Dividend Increases/Decreases for the Week Ending July 25
July 28, 2014
Below we provide a list of firms that raised/lowered their dividends during the week ending July 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 Alliance Bancorp (ALLB): now $0.06 per share quarterly dividend, was $0.05. Altera (ALTR): now $0.18 per share quarterly dividend, was $0.15. BancorpSouth (BXS): now $0.075 per share quarterly dividend, was $0.05. BankFinancial (BFIN): now $0.02 per share quarterly dividend, was $0.01. Bar Harbor Bankshares (BHB): now $0.23 per share quarterly dividend, was $0.223. BBCN Bancorp (BBCN): now $0.10 per share quarterly dividend, was $0.075. BorgWarner (BWA):
Defense Industry Round Up
July 25, 2014
The ongoing conflict in Ukraine, Israel’s offensive in the West Bank, North Korea calling a US movie an act of war, the latest in Iran, and US troops going back to Iraq suggest there may finally be upside to a defense budget that has experienced nothing but pressure since peak spending at $691 billion in 2010 (see grey bar in image below, from left to right). Image Source: US DoD Fiscal Year 2015 Budget Request With the markets making new highs seemingly every week, bargains have become more difficult to find. We point members to ideas in the Best Ideas portfolio and Dividend Growth portfolio, but an increasingly more uncertain geopolitical backdrop–where defense spending upside is growing more and more
Baidu Continues to Impress
July 25, 2014
For the sake of not repeating the investment thesis on Baidu (BIDU) in this article, we’ve provided the link to ‘Baidu’s Internet Presence in China Is Phenomenal’ for background. Also, please don’t forget to access the company’s 16-page report, if desired. On Thursday, the Chinese Internet search giant reported excellent second-quarter results. Total revenue surged an impressive 58.5% from the same period a year ago, while operating profit advanced 22.5%. Baidu has a clear lead in mobile in China, with mobile revenue now as much as 30% of total revenue. Net income attributable to Baidu leapt more than 34%, to $571.7 million. The growth rates were fantastic, and we think Baidu is now trading more consistently with its blockbuster performance
Amazon Drops $40 Per Share
July 25, 2014
Amazon (AMZN) continues to focus on taking market share and damaging its competitors rather than generating large accounting profits and cash flows. The company’s cash-flow generation should improve if investments turn out to be profitable (and management turns off the expense gushers), but the company remains a low-margin retailing operation. The market has recently grown impatient with the executive suite’s lack of profit focus, and reaction to its second-quarter results, released Thursday, couldn’t have made this point more clear. For a company that boasts a market capitalization of ~$146 billion, one would think the firm is highly profitable. For Amazon, however, this just isn’t the case. We explain why the firm garners such an elevated valuation (despite meager profits) in
Financial Analysis 501: Why Value Is Always Based on Future Expectations
July 25, 2014
A version of this article appeared on our website October 25, 2013. On October 24, 2013, Amazon (AMZN) reported better-than-expected fiscal third-quarter results. Let’s take a look at the firm’s income statement and cash flow statement to explain why value is always based on future expectations of earnings and free cash flow. The concept of value is not based on a firm’s most recent-quarterly performance or its past performance. Amazon currently sports a market capitalization of $166.3 billion as of the time of this writing. Income Statement << What Is the Income Statement? Image Source: Amazon For a company that records $17.1 billion in revenue (the third line down called ‘total net sales’), Amazon’s quarterly ‘loss before income taxes’ of $43 million (negative
Ford Surprises to the Upside; GM Distracted By Recalls
July 24, 2014
Sometimes it’s easy to fall in love with a company and its products. This, unfortunately, can become a behavioral and psychological barrier to financial outperformance. Whether you are a Ford or Chevy guy or gal determines little about how successful you will be as an investor in auto stocks. The most important determinant to financial outperformance in the auto space is not based on which type of car or truck you drive (or like), but instead, it is based on understanding and capitalizing on the factors that drive stock prices. To this point, stock prices are driven, of course, by the buying and selling of shares, and the buying and selling of shares is primarily influenced by a company’s intrinsic
Earnings from 5 Dividend Growth Giants
July 24, 2014
Let’s evaluate the recent quarterly results of five traditional dividend growth plays. Please be sure to access the 16-page reports and dividend reports of the firms included in this article. If you are interested in receiving the valuation models of companies, please let us know. Coca-Cola (KO) There are few companies fundamentally stronger than Coca-Cola. The firm boasts a number of competitive advantages: its brands, financial strength, distribution system, global reach, and a deep executive bench. It has raised its dividend in each of the past 50+ years, and we expect dividend growth to continue at a high-single-digit annual pace for the foreseeable future. Though the strength of Coca-Cola’s competitive position is undeniable, we don’t expect the ‘cola wars’ with
How We Add Incremental Value to Your Research and Analysis on Apple
July 23, 2014
There’s a lot we can talk about with respect to Apple’s solid fiscal third-quarter results–and we will–but the most important takeaway from this article is how we strive to add incremental value to your research and analysis of the iPhone giant. First of all, we don’t play the quarterly earnings beat-or-miss game at Valuentum. You can read about how we think about near-term forecasts and what we think are the most important drivers behind a firm’s long-term intrinsic value here. Most sell-side analysts and commentators spend the majority of their time analyzing factors that impact the company’s financial performance (not necessarily its stock price) over the next couple years, a time frame that generally accounts for ~20% of a company’s total
Nelson’s Video Clip on CNBC Asia’s Street Signs
July 23, 2014
“Brian Nelson, President of Equity Research at Valuentum Securities, explains why the latest food safety scandal won’t have a lasting impact on McDonald’s and Yum Brands.” — CNBC Please select here to view video.
Holy Guacamole! McDonald’s Wishing It Had Kept Chipotle
July 22, 2014
Very few investors probably remember that Chipotle (CMG) used to be owned in part by McDonald’s (MCD). McDonald’s had originally taken a stake in Chipotle in February 1998, when Chipotle had but 14 restaurants in Denver. The maker of the Big Mac would go on to own 90% of the subsidiary and eventually spin it off in an initial public offering in January 2006. McDonald’s would receive ~$1.5 billion from the sale, but with Chipotle’s market capitalization now at over $20 billion, it’s clear the burger-and-fries behemoth exited way too early. The most recently-reported results by both restaurants tell the diverging story quite well. McDonald’s reported relatively disappointing second-quarter results Tuesday. The performance can best be described as flat. Global
