Verint Systems’ Strategy Delivers
December 6, 2018
Image Source: Verint Systems Investor Presentation Actionable intelligence leader Verint Systems continues to deliver on its strategy in its ‘Customer Engagement’ segment, while its ‘Cyber Security’ segment is taking advantage of a number of trends. Management’s initial guidance for next fiscal year impressed. By Kris Rosemann Simulated Best Ideas Newsletter portfolio idea Verint Systems (VRNT) turned in a solid fiscal third quarter report December 6 as momentum stemming from investments in advanced analytics, automation, and cloud across its actionable intelligence portfolio are driving expectations for ongoing demand growth. Organizations need this actionable intelligence to create an engaged workforce and smarter customer engagements, and its cybersecurity business is taking advantage of the necessity for protection against ever-advancing cyber threats. Initial guidance
Trade Uncertainty Update
December 6, 2018
Image Source: John Karakatsanis The arrest of a high profile Chinese tech executive has renewed concerns over trade tensions after the US markets were closed for a day of remembrance for the 41st President of the US. Also, the Fed released its Beige Book. By Kris Rosemann Despite the markets being closed December 5 in remembrance of the passing of George H.W. Bush, the 41st President of the US, investors continue to be pulled in different directions regarding the state of US-China trade negotiations, and the situation continues to become more muddled. After a weekend of optimism, a new round of doubt was cast over the legitimacy of the progress made at the G20 Summit, but China’s (FXI) commerce ministry offered
What’s Weighing on the Markets
December 4, 2018
Renewed concerns over the severity of trade tensions, a flattening yield curve, negative news out of the homebuilding space and other geopolitical uncertainties have investors feeling anxious. December 4 marked the worst day for the Dow Jones Industrial Average since October 10. By Kris Rosemann What was once thought to be broad-based optimism related to potentially easing trade tensions between the US and China (FXI) and investors taking a liking to recent commentary from the Fed regarding an easing of the future trajectory of rate hikes came tumbling down during the trading session December 4. President Trump tweeted early in the session that people should remember he is “a Tariff Man” if a trade deal cannot be reached with China,
Dollar General Slips on Lower Bottom-Line Guidance
December 4, 2018
Simulated Best Ideas Newsletter portfolio idea Dollar General continues to deliver consistent top-line performance, but higher than expected expenses in the second half of its fiscal 2018, including hurricane-related expenses and rising transportation costs, resulted in a reduction of operating margin and diluted earnings per share guidance. Net sales growth expectations were also tempered slightly. By Kris Rosemann Margin performance across the retail space has left a bit to be desired of late, “Retail Margins Weighed Down by Labor, Transportation Costs,” and simulated Best Ideas Newsletter portfolio idea Dollar General (DG) was unable to avoid some of the pressures as its fiscal third quarter report, results released December 4, brought with it slightly lower margin expectations for the full fiscal
In the News: Conflicting Crude Oil Reports, All Eyes on G20 Summit, HP Battling Through Tariffs, Altria Eyes Crown Juul of E-Cigs
November 30, 2018
Let’s take a look at some top stories across the markets, including conflicting reports on the likelihood of a crude oil production cut agreement from OPEC and Russia, implications of the G20 Summit this weekend, HP’s solid fiscal fourth quarter report, and Altria’s potential acquisition of a stake in noted private e-cig maker Juul. By Kris Rosemann Volatility in the crude oil market (USO) is nothing new, but investors have been whipsawed quite notably of late by a number of conflicting reports that have potentially meaningful implications on the direction of crude oil prices in the near term. Reports that Russia (RSX) was in agreement with Saudi Arabia (KSA) over the need for production cuts provided a boost to the
Dividend Increases/Decreases for the Week Ending November 30
November 30, 2018
Below we provide a list of firms that raised their dividends during the week ending November 30. 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 Associated Banc-Corp (ASB): now $0.17 per share quarterly dividend, was $0.15. C&F Financial (CFFI): now $0.37 per share quarterly dividend, was $0.36. Capital Southwest (CSWC): now $0.46 per share quarterly dividend, was $0.34. Culp (CULP): now $0.10 per share quarterly dividend, was $0.09. Four Corners Property Trust (FCPT): now $0.2875 per share quarterly dividend, was $0.275. Herzfeld Caribbean Basin Fund (CUBA): now $0.305 per share annual
United Technologies Announces Separation Plans
November 29, 2018
Image Source: United Technologies Investor Presentation United Technologies completed the acquisition of Rockwell Collins and announced plans to separate into three independent companies. By Kris Rosemann Key Takeaways United Technologies completed its acquisition of Rockwell Collins and now plans to separate into three independent companies: an aerospace and defense supply company, a climate control company, and an elevator company. The separation is expected to be completed in 18-24 months. The acquisition has resulted in a significant increase in financial leverage, and both Moody’s and S&P lowered United Technologies’ credit rating to three notches above junk territory. United Technologies is prioritizing deleveraging heading into the separation. No material share repurchases will be executed, and we suspect dividend growth to be paused as
Cardinal Health Battling Bottom-Line Headwinds
November 28, 2018
Image Source: Global Panorama Healthcare product distributor and Dividend Aristocrat Cardinal Health has had its share price performance in 2018 dampened by a number of factors, including generic drug price deflation weighing on its ‘Pharmaceutical’ segment, struggles in its ‘Medical’ segment, and the potential for disruption within its industry. By Kris Rosemann The drug distribution industry is attractive as a result of the group’s predictable revenue streams and the strong competitive positions of a number of participants, which result from the barriers to entry that are difficult-to-replicate distribution networks, myriad regulatory compliance issues, and industry relationships. The industry currently operates as an oligopoly with McKesson (MCK), Cardinal Health (CAH), and AmerisourceBergen (ABC) collectively controlling more than 90% of the market.
Traffic Improves, Pricing Leads Comps Growth at Cracker Barrel
November 27, 2018
Image Source: Mike Mozart Cracker Barrel’s fiscal 2019 first quarter report revealed improving traffic trends from the previous quarter, and menu price hikes continue to help drive average transaction value higher. Margin performance is worth watching, but we like that management is continuing to invest in its growth initiatives. By Kris Rosemann Shares of simulated Dividend Growth Newsletter portfolio idea Cracker Barrel (CBRL) have performed extremely well of late, and our decision to stick with the company following a weaker than expected fiscal 2018 fourth quarter report is paying off. Shares are up ~27% as of this writing since the close of the day of that fourth quarter report and ~37% since we initially highlighted the idea in early 2016.
In The News: Record-Low Smoking Rates, China Steel Demand Concerns, and a New Look GM
November 26, 2018
US smoking rates are at all-time lows, and the FDA is pushing to restrict sales of menthol products and flavored e-cigarettes. Meanwhile General Motors has announced an accelerated restructuring plan, and concerns have cropped up regarding steel demand in China. By Kris Rosemann The Centers for Disease Control and Prevention (CDC) estimates that 14% of US adults, or roughly 34.3 million people, smoked cigarettes in 2017, a record low, compared to 15.5% in 2016 and 42.4% in 1965, the first year the figure was tracked. Public health initiatives have clearly played a role in the decline, but the CDC also estimates that 47 million people still use some form of tobacco product. The US Food and Drug Administration (FDA) is
