November Auto Sales Roundup
December 4, 2012
November auto sales were strong across the board, with the SAAR expected to be around 15.2 million units. Let’s take a look at performance on an individual company basis. Ford Best Ideas Newsletter holding Ford (click ticker for report: ) healthily exceeded its consensus sales growth forecast of 3.5% unit growth, with sales expanding 6.5% during November and retail sales growing 12%. Total small car units surged 76% year-over-year, making it Ford’s best November small car performance in 12 years. Utilities and trucks units lagged cars, growing 2% and 3.7%, respectively, compared to 15.2% growth in total car sales. Although performance was boosted due to sales being pulled into November as a result of Sandy, we thought the results were good,
Are Any Rumored Buyouts Worth Betting On?
December 3, 2012
Buyouts and private-equity acquisitions can provide powerful stock moves and often act as the catalyst to drive stock prices to intrinsic value. In the portfolio of our Best Ideas Newsletter, we had held shares of Collective Brands. We liked the company’s valuation, relatively small size, and its attractiveness to other companies (among other things). And while we’d never own a stock solely on speculation of M&A activity, a buyout turned out to be the catalyst for our call on Collective Brands to work out for members. Shares proceeded to appreciate over 35% on our cost basis! In recent months, we’ve heard rumors of cash-heavy companies and private equity funds interested in several different deals. Let’s take a look at a few higher-profile names.
FAQ: Why Are There Firms On Your Dividend Growth Watch List That Don’t Have Attractive Dividend Growth Profiles…Yet
December 3, 2012
We answer a frequently asked question.
A Dual Focus on Valuation and Yield Is the Best Way to Combat Changes in Future Dividend Tax Rates
December 1, 2012
With a potential hike in the dividend tax rate just around the corner, there is no more important time than now for income investors to evaluate their existing portfolio holdings to determine whether they are well-positioned for a higher-tax environment. Assuming there are no changes to the current trajectory, the top dividend tax rate is expected to rise to 39.6% next year (up from 15% currently), and the highest-income earners will see a Medicare surtax on top of that. Evaluate All Aspects of a Dividend Investment First of all, we think those investing in high-yielders (firms) at any price (HYAAP) may be most affected by this change in tax rates. These high-yielders at any price (HYAAP) tend to be favorites of those at or near retirement, particularly given the paltry payouts on fixed
Disclosures
December 1, 2012
Valuentum has not owned and does not own any shares of stocks mentioned on its website. Valuentum owns shares in the DIA, VOO, SCHG, SPY, and QQQ. From January 2011 through November 2012, Brian Nelson had long exposure to ACOM. From May 2011 through June 2011, Brian Nelson had put option exposure to AMR. Since mid-November 2012 through March 2020, Brian Nelson has not owned any shares of stocks/ETFs mentioned on Valuentum’s website. Brian Nelson currently owns shares in SPY, SCHG, DIA, QQQ, VOT, RSP, and IWM in his retirement account. He also owns less than 1 Bitcoin. Majority share owner of Valuentum, Elizabeth Nelson, currently has exposure to HON in her retirement account. Mr. Nelson’s household owns one share
November Retail Sales Disappoint
November 29, 2012
Without question, November retail sales numbers have been lackluster. Although the number of retailers that report monthly sales figures continues to decline, let’s take a look at some of the interesting insights we saw from those that still report numbers. Kohl’s Even though we’re fairly bearish on Kohl’s (click ticker for report: ) over the long term, we did not expect the fourth quarter to start off so poorly. Same-store sales fell 5.6% year-over-year, lapping a 6.2% decline during the same period in 2011. Total sales fell 4.9%, and the company continues to lose momentum. The firm blamed Hurricane Sandy and recognizing e-commerce sales in December as the major drivers of weakness, but we think the results highlight how poorly
More Special Dividends
November 29, 2012
As we previously mentioned, special dividends are “in” this holiday season, as a few more firms declared one-time dividends. Louisiana-based bank Teche Holding Company (TSH) announced that it will pay out its regular quarterly dividend of $0.365 per share with an additional payment of the same amount. However, the firm intends to skip its dividend in the first quarter of 2013, and it was careful not to commit to resuming its dividend in the second quarter, though it says it is likely to resume. Teche is a pretty obscure bank with a market capitalization under $100 million, but the situation underscores the uncertainty felt by so many firms at the current juncture. Retailer Stein Mart (SMRT) followed suit, declaring a
JoS A. Bank Struggles to Maintain Margins
November 29, 2012
Wednesday morning, men’s suit retailer JoS A. Bank (click ticker for report: ) reported weaker than expected earnings for its third quarter. Sales increased 11% year-over-year to $233 million, roughly in-line with consensus expectations. Earnings per share fell 13% year-over-year to $0.47, which was worse than expected. In a highly promotional low-end suit environment, the firm had to run several special sales to compete with the likes of Macy’s (click ticker for report: ), which was also quite promotional (and has the advantage of a stable of brand names). Same-store sales increased 4.8%, with online/direct marketing sales up 26% year-over-year, though the company acknowledged November sales trended downward (thanks in part to Sandy). Gross margins tumbled from 62.6% to 57%,
Special Dividends: A Fantastic Idea…Fiscal Cliff Has Started a Trend
November 29, 2012
Throughout 2012, we’ve seen a huge surge in special dividends, with 59 companies in the Russell 3000 declaring special dividends from September to November compared to just 15 during the same period last year. The impetus is obvious: the impending fiscal cliff has left both companies and investors wondering what to do with the mountains of cash sitting on pristine balance sheets and low return prospects. As a result, companies across different sectors are declaring special one-time dividends. Costco (click ticker for report: ) will pay a one-time special dividend of $7 per share (amounting to $3 billion) as a reward to shareholders, while Tyson Foods (click ticker for report: ) declared a special one-time payment of $0.20 per share.
Green Mountain Posts Strong Revenue Growth
November 28, 2012
The much maligned Green Mountain (click ticker for report: ) reported better than anticipated fourth quarter results Tuesday afternoon. Revenue surged 33% year-over-year to $946.7 million, which was better than expected, though boosted by an additional selling week. Earnings, helped by a 3.1 million-share stock-buyback, grew 36% year-over-year to a better-than-expected $0.64 per share, on a non-GAAP basis. One of the firm’s largest concerns, inventories, grew 14% year-over-year, which was much slower than the sales rate. Considering the SEC inquiry into the company’s accounting practices, we’ve been particularly focused on the firm’s financial statements. Accounts payable increased only 5% year-over-year, though we did see meaningful spikes in accrued expenses (up 44% year-over-year) and current income tax payable (up 204% year-over-year).
