Brian Nelson

Home Depot’s Third-Quarter Performance Better Than Lowe’s

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On Tuesday, Home Depot (HD) reported excellent third-quarter results. Total sales advanced 7.4% from the third quarter of last year as comparable store sales jumped by a similar amount – comparable sales for the US were 8.2%. Operating income jumped an impressive 32.3% from the same period a year ago, while net earnings for the period increased 28.4% on an adjusted basis, to $0.95 per share. The top-line strength and significant operating leverage was on display during the quarter, and Home Depot was quite positive for the remainder of fiscal 2013, too: Based on year-to-date performance and outlook for the remainder of the year, the company raised its fiscal 2013 sales guidance and now expects sales to be up approximately … Read more

TJX Companies and Urban Outfitters Post Strong Growth in 3Q

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TJX Companies (TJX) and Urban Outfitters (URBN) both showed impressive sales growth during their respective fiscal third quarters (results released this week). TJX Companies Has Years of Store Growth and Earnings Expansion Ahead of It TJX Companies, one of the largest off-price retailers of apparel and home furnishings in the US, released solid third-quarter results Tuesday. Net sales advanced 9%, while consolidated same-store sales increased 5% on top of 7% growth in the prior-year period. The company’s consolidated pre-tax profit margin advanced 0.9 percentage points thanks in part to buying and occupancy leverage and easier year-over-year overhead comparisons. Adjusted diluted earnings-per-share was solid during the quarter, advancing to $0.75 from $0.62 in the prior-year period (a 21% increase). Fiscal-year-to-date, cash … Read more

Best Buy Tumbles Back to Our Fair Value Estimate

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On Tuesday, Best Buy (BBY) reported decent third-quarter results considering the intense competition from both brick-and-mortar locations and online powerhouses. Revenue was essentially flat from the same period a year ago, as comparable store sales of 0.3% improved substantially from the year-ago period’s 5.1% decline (see image below). Leading the charge in the quarter was Best Buy’s online presence, where same-store sales advanced 15.1% in the quarter, accelerating from the 10.3% pace set in the third quarter of last fiscal year. Increased traffic, a higher average order value, and a higher number of online orders being placed in retail stores benefited domestic online revenue. The rate of the company’s international comparable same-store sales decline slowed to 6.4% from more than … Read more

Medtronic Posts Better Than Expected Fiscal 2Q Results

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Cardiac and vascular medical giant Medtronic (MDT) reported solid fiscal second quarter results Tuesday. Revenue advanced 3.3% on a constant-currency basis, while non-GAAP diluted earnings per share jumped to $0.91, up about 3% from last year’s period. Both measures were slightly better than expected, though we note margins could have been a bit stronger. International revenue jumped 5% on a constant currency basis, while emerging market revenue leapt 13% excluding currency. Revenue in the firm’s ‘Cardiac and Vascular’ group performed well (up 4%, excluding currency), as Implantable Cardioverter Defibrillators (ICDs)* grew 4% and drug-eluting stents advanced 8%, the latter bolstered by share gains from the firm’s Resolute Integrity drug-eluting stent. Sales in the company’s ‘Restorative Therapies’ segment jumped 2% (excluding … Read more

Salesforce.com Continues Rapid Revenue Expansion; Targets $5 Billion+ in Revenue for Fiscal 2015

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On Monday, Salesforce.com (CRM), one of the largest firms in enterprise cloud computing, reported excellent fiscal 2014 third quarter results. Revenue surged 36% year-over-year, while deferred revenue expansion largely kept pace (up 34% year-over-year). Unbilled deferred revenue, or business that is contracted but unbilled and off balance sheet, was $4.2 billion, up 40% from the same period a year-ago. Though non-GAAP earnings per share came in at a meager $0.09 during the period, the firm posted operating cash flow of $138 million, which was up 30% on a year-over-year basis. Capital expenditures jumped to $74 million from $51 million in the year-ago period, resulting in free cash flow of $64 million (or about 6% of sales). Salesforce.com ended the quarter … Read more

Stock Market Euphoria Continues; Dow Surpasses 16,000, S&P Jumps Above 1,800

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Disclaimer: This article is for informational purposes only and should not be considered a solicitation to buy or sell any security or to engage in any asset allocation decisions. Please seek professional advice from your financial advisor who knows your individual needs and risk tolerances. Key Takeaways è Stock prices have become disconnected from current fundamentals, and euphoria in the stock market is running wild. è We encourage investors to assess their exposure to small caps (equities with market capitalizations under $2 billion) and determine whether a price fall of 25% or more in coming years would be tolerable. Still, we’ll likely see higher prices for small caps before we see lower ones. è The current forward 12-month P/E ratio … Read more

Dividend Increases for the Week Ending November 15

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Below we provide a list of firms that raised their dividends during the week ending November 15. The dividend reports of covered firms on this list will be updated shortly with the new information. To access our dividend reports, please click here (or use our ‘Symbol’ search box in our website header). Firms Raising Their Dividends This Week Automatic Data Processing (ADP): now $0.48 per share quarterly dividend, was $0.435. EMC Insurance Group (EMCI): now $0.23 per share quarterly dividend, was $0.21. GasLog (GLOG): now $0.12 per share quarterly dividend, was $0.11. Griffon Corporation (GFF): now $0.03 per share quarterly dividend, was $0.025. LyondellBasell Industries N.V. (LYB): now $0.60 per share quarterly dividend, was $0.50. Medical Properties Trust (MPW): now $0.21 … Read more

Valuentum’s November Edition of Its Best Ideas Newsletter!

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The Best Ideas Portfolio Continues to Trounce the Market, by Brian Nelson, CFA For our new members, this is our Best Ideas Newsletter. We house our Best Ideas portfolio in this monthly publication. The Best Ideas portfolio can always be found on page 8 of the Best Ideas Newsletter. The Best Ideas portfolio includes companies that have passed the test of our analyst team. First, these firms generally have scored highly on the Valuentum Buying Index, a rating system that ranks the timeliness of ideas on the basis of 1 through 10 (with 10 being the best). Once a best idea is added to the portfolio, we typically hold on to it until it registers a 1 or 2 on … Read more

Wal-Mart’s Free Cash Flow Tumbles; Earnings Outlook Continues to Deteriorate

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On Thursday, Wal-Mart (WMT) issued relatively lackluster third-quarter results. Consolidated net sales advanced 1.6% (2.7% on a constant-currency basis), but comparable store sales fell 0.3% in Walmart US and only nudged 1.1% higher at Sam’s Club (both measures exclude the impact of fuel). Consolidated operating income increased 3.6% thanks to improved performance across the board. Reported third-quarter diluted earnings per share from continuing operations came in at $1.14 per share, a 6.5% jump compared to the measure in the year-ago period. For the nine months ended in October, net cash from operating activities came in at $13.3 billion and capital expenditures were $9.5 billion, resulting in free cash flow of $3.8 billion, or about 1.1% of Wal-Mart’s massive revenue base. … Read more

Cisco’s Outlook Comes up Short; Shares under Pressure

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On Wednesday, networking giant Cisco (CSCO) reported mixed fiscal first-quarter results (ending in October), and the company’s order performance in the period and fiscal second-quarter guidance came up short versus expectations. Revenue in the fiscal first-quarter dropped 2% year-over-year, but non-GAAP net income and earnings per share advanced 11.6% and 10.4%, respectively, from the prior-year period. Non-GAAP diluted earnings per share of $0.53 came in a few pennies better than expected. Net cash from operations advanced to $2.65 billion from $2.47 billion in the year-ago period, while capital expenditures expanded to $315 million from $265 million. Free cash flow was $2.3 billion, or 19.3% of sales (a strong figure). Cash and investments totaled $48.2 billion and short and long-term debt totaled … Read more