Exclusive Analysis for the Discerning Investor
Brian Nelson Merck reported solid second quarter results and indicated that progress in its pipeline remains strong. Though the firm will face patent expiration of its blockbuster Singulair in coming weeks, we think shares remain fairly valued.
Dividend growth gem Republic Services hiked its dividend 7% as it works to get its operations back on track. The garbage hauler’s second quarter was decent, and its debt refinancings suggest continued strong dividend growth for years to come.
Amazon reported weak second-quarter results as profits plummeted and free cash flow dropped considerably. Though we have no qualms about the online retailer’s revenue expansion, we’d like to see more robust profit-generation before considering it in our Best Ideas portfolio.
Starbucks reported lower than expected fiscal third-quarter results, and its outlook fell short of consensus expectations. We continue to think the shares are overvalued.
Facebook posted disappointing second-quarter results in its first earnings report since going public. The firm continues to converge to our $20 per share fair value estimate.
Consumer products firms Colgate and Kimberly Clark posted strong second quarter results that showed solid organic growth and gross margin expansion. Though the share price of each firm falls within its respective fair value range, we’re keeping a close eye on both companies.
Exxon reported lower than expected second-quarter earnings as lower oil and gas prices weighed on the firm during the period. The oil and gas giant has the least attractive dividend yield among its peer group.
Precision Castparts reported strong fiscal first-quarter results. Though the firm may face some near-term headwinds due to unexpected repairs on a couple of its forging presses, its exposure to the aerospace upswing has never been stronger.
3M posted solid second quarter earnings, but its underlying business segments continue to be a mixed bag. The firm’s Health Care and Industrial/Transportation segments remain quite strong, but the company’s Electro/Communications and Display/Graphics divisions continue to be pressured.
The garbage hauler continues to pull in cash at a nice pace, and restructuring plans should help offset cost headwinds.