Brian Nelson

Siemens Simplifies; Nokia Diversifies

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German conglomerate Siemens (click ticker for report: ) put its 50% stake in Nokia-Siemens Networks on the chopping block just a few weeks ago, and the firm already has found a buyer: Nokia (click ticker for report: ). Nokia will pay Siemens $2.2 billion (€1.7 billion) for the half of the joint-venture it doesn’t already own—not a bad price for a business that reported €13.8 billion in revenue and €822 million in operating profit during 2012. With adjusted EBITDA of €1.09 billion, Siemens let go of the stake for less than 3x EBITDA.   Image Source: Nokia-Siemens Networks Annual Report With its mobile phone business sputtering, we certainly like the deal for Nokia. The joint-venture has been free cash flow … Read more

Price Momentum Got Ahead of Fundamentals at BlackBerry

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Canadian smartphone maker BlackBerry (click ticker for report: ) reported weak results for its fiscal year 2014 first quarter Friday morning. Revenue increased 9% year-over-year to $3.1 billion, which was well below consensus estimates. Earnings per share had several moving parts, but when adjusted for one-time issues, came in at a loss of $0.06. The loss was a drastic improvement from the same period a year ago when the company lost nearly $1 per share, but fell short of consensus expectations calling for a slight profit. BlackBerry 10 shipments were also below consensus estimates, coming in around 2.7 million units compared to the 3 million units the Street anticipated. Geographic Performance Image Source: BBRY Q1 FY2014 Earnings Release Geographic data reveals exactly … Read more

North America Remains Nike’s MVP

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Thursday afternoon, athletic apparel goliath Nike (click ticker for report: ) announced strong fourth-quarter results. Revenue increased 7% year-over-year to $6.7 billion, modestly exceeding consensus expectations. Earnings per share surged 27% year-over-year to $0.76 per share due mostly to increased margins, better than consensus estimates. For the full year, free cash flow totaled $2.4 billion on $25 billion of sales. A few items struck us as the prevailing stories in Nike’s fourth quarter and fiscal year 2013. First, the sustained success of Nike’s North American business is incredible. Revenue in Nike’s “mature” segment increased 12% year-over-year during the fourth quarter to $2.7 billion. For the full-year, revenue in North America increased 18% year-over-year to $10.4 billion—the first time the company … Read more

Dividend Increases for the Week Ending June 28

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Below we provide a list of firms that upped their dividends for the week ending June 28. 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. Firms Raising Their Dividends This Week Duke Energy (DUK): now $0.78 per share quarterly dividend, was $0.765. Glacier Bancorp (GBCI): now $0.15 per share quarterly dividend, was $0.14. Matson (MATX): now $0.16 per share quarterly dividend, was $0.15. Spreadtrum Communications (SPRD): now $0.10 per share quarterly dividend, was $0.095. Wayne Savings Bancshares (WAYN): now $0.08 per share quarterly dividend, was $0.07. Worthington Industries (WOR): now $0.15 per share quarterly dividend, was $0.13. ZAIS Financial Corp (ZFC): now $0.45 per share … Read more

Revenue Growth Not an Issue at Synaptics

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After persistent rumors surrounding weakness in Samsung Galaxy S4 sales weighed on the stock, touch-screen control supplier Synaptics (click ticker for report: ) raised its fourth quarter outlook Tuesday. The increase wasn’t a small one either–the firm increased its revenue outlook to the range of $227-$230 million, much higher than the initial guidance calling for revenue in the range of $190-$205 million. Gross margins are expected to be around 50%, which will be a modest improvement from the previous quarter. Though no company ever likes to see demand cuts from one of its largest customers, it doesn’t appear that the cut will have much impact on Synaptics. The firm provides technology for all sizes of touch screen experiences, and it … Read more

DirecTV to Correct Overstated Subscriber Numbers

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Best Ideas Newsletter holding DirecTV (click ticker for report: ) announced Thursday that it had over-reported Latin American subscribers by approximately 100,000 accounts at the end of 2012. The error came from the 93%-owned Sky Brasil, which continued the practice into 2013, leading to subscribers being over-reported by 200,000 accounts at the end of the first quarter. Unfortunately, it appears these customers also received service without paying after the inflated accounts were improperly terminated. Needless to say, we’re not pleased with the artificial account inflation, which not only boosted raw subscriber numbers but also lowered churn. DirecTV anticipates churn will increase during the second quarter in Brazil, but it will have no impact on the rest of the business. The … Read more

Precision Castparts Scoops Up Permaswage; Commercial Aircraft Orders Keep Rolling In

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On Thursday, Best Ideas Newsletter portfolio holding Precision Castparts (click ticker for report: ) acquired California-based aerospace supplier Permaswage for $600 million. Permaswage specializes in swage fittings, and its technology is included in almost every major commercial and military aircraft program. The deal is right in Precision Castparts’ wheelhouse as it improves dollar-content per aircraft and enhances the firm’s already-robust product suite. Precision Castparts’ CEO Mark Donegan should have no problems folding in the firm’s state-of-the-art operations and driving material synergies across the board. Though profitability disclosures are limited, we have a high degree of confidence that cost-savings and revenue enhancements will trump any meaningful premium that may have been paid above the entity’s fair value. We also think the deal strengthens Precision Castparts’ position in separable … Read more

Dish Won’t Go to War Over Clearwire; What’s Next?

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Late on Wednesday afternoon, news hit the tape that Dish Network (click ticker for report: ) would end its pursuit for Clearwire (CLWR), paving the way for Sprint (click ticker for report: ) to assume full control of the company for $5 per share (in line with our fair value estimate). Although we thought as well as the market thought (since shares of Clearwire were trading above the Sprint buyout price prior to the withdrawal) that Dish Chairman and founder Charlie Ergen would make a higher offer for Clearwire, Ergen may have known a bit more than he led onto during the bidding process, given that the FCC just approved draft rules for the auction of additional spectrum one day … Read more

Positive US Housing Data Persists; The Recovery is Real

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Through the course of this week, we’ve received a number of positive data points suggesting the US housing recovery is well on its way. Long-time Valuentum members know that we’ve been very bullish on the housing turn since early 2012 (view the January 2012 edition of our Best Ideas Newsletter here). The S&P/Case-Shiller Index kicked off the week’s events with a 12% year-over-year price increase in the 20-city composite index for April (there’s a two month lag in the data). The 10-city index also rose 11.6% year-over-year. Both metrics have recovered to 2004 levels, but both remain well below the 2007 all-time (“bubble”) highs. Image Source: S&P Dow Jones Indices Image Source: S&P Dow Jones Indices We were also very … Read more

Verizon Might Jump Into Canada

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After weeks of mounting speculation, US telecom giant Verizon (click ticker for report: ) has allegedly offered a deal valued at $700 million to acquire Canadian mobile provider Wind Mobile. In addition to potentially acquiring Wind Mobile, Verizon is also in talks to acquire another carrier, Mobilicity, and it could enter the bidding for government spectrum offers. Why is Verizon interested now? For years, Canadian regulations have previously disallowed a foreign entity from fully-owning a domestic telecom business, but it has only been recently that ownership rules have started it loosen. Still, the country remains dominated by the “Big Three” in the mobile carrier space: Rogers Communications (RCI), BCE (click ticker for report: ), and Telus (TU). However, Canadian regulators … Read more