Head-To-Head Analysis: American Public Education (APEI) & China Distance Education (DL)

American Public Education (NASDAQ: APEI) and China Distance Education (NYSE:DL) are both small-cap consumer discretionary companies, but which is the superior investment? We will contrast the two businesses based on the strength of their risk, analyst recommendations, institutional ownership, valuation, dividends, earnings and profitability.

Risk and Volatility

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American Public Education has a beta of 0.67, indicating that its stock price is 33% less volatile than the S&P 500. Comparatively, China Distance Education has a beta of 1.52, indicating that its stock price is 52% more volatile than the S&P 500.

Insider & Institutional Ownership

94.1% of American Public Education shares are owned by institutional investors. Comparatively, 22.1% of China Distance Education shares are owned by institutional investors. 3.2% of American Public Education shares are owned by company insiders. Comparatively, 41.6% of China Distance Education shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Profitability

This table compares American Public Education and China Distance Education’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
American Public Education	7.10%	7.90%	6.71%
China Distance Education	3.94%	9.25%	2.65%

Analyst Ratings

This is a summary of recent recommendations for American Public Education and China Distance Education, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
American Public Education	0	3	1	0	2.25
China Distance Education	0	0	0	0	N/A

American Public Education currently has a consensus price target of $39.33, suggesting a potential downside of 11.91%. Given American Public Education’s higher probable upside, analysts clearly believe American Public Education is more favorable than China Distance Education.

Valuation & Earnings

This table compares American Public Education and China Distance Education’s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
American Public Education	$299.25 million	2.45	$21.12 million	$1.29	34.61
China Distance Education	$130.99 million	1.90	$14.93 million	N/A	N/A

American Public Education has higher revenue and earnings than China Distance Education.

Summary

American Public Education beats China Distance Education on 8 of the 12 factors compared between the two stocks.

American Public Education Company Profile

American Public Education, Inc., together with its subsidiaries, provides online and campus-based postsecondary education. The company operates through two segments, American Public Education and Hondros College of Nursing. It offers 108 degree programs and 109 certificate programs in various fields of study, including business administration, health science, technology, criminal justice, education, and liberal arts, as well as national security, military studies, intelligence, and homeland security. The company also provides diploma in practical nursing and an associate degree in nursing; and an online registered nurse to Bachelor of Science in nursing completion program. American Public Education, Inc. was founded in 1991 and is headquartered in Charles Town, West Virginia.

China Distance Education Company Profile

China Distance Education Holdings Limited provides online and offline education services, and sells related products in the People's Republic of China. It operates through three segments: Online Education Services, Business Start-Up Training Services, and The Sale of Learning Simulation Software. The company offers online professional education services in accounting, healthcare, and engineering and construction industries; and other professional education courses, such as online test-preparation courses for the national judicial examination and self-taught learners pursuing higher education diplomas or degrees, test preparation courses for university students, accounting practical skills training courses, and online language courses. Its online courses feature pre-recorded audio-video lectures taught by experts; and other content, such as course outlines, exercise questions, mock exams, and frequently asked questions and answers. The company's online lectures are supplemented by its proprietary Learning Management System, which tracks individual study progress, records course notes, and collects incorrectly answered questions. As of September 30, 2017, it operated 25 Websites, including its primary Website cdeledu.com. In addition, the company operates an Open Learning Platform, a proprietary education platform to share educational content and deliver live courses online; and sells proprietary books and reference materials. Further, it provides business start-up training courses to university students, job seekers, and individuals; offline accounting and healthcare professional training, courseware production, and online platform development services; and mobile accounting, engineering and construction, healthcare, and legal courses through an app on Android and Apple iOS tablets and smart phones, as well as sells learning simulation software to the college market. The company was founded in 2000 and is based in Beijing, the People's Republic of China.

Jubilant Food Q1 PAT seen up 98.6% YoY to Rs. 60 cr: HDFC

HDFC has come out with its first quarter (April-June�� 18) earnings estimates for the FMCG sector. The brokerage house expects Jubilant Food to report net profit at Rs. 60 crore up 98.6% year-on-year (down 6.4% quarter-on-quarter).

Net Sales are expected to increase by 20 percent Y-o-Y (up 4.5 percent Q-o-Q) to Rs. 810 crore, according to HDFC.

Earnings before interest, tax, depreciation and amortisation (EBITDA) are likely to rise by 58.9 percent Y-o-Y (down 1 percent Q-o-Q) to Rs. 130 crore.

Disclaimer: The views and investment tips expressed by investment experts on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

Read More First Published on Jul 19, 2018 05:38 pm

Best Growth Stocks To Watch Right Now

tags:TBI,JWN,ISRG,BWLD,

Brokerages predict that Heska Corp (NASDAQ:HSKA) will report earnings per share (EPS) of $0.17 for the current quarter, according to Zacks Investment Research. Two analysts have made estimates for Heska’s earnings, with estimates ranging from $0.16 to $0.17. Heska reported earnings of $0.44 per share in the same quarter last year, which indicates a negative year-over-year growth rate of 61.4%. The business is scheduled to issue its next quarterly earnings report on Monday, July 30th.

On average, analysts expect that Heska will report full year earnings of $1.68 per share for the current year, with EPS estimates ranging from $1.63 to $1.73. For the next year, analysts forecast that the firm will report earnings of $2.07 per share, with EPS estimates ranging from $2.03 to $2.11. Zacks Investment Research’s EPS calculations are a mean average based on a survey of research analysts that that provide coverage for Heska.

Best Growth Stocks To Watch Right Now: TrueBlue Inc.(TBI)

Advisors' Opinion:

• [By Logan Wallace]

  Media stories about Trueblue (NYSE:TBI) have trended somewhat positive on Monday, according to Accern Sentiment. The research firm rates the sentiment of news coverage by reviewing more than 20 million news and blog sources in real time. Accern ranks coverage of publicly-traded companies on a scale of negative one to one, with scores closest to one being the most favorable. Trueblue earned a media sentiment score of 0.09 on Accern’s scale. Accern also assigned media stories about the business services provider an impact score of 45.3296498009881 out of 100, meaning that recent news coverage is somewhat unlikely to have an effect on the stock’s share price in the near future.

• [By Stephan Byrd]

  Russell Investments Group Ltd. grew its stake in Trueblue Inc (NYSE:TBI) by 21.2% during the first quarter, HoldingsChannel reports. The fund owned 137,178 shares of the business services provider’s stock after purchasing an additional 23,951 shares during the quarter. Russell Investments Group Ltd.’s holdings in Trueblue were worth $3,553,000 at the end of the most recent quarter.

• [By Logan Wallace]

  Trueblue (NYSE: TBI) is one of 23 public companies in the “Help supply services” industry, but how does it contrast to its rivals? We will compare Trueblue to similar businesses based on the strength of its analyst recommendations, institutional ownership, valuation, profitability, dividends, earnings and risk.

• [By Joseph Griffin]

  Trueblue Inc (NYSE:TBI) has received a consensus rating of “Hold” from the six brokerages that are currently covering the firm, MarketBeat.com reports. Two investment analysts have rated the stock with a sell recommendation and three have assigned a hold recommendation to the company. The average twelve-month target price among brokerages that have issued a report on the stock in the last year is $27.50.

• [By Logan Wallace]

  Get a free copy of the Zacks research report on Trueblue (TBI)

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

• [By Stephan Byrd]

  American Century Companies Inc. grew its holdings in shares of Trueblue Inc (NYSE:TBI) by 24.4% in the 1st quarter, according to its most recent disclosure with the SEC. The fund owned 95,307 shares of the business services provider’s stock after purchasing an additional 18,680 shares during the period. American Century Companies Inc. owned approximately 0.23% of Trueblue worth $2,468,000 as of its most recent SEC filing.

Best Growth Stocks To Watch Right Now: Nordstrom Inc.(JWN)

Advisors' Opinion:

• [By Adam Levine-Weinberg]

  Nordstrom (NYSE:JWN) returned to earnings growth last quarter, as the reduced corporate tax rate helped the upscale retailer post a double-digit increase in earnings per share. Investors still dumped Nordstrom stock in after-hours trading on Thursday, punishing the company for weak comparable-store sales growth.

• [By JJ Kinahan]

  This week brings a string of retail results with reports from Walmart Inc. (NYSE: WMT) on Thursday morning and Nordstrom, Inc. (NYSE: JWN) after market close the same day. Next week, big-box retailer Target Corporation (NYSE: TGT) and home improvement retailer Lowe’s Companie, Inc. (NYSE: LOW) both report before market open on Wednesday, May 23. For a look at what else is going on across markets, check out today’s market update if you have time.

• [By JJ Kinahan]

  This week brings a string of retail results with reports from Macy’s Inc. (NYSE: M) on Wednesday morning and Nordstrom, Inc. (NYSE: JWN) after market close on Thursday. Next week, big-box retailer Target Corporation (NYSE: TGT) and home improvement retailer Lowe’s Inc. (NYSE: LOW) both report before market open on Wednesday, May 23. For a look at what else is going on across markets, check out today’s market update if you have time.

• [By Stephan Byrd]

  Nordstrom, Inc. (NYSE:JWN) insider Ken Worzel sold 13,703 shares of the company’s stock in a transaction on Wednesday, April 11th. The shares were sold at an average price of $48.97, for a total value of $671,035.91. The sale was disclosed in a legal filing with the Securities & Exchange Commission, which is accessible through this link.

Best Growth Stocks To Watch Right Now: Intuitive Surgical Inc.(ISRG)

Advisors' Opinion:

• [By Motley Fool Staff]

  Stock No. 4: Let's go to the "I" stock from our April stocks a year ago. That's one of my favorite companies, a stock that I own, and have held for more than a decade, and that would be Intuitive Surgical (NASDAQ:ISRG), the maker of the da Vinci robot, the surgical robot.

• [By Jason Hall, Sean Williams, and Jordan Wathen]

  We asked three investors who regularly contribute to The Motley Fool to help us identify some of the "wonderful" companies, and they made strong cases for�Mastercard Inc.�(NYSE:MA), Intuitive Surgical, Inc.�(NASDAQ:ISRG), and Pattern Energy Group Inc. (NASDAQ:PEGI). These are three very different companies, but they share some important traits that make them worth your consideration as "ultra-long-term" investments: Big long-term trends driving their business prospects for many years of growth, and excellent management with strong track records of success.

• [By Garrett Baldwin]

  Earnings season is now in full swing, with today's key reports from�International Business Machines Corp. (NYSE: IBM), Johnson & Johnson (NYSE: JNJ), and Intuitive Surgical Inc.�(Nasdaq: ISRG). Thanks to tax cuts, expectations are high. Analysts expect profit growth to top 18%, which would be the biggest jump in seven years. But there are a few bearish trends that are still lurking in the market. And if you're serious about making money, you need to know how to harness them and target individual stocks for life-changing gains.�Money Morning�Quantitative Specialist Chris Johnson explains.

Best Growth Stocks To Watch Right Now: Buffalo Wild Wings Inc.(BWLD)

Advisors' Opinion:

• [By Steve Symington]

  That's not to say it was a quiet day for every stock on the market. With earnings season ramping up, brewing giant Anheuser-Busch InBev (NYSE:BUD) and restaurant chain Buffalo Wild Wings (NASDAQ:BWLD) served as an exercise in contrast as investors reacted to their respective quarterly reports.

• [By Peter Graham]

  A long term performance chart shows Dave & Busters Entertainment�tripling in value�before falling back while�small cap upscale gentlemen's clubs and restaurant owner�RCI Hospitality Holdings, Inc (NASDAQ: RICK) began taking off in 2016 and small cap�Buffalo Wild Wings (NASDAQ: BWLD) is being acquired by Arby��s Restaurant Group:

Charting a bullish Q3 start, S&P 500 challenges major resistance

Editor��s Note: This is a free edition of The Technical Indicator, a daily MarketWatch subscriber newsletter. To get this column each market day, click here.

The Technical Indicator starts its sixteenth year this month.

Against this backdrop, the U.S. benchmarks have weathered an unusually jagged 2018 first-half, though the market technicals have firmed with a strong third-quarter start. The charts below add color:

Before detailing the U.S. markets�� wider view, the S&P 500��s SPX, +0.22% �hourly chart highlights the past two weeks.

As illustrated, the S&P has knifed atop the May peak (2,742) and rallied to next resistance.

The range top matches the S&P��s five-month closing peak (2,786.9), established last month, and is currently under siege. On further strength, slightly more distant overhead matches the March peak (2,802).

Similarly, the Dow Jones Industrial Average DJIA, +0.46% �has come to life.

In its case, the blue-chip benchmark has reclaimed the 200- and 50-day moving averages, reaching positive year-to-date territory slightly above the 2017 close (24,719).

Tactically, the former range top closely matches this week��s gap (24,520) and pivots to support.

Meanwhile, the Nasdaq Composite remains the strongest big three U.S. benchmark.

Recall that its recent price action resembles that of the S&P 500. Both benchmarks have knifed atop the breakdown point �� Nasdaq 7,637 and S&P 2,742 �� and subsequently extended the breakout.

Widening the view to six months adds perspective.

On this wider view, the Nasdaq has rallied sharply from the 50-day moving average, an area closely matching major support (7,474). Bullish price action.

The strong July start places the Nasdaq��s record close (7,781.5) and absolute record peak (7,806.6) firmly within view.

Looking elsewhere, the Dow Jones Industrial remains the weakest widely-tracked U.S. benchmark.

Still, the index has reclaimed its 200- and 50-day moving averages �� across two sessions �� rising to challenge familiar overhead.

Specifically, resistance broadly spans from 24,719 to 24,876, levels matching the 2017 close and 2017 peak. A close higher would place the Dow in recently less-charted territory, opening the path to potentially swift follow-through.

Meanwhile, the S&P 500 has reclaimed its breakdown point (2,742) knifing from a well-defined range.

The prevailing upturn originates from major support at the 2017 peak (2,695). The June low (2,692) closely matched support.

The bigger picture

Collectively, U.S. stocks are off to a constructive third-quarter start.

Each big three benchmark has rallied atop major resistance �� including S&P 2,742 and Nasdaq 7,637 �� a move initially fueled by last week��s strong monthly U.S. jobs report. The breakout has subsequently followed through despite persistent trade-related uncertainty.

Moving to the small-caps, the iShares Russell 2000 ETF remains the strongest widely-tracked U.S. benchmark.

The July rally punctuates a successful test of the 50-day moving average, and places all-time highs within view. The IWM��s record close (169.97) is closely followed by the absolute record peak (170.20).

Meanwhile, the S&P MidCap 400 has knifed to a stealth breakout attempt.

In fact, Monday��s close (365.39) marked a fractional record close, eclipsing the former record by just 25 cents.

The MDY��s absolute all-time high (366.10), established June 12, is currently under siege.

Looking elsewhere, the SPDR Trust S&P 500 has reclaimed its breakdown point (274.25) a level matching the May range top.

The rally places the June peak (279.48) within striking distance. The pending retest should be a useful bull-bear gauge.

Against this backdrop, the S&P 500 is acting well technically.

To start, the S&P has knifed atop its breakdown point (2,742) rising straight to its next significant hurdle. Resistance matches the June closing peak (2,687), and is currently under siege.

Moreover, the July rally originates from major support matching the 2017 peak (2,695). The June low registered just three points lower.

Put differently, the June downturn spanned 99 points �� from top to bottom �� and the S&P has rallied swiftly to its latest crack at the range top.

On further strength, the March peak (2,802) marks an inflection point, while the January gap broadly spans from 2,838 to 2,851.

More broadly, an intermediate-term target projects from the June low to about 2,890, a level surpassing the S&P��s all-time high (2,872).

Beyond specific levels, the S&P 500��s intermediate- to longer-term bias remains bullish despite the admittedly jagged 2018 backdrop. The retest of the range top, currently underway, should add color.

See also: Charting the S&P 500��s new range amid early third-quarter cross currents.

Tuesday��s Watch List

The charts below detail names that are technically well positioned. These are radar screen names �� sectors or stocks poised to move in the near term. For the original comments on the stocks below, see The Technical Indicator Library.

Initially profiled May 9, the SPDR S&P Oil and Gas Exploration & Production ETF XOP, -0.16% �has added 7.6% and remains well positioned.

As illustrated, the group has rallied from the 50-day moving average, a recent bull-bear inflection point. (See the April breakout.)

The prevailing upturn also punctuates a successful test of the breakout point, an area defined by the January and April peaks.

More broadly, the group is rising from a continuation pattern �� underpinned by the 200-week moving average �� illustrated on the three-year chart. The July rally opens the path to much less-charted territory, and potentially material upside follow-through.

Conversely, the Financial Select Sector SPDR XLF, -0.40% �remains a 2018 laggard.

Still, the group has come to life this week, rising from seven-month lows to reclaim the breakdown point (26.50) on increased volume.

More distant overhead matches the 50- and 200-day moving averages, an area closely followed by trendline resistance. An eventual close higher would likely signal a trend shift, strengthening the broad-market bull case. The pending retest is worth tracking.

Charting well positioned Dow 30 components

Initially profiled April 30, Dow 30 component Nike, Inc. NKE, +0.35% �has returned 11.1% and remains well positioned.

Late last month, the shares gapped to all-time highs, rising after the company��s strong fourth-quarter results.

The ensuing pullback has been comparably flat, placing the shares at an attractive entry near the breakout point and 4.8% under the June peak.

Looking elsewhere, 3M Co. MMM, +0.17% �is a beaten down Dow 30 component showing signs of life. (Yield = 2.7%.)

As illustrated, the shares have edged atop a nearly six-month downtrend that closely tracks the 50-day moving average, currently 199.90.

The upturn comes from a tight two-week range �� underpinned by major support �� laying the groundwork for potentially more decisive follow-through. Tactically, the former range top, circa 199, closely matches the trendline, and a breakout attempt is in play barring a violation.

Meanwhile, Coca-Cola Co. KO, +1.15% �is a third Dow 30 component positioned to rise. (Yield = 3.5%.)

Late last week, the shares cleared trendline resistance, rising to challenge the 200-day moving average, currently 44.70. This area closely matches a four-month range top (45.10) and an eventual close higher opens the path to less-charted territory.

Tactically, the trendline pivots to support, circa 44.00, and the recovery attempt is intact barring a violation.

Finally, VMWare, Inc. VMW, +0.63% ��� not a Dow 30 component �� is a well positioned large-cap data storage name.

As illustrated, the shares have recently knifed to a record close, rising after parent Dell Technologies announced it will return to the public markets via acquisition of its tracking stock, reducing the chances of a reverse merger with VMWare.

The ensuing pullback places the shares at an attractive entry near the top of the gap (153.60) and 6.1% under the July peak. A slightly deeper floor matches the trendline and the bottom of the gap (149.00).

Editor��s Note: This is a free edition of The Technical Indicator, a daily MarketWatch subscriber newsletter. To get this column each market day, click here.

Still well positioned

The table below includes names recently profiled in The Technical Indicator that remain well positioned. For the original comments, see The Technical Indicator Library.

Company	Symbol	Date Profiled
NetEase, Inc.	NTES	July 9
Hess Corp.	HES	July 9
Dish Network Corp.	DISH	July 9
Seattle Genetics, Inc.	SGEN	July 9
Johnson & Johnson	JNJ	July 5
Kroger Co.	KR	July 5
Iron Mountain, Inc.	IRM	July 5
Agnico Eagle Mines Limited	AEM	July 5
Silicon Motion Technology Corp.	SIMO	July 3
CyrusOne, Inc.	CONE	July 3
At Home Group, Inc.	HOME	July 3
FleetCor Technologies, Inc.	FLT	July 2
Tandem Diabetes Care, Inc.	TNDM	July 2
Diamond Offshore Drilling, Inc.	DO	July 2
Oceaneering International, Inc.	OII	June 29
PTC, Inc.	PTC	June 29
Puma Biotechnology, Inc.	PBYI	June 29
NII Holdings, Inc.	NIHD	June 29
Cirrus Logic, Inc.	CRUS	June 27
BioMarin Pharmaceutical, Inc.	BMRN	June 27
Canada Goose Holdings, Inc.	GOOS	June 27
Church & Dwight Co., Inc.	CHD	June 27
iRobot Corp.	IRBT	June 25
CF Industries Holdings, Inc.	CF	June 25
Marathon Oil Corp.	MRO	June 25
Procter & Gamble Co.	PG	June 22
Semtech Corp.	SMTC	June 22
Lands�� End, Inc.	LE	June 21
Endeavor Silver Corp.	EXK	June 21
Merck & Co., Inc.	MRK	June 21
Williams-Sonoma, Inc.	WSM	June 20
Spark Therapeutics, Inc.	ONCE	June 20
Vishay Intertechnology, Inc.	VSH	June 18
Dillard��s, Inc.	DDS	June 18
Alphabet, Inc.	GOOGL	June 15
Allergan	AGN	June 15
Pepsico, Inc.	PEP	June 14
Glu Mobile, Inc.	GLUU	June 14
Mosaic Co.	MOS	June 13
Consumer Staples Select Sector SPDR	XLP	June 13
Roku, Inc.	ROKU	June 12
Analog Devices, Inc.	ADI	June 12
Viking Therapeutics, Inc.	VKTX	June 12
Medicines Co.	MDCO	June 11
Health Care Select Sector SPDR	XLV	June 8
Monster Beverage Corp.	MNST	June 7
VMWare, Inc.	VMW	June 6
SPDR S&P Biotech ETF	XBI	June 5
Twitter, Inc.	TWTR	June 5
Kohl��s Corp.	KSS	June 5
Pan American Silver Corp.	PAAS	May 25
Immunomedics, Inc.	IMMU	May 24
Supernus Pharmaceuticals, Inc.	SUPN	May 23
Electronic Arts, Inc.	EA	May 22
Momo, Inc.	MOMO	May 22
Union Pacific Corp.	UNP	May 21
Twilio, Inc.	TWLO	May 21
Intercept Pharmaceuticals, Inc.	ICPT	May 21
Energy Select Sector SDPR	XLE	May 18
Range Resources Corp.	RRC	May 17
SPDR S&P Metals & Mining ETF	XME	May 17
SPDR S&P Retail ETF	XRT	May 15
Lowe��s Companies, Inc.	LOW	May 14
Texas Instruments, Inc.	TXN	May 11
PowerShares QQQ Trust	QQQ	May 10
Facebook, Inc.	FB	May 9
Electronics for Imaging, Inc.	EFII	May 9
SPDR S&P Oil and Gas Exploration & Production ETF	XOP	May 9
Coupa Software, Inc.	COUP	May 8
Apple, Inc.	AAPL	May 7
PDC Energy, Inc.	PDCE	May 7
Under Armour, Inc.	UA	May 2
Norfolk Southern Corp.	NSC	May 2
Advanced Micro Devices, Inc.	AMD	May 1
UnitedHealth Group, Inc.	UNH	Apr. 30
Nike, Inc.	NKE	Apr. 30
DSW, Inc.	DSW	Apr. 30
Home Depot, Inc.	HD	Apr. 27
Noble Energy, Inc.	NBL	Apr. 27
Costco Wholesale Corp.	COST	Apr. 26
CSX Corp.	CSX	Apr. 26
Applied Optoelectronics, Inc.	AAOI	Apr. 19
Chipotle Mexican Grill, Inc.	CMG	Apr. 19
Wingstop, Inc.	WING	Apr. 19
F5 Networks, Inc.	FFIV	Apr. 18
EOG Resources, Inc.	EOG	Apr. 11
Autodesk, Inc.	ADSK	Apr. 10
NetApp, Inc.	NTAP	Apr. 9
Whiting Petroleum Corp.	WLL	Mar. 22
Domino��s Pizza, Inc.	DPZ	Mar. 21
Veeva Systems, Inc.	VEEV	Mar. 15
Burlington Stores, Inc.	BURL	Mar. 14
Baozun, Inc.	BZUN	Mar. 9
AxoGen, Inc.	AXGN	Mar. 8
TJX Companies, Inc.	TJX	Mar. 6
Chart Industries, Inc.	GTLS	Mar. 6
Macy��s, Inc.	M	Mar. 5
Five9, Inc.	FIVN	Mar. 5
LivePerson, Inc.	LPSN	Feb. 28
VeriSign, Inc.	VRSN	Feb. 26
Shutterfly, Inc.	SFLY	Feb. 22
ServiceNow, Inc.	NOW	Feb. 21
Palo Alto Networks, Inc.	PANW	Feb. 16
Adobe Systems, Inc.	ADBE	Feb. 16
Salesforce.com, Inc.	CRM	Feb. 12
Fortinet, Inc.	FTNT	Jan 19
Arrowhead Pharmaceuticals Corp.	ARWR	Jan. 11
Sarepta Therapeutics, Inc.	SRPT	Jan. 3
MSCI, Inc.	MSCI	Nov. 20
Motorola Solutions, Inc.	MSI	Nov. 14
Lululemon Athletica, Inc.	LULU	Oct. 24
HubSpot, Inc.	HUBS	Oct. 4
XPO Logistics, Inc.	XPO	Oct. 2
Nvidia Corp.	NVDA	Sept. 27
Bottomline Technologies, Inc.	EPAY	July 13
GrubHub, Inc.	GRUB	May 4
Square, Inc.	SQ	Mar. 3
Netflix, Inc.	NFLX	Oct. 4
Microsoft Corp.	MSFT	Aug. 5

Michael Ashbaugh

Michael Ashbaugh writes technical analysis for MarketWatch and is editor of MarketWatch's "The Technical Indicator" newsletter.

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Comment Related Topics Investing U.S. Stocks Mutual Funds Exchange Traded Funds Options Center Bonds Quote References SPX +6.00 +0.22% DJIA +113.99 +0.46% XOP -0.07 -0.16% XLF -0.11 -0.40% NKE +0.27 +0.35% MMM +0.35 +0.17% KO +0.51 +1.15% VMW +0.97 +0.63% Show all references MarketWatch Partner Center Most Popular Why it��s time to go full MAGA in your stock picks, says Deutsche Bank ��This rally in stocks is a last hurrah!�� warns Guggenheim��s Minerd See how this couple went from debt to $1.5 million in savings

Supreme Court Nominee Brett Kavanaugh Penned Healthcare Dissent Focused On Tax

&l;p&g;&l;img class=&q;dam-image getty size-large wp-image-994988220&q; src=&q;https://specials-images.forbesimg.com/dam/imageserve/994988220/960x0.jpg?fit=scale&q; data-height=&q;640&q; data-width=&q;960&q;&g; U.S. Circuit Judge Brett M. Kavanaugh looks on as U.S. President Donald Trump introduces him as his nominee to the United States Supreme Court during an event in the East Room of the White House July 9, 2018, in Washington, DC.&a;nbsp; (Photo by Chip Somodevilla/Getty Images)

President Trump has announced his nomination to fill the vacancy on the Supreme Court of the United States (SCOTUS) created by Justice Anthony Kennedy&s;s retirement. On Monday, the President gave the nod to District of Columbia Circuit Court of Appeals Judge Brett Kavanaugh. Kavanaugh has close ties to the Supreme Court. He clerked for Kennedy in the 1990s with another Supreme Court Justice, Neil Gorsuch. For the past dozen years, he&s;s been a fixture in the DC courts, which have produced other SCOTUS Justices, including Clarence Thomas, Ruth Bader Ginsburg, and Chief Justice John Roberts.

SCOTUS Justices typically don&s;t cut their teeth on tax cases, and Kavanaugh would be no exception. There is one tax-related case in his career, though, that stands out: &l;em&g;Seven-Sky v. Holder&l;/em&g; (Susan SEVEN&a;ndash;SKY, Also Known as Susan Sevensky, et al., Appellants v. Eric H. HOLDER, Jr., et al., Appellees, No. 11&a;ndash;5047).

The case was a challenge to the Affordable Care Act (also called &q;ACA&q; or sometimes &q;Obamacare&q;). The Act was passed by Congress on March 21, 2010, and signed into law by then President Barack Obama two days later. A number of lawsuits followed, including &l;em&g;Seven-Sky,&a;nbsp;&l;/em&g;which involved a challenge to the &q;minimum essential coverage provision.&q; The minimum essential coverage provision required that folks purchase and maintain healthcare insurance. It&s;s more commonly known as the individual mandate and if you don&s;t have coverage - and don&s;t qualify for a waiver or an exemption - you&s;re subject to a penalty. (Er, tax? Keep reading.)

(The mandate is still in place for 2018. You can read more &l;a href=&q;https://www.forbes.com/sites/kellyphillipserb/2018/01/21/ask-the-taxgirl-when-do-the-new-tax-law-changes-go-into-effect/&q;&g;here&l;/a&g;.)

In &l;em&g;Seven-Sky&l;/em&g;, the taxpayers argued that the healthcare mandate exceeded Congress&a;rsquo; authority under the Commerce Clause in the Constitution. The result, they argued, also burdened their religious exercise in violation of the Religious Freedom Restoration Act (RFRA).

The district court disagreed, and the taxpayers appealed the decision. The appellate court affirmed, meaning that they&a;nbsp;found that the district court&a;nbsp;reached the correct decision.

One of the issues that the judges considered in the case was whether the court had the right to hear it at all. Courts can only hear matters for which they have jurisdiction. The issue of jurisdiction tends to be raised by an immediate party to the case. Here, that would have been the taxpayers or the government - but neither raised the issue at this level. Instead, the issue was brought up in an &l;em&g;amicus curiae&l;/em&g; brief. &l;em&g;Amicus curiae&l;/em&g; is a Latin phrase meaning &q;friend of the court.&q; For legal purposes, an &l;em&g;amicus curiae&l;/em&g; is a party who is not formally involved in the case - meaning neither a plaintiff nor a defendant - but someone (or some organization) which has a vested interest in the outcome.

Here&s;s the gist of the argument. There&s;s a provision in the Tax Code called the Anti&a;mdash;Injunction Act (AIA). It basically says that you can&s;t raise a challenge to an assessment or collection of a&a;nbsp;tax before the tax is enforced. You already know the drill: For example, you have to get a notice from the Internal Revenue Service (IRS) before you can file your case in Tax Court.

(You can read more about the Tax Court &l;a href=&q;https://www.forbes.com/sites/kellyphillipserb/2017/04/12/taxes-from-a-to-z-2017-u-is-for-united-states-tax-court/&q;&g;here&l;/a&g;.)

With that in mind, the court considered two questions:

&l;/p&g;&l;ul&g;&l;li&g;Did the words &q;any tax&q; in the AIA apply to the shared responsibility payment?&l;/li&g; &l;li&g;If the terms of the AIA didn&s;t apply, did the language describing the mandate under the Affordable Care Act change the analysis?&l;/li&g; &l;/ul&g;

The appellate court found that the failure to maintain minimum essential coverage resulted in a penalty, a term they felt was deliberate,&a;nbsp;as opposed to a tax. The majority wrote, &q;Nothing we have seen suggests that Congress intended for &s;any tax&s; in the Anti&a;ndash;Injunction Act to include exactions unrelated to taxes that Congress labeled &s;penalties.&s;&q; That interpretation, the court found, was supported by judicial construction of the Tax Injunction Act, a statute with language similar to that found in the AIA but applied to state taxes.

Kavanaugh, in a lengthy (65 page) dissent, suggested instead that Congress intended for the AIA to apply to the mandate, because the Affordable Care Act directs that the penalty (we&s;re using the &q;p&q; word here instead of the &q;t&q; word) be &q;assessed and collected in the same manner&q; as a tax. The similarities, he argued, meant that it should be treated like a tax - including its applicability under the AIA. The majority disagreed with the &q;dissent&s;s linguistic analysis&q; noting that the language in the statute otherwise raised distinctions.

Kavanaugh failed to convince his colleagues that the &q;straightforward chain of logic&q; meant that they could not hear (and decide) the case. But his reasoning - that the AIA barred the suit - is important. That&s;s because procedure&a;nbsp;matters. Kavanaugh didn&s;t argue that the Affordable Care Act was unconstitutional. He never got that far. He argued instead that the court couldn&s;t hear the case, declaring:

&l;blockquote&g;The Tax Code is never a walk in the park. But the statutory analysis here leads to a firm conclusion that the Anti&a;ndash;Injunction Act bars this suit.&l;/blockquote&g;

(You can read the case, which downloads as a pdf &l;a href=&q;https://cases.justia.com/federal/appellate-courts/cadc/11-5047/11-5047-1340594-2011-11-08.pdf?ts=1411134762&q; target=&q;_blank&q;&g;here&l;/a&g;.)

Dissents don&s;t&a;nbsp;typically cause a big stir, and this one might have just been a legal footnote except for one thing: The argument that the mandate was a tax - and not a penalty - became a central argument at SCOTUS when considering whether the Affordable Care Act was constitutional. Chief Justice Roberts agreed with the government&s;s position (which, remember, the government did not initially bring in the &l;em&g;Seven-Sky&l;/em&g; case) that the shared responsibility payment was a &q;tax&q; and not a &q;penalty&q; - and Congress has the authority to regulate federal tax.

However, Roberts went on to say that Congress did not intend for the payment to be treated as a &a;ldquo;tax&a;rdquo; for purposes of the AIA. Even though the payment acted like a tax, Congress&l;span&g;&a;nbsp;described the payment as a penalty.&a;nbsp;&l;/span&g;He reasoned that &q;here Congress uses certain language in one part of a statute and different language in another, it is generally presumed that Congress acts intentionally.&q;&a;nbsp;He concluded, then, that Congress&a;nbsp;intended for the law barring challenges to a tax which had not yet taken effect to apply only to pure tax cases - and the Affordable Care Act wasn&s;t one of those cases. That meant, as in &l;em&g;Seven-Sky&l;/em&g;, that the Court could hear and decide the case.

(You can read more about SCOTUS&s; Affordable Care Act ruling &l;a href=&q;https://www.forbes.com/sites/kellyphillipserb/2012/06/28/when-is-a-penalty-a-tax-sorting-through-the-scotus-health-care-decision/#244e3d85bf30&q;&g;here&l;/a&g;.)

The rest, as they say, is history. The Affordable Care Act is still the law, and the mandate remains in place for a little longer. (Who says words don&s;t matter?)

What��s the play as the trade-war starter gun goes off? Buy the news

It is on.

The trade war that is, with U.S. tariffs kicking in as promised just after the clock struck midnight, and China apparently making good on its own promise to match. Even if this was all well-telegraphed, the reality may still be a bit tough to digest for Wall Street.

And for American businesses, the unease can only get worse, warns JonesTrading��s Michael O��Rourke. The chief market strategist reminds us that the biggest beneficiaries of globalization �� something Trump has been vocal in criticizing �� have been U.S. companies.

��American corporations need China more than China needs them, and with every escalation their uncertainty rises,�� said O��Rourke.

While you��re watching trade headlines, though, don��t forget it��s jobs day. That��s as some are still chewing over those hawkish Fed minutes and the fact the central bank is paying close attention to the trade spat. So rub the sleep out of that third eye.

On to our call of the day, which predicts some ��buy-the-news�� action in the wake of the first big volleys of the trade war. Asian stocks finished higher, and there has been no huge flight to the dollar, gold or other havens this morning.

The call comes from Charalambos Pissouros at JFD Brokers, who points to how the market reacted when Trump first threatened those tariffs �� with a slump of more than 500 points for the Dow.

��The markets have already responded to the proposal of these tariffs back in April. In mid-June, when the U.S. finally decided on the matter and China responded, markets remained somewhat indifferent, but they took a hit a few days later on Trump��s fresh threats,�� says the JFD senior market analyst in a note to clients.

��Thus, for fears and anxiety to surge again, we may need to get new threats or unplanned actions. In other words, something that investors haven��t noted on their agendas,�� he says.

In other words, wait for the tweets.

The market

That ��buy the news�� thing isn��t quite what we��re seeing in premarket, with Dow YMU8, -0.35% S&P ESU8, -0.19% �and Nasdaq NQU8, -0.21% futures headed lower, after a rebound for the Nasdaq COMP, +1.12% �drove the Dow DJIA, +0.75% and S&P 500 higher Thursday. Asia markets ADOW, +0.47% �saw a bounce, while Europe SXXP, -0.14% �is clinging to green.

Gold GCU8, -0.29% �is easing, the dollar DXY, -0.13% �is down, and crude CLU8, -0.76% �is also off.

See the Market Snapshot column for more.

The economy

It is nonfarm payrolls day. The big numbers roll out at 8:30 a.m. Eastern Time, and economists expect employment numbers to rise by 200,000, the jobless rate to reach 3.8%, but no big action on wages.

Check out: How low can U.S. unemployment go? What to watch in the June jobs report

The buzz

In the first salvoes of the trade war, the U.S. hit China with $34 billion in levies early Friday, and China fired back. But just before that, Trump upped the ante by threatening $500 billion in tariffs against the Middle Kingdom �� for roughly the amount of total goods the U.S. imported from China last year.

On that note, Ford F, +0.55% �says its China sales slumped 38% in June. Meanwhile, big Chinese ports are apparently already holding up U.S. goods.

J.P. Morgan JPM, +0.65% �says, no, it isn��t interested in buying into Deutsche Bank DB, +4.02% But shares of the embattled German bank are flying anyway.

Elon Musk is sending SpaceX and Boring Co. engineers to Thailand to see if they can help rescue the 12 boys stuck in a cave. The Tesla TSLA, -0.55% �CEO has been on Twitter discussing ideas such as creating a tunnel through the flooded cave network to let them walk out. No rescue will be easy �� it has already cost the life of a Thai navy diver.

Sec. of State Mike Pompeo will present Kim Jong Un with a CD recording of ��Rocket Man �� echoing Trump��s taunt �� at their meeting in Pyongyang on Friday.

A top executive at Wynn Resorts WYNN, +1.75% �, who knew about a secret $7.5 million settlement between CEO Steve Wynn and a casino employee, is stepping down.

Over in the U.K., Prime Minister Theresa May is holding a crucial cabinet meeting in the countryside to discuss her new Brexit plan �� though Airbus��s CEO says her government ��still has no clue�� about how to exit without severe harm.

The chart

Forget the thrills and spills �� the U.S. stock market really has gone nowhere in 2018. So writes Michael Kramer, founder of Mott Capital Management, who discusses the S&P 500��s lack of progress in a blog.

Here��s his chart, which lays out a bumpy ride to nowhere for the index:

��The ebbs and flows of good and bad news are two forces that the market is entirely undecided about, and for the most part, it keeps a lid on the stock market,�� says Kramer.

On the one hand, there is a strong economy that should lead to strong earnings growth and higher stock prices. But threats of a global trade war have kept getting in the way, he explains.

In a second blog, he talks about how all that frustrating action has left investors with a ��have and have-not market,�� where the winners are tech, consumers and biotech (minus chips) and the losers are on the front lines of a trade war �� industrials, materials and staples:

Win some, lose some

Kramer��s got a lot more insight on the topic. Check out his full thoughts here.

Opinion: Why the odds are good that stocks will be higher at the end 2018

The quote

��This is so uncalled for. Going after a 94-year-old former president��s promotion of volunteerism. I don��t mind POTUS being a fighter. I do mind him being rude.�� �� That was Ari Fleischer, who served in Bush 43��s administration, on Twitter.

He was referring to a speech by Trump in Montana, where the U.S. president took a swipe at the rhetoric of a ��thousand points of light.�� That phrase was in the inaugural speech by Bush 41, who set up the Points of Light Foundation for volunteering in 1990.

Random reads

Father of Holocaust victim Anne Frank tried to get U.S. visas but was blocked by immigration.

Japan executed a doomsday cult leader guilty of deadly sarin attacks in the ��90s.

Marcel the French pig makes his World Cup predictions ahead of a big weekend.

Nothing to see here: Canada PM responds to 18-year old groping allegation.

New York Mayor Bill de Blasio used a $3 million plane to jet back from a vacation.

Protests to mark Trump��s U.K. visit next week include a 19-foot angry ��Trump baby�� balloon.

Mayor of London says 'Trump baby' protest blimp can fly https://t.co/hj5EBzA4o2? pic.twitter.com/RsAveZpIQQ

— Reuters Top News (@Reuters) July 6, 2018

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Barbara Kollmeyer

Barbara Kollmeyer is an editor for MarketWatch in Madrid. Follow her on Twitter @bkollmeyer.

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