Brian Nelson

iWatch? iTV? Apple’s Innovation Death a Media Construct

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Although it remains very much a head-scratcher to us, shares of Apple (click ticker for report: ) have continued to fall towards Jeff Gundlach’s $425 price target. We’ve been mostly silent on the company’s share slide, because, frankly, we don’t think the fundamental story has changed at all. Recent news regarding the potential of the iWatch and the long-awaited iTV has piqued our interest, as we believe both could add upside to earnings. Apple’s design genius John Ive, known by some to be as integral to Apple’s design as the late Steve Jobs, has spent years dissecting Nike (click ticker for report: ) and other watches. We could speculate all day about the possibilities of an iWatch, but we find … Read more

Best Buy Showing Signs of Life

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Big box retailer Best Buy (click ticker for report: ) posted solid results for its fiscal year 2013 fourth quarter. Thanks to an extra selling week, revenue was roughly flat year-over-year at $16.7 billion, exceeding consensus estimates. Earnings, adjusted to reflect operating expenses, declined 25% year-over-year to $1.64 per share, which was better than consensus expectations. Overall, sales slipped about 1%, but still totaled $49.6 billion for the year. The domestic segment is showing signs of life, with domestic same-store sales increasing 0.9% and online growth jumping 11.2% during the quarter. Overall sales fell 0.3% year-over-year as the firm shuttered 49 big box locations. The firm experienced a modest increase in SG&A costs, which were up 140 basis points as … Read more

Wisconsin Deteriorates But Chicago Stands Out at Roundy’s

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  Grocery store chain Roundy’s (click ticker for report: ), which operates under several banners in Wisconsin, Minnesota, and Illinois, reported solid fourth quarter results late last week. Sales increased 1.4% year-over-year to $982 million, roughly in line with consensus expectations. Earnings weren’t as strong, falling 37% year-over-year to $0.19 per share—a figure that excludes the impact of a few one-time events. The trend we saw at Roundy’s throughout 2012 continued in the fourth quarter: Chicago’s Mariano’s chain did fantastically well, “exceeding” sales and profit expectations while posting double digit same-store sales growth. On the other hand, the core business in Minnesota and Wisconsin continues to struggle, dragging total same-store sales down 2.1%. These markets, once underserved by Target (click … Read more

February Auto Roundup

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Let’s take a look at February auto sales, which appear to have come in at a SAAR around 15.4 million units. Ford Best Ideas Newsletter holding Ford (click ticker for report: ) posted a solid February, selling 195,822 vehicles—a 9% increase compared to the same month a year ago. We think the number is even more impressive considering February 2012 had fairly good weather, while February 2013 was viciously cold and snowy for much of the United States. Strength was broad based, though utilities (up 21%) greatly outperformed both cars and trucks, which were up 6% and 4% year-over-year, respectively. Both the Edge (up 29%) and Explorer (up 59%) were hot sellers during February, possibly the result of a cold … Read more

Will the FDA Crush Intuitive Surgical?

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Shares of Intuitive Surgical (click ticker for report: ) plunged in trading Thursday afternoon, but recovered much of the loss Friday morning after the FDA announced it was launching an investigation into issues arising from use of the da Vinci systems. The FDA sent surveys to several hospitals, and it is looking to determine whether a rise in incident reporting from robotic surgeries is an issue with the system, the patient, or the surgeon. From initial reports, it appears that few of the issues have originated from robotic malfunction, but rather from user error. We also think it’s important to note that Intuitive Surgical hasn’t experienced any increase in the already small death rate. While it appears the firm is … Read more

The Good, The Bad, and The Ugly: Macy’s, Kohl’s and JC Penney

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The fourth quarter is easily the most important quarter for retailers, and we saw winners and losers surface. The fortunes couldn’t have been more different, so let’s take a look at the results of the department stores. The Good: Macy’s Macy’s (click ticker for report: ) fourth quarter was among the best of the department stores, if we exclude performance from higher-end Nordstrom (click ticker for report: ). Macy’s took advantage of JC Penney’s (click ticker for report: ) movement away from discounting to run several promotional sales, which drove revenue growth of 7% year-over-year to $9.4 billion during the quarter (with one extra week of sales). Earnings, net of one-time expenses, increased 21% year-over-year to $2.05 per share, easily … Read more

Firms Raising Their Dividends in the Week Ending March 1

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The flurry of dividend increases continues. Below we provide a list of firms that upped their dividends for the week ending March 1. 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 Acadia Realty Trust (AKR): now $0.21 per share quarterly dividend, was $0.18. American Realty Capital Properties (ARCP): now $0.075 per share monthly dividend, was $0.7458. Big 5 Sporting Goods Corporation (BGFV): now $0.10 per share quarterly dividend, was $0.075. CBL & Associates Properties, Inc. (CBL): now $0.23 per share quarterly dividend, was $0.22. Cedar Fair (FUN): now $0.625 per share quarterly distribution, was $0.40. Chico’s (CHS): … Read more

Dollar Tree’s Strong Fourth Quarter Quells Fears in the Sector

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Wednesday morning, discount retailer Dollar Tree (click ticker for report: ) announced solid fourth quarter results. Revenue jumped 15% year-over-year to $2.3 billion, slightly above consensus estimates. Earnings also exceeded consensus expectations, up 26% year-over-year to $1.01 per share. Same-store sales at the chain increased 2.4% during the quarter, reflecting broad-based geographic and category space. Not surprisingly, comps accelerated in December as the firm’s value proposition drove holiday shoppers into the store. The firm also expanded its frozen goods selection, which was put into 329 new stores in 2012. Management indicated that the company plans on equipping more stores with refrigeration capabilities, which could add incremental higher-margin sales. Gross margins were 10 basis points higher year-over-year during the fourth quarter … Read more

Big 5’s Quiet Success Continues

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Sporting goods retailer Big 5 (click ticker for report: ) announced wonderful fourth quarter results Tuesday afternoon. Revenue increased 7% year-over-year to $243 million, slightly above consensus estimates. Earnings per share were considerably better, as the company was roughly break-even during the fourth quarter of 2011, but earned $0.19 per share in the fourth quarter of this year. For the full-year, earnings per share were 30% higher at $0.69. We profiled Big 5 in June of 2011, and shares have appreciated very nicely since. Same-store sales during the quarter were strong, jumping 6.5% from the same period a year ago. Big 5 admitted to benefiting from the post-Sandy Hook jump in guns and ammunition sales, but we also think the company … Read more