German banking giant Deutsche Bank said Friday it has agreed toa $7.2 billion settlement with the U.S. Justice Department over its marketing and sales of mortgage-backed bonds risky securities that helped start the global financial crisis.
Under the deal, which isnt yet final, the bank agreed to pay $3.1 billion in fines and $4.1 billion in compensation through such measures as easing loan repayment terms for homeowners and borrowers.
Separately, Swiss bank Credit Suisse announced it had agreed to a similar settlement under which it would pay nearly $5.3 billion.
The settlements, focused on activities in 2005-2007 leading to the financial crisis, stem from the banks’ bundling of sub-primemortgages from people with shaky credit into securities marketed and sold to investors who often were misled about the underlying risks.When the mortgages defaultedas the U.S. real estate market collapsed, so did the bonds, spreading losses and panic throug h the financial system.
Best Stocks To Buy Right Now: Jacobs Engineering Group Inc.(JEC)
- [By Ben Levisohn]
Lee offers 22 stocks that could benefit from the correlation trade: Western Digital (WDC), Xerox (XRX), First Solar, Ford Motor, Best Buy (BBY), PulteGroup (PHM), AutoNation (AN), Textron (TXT), Jacobs Engineering Group (JEC), Mosaic, BB&T (BBT), Fifth Third Bancorp (FITB),Loews (L), Regions Financial (RF), KeyCorp (KEY), Comerica (CMA), Leucadia National (LUK), Zions Bancorp (ZION), Valero Energy (VLO), Marathon Oil, Cardinal Health (CAH), and Pepco Holdings (POM).
Best Stocks To Buy Right Now: Firsthand Technology Value Fund, Inc.(SVVC)
- [By Hibah Yousuf]
Similarly, Twitter is also the biggest holding in the Firsthand Technology Value Fund (SVVC). With just over 1 million shares of the social media platform, Twitter represents nearly 11% of the total portfolio as of mid-year. Shares of Firsthand Technology Value jumped more than 6% Friday.
Best Stocks To Buy Right Now: Computer Programs and Systems Inc.(CPSI)
- [By Lisa Levin]
Shares of Computer Programs & Systems, Inc. (NASDAQ: CPSI) were down 31 percent to $27.00 after the company posted weaker-than-expected Q2 results.
Best Stocks To Buy Right Now: Chipotle Mexican Grill Inc.(CMG)
- [By Casey Wilson]
Unfortunately, there were a lot of disappointing companies to choose from. We picked the worst of the worst. Check out our list of the most-hated companies of 2016…
Most-Hated Companies 2016 No. 5: Chipotle Mexican Grill Inc. (NYSE: CMG)
Chipotle’s problems all started in July 2015 with an E. coli outbreak…
- [By Ben Levisohn]
Citigroup went full bull on Newmont Mining (NEM) and Barrick Gold (ABX), while Stifel offered more evidence that Chipotle Mexican Grill (CMG) should be trading at about half its closing price of $402.64.
- [By Ben Levisohn]
How do Astrachan and Chamberlin determine Starbucks’ valuation is fair? Not by comparing it to other restaurants, but by comparing it to 15 other consumer stocks with global brands, including Chipotle Mexican Grill (CMG), Colgate-Palmolive (CL), and Nike (NKE). Here’s the list of 15 companies:
- [By Ben Levisohn]
Shares of Chipotle Mexican Grill(CMG) are tumbling in after-hours trading after the burrito purveyor beat earnings forecasts but disclosed that it was on the receiving end of a Justice Department subpoena.
Victor J. Blue/Bloomberg News
Chipotle reported a fourth-quarter profit of$2.17 a share, beating forecasts for $1.86 a share, on sales of $997.5 million, missing forecasts for $1.008 billion. The company said same-store sales dropped 14.6%, while profit margins fell to19.6%, down from 26.6%. In the company’s press release, Chipotle founder Steve Ellscalled the fourth quarter “the most challenging period in Chipotles history.”
It’s not gong to get much better. “2016 will be a very difficult year relative to our past performance,” co-CEO Monty Moran said in the same press release. Among the reasons why: The U.S. Attorneys office for the Central District of Californiaserved Chipotle with a subpoena “broadening the scope of the previously-announced criminal investigation.”
Shares of Chipotle Mexican Grill have tumbled 8.5% to $435.05 at $6:17 p.m. today.
UPDATE:S&P Capital IQ’s Tuna Amobicalls Chipotle’s shares “unattractive.” He explains why:
With easing health concerns after CDC’s investigation of E.coli cases at CMG’s restaurants, and despite a related criminal probe, we raise our 12-month target price by $40 to $440. With an impliedly steep premium P/E of 34.4X our ’16 estimate, below historic average but well above 18% long-term EPS growth, we still view Chipotle Mexican Grill as unattractive. With expense deleverage, we cut our ’16 EPS estimate by $1.28 to $12.78 and set ’17′s at $16.55. Q4 EPS of $2.17 vs. $3.84, was $0.19 above our estimate. Q4 revenues fell 7% on 15% decline in comp sales, as margins shed 600 basis points.
Best Stocks To Buy Right Now: Nuveen Municipal Value Fund Inc.(NUV)
- [By Donald van Deventer]
The latest implied forward rate forecast from Kamakura Corporation shows projected 10-year U.S. Treasury yields differing -0.07% to 0.03% from last week while fixed rate mortgage yields varied by -0.01% to 0.08%. Mortgage yields, determined by the Monday through Wednesday weekly survey of the Federal Home Loan Mortgage Corporation, lag Treasury movements simply because of the 3-day yield calculation used in the Primary Mortgage Market Survey. The 10-year U.S. Treasury yield is projected to rise from 2.92% at Thursday’s close (down 0.06% from last week) to 3.374% (down 0.06% from last week) in one year. The 10-year U.S. Treasury yield in ten years is forecast to reach 4.639%, 1 basis point lower than last week. The 15-year fixed rate mortgage rate is forecast to rise from the effective yield of 3.69% on Thursday (down 0.001% from last week) to 4.222% (down 0.006% from last week) in one year and 6.29% in 10 years, up 0.038% from last week. We explain the background for these calculations in the rest of this note, along with some mortgage servicing rights metrics. The forecast allows investors in exchange traded U.S. Treasury funds (TLT) (TBT), total return bond funds (BOND), municipal bonds (NUV) and exchange traded mortgage funds (REM) to assess likely total returns over the next 120 months. Treasury-related exchange traded funds affected by the forward rates include: