Dividend Increases/Decreases for the Week Ending March 11
March 14, 2016
Colgate-Palmolive continues to enjoy the benefits of being a Dividend Aristocrat as it garners an elevated multiple as one of the most well-known consumer staples entities. Image source: Fredrick Rubensson Below we provide a list of firms that raised/lowered their dividends during the week ending March 11. 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 Alexandria Real Estate Equities (ARE): now $0.80 per share quarterly dividend, was $0.77. American Tower (AMT): now $0.51 per share quarterly dividend, was $0.49. Citizens Financial Services (CZFS): now $0.415 per share quarterly dividend, was $0.41. Colgate-Palmolive
Big Labor Topples Republic Airways; More Trouble for Other Airlines?
March 12, 2016
Image Source: Boeing 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. Here a durable competitive advantage has proven elusive ever since the days of the Wright Brothers. Indeed, if a farsighted capitalist had been present at Kitty Hawk, he would have done his successors a huge favor by shooting Orville down. — Warren Buffett, annual letter to Berkshire Hathaway shareholders, 2008. The airline industry has just turned in its second consecutive year of record profits, but the harmony may soon be over for the industry as it could be on the verge of its next big problem. If major airlines are not
Part I: Nelson’s Evaluation of Berkshire’s 2015 Annual Report
March 10, 2016
Image Source: Fortune Live Media By Brian Nelson, CFA It’s always fun to crack open the Berkshire Hathaway (BRK.A, BRK.B) annual report, this year’s 2015. It reminds me of how much times have changed. For one, if Warren Buffett had been starting out in the investment business today, he simply wouldn’t have had a chance. The front page of this year’s Berkshire Hathaway shareholder letter shows that he trailed the market 33% of the time in the first 6 years in business (1965-1970), and the company lost half of its market value in 1974. Very few fund managers today, if any at all, that lose half of their market value in one year, trailing the market by 22 percentage points
Dividend Increases/Decreases for the Week Ending March 4
March 7, 2016
Image: Gulfstream, a General Dynamics company, makes some of the most technologically-advanced business jet aircraft, Charley W. Karl Below we provide a list of firms that raised/lowered their dividends during the week ending March 4. 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 Bank of Nova Scotia (BNS): now C$0.72 per share quarterly dividend, was C$0.70. Big Lots (BIG): now $0.21 per share quarterly dividend, was $0.19. Broadcom (AVGO): now $0.49 per share quarterly dividend, was $0.44. Chatham Lodging Trust (CLDT): now $0.11 per share monthly dividend, was $0.10. Citizen Community Bancorp
Thinking About Increasing Equity Exposure Modestly in Best Ideas Newsletter Portfolio
March 4, 2016
Image Source: Berkshire Hathaway By Brian Nelson, CFA I’m putting together something for you… …an annotated commentary of Berkshire Hathaway’s (BRK.A, BRK.B) recently-released 2015 annual report, and specifically Warren Buffett’s letter to shareholders. Why does my opinion on this topic matter? Well, having trained hundreds of equity and credit analysts on the concept of “economic moats” (or competitive advantages) across continents for one of the largest independent investment research firms and its clients and beyond, I believe that my opinion is at least worth hearing on the topic, if only for thought-generation, conceptual understanding, and debate. Given some of the recent technical strength at Berkshire, we are also considering taking a bite out of shares should markets remain strong,
Valuentum: Still Bullish on Kinder Morgan Since Mid-Teens
March 4, 2016
“Valuentum called the collapse in Kinder Morgan’s shares from $40 per share to the low-teens, and now we have called the rebound to $20 from the low-teens. Though this action may not fit into the playbook of the “buy and hold” investor, the idea of “selling” overpriced stocks that are going down and “buying” overpriced stocks that are going up is a core part of our methodology.” By Brian Nelson, CFA I’m still getting emails about how wrong we were about our calls on Kinder Morgan (KMI). Will they ever stop? We’re doing our best to relieve investors of the shackles of “buy and hold” thinking, which is separate, distinct and runs counter to investing with a focus on long-term
We Said 2016 Was Going to Be a Big One for Intel; FVE: $38
March 3, 2016
Image Source: Thomas Cloer Last October, we wrote that “Intel May Have a Breakout Year in 2016,” and despite the rough start to the year, our thesis continues to progress nicely. Here’s what we wrote several months ago: Part of the reason why we like Intel (INTC) is that many continue to dismiss the firm’s entrance into the mobile market, an area traditionally dominated by Qualcomm (QCOM). It is widely-accepted that Intel’s research and development prowess has nearly put AMD (AMD) out of business, and we’re confident the chip giant’s resources and innovation track record will open the door to the mobile market in a big way. In March (2015), it was reported that Intel’s technology will find its way
The Long-term Remains Ominous for Potash Producers
March 3, 2016
By Brian Nelson, CFA We think investors are finally getting a feel for the vulnerability of commodity-oriented equities, almost across the board. Potash (POT), the largest member of Canpotex, rang the alarm bell a number of weeks ago, slashing its dividend, “The Bounce in Energy and Potash’s ‘Surprising’ Dividend Cut (Jan 2016).” Times have been tough across the industry, but the big shocker was its “little brother,” pure-play Intrepid Potash (IPI), which put up terrible fourth-quarter results February 29 and warned that “pricing pressure…has the potential to cause a breach in (its) loan covenants.” Incredible. Intrepid Potash has now fallen to under $1 per share from ~$40 in early 2011. As we wrote in July 2013, “Uralkali Backs Out of
Medtronic Expects to Generate $40 Billion in Free Cash Flow in Next 5 Years
March 2, 2016
Image Source: Medtronic, JP Morgan Healthcare Conference Presentation, January 11 On March 1, top holding in the Dividend Growth Newsletter portfolio Medtronic (MDT) reported solid fiscal third-quarter results, now a full year after it completed the deal with Covidien. In the period, Medtronic’s comparable, constant-currency revenue advanced 6% while it recorded non-GAAP diluted earnings per share of $1.06. Management complained of currency headwinds, not unlike that of other multinationals, but reiterated its 2016 diluted non-GAAP earnings per share in the range of $4.36-$4.40, which includes a forex headwind of $0.45-$0.50 in the year. Non-GAAP earnings in Medtronic’s case “relate to charges or gains that management believes may or may not recur with similar materiality or impact on results in future
Politics and the Markets
March 2, 2016
Image Source: DonkeyHotey By Brian Nelson, CFA I personally cannot believe how long this election cycle has been. Have we really had 10 Republican debates? It seems like the town halls are adding up, too? If it wasn’t for Apple’s (AAPL) run-in with the FBI, “Most of us woke up to the news… (Feb 18),” one might have not known that former producer of McAfee anti-virus software John McAfee may run as the Libertarian Party candidate, and what about Michael Bloomberg? Could the latter play spoiler to Donald Trump’s hopes for the oval office if he divides the Republican vote? Or will traditional Republicans that prefer anyone else but “the Donald” donate to Hillary Clinton’s candidacy in the general election,
