Apple Charging Higher
December 11, 2019
Image Shown: Shares of Apple Inc continue to climb higher and we like the name in both our Best Ideas Newsletter and Dividend Growth Newsletter portfolios. This is a long-term holding with substantial potential capital appreciation and dividend growth upside. By Callum Turcan Apple Inc (AAPL) is a top holding in both our Best Ideas Newsletter and Dividend Growth Newsletter portfolios, with shares of AAPL yielding ~1.1% as of this writing. The top end of our fair value range estimate for shares of AAPL sits at $280, decently above where shares are trading at as of this writing. Considering the favorable technicals Apple has experienced of late, we see substantial room for shares to move higher still. Please keep in
Health Care Sector Remains Hot
December 9, 2019
Image Shown: The Health Care Select Sector SPDR ETF, a holding in both our Best Ideas Newsletter and Dividend Growth Newsletter portfolios, has been on an upward tear over the past several years. Strong macro tailwinds combined with the ability for industries within the health care sector to generate meaningful shareholder value have been key to supporting strong capital appreciation of equities operating in the area of late. By Callum Turcan The Health Care Select Sector SPDR ETF (XLV) is a top holding in both our Best Ideas Newsletter and Dividend Growth Newsletter portfolios. We like the exposure and diversification to health care equities that XLV provides. XLV yields ~1.5% as of this writing. State Street Corp (STT) acts as
Intel’s Resilient Free Cash Flows and Improving Outlook
December 9, 2019
Image Shown: Shares of Intel Corporation have resumed their upward climb after stumbling during the middle of 2019. We continue to like the name in both our Best Ideas Newsletter and Dividend Growth Newsletter portfolios. By Callum Turcan Intel Corp (INTC) is another one of our favorite companies and is included in both our Best Ideas Newsletter and Dividend Growth Newsletter portfolios. After coming under fire during the middle of 2019, INTC is back on a nice upward trajectory. The top end of our fair value range estimate sits at $61 per share of INTC, indicating there’s plenty of room for Intel to run higher. Shares of INTC yield 2.2% as of this writing, and we view the company’s dividend
Our Reports on Stocks in the Tobacco Industry
December 9, 2019
Image Source: Altria Structure of the Tobacco Industry The oligopolistic tobacco industry is attractive in a number of ways. Firms sell an “addictive” product (cigarettes and/or smokeless tobacco), have significant pricing power, generate high margins, and strong returns on invested capital. Still, declining trends in smoking in the US, threats of tobacco-related litigation, new tobacco regulation (labeling) that discourages tobacco use, and excise tax price shocks that may impact demand will always be concerns. In any case, we tend to like the structural characteristics of the tobacco industry and the shareholder-friendly policies of constituents. We’ve reallocated our resources to cover more recession-resistant stocks. See here.
Dollar General Remains in Command
December 6, 2019
Image Source: Mike Mozart By Brian Nelson, CFA Dollar General (DG) is a holding in the Best Ideas Newsletter portfolio. The company reported strong third-quarter results December 5 that showed better performance than rival Dollar Tree (DLTR). Discount retail continues to feel the ill-effects of tariffs that are raising cost of goods sold, but Dollar General is taking the headwinds in stride. During its most recently reported quarter, Dollar General posted same-store sales growth of 4.6%, helping to drive overall net sales up nearly 9%. Operating profit advanced more than 11%, diluted earnings per share nearly 13%, and year-to-date operating cash flow nearly 10%, as the firm returned more than $480 million to shareholders through buybacks and dividends in the
Best Buy’s Rebound Continues
December 5, 2019
Image Shown: Best Buy Co Inc has staged an impressive rebound over the past few years. This rebound was aided by significant investments in its digital presence, recognizing the core markets Best Buy wanted to target, and ultimately comparable store sales growth. By Callum Turcan On November 26, Best Buy (BBY) reported third quarter earnings for its fiscal 2020 (three month period ended November 2, 2019) that beat both top- and bottom-line consensus estimates. Even better, Best Buy raised its guidance for fiscal 2020, largely on the back of stronger than expected same-store sales growth. Best Buy’s update helped send shares of BBY over our fair value estimate of $76 per share, and if this outperformance is sustained, the retailer
Reflecting on Two of Our Favorite Best Ideas Newsletter Portfolio Holdings
December 4, 2019
As we get closer to finishing out 2019, let’s take a look at two of the big winners in our Best Ideas Newsletter portfolio this year: Facebook and Alphabet. What a comeback Facebook has made since the summer of 2018! On the basis of our fair value estimate, we expect the company to surpass new highs. Alphabet just hit an all-time high last month, too! By Callum Turcan Facebook Image Shown: Shares of Facebook Inc have skyrocketed over the past year as the market shrugged off near-term political/regulatory headwinds and looked out towards the future, with an eye towards Facebook’s strong free cash flow growth trajectory and pristine balance sheet. Facebook Inc (FB) is a company we’ve been pounding the
Cracker Barrel Doing Well Despite Industry Headwinds
December 4, 2019
Image Source: 2019 Annual Shareholder Meeting, November 21. Although the restaurant business continues to face pressures, Cracker Barrel’s fundamentals have outperformed. By Brian Nelson, CFA The month of October was not kind to many in the restaurant business. While restaurant same-store sales advanced 0.06% in October, according to data from TDn2K, comparable traffic fell 3.1% during the month. While comp sales for the broader restaurant industry may remain positive through the remainder of 2019 thanks to pricing growth, the problem is that to-go and off-premise sales are hurting traffic. Here’s what TDn2K had to say about that: The erosion of guest counts remains unchanged, as restaurants rely on to-go and off-premise sales to fuel growth. Third-party delivery is playing a
Cleveland-Cliffs Buying AK Steel Through All-Stock Transaction
December 3, 2019
Image Shown: A tale of two charts, with Cleveland-Cliffs Inc in blue and AK Steel Holding Corporation in orange, after the announcement was that that the former would acquire the latter in an all-stock deal. By Callum Turcan On December 3, Cleveland-Cliffs Inc (CLF) agreed to acquire AK Steel Holding Corporation (AKS) through an all-stock deal, creating a vertically integrated producer of iron ore and steel products in the US. Cleveland-Cliffs operates three iron ore mines in Michigan and Minnesota, along with a hot briquetted iron production plant in Ohio that’s under-construction, and AK steel operates steel mills in North America along with related facilities in Western Europe. Deal Overview Cleveland-Cliffs is offering 0.4 share of CLF for every share
McDonald’s Enters the Chicken Sandwich Wars
December 2, 2019
Image Shown: Shares of McDonald’s Corporation have pulled back over the past couple of months after an epic run during most of 2019, which we view as the market recognizing shares of MCD had gotten way ahead of themselves. By Callum Turcan McDonald’s (MCD) is testing out a new crispy chicken sandwich offering in two US cities; Knoxville, Tennessee and Houston, Texas. This pilot project is expected to run through January 2020. While McDonald’s offers the ‘McChicken, its new chicken sandwich offering is far more substantial (the McChicken is to a chicken sandwich what the ‘McDouble’ is to a burger) and meant to compete with offerings from privately-held Chick-fil-A and Restaurant Brands International Inc’s (QSR) Popeyes Louisiana Kitchen. We still
