275  7TH Ave  7th floor New York , NY 10001                                                                                                                dcullinanecpa@yahoo.com

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​Daniel Cullinane CPA                                   p 848-250-9587                                                                                                                                     





​The White House is finalizing an executive order that would expand health plans offered by associations to allow individuals to pool together and buy insurance outside their states, a unilateral move that follows failed efforts by Congress to overhaul the health care system.President Donald Trump has long asserted that selling insurance across state lines would trigger competition that brings down premiums for people buying their own policies. Experts say that’s not guaranteed, partly because health insurance reflects local medical costs, which vary widely around the country.

Moreover, White House actions may come too late to have much impact on premiums for 2018.Trump was expected to sign the executive order this week, likely on Thursday, a senior administration official said Sunday.Under the president’s executive action, membership groups could sponsor insurance plans that cost less because — for example — they wouldn’t have to offer the full menu of benefits required under the Affordable Care Act, also called “Obamacare.” It’s unclear how the White House plans to overcome opposition from state insurance regulators, who see that as an end-run to avoid standards.

“There are likely to be legal challenges that could slow this effort down,” said Larry Levitt of the nonpartisan Kaiser Family Foundation.Similar alternatives have been promoted by Kentucky Sen. Rand Paul, a Republican holdout during the health care debate. Senate leaders didn’t bring the latest GOP health care bill to a vote because they lacked the votes to pass it.Association plans “kind of went away with the ACA, and now the idea seems to be to re-create them,” said Jeff Smedsrud, a health insurance marketing entrepreneur. “It’s not clear what they would really look like.”

Smedsrud said a different option also under consideration by the White House, to loosen restrictions on “short term” insurance plans, could be a safety valve for some consumers.Those plans generally have limited benefits and remain in force for less than a year. During the Obama administration, the availability of short-term coverage was restricted. One of Smedsrud’s companies sells short-term plans.Others warned that over time the White House order could undermine state insurance markets created under Obama’s law, by siphoning off healthy people to plans with lower premiums and skinnier benefits.The order was being drafted as Trump expressed his willingness to work with Democrats on health care after Republicans were unable to approve legislation that would have repealed and replaced “Obamacare.”
The president said Saturday that he had spoken to Senate Democratic leader Chuck Schumer of New York to see if Democrats would want to collaborate with him on improving health care. He told reporters before departing for a North Carolina fundraiser that he was willing to consider a “temporary deal” and referred to a popular Republican proposal that would have the federal government turn over money for health care directly to states in the form of block grants.

Schumer said through a spokesman Saturday that Trump “wanted to make another run at ‘repeal and replace’ and I told the president that’s off the table.” Schumer said if Trump “wants to work together to improve the existing health care system, we Democrats are open to his suggestions.”It was unclear if the expected White House order could lead to changes sweeping enough and quick enough to help several million consumers exposed to higher premiums next year for their individual health insurance plans.It typically takes government agencies several months to carry out presidential directives, since they generally must follow a notice-and-comment process. Sign-up season for individual health insurance starts Nov. 1 and ends Dec. 15.
Whether this executive order could impact the 2018 market is yet to be seen, since the health plans have created and priced their 2018 products already, and open enrollment begins in just three weeks,” said health industry consultant Robert Laszewski.
While nearly 9 million consumers who receive tax credits under the Obama-era law are protected from higher premiums, about 6.7 million other customers with individual coverage get no subsidies and will bear the full brunt of cost increases that reach well into the double digits in many states.Many in this group are solid middle-class, including self-employed business people and early retirees. Cutting premiums for them has been a longstanding Republican political promise.

“If the question is, is the president interested in working with Democrats to repeal and replace — that would be our language — the answer is yes,” White House budget director Mick Mulvaney said during an interview with NBC’s “Meet the Press.” ”The Democrats would use a different word for that, but the president wants to get something done.”

​Luxury goods maker Coach Inc. (NYSE: COH) announced on Wednesday that by the end of the month it will be known as Tapestry Inc. The move is meant to better incorporate the company’s various brands, which now include Stuart Weitzman and Kate Spade, along with Coach bags and leather goods.

The name change is also meant to appeal to younger shoppers, to reflect “a commitment to be approachable” and to allow the company to grow into new categories, the company said. However, the Coach brand name will remain on those products and stores.

CEO Victor Luis said in the release:

We are now at a defining moment in our corporate reinvention, having evolved from a mono-brand specialty retailer to a true house of emotional, desirable brands. In Tapestry, we found a name that speaks to creativity, craftsmanship, authenticity and inclusivity on a shared platform.

The reaction on social media was perhaps not what the company had hoped for, with many questioning or even mocking the decision to change identities after 76 years. Investors also drove the share price down almost 3% on Wednesday to $38.87, in a 52-week trading range of $34.07 to $48.85.

Piper Jaffray downgraded Coach to Neutral from Overweight last week, but earlier Sanford Bernstein started the shares at Outperform with a $51 price target. The consensus target price currently is $48.91

Corporate history is full of name changes, for a great variety of reasons, from Philip Morris becoming Altria and Research in Motion becoming BlackBerry to Kentucky Fried Chicken changing to KFC and WWF becoming WWE. Even tech colossus Google was once known as Back Rub.

Coach will also change its ticker symbol from COH to TPR at the end of the month and will continue to trade on the New York Stock Exchange.

​401 K

The S&P 500 just had its least volatile September ever, but one top Wall Street firm believes the recent sedate markets will not last. JPMorgan reiterated its overweight rating for Goldman Sachs shares, saying the investment bank's trading results will improve as the markets get more volatile.Goldman Sachs "has shown excellent progress when it comes to delivering shareholder value through strong cost management, creating positive operating leverage and thus maintained total capital return to shareholders," analyst Kian Abouhossein wrote in a note to clients Wednesday.He adds he expects volatility will pick up next year and Goldman will be able to improve its struggling commodities trading business.Abouhossein raised his price target for Goldman shares to $263, which is 9 percent higher than Tuesday's closing price. The old target was $260.Goldman's vaunted trading business is having a difficult year. Its second-quarter fixed income, currency and commodities revenue declined 40 percent from the previous year, and the bank said it was "a challenging environment characterized by low levels of volatility, low client activity and generally difficult market-making conditions."

The bank has been able to cut non-compensation expenses by 17 percent during the last five years. The analyst also predicts the company's Marcus online lending business can grow to nearly $1 billion in sales in three years.Goldman Sachs shares have underperformed the market this year. Its stock is up just 1 percent year-to-date through Tuesday compared with the S&P 500's 13 percent gain. The shares are up slightly in midday trading on Wednesday following the report.

With the third-quarter earnings parade in full swing, we are starting to see how the market is responding to earnings and the results are interesting. There were some hot momentum stocks that fell on good numbers, like Netflix Inc. (NASDAQ: NFLX), and some unloved companies like International Business Machines Corp. (NYSE: IBM) that had big rallies and good numbers. One thing is for sure: Looking for stocks cheaper than the S&P 500 makes sense as it trades at multiyear valuation highs.We recently covered stocks that Jefferies analysts have Buy ratings on that are trading cheaper than the S&P 500, or as they like to say, “Value without the trap.” They have come up with four more that look like outstanding buys for accounts that have a more aggressive risk tolerance. These stocks have the characteristics the Jefferies team screens for and were cited in their report.We started with Buy-rated stocks that are cheaper than the S&P and looked at those with flat or up consensus revisions over each of the past two earnings periods. Given that these stocks are cheaper than the S&P by an average of 3.5 P/E multiple points, we felt that even flat revisions were good enough, and we also felt that requiring two quarters of flat/up revisions would help to argue that the better revisions were sustainable.

Alliance Data Systems

This company has hit our insider buying screens in a big way this year, as ValueAct Holdings has purchased a substantial number of shares in Alliance Data Systems Corp. (NYSE: ADS). The company is a provider of data-driven marketing and loyalty solutions serving consumer-based businesses in a range of industries.The company offers a portfolio of integrated outsourced marketing solutions, including customer loyalty programs, database marketing services, end-to-end marketing services, analytics and creative services, direct marketing services and private label and co-brand retail credit card programs.

Alliance Data Systems operates through three segments.

LoyaltyOne provides coalition and short-term loyalty programs through the company’s Canadian AIR MILES Reward Program and Brand Loyalty.
Epsilon provides end-to-end, integrated marketing solutions.
Card Services provides risk management solutions, account origination, funding, transaction processing, customer care, collections and marketing services for the company’s private label and co-brand retail credit card programs.Shareholders receive a 0.88% dividend. The Jefferies price objective for the stock is $270, and the Wall Street consensus price target is $267.50. The stock closed Wednesday at $235.82 a share.

Arris International

This stock has been a Jefferies favorite for some time and is a top small cap pick. Arris International PLC (NASDAQ: ARRS) provides media entertainment and data communications solutions in the United States and internationally. It operates through two segments.The Customer Premises Equipment segment offers various product solutions, including set-top boxes, gateways, digital subscriber lines and cable modems, and embedded multimedia terminal adapters and voice/data modems that enable service providers to offer voice, video and high-speed data services to residential and business subscribers.

The Network & Cloud segment provides cable modem termination system, converged cable access platform, multichannel video programming distributors, programmer equipment, ad insertion technologies and equipment in the ground or on transmission poles, as well as equipment used to initiate the distribution of content-carrying signals.While the concern over the set-top box arena has been cited around Wall Street, the company still holds a 27% to 30% market share, and many analysts feel that it will be years before demand slows. Trading at a low nine times estimated 2018 earnings, the stock is cheap at current levels, and if the company guidance stays in line with current forward estimates, the analysts feel confidence could begin to return.Jefferies has a $34 price target, and the posted consensus target is $34.50. Shares closed Wednesday at $28.04.


This company remains a top pick across Wall Street and derives 20% of its business from Apple. Broadcom Ltd. (NASDAQ: AVGO) has an extensive semiconductor product portfolio that addresses applications within the wired infrastructure, wireless communications, enterprise storage and industrial end markets.Applications for Broadcom’s products in its end markets include data center networking, home connectivity, broadband access, telecommunications equipment, smartphones and base stations, data center servers and storage, factory automation, power generation and alternative energy systems and displays.
Top Wall Street analysts like the leadership in the mobile, data center and broadband markets, and especially in the radio frequency (RF) arena. Many on Wall Street see a cyclical rebound in industrial and communications demand.The analysts note that the stock is underowned compared to peers, and the 40% iPhone content growth, combined with the closure of the Brocade purchase, which they feel is accretive, are very positive catalysts. They also feel dividend growth is possible.Broadcom investors receive a 1.63% dividend. The $286 Jefferies price target is the same as the consensus target. The stock closed most recently at $245.82 per share.

Steel Dynamics

This is another company that Jefferies remains very positive on.Steel Dynamics Inc. (NASDAQ: STLD) operates six steel mini-mills in Indiana, Virginia, Mississippi and West Virginia. Production capacity has been nearly 10 million tons, of a total 110 million U.S. capacity.The company makes flat rolled products, special/merchant bars and structural steel products. Steel Dynamics can process about 7 million tons of ferrous scrap and has a downstream operation that processes finished steel. The analysts noted this in the research:

The company remains one of analyst Seth Rosenfeld’s top picks in the US steel sector as a high-quality play on the gradually tightening domestic steel market. In the near-term, Steel Dynamics should benefit from improving margins as scrap input costs begin to retrace heading into the fourth quarter after a period of abnormal strength, which weighed on profitability in recent months. In the medium-term the company is leveraged to rising domestic demand across diversified end markets (infrastructure, machinery, autos) and falling import penetration, which should allow them to better optimize its existing excess capacity with notable fixed cost leverage as volumes rise.

Shareholders are paid a 1.6% dividend. The Jefferies price target is $42. The consensus target is $40.14, and the stock ended Wednesday trading at $38.73 a share

It appears that there is yet another underlying attack Americans in their effort to properly save for retirement. The reports in the week of October 20 indicated a Republican plan to limit the deductibility of annual retirement contributions into 401(k) plans. Then President Trump shot down this idea in a tweet on Monday, October 23. But it appears that the House of Representatives may still be weighing adjustments to how much Americans can save for retirement in qualified retirement savings plans.

U.S. Congressman Kevin Brady, a Republican representing the 8th District (Conroe, Texas), is the Chairman of the House Ways and Means Committee. According to the Washington Post and The Wall Street Journal, Brady indicated in a Christian Science Monitor breakfast that Republicans continue to weigh adjustments to 401(k) plans as part of a tax-code change.

There is a serious problem here: Americans are already very much behind the eight-ball when it comes to having saved up for retirement. Many people in their 40s and 50s have literally saved only a few thousand dollars, and even if that was magically bumped up to $200,000 the figure is far too low for most people to be able to afford anything that would resemble an adequate retirement.

What the public needs to be alarmed about is that it is already hard for many Americans to adequately save enough money for retirement. Every taxpayer pays handily into Social Security, and the new retirement age of 67 implies that anyone under 50 pays into Social Security for about 45 years.

.The tax-deductibility incentive under 401(k) and traditional IRA plans are meant to entice Americans to save on their own for retirement. This allows the money to grow without being taxed until it is accessed down the road. If you take away the incentive now, it is without question that results in less savings. It also means that the government is hell-bent on taxing today without consideration for the future.

As American companies have the highest corporate tax rates of all developed nations, those corporate tax rates need to come down. If they are coming down and being funded by the likes of every person who wants to save for retirement, then this technically is corporate welfare.

Most sensible people understand that there has to be some give and some take for any deal to work for the greater good. What many people who are key in making policy fail to consider about saving for retirement is that there are already too many restrictions on what can be contributed into retirement plans for many Americans. 401(K) plans are subject to tests about which participants and owners can contribute, and there are restrictions on income limits that can prevent certain IRA contributions.

Congressman Brady may head one of the most powerful committees in Congress, but he is by and large unreachable considering this position. Congressman Brady’s contact page on his official website says:

I am very interested in hearing your views on issues of importance to you. Due to the large volume of US Mail, email, phone calls and faxes I receive, I am only able to accept messages from residents of the 8th Congressional District of Texas. Congressional courtesy dictates that Representatives be given the opportunity to assist their own constituents. If you are a resident of another district, I encourage you to contact your Representative in Congress …

When President Trump rejected the idea of lowering current savings limits, he said:

There will be NO change to your 401(k). This has always been a great and popular middle class tax break that works, and it stays!24/7 Wall St.
14 Mistakes That Can Wreck Your Retirement Plans

24/7 Wall St. recently showed how every single person in their 20s and 30s can somewhat easily save up $1 million by the time they retire. We also showed how every other type of saver can work toward that goal of $1 million saved. Limiting 401(k) plan contributions, and perhaps traditional IRA contributions, will kill the ability for people to come anywhere close to adequate retirement savings.

Most younger employees can no longer count on company pension plans to take care of them after retirement. It’s a given that the caps in Social Security are only going to be a supplement to fund your retirement as well, and we already know that many legislators already want to lower or restrict Social Security benefits ahead.

The Employee Benefit Research Institute’s EBRI/ICI Participant-Directed Retirement Plan Data Collection Project is said to be the largest and most representative repository of information about individual 401(k) plans in aggregate, but its data even in 2017 comes with a big look-back period. As of December 31, 2012, the EBRI/ICI database included statistical information about 24 million 401(k) plan participants covering some 64,619 employer-sponsored plans and representing $1.536 trillion in assets. This is said to cover 46% of the universe of 401(k) plan participants, more than 10% of plans and 44% of 401(k) plan assets.

Another report comes from BenefitsPRO showing that U.S. retirement assets hit $24.9 trillion (including corporate and government pensions) as of the end of March 2015. It also indicated that retirement assets accounted for 36% of household financial assets. Of those assets, IRAs accounted for the greatest share of assets at $7.6 trillion. Also, defined contribution plans held $6.8 trillion, $4.7 trillion of which was held in 401(k) plans.

Unfortunately, lawmakers are continuing to play their hands close to their chests when it comes to what tax reform really will look like. We can only hope that financially responsible retirement savers aren’t the ones paying the biggest price here.