Best Ideas Portfolio Holding EDAC Tech Breaks Above $16.30 Per Share!
March 4, 2013
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Will the FDA Crush Intuitive Surgical?
March 4, 2013
Shares of Intuitive Surgical (click ticker for report: ) plunged in trading Thursday afternoon, but recovered much of the loss Friday morning after the FDA announced it was launching an investigation into issues arising from use of the da Vinci systems. The FDA sent surveys to several hospitals, and it is looking to determine whether a rise in incident reporting from robotic surgeries is an issue with the system, the patient, or the surgeon. From initial reports, it appears that few of the issues have originated from robotic malfunction, but rather from user error. We also think it’s important to note that Intuitive Surgical hasn’t experienced any increase in the already small death rate. While it appears the firm is
The Good, The Bad, and The Ugly: Macy’s, Kohl’s and JC Penney
March 1, 2013
The fourth quarter is easily the most important quarter for retailers, and we saw winners and losers surface. The fortunes couldn’t have been more different, so let’s take a look at the results of the department stores. The Good: Macy’s Macy’s (click ticker for report: ) fourth quarter was among the best of the department stores, if we exclude performance from higher-end Nordstrom (click ticker for report: ). Macy’s took advantage of JC Penney’s (click ticker for report: ) movement away from discounting to run several promotional sales, which drove revenue growth of 7% year-over-year to $9.4 billion during the quarter (with one extra week of sales). Earnings, net of one-time expenses, increased 21% year-over-year to $2.05 per share, easily
Firms Raising Their Dividends in the Week Ending March 1
March 1, 2013
The flurry of dividend increases continues. Below we provide a list of firms that upped their dividends for the week ending March 1. 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. Firms Raising Their Dividends This Week Acadia Realty Trust (AKR): now $0.21 per share quarterly dividend, was $0.18. American Realty Capital Properties (ARCP): now $0.075 per share monthly dividend, was $0.7458. Big 5 Sporting Goods Corporation (BGFV): now $0.10 per share quarterly dividend, was $0.075. CBL & Associates Properties, Inc. (CBL): now $0.23 per share quarterly dividend, was $0.22. Cedar Fair (FUN): now $0.625 per share quarterly distribution, was $0.40. Chico’s (CHS):
Dollar Tree’s Strong Fourth Quarter Quells Fears in the Sector
March 1, 2013
Wednesday morning, discount retailer Dollar Tree (click ticker for report: ) announced solid fourth quarter results. Revenue jumped 15% year-over-year to $2.3 billion, slightly above consensus estimates. Earnings also exceeded consensus expectations, up 26% year-over-year to $1.01 per share. Same-store sales at the chain increased 2.4% during the quarter, reflecting broad-based geographic and category space. Not surprisingly, comps accelerated in December as the firm’s value proposition drove holiday shoppers into the store. The firm also expanded its frozen goods selection, which was put into 329 new stores in 2012. Management indicated that the company plans on equipping more stores with refrigeration capabilities, which could add incremental higher-margin sales. Gross margins were 10 basis points higher year-over-year during the fourth quarter
Big 5’s Quiet Success Continues
February 28, 2013
Sporting goods retailer Big 5 (click ticker for report: ) announced wonderful fourth quarter results Tuesday afternoon. Revenue increased 7% year-over-year to $243 million, slightly above consensus estimates. Earnings per share were considerably better, as the company was roughly break-even during the fourth quarter of 2011, but earned $0.19 per share in the fourth quarter of this year. For the full-year, earnings per share were 30% higher at $0.69. We profiled Big 5 in June of 2011, and shares have appreciated very nicely since. Same-store sales during the quarter were strong, jumping 6.5% from the same period a year ago. Big 5 admitted to benefiting from the post-Sandy Hook jump in guns and ammunition sales, but we also think the company
We’re Staying Far Away From First Solar
February 28, 2013
Tuesday afternoon, the struggling solar firm First Solar (click ticker for report: ) announced fourth quarter results. Revenue grew 63% year-over-year to $1.1 billion, falling well short of consensus estimates. Earnings, adjusted for restructuring charges, swung to a profit of $2.04 per share, roughly in line with consensus estimates. Gross margins were significantly higher than the year ago period at 27.3%, but were down 110 basis points sequentially. Module manufacturing costs were 11% lower than a year ago at $0.66 per watt. First Solar’s most-efficient facility achieved costs as low as $0.64 per watt, but it remains to be seen if these costs are low enough to compete on a global scale. Regardless, management provided one of the most bearish
Vitamin Shoppe Falls…Is the New GNC Gold Card Program to Blame?
February 28, 2013
Health supplement retailer Vitamin Shoppe (VSI) announced fourth quarter results Tuesday morning. Revenue grew only 2% on a reported basis to $218 million, but the company was lapping a 14 week quarter in the prior year. Therefore, on a comparable basis, we think sales grew closer to 10% year-over-year, though the number was still slightly below expectations. Earnings, excluding certain items including the integration costs of Super Supplements and the impact of Sandy, were $0.40 per share, in line with consensus expectations and 29% higher than the same period a year ago. Same-store sales growth was fairly solid, in our view, up 5.2% year-over-year in spite of a 1.6 percentage point drag from Hurricane Sandy. This lagged competitor GNC (GNC), which
Target Remains Cautious on 2013; Shares Look Fairly Valued
February 28, 2013
Retail powerhouse Target (click ticker for report: ) announced solid fourth quarter results Wednesday morning. Revenue increased 7% year-over-year to $22.3 billion, which fell short of consensus expectations. Earnings per share, when adjusted for expenses related to the Canadian rollout, grew 10% to $1.65, above consensus estimates. Though overall sales growth was solid, same-store sales increased only 0.4% year-over-year during the quarter. The results were a little worse than the growth we saw at Wal-Mart (click ticker for report: ) and also a little worse than the same-store sales growth rate we saw at Dollar Tree (click ticker for report: ), which we would attribute to consumers being very cautious with non-core purchases during the holiday season. In fact, management
Home Depot Posts a Blowout Fourth Quarter
February 27, 2013
Home improvement retailer Home Depot (click ticker for report: ) announced wonderful fourth quarter results Tuesday morning. Revenue rose 14% year-over-year to $18.2 billion, easily exceeding consensus expectations. Earnings also exceeded consensus estimates, growing 36% year-over-year to $0.68 per share. Same-store sales expansion outperformed the 1.9% growth rate we saw at Lowe’s (click ticker for report: ) earlier this week, jumping 7% year-over-year and 7.1% in the US. Management noted that large ticket items were the standout performer, saying: Total comp transactions grew by 1.7% for the quarter, while average ticket increased 5.6%. Our average ticket increase was impacted somewhat by commodity price inflation in lumber and copper, which contributed approximately 80 basis points to comp. Transactions for tickets under
