Our Reports on Stocks in the Staffing Services Industry
December 15, 2019
Image Source: Michael Cote Structure of the Staffing Services Industry The staffing services industry spans firms that provide business outsourcing services to those that offer talent management solutions. Providers of business outsourcing solutions compete with a variety of independent firms as well as captive in-house functions. Their businesses are characterized by long-term client relationships and recurring revenue. Talent management firms offer executive recruitment and consulting services and face emerging competition from professional networking website providers. Attracting consultants is particularly important for executive recruitment entities. We’re neutral on the group. We’ve optimized our coverage universe. For reports on staffing services companies, please click here.
Our Reports on Stocks in the Recreational Vehicles Industry
December 15, 2019
Image Source: Diamondback Structure of the Recreational Vehicles Industry The recreational vehicles industry spans firms that make boats, snowmobiles, all-terrain vehicles (ATVs), recreation vehicles and related accessories. Strong competition exists in all of these product groups, ranging from large, highly-diversified firms to small, single-product businesses. The revenue streams of participants are cyclical and are highly sensitive to personal discretionary spending levels. A strong distribution and dealer network is vital. Overall credit market conditions and the financial service operations of firms in the group should be watched very closely. We’re neutral on the structure of the space. We’ve optimized our industrials coverage. For their reports, please click here.
Oracle’s Dividend Growth Trajectory Remains Solid
December 13, 2019
Image Source: Oracle Corporation – Financial Analyst Meeting Presentation, September 2019 By Callum Turcan On December 12, Oracle Corporation (ORCL) reported second quarter earnings for its fiscal 2020 (period ended November 30, 2019). Massive share repurchases reduced Oracle’s diluted outstanding weighted-average share count from 3,908 million in the first half of fiscal 2018 to 3,370 million in the first half of fiscal 2019. That played a key role in boosting Oracle’s EPS performance (diluted GAAP EPS was up 12% year-over-year in the first half of fiscal 2020) as its revenues were broadly flat during this period. We continue to like Oracle in our Dividend Growth Newsletter portfolio given the strength of its free cash flow profile and promising outlook. Shares
Our Reports on Stocks in the Broad Chemicals Industry
December 13, 2019
Structure of the Chemicals Industry The broad chemicals industry includes firms that make thousands of different chemical substances, ranging from basic raw materials to advanced specialty chemicals. Making chemicals is a cyclical and energy-intensive business, with volatile oil/gas prices influencing feedstock, operation, and transportation costs. Specialty providers can carve out niches, but commodity chemicals producers are largely undifferentiated, making it impossible to gain a sustainable competitive edge. The industry is very capital intensive, and large swings in prices and volume should be expected. We don’t like the industry structure. We’ve optimized our chemicals coverage, the reports of which can be found here.
Our Reports on Stocks in the Conglomerates Industry
December 12, 2019
Our Reports on Stocks in the Communications Equipment Space
December 12, 2019
Image Source: Seth Stoll Structure of the Networking Equipment Industry Firms in the networking equipment industry provide products for transporting data, voice, and video within businesses and around the world. Participants must adapt to address virtualization/cloud-driven needs in the enterprise data center market; the convergence of video, collaboration, and networked mobility technologies; and the move toward programmable, virtual networks. The industry is characterized by low barriers to entry, rapid technological change and significant pricing competition. Gross margins can be volatile and should be watched closely. We don’t like the structure of the group. We’ve optimized our tehnology coverage. To access the reports, please select here.
GameStop’s Problems Continue
December 11, 2019
Image Source: GameStop Corporation – Fourth Quarter Fiscal 2018 Earnings IR Presentation By Callum Turcan On December 10, video game retailer GameStop Corp (GME) reported third quarter earnings for its fiscal 2019 (13-week period ended November 2, 2019) that were simply terrible. Shares of GME were down big after-hours on December 10. GAAP net sales were down 26% year-over-year last quarter, hitting $1.4 billion, while the company’s GAAP operating loss came in at ~$0.05 billion, an improvement versus an operating loss of $0.5 billion (due to a large goodwill impairment charge) in the same period last fiscal year. GameStop halted its common dividend program in the middle of 2019, which freed up substantial cash flow for share buybacks and deleveraging
Our Reports on Stocks in the Pollution Controls Industry
December 11, 2019
Image Source: Daniel Lerps Structure of the Pollution Controls Industry The pollution controls industry spans firms that make air/liquid filtration systems to those that focus on nitrogen oxide (NOx) reduction and sulfur abatement systems. The filtration markets are highly competitive requiring significant R&D expenses, and both pricing and margin pressure are present. Though certain patents offer advantages, success of participants in the air pollution control market is dependent on the continued enforcement of pollution regulations across the globe, especially in China where pollution control has become a top priority. We’re neutral on the structure of the group. We’ve optimized our industrials coverage. For their reports, please click here.
Our Reports on Stocks in the Financial Exchanges Industry
December 11, 2019
Image Source: Matt Griffin Structure of the Exchanges Industry The exchanges industry consists of firms that deliver trading, clearing, exchange technology, and regulatory securities listing. Industry constituents operate some of the most well-known exchanges including the NASDAQ, Chicago Board Options Exchange, and the Chicago Mercantile Exchange. Firms carve out competitive advantages via scale (operating the largest market for a given financial instrument) and via technological superiority (transaction speeds and reliability). The securities markets are intensely competitive, but new entrants tend to have limited liquidity/capability. We like the industry structure. We’ve reallocated our resources to cover other companies.
Visa Operates a Great Business
December 11, 2019
Image Shown: Shares of Visa Inc have shot upwards over the past year and we continue to like the name as a top holding in our Best Ideas Newsletter portfolio. By Callum Turcan One of our favorite companies out there is Visa Inc (V). The company generates robust free cash flows, its outlook is supported by powerful secular growth tailwinds, the firm doesn’t take on credit risk as it doesn’t issue out credit cards (making Visa a “pure play” on the shift from cash to card around the world), and generally speaking, the company has been very shareholder friendly. We continue to like Visa as a top holding in our Best Ideas Newsletter portfolio, a position it has been for
