Brian Nelson

In The News: Record-Low Smoking Rates, China Steel Demand Concerns, and a New Look GM

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US smoking rates are at all-time lows, and the FDA is pushing to restrict sales of menthol products and flavored e-cigarettes. Meanwhile General Motors has announced an accelerated restructuring plan, and concerns have cropped up regarding steel demand in China. By Kris Rosemann The Centers for Disease Control and Prevention (CDC) estimates that 14% of US adults, or roughly 34.3 million people, smoked cigarettes in 2017, a record low, compared to 15.5% in 2016 and 42.4% in 1965, the first year the figure was tracked. Public health initiatives have clearly played a role in the decline, but the CDC also estimates that 47 million people still use some form of tobacco product. The US Food and Drug Administration (FDA) is … Read more

Deere Expects Replacement Cycle to Continue Despite Trade Tensions

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Image Source: David Wright Deere & Co’s fiscal 2018 fourth quarter report included expectations for the replacement cycle for farm machinery to continue despite global trade tensions and other geopolitical uncertainty. Its equipment operations have performed well of late as it continues to ride a wave of solid demand. By Kris Rosemann Ag equipment giant Deere & Company (DE) reported fiscal 2018 fourth quarter earnings November 21, and the company continues to take advantage of the replacement cycle for farm machinery amid global trade tensions and other geopolitical uncertainty. New and innovative products are also helping drive its top line, according to management, and net sales advanced 18% in the fiscal fourth quarter on a year-over-year basis. Equipment net sales … Read more

Dividend Increases/Decreases for the Week Ending November 23

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Below we provide a list of firms that raised their dividends during the week ending November 23. 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 Becton, Dickinson (BDX): now $0.77 per share quarterly dividend, was $0.75. CB Financial Services (CBFV): now $0.23 per share quarterly dividend, was $0.22. Cross Timbers Royalty Trust (CRT): now $0.144509 per share monthly dividend, was $0.124040. Deswell Industries (DSWL): now $0.06 per share semi-annual dividend, was $0.04. Exchange Bank (EXSR): now $1.00 per share quarterly dividend, was $0.95. Farmers & Merchants Bank of Long Beach (FMBL): … Read more

Consumer Staples Earnings Roundup

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Image Source: Mike Mozart Let’s take a look at the earnings reports of some of the largest consumer staples companies. Margin performance left a good deal to be desired across the space as transportation and raw material costs are largely on the rise, and organic growth trends could be better. Companies included: Kellogg, Kraft Heinz, Kimberly-Clark, and Colgate Palmolive. By Kris Rosemann Macroeconomic uncertainty stemming from geopolitical tensions and potentially slowing economic growth in emerging markets have played a role in stagnant top-line growth for consumer staples entities of late, and ongoing pricing and promotional battles are not likely to go away anytime soon as the proliferation of the convenience of online shopping has brought about a new era in … Read more

Retail Margins Weighed Down by Labor, Transportation Costs

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Image Source: Mike Mozart Selling pressure across retail came after several notable operators reported earnings November 20. Let’s take a look at what is driving investor reaction within the space. By Kris Rosemann A number of high profile retailers (XRT) reported earnings before the open November 20, and selling pressure ensued due in large part to margin weakness across the space. Higher transportation and wage costs were common themes, but top-line performance held solid for the group, generally speaking. A number of retailers from a variety of segments within the sector are feeling the damage to sentiment from the flurry of reports as the implications of the margin pressures are not expected to be unique to those specific retailers that reported … Read more

In The News: Oil, Housing, and Cryptocurrency

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Let’s take a look at some market-impacting headlines from the morning of November 19, including volatile oil prices, pressure in the housing market, and the sustained decline in Bitcoin. By Kris Rosemann Speculation in the global crude oil market (USO) that Saudi Arabia would be able to lead OPEC and Russia to cut supply appears to have taken a hit as Russian Energy Minister Alexander Novak stated his views that producers need to monitor supply and demand levels in the coming weeks before deciding on a course of action. Saudi-led OPEC is looking to strike a similar production cap agreement to those seen in recent years with the goal of reducing output by 1 million barrels per day to 1.4 … Read more

Plenty of Reasons for Prudence in Today’s Market

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Image shown: SPDR S&P 500 ETF (SPY) share price performance since early 2016. Source: TradingView.  Market volatility looks to be here to stay. Let’s take a look at some of the recent developments that have market observers concerned. Let’s also dissect recent commentary from Fed Chairman Jerome Powell. By Kris Rosemann Volatility in US equities (SPY) is back in a notable way and is not likely to disappear anytime soon. Market participants continue to weigh the pros and cons of a number of factors, including 1) rising interest rates and their impact on asset prices, 2) the massive corporate debt loads found across the landscape (global debt to GDP ratios are at all-time highs), 3) a seemingly strong and steady US economy, … Read more

Encana Adds Attractive Assets with Purchase of Newfield Exploration

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Image Source: Encana third-quarter presentation Encana already holds a nice presence in some of the most attractive oil-producing regions in North America, and its merger agreement with Newfield Exploration should only add to its appealing portfolio of unconventional plays. By Callum Turcan Encana Corporation (ECA) is a growing upstream oil & gas producer with operations in Canada and the United States. The firm’s two biggest targets in Canada are the Duvernay and Montney shale plays, and in the US, Encana is primarily focused on developing the Permian Basin and Eagle Ford plays. What all four of these regions have in common is they yield wells with a high-liquids production mix, allowing Encana to directly capitalize on the uneven and wobbly … Read more

Dividend Increases/Decreases for the Week Ending November 16

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Below we provide a list of firms that raised their dividends during the week ending November 16. 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 Acadia Realty Trust (AKR): now $0.28 per share quarterly dividend, was $0.27. Acme United (ACU): now $0.12 per share quarterly dividend, was $0.11. Agilent (A): now $0.164 per share quarterly dividend, was $0.149. American Equity (AEL): now $0.28 per share annual dividend, was $0.26. Anadarko Petroleum (APC): now $0.30 per share quarterly dividend, was $0.25. Aramark (ARMK): now $0.11 per share quarterly dividend, was $0.105. Brown-Forman … Read more

Cisco Off to Strong Start in Fiscal 2019

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Image Source: Ecole polytechnique Simulated newsletter portfolio idea Cisco turned in a strong fiscal 2019 first quarter report November 14 as it continues to transform its business model towards one with a greater focus on subscription-based revenue. By Kris Rosemann Networking giant Cisco (CSCO) is off to a strong start in its fiscal year 2019 as its first quarter report, released November 14, revealed total revenue growth of 8% on a year-over-year basis amid its ongoing business model transformation. The transformation to a greater focus on software subscription revenue has been in part accelerated by inorganic growth such as the recent $2.35 billion acquisition of Duo Security, which brings cloud-based identity solutions for unified access security, a focus consistent with Cisco’s … Read more