Brian Nelson

Dividend Growth Gem Johnson & Johnson Hikes Dividend 7%

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On Thursday, Johnson & Johnson (JNJ) boosted its dividend 7%, and we continue to expect strong growth in its payout in coming years. We believe J&J remains a core holding in our Dividend Growth Newsletter. << About our Dividend Growth Newsletter — PR Newswire (April 26) “…the Board of Directors voted to increase the quarterly dividend for the 50th consecutive year from 57 cents per share to 61 cents per share. The dividend will be payable on June 12, 2012.”

Ancestry.com Delivers a Strong First-Quarter Report; Up 10%+ in After-Hours Trading

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This article appeared on Seeking Alpha. Please view disclosures: https://seekingalpha.com/article/529871-ancestry-com-delivers-a-strong-first-quarter-report-up-10-percent-in-after-hours-trading Best idea Ancestry.com () reported fantastic first-quarter results Wednesday, blowing by consensus estimates on both the top- and bottom-line. Adjusted EBITDA and subscriber growth numbers also came in better than expectations. We are reiterating our $41 per share fair value estimate on the company and expect the firm to catch a bid tomorrow on its better-than-expected outlook, recent roll-up of competitor Archives.com, commentary regarding the high probability of NBC extending its top-viewing TV show Who Do You Think You Are?, and excitement around the marketing initiatives for a searchable database of the US Federal 1940 Census, the biggest catalyst for genealogical research in the past decade. The company’s subscribers grew an … Read more

Best Idea EDAC Tech Issues Fantastic First-Quarter Results; Raising Our Fair Value

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Best idea EDAC Tech (EDAC) reported strong fiscal 2012 first-quarter results Wednesday. We are raising our fair value estimate on the aerospace component supplier to $23 per share (was $15) as a result of a slightly lower discount rate in our cash-flow model, higher growth and profitability assumptions, and continued confidence in the recognition of the company’s burgeoning backlog, which now is roughly 3 times its annual run rate of sales. The shares are currently trading just above $13 each. << About our Best Ideas Newsletter  EDAC Tech’s revenue advanced 19% to a record $24 million in the quarter, blowing by management’s conservative high-single-digit guidance offered in its previous report (and our low teens estimate). Net income more than tripled … Read more

Best Idea Buffalo Wild Wings Posts Strong First-Quarter Results

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Best idea Buffalo Wild Wings () reported strong first-quarter results Tuesday that support our view that the firm’s expansion efforts are still in the early innings. Though we liked the firm’s quarter, Buffalo Wild Wings is getting a bit pricey at these levels and we may look to scale back our position even further in the portfolio of our Best Ideas Newsletter on continued strength. Our fair value estimate for the bar-and-restaurant chain remains unchanged. The firm’s first-quarter revenue advanced an impressive 37.9%, as sales from company-owned restaurants jumped more than 40% from the same period a year ago. Same-store-sales increased 9.2% at company-owned restaurants and 7.3% at franchised restaurants, indicating that the Buffalo-Wild-Wings concept continues to resonate with consumers. The … Read more

Our Thesis on Apple Remains Firmly Intact

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On Tuesday, Apple () reported tremendous fiscal 2012 second-quarter results. The iPad-maker’s revenue came in at $39.2 billion, while net earnings were $11.6 billion, or $12.30 per diluted share, blowing by consensus estimates (which were $10.02 per share). We are maintaining our $636 per share fair value estimate at this time and expect the firm to converge to that level in short order. Apple’s growth rates were absolutely fantastic and compare to revenue of $24.7 billion and net earnings of $6 billion, or $6.40 per diluted share, in the same period a year ago. The company’s gross margin also advanced roughly 6 percentage points from the same period a year ago, revealing significant pricing power within its supply chain. As … Read more

IBM Increases Dividend; Annual Yield Still Not That Attractive

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On Tuesday, IBM () boosted its dividend 13%, and we continue to expect double-digit growth in its payout in coming years. However, we like the dividend profiles of a few of its tech peers better, namely Microsoft (MSFT) and Intel (INTC). << About our Dividend Growth Newsletter — BusinessWire (April 24) “The IBM (IBM) board of directors today declared a regular quarterly cash dividend of $0.85 per common share, payable June 9, 2012 to stockholders of record May 10, 2012. Today’s dividend declaration represents an increase of $0.10, or 13 percent higher than the prior quarterly dividend of $0.75 per common share. This is the 17th year in a row that IBM has increased its quarterly cash dividend, and the … Read more

3M Issues First-Quarter Results; Raises Bottom End of Full-Year Guidance Range

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3M (MMM) issued strong first-quarter results Tuesday that revealed expansion in almost every business segment. The company’s performance was one of the better ones we’ve seen from industrial firms so far this quarter. We also liked GE’s (GE) report here and Honeywell’s (HON) report here and were quite pleased with the recently upwardly-revised outlooks from Parker-Hannifin (PH) and Illinois Toolwork (ITW). 3M’s management followed the lead of its industrial peers and also raised the lower end of its full-year 2012 earnings-per-share outlook range. Our fair value estimate of the company remains unchanged, however. << Our 16-page Equity Report on 3M (MMM) – login required On a reported basis, net revenue advanced 2.4% thanks to an 8.6% jump in its Industrial and Transportation segment, a 5.5% improvement … Read more

United Tech’s HVAC Orders Represent Another Positive Data Point on US Housing

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Industrial conglomerate, United Technologies (), posted mixed first-quarter results Tuesday that showed strength in its residential HVAC and commercial aerospace businesses but weakness in its Otis elevator division. Though we weren’t pleased by order trends in China and Europe, we are sticking with our fair value estimate for the firm. The firm’s net sales fell 2% in the period thanks to divestitures and currency headwinds, though organic sales did edge up a meager 1%. The firm’s segment operating margin dropped 10% mainly because of higher research and development costs, but on a reported basis, the company’s operating margin came in at 13.7% (versus 13.3% in the year-ago period). Earnings per share advanced 24%, to $1.31 per share, in the quarter … Read more

Concerns about Hasbro’s First-Quarter Performance Overblown; We Expect a Strong Back Half of 2012

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On Monday, Hasbro () reported disappointing first quarter results. Though we were not happy with the performance in the quarter, we maintain our view that the firm’s dividend growth profile remains strong. Our fair value estimate of Hasbro remains unchanged. Hasbro’s net revenue in the first quarter fell 3%, and the company did little to adjust its cost structure effectively to mitigate the earnings decline. Earnings fell into the red, with the company posting a $0.02 per share net loss during the quarter (it had earned $0.12 per share in the same period a year ago). Excluding severance-related costs, earnings per share came in at $0.04 (consensus estimates were at $0.08 per share). One of the bright spots, however, was that its … Read more

D.R. Horton’s Fiscal Second-Quarter Results Speak to a Firming Housing Market; Its Cancellation Rate Drops to Pre-Crisis Levels

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D.R. Horton (), one of the largest homebuilders in the US, posted excellent fiscal 2012 second-quarter results that support our view that the domestic housing market is firming. Though we liked its performance, we still believe the homebuilding group is a bit ahead of itself as it relates to valuation, and we remain on the sidelines. We continue to prefer ancillary, diversified plays on the housing market via the two banking exchange-traded funds we hold in the portfolio of our Best Ideas Newsletter. << About Our Best Ideas Newsletter The statistics conveying D.R. Horton’s growth off “the bottom” were fairly impressive. Homebuilding revenue in its fiscal second quarter jumped 28% thanks to a more than 20% increase in homes that … Read more