Brian Nelson

Astronics Surges on Record Results

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Best Ideas Newsletter holding Astronics (click ticker for report: ) reported a first quarter that displayed the company’s fantastic earnings potential. Revenue jumped 14% year-over-year to $76 million, which exceeded consensus estimates by a few million dollars. Earnings growth was robust as earnings per share rose 40% year-over-year to $0.56, which was significantly above consensus estimates. The firm’s backlog increased $4.5 million sequentially to a record high of $119 million. To top it off, the firm generated $12.5 million in free cash flow. Aerospace continued to be the standout segment. Total aerospace revenue rose 16% year-over-year to $71.7 million. While commercial revenue also grew 16%, business jet revenue jumped 30% year-over-year and FAA/Airport revenue increased 48% year-over-year. Although the FAA … Read more

Strong Earnings Powers CBS; Tony Stark Boosts Disney

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Media stocks have been on a fantastic run as of late, and the trend looks to continue after CBS (click ticker for report: ) posted great results and Disney’s (click ticker for report: ) Iron Man 3 put up a blockbuster debut at the box office internationally and domestically. Let’s take a look at recent events. CBS CBS posted strong first quarter results, driven by a 6% year-over-year increase in revenue to $4 billion, which resulted in a 24% jump in operating earnings per share to $0.73. Both figures easily exceeded consensus expectations. Strong headline results consummated in $553 million in free cash flow. Results were solid for CBS across all of its segments, though entertainment led the charge with … Read more

Facebook and LinkedIn Early In Monetization; Neither a Bargain

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During the past week, publicly traded social media giants Facebook (click ticker for report: ) and LinkedIn (click ticker for report: ) both reported strong first quarter results. Facebook’s revenue grew 38% year-over-year to $1.46 billion, exceeding consensus estimates, while earnings per share were flat at $0.12. LinkedIn’s revenue surged 72% year-over-year to $325 million driving earnings per share of $0.45—both figures handily better than consensus expectations. Cash flow at both companies revealed significantly different stories. LinkedIn generated roughly $59 million in free cash flow as the company’s research and development spending was kept in check. Facebook posted negative free cash flow of $12 million as the firm invested heavily in mobile, servers, and data centers. Both firms’ valuations are … Read more

China and North America Help Drive GM

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Global auto giant General Motors (click ticker for report: ) reported much better than expected first quarter results earlier this week. Revenue, though down 2% year-over-year at $36.9 billion, easily exceeded consensus expectations. Earnings per share, adjusted for one-time items, fell 28% year-over-year to $0.67, which was also far stronger than anticipated. Automotive free cash flow wasn’t incredibly strong, turning to a negative $1.3 billion. Not surprisingly, North America was among the standout performers at GM driven by market share gains. Both Cadillac and Buick were fantastic in the United States, with sales growing 38% and 28%, respectively. We think the brands have done spectacular job fighting back against the strong performance of the likes of Audi and BMW with … Read more

Dividend Growth Holding Phillips 66’s Earnings Boom

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Earlier this week, Dividend Growth Newsletter holding Phillips 66 (click ticker for report: ) reported strong first quarter results on the back of fantastic refining margins. Adjusted earnings per share surged 83% year-over-year to $2.19, handily exceeding consensus estimates. The firm generated over $1.4 billion in free cash flow which it returned to shareholders in part via the repurchase of 6.4 million shares for $382 million and $194 million in dividends. Refining profitability drove a high percentage of the earnings growth at Phillips 66, as refining profits doubled to $909 million. The firm realized a profit margin of $13.94 per barrel. Advantaged crude, which the firm purchases at a discount to relative global benchmarks, jumped 800 basis points year-over-year to … Read more

Intel’s New Management Team Looks Fit for the Challenge

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Earlier this morning, Best Ideas and Dividend Growth Newsletters holding Intel (click ticker for report: ) announced that it has ended its search to find a replacement for current President and CEO Paul Otellini. Stepping into the CEO role will be current COO Brian Krzanich, while Renee James will take the helm as President. Krzanich appears to be a typical Intel hire, in our view. Every Intel CEO has come from within after spending several years at the firm. Krzanich joined the company in 1982, and has since held various roles throughout the development and business side of the firm. His expertise lies in manufacturing, which has been a crown jewel of Intel’s competitive advantage over the past several years. … Read more

Visa’s Second Quarter Was Fantastic

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Credit and debit payment network provider Visa (click ticker for report: ) announced fantastic second-quarter results Wednesday afternoon. Revenue for the quarter jumped 15% year-over-year to $3 billion, easily exceeding consensus estimates. Earnings per share, adjusted for a one-time tax benefit during the second quarter of the prior year, increased 20% year-over-year to $1.92. Due to litigation expenses, free cash flow does not look great year-to-date, but management is confident the company can generate $6 billion in free cash flow for the full-year. Considerable focus on the call addressed the company’s new exclusive card branding with JP Morgan’s (click ticker for report: ) credit unit—not surprising given CEO Charlie Scharf’s previous position as Chase’s retail financial services chief. The deal … Read more

The May Edition of Our Dividend Growth Newsletter!

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All-Time Market Highs Complicate The Yield Hunt – By Brian Nelson, CFA Our Dividend Growth Portfolio (see page 5) continues to post strong results, with several names hitting fresh all-time highs over the past few weeks. With our cash balance relatively high, we anticipate to capitalize on any material pullback by adding to existing positions or opening new ones. We’ve had our sights on a few names on our watchlist (page 12) that we believe could add some outperformance and diversification to our portfolio. Although market fundamentals remain relatively strong, the increase in equity prices has had the unfortunate effect of making attractive yields scarcer. Strong earnings performance during the first quarter has pushed down the yields of some of … Read more