What a Ride! Intel Jumps Past $35 Per Share
November 21, 2014
The news flow in the markets has started to slow as third-quarter earnings season nears a close. According to FactSet, through November 14, “of the 462 companies (out of the S&P 500) that have reported earnings to date for Q3 2014, 77% have reported earnings above the mean estimate and 59% have reported sales above the mean estimate…The blended earnings growth rate for Q3 2014 is 7.9%.” It appears that even with some big disappointments from such large firms as McDonald’s (MCD), Coca-Cola (KO), IBM (IBM) and Amazon (AMZN) that third-quarter earnings season could be considered better than mixed. That said, “for Q4 2014, 62 companies have issued negative EPS guidance and 19 companies have issued positive EPS guidance.” We
Best Buy Beats in Third Quarter
November 20, 2014
Best Buy (BBY) has been marked for dead for years. The demise of Circuit City and strategic concerns about excess floor space are two of the biggest red flags for a business model such as that of Best Buy. But the dagger in the Best Buy long thesis has always been that the company is merely a showroom where consumers flock to in order to try out new gadgets only to buy them at online competitors such as Amazon (AMZN) or eBay (EBAY) for a discount. Best Buy revealed in its third-quarter results, however, that it is handling the tumultuous competitive market quite well, and we think the firm’s fundamental resilience speaks to the general health of the brick-and-mortar big
A Guide to Valuentum’s Stock Reports
November 20, 2014
Download this slide deck that walks through the 16-page stock reports. <select image to download>
Walmart and Target Both Beat Expectations
November 19, 2014
Big box retailers have showcased some resilience during the third quarter, with Home Depot (HD), Lowe’s (LOW) and Dick’s Sporting Goods (DKS) posting relatively strong results. Walmart (WMT) and Target (TGT) also followed through with respectable quarters, and we think this bodes well for most of the group heading into the holiday season. Walmart’s third-quarter results, released November 13, showed consolidated net sales advancing 2.8% with US comparable store sales increasing 0.5% for the 13-week period ended October 31, 2014. Walmart has been under competitive attack from a variety of fronts. Not only is Target its key rival, but dollar stores such as Family Dollar (FDO), Dollar General (DG) and Dollar Tree (DLTR) have been nipping at its heels through
Medtronic Surpasses $70 Per Share
November 18, 2014
Interested in what the path of Medtronic’s (MDT) equity price has been since it was added to the Dividend Growth portfolio? Incredible, no? It’s so important that we point to our favorite ideas such that you can become familiar with our track record. We don’t get everything correct, but our hit rate on new ideas has been near perfect. Unlike other research houses, we take to heart Warren Buffett’s two rules: Rule No. 1: “Never lose money. Rule No. 2: Never forget rule No. 1.” This is why it may be a few weeks or a few months between each email transaction alert we send out to members. We want to deliver only the best. If we were interested in
Home Depot, Dick’s Sporting Goods Report Strong 3Q Results
November 18, 2014
Tuesday brought a couple solid reports from the consumer discretionary sector (XLY). Home Depot (HD), which we think is a better operator than peer Lowe’s (LOW), posted an impressive comparable-store sales increase during the third quarter, while Dick’s Sporting Goods (DKS) showcased a strong high-teens pace of top-line expansion in the period. Our reasoning behind Home Depot’s operating superiority relative to Lowe’s is worth repeating. For starters, the most important metric to judge a business is return on invested capital (ROIC), or the amount of earnings (before interest) that a firm generates divided by the amount of capital that it must hold in the business in order to generate that earnings stream. Return on invested capital is not a pure
The November Edition of the Best Ideas Newsletter!
November 16, 2014
Please download the November edition of the Best Ideas Newsletter .
Dividend Increases for the Week Ending November 14
November 16, 2014
Below we provide a list of firms that raised their dividends during the week ending November 14. 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 Automatic Data Processing (ADP): now $0.49 per share quarterly dividend, was $0.48. CBL & Associates Properties (CBL): now $0.265 per share quarterly dividend, was $0.245. Dow Chemical (DOW): now $0.42 per share quarterly dividend, was $0.37. General Growth Properties (GGP): now $0.17 per share quarterly dividend, was $0.16. Griffon (GFF): now $0.04 per share quarterly dividend, was $0.03. Group 1 Automotive (GPI): now $0.19 per share quarterly
Cisco Is Breaking Out
November 14, 2014
We’re adding Cisco (CSCO) to both the Best Ideas portfolio and Dividend Growth portfolio. Communications networking giant Cisco recently registered a 9 on the , and the firm’s dividend has always been one of the strongest in our coverage. Shares yield ~3% and boast an incredible 3.4 ratio on the Dividend Cushion. These marks are very similar to one of our other dividend growth favorites, Microsoft (MSFT). Both tech giants benefit from huge cash positions on the balance sheet, a characteristic that we view as vital to a sustainable and growing dividend. Though Cisco has registered a 9 on the Valuentum Buying Index before (at $15.82 in September 2011 and at $19.06 in August 2012), we’ve been hesitant to add shares to
Look Out Below: Crude Oil Prices Continue to Tumble
November 13, 2014
West Texas Intermediate crude oil (Dec’14) fell under $75 per barrel today, now almost $30 lower than its 52-week high, reaching the lowest level since September 2010. Brent crude also fell to a four-year low. We view the move in crude as a net-negative for the economy and S&P 500 earnings, even though many from transportation to retail will benefit from lower energy costs. The energy sector accounts for roughly 10% of the S&P 500 (SPY), and ExxonMobil (XOM) and Chevron (CVX) top the index’s top 10 holdings. We think falling crude oil prices are more a reflection of expectations for declining global economic activity, which in itself, signals that trouble is on the horizon. North American shale production continues
