GE Continues Transformation; Steady Growth at Honeywell
April 22, 2016
Shown: GE’s backlog of unfulfilled orders remains robust, a sign of durability and strength. Image Source: GE’s earnings presentation. We continue to be encouraged by the progress newsletter portfolio holding General Electric (GE) is showing in its GE Capital exit plan. The firm is now ahead of schedule on that plan, having signed $166 billion in asset sales and closed $146 billion of those sales. Its transformation is now ~80% complete, and it continues to pick up momentum in 2016. The company also submitted its application for de-designation as a systematically important financial institution (SIFI) on March 31. However, as GE continues its transformation, which includes the integration of recent acquisition Alstom, its reported results have become quite convoluted as
Since 2014: Microsoft Up ~50%; Alphabet Up ~30%, Visa Up ~40%
April 22, 2016
Image Source: Brandon Martin-Anderson The past few weeks have been difficult ones for the newsletter portfolios. Sure, we’ve had some great reports from Hasbro (HAS) and Union Pacific (UNP), but the broad performance of some of our high-profile holdings hasn’t been what we’ve grown accustomed to. We’ve been concerned about the market’s “fluff” for some time, but equities have been racing ahead in any case, mostly in light of expectations for ongoing delays in continued contractionary monetary policy by the Fed, so the sluggish reports weren’t exactly what we were looking for to end the week. On Friday, April 22, we were “hit” with three rather glum quarterly reports from Microsoft (MSFT), Google – now known as Alphabet (GOOG, GOOGL),
The Market – On Its Head
April 21, 2016
By Brian Nelson, CFA The sector/theme returns have almost been turned on their head as some of the worst performers in the first few weeks of 2016, namely materials (XLB), energy MLPs (AMLP, AMZ), and energy (XLE), have transformed into leaders through the latest data update, April 21. As we outlined in “Alerts: Adding More High-Quality Exposure, (April 2016)” the dividend “track record” growth craze is on, in our view, and yield-rich exposures from utilities (XLU) to the dividend-growth focus itself (SDY) have rallied more than 9% in the year thus far. The metals gold (GLD) and silver (SLV) have also proved to be good trades out of the gates thus far in 2016, up ~18% and 23%, respectively, though
It’s Kinder Morgan’s Fundamentals
April 21, 2016
Image Source: Kurtis Garbutt By Brian Nelson, CFA Skeptics: Kinder Morgan’s (KMI) fundamentals are the reason why the stock has cratered from $45 per share to under $20. Many investors that failed to pay attention to the financials continue to be in disbelief, looking for a scapegoat for their miscue. There’s never a good reason to be stubborn when it comes to investing. The very best quality any analyst can have is the ability to change one’s mind. I’ve taught this religiously for years, but why do many even seasoned investors have a difficult time admitting that they’ve been wrong? It’s only human nature. Let me explain what’s going on with Kinder Morgan. We first have to start with what
Alerts: Adding More High-Quality Exposure
April 20, 2016
The dividend growth “track record” craze continues to be on in a big way, and we can’t help but feel there are similarities to the outcome of the ‘Nifty Fifty’ craze in the late 1960s and 1970s as there might be to dividend growth investing today. For those that may not be familiar, the ‘Nifty Fifty’ was a group of “buy-and-hold” large cap stocks that were largely credited with driving the market to new heights during the early 1970s. Many called these stocks with stable earnings one-decision stocks — they were to be bought and held forever. We have believed for some time that the proliferation of dividend growth investing may very well have the same effect on today’s market,
Did You Know: Coca-Cola Is Shrinking; Intel Is Growing?
April 20, 2016
How fragile is this bubbly market? The long-anticipated Organization of the Petroleum Exporting Countries (OPEC) conference in Doha, Qatar, that would mark the beginning of the end for all of crude oil’s (USO) malaise came and went, and nothing happened. We’ve now had a series of rumors about the potential for production freezes that have driven crude oil prices from the mid-$20s to nearly $40 per barrel, but nothing fundamental has changed. The bump in crude oil prices since the bottom has been almost entirely speculative. Crude oil prices would jump on rumors, and then when the rumor would prove untrue, they wouldn’t give back the gains. It appears hopes, dreams and speculation with a dash of short covering have
Domestic Pharma Drives JNJ’s 1Q; Stock Hits All-Time High
April 19, 2016
By Kris Rosemann The recent decision to add Johnson & Johnson (JNJ) to the Best Ideas Newsletter portfolio is beginning to look like a very timely one, as the company is looking poised to use its recent quarterly report and guidance increase to drive a rally in shares. Meanwhile, its performance in the Dividend Growth Newsletter portfolio, where it was added at ~$66 in late 2011, speaks for itself at this point as it continues to be one of the most dependable and competitive dividend payers on the market. Though reported top-line growth in the first quarter was a paltry 0.6% on a year-over-year basis, operational sales growth came in at 3.9% after backing out the negative currency impact of
ETE Down 70%; IBM Poor Quality, Netflix Begins to Implode
April 19, 2016
Shown above: Energy Transfer Equity’s recent share price performance. A lot of investors depend on us for our energy research. We’ve been busy publishing on the website, and we can’t possibly send out all of our research via email, so please come visit. Many are aware of our take in any case: the energy master limited partnership (AMLP, AMZ) isn’t going away tomorrow, but it may not last over the long haul. This is nothing new. We’ve been saying this since the peak in energy MLP share prices, which just so happened to coincide with Energy Transfer Equity’s (ETE) heights in the mid-$30s. Our readers understand that we’re taking the long view with MLPs when we talk about business models
Dividend Giant Hasbro Surges; Raises Dividend 10%+
April 18, 2016
“If I had asked people what they wanted, they would have said faster horses.” – attributed to Henry Ford Image Source: Disney Entrepreneur Henry Ford had to be very careful listening to customer feedback when he first rolled out the automobile. If he hadn’t focused on his vision, he would have found himself trading the assembly line for a line of stalls housed to breed faster horses. The thought-processes behind the Valuentum strategy are much like those of Henry Ford selling the very first automobile to the American public. Though the horse and automobile both address means of transportation, the latter required a brand new way of thinking about travel itself. The automobile wasn’t “wrong,” if there can be a
Dividend Increases/Decreases for the Week Ending April 15
April 18, 2016
Costco location in Enfield, CT. Mike Mozart Below we provide a list of firms that raised/lowered their dividends during the week ending April 15. 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 Adams Express (ADX): now $0.05 per share quarterly dividend, was $0.03. Antero Midstream (AM): now $0.235 per share quarterly dividend, was $0.22. Aon (AON): now $0.33 per share quarterly dividend, was $0.30. Carnival (CCL): now $0.35 per share quarterly dividend, was $0.30. Ciner Resources (CINR): now $0.564 per share quarterly dividend, was $0.5575. Costco Wholesale (COST): now $0.45 per share
