March Retail Sales Speak to Strength in the US Economy
April 6, 2012
Retail sales numbers issued Thursday by the International Council of Shopping Centers (ICSC), which tracks 22 retailers, reinforced what we’ve been saying for some time: the US economy continues to grow and the pace of expansion may even be accelerating, even in the face of domestic political uncertainty, concerns about a slowdown in Chinese growth, and a recession in the Eurozone. According to ICSC data, retail sales rose 4.1% for March, with strong growth across all segments. We think the strong March retail sales performance and improving employment trends bode well for the US economy as we head into the second quarter. Though we liked the underlying March performance, we’re not making any changes to our fair value estimates for
Strong March Auto Sales Support Our Bullish Take on Ford
April 4, 2012
Preliminary monthly data showed that March auto sales in the US increased 12.7% and that Ford’s (F) performance was its best showing for the month in five years. The industry-wide seasonally-adjusted rate came in at a whopping 14.4 million vehicles. Although Ford’s growth rate trailed other car manufacturers, many peers were lapping easy comparisons due to last year’s production setbacks, and we’re not reading too much into it. We continue to believe Ford is a core position in the portfolio of our Best Ideas Newsletter. Though the increase in Ford’s sales was lower than peers’ during the month, we can’t find too much fault in the company’s monthly performance and are excited about what the numbers may mean with respect to profitability. As
SanDisk Cuts First-Quarter Outlook; We Continue to Steer Clear of the Shares
April 3, 2012
Flash-memory maker SanDisk (SNDK) issued a weak business update after the close Tuesday. The firm blamed weaker-than-expected pricing and demand, as it now forecasts total revenue to be approximately $1.2 billion in the first quarter, down from its previously expected $1.35 billion at the high end of the range and well below consensus expectations of $1.34 billion. SanDisk also said that its gross margin would be less than the 39% to 42% range it had previously expected in the period. We’ll be expecting more information from the chip maker when it reports quarterly results April 19. At this time, however, we’re sticking with our fair value estimate for SanDisk and continue to steer clear of the firm’s shares.
Releasing Our Most Advanced Stock Screener Yet — the Valuentum DataScreener500
April 2, 2012
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Valuentum’s April Edition of Its Dividend Growth Newsletter! Another Month of Relative Outperformance!
April 2, 2012
We had another strong month of relative outperformance in the portfolio of our Dividend Growth Newsletter, as we widened our outperformance gap relative to the Dow Jones Select Dividend Index (DVY) by another 40 basis points (please see page 5). We also collected (or have in receivables) roughly $547 in dividend payments from the publishing of the previous edition of our Dividend Growth Newsletter, a nice sum. We continue to expect strong outperformance from our portfolio through the course of 2012 and beyond, and view Hasbro (HAS), Medtronic (MDT), Intel (INTC), and Republic (RSG) as the most timely dividend-growth opportunities on the market today, with each posting a 9 on our Valuentum Buying IndexTM. We may add to those
We Can’t Rule Out That Best Buy Won’t Eventually Go the Way of Circuit City; VBI Score: 3
March 29, 2012
Big-box electronics retailer Best Buy (BBY), on Thursday, issued fiscal fourth-quarter 2012 results that beat expectations on the bottom line but fell short of consensus forecasts on the top line. The beleaguered retailer also outlined a new transformational strategy that we view to be fraught with implementation and execution risk. We expect to take a closer look at our valuation model on Best Buy, but our fair value estimate range for the firm is unchanged at this time. Best Buy’s revenue advanced 3% in its fiscal fourth quarter, despite comparable store sales falling 2.4% in the period (compared to a decline of 4.7% for the prior-year quarter). Gross profit advanced at a similar pace, though overhead increases did put
Best Idea Collective Brands Surges 10% To Over $20 Per Share
March 29, 2012
<< Collective Brands (PSS) Reaches 10-Month High on E-Land Bid Report, Bloomberg
McDonald’s Transition Could Provide an Entry Point for Dividend Growth Investors
March 28, 2012
Last week, McDonald’s (MCD) CEO Jim Skinner announced that he will be retiring from the company on June 30, 2012, after more than four decades on the job. His replacement will be current chief operating officer and President Don Thompson. Skinner led McDonald’s during its post “Supersize Me” revival and has done a tremendous job integrating new products (McCafe comes to mind), re-modeling dreary stores and increasing both earnings and revenue. His rise from assistant store manager to CEO without a college degree seems nearly impossible to replicate, and his understanding of the day-to-day business and McDonald’s customer is unparalleled.That being said, Don Thompson is no slouch either. He started his career at McDonald’s 22 years ago, and has quickly
Lennar Records Strongest First-Quarter Homebuilding Operating Margin in Six Years
March 27, 2012
The nation’s third-largest homebuilder Lennar (LEN) reported strong first-quarter results Tuesday that revealed strong order growth, which largely eased concerns brought about by KB Home’s (KBH) recent disappointing order performance. Though we think the housing market will show continued stabilization and improvement during 2012, we’re not enthused by any of the valuations presented by homebuilding stocks at this time. We remain on the sidelines with respect to Lennar and its peers. Lennar’s revenue increased 30% in the quarter, as deliveries expanded at a similar pace (29%) and the firm experienced positive pricing. New orders advanced 33%, to 3,022 homes, while the firm’s backlog increased to 2,711, up 39%. The firm’s cancellation rate came in at 18% during the period. The homebuilder’s
