Member Articles

Cisco Delivers, Deere Disappoints, Pinterest Plummets, More Reports

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Cisco Delivers, Deere Disappoints, Pinterest Plummets, More Reports — In alphabetical order by ticker symbol: AMAT, BIDU, CSCO, DE, FLO, INTC, JACK, PINS, WMT — Applied Materials (AMAT): Applied Materials reported better-than-expected second-quarter fiscal 2019 results May 16, but the headline print wasn’t that exciting. Revenue dropped 23%, its operating margin gave back 6.3 percentage points, and diluted earnings per share dropped 34%, but the results were “toward the top-end of (its) guidance range, reflecting solid execution across the company in a business environment that remains challenging.” The chip-maker’s risk profile is too high for our taste, and we just have a hard time getting comfortable with the instability of operating results. We value shares of Applied Materials at $48 each, … Read more

Nvidia Scraps Full-Year Guidance, Market Balks

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Image Source: Nvidia Corporation – IR Presentation By Callum Turcan Nvidia Corporation (NVDA) designs chips for data centers, PCs and laptops with a heavy focus on gaming performance, next-generation automobiles (such as autonomous vehicles), and other purposes. The company is built around two segments, GPUs (graphics processing units for visual, AI, and cloud computing uses) and Tegra Processors (integrates GPUs and CPUs, central processing units, into one chip for mobile devices, gaming systems, entertainment systems, autonomous vehicles, and other uses). Management breaks down the markets Nvidia is targeting into four categories; Gaming, Visual Performance, Datacenter, and Automotive. Due to its low payout ratio, Nvidia yields just 0.4% as of this writing, but we think the company could become a meaningful … Read more

Dividend Increases/Decreases for the Week Ending May 17

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Below we provide a list of firms that raised their dividends during the week ending May 17. The dividend reports of covered firms on this list will be updated shortly with the new information. To access our dividend reports use the ‘Symbol’ search box in our website header. Firms Raising Their Dividends This Week Adams Resources (AE): now $0.24 per share quarterly dividend, was $0.22. Business First Bancshares (BFST): now $0.10 per share quarterly dividend, was $0.08. Chubb (CB): now $0.75 per share quarterly dividend, was $0.73. CoreSite Realty (COR): now $1.22 per share quarterly dividend, was $1.03. Curtiss-Wright (CW): now $0.17 per share quarterly dividend, was $0.15. Extended Stay America (STAY): now $0.23 per share quarterly dividend, was $0.22. … Read more

Markets Swooning, Expect Extreme Volatility, Finger on Put-Option Trigger

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Image shown: We notified members December 26 that we had  moved  the Best Ideas Newsletter portfolio and Dividend Growth Newsletter portfolio to a “fully invested” position, from a 30% and 20% cash “weighting” at the high end of the range, respectively.  — No change to simulated newsletter portfolios…at this time.  — Hi everyone, — Hope you’re navigating these tumultuous markets well.   — If you recall, during the holiday season last year, we had moved the Best Ideas Newsletter portfolio and Dividend Growth Newsletter portfolio to “fully invested.” See image above (point of the arrow). Because many members were traveling and out of the office, not all were able to read the notification until a week or two after. They were … Read more

Our Reports on Stocks in the Media Industry

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Image Source: Sarah Ackerman Structure of the Media Industry The media industry consists of mass media firms that have operations spanning: the entertainment business, cable networks, publishing, local market broadcasting and outdoor advertising. The entertainment and cable network businesses are highly competitive, as rivals generate audience interest to sell advertising and premium subscription services. The publishing business continues to experience a secular shift toward electronic distribution, while local market broadcasting and outdoor advertising compete for advertising revenues with other regional media. We’re generally neutral on the overall structure of the group. Media – Advertising: CCO, DAKT, IPG, LAMR, MDP, MWW, OMC Media – CATV: AMCX, CMCSA, DISCA, DISH, VIA Media – Entertainment: CNK, DIS, IMAX, ISCA, LYV, MSG, NFLX, NWSA, RGC

When We Get It “Wrong” — How To Think About Our Methodology In Action

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When We Get It “Wrong” — How To Think About Our Methodology In Action Image: Chipotle (CMG) was one of our best calls in 2019.   Image: Verint (VRNT) was a controversial idea in the Best Ideas Newsletter portfolio that worked out great for members this year.   Image: Visa (V) has been the top-weighted idea in the Best Ideas Newsletter for as long as we can remember. In December 2017, when we migrated to weighting ranges for ideas in the newsletter portfolio, the company’s “weight” was 8.6%. The image above shows its performance relative to the S&P 500 (SPY) since then. Source (pdf). — Let’s talk about the newsletter portfolios, some areas where we’ve made mistakes, and how some members use our services. … Read more

Booking Holdings’ Quarter; Still More MLP Transparency Needed, More Reports

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— Booking Holdings’ Quarter; Still More MLP Transparency Needed, More Reports —  In alphabetical order by ticker symbol: ALB, BKNG, DDD, ET, GPRO, JD, KDP, OSTK, SONO, YELP  —  Albemarle (ALB): Albemarle remains on our list of unique ideas in the chemicals space. The company is heavily tied to lithium production, and it has one of the lowest-cost positions for lithium carbonate and lithium hydroxide (a source of sustainable competitive advantage). We view this as a fantastic opportunity, especially as it relates to expectations for a surge in electric vehicle demand in coming years. Though lithium represents just one portion of its specialty chemicals operations (it also produces bromine specialties and catalysts), the company’s diversification has rewarded shareholders with more than … Read more

Top New Dividend Growth Idea: Parker Hannifin

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It’s been a while since we’ve been this excited about a dividend growth stock. We’ll be looking to add Parker-Hannifin to the Dividend Growth Newsletter portfolio soon. By Callum Turcan Parker-Hannifin Corporation (PH) is an industrial company that supplies everything from water purification filters to check valves to fuel tank inerting systems to its customers all over the world. The firm yields 2.1% as of this writing and Parker-Hannifin is targeting a dividend payout ratio of 30 – 35% of its net income over the next five years. As Parker-Hannifin continues to grow its bottom line while sporting tremendous free cash flow conversion rate north of 100%, we see the firm as having a very promising dividend growth story. Note … Read more

Disney’s Mixed Report, Stamps Implodes, and Astronics for the Radar, More Reports

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Disney’s Mixed Report, Stamps Implodes, and Astronics for the Radar, More Reports — In alphabetical order by ticker symbol: ATRO, DIS, ETSY, GDOT, NYT, PBPB, ROKU, STMP, SVMK, TPR, TVTY — Astronics (ATRO): We are strongly considering one of our favorite small-cap aerospace suppliers after a solid showing during its first quarter, results released May 8. If you may recall, Astronics was a winner in the Best Ideas Newsletter portfolio in the past, and even with Boeing on the skids given 737 MAX crashes, we’re not shying away from considering aerospace supply-chain exposure, given the massive backlogs at the airframe makers. Astronics’ sales advanced more than 16% in the quarter, and it registered its fifth consecutive quarter of record aerospace revenue. … Read more

Allergan’s Peculiar Non-GAAP Reporting, Wendy’s Free Cash Flow, More Reports

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In alphabetical order by ticker symbol: AGN, EA, ENR, LYFT MYL, PZZA, S, WEN. — Allergan (AGN): Allergan’s first-quarter report, released May 7, came in better than expected, despite the headline numbers not looking that great. GAAP net revenue declined 2% on a year-over-year basis, while it posted a rather large operating loss. The Botox maker continues to advance its pipeline, and it raised its non-GAAP top and bottom-line guidance for fiscal 2019. However, we can’t get comfortable with the huge discrepancy between GAAP and non-GAAP bottom-line guidance. The former calls for a loss of $5.70 per share on the year, while the latter calls for a gain of $16.55 per share on the year. What’s worse, the GAAP bottom-line earnings guidance … Read more