Encouraging News Regarding Worldwide PC Shipments
April 10, 2014
You may not have noticed it, but Intel (INTC) has rallied nearly seven points since the bottom established in late 2012 – that’s roughly a 40%+ upward advance through today. On Wednesday, International Data Corp (IDC) released some very good news for the PC supply chain. Though worldwide personal computer (PC) shipments continued to decline during the first quarter of 2014, the pace of the fall was nearly a percentage point better than expected (-4.4% versus -5.3% forecast, -5.6% in the fourth quarter, and -7.3% in the third quarter). Much of the upside surprise during the period came from mature commercial markets as technical support for Windows XP expired. After eight consecutive quarters of declines in worldwide PC shipments, we’re
Alcoa’s First Quarter Results: The Most Important Slide
April 9, 2014
Image Source: Alcoa Notes: Aerospace: 7.5% end market CAGR (2013-2016); ~8 year production backlog for large commercial aircraft Automotive: >50% CAGR for North American auto sheet (2013-2016); North American aluminum auto sheet demand by 2025 over 1 million metric tons Commercial Transportation: 3-4% heavy duty truck market CAGR (2013-2016); 40% of wheels market expected to be aluminum by 2014 Packaging: 2-3% global beverage can market CAGR (2013-2016); aluminum penetration versus steel continues in China, Asia, Europe and Africa (currently 86% globally) Continued Growth Across End Markets Alcoa is increasing its 2014 global aerospace growth expectation by one percentage point (8 percent to 9 percent, previously 7 percent to 8 percent), on strong demand for both large commercial aircraft and regional
Ford’s Opportunity in China
April 9, 2014
Asia Pacific Africa “Ford’s strategy in Asia Pacific Africa is to grow aggressively with an expanding portfolio of global One Ford products with manufacturing hubs in China, India and ASEAN… …In the fourth quarter, wholesale volume was up 29 percent from a year ago, and net revenue, which excludes the company’s China joint ventures, grew 16 percent. Ford’s wholesale volume in China was up 45 percent in the fourth quarter and about 50 percent for the full year. The higher volume in the region mainly reflects improved market share. Higher industry volume, increasing from a SAAR of 33.1 million units to 38.1 million units and favorable changes in dealer stocks also contributed. Higher revenue primarily reflects favorable volume and mix.
Coal Industry Update
April 8, 2014
In July of last year, Valuentum offered its comprehensive outlook for the coal and railroad industries (click here). Since that time, Union Pacific (UNP), our favorite railroad idea, has surged to $185 per share from $155 per share, while some of our biggest concerns regarding the coal miners have come to fruition. James River Coal (JRCC), one of the most indebted miners in the industry, filed for Chapter 11 bankruptcy Tuesday, a process that will likely result in the complete eradication of shareholders’ equity as the firm restructures: James River intends to use the Chapter 11 process to continue implementing a comprehensive turnaround plan aimed at addressing its challenges in the changing coal mining industry. James River expects its mining
eBay’s Same-Store Sales Are Accelerating
April 8, 2014
No longer is eBay (EBAY) a simple auction website. With PayPal, eBay has become an Internet commerce powerhouse and an impressive, hard-to-duplicate payment platform. If this weren’t enough to get investors excited about the company’s stranglehold on the Internet, Carl Icahn is taking some major steps to coerce the market to recognize eBay’s true intrinsic value. The activist guru is encouraging management to conduct an initial public offering (IPO) of PayPal, a move that we think will unlock shareholder value. We’ve seen companies spin off subsidiaries many a time before, the most recent planned offering is Yahoo (YHOO) and Alibaba, for example. Yahoo has performed wonderfully in light of the monetization and increased liquidity of its investment in Alibaba, and
Dividend Increases for the Week Ending April 4
April 7, 2014
Below we provide a list of firms that raised their dividends during the week ending April 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 Ameriana Bancorp (ASBI): now $0.02 per share quarterly dividend, was $0.01. Artesian Resources Corporation (ARTNA): now $0.2119 per share quarterly dividend, was $0.2088. Bank of the Ozarks (OZRK): now $0.23 per share quarterly dividend, was $0.22. PNC Financial Services Group (PNC): now $0.48 per share quarterly dividend, was $0.44. Select Income REIT (SIR): now $0.48 per share quarterly dividend, was $0.46. TJX Companies (TJX): now $0.175 per
Focus on a Rules-Based Process Not on Short-term Outcomes
April 4, 2014
By Brian Nelson, CFA …you should be skeptical of what investment advice you use and who your sources are. (Investment gurus) give…seemingly solid advice in (their) columns, but (as) it turns out (their) stock picking skills don’t translate so well into the mutual fund industry… …Part of the problem is that you have no idea what they’re actual track record is or the conviction they hold on each recommendation they put out there. The talking heads have no idea what your risk profile and time horizon are. There’s a huge disconnect between financial predictions you read about or see on TV and your personal circumstances. That’s why it’s so important to focus on a rules-based process instead of short-term outcomes. It
Our Notes from Buffalo Wild Wings’ 2014 Analyst Day
April 3, 2014
Notes Buffalo Wild Wings (BWLD) has been a great growth story. (1) Substantial unit growth opportunities remain across the US and Canada. The company’s vision is to be a growth enterprise of restaurant brands, with more than 3,000 restaurants worldwide. The firm’s growth strategy includes creating the ultimate guest experience in the US and Canada, growing Buffalo Wild Wings into an international, globally-connected brand, and building an enduring, diversified portfolio of brands, including PizzaRev. (2) Challenges: slow economic growth projections, consumer demands for more robust flavors and authenticity, and governmental pressures (minimum wages, tipped wages, and healthcare). (3) 2014 financial outlook: 2014 net earnings growth of 20%; relatively flat commodity costs (excluding traditional chicken wings); labor deleveraging, strong net earnings
Valuentum’s April Edition of Its Dividend Growth Newsletter!
April 2, 2014
The April edition of the Dividend Growth Newsletter is now available!
Best Ideas Portfolio Holding Ford Puts Up Fantastic March Sales Numbers; Best in 8 Years!
April 1, 2014
It seems like yesterday that we were “pounding the table” on scooping up shares of Best Ideas portfolio holding Ford (F). Of course, looking back, the transaction email alert was in May 2012 at just over $10 per share. Though that doesn’t mean much for new members, we think Ford is still a fantastic idea to gain exposure to pent-up demand related to the domestic auto recovery and global demand for auto adoption, especially in emerging markets. The speculative money is flowing into Tesla (TSLA), which to the firm’s credit is turning a lot of heads, but we think the “smart” money continues to be in Ford. Shares of Tesla are just too risky for even the most risk-seeking investor, and
