Member Articles

3 Reasons Why Buffalo Wild Wings Is a Long-Term Winner

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#1: Buffalo Wild Wings Has Captured the Hearts of Children “Plant the Brownie acorn and the Kodak oak will grow.” George Eastman knew all too well about winning the hearts of children. The inventor-entrepreneur popularized flexible film in the 1880s, and his first Kodak camera was available for purchase by the end of the decade. But the breakthrough was too expensive, and it wasn’t until the Kodak Brownie, released a dozen years later, that photography was democratized. The camera sold for just a $1 and was easy to use. But importantly, Eastman focused his marketing and advertising efforts on children. When these children grew up, the seeds had been planted, and Eastman had built an empire. The Kodak oak grew. … Read more

Quick Take: Gilead Blows By 2Q Estimates; Investors Getting Drug Pipeline for Free

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Gilead (GILD) has delivered. The company’s second-quarter 2015 results showed product sales of $8.1 billion and non-GAAP earnings per share of $3.15, up 27% and 33%, respectively, from the same period a year ago. For those that don’t know Gilead, the company’s hepatitis C powerhouse drug, Harvoni (ledipasvir 90 mg/sofosbuvir 400 mg), led to the quarterly outperformance. We continue to believe the market is 1) underestimating the sustainability of Harvoni (both the number of potential patients to be treated globally and pricing resiliency) as well as its drug development pipeline, which we believe investors are getting for free. Gilead is a holding in the portfolio of the Best Ideas Newsletter, and we don’t expect to make any changes following the … Read more

Best Ideas Newsletter Holding Teva Surges!

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On July 27, Teva Pharmaceuticals (TEVA) reported solid preliminary results for the second quarter of 2015. The firm is growing organically, and its fundamental strengths shone throughout its report. Revenue increased 6% in the period, after excluding the impact of currency headwinds and the sale of US OTC plants in the second quarter of 2014. Non-GAAP operating income grew 16% from the year-ago quarter to $1.6 billion, and non-GAAP earnings per share increased 15% to $1.43 in the period. Cash flow from operations advanced an impressive 41% to $1.5 billion in the second quarter, and free cash flow grew 51% to $1.3 billion in the period. The solid bottom line performance caused management to raise its earnings per share guidance … Read more

The Chinese Market Is Rigged

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The Chinese equity markets do not reflect reality. The government has made it so. Trading on hundreds of  Chinese-listed stocks has been halted or suspended during the past few weeks, short selling (or even selling by large shareholders) has been banned, and as much as 10% of GDP has been pledged to prop up Chinese shares, and the list of government intervention goes on and on. The Chinese equity markets are “rigged,” and the government holds all the cards. Even so, share prices won’t stop falling. There may be nothing left to stop them. The writing has been on the wall for years that a bubble had been forming in China. As when everyone was on margin and “playing” the … Read more

Not Throwing Away This Garbage Hauler

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It may not be a glamourous business but it is a good one. Pricing emanates from disposal operations – that’s what industry experts say. Waste has to go somewhere, and therefore whoever has the disposal operations sets the bar with respect to pricing from transfer facilities all the way through collections. After all, garbage pick-up operators won’t be in business for long if they pay more to dispose of waste than they charge to pick it up. Industry economics in the waste industry are relatively easy to understand. As for the players, Waste Management (WM) and Republic Services (RSG) have the largest disposal operations in the US. At the end of 2014, Waste Management owned or operated 252 landfill sites, the largest … Read more

Dividend Increases for the Week Ending July 24

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Below we provide a list of firms that raised their dividends during the week ending July 24. 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 BancorpSouth (BXS): now $0.10 per share quarterly dividend, was $0.075. Bar Harbor Bankshares (BHB): now $0.255 per share quarterly dividend, was $0.25. Baylake Corp (BYLK): now $0.09 per share quarterly dividend, was $0.08. BBCN Bancorp (BBCN): now $0.11 per share quarterly dividend, was $0.10. B&G Foods (BGS): now $0.35 per share quarterly dividend, was $0.34. Chemical Financial (CHFC): now $0.26 per share quarterly dividend, was $0.24. … Read more

Selecting Winners

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It’s hard to go wrong with exposure to the credit-card processing arena. Investors have made a lot of money in Visa (V), MasterCard (MA), Discover Financial (DFS), American Express (AXP) and Capital One (COF) during the past several years, but they’ve made the most with Best Ideas Newsletter portfolio holding Visa. Since Visa was added in November 30, 2011, the company has more than tripled, a return that is more than 50 percentage points better than MasterCard’s, more than 70 percentage points better than Discover’s, more than 120 percentage points better than Capital One’s, and about 150 percentage points better than American Express’. All have done well, but Visa has done the best. Long-time readers of Valuentum know that we’ve … Read more

Organic Growth Sweetens Nonalcoholic Beverage Industry

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The nonalcoholic beverage segment of the commercial beverage industry is highly competitive, consisting of numerous companies that make various sparkling beverages, water products, juices, fruit drinks, energy and other performance-enhancing drinks. Pricing, advertising, product innovation, and the availability of in-store private-label beverages are key drivers that impact demand. Growth for nonalcoholic beverage producers has become increasingly dependent on the emerging global middle class in recent years. For example, Latin America was the most productive region for most producers in the second quarter. Consumers in developed economies have become more and more aware of the health concerns associated with sugar-sweetened beverages like soft drinks, and have therefore been more inclined to choose healthier alternatives. Industry participants are constantly innovating their products … Read more

Guide to Second Quarter Earnings; Big Pharma Experiencing Earnings Momentum

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Abbott (ABT) Abbott is one of our favorites in Big Pharma. We know many of you hold the stock in your own portfolios, and frankly, the company is one of the best operators in its industry. Abbott’s second-quarter performance revealed continued strength in its global diagnostics and branded generics businesses. Foreign currency exchange headwinds have posed problems for almost every multi-national in our coverage, but on an operational basis, second-quarter worldwide sales leapt nearly 10%. Abbott kept its full-year 2015 adjusted EPS guidance range from continuing operations unchanged at $2.10-$2.20, a rarity across a pharma universe that’s experiencing fantastic earnings momentum as of late. Keys to the Quarter: We were very pleased with the traction witnessed in Abbott’s pediatric nutrition … Read more