Rising Rates Spur Verizon-Vodafone Deal
September 4, 2013
Although financing isn’t fully secured yet, earlier this week Verizon (click ticker for report: ) and Vodafone (click ticker for report: ) agreed to a $130 billion deal for Verizon to acquire Vodafone’s 45% stake in Verizon Wireless. The deal values Verizon Wireless at nearly $290 billion (or nearly 10 times EBITDA), and it could immediately boost earnings per share by 2%-10%. Though this is certainly a large deal, we think Verizon acted quickly to capitalize on interest rates that have moved sharply to the upside in recent months (it didn’t want to wait for a further increase, which may have made the deal cost-prohibitive). As we noted in our prior discussion of the deal, rising rates and a declining
Flashback 2008: Brian Nelson and Pat Dorsey — the Morningstar Years
September 4, 2013
We think it’s important to know the people you’re working with at Valuentum. We’re not some robot behind the scenes that only lives in the Internet. We’re hard-working individuals with families just like you. Let’s take a flashback in time to when Valuentum’s current President of Equity Research Brian Nelson called for Boeing’s shares to hit $110 in 2008, while he was working as a Senior Analyst at Morningstar. Shares are just a few dollars away from that level today. Source: http://www.youtube.com/user/MorningstarInc?feature=watch << Learn more about Brian Nelson, CFA Aerospace & Defense – Prime: BA, FLIR, GD, LLL, LMT, NOC, RTN Aerospace Suppliers: AIR, ATRO, COL, HEI, HXL, PCP, SPR, TDY, TXT
Who Won? CBS and Time Warner Cable Strike a Deal
September 3, 2013
Monday afternoon, content owner CBS (click ticker for report: ) and cable provider Time Warner Cable (click ticker for report: ) came to an agreement over retransmission fees, allowing CBS programming to resume for Time Warner Cable customers. The battle lasted for nearly a month, and as we predicted, the upcoming NFL season spurred a deal. We noted that anger from consumers regarding the situation seemed relatively subdued, but that can change quickly when a fan cannot view a game. Unfortunately, no exact details of the agreement are available, so determining a winner and a loser becomes more difficult. However, commentary from the CEOs of both companies suggests the deal was more favorable for CBS than Time Warner. CBS made
Ballmer’s Last Big Move? Acquire Nokia’s Mobile Phone Unit
September 3, 2013
Late Monday night, news broke that Dividend Growth Newsletter portfolio holding Microsoft (click ticker for report: ) will acquire Nokia’s (click ticker for report: ) device and services business for $7.1 billion. Though rumors about a deal have swirled since the two companies partnered for the Lumia, the timing is somewhat shocking, in our view. With CEO Steve Ballmer to depart within the next twelve months, we assumed he wouldn’t make any major splashes. Deal Details On the surface, this deal seems a lot like Google’s (click ticker for report: ) acquisition of Motorola Mobility. However, the details differ materially, particularly since Microsoft didn’t acquire the entire Nokia business. Further, Nokia will retain its patent portfolio and lease its patents
Valuentum’s September Edition of Its Dividend Growth Newsletter
September 2, 2013
Don’t Be Lulled to Sleep by Brian Nelson, CFA When everything seems to be going your way in the stock market, it’s always best to make sure you’ve got your bases covered, as fortunes in this business can change on a dime. As we continue to significantly exceed the goals of our Dividend Growth portfolio(*), we continue to be cognizant of the Big Three: Syria, a new Fed chief, and the looming debt ceiling. For a deeper read on these three headline dynamics that could send the market into a tailspin for the remainder of the year, please click the following link (login required): /20130827 We’re not saying that the back half of 2013 will be tough for investors, but with
Firms Raising Their Dividends in the Week Ending August 30
August 30, 2013
Below we provide a list of firms that upped their dividends for the week ending August 30. The dividend reports of covered firms on this list will be updated shortly with the new information. To access our dividend reports, please click here (or use our ‘Symbol’ search box in our website header). Firms Raising Their Dividends This Week BancorpSouth (BXS): now $0.05 per share quarterly dividend, was $0.01. Eastgroup Properties (EGP): now $0.54 per share quarterly dividend, was $0.53. Escalade (ESCA): now $0.09 per share quarterly dividend, was $0.08. FBL Financial (FFG): now $0.15 per share quarterly dividend, was $0.11. Harris Corp (HRS): now $0.42 per share quarterly dividend, was $0.37. MB Financial (MBFI): now $0.12 per share quarterly dividend, was $0.10.
The Market Fully Appreciates Seadrill’s Execution
August 30, 2013
Rig contractor Seadrill posted strong second quarter results, but shares look fairly valued.
Verizon Making a Bold Leap
August 30, 2013
Verizon could acquire the 45% stake in Verizon Wireless currently owned by Vodafone for $130 billion.
Tiffany Is Getting Back on Track
August 29, 2013
Luxury jeweler Tiffany (click ticker for report: ) posted decent second quarter results Tuesday morning. Sales increased 4% year-over-year to $926 million, falling slightly short of consensus estimates, but not enough to warrant concern. Earnings per share were 15% higher than the year-ago period at $0.82, several pennies higher than consensus expectations. Source: Valuentum, Company Filings Same-store sales growth at Tiffany wasn’t bad during the second quarter, up 5% year-over-year on a constant-currency basis. However, it is hard to ignore the two-year trend that is clearly declining, as the two-year stacked comp shows (see light blue line on right in image above). Americas Recent trends in the Americas region reveal that much of Tiffany’s potential growth in the market has
Strength in Footwear Persists
August 29, 2013
Shoe retailers DSW (click ticker for report: ) and Brown Shoe Company (BWS) posted better-than-expected second-quarter results. DSW On Tuesday, DSW’s second-quarter release revealed that its sales surged 9.7% year-over-year to $562 million, easily exceeding consensus expectations. Earnings per share adjusted for luxury testing and the termination of Retail Venture Inc’s pension plan increased 47% year-over-year, to $0.97. Image Source: Valuentum, Company Filings After same-store sales slipped 2.4% during the first quarter, DSW returned to growth in the second quarter, with same-store sales 4.4% higher than the same period a year ago, re-accelerating the two-year comp trend (8.6%). Not only has DSW added some new merchandise to stores with necklaces and other small accessories, but management pointed to strength in
