Brian Nelson

Alert: Changes to the Newsletter Portfolios

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Image Source: Mike Cohen cc by 2.0. Summary Best Ideas Newsletter portfolio Pepsi (PEP): 4%-6% à 0% McDonald’s (MCD): 4%-6% à 0% Amazon (AMZN): 0% à 4%-6% Nvidia (NVDA): 0% à 4%-6% Dividend Growth Newsletter portfolio Honeywell (HON): 3%-4% à 0% McDonald’s (MCD): 3%-4% à 0% Meta Platforms (META): 0% à 3%-4% Booking Holdings (BKNG): 0% à 3%-4% By Brian Nelson, CFA 2024 proved to be a great year for stock investors. The Dow Jones Industrial Average ETF Trust (DIA) has advanced nearly 15% year-to-date on a price-only basis, while the SPDR S&P 500 ETF Trust (SPY) is up a whopping 25%+ on a price-only basis. The Invesco QQQ Trust (QQQ) is up even more at a 27% advance in … Read more

Dividend Increases/Decreases for the Week of December 27

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Below we provide a list of firms that raised their dividends during the week ending December 27. 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                          Cadiz Inc. 8.875% DEP PFD A (CDZIP): now $0.56 per share quarterly dividend, was $0.55. Centrais Elétricas Brasileiras S.A. – Eletrobrás (EBR): now $0.1414 per share annual dividend, was $0.0789. Crazy Woman Creek Bancorp (CRZY): now $0.32 per share annual dividend, was $0.31. Preferred Bank (PFBC): now $0.75 per share quarterly dividend, was $0.70. United Bancorporation of Alabama (UBAB): now $0.60 per share semi-annual … Read more

Shares of UnitedHealth Group and Vertex Pharma Sour

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Image Source: Rodrigo Senna cc by 2.0. By Brian Nelson, CFA Over the past few weeks, UnitedHealth Group (UNH) has faced a plethora of negativity. First, UnitedHealthcare CEO was shot and killed – not UnitedHealth Group’s CEO Andrew Witty – but the CEO of its health benefits unit. The killing happened right before UnitedHealth’s plans for its annual Investor Day. The event sparked social media outrage against U.S. health insurers. There has also been new legislation introduced to potentially break up pharmacy benefit managers. President-elect Donald Trump has also made statements to the effect of breaking up the middlemen in reference to the pharmacy benefit managers. As of right now, we continue to monitor the situation, but the risks have substantially … Read more

Adobe Issues Cautious Fiscal 2025 Guidance

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Image Source: Adobe By Brian Nelson, CFA Adobe (ADBE) reported better than expected fiscal fourth quarter 2024 results on December 11 that showed outperformance with respect to revenue and non-GAAP earnings per share. Revenue increased 11% in the quarter, while diluted earnings per share came in at $3.79 on a GAAP basis and $4.81 on a non-GAAP basis, exceeding the consensus forecast by $0.14. The company put up record fiscal fourth quarter operating cash flow of $2.92 billion, while it exited the quarter with remaining performance obligations of $19.96 billion. Free cash flow was $2.87 billion for the three months ended November 29. Management was upbeat in the press release: Adobe delivered record FY24 revenue, demonstrating strong demand and the … Read more

Toll Brothers Ends Strongest Year Ever

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By Brian Nelson, CFA On December 9, luxury homebuilder Toll Brothers (TOL) reported better-than-expected fourth-quarter fiscal 2024 results with revenue and non-GAAP earnings per share coming in higher than the consensus forecasts. Home sales revenues increased 10% in the quarter, while delivered homes were 3,431, up 25%. Net signed contract value was up 32% compared to the same quarter a year ago, with contracted homes of 2,658, up 30%. Backlog value, however, fell 7% on a year-over-year basis, with homes in backlog of 5,996, down 9%. Toll Brothers’ adjusted home sales growth margin, which excludes interest and inventory write-downs, came in at 27.9% in the quarter, below the adjusted home sales gross margin of 29.1% in the fiscal fourth quarter … Read more

Oracle’s Remaining Performance Obligations (RPO) Growth Speaks to Accelerated Expansion

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Image Source: Oracle By Brian Nelson, CFA On December 9, Oracle (ORCL) reported lower than expected second quarter fiscal 2025 results with revenue and non-GAAP earnings per share coming in lower than the consensus forecasts. Total revenue was up 9% year-over-year in both USD and constant currency, while GAAP earnings per share increased 24% and non-GAAP earnings per share advanced 10%, to $1.47. Cloud services and license support revenues increased 12% year-over-year in both USD and constant currency, while cloud license and on-premise license revenue nudged up 1% in USD and 3% in constant currency. Management’s commentary was upbeat in the press release: Record level AI demand drove Oracle Cloud Infrastructure revenue up 52% in Q2, a much higher growth … Read more

Dollar General Hit By Hurricane-Related Expenses

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Image Source: Valuentum By Brian Nelson, CFA On December 5, Dollar General (DG) reported mixed third quarter results with revenue exceeding the consensus forecast, but GAAP earnings per share coming up short relative to expectations. Net sales increased 5% in the quarter thanks to positive sales contributions of new stores and same-store sales expansion of 1.3%, which reflected increases of 1.1% in average transaction amount and 0.3% in customer traffic. In the quarter, operating profit fell more than 25% and diluted earnings per share fell nearly 30%, however, as the company suffered from hurricane-related expenses. Management had the following to say about the quarter: We are pleased with our team’s execution in the third quarter, particularly in light of multiple … Read more

Lululemon’s International Business Powers Results, Tweaks 2024 Guidance

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Image Source: Lululemon By Brian Nelson, CFA On December 5, Lululemon (LULU) reported better than expected results for its third quarter of fiscal 2024, with both revenue and GAAP earnings per share exceeding the consensus forecasts. Net revenue increased 9% (8% on a constant dollar basis) in the quarter thanks primarily to strength in its International net revenue, which advanced 33% (30% on a constant dollar basis). Americas net revenue increased 2% in the quarter. Comparable sales advanced 4% (3% on a constant dollar basis) for the quarter led by International comparable sales growth of 25% (or 22% on a constant dollar basis). Americas comparable sales decreased 2%. Lululemon’s gross profit increased 12% in the quarter as its gross margin … Read more

Foot Locker Talks of a More Promotional Environment, Softening Consumer Spending

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Image Source: Foot Locker By Brian Nelson, CFA Foot Locker (FL) reported lower-than-expected third quarter results on December 4, with revenue and non-GAAP earnings per share coming in below the consensus forecasts. The company also lowered its 2024 sales and non-GAAP earnings per share outlook. Total revenue fell 1.4% year-over-year (down 2.2% on a constant currency basis) in the quarter, with comparable store sales up 2.4%. Foot Locker and Kids Food Locker experienced comparable store sales growth of 2.8%, while Champs Sports and WSS experienced comparable store sales growth of 2.8% and 1.8%, respectively. Foot Locker experienced gross margin expansion of 230 basis points year-over-year in the quarter, but the company’s non-GAAP earnings per share of $0.33 was lower than expectations. … Read more

Exxon Mobil’s Permian Assets Performing Well, Structural Cost Reductions on Track

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Image Source: Exxon Mobil By Brian Nelson, CFA Exxon Mobil (XOM) recently reported better than expected third quarter results, though performance faced some headwinds from lower industry refining margins and reduced natural gas prices. Total revenues and other income fell 0.8% in the quarter on a year-over-year basis, while earnings excluding identified items (non-GAAP) fell to $8.6 billion from $9.2 billion in the year-ago period. Diluted earnings per common share came in at $1.92 versus $2.25 in the same period a year ago. Management had the following to say about the quarter: We delivered one of our strongest third quarters in a decade. Our industry-leading results continue to demonstrate how our enterprise-wide transformation is improving the structural earnings power of … Read more