Cerbat Gem

Carrier Corp. Offered $7M In Incentives To Retain U.S. Jobs