Investing action plan for ArcelorMittal (MT) And Guess’ Inc. (GES)

ArcelorMittal (NYSE: MT) shares are -30.33% down in the year-to-date (YTD) period and have moved 3.47% or $0.41 higher in the latest trading session. However, stock’s trailing 12-month performance remains nearly +84.04% lower. Comparatively, the stock is -33.32% down YTD and 24.06% over the trailing 3-month period. If we look at the shorter duration, its week performance is 3.56% and 9.60% over the month.

Analyst Recommendations

On June 23, 2020, Societe Generale recommended the MT stock is a Hold, while earlier, Goldman had Initiated the stock as a Buy on July 15, 2020. 20 analysts offering the recommendations for the stock have a consensus rating of 2.00 to suggest that the MT stock is a “Moderate Buy. 0 of the 20 analysts rate the stock as a “Sell”, while 0 has rated it as “Underweight”. 12 recommend buying, with 3 rating it as an Overweight.

The stock currently trades at $12.22 and analysts tracking its performance over the next 12 months have a consensus estimate price target of $16.59. The forecasts give the ArcelorMittal stock a price target range of $21.20 on the higher side while at least one analyst think the stock could plunge to a low of $10.12. The two limits represent an upside potential of 42.36% or -20.75%.

Earnings Forecast

Analysts estimate the earnings to increase 40.00% in the current quarter to -$0.39, down from the $0.36 reported in the same quarter a year ago. For the current year, earnings should grow to an average of -$1.54, down -27.20% from $1.28 reported last year. Analysts also offered guidance for the next financial quarter, with their average projected EPS at between -$0.22 and -$0.22. Wall Street estimates earnings per share to be at an average of $1.15 for the next year.

Guess’ Inc. (NYSE:GES), on the other hand, is trading around $11.27 with a market cap of $790.25M and analyst research firms have a negative stance on its shares. Analysts predict that the stock will reach $12.20 and spell out a more modest performance – a 7.62% return. Some analysts are even forecasting -$1.15 per share in earnings this year on a short term (1 year) basis.

Let us briefly look at the Guess’ Inc. (GES) financials, with a focus on its operating details as indicated in its earnings report for the last quarter.

Company balance sheet and cash flow

GES’s operating expenses over the recent quarter were at $196.74 million. This represented a 24.4% of the company’s total revenues which amounted $260.25 million. With this in place, we can see that the company’s diluted EPS declined -$2.40 on the year-over-year period, shrinking to -$0.27 as given in the last earnings report.

In terms of the balance sheet & cash flow as of (Jul 2020), the total assets figure advanced to $2.35 billion from $2.43 billion over the previous quarter. The cash flow from operating activities totaled -$61.55 million, significantly higher than the -$96.5 million reported in the year-ago quarter. The company’s free cash flow for the quarter was -$67.53 million.

Insider activity

Insiders have transacted a total of 8 times at Guess’ Inc. over the last 6 months, with insider purchases undertaken 7 times and accounting for 1,025,873 shares. Insider sales totaled 18,800 shares over the same period, with these deals completed in 1 transactions. Looking at these numbers, we realize that net purchases over that period are 6.0 shares. Insiders now hold a total of 26.87M shares after the latest sales, with 4.00% net shares purchased.

Major holders

Insiders own 1.10% of the company shares, while shares held by institutions stand at 68.50% with a share float percentage of 41.61M. Investors are also buoyed by the number of investors in a company, with Guess’ Inc. having a total of 214 institutions that hold shares in the company. The top two institutional holders are FMR, LLC with over 9.46 million shares worth more than $91.48 million. As of Jun 29, 2020, FMR, LLC held 13.99% of shares outstanding.

The other major institutional holder is Blackrock Inc., with the investment firm holding over 6.82 million shares as of Jun 29, 2020. The firm’s total holdings are worth over $65.96 million and represent 10.09% of shares outstanding.