Brian Nelson

Don’t Speculate on Earnings and Especially on Lululemon’s

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At Valuentum, the primary and initial focus of our methodology is centered on calculating the long-term intrinsic value of firms based on a robust discounted cash-flow analysis (click here for a narrated, in-depth presentation on our process). We’ve written in the past about how we’re not fans of speculating on earnings releases, and we think doing so is nothing more than gambling. Lululemon (LULU) reports earnings on Thursday, and its past post-earnings moves have been drastic. After reporting in-line earnings and modest guidance in its last report, the stock fell from $49.70 at the previous close to open at $41.94 after reporting earnings. The stock then proceeded to rally back-up to close at $47.17. That’s a lot of volatility for … Read more

Oracle Posts Better-Than-Expected Fiscal 2012 Third-Quarter Results

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Oracle (ORCL) posted better-than-expected fiscal 2012 third-quarter results after the close Tuesday. We continue to believe the shares have valuation upside and are sticking with our $38 per share fair value estimate. Total revenues advanced 3% thanks to roughly a 7% increase in new software license revenues and an 8% jump in software license updates and product support sales. Hardware systems products revenue fell 16%, however. Non-GAAP operating income advanced 8% to $4.2 billion, while non-GAAP net income jumped 13% from the same period a year ago. Non-GAAP earnings per share increased 15%, to $0.62, blowing by consensus expectations of $0.56 per share. On its conference call, Oracle said that it thinks non-GAAP, constant-currency revenue for the current quarter will … Read more

Adobe Issues Poor Outlook But Cash Flow Generation Remains Very Strong

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Adobe (ADBE) reported poor fiscal first-quarter 2012 results after the close Monday that disappointed most investors. Though we plan to update our valuation model on the firm, we don’t expect to make a material change to Adobe’s fair value at this time. The company’s revenue advanced a modest 1.7% in its fiscal first quarter as subscription and services-and-support sales expansion offset weakness in its products segment, which fell over 4% from the same period a year ago. Adobe’s gross margin, however, improved to 89.6% from 89.5% in last year’s quarter. Operating income fell 4.4% from the year-ago quarter, as sales and marketing expenses surged. There was nothing concerning in the firm’s below-the-line items, though the company did suffer from a … Read more

Though Ugg’s Probably Aren’t Dead, Deckers’ Shares Have Only Limited Upside

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The news for Deckers (DECK) hasn’t been great over the past several months. The slide in its share price began when the Street became more cautious on its fundamentals in December, and it recently culminated with flat earnings growth guidance for its fiscal year 2012 due primarily to higher input costs. Though the raw expense of boot materials (sheepskin) may weigh on the company’s fundamentals in the near term, we think the market has generally overreacted to the these headwinds. Regardless of how fashionable men think the company’s flagship Ugg boots are (often nicknamed “Ugg-ly), we think they’re among the most dominant women’s winter footwear brands, along with Sorel (COLM) and North Face (VFC). And why wouldn’t they be? Other … Read more

Honoring CNBC Anchor Mark Haines

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Brilliant CNBC anchor, Mark Haines, who had been a fixture there for 22 years, passed away last year. On March 9, 2009, three years ago to the day, he officially called the “market bottom.” Though many attempted to do so for weeks and months during the Great Recession, his call was original and genuine. The S&P has doubled since that time.   View Mark Haines “market-bottom” call on March 9, 2009: