Tuesday brought about a nice S&P/Case-Shiller number and better-than-expected quarterly performance from Hormel Foods and Hewlett Packard. Though we liked the news, firms in our Best Ideas portfolio and Dividend Growth portfolio represent our best ideas at any time.
Housing
From press release: “Data through September 2013, released today by S&P Dow Jones Indices for its S&P/Case-Shiller Home Price Indices, the leading measure of U.S. home prices, showed that the U.S. National Home Price Index rose 3.2% in the third quarter of 2013 and 11.2% over the last four quarters. In September 2013, the 10- and 20-City Composites gained 0.7% month-over-month and 13.3% year-over-year.” To continue reading >>
Homebuilders: DHI, GFA, JOE, KBH, LEN, MDC, MTH, NVR, PHM, RYL, SPF, TOL
Hormel Foods (HRL)
From press release: “Hormel Foods Corporation today reported its performance for the fiscal year 2013 fourth quarter and full year…Fourth quarter record diluted EPS of $0.58, up 18 percent from $0.49 per share; segment operating profit increased 21 percent. Record dollar sales of $2.3 billion, increased 7 percent; volume up 3 percent; Grocery Products operating profit up 17 percent; volume up 24 percent (volume down 2 percent excluding sales of SKIPPY products); dollar sales up 23 percent (dollar sales up 1 percent excluding sales of SKIPPY products).” To continue reading >>
Hewlett-Packard (HPQ)
From press release: “Fourth quarter non-GAAP diluted net earnings per share of $1.01, down 13% from the prior-year period; Fourth quarter GAAP diluted net earnings per share of $0.73, up from GAAP diluted net loss per share of $3.49 in the prior-year period; Fourth quarter net revenue of $29.1 billion, down 3% from the prior-year period and down 1% when adjusted for the effects of currency; Fourth quarter cash flow from operations of $2.8 billion, down 31% from the prior-year period.” To continue reading >>
Valuentum’s Take
We’re always very pleased to see housing prices move in the right direction, as it has positive implications across the entire housing value chain from cabinet makers to mortgage originators. Dividend Aristocrat Hormel Foods continues to defy gravity, and while we’re huge fans of the firm’s dividend growth profile, shares are far from cheap at current levels. Hewlett-Packard’s quarterly performance was better than expected, and we continue to expect valuation upside potential to $30 per share. However, we don’t hold Hormel Foods, Hewlett-Packard, or any homebuilder in our actively-managed portfolios. We’re comfortable with our existing portfolio holdings.
Note: News flow will be slow in the next few days as the US markets approach the Thanksgiving holiday.