Brian Nelson

House of Cards – A Sign That Netflix Can Become a Content Creator

by

Since activist investor Carl Icahn took a public stake, shares of Netflix (click ticker for report: ) have been on a tear. Shares really took off after the firm reported strong earnings for its fourth quarter and a bullish outlook for the first quarter of 2013. Shares have nearly doubled in 2013 alone, and it seems the market is getting even more bullish on Netflix. In our view, this has less to do with recent earnings trends, but rather, we believe the success of House of Cards has been a positive catalyst for the stock. The show has received fantastic reviews with an aggregate score of 9 on IMDB.com, and it has been mentioned in the same breaths as blockbuster … Read more

Pandora’s Market Share is Improving…But Profitability Continues to Flounder

by

Internet radio company Pandora (click ticker for report: ) announced the results for its fiscal year 2013 fourth quarter late last week. Results were mostly better than expected, with revenue surging 54% year-over-year to $125 million. Earnings were a penny higher than consensus forecasts, as the company lost just $0.04 per share, significantly better than the year prior. Pandora’s service continues to surge in popularity thanks to the convenience of mobile and continued market share gains. Hours listened jumped 53% year-over-year during the quarter to 4.05 billion hours, while hours listened for the year grew 70% year-over-year to 14.01 billion hours. Perhaps even more telling, the company’s share of the US radio market in February jumped to a whopping 8.48%, … Read more

Foot Locker Posts a Strong Fourth Quarter; Mr. Market Questions Guidance

by

Athletic footwear retailer Foot Locker (click ticker for report: ) announced fantastic fourth quarter results Friday morning, finishing off a tepid 2012. Revenue jumped 14% year-over-year to $1.7 billion thanks to an extra selling week, which was slightly better than consensus estimates. Earnings per share, adjusted for one-time impairment charges, jumped 33% year-over-year to $0.73 per share, slightly above consensus estimates. This did, however, include a $0.09 benefit from the extra week during the quarter. Same-store sales, one of our favorite metrics to measure the performance of retailers, were fantastic, growing 7.9% year-over-year. The winter quarter is notoriously strong as several of the companies partners, including Nike (click ticker for report: ) and adidas, release extremely popular basketball models; this winter … Read more

McDonald’s February Shows Stabilization

by

Dividend growth gem McDonald’s (click ticker for report: ) announced decent February results earlier this morning. On a reported basis, global same-store sales dropped 1.5% year-over-year, but when adjusted for a calendar shift, February same-store sales actually increased 1.7% globally. The US continued to be a weak spot, with same-store sales down 3.3% on a reported basis and flat on a comparable basis. This occurred during a month in which the company had several product introductions, but the firm also had to lap an incredibly difficult 11.1% same-store sales growth rate the firm posted in February 2012. We’re not incredibly disappointed in the US, and we will see comparisons get much easier toward the back half of the year. Europe … Read more

Firms Raising Their Dividends in the Week Ending March 8

by

The flurry of dividend increases continues. Below we provide a list of firms that upped their dividends for the week ending March 8. 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 Allied World (AWH): now $0.50 per share share quarterly dividend, was $0.375. Agree Realty (ADC): now $0.41 per share quarterly dividend, was $0.40. Amtrust Financial (AFSI): now $0.14 per share quarterly dividend, was $0.10. Canadian Natural (CNQ): now C$0.125 per share quarterly dividend, was C$0.105. Colgate-Palmolive (CL): now $0.68 per share quarterly dividend, was $0.62. Covanta (CVA): now $0.165 per share quarterly dividend, was $0.15. Devon … Read more

Best Idea EDAC Technologies Caps off 2012 With Huge Earnings Growth

by

Best Ideas Newsletter holding EDAC Tech (click ticker for report: ) announced fantastic fourth quarter results. Revenue rose 25% year-over-year to $28.4 million during the period, leaving the company with full-year revenue of $106.5 million, 23% higher than a year ago. Earnings growth was also strong, growing 24% year-over-year during the fourth quarter to $0.26 per share. For the full year, earnings increased a whopping 53% to $1.06 per share. We saw a nice improvement in gross margins during the fourth quarter, rising 140 basis points year-over-year to 19.3%. The higher-margin processing business that EDAC acquired when it purchased EBTEC helped boost overall gross margins. On the other side of the cost equation, SG&A rose nearly 43% on an absolute … Read more

Carl Icahn Now Mixing It Up With Dell

by

Late yesterday, it was reported that activist billionaire investor Carl Icahn has taken a 6% stake in shares of Dell (click ticker for report: ). Icahn has confirmed he has a position, and he sent Dell a letter describing what he thinks the company should do. Instead of going private, he wants Dell to execute a recapitalization, which includes $5.25 billion in new debt that will be used to leverage the company and pay out a dividend of $9 per share. Icahn Enterprises could provide the entire $5.25 billion in bridge financing. He also believes the $9 per share could be added to the existing price, unlocking additional value for shareholders. Icahn voiced his opinion on why the company should … Read more

Who’s Amazon’s Next Victim?

by

An interesting white paper was released recently, analyzing how Amazon (click ticker for report: ) is altering the retail landscape. The paper itself had some interesting insights, but our favorite takeaway of Placed’s work was the top ten companies at risk. 1.    Bed Bath and Beyond (click ticker for report: ) 2.    PetSmart (click ticker for report: ) 3.    Toys ‘R Us 4.    Best Buy (click ticker for report: ) 5.    Sears (click ticker for report: ) 6.    Barnes & Noble (BKS) 7.    Kohl’s (click ticker for report: ) 8.    Target (click ticker for report: ) 9.    Costco (click ticker for report: ) 10. JC Penney (click ticker for report: ) For the most part, we agree with the list, … Read more

PetSmart Stumbles on Weak Guidance

by

Wednesday afternoon, former Best Ideas Newsletter put option position PetSmart (click ticker for report: ) reported solid fourth quarter results offset by lackluster 2013 guidance. Revenue rose 15% year-over-year to $1.7 billion, falling just shy of consensus estimates. Earnings per share rose 36% year-over-year to $1.24 per share, exceeding consensus expectations by a few cents. Same-store sales growth during the quarter was superb, rising 4.6%, though the growth rate was down sequentially from the 6.5% same-store sales growth rate in the third quarter. Management added some color on the cadence of the quarter, saying: So we don’t typically talk about the inter-quarter, but I think it was a little volatile over the quarter, so it’s worth speaking to for now. … Read more

Eddie Lampert’s Buying More Sears, Should You?

by

In addition to announcing improved fourth quarter results at Sears (click ticker for report: ), it was revealed earlier this week that Sears’ chairman and CEO Eddie Lampert purchased another $55 million worth of Sears for his personal ownership. The big question now is whether Lampert, a savvy hedge fund manager, is sinking his entire career into doubling and tripling and quadrupling down on Sears, or perhaps he is seeing what no one else can, and Sears is the bargain of the lifetime. We’ve been fairly critical of his tenure, but it is undeniable that Lampert has done a fantastic job focusing the company on becoming an omni-channel retailer. In his letter to shareholders, Lampert discusses the Shop Your Way … Read more