Housing Is Back! Trends in Home Improvement
November 29, 2016
Housing prices are no longer in the dumps. What does this mean for the home improvement retailers, and how might other trends be helping to provide a positive industrywide backdrop? Both Home Depot and Lowes may be long-term winners, but valuation considerations shouldn’t be ignored. The Valuentum analyst team digs in. ~8 mins. If you cannot view the podcast below, please select the link here or view the transcript that follows. Chris Araos: Hello, this is Chris Araos at Valuentum Securities. With me are Kris Roseman and Brian Nelson. Today, we are going to focus on Home Depot (HD) and Lowes (LOW) and why they are doing so well. We have a strong housing market. New home sales have hit
Cracker Barrel Continues Positive Comparable Store Restaurant Sales Streak
November 29, 2016
Image Source: Neil Thompson By Kris Rosemann Even prior to adding Cracker Barrel (CBRL) to the Dividend Growth Newsletter portfolio, “Alerts: A Long-Time Favorite from the Bullpen and An Interest Rate Risk Hedge,” we had been keen observers of the stock’s potential as an income idea, “Free Cash Flow Feeds Cracker Barrel’s Dividend Growth.” We continue to believe the restaurant has been proficient in setting itself apart from the remainder of the dine-in restaurant space, and not just in the sense of its differentiated concept, but the proof is in the numbers, too. For example, the company’s operating margin expanded to 9.6% in fiscal 2016 from 6.9% in fiscal 2011, while sales growth at Cracker Barrel has expanded at a
Dividend Increases/Decreases for the Week Ending November 25
November 28, 2016
Below we provide a list of firms that raised/lowered their dividends during the week ending November 25. 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 Aircastle (AYR): now $0.26 per share quarterly dividend, was $0.24. Aramark (ARMK): now $0.103 per share quarterly dividend, was $0.095. Becton, Dickinson (BDX); now $0.73 per share quarterly dividend, was $0.66. Capital City Bank (CCBG): now $0.05 per share quarterly dividend, was $0.04. Chicago Rivet & Machine (CVR): now $0.20 per share quarterly dividend, was $0.18. First Connecticut (FBNK): now $0.09 per share quarterly dividend, was
Earnings Insight – Medtronic’s Free Cash Flow Story
November 23, 2016
Let’s cover some ground on Medtronic’s (MDT) calendar third-quarter report, its second-quarter fiscal 2017 results. By Brian Nelson, CFA What management said: “Q2 revenue was disappointing and did not meet our expectations. We faced issues that affected our growth, including slower than expected revenue as we await new product introductions, particularly in CVG and Diabetes,” said Omar Ishrak, Medtronic chairman and chief executive officer. “Despite this revenue shortfall, we produced a strong improvement in operating margins and double digit constant currency earnings per share growth.” The scoop: Medtronic probably did more to frighten investors with its use of the word “disappointing” in its fiscal second-quarter press release, issued November 22, than anything fundamental. Fiscal second-quarter revenue increased 4%, or 3%
For-Profit Education Stocks Don’t Make the Grade
November 23, 2016
The Valuentum analyst team discusses the challenges many for-profit institutions face, the growing student loan problem, and hopes for a less-stringent regulatory environment during the Trump administration. The team’s favorite idea in the space is also revealed. ~8 mins. If you cannot view the podcast below, please select the link or view the transcript below. Brian Nelson, CFA: According to a recent article by the Wall Street Journal, “more than 40% of Americans who borrowed from the government’s main student-loan program aren’t making payments or are behind on more than $200 billion owed.” How much is $200 billion? To put that number in perspective, it equates to wiping the entire equity value of a global bank like JP Morgan (JPM) completely
Energy Transfer Partners’ Implicit Distribution Cut
November 22, 2016
By Kris Rosemann Another simplification transaction in the MLP space — who would have thought an MLP needed material changes in their corporate structures? If you’ve been reading our analysis of the industry recently, you would be on that list, “Distributing Truth on MLPs,” “Plains All American to Undergo Simplification Transaction.” To us, the merger agreement between Energy Transfer Partners (ETP) and Sunoco Logistics Partners (SXL) November 21 is yet another acknowledgement of the flaws in the MLP business model and recognition of the lack of clarity regarding the long-term viability of the MLP model. In the merger agreement, Energy Transfer Partners unitholders will receive 1.5 units of Sonoco Logistics Partners for each Energy Transfer Partners unit held. Also, all
What You Should Know About MMORPGs
November 22, 2016
The Valuentum analyst team talks about the Chinese gaming industry and the financials of Tencent (TCEHY) and Netease (NTES), in particular. Both generate strong free cash flow and have solid balance sheets, but there are myriad risks to consider, too. ~5 mins. Podcast no longer available. Transcript as follows. Chris Araos: Welcome to Valuentum’s podcast. This is Christopher Araos, and joining us today is Brian Nelson and Kris Rosemann. Today, we’re going to talk about the MMORPG landscape in China. Brian? Brian Nelson, CFA: Thanks for that Chris. I think just to give a little bit of background MMORPG stands for massively multiplayer online role-playing (PC-client) games. Wow, that’s a mouthful. These are very, very popular games across the globe
Trust the Numbers, Not Just Management
November 21, 2016
“How Simple Financial Statement Analysis Could Save You Big”
Warren Buffett Is Back Into Airlines, Should You?
November 19, 2016
Warren Buffett has changed his mind about airline stocks… In this 10-minute podcast, the Valuentum analyst team talks all about the hazards of the airline business model from substantial operating leverage to the risks of volatile jet fuel costs to bankruptcies and beyond. The team also highlights the long-term passenger growth prospects of the sector, and recent consolidation that has brewed a more optimistic tone from industry observers. To view Valuentum’s updated YouTube page, please see here. Ticckerized for airline-related equities around the globe. Brian Nelson, CFA: The worst sort of business is one that grows rapidly requires significant capital to engender the growth and then earns little or no money. Think airlines. There’s a durable competitive advantage that has proven
Teva’s ~7x P/E Multiple – Earnings Insight
November 18, 2016
Image Source: Teva Let’s cover some ground on Teva Pharma’s (TEVA) third-quarter report. By Brian Nelson, CFA What management said: “This has been a year of transition for Teva, underscored this quarter by the close of our strategic acquisition of Actavis Generics, which had significant contribution to our results. Actavis will continue to contribute in a meaningful way to the future growth of our generics business through the strengthened R&D capabilities and complementary pipeline and portfolio, and enhance our leadership in an increasingly evolving industry,” stated Erez Vigodman, Teva’s President and CEO. “We were also pleased to report this quarter that we have successfully completed the second pivotal phase three study for SD-809 for tardive dyskinesia and plan to submit
