Brian Nelson

Williams’ Rejection, Medtronic’s Hike, eBay’s Sale, and Hershey’s Disappointment

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Williams Companies Rejects Offer from Energy Transfer Equity Natural gas pipeline company Williams Companies (WMB) has seen shares jump after Energy Transfer Equity (ETE) confirmed reports that it had made a bid to acquire the company. Despite the all-equity offer of $64 per share representing a 32% premium to Williams’ June 19 closing price, the offer was rejected by the firm as significantly too low. ETE has made multiple attempts to talk with Williams’ management about a possible merger in the past half year, and ETE has said its offer is contingent on the abortion of Williams’ pending purchase of Williams Partners (WPZ). The initial offer came on May 19, six days after Williams Companies announced it would buy Williams … Read more

Oracle’s Cloud Performance Leaves a Hazy Overall Outlook

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After reporting fourth quarter and full year results for fiscal 2015 on June 17, Oracle (ORCL) shares took a significant hit. It is easy to see the effect foreign exchange rates had on the quarterly results, but there is more to the miss than meets the eye. In the fourth quarter of fiscal 2015, Oracle reported revenue of ~$10.7 billion, a decrease of 5% as reported, or an increase of 3% on a constant currency basis. Driving the top line lower was a decrease in software and cloud revenue, more specifically new software licenses, where sales dropped 17%; new software licenses make up more than 20% of total revenue. Attempting to offset this significant drop was strong 29% growth in … Read more

Dividend Increases for the Week Ending June 19

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Below we provide a list of firms that raised their dividends during the week ending June 19. 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 Farmers & Merchants Bancorp (FMAO): now $0.22 per share quarterly dividend, was $0.21. FBR (FBRC): now $0.20 per share quarterly dividend, first dividend paid. First Bancorp (FNLC): now $0.22 per share quarterly dividend, was $0.21. Great Southern Bancorp (GSBC): now $0.22 per share quarterly dividend, was $0.20. Investar (ISTR): now $0.0078 per share quarterly dividend, was $0.0074. Medtronic (MDT): now $0.38 per share quarterly dividend, was … Read more

5 More Reasons Why We Think Kinder Morgan’s Shares Will Collapse

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This article was originally published on valuentum.com/. “…the credit rating agencies have a lot to think about. Kinder Morgan’s investment-grade credit rating is in part supported by the firm’s ability to access the equity markets to sell its own stock. But its share price is artificially propped up by the incorrect application of dividend discount models that are using financially-engineered dividends, which themselves are in part supported by the debt raised from an investment-grade credit rating, which is then used to keep raising debt and growing the dividend…and so on.” 5 More Reasons Why We Think Kinder Morgan’s Shares Will Collapse It may feel like something’s different at our independent equity research firm, but nothing has changed in the past … Read more

Target-CVS Agreement: What It Really Means

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Image Source: Mike Mozart Target (TGT) and CVS Health (CVS) announced an agreement June 15 in which CVS would acquire, rebrand, and operate Target’s pharmacies and clinics for the price of approximately $1.9 billion. After the deal closes, CVS will operate 1,660 of Target’s pharmacies in its stores under the CVS/pharmacy brand name. The nearly 80 Target clinics involved in the deal will be rebranded as MinuteClinic, and CVS plans to open up to 20 new clinics in Target stores, part of the CVS/minuteclinic goal to operate 1,500 clinics by 2017. Target and CVS also plan to open five to ten small, flexible store formats that will be branded TargetExpress and include a CVS/pharmacy. After Target’s recent Canada debacle, we … Read more

Business As Usual

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It may seem like something is different, but nothing has changed since the last edition of the Best Ideas Newsletter. We’ll continue to provide spot-on analysis across our entire coverage universe. For some of our new members that may not be familiar with our independent investment research firm, we publish two newsletter portfolios. The Best Ideas Newsletter portfolio is housed in this publication, the Best Ideas Newsletter, which we release on the 15th of the month. The other newsletter portfolio that we produce is the Dividend Growth Newsletter portfolio, and that portfolio is housed in the Dividend Growth Newsletter, which we release on the 1st of each month. The newsletters are a companion to the research we produce on our website on … Read more

The Under-reported Story: The Presence of Avian Influenza May Be the “New Norm”

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Source: Cal-Maine, Valuentum estimates; Urner-Barry Southeastern Regional Large Egg Market Price (per dozen eggs) Egg prices are soaring as the avian flu has run rampant across farms in Midwestern states. According to some studies, the outbreak has reduced the national flock by more than 10%, and it is the largest outbreak on record in US history. Egg prices are the highest they’ve been in some time, and investors may not be fully aware of the implications. A state of emergency has been declared in Iowa, where the impact may be the worst. Scientists believe the virus may recede as temperatures in the Midwest increase, but every company in the food products industry, big or small, is being impacted at the … Read more

Iron Prices to Move Higher, Ore Is It Wishful Thinking?

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A number iron ore producers–including Vale (VALE), BHP Billiton (BHP), Cliffs Natural Resources (CLF), and Best Ideas Newsletter portfolio holding Rio Tinto (RIO)–have seen share prices jump after reports that Chinese demand for the key ingredient in steel production will increase in the second half of 2015. This is good news for iron ore producers, as approximately half of the world’s steel is produced in China. According to Vale CEO Murilo Ferreira, Chinese imports of iron ore will increase significantly in the back half of this year as domestic production is expected to be down ~200 million metric tons. According to Ferreira, a significant amount–more than most realize–of Chinese iron ore producers have ceased operations, boosting the country’s import demand. … Read more

Friday Evening News

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Square to Go Public According to Forbes, San Francisco based mobile payment company, Square, is expected to go public sometime in 2015. In fact, sources close to the situation report that the firm is expected to file a confidential registration statement very soon, if it hasn’t happened already. Under the JOBS Act, emerging, growing companies can file for an IPO confidentially if they meet certain requirements, including having less than $1 billion in annual revenue. Internal debate over the ideal time for the firm’s IPO has clouded the situation, as has the appointment of co-founder and CEO Jack Dorsey as Twitter’s (TWTR) interim CEO. Also this week, Square launched a new credit card and phone reader designed to allow businesses … Read more

5 Reasons Why We Think Kinder Morgan’s Shares Will Collapse

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The facts have changed at Kinder Morgan (KMI). We’re removing the company from the Dividend Growth portfolio right now! The entire position will be eliminated at $40 per share. What was once an optimistic view of the entity’s decision to de-risk by consolidating its disparate master-limited-partnership structure has now turned into fear that the firm’s equity may collapse. From its overpriced valuation to its restrictive debt load to its poor Dividend Cushion ratio that warns of tremendous risks to its dividend growth plans, Kinder Morgan may turn into one of the worst-performing companies this year and into 2016. We’re getting out…and in a hurry. Here are 5 reasons why we think Kinder Morgan’s shares will collapse. 1) The Valuation Paradigm Has … Read more