Exclusive Analysis for the Discerning Investor
Brian Nelson Tiffany reported disappointing first-quarter results that showed decent revenue expansion but weak bottom-line performance. Though we expect to ratchet down our near-term earnings expectations, we don’t expect to make a material change to our fair value estimate.
Hewlett-Packard posted strong second-quarter results that came in better than consensus expectations. We’re optimistic on HP’s restructuring plans as well as the company’s dirt cheap valuation. However, peers like Intel and Microsoft look like much more attractive investments with better growth potential and near-term catalysts. Both companies also provide investors with better, safer yields, as we think both are best-in-class in chips and enterprise software, respectively.
Dell reported terrible first-quarter results, and we are putting our fair value estimate of the computer maker under review. Though we expect to lower it materially, we maintain that the firm’s shares are significantly underpriced at today’s levels. However, we prefer Apple in the portfolio of our Best Ideas Newsletter.
Ralph Lauren posted strong fiscal fourth-quarter results and doubled its dividend. However, the shares are fairly valued, in our opinion, and its annual yield is not yet large enough to get us excited.
Medtronic posted strong fiscal fourth-quarter results and offered a solid outlook for its fiscal 2013. We’re big fans of the medical device maker’s dividend-growth profile and expect the company to continue to return cash to shareholders.
General Motors may have an improved balance sheet and a tremendous opportunity in China, but we still feel Ford is the better risk-adjusted way to play the recovery in global automotive demand.
Lowe’s reported decent first-quarter results, but same-store sales performance revealed that Home Depot may be stealing share from its smaller competitor. Lowe’s also cut its full-year outlook, and we expect continued valuation downside to the low-$20s per share.
Facebook’s initial public offering will be met with much interest, but we have concerns about taking a stab in its shares after it begins trading.
We liked Walmart’s first-quarter results and don’t think the firm’s alleged bribery scandal at its Mexican division will materially impact the trajectory of its earnings outlook or dividend.
Dick’s Sporting Goods posted strong first-quarter results, but the potential impact from encroaching online competition remains unclear. We think Nike is a much better idea for investors looking to gain exposure to the athletic retail space.