Yum! Brands Says the Worst Is Over in China
September 9, 2013
Late Friday afternoon, fast food giant Yum! Brands (click ticker for report: ) once again posted weak same-store sales results in China. Same-store sales in August declined 10% year-over-year driven by a 12% decline at KFC and 5% growth at Pizza Hut. For the third quarter, Yum! estimates that total same-store sales fell 11% with KFC down 14% and Pizza Hut’s same-store sales up 4%. This isn’t the first time Yum!’s same-store sales in China have moderated. After falling 19% year-over-year in May, Chinese same-store sales declined 10% in June, and then fell 13% year-over-year in July. Management noted that it believes same-store sales growth will be positive in the fourth quarter, implying Chinese sales may finally have bottomed. Image
Dollar General Shows Solid Growth
September 9, 2013
Dollar General posted solid second-quarter results that suggest the firm is stealing market share from Wal-Mart.
Finisar Sees Margins Surge on Telecom Demand
September 8, 2013
After posting a strong end to fiscal year 2013, fiber-optics maker Finisar (click ticker for report: ) registered fantastic results for its fiscal 2014 first quarter Thursday. The firm set an all-time quarterly revenue record of $266 million, up 9.3% sequentially and exceeding consensus estimates. Earnings per share on a non-GAAP basis soared 55% year-over-year to $0.31 per share, in-line with consensus expectations. The boom in telecom carriers like AT&T (click ticker for report: ), Sprint (click ticker for report: ), and T-Mobile (TMUS) investing in 4G LTE technology helped lift demand during the first quarter. Telecom had been an area of weakness during the firm’s fourth quarter. CEO Eitan Gertel added some commentary on the products driving first-quarter strength
Introduction to Valuentum Securities
September 7, 2013
View a presentation slide deck that Brian Nelson, President of Equity Research & ETF Analysis at Valuentum, gave to a group of interested investors recently.
LinkedIn Acknowledges Its Stock Is Overpriced
September 7, 2013
Business social networking site LinkedIn (click ticker for report: ) announced Wednesday afternoon that it would execute a secondary public offering expected to close on September 10. LinkedIn will offer 5,381,166 shares of its Class A common stock at a price of $223 per share for proceeds of $1.2 billion. When a well-capitalized company like LinkedIn offers stock, it can often signal that the company believes its shares are overvalued. As of its most recent quarter, LinkedIn had over $800 million in cash and short-term investments against no long-term debt. The company was also free cash flow positive (albeit free cash flow wasn’t robust) in fiscal year 2012. LinkedIn isn’t in dire need of cash, so we think the company
Is the New PayPal App a Game-Changer for eBay?
September 6, 2013
Thursday afternoon, eBay’s PayPal (click ticker for report: ) released its updated version of its iOS and Android mobile application. This release marks the latest attempt for a digital wallet to usurp the importance of the credit/debit card and “simplify” payments. By no means is this the first attempt for a company to push a digital wallet. Google Wallet (click ticker for report: ) has failed to gain much traction, not because it is exclusive to Android, but mostly because it isn’t a very intuitive program and awareness isn’t high. Apple’s Passbook (click ticker for report: ) has sneaked into the marketplace to become the fourth most popular mobile commerce app. Passbook differs from Google Wallet in the sense that
Samsung’s Smartwatch Underwhelms
September 6, 2013
The day many had been waiting for in tech came Wednesday morning as Samsung unveiled its long-rumored smartwatch, dubbed the “Galaxy Gear,” to the public. The Galaxy Gear acts as a compliment to a smartphone, allowing users to check text messages, phone calls, and e-mails, as well as set alarms, run apps, and check the weather. The smartwatch will supposedly integrate seamlessly with the upcoming Galaxy Note III, and it will retail for $300. The Market Isn’t Big Enough at Launch Our first issue with the Galaxy Gear is the miniscule addressable market at launch. Though the device will eventually be compatible with the Galaxy S IV and other Samsung smartphones, it will only work with the Note III at
US Auto Market Shows Resolve in August; Ford Remains Our Best Idea; C-Max Outselling Tesla’s Model S
September 5, 2013
During the past two years, we’ve never wavered on our bullish take on the domestic automotive sector—pent-up demand, inexpensive credit, and a rapidly age fleet have all combined to propel a robust automotive comeback. August was no different, with the SAAR topping 16.1 million units during the month. Let’s take a look at how some of the auto makers performed. Ford Best Ideas Newsletter portfolio holding Ford (click ticker for report: ) posted fabulous August sales results as unit sales surged 12.2% year-over-year to 221,270 units. Retail sales were up 20% year-over-year, and Ford could hardly produce enough vehicles to meet demand, adding 1,400 workers at its Flat Rock Assembly. F-Series sales continued to lead the way, with unit sales
New Management Will Not Change Realty Income
September 5, 2013
On Tuesday, Dividend Growth Newsletter portfolio holding Realty Income (click ticker for report: ) announced John Case will succeed the departing Tom Lewis as CEO. Being named CEO is a rare feat at Realty—he will be just the third CEO in its 44-year history. Case isn’t short on experience, spending 19 years in real estate investment banking, spanning several firms and working on over $100 billion worth of transactions. Case came to Realty in April 2010 as President and Chief Investment Officer, so he’s incredibly familiar with the corporate culture and the strategy that the firm has successfully implemented over its history. It’s fair to believe Case was behind some of the recent reshuffling in the company’s property portfolio that
