Taking a Ride in Ford’s Stock
January 14, 2013
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More Holiday Results Pour In; Fortunes Diverge
January 14, 2013
Monday morning, additional holiday results have rolled in, and not surprisingly, the results diverged materially. Hhgregg (HGG), the electronics and appliances retailer that has attempted to fill the void left by Circuit City’s closing, reported terrible third-quarter results. Total sales dropped 3.6% year-over-year to $799.6 million, with same-store sales tumbling 9.7% compared to the year ago period. The decline was driven by weak video (TV) sales, which fell 24.6% on a comparable-basis, and a 6.1% increase in appliances that was well behind Best Buy’s (click ticker for report: ) performance. As we’ve previously addressed, the big box electronics retailers are having a tough time not only finding new items to fill the void of declining media sales, but firms have
Is Facebook’s Move Fundamentally Driven?
January 14, 2013
After bottoming in early September last year, shares of Facebook (click ticker for report: ) have been off to the races, climbing back to over $31 at a rapid pace. The company is still trading below its initial offer price, however. The big jump has been (in part) a result of the company reporting a tremendous jump in mobile revenue, and thus far, we’ve seen Facebook prove to be one of the best companies at profiting from the rapid shift from PCs to mobile. Without question, we think the good news about mobile revenue is a positive shift in fundamental data. However, we do not think such news is worthy of the incredibly positive price action. We continue to believe that fast-money traders and speculators
Best Idea Portfolio Holding eBay Continues to Approach All-Time Highs
January 13, 2013
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Best Buy’s Holiday Sales Were Solid; Margins Are the Issue
January 11, 2013
This morning, the maligned big box electronics retailer Best Buy (click ticker for report: ) provided updates on its holiday sales results, which were relatively strong, in our view. Breaking the downward spiral, same-store sales in the US were flat compared to last year, but continued to decline internationally, down 6.4% year-over-year. However, overall sales declined to $12.8 billion for the 9-week holiday season compared to $12.9 billion for the same period last year, suggesting overall business was fairly solid. Consistent with trends throughout 2012, consumer electronics were weak, while ‘Computing and Mobile Phones’ revenues surged. Source: Best Buy Holiday Sales Report, Valuentum Consumer electronics, largely comprised of TVs, has been weak and probably will continue to be until we see
Is Tiffany Still Sparkling?
January 11, 2013
Luxury retailer Tiffany (click ticker for report: ) reported challenging holiday sales Thursday. Global sales growth came in at 4% ($992 million)–the low end of the firm’s previous guidance range–after sales really slumped in North America. Same-store sales at the Tiffany 5th Avenue flagship store in New York and stores throughout North America declined 2% during the holiday period. Internet and catalog sales in the region did increase 4%, leading total sales in the Americas region to increase 2% on a constant currency basis (and 3% on a reported basis to $516 million). This could be a negative for other stores such as Saks (click ticker for report: ) that are so heavily tied to New York flagships, but we
Ford Doubles Its Dividend; Another Catalyst Driving the Firm’s Shares Toward Our Fair Value Estimate
January 10, 2013
This morning, automaker and Best Ideas Newsletter holding Ford (click ticker for report: ) announced that it will increase its quarterly dividend by 100%, to $0.10 per share. We predicted Ford would resume its dividend, and the raise comes as little surprise to us, given Ford’s improved capital structure and eagerness to return cash to shareholders. We expect to update our dividend report on Ford soon. At its current price, the annual dividend yield is now approximately 2.9%, while the yield on cost of those who invested alongside Valuentum is substantially higher at approximately 3.7%. Not only does the yield provide investors with a stronger income stream, but the increased dividend reflects management’s confidence in the business going into 2013,
Is a Cheaper iPhone in the Works?
January 10, 2013
On the iPhone’s (click ticker for report: ) 6th birthday, rumors are swirling that Apple is working on a cheaper iPhone to compete with the dozens of smartphones its competitors release every year. Since shares have fallen nearly $200 from the mid-September peak, investors and other market participants seem worried that Apple is losing its luster, and that consumers prefer the Galaxy SIII and the Note. Plus, market share data out of both Europe and China has been relatively bearish. Our confidence in Apple hasn’t been shaken, as we focus on what’s far more important for a company than market share: profits. We think investors are reaching to explain the recent share price decline instead of acknowledging that the company’s
Best Idea Portfolio Holding Visa Hits All Time High
January 10, 2013
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