Tesla’s Deliveries Bounce Back in Second Quarter
July 6, 2024
Source: Tesla By Brian Nelson, CFA On July 2, Tesla (TSLA) released its production and delivery numbers for the second quarter of 2024. Production of Model 3/Y and other models totaled 410,831, while total deliveries came in at 443,956 units, consisting of 422,405 Model 3/Y and the balance coming from other models. The results were better than expected and helped to propel shares of the electric-vehicle maker higher. Tesla’s equity has shot up past the high end of our fair value estimate range, and while we liked the better-than-feared news regarding its deliveries, we continue to be on the sidelines with respect to Tesla’s shares. The next big catalysts for Tesla’s shares are its earnings release on July 23 and
Dividend Increases/Decreases for the Week of July 5
July 5, 2024
Below we provide a list of firms that raised their dividends during the week ending July 5. 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 Bank OZK (OZK): now $0.40 per share quarterly dividend, was $0.39. DouYu International (DOYU): now $9.76 per share special dividend. Lorne Park Capital Partners (LPC:CA): now $0.008 per share quarterly dividend, was $0.007. Medalist Diversified REIT (MDRR): now $0.05 per share quarterly dividend, was $0.02. MV Oil Trust (MVO): now $0.41 per share quarterly dividend, was $0.33. PNC Financial (PNC): now $1.60 per share
High Yield Dividend Income Investing Is Not as Easy as Chasing the Highest Yield
July 3, 2024
Dear members: — The skills to successfully invest for long-term capital gains or long-term dividend growth are much different than those required for generating high yield dividend income. Income investing is a much different proposition. However, the skills do center on a similar equity evaluation process, but one that requires an acknowledgement and heightened awareness of considerably greater downside risks. Income investing, or high yield dividend income investing, should at times be considered among the riskiest forms of investing, as many high dividend-yielding securities tend to trade closer to the characteristics of junk-rated bonds than they do most net cash rich and free cash flow generating powerhouses that we like so much in the Best Ideas Newsletter portfolio (1) and Dividend Growth
Boeing to Acquire Spirit AeroSystems
July 1, 2024
Image: Boeing’s shares have traded sideways the past few years as it works to fix safety issues. By Brian Nelson, CFA Boeing (BA) has been plagued with safety issues the past couple of years as the company’s decision to cut costs by outsourcing much of its manufacturing operations has created a whole host of problems. Two deadly plane crashes of its 737 MAX coupled with a blown-out area of the fuselage in a recent Alaska Airlines (ALK) flight are but a few missteps that have plagued the aircraft maker. On July 1, Boeing announced that it would roll back some of its outsourcing, announcing that it would bring fuselage maker Spirit AeroSystems (SPR) back into the fold. Boeing’s purchase of
Nike’s Revenue Under Pressure
June 28, 2024
Image: Nike’s shares have languished of late, and a comeback will take some time. By Brian Nelson, CFA On June 27, Nike (NKE) reported disappointing fourth quarter fiscal 2024 results and issued an outlook for fiscal 2025 that came up short relative to expectations. Revenue in the quarter fell 2%, missing the consensus estimate, but was flat on a currency-neutral basis. Revenue for its Nike brand advanced 1% on a currency-neutral basis, while Nike direct revenue fell 7% on a currency-neutral basis. Wholesale revenue was up 8% on a currency-neutral basis, while revenues for Converse dropped 17% on a currency-neutral basis. Nike’s guidance for 2025 wasn’t very encouraging. Here’s what the executive team said on the conference call: Now let
Shares of Walgreens Boots Alliance Collapse
June 27, 2024
Image: Walgreens’ shares have been under constant pressure for some time now. By Brian Nelson, CFA On June 27, Walgreens Boots Alliance (WBA) reported mixed third quarter results for fiscal 2024. Though sales increased 2.6% from the year-ago period, adjusted operating income fell 36.3% on a constant-currency basis, reflecting in part “softer U.S. retail and pharmacy performance.” Adjusted net earnings told a similar story, falling 36.6%, to $0.63 per share in the quarter, missing the consensus estimate. Management spoke of continued problems in its quarterly press release commentary: We continue to face a difficult operating environment, including persistent pressures on the U.S. consumer and the impact of recent marketplace dynamics which have eroded pharmacy margins. Our results and outlook reflect
General Mills’ Organic Performance Reveals Underlying Weakness
June 26, 2024
Image Source: General Mills By Brian Nelson, CFA On June 26, General Mills (GIS) reported mixed fourth-quarter fiscal 2024 results that showed weakness on the top line, but a modest beat relative to the consensus forecast on the bottom line. Fourth-quarter net sales dropped 6% from the same period a year ago as organic growth was also down 6% “driven by the trade expense timing comparison, a reduction in retailer inventory, and a headwind in its International segment results.” Organic volume declined 6 percentage points in its North America Retail segment and 7 percentage points in its Pet segment, with both segments experiencing organic price/mix headwinds of one percentage point, too. Its North America Foodservice business did comparatively better, recording
FedEx’s Cost Initiatives Drive Strong Fiscal 2025 Guidance
June 26, 2024
Image Source: FedEx By Brian Nelson, CFA On June 25, FedEx (FDX) reported better than expected fourth quarter results for fiscal 2024. Revenue advanced 0.9% on a year-over-year basis in the fourth quarter, while adjusted operating income expanded to $1.87 billion from $1.77 billion in the same period a year ago. Net income increased to $1.34 billion in the fiscal fourth quarter from $1.25 billion in last year’s quarter. Adjusted diluted earnings per share came in at $5.41, up from $4.94 in the same period a year ago. Management had the following to say about the quarterly performance: We made significant progress in fiscal 2024 and ended the year strong, delivering four consecutive quarters of expanding operating income and margin
Carnival Corp. Experiencing Strong Demand Trends
June 25, 2024
Image: Carnival Corp.’s shares have bounced from its 2022 lows, but the company has yet to return to new highs, despite strong bookings demand. By Brian Nelson, CFA On June 25, Carnival Corp. (CCL) reported better-than-expected second quarter results for fiscal 2024. Total revenue advanced to $5.78 billion from $4.91 billion in the same period a year ago, while operating income expanded to $560 million from $120 million in last year’s quarter. Net income swung to a profit of $92 million from a net loss of $407 million in the second quarter of fiscal 2023. Management commentary was upbeat in the press release: We have made incredible strides in improving our commercial operations, strategically reallocating our portfolio composition and formulating
FactSet Research Reveals Softness on Top Line
June 24, 2024
Image: FactSet’s shares have been choppy the past couple years. By Brian Nelson, CFA On June 21, FactSet Research (FDS) reported mixed third-quarter fiscal 2024 results that showed revenue increasing 4.3%, in-line with expectations, and adjusted diluted earnings per share of $4.37, up 15.3% from last year’s quarter and better than what the Street was looking for. The bottom line benefitted from higher revenues, margin expansion, as well as a reduced share count, offset in part by higher income taxes. Organic revenue grew 4.5% on a year-over-year basis, while organic Annual Subscription Value (ASV), which “represents the forward-looking revenues for the next 12 months from all subscription services,” increased 5% on a year-over-year basis, to $2.22 billion. The company’s adjusted
