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The data and information included in bond reports (the “Bond Report” and/or “Research Reports”) are generated by quantitative research models. Bond Reports may contain ratings data and analysts’ commentaries from S&P Global Ratings, an affiliate of S&P Global Market Intelligence, a division of S&P Global Inc. When using this report, investors are advised to consult the accompanying glossary of investment terms. Bond Reports are prepared by Accounting Research & Analytics, LLC d/b/a CFRA, which is not affiliated with S&P Global Ratings and/or S&P Global Inc. Bond Reports are generally updated on a daily basis.
In general the bond market is volatile, and fixed income securities carry interest rate risk. Investments are subject to investment risks including the possible loss of the principal amount invested. Bond investments may be subject, but not limited, to the following investment risks:
Credit and default risk – Corporate bonds are subject to credit risk. It’s important to pay attention to changes in the credit quality of the issuer, as less creditworthy issuers may be more likely to default on interest payments or principal repayment. If a bond issuer fails to make either a coupon or principal payment when they are due, or fails to meet some other provision of the bond indenture, it is said to be in default.
Market risk – Price volatility of corporate bonds increases with the length of the maturity and decreases as the size of the coupon increases. Changes in credit rating can also affect prices. If one of the major rating services lowers its credit rating for a particular issue, the price of that security usually declines.
Event risk – A bond’s payments are dependent on the issuer’s ability to generate cash flow. Unforeseen events could impact their ability to meet those commitments.
Call risk – Many corporate bonds are callable, which means they can be redeemed or paid off at the issuer’s discretion prior to maturity. Typically an issuer will call a bond when interest rates fall below the coupon rate potentially leaving investors with a loss in income and less favorable reinvestment options. Prior to purchasing a corporate bond, determine whether call provisions exist. An investors should ensure that the yield he/she is quoted includes the yield to the worst case in the event of a call.
Sector risk – Corporate bond issuers fall into four main sectors: industrial, financial, utilities, and transportation. Bonds in these economic sectors can be affected by a range of factors, including corporate events, consumer demand, changes in the economic cycle, changes in regulation, interest rate and commodity volatility, changes in overseas economic conditions, and currency fluctuations. Understanding the degree to which each sector can be influenced by these factors is the first step toward building a diversified bond portfolio.
Interest rate risk – If interest rates rise, the price of existing bonds usually declines. That’s because new bonds are likely to be issued with higher yields as interest rates increase, making the old or outstanding bonds less attractive. If interest rates decline, however, bond prices usually increase, which means an investor can sometimes sell a bond for more than they paid or a premium to face value, since other investors are willing to pay a premium for a bond with a higher interest payment. The longer a bond’s maturity, the greater the impact a change in interest rates can have on its price. If you’re holding a bond until maturity, interest rate risk is not a concern.
Government securities risk – The U.S. Treasury only backs in full all some obligations of the U.S. government, its agencies and instrumentalities. Some obligations are backed only by the credit of the issuing agency or instrumentality, and in some cases there may be some risk of default by the issuer. The U.S. government or its agencies or instrumentalities cannot guarantee the market value of a security, only the timely payment of interest and principal when held to maturity. U.S government securities may increase or decrease in value based on global demand and changes in global economic conditions affect the demand for these securities.
Municipal securities risk – Public information available about municipal securities is in general limited and less available than that for corporate equities or bonds. Special factors, such as legislative changes, and state and local economic and business developments, may adversely affect the yield and/or value of the bond investments in municipal securities. Investments in municipal projects of a municipality or a state may impact the bond”s value, if economic, business or political conditions change for the municipality or state.
Foreign risk – In addition to the risks mentioned above, there are additional considerations for bonds issued by foreign governments and corporations. These bonds can experience greater volatility, due to increased political, regulatory, market, or economic risks. These risks are usually more pronounced in emerging markets.
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John is Vice President of Equity Research. He joined CFRA in April 2019. He is responsible for fundamental equity research and analysis covering several segments within the Information Technology and Communication Services sectors, including enterprise software and SaaS/cloud providers, Internet advertising/social media platforms, and game developers.
Prior to joining CFRA, John co-founded Samadhi Capital Partners, an investment advisor and equity research firm where he developed an investment process and framework targeted at tech sector equities, with a particular emphasis on gauging the impact of and identifying the long-term winners from artificial intelligence, machine learning, deep learning, neural networks, and related developments categorized under the larger “cognification of software” mega-trend. Before his entrepreneurial stint, he served as Senior Analyst and Portfolio Manager at Sands Capital Management, responsible for the firm’s investments within the tech sector.
John began his career in equity research with an independent equity research firm, Precursor, where he was ranked as the top analyst covering network equipment stocks among independent research firms. He also spent the first dozen years of his career in various roles within the tech industry. During this time, he published dozens of white papers and research reports on topics ranging from network processors, Virtual LAN (VLAN) technology, and the historical evolution of enterprise application architecture.
John graduated from Harvard University with a BA in East Asian Studies.
Matthew is Vice President of Equity Research at CFRA. He is responsible for providing differentiated and actionable research and recommendations on equities in the Materials and Industrials sectors. Matthew’s areas of focus include: metals & mining, construction materials, containers & packaging, and building products. Matthew previously held the position of Industry/Equity Analyst at S&P Global Market Intelligence.
Matthew joined CFRA in 2016 and S&P Global in 2014, after working on the buy-side as an Equity Analyst at London Capital Management in London, Canada, where he covered North American stocks in the Energy and Consumer Staples sectors. Prior to joining the equity research industry, Matthew worked as a Financial Analyst for companies in both the retail and fitness areas.
Matthew holds his Bachelor of Business Administration degree from Colorado State University and his MBA from Concordia University in Montreal, Canada. He is also a CFA charterholder.
Prior to joining S&P Global in 1989 and CFRA in 2016, Sam served as Editor In Chief at Argus Research, an independent investment research firm in New York City.
He holds an MBA in Finance from New York University and a B.A. in History/Education from Muhlenberg College, in Allentown, PA. He is a CFP® certificant and is a Trustee of the Securities Industry Institute®, the executive development program held annually at The Wharton School of The University of Pennsylvania.
Follow Sam on Twitter: @StovallCFRA
Prior to joining CFRA, Todd previously served in other financial positions at S&P Global, such as International Mutual Fund Sector Specialist, Large Cap Value and Large Cap Growth Analyst and has served on the Fund Services Asset Allocation Committee. Prior to joining S&P Global in 2001, Todd was managing editor of Value Line Mutual Fund Survey and Senior Large Cap and Small Cap Value Mutual Fund Analyst. He was also a Financial Advisor with Morgan Stanley.
Todd holds a B.G.S in Finance from the University of Michigan and an MBA in Finance from New York University.
Follow Todd on Twitter at: @ToddCFRA
Prior to joining CFRA, Lindsey worked as an Investment Strategist with S&P Global within the Investment Advisory Services division. She worked in several different capacities at TheStreet.com before that, from helping to manage Jim Cramer’s small and mid-cap Charitable Trusts, to leading trader blog conversations and writing research. She learned the ropes as an equity research analyst at J.P Morgan and Deutsche Bank covering retail companies, and began her career in investment banking with Jefferies & Company’s Mergers & Acquisition group.
Follow Lindsey on Twitter: @LBellCFRA
Prior to joining CFRA and S&P Global, Tuna was a Senior Equity Analyst at Lehman Brothers, New York. He participated in key decisions by the firm’s Investment Policy Committee and was highly instrumental in managing a multi-capitalization equity portfolio, with primary focus on the Technology, Media and Telecom (TMT) sectors. Tuna also gained extensive global consulting experience in his previous roles at Arthur Andersen and KPMG.
Tuna earned an MBA in Finance from the Strathclyde University Business School in Scotland, U.K. He also holds a B.Sc. in Accounting from University of Nigeria as well as LL.B. (JD). Tuna is a CFA charterholder and a Certified Public Accountant (CPA).