Brian Nelson

Best Ideas Alert: Collective Brands (PSS) To Narrow Potential Suitors to 10; Bidding Likely to Start at $20 Per Share

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From Bloomberg: “The company (Collective Brands) began yesterday notifying the 20 bidders from the first round whether they would move on to the next, which will comprise about 10 parties, said the people, who declined to be identified as talks are private. Based on bids so far, Collective Brands could get at least $20 a share if the entire business is sold, said one of the people. That would value the Topeka, Kansas-based retailer at about $1.2 billion. Collective Brands got initial offers from buyout firms TPG Capital and Leonard Green & Partners LP, as well as from rivals such as Wolverine World Wide Inc., Columbia Sportswear Co. (COLM) and Deckers Outdoor Corp. (DECK), the people said. The retailer is keeping … Read more

Coca-Cola Posts Fourth-Quarter Results; Focus Remains on Controlling Costs

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On Tuesday, Coca-Cola (KO) reported solid fourth-quarter results that showed strength across all of its major geographic operating groups. We will be revisiting our valuation model for the concentrate maker, but we don’t expect to make a material change to our $65 fair value estimate. Fourth-quarter net revenues jumped 5% (6% excluding currency), as global volume advanced 3% in the quarter driven by solid international volume expansion of 4% (North America volume grew 1%). Coca-Cola noted that it grew value share in NARTD (non-alcoholic ready-to-drink) beverages across most of its beverage categories. Brand Coca-Cola’s volume increased 3%, with expansion coming from around the world – 33% growth in Thailand, 15% growth in India, 13% growth in China, etc. Worldwide still … Read more

Yum! Brands’ Fourth-Quarter Results Show Chinese Demand Remains Strong; Shares Still Expensive

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Yum! Brands’ (YUM) fourth-quarter results, issued after the close Monday, revealed strong performance, particularly in China. Though the firm will likely get a bid tomorrow, we believe the shares to be a bit rich and remain on the sidelines. Our fair value estimate for the world’s largest restaurant company is unchanged. Worldwide system sales grew 11% in the fourth quarter thanks to 33% growth in China. Same-store sales grew an impressive 21% in China during the fourth quarter and managed to stay positive in the US during the period. We think such performance speaks clearly about the strength of the Chinese economy/consumer, and the positive US same-store-sales growth represents an improvement over the full-year measure (and anniversaries a very strong … Read more

Best Idea Astronics Up Nearly 8% Today on Strong Fourth-Quarter Results

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Best idea Astronics (ATRO) reported strong fourth-quarter results Monday and offered an outlook for 2012 that pleased most investors. The stock is surging roughly 8% today, and we continue to believe the company belongs in the portfolio of our Best Ideas Newsletter.   We were impressed with Astronics’ performance pretty much across the board. Fourth-quarter revenue jumped 18% led by a 24.5% increase in aerospace sales, while gross profit surged nearly 40% on the heels of 4.4 percentage points of gross-margin expansion. Astronics continues to reap the benefits of higher demand for both aircraft cabin electronics products and aircraft lighting products. The company’s operating margin was roughly flat in the period, but after excluding a goodwill impairment loss related to … Read more

Dividend Growth Portfolio Holding Hasbro Raises Dividend 20%; Now Boasts 4%+ Yield

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Dividend-growth portfolio holding Hasbro (HAS) reported mixed fourth-quarter results Monday and increased its dividend a whopping 20%, even more than we had anticipated. Though we had expected a nice dividend increase for 2012, we’ll be updating our dividend report on the company shortly.   The firm reported a 4% increase in revenue in the fourth quarter from the same period a year ago thanks to strong international growth (up 8%), offset by lower-than-expected growth in its US and Canada segment (down 2%). The top-line was weighed down by challenges in its Games & Puzzles and Girls categories, which fell 11% and 16%, respectively. However, we think management has taken the appropriate steps post-Thanksgiving to re-accelerate growth in these segments via … Read more

Employment Data, Released Today, Reinforces Our Long-Held View That the US Will Avoid a Double-Dip Recession

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Total nonfarm payroll employment rose by 243,000 in January, and the unemployment rate decreased to 8.3 percent, the U.S. Bureau of Labor Statistics reported today. Job growth was widespread in the private sector, with large employment gains in professional and business services, leisure and hospitality, and manufacturing. Government employment changed little over the month. Please click on the link below to read the full report: << Bureau of Labor Statistics’ Employment Situation Summary << Our Newsletter Archive

Gilead Sciences Releases Favorable Hepatitus C Data

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From Gilead Sciences (GILD) fourth-quarter earnings conference call: “The worldwide potential for all oral antiviral pan-genotypic HCV cure is sizable with over 12 million infected individuals in commercial markets alone. We are already in high gear preparing global launch plans that will bring GS-7977 expeditiously to patients around the world. Our established relationships with the hepatologist and gastroenterologist via Viread HPV, our knowledge of liver disease payers and policy makers and the exciting potential of leveraging our HIV resources to expand HCV-provided capacity is a galvanizing prospect. And I am confident the Gilead commercial organization will rise to the occasion… …As you know, results from the ELECTRON study were presented by Pharmasset at AASLD last October where GS-7977 and ribavirin for … Read more