Brian Nelson

Best Idea eBay Releases Fantastic First-Quarter Results; Raises 2012 Guidance

by

Best Idea eBay () reported fantastic first-quarter results after the close Wednesday. Both revenue and net income expanded at a nice double-digit pace, as PayPal continues to drive strong performance. In after-hours trading, the shares are up 6%+ (to over $38 per share) on the report. We are strongly considering adding to our existing position in the portfolio of our Best Ideas Newsletter, as we think the shares are conservatively worth $46 each (with upside to the high $50’s based on the upper end of our fair value range). << View Our Newsletter Archives In the first quarter, the global commerce platform and payments leader’s revenue advanced an impressive 29% from the same period a year ago. Net income on a … Read more

Intuitive Surgical Posts Strong First-Quarter Results

by

Intuitive Surgical (), one of the more well-known momentum firms on the market today, reported excellent first-quarter earnings after the close Tuesday. We don’t view the firm as yet a ‘Valuentum’ stock (a style of investing that we ascribe to) as it has yet to reach a valuation that we find attractive. We’re sticking with our fair value estimate for Intuitive Surgical at this time. << More on ‘Valuentum’ Investing The robotic medical-equipment firm, best known for its da Vinci Surgical System (click here), reported first-quarter 2012 revenue of $495 million, which advanced an impressive 28% from the same period a year ago (consensus was at $477 million). The key drivers continue to be higher robotic procedure adoption and higher … Read more

Best Idea Intel Continues to Deliver Solid Results and Return Cash to Shareholders

by

Best Idea Intel () reported another strong quarter Tuesday. Some of the financial highlights include a strong gross margin of 64% (65.1% non-GAAP), earnings per share of $0.53 (versus consensus expectations of $0.50 per share), and $3 billion in cash flow generated from operations. Additionally, during its first quarter, the company bought back $1.5 billion in stock and paid out $1 billion in dividends. Management still has the authorization for an additional $8.6 billion in share buybacks (which are value-creating at these price levels), and we think the company’s excellent dividend payout (0.84 per share; 3% annual yield) could increase meaningfully in coming years. Our fair value estimate remains unchanged. Though revenue only advanced modestly on a year-over-year basis thanks to inventory … Read more

IBM Raises Full-Year Earnings Guidance; 1Q Beat Due to Lower Quality Drivers; Services Backlog Falls

by

International Business Machines () posted mixed first-quarter results after the close Tuesday. Though the firm showed material bottom-line expansion, the firm’s top-line growth was relatively modest and its services backlog fell before adjusting for a favorable impact from currency. We are sticking with our fair value estimate for the company. Revenue was essentially flat from the same period a year ago as software, services and a doubling of cloud-based revenue helped offset a stiff decline in hardware sales. We were pleased to see the strength in software revenue (up 5%), but we’re slightly disappointed in the company’s services business, where revenue edged up just 1% and services backlog declined 2% before adjusting for currency. We’ll be keeping this important, “yellow flag” data … Read more

Despite Lackluster Results, Johnson & Johnson Remains a Solid Dividend-Growth Holding

by

Johnson & Johnson (JNJ) issued relatively uneventful first-quarter results Tuesday. We don’t expect to make a change to our fair value estimate, and we continue to like the company as a holding in the portfolio of our Dividend Growth Newsletter. << View Our Dividend Growth Newsletter Archives First-quarter revenue was roughly flat from the same period a year ago, as domestic sales declines and a negative currency impact more than offset international strength.  Net earnings in the quarter were also less-than-compelling with earnings per share advancing a meager 1.5%, to $1.37. However, J&J did update its earnings guidance for the full year to as much as $5.17 per share at the high end of the range, but most of the … Read more

Coca-Cola Reports Strong First-Quarter Results; Hits 14-Year Highs

by

Coca-Cola (KO) reported strong first-quarter 2012 results Tuesday that revealed 5% global volume growth with expansion across every geographic operating group. Though we liked the performance during the period, we see no reason to change our fair value estimate on the firm at this time. The world’s biggest drink maker’s first-quarter net revenue advanced 6%, and the firm leveraged that sales expansion into operating-income growth of 10%. The revenue expansion was driven evenly by concentrate sales and positive pricing. However, currency-neutral operating income grew in line with the pace of sales as the company faced difficult comparisons with respect to commodity costs in the quarter.  Earnings per share came in at $0.89 in the quarter (consensus was at $0.88), with cash … Read more

We Still Like ConocoPhillips as a Solid Dividend-Growth Idea

by

On Monday, ConocoPhillips (COP) said on its investor-update call that it expects to grow its cash flow to $22 billion by 2016 – that’s up from about $16 billion this year, an 8.2% compound annual growth rate. The firm also noted that it expects to allocate roughly 20% to 25% of its annual cash flow to dividend payments. We continue to like this high-yielder (3.6% annual payout) in the portfolio of our Dividend Growth newsletter and expect the company to experience high-single-digit dividend growth for some time to come. Conoco’s 3-Year Repositioning Plan “ConocoPhillips continues to execute its asset disposition program, targeting $10 billion in proceeds during 2012. During the quarter, the company closed on the sale of its Vietnam … Read more

Dividend Growth Gem P&G Increases Dividend for 56th Consecutive Year; Ups Payout 7%

by

P&G’s dividend increase of 7% was roughly in line with our expectations of high-single-digit growth. — Business Wire (Friday, April 13) “The Procter & Gamble Company (NYSE: PG – News) announced that its Board of Directors declared an increase in the quarterly dividend from $0.525 to $0.562 per share on its Common Stock and on the Series A and Series B ESOP Convertible Class A Preferred Stock of the Company, payable on or after May 15, 2012 to Common Stock shareholders of record at the close of business on April 27, 2012 and to Series A and Series B Preferred Stock shareholders of record at the start of business on April 27, 2012. This represents a 7% increase compared to the … Read more

A Stock Split Steals the Headlines from Google’s Quarterly Results

by

Google (GOOG) posted another solid first quarter after the close Thursday, with revenues growing 24% from the same period a year ago and adjusted earnings per share coming in at $10.08 — ahead of consensus estimates. Our thesis on Google (click here) remains unchanged, and we think shares continue to be fairly valued at current levels. We’d grow more interested in adding Google to our Best Ideas portfolio if it registered a higher score on our Valuentum Buying Index. At this time, we’re also quite comfortable with our current technology exposure in the portfolio: Apple (AAPL), Intel (INTC), and eBay (EBAY). Aggregate paid-clicks were up a whopping 39% compared to the first quarter of 2011 (and up 7% sequentially), suggesting Google … Read more

JP Morgan’s First-Quarter Results Support Our Small Financials Exposure; Credit Quality Continues to Improve

by

JP Morgan (JPM) reported strong first-quarter results Friday that revealed a strengthening balance sheet and positive credit trends in its consumer real estate and credit card portfolios. The firm’s net income fell $172 million (3%) from the same period a year ago, though earnings per share advanced modestly, to $1.31 (consensus expectations were at $1.18 per share). Though we expect the earnings environment to continue to be challenging for banks, we do expect the group as a whole to fetch better valuations in the years ahead as the outsize risk premium associated with ongoing concerns about the domestic housing market and European sovereign debt ease. We continue to hold small, diversified financial positions in the portfolio of our Best Ideas Newsletter, … Read more