Brian Nelson

Apple Turns in Solid Quarter; Will Stop Reporting Unit Sales Figures

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Image Source: John Jones  Apple’s fiscal fourth quarter report was one of ongoing momentum in many areas, but the investing community has taken great issue with its decision to stop reporting quarterly updates on unit sales of iPhones, iPads, and Macs. By Kris Rosemann Simulated newsletter portfolio holding Apple’s (AAPL) fiscal fourth quarter report, released November 1, has been a subject of even greater attention than usual for the largest company by market cap after it announced it would no longer disclose quarterly unit sales data for the iPhone, iPad, and Mac. We can’t say that we are fans of transparency levels declining, but we will not be joining the masses in blasting Apple for the move. Nevertheless, investors are … Read more

Adding Xilinx to the Dividend Growth Newsletter Portfolio

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We’re adding Xilinx to the simulated Dividend Growth Newsletter portfolio. The company generates a hefty Dividend Cushion ratio of 3.3! By Brian Nelson, CFA Xilinx (XLNX) rewrites the book when it comes to free cash flow efficiency! The company makes programmable logic devices (PLDs), including programable System on Chips (SoCs) and three-dimensional integrated circuits (3D ICs), and its intellectual property is a key component of its value proposition. During the three fiscal years ending 2018, for example, Xilinx’s operating cash flow averaged over $830 million, while its entire cash bill for capital spending, including growth and maintenance, averaged just over $50 million, meaning all capital spending represented, on average, approximately 6% of operating cash flow. This is simply incredible. During … Read more

General Motors Overcomes Challenges in Strong Third Quarter; Ford Backs Off 2020 Targets

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Image Source: GM third-quarter earnings presentation Despite challenges in its cost structure and the Chinese market, simulated newsletter portfolio idea General Motors turned in a strong third quarter report, and shares reacted favorably after several months of selling pressure. Rival Ford also reported a solid third quarter report, but it no longer expects to hit its 2020 EBIT margin and ROIC targets. By Kris Rosemann Shares of simulated newsletter portfolio idea General Motors (GM) leapt during the October 31 trading session after the company released a strong earnings report before the open that included record third-quarter adjusted diluted earnings per share and record third-quarter equity performance from GM China. Net revenue in the period advanced 6.4% on a year-over-year basis to … Read more

Facebook Reports 2+ Billion Daily Users Across Its Platforms

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Image Source: Book Catalog After a rough stretch for shares, Facebook’s third quarter report has helped breathe some life into the stock as the company continues to grow at a robust double-digit rate and free cash flow generation remains superb. By Kris Rosemann Shares of simulated Best Ideas Newsletter portfolio idea Facebook (FB) have faced significant selling pressure since its second quarter report that indicated it would be taking a number of self-enforced measures that would severely impact its operating margin, but a third-quarter report that included a slight near-term cost and capital spending guidance reduction has breathed some life into shares. We think the company may have given in to political pressures, but we continue to have confidence in … Read more

Upstream Oil Major On the Upswing

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Image Source: Author’s Calculations and SEC Filings ConocoPhillips appears poised to grow its dividend thanks to a materially healthier balance sheet and an improving free cash flow profile. Volatile energy resource pricing will always be a long-term risk to the payout, but the near term looks bright for the upstream oil major. By Callum Turcan ConocoPhillips (COP) may present a strong dividend growth opportunity as it appears set to build upon its current 1.8% dividend yield. First, let’s cover exactly what forced the company to cut its dividend a few years back, and then dig into the potential drivers for dividend growth in the coming years. ConocoPhillips spun-off its downstream division and a large part of its midstream operations from … Read more

GE Slashes Dividend Again; Will Reorganize ‘Power’ Business

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Image Source: rik-shaw Industrial giant General Electric plans to cut its dividend once more in order to accelerate deleveraging, and it also will split its ‘Power’ business into two units. We’ve cut our fair value estimate for shares following the strategic update and earnings report. By Kris Rosemann Prior to its earnings release and strategic update before the open October 30, General Electric’s (GE) Dividend Cushion ratio was 0.1, which brought with it very poor Dividend Safety and Dividend Growth ratings, even after it halved the payout in late 2017, as its industrial operations were not able to generate enough cash flow to sustain a healthy payout. Management now plans to reduce its quarterly payout to $0.01 per share from … Read more

Gilead Sciences Beats Expectations; Raises Product Sales Guidance

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Image Source: Gilead Sciences’ third-quarter earnings presentation Gilead Sciences continues to battle challenges in the HCV market, but its HIV product sales grew nicely in the third quarter. Management remains optimistic regarding the potential of its cell therapy treatment, headlined by Yescarta. By Kris Rosemann Simulated newsletter portfolio idea Gilead Sciences (GILD) turned in a better than expected third-quarter report after the close October 25, though its top line continues to face pressure as its HCV products sales fight rising levels of competition. Total revenues fell to ~$5.6 billion from $6.5 billion in the year-ago period as HCV product sales declined to $902 million in the period from $2.2 billion in the third quarter of 2017. HIV product sales climbed … Read more

Data Center Leads Intel’s Impressive Top-Line Growth; Guidance Raised

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Image Source: Intel third-quarter earnings presentation Intel reported strong third quarter results and subsequently raised its full-year guidance for a number of metrics. The company continues to throw off gobs of free cash flow and boasts a solid combination of a competitive dividend yield and a strong Dividend Cushion ratio. By Kris Rosemann Simulated newsletter portfolio idea Intel (INTC) has found itself out of the market’s favor of late as a result of a delayed chip launch that some expect will allow rivals to take notable market share from the company, but shares gained nicely following its third quarter report, released after hours October 25. Intel’s top-line advanced 19% on a year-over-year basis to an all-time company record of $19.2 … Read more

Pricing Drives Altria’s Top Line Slightly Higher

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Image Source: Melanie Tata Tobacco giant and simulated Dividend Growth Newsletter portfolio idea Altria pushed its top line slightly higher in the third quarter thanks to ongoing pricing power, and its flagship brand Marlboro continues to dominate in terms of retail share.  By Kris Rosemann Simulated Dividend Growth Newsletter portfolio idea and tobacco giant Altria (MO) reported third quarter results October 25, revealing slight year-over-year top-line growth of 1.6% as higher pricing offset volume declines in its ‘Smokeable Products’ segment en route to 1% net revenue growth and pricing strength in its ‘Smokeless Products’ segment drove 6.5% net revenue growth. The company’s total cigarettes retail share declined 50 basis points from the third quarter of 2017 to 50.1%, and Marlboro … Read more

Midstream Energy Pounded, MLP Distribution Cut at Golar LNG Partners

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Image shown: The midstream MLP space continues to suffer. Performance of the group since mid-June 2015. By Kris Rosemann and Brian Nelson, CFA There aren’t many calls that have been as large as Valuentum’s was in midstream energy in mid-June 2015. Midstream energy equities comprised some $500-$600 billion in market capitalization at their peak, and our work was prominently highlighted in Barron’s for all to see. Within the High Yield Dividend Newsletter, we’ve received great praise in continuing to highlight the risks of the space, but we can’t change that high yield, itself, is risky, as almost by definition, it means that companies will have poor Dividend Cushion ratios. This doesn’t mean that you won’t be able to find opportunities … Read more