Exclusive Analysis for the Discerning Investor
Brian Nelson Emerson Electric posted fiscal second-quarter results that showed weakness in Europe and China. However, we continue to be huge fans of the firm’s cash-flow generation and dividend profile.
Collective Brands no longer represents an attractive investment opportunity.
Trash-taker Republic Services posted terrible first-quarter results and lowered its full-year outlook across the board. We were not pleased with the performance of the garbage hauler and may look to reduce our position in our portfolios in coming days.
Best-idea Ford hit the ball out of the park with its North American performance, but weakness in Europe and Asia weighed on results. We’re sticking with our fair value estimate.
Ugg boots-maker Decker’s disappointed investors in a big way last week. Though we don’t plan on scooping up the shares anytime soon, we’re growing more constructive on the firm’s valuation.
E-commerce stalwart Amazon reported first-quarter sales and earnings that blew past consensus estimates. However, we remain on the sidelines based on valuation (the first and most important component of our Valuentum Buying Index).
“(Collective Brands) expected to receive bids that valued it at $20 to $22, people with knowledge of the matter said last month. That range was higher than the company anticipated in August, when it disclosed a review of plans to increase shareholder value, said the people.” Read the full Bloomberg news release >> The cost basis for our position in Collective Brands is just over $15 per share. << About Our Best Ideas Newsletter
Republic Services (RSG) posted disappointing first-quarter results and lowered its full-year outlook. Though we weren’t pleased with the performance of the garbage hauler, we are reiterating our view that the shares remain significantly underpriced at current levels. We will publish an expanded note about the firm’s quarter, including our updated take on the trash taker soon. << Republic Services, Inc. Reports First Quarter Results << Republic Services’ CEO Discusses Q1 2012 Results – Earnings Call Transcript
Starbucks () posted solid fiscal 2012 second-quarter results after the close Thursday. Though we liked the quarter, we think the share price is a bit ahead of the company’s valuation. We’ll likely be raising our fair value estimate for Starbucks after factoring in the stronger-than-expected performance, but we still believe the shares are significantly overpriced. The coffee chain’s revenue advanced 15% thanks to global comparable sales growth of 7% driven almost entirely by increased traffic. Starbucks’ China business did quite well, too, notching its seventh consecutive quarter of comparable sales growth exceeding 20%. Further, the company continues to experience strong sales of its Starbucks- and Tazo-branded K-Cup packs, with revenue in its Channel Development segment jumping almost 60%. During the quarter, Starbucks opened … Read more
Sprint Nextel (S) reported first-quarter 2012 earnings Wednesday. Revenue grew 6% compared to the first quarter of 2011, driven by higher average revenue per user, as subscribers continue to opt for smart phones tied to higher-priced data plans. The company sold over 1.5 million Apple (AAPL) iPhones, and we think that adding the phone to its lineup, though expensive, has allowed the company to compete with AT&T (T) and Verizon (VZ). A whopping 86% of Sprint platform post-paid phone sales were smartphones, and Sprint now has 69% of its postpaid customers using smartphones. We think this will continue to drive revenue growth as more customers opt for unlimited, premium data plans. Our fair value for Sprint remains unchanged. << Our … Read more