Things for Your Radar Tuesday
April 21, 2015
Hearing that: Windows 10 launch will be at the end of July. Positive for Microsoft (MSFT). Teva Pharma (TEVA) and Mylan (MYL) looking to tie the knot. Teva getting a nice bounce. IBM’s (IBM) top-line still weak. No interest in shares. Big Blue is not the blue chip equity it once was. Legacy Reserves (LGCY) cuts dividend. No surprise here. We’ve been expecting this for some time. Under Armour (UA) is too rich for our taste. Shares are off after first-quarter report. Rio Tinto (RIO) sees sharp drop in first-quarter iron ore shipments. We’re not interested in adding. ITW (ITW) suffering from guidance cut. Industrial bellwether supporting case that the industrial economy is slowing a tad. Hasbro (HAS) has a
Dividend Increases for the Week Ending April 17
April 21, 2015
Below we provide a list of firms that raised their dividends during the week ending April 17. 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 Blackstone Group (BX): now $0.89 per share quarterly dividend, was $0.78. CSX (CSX): now $0.18 per share quarterly dividend, was $0.16. Discover Financial Services (DFS): now $0.28 per share quarterly dividend, was $0.24. Donegal Group (DGICA): now $0.135 per share quarterly dividend, was $0.1315. Fidelity Southern (LION): now $0.10 per share quarterly dividend, was $0.09. General Motors (GM): now $0.36 per share quarterly dividend, was $0.30.
You Must Be So Pleased!
April 20, 2015
Image Source: Gage Skidmore We know it’s difficult for new members, especially those not following the newsletter portfolios directly, to read about the “story arc,” or the follow-ups on some of the ongoing ideas held within the newsletter portfolios. But Hasbro (HAS) is a rather unique case. For much of the past decade or so, the firm was simply written off as a physical toy company in a digital world. What we saw that others didn’t, however, was the firm’s lovable brand portfolio and the ongoing opportunity in its Entertainment and Licensing segment. Though the first quarter is the least significant of the year, shares are surging yet again on its quarterly performance. Absent currency exchange fluctuations, revenue advanced an
The Market Top?
April 17, 2015
For those that are following along closely, you shouldn’t be surprised if the market corrects 5%-10% in the coming months. Let’s talk about this. From a technical standpoint, it may not be too far of stretch to say that we’re likely going to test the bottom of the S&P 500 (SPY) uptrend, and that could feasibly mean a drop to the 200-day moving average (blue line above). My technical alerts are telling me that with respect to the S&P 500, we’ve just dipped below the 50-day moving average, an arbitrary simple rolling average but one that is no less self-fulfilling than value investing itself. Don’t panic though. We’ve cut through the 50-day moving average many a time before during this
Johnson & Johnson Finetunes 2015 Guidance
April 15, 2015
It’s pretty incredible if you think about it: Johnson & Johnson (JNJ) hovering around $100 per share. The company was an inaugural addition to the Dividend Growth portfolio in January 2012 in the mid-$60s, and we’re sure that many of you have been holding J&J for much longer than that. The company has been a big winner, with 2013 being an exceptionally good year. 2014 got off to a good start, but since then, share-price performance has been relatively flat, including thus far in 2015. On April 14, Johnson & Johnson released its first-quarter results for 2015. As with many global firms, the company’s performance was hurt by currency issues, but adjusted top-line results advanced more than 3%, led by
You Have to Want to Serve
April 13, 2015
I confess. I went on a short weekend getaway, and the team rested, too. It has been awhile, and frankly, we needed a break. We’re covering a lot of ground at Valuentum, and we’re doing a great job with so many points of research presence. I came home Sunday night after an adventurous but rejuvenating weekend to the following emails: Hello…can you please cancel my subscription and provide a refund for the unused portion of my annual subscription. Thanks Please cancel the renewal of my subscription which expires April 20th. Great information on your site and in the newsletters, I just find myself not having the time to read and utilize them all, as I have multiple other sources of
GE Sees Top In Real Estate?
April 10, 2015
Image Source: Jeff Turner Perhaps to no surprise to those following the General Electric (GE) story closely, the industrial conglomerate is looking to shed operations tied to the financial markets and work to reignite its moaty and cash-rich industrial businesses. We’ve long been fans of this strategic endeavor, and we’re not changing our tune now. On April 9, the Wall Street Journal reported that GE is “close to selling off most of its $30 billion in real-estate holdings,” and we view this as not only a natural extension of the company’s 75/25 industrial/financial goal, but also a de-risking maneuver in light of the possibility for meaningfully higher interest rates in coming years. We’ve previously made the case that rising net
Intel, A Disciplined Capital Allocator?
April 10, 2015
Image Source: Gareth Halfacree We fully applaud Intel’s (INTC) management for walking away from the deal with Altera (ALTR). Though we liked the transaction from a strategic standpoint, our view centered on the assumption that Intel could “pay up to ~$40 per share for the company…and still create value for existing shareholders.” With Altera’s shares trading north of $43 at present, Intel would have had to pay a sharp premium to market levels, perhaps in the $60s, to entice management. Bloomberg reported that Intel had offered as much as $54 per share, and in this light, we’re glad the company walked away. Even though we think the bid was too high, our opinion of the executive suite has been
Mylan’s Deal for Perrigo Boosts Teva
April 9, 2015
Image Source: epSos .de We outlined the case on Best Ideas portfolio holding Teva (TEVA) in our generics industry thesis here. The company was added to the portfolio July 24, 2013 at $41.22 per share. Teva Pharma’s shares are now trading north of $66 each, converging to our fair value estimate in just less than two years. With valuations stretched throughout much of our coverage universe, we’re going to continue to let this winner run. Driving the firm higher April 8 was news of Mylan’s (MYL) bid for Perrigo (PRGO) at a significant premium to the latter’s share price. Under the conditions of the non-binding proposal, Perrigo shareholders would receive $205 in a combination of cash and Mylan stock for
The Time to Consider Owning Alcoa Has Passed
April 9, 2015
Image Source: aushiker First-quarter earnings season is already upon us, with aluminum giant Alcoa (AA) kicking things off April 8. If there is one thing investors should know about Alcoa, buying the company’s equity nearly 7 years into an economic recovery is fraught with capital risk. No matter how much Alcoa’s business shifts to value-add from commodity-type metal, core demand will always be cyclical. There were a lot of good numbers in the Alcoa report. Revenue grew 7% thanks to organic expansion in automotive and aerospace, while net income came in at $0.28 per share. After-tax operating income of $191 million was a record for its ‘Engineered Products and Solutions’ division, while the same measure in its ‘Alumina’ segment doubled
