Brian Nelson

United Tech’s Potential Bid For Goodrich To Start Wave Of Aerospace Acquisitions

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As we outlined previously in our long-term outlook on aerospace demand, the sector is the place to be and represents the largest weighting in the market-beating portfolio contained within our Best Ideas Newsletter, with Precision Castparts (PCP), Astronics (ATRO), and Edac Tech (EDAC) as core holdings. We outline our forecast for large commercial aircraft demand below:                       As shown above, the expected growth rate of aircraft deliveries during the next five years is truly remarkable. Both Airbus and Boeing are ramping up production of their workhorse A320 and 737 programs to thwart potential cancellations as competition heats up from global rivals — Bombardier, etc. — in the narrowbody market. Boeing has resumed a target of producing seven 777s a month (from … Read more

Ancestry.com Has Staying Power, Has the Makings of a Double

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This article appeared on Seeking Alpha. Please view disclosures: https://seekingalpha.com/article/293902-why-ancestry-com-has-staying-power-a-double-in-the-making Ancestry.com (ACOM) has taken its shares of lumps following its second-quarter earnings release, which revealed a digestion of the massive growth in subscribers experienced in the first quarter. According to the most recent tally, roughly 25% of the free float of Ancestry.com’s shares are short — an absolutely amazing level given the profitability and growth of the firm. As we outlined in our second-quarter earnings note, we were pleased with the results and maintain that the firm is significantly undervalued: Subscriber growth of 28% from the same period a year ago fueled a 36% increase in the company’s top line during the quarter. We were particularly impressed with the level of average … Read more

Spirit Airlines Retains Cost Advantage, AMR and United Continental Trail Peers

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In the commodified airline industry, the lowest-cost provider often dictates the price for any given route, and real pricing growth continues to elude this troubled industry. As a result, efficient and low-cost operations are paramount to success, and in many cases, essential for long-term survival. The primary metric used to gauge the cost structure of an airline is cost per available seat mile (CASM) — or the cost to fly one seat one mile, whether it’s occupied or not. Unfortunately, comparing one airline’s consolidated CASM with that of another offers little insight into which airline is truly more cost efficient, as some carriers sport regional operations and others vastly different route structures and fleets. To really compare the cost structures … Read more

Drinking from the Fire Hose: Making Smarter Decisions without Drowning in Information.

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Valuentum’s subscriber base enjoys reading the latest and greatest investing books. As a result, Valuentum requests and receives business and investing books before they are officially released. Our editorial staff took a look at the following book, and here’s what we thought after reading it: Drinking from the Fire Hose: Making Smarter Decisions without Drowning in Information. By Christopher J. Frank and Paul Magnone. Portfolio, 2011. 256 p. ISBN 978-1-5918-4426-6. Book Release Date: September 1, 2011   Frank (vice-president of business-to-business and communications research at American Express) and Magnone (director of global business development and alliances at Openet) offer their take on the information overload facing organizations, and suggest that with a few simple questions it is possible to sort … Read more

Valuentum Selects Xignite to Provide Pricing and Financial Data for its Stock Reports

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Woodstock, IL, September 4, 2011—Valuentum Securities, Inc, a provider of independent investment research, has chosen Xignite, Inc, the leading cloud services provider of on-demand financial market data and application components, to provide historical pricing data and financial statement data to power its 16-page equity research reports. As a leading provider of independent equity research, Valuentum is driven to provide individual investors with the most comprehensive stock analysis on the Web. Valuentum selected Xignite as a data partner because Xignite’s Web services delivery model and cost-effective pricing enabled Valuentum to further its mission to serve the growing needs of the individual investor without any additional investment in hardware, software, vendor tools, or custom coding. “As other equity research providers abandon the … Read more

Valuentum Begins Publishing 16-page Stock Research Reports

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Woodstock, IL, September 4, 2011—Valuentum Securities, Inc., a provider of independent investment research, has begun publishing equity research reports for the largest U.S. companies. During the next 12 months, Valuentum plans to produce 16-page equity research reports for up to 1,800 companies currently monitored by its analyst team. The reports are available with a subscription to Valuentum.com, the company’s investment Web site.   “We strive to be the champion of the individual investor, and our equity research reports are targeted to meet their needs.” said Brian Nelson, president of equity research at Valuentum. “The proliferation of untrustworthy financial opinions on the web and the poor performance of once-trusted independent equity research providers have left the individual investor underserved in today’s difficult market environment. Individual investors … Read more

Rush Could Ride the Coming Truck Upcycle to New Highs

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Rush Enterprises (RUSHA) is a full-service, integrated retailer of commercial vehicles and related services. Through its network of Rush Truck Centers, the company provides one-stop service for the needs of its commercial vehicle customers, including retail sales of new and used vehicles, aftermarket parts sales, service/repair stations, and financing/leasing-related products (Image Source: 2010 Annual Report).   Key Strengths The firm’s parts and services segment generates roughly 60% to 70% of total gross profit. This is a higher margin and recurring revenue stream — more lucrative than truck sales and its rental and leasing business lines (Image Source: 2010 Annual Report) Parts and services continue to grow rapidly. The firm is the only authorized dealer for Peterbilt, made by Paccar (PCAR) and International … Read more

Dick’s Sporting Goods Appears Slightly Overvalued

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The ever expanding Dick’s Sporting Goods looks fairly valued   With the recent tremendous success that we’ve seen in Under Armour (UA), Nike (NKE), and Adidas, it’s natural to look at the company bringing these products to the consumer. Not surprisingly, it’s a pretty competitive landscape, and we’re initiating coverage of the biggest player, Dick’s Sporting Goods (DKS) at a fair value of $30 per share. We think the market may be a little too enthusiastic about the company’s growth prospects.   Riding the sports apparel tailwind   If any company has benefited from the strength in Under Armour, it’s been Dick’s. The company accounts for over 30% of UA sales, and with its premium brand name, has been able … Read more

Best Idea Collective Brands Beats Estimates, Shares Up Over 20%

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Earlier Collective Brands (PSS), one of our best ideas, reported second-quarter earnings that beat most analysts’ estimates and announced a plan to unlock shareholder value. Sales were up nearly 5% and net of a large goodwill impairment, earnings came in at $0.16 a share. The numbers weren’t the big news. Collective announced that it will pursue “strategic initiatives to unlock shareholder value” which we speculate involves a sale of the company, possibly to a private equity firm, or a spin-off of the successful PLG group. We’ve thought that a sum of the parts evaluation shows the true value of Collective, but we underestimated management’s willingness to deliver, and are very pleasantly surprised. We are maintaining our fair value of $24, … Read more

We Outline Our Bullish Case for Ford

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One of the best trades of the 1980’s could be relevant again today: we love Ford   Famous investor and manager of the Fidelity Magellan Fund Peter Lynch is best known for his “buy what you know” strategy. Though Lynch did a lot more than just go to malls and buy stock in the most popular stores, occasionally the best investment opportunities are right in front of you. We think investors will have a chance to replicate Lynch’s famous auto trade of the 1980’s today with shares of Ford inexplicably tumbling towards the single digits. On a discounted cash-flow basis, we think Ford is worth $20 if we double dip into a second recession, $34 under the continued low-growth scenario, … Read more