Exclusive Analysis for the Discerning Investor
Brian Nelson Chipotle is a fantastic company with excellent growth prospects. Shares, however, are priced to perfect execution, which cannot be guaranteed in the ultra-competitive fast-casual space.
Hasbro put up a fantastic third quarter, and we continue to like the company as an income growth idea.
We knew something was terribly wrong. IBM’s (IBM) earnings quality had been waning, and we thought a big miss might be on the horizon. We wrote here in January 2014: Never did we ever think we’d be using Big Blue as an example of poor earnings quality, but its fourth-quarter 2013 results, released January 21, fit the mold. The first is revenue growth. IBM’s fourth-quarter 2013 revenue dropped 5.5%, a pace that exceeded that of the 4.6% drop for the year, indicating an acceleration of the revenue decline. We’re viewing this as a sign that the worst may still be ahead of Big Blue as it tries to steer the company back to growth. Without a solid backdrop of revenue growth, earnings-per-share expansion will … Read more
Let’s take a look at dividend increases for the week ending October 17.
Honeywell and Textron raised full-year 2014 guidance, and General Electric thinks organic revenue growth for the year will be at the high-end of the 4%-7% guided range. Still, their outlooks for 2015 will trump any performance during the remainder of this year.
The markets rallied today, but next week will be very important. We’re monitoring the credit markets closely for hints on risk-taking and its impact on the direction of the broader equity markets.
Consensus estimates aside, Google (GOOG, GOOGL) issued a very strong third quarter Thursday. The firm reported consolidated revenues of $16.52 billion in the quarter, an increase of 20% on a year-over-year basis. Non-GAAP operating income for the period was $5.36 billion, which compares to non-GAAP operating income of $4.62 billion in last year’s quarter, an increase of 16%. Non-GAAP EPS in the third quarter of $6.35 advanced 12.8% over the $5.63 mark in the prior-year period. Much like that which occurred in eBay’s (EBAY) third quarter, which it reported earlier this week, operating leverage was absent in Google’s business model during the period. Google’s bottom-line growth rate was still solid, but we would have liked to see earnings growth in excess … Read more
Crude oil prices continue their slide, European economies in free-fall, and earnings outlooks have been muted.
Kinder Morgan (KMI) has moved to the top of our watch list after it made the decision to bring in-house Kinder Morgan Energy Partners (KMP), Kinder Morgan Management (KMR), and El Paso Pipeline Partners (EPB), thereby reducing its business structure risk as a holder of master limited partnerships (MLP), which remain heavily dependent on access to external new capital (something we’re not fond of). Holding an MLP in the newsletter portfolios is not a risk we take lightly. On Wednesday, Kinder Morgan (KMI) reported that cash available to pay dividends advanced 2.6% in the third quarter, to $435 million. The solid performance facilitated a dividend increase to $0.44/share on a quarterly basis, a 2.3% jump from previous levels and a … Read more
News hit several weeks ago that eBay (EBAY) would separate its Marketplaces operations and its PayPal operations into two publicly-traded companies, a move that we think is a good idea to unlock shareholder value. Creating two standalone businesses best positions eBay and PayPal to capitalize on their respective growth opportunities in the rapidly changing global commerce and payments landscape, and is the best path for creating sustainable shareholder value. eBay and PayPal will be sharper and stronger, and more focused and competitive as leading, standalone companies in their respective markets…As independent companies, eBay and PayPal will enjoy added flexibility to pursue new market and partnership opportunities. And we are confident following a thorough assessment of the relationships between eBay and … Read more