Brian Nelson

The April Edition of Our Dividend Growth Newsletter!

by

S&P and Our Portfolio Hit All-Time Highs, 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. Economic data throughout March was mostly positive, although the debacle in Cyprus, continued stagnation in Europe, and questionable growth in China may lead some to believe otherwise. Oddly, the headlines aren’t much different than they were a year … Read more

Firms Raising Their Dividends in the Week Ending March 29

by

Very few firms raised their dividend during the week ending March 29. To access our dividend reports, please click here. Firms Raising Their Dividends This Week: Camden National (CAC): now $0.27 per share quarterly dividend, was $0.25. City Holding Company (CHCO): now $0.37 per share quarterly dividend, was $0.35. The Female Health Company (FHCO): now $0.07 per share quarterly dividend, was $0.06. Shoe Carnival (SCVL): now $0.06 per share quarterly dividend, was $0.05. Signet Jewelers (SIG): now $0.15 per share quarterly dividend, was $0.12. Washington Federal (WAFD): now $0.09 per share quarterly dividend, was $0.08.

Why Finish Line Is Running After a Weak Fourth Quarter

by

Shares of athletic footwear retailer Finish Line (click ticker for report: ) are soaring today after the firm announced lackluster fourth quarter results. Revenue fell slightly on a reported basis, though when adjusted to reflect a comparable selling period, revenue ticked up 4% compared to a year ago—still slightly below expectations. Earnings per share fell 6% year-over-year to $0.76, but were up about 3% when excluding the extra week of fiscal year 2012’s fourth quarter. Same-store sales increased just 0.7% year-over-year, driven by a 21% increase in digital sales. We were disappointed in the huge divergence between Finish Line and rival Footlocker (click ticker for report: ), which posted same-store sales growth of 7.9% in its fourth quarter. Footlocker’s superior … Read more

Will T-Mobile’s iPhone 5 Deal Change the Wireless Industry?

by

Tuesday afternoon, wireless carrier T-Mobile finally relented and announced that it will begin carrying Apple’s (click ticker for report: ) iPhone. Bears can attack market share numbers all day, but we’ve shown plenty of evidence supporting why the iPhone is exceptionally popular. Commscore showed data giving Apple 37.8% market share in January, Verizon (click ticker for report: ) reported that iPhones accounted for 63% of smartphones during the fourth quarter, and AT&T (click ticker for report: ) had iPhones account for 84% of its smartphone mix during the same period. Demand for the product remains robust, in our view. Regardless, T-Mobile’s iPhone strategy is a stark departure from industry norms. T-Mobile will finance the phone, allowing consumers to purchase an … Read more

Will Tiffany Shine in 2013?

by

Luxury jeweler Tiffany (click ticker for report: ) announced lackluster fourth quarter results late last week, but provided relatively upbeat guidance. Revenue grew 4% year-over-year to $1.2 billion, falling just a touch short of consensus estimates. Earnings per share rose 1% year-over-year to $1.40, a few cents higher than consensus expectations. For the full-year, revenue rose 4% to $3.8 billion while earnings per share dropped 5% to $3.25. During the fourth quarter, Asia-Pacific continued to be the company’s growth driver, with constant currency same-store sales growth of 6% driving total constant currency sales growth of 10%. Stores generated a sterling $4,500 in sales per square foot, and that number looks poised to grow in fiscal year 2013, even though the … Read more

Sonic Posts a Solid Second Quarter

by

Fast-food restaurant Sonic (click ticker for report: ) reported solid second quarter results Monday afternoon. Revenue fell 3% year-over-year to $111 million as the company lapped a leap year in the same period of last year, putting the number in-line with consensus estimates. Nevertheless, earnings increased 67% year-over-year to $0.05 per share, which was also in-line with consensus expectations. For the quarter, same-store sales (excluding the extra day) jumped 1.3% year-over-year on a systemwide basis, but rose 3.3% at company owned locations. Divergence between company-owned and franchise-owned restaurants is not uncommon, and this continued gap could continue for a variety of reasons, including the owner’s skill level and promotional execution. Regardless, the results were relatively strong, suggesting the company could be … Read more

FedEx Lowers Its Guidance…Again

by

International shipping giant FedEx (click ticker for report: ) reported weak third quarter results and a light outlook as its customers have flocked towards lower cost shipping options. Revenue grew 4% year-over-year to $11 billion, slightly above consensus expectations. Earnings fell 21% year-over-year on a non-GAAP basis to $1.13 per share, as operating margins declined 330 basis points to 5.4%. On a segment basis, FedEx Express revenue grew just 2% year-over-year to $6.7 billion, with volumes and pricing up 1%, respectively in the US. International Economy shipping volumes grew 12%, while International Priority volumes increased just 2%. As a result, average export revenue per package fell 3%, leading segment operating margins down 350 basis points to 1.8%. CEO Fred Smith … Read more

Michael Dell May Have to Sweeten His Offer

by

Bidding for control of Dell (click ticker for report: ) between CEO/founder Michael Dell’s consortium, Carl Icahn, and Blackstone appears to be heating up. At this point, we’re fairly confident shareholders will receive more than the initial offer of $13.65, but how much more remains unknown. We think $15 is reasonable, but we would not be surprised to see the firm fetch a higher price with the amount of cash available for financing. Still, merger-risk arbitrage is not Valuentum’s style, so we won’t take a position in the portfolio of our Best Ideas Newsletter.

Strong Iron Ore Supply Weighs on Rio Tinto

by

Over the past several weeks, the diversified mining sector has been under attack, as Vale (ticker for report: ), BHP (click ticker for report: ) and Best Ideas Newsletter holding Rio Tinto (click ticker for report: ) have seen their share prices decline considerably. Given the relative performance of the S&P 500, as well as improving macro fundamentals in the United States, the decline may seem inexplicable—until we consider the dynamics of the iron ore industry. Iron ore (one of the most important and profitable commodities in recent years) prices rose over 60% in relatively short order during the beginning of the year, suggesting robust demand from China. However, China responded aggressively to the rise in prices, accusing the big … Read more