Our Reports on Stocks in the Agricultural Equipment Industry
January 17, 2020
Structure of the Agricultural Machinery Industry The agricultural machinery industry is composed of firms that make farm and construction equipment. Demand for agricultural equipment is levered to farm incomes and commodity prices, while purchases of construction equipment are dependent on global economic health. Population growth and the increasing need for food/energy are the major long-term drivers for new orders across the industry. Still, firms are competitive, capital intensive, and possess significant operating leverage. A strong/dependable brand and an expansive distribution network are keys to success. We’re neutral on the group. We’ve optimized our industrials coverage. Our reports can be found here.
Dividend Increases/Decreases for the Week Ending January 17
January 17, 2020
Below we provide a list of firms that raised their dividends during the week ending January 17. The dividend reports of covered firms on this list will be updated shortly with the new information. To access our dividend reports use the ‘Symbol’ search box in our website header. Firms Raising Their Dividends This Week Abbott Laboratories (ABT): now $0.36 per share quarterly dividend, was $0.32. Algoma Central (AGMJF): now CAD 0.12 per share quarterly dividend, was CAD 0.11. Alliant Energy (LNT): now $0.38 per share quarterly dividend, was $0.355. Allied Properties Real Estate Investment Trust (APYRF): now CAD 0.1375 per share monthly dividend, was CAD 0.1330. Ally Financial (ALLY): now $0.19 per share quarterly dividend, was $0.17. Apogee (APOG): now
Alcoa’s Turnaround Still a Work in Progress
January 16, 2020
Image Shown: It has been rough for Alcoa Corporation over the past couple of years as the company faces a slowing global industrial economy while trying to optimize its asset base and overall operations in a bid to save on costs. By Callum Turcan After the market close on January 15, alumina, aluminum, and bauxite product leader Alcoa Corporation (AA) reported earnings covering the fourth quarter of 2019. The company’s top- and bottom-line results missed consensus expectations, sending shares of AA lower initially during after-hours trading. Financial Updates For the full-year, Alcoa recorded $10.3 billion in GAAP sales, a GAAP operating loss of $0.4 billion, and GAAP diluted EPS of -$6.07 (negative $6.07). On a non-GAAP adjusted basis, Alcoa’s diluted
Wells Fargo Remains an Inefficient Bank Despite Regulatory Overhang
January 16, 2020
Wells has been forced to do a lot of hiring related to remediating its problems with regulators, but the problem is simply larger than that. This is an inefficient bank, which is very odd considering the massive scale that it benefits from. By Matthew Warren Well Fargo (WFC) reported terrible fourth-quarter results January 14. The company earned 60 cents per share, down from $1.21 in the same quarter last year, missing analyst consensus estimates for both the top and bottom line. While it is a messy quarter with a large litigation write down related to previous scandals and other “one time” items, the main theme is that expenses are simply too high and going in the wrong direction at Wells
Visa Enhances Its Long-Term Outlook
January 15, 2020
Top weighted Best Ideas Newsletter portfolio holding Visa continues to augment its long-term outlook for the betterment of its shareholders, in our view. By Callum Turcan On January 13, top weighted Best Ideas Newsletter portfolio holding Visa Inc (V) announced it was buying financial tech company Plaid for $5.3 billion. Plaid primarily offers a network that allows consumers to connect financial accounts to apps securely and safely, meaning that when a consumer downloads a mobile financial-oriented app to their phone (for example), Plaid is the company that ensures a smooth connection between app and the relevant financial institution when it comes to transferring information and ultimately money. What’s important about this acquisition is that Visa, once again, is showcasing its
Our Reports on Stocks in the Pharmaceuticals (Biotech/Generic) Industry
January 15, 2020
Image Source: Open Grid Structure of the Pharmaceuticals Industry The pharma (generic/other) industry is composed of makers of both brand and generic drugs. Intellectual property protection remains vital to the successful commercialization of safe/effective medicines, avoidance of pricing pressures, and offers brand firms competitive advantages over the life of such patents. Firms in the biotechnology industry face no certain future. Drug development is complex, difficult, and risky, and failure rates are high. Competition can be fierce when biosimilar products exist, though patents are material competitive advantages. We like the group, but the timing of expiration of patents should be watched closely. We’ve optimized our health care coverage, the reports of which can be found here.
JPMorgan’s Quarter Shows Higher Sustainable Growth Potential
January 15, 2020
“We are raising our fair value estimate of JPMorgan to $160 per share to reflect higher sustainable growth than we’d previously been expecting.” — Matt Warren By Matthew Warren JPMorgan Chase & Co (JPM) reported an impressive set of results, and in fact, a record fourth quarter, with managed net revenue up 9% and net income up 21%, beating on both the top and bottom lines versus analyst consensus estimates. The bank continues to churn out best-in-class return on tangible capital for the money center banks at 17% in the quarter. JPMorgan’s efficiency ratio came in at an impressive 56%, or 55% on an adjusted basis. For a bank with such a sizable i-bank and capital markets business (where efficiency
Disney Joins the Best Ideas Newsletter Portfolio
January 14, 2020
Image Shown: Shares of The Walt Disney Company have performed well over the past year, and we see room for additional upside. By Callum Turcan Media and entertainment giant The Walt Disney Company (DIS) was just added to our Best Ideas Newsletter portfolio (article link here announcing recent portfolio changes). Though the firm does not register the typically high Valuentum Buying Index rating that we would prefer with new additions (sometimes we have to relax criteria to achieve newsletter portfolio goals), we like Disney’s business model and its future free cash flows are underpinned by: a top quality intellectual property (‘IP’) portfolio that’s practically impossible to replace, the immense profitability of its theme parks (which benefit from its strong and ever-growing IP
ALERTS: Big Changes to the Portfolios; Goodbye Apple!
January 13, 2020
Image Source: GDS-Productions Summary Best Ideas Newsletter portfolio Remove: AAPL (7%-12%), GM (2.5%-4%) = 9.5%-16% Add to PYPL (increase weighting by 3%, to the range of 5.5%-7%), add DIS (2.5%-4%), add XAR (4%-5.5%) = 9.5%-14% Dividend Growth Newsletter portfolio Remove: AAPL (5.5%-7.5%), GM (3.5%-5.5%) = 9%-13% Add: BAC (2.5%-3.5%), NEM (2.5%-3.5%), RSG (2.5%-3.5%), LMT (2.5%-3.5%) = 10%-14% —– By Callum Turcan and Brian Nelson, CFA We are making a number of changes to the Best Ideas Newsletter portfolio and Dividend Growth Newsletter portfolio as this market continues full steam ahead. We remain near fully invested in both newsletter portfolios, but we are positioning them more defensively as we enter 2020. The following changes will be reflected in the newsletter portfolios
Intel Has Performed Well Since Acquiring Mobileye
January 13, 2020
Image Shown: Intel Corporation (represented by the blue line in the graph above), a long time holding in both our Best Ideas Newsletter and Dividend Growth Newsletter portfolios, has substantially outperformed the NASDAQ 100 (QQQ) index (black line) and the S&P 500 (SPY) index (orange line) since the period just before announcing its ~$15 billion deal to acquire Mobileye in March 2017, before taking dividends into consideration (given that Intel pays out a decent dividend, that wouldn’t change this picture materially). By Callum Turcan Shares of Best Ideas Newsletter and Dividend Growth Newsletter portfolio holding Intel Corporation (INTC) have performed well since announcing back in March 2017 that it was going to acquire Mobileye, a maker of software for the
