Posted: Aug 12, 2010 10:20 AM by Ryan C. Fuhrmann
Walt Disney Co. (NYSE:DIS) reported third-quarter results on Tuesday that served as another indication that advertising trends are improving along with the overall economy. Its other operating units are just as economically sensitive, which means investors stand to gain handsomely as Disney’s sales and profit rise along with an increasingly favorable consumer climate.
Department store giant reported better-than-expected profits during its second quarter and raised its full-year earnings guidance. This was welcome news to investors, though at this point it isn’t clear if this strong performance will continue or if Macy’s stands out from the competition.
Entertainment content giant Viacom (NYSE:VIA) is finally seeing a boost from a stronger advertising market. This improvement should continue along with the overall economy. Overall, its businesses are volatile due to the economy and fickle consumer tastes, but may be worth it given its high profit potential during upswings in its operations.
Life insurance giant Prudential Financial (NYSE:PRU) reported a hefty jump in profits during its second quarter. Insurance and annuity sales also continued to recover nicely after a difficult stretch over the past couple of years. The stock is still stuck slightly below book value and could be a good entry point for investors.
Consumer goods firm Clorox (NYSE:CLX) reported fourth quarter and full-year results on Tuesday that were notable for their lack of surprises. A Venezuelan currency devaluation adversely affected the firm and archrivals, but other than that Clorox saw steady sales growth and robust overseas trends. The fact that it is smaller than many peers also indicates growth will be less of an uphill battle going forward.
Financial products distributor Primerica (NYSE:PRI) went public on April 1, 2010 at a price of $15 per share. The stock ran quickly after the offering but has recently settled down at just over $23 per share. The current valuation looks reasonable overall, but Primerica’s fortunes remain closely tied to its former parent
The credit crisis wreaked havoc on the market values of the investment portfolios of most life insurers. With financial markets and liquidity returning back to normal, the values of bonds, real estate, and equities on the balance sheet are returning to normalized levels. This was the case for MetLife (NYSE:MET) during its second quarter. Its core operations continued to perform well and an upcoming purchase will add very appealing international exposure. (To learn more about the credit crisis, see Credit Crisis: Introduction).
Equifax (NYSE: EFX), TransUnion and Experian operate an arguable oligopoly when it comes to maintaining and selling consumer credit information. Fair Isaac (NYSE: FICO) also provides FICO scores for consumers that compile data from the three above providers and qualifies as another competitor, but overall the market is concentrated. Unfortunately for Equifax, its core business isn’t growing much and has left it relying on less impressive businesses for growth.
For the past few years, Masco Corp. (NYSE:MAS) has been in a dubious position as a market leader in the beleaguered home improvement and building products markets. It released second-quarter results on Monday that showed decent sales and profits that beat analyst expectations, but sees a difficult end to the year and will continue to have to bide its time until industry trends improve.
Posted: Jul 28, 2010 09:30 AM by Ryan C. Fuhrmann
Drug distribution firm AmerisourceBergen Corp (NYSE:ABC) is reaping the benefits of a couple of favorable tailwinds in its business these days. The firm released third-quarter earnings on Tuesday to illustrate these positive trends. Loyal investors should continue to benefit, as they have over the past few years.
During its second-quarter financial results release, consumer-goods giant Kimberly-Clark Corp. (NYSE:KMB) stated that it will “continue to strengthen our brands, pursue our targeted growth initiatives and invest for future growth.” Quarterly sales came in a bit light of expectations, but profit growth was better than expected, as were signs that certain regions of the world hold solid growth potential.
Industrial conglomerate United Technologies (NYSE: UTX) reported second quarter results earlier this week. Investors breathed a sigh of relief as sales growth appears to be returning to the firm’s far-flung global operations. Management continued to keep a tight lid on costs, too, which will prove helpful as it recovers from a difficult couple of years.
Tupperware Brands (NYSE:TUP) focuses on a direct-sales model that consists of an army of individuals that sell its kitchen storage and beauty brands directly to other consumers. The business model is proving quite popular in emerging markets and could result in steady, substantial gains for shareholders in the coming years.
Diversified healthcare giant Johnson & Johnson (NYSE: JNJ) reported second quarter earnings July 20. Profitability is holding up very well in the face of anemic sales trends and a number of product quality issues. However, overall growth trends are murky and could remain so for some time.
Industrial distributor and supplier W.W. Grainger (NYSE:GWW) reported strong financial results during its second quarter. Sales and profits have held up well over the last couple of years, withstanding a credit crunch and global recession. The firm’s outlook is also strong but investment appeal is currently lacking.
Toy and game designer Mattel (NYSE:MAT) is currently seeing a good degree of sales momentum due to a hit movie and resurgence in a couple of storied toy brands. Whether this momentum will continue is uncertain, but there are other positives to the investment story.
Posted: Jul 16, 2010 09:50 AM by Ryan C. Fuhrmann
Personal and commercial auto insurer Progressive Corp. (NYSE:PGR) reported second-quarter results on Tuesday that showed the company continues to grow in the segment that sells auto policies directly to consumers. Strong historical growth and high underwriting standards are other reasons to look closely at the stock, even though it is more pricey than the firm’s archrivals.
Yum! Brands (NYSE:YUM) reported second-quarter financial results on Tuesday that demonstrated a steady focus on growth outside of the U.S. China remains its top priority, and though domestic trends remain tepid, management was able to control costs at home and minimize a hit to profits.
Back in May, TeleNav (Nasdaq:TNAV) went public for $8 a share. The shares quickly soared more than 30% but have since settled back toward their offering price. At current levels, they are worth a close look because TeleNav has plenty of growth potential and a business model that could prove quite lucrative for shareholders over the long term.
Posted: Jul 13, 2010 09:18 AM by Ryan C. Fuhrmann
Not that long ago, home improvement retailer Lowe’s (NYSE:LOW) had no problem growing sales and earnings in excess of 20% per year. That trend quickly reversed course when the residential housing market peaked in 2005, and industry conditions have been dismal ever since. Investors are still waiting for a recovery and could use a higher margin of safety to be coaxed into investing in Lowe’s stock.
Posted: Jul 12, 2010 09:21 AM by Ryan C. Fuhrmann
Small capitalization consumer goods firm WD-40 Corp. (Nasdaq:WDFC) reported third-quarter earnings on Wednesday that came in well above analyst projections. Despite the good news, at current share price levels larger rivals are more appealing investment options.
Stock market weakness and tepid domestic growth prospects have sent shares of retailing giant Wal-Mart (NYSE:WMT) back below $50 per share. This represents a compelling value proposition for astute investors.
Posted: Jul 06, 2010 09:30 AM by Ryan C. Fuhrmann
Zep, Inc. (NYSE:ZEP), a provider of chemical cleaning solutions, was spun off from Acuity Brands (NYSE:AYI) in late 2007. This means that Zep is close to completing its third full year as an independent entity. Since that time, sales and profit trends have been murky, but should start looking up once end-customer demand improves.
Posted: Jul 05, 2010 14:00 PM by Ryan C. Fuhrmann
For-profit educator Apollo Group (Nasdaq:APOL) is better known for its University of Phoenix classes that are offered in both and online format and via physical campuses. Apollo is the largest for-profit educator out there, but this has done little to hamper its growth prospects. However, the debt its students take on and murky graduation trends are bigger long-term worries for this company; the firm is addressing these issues, but they may be impacting its stock.
Lighting fixture maker Acuity Brands (NYSE: AYI) is still struggling along with its residential and commercial construction customer base. Its third quarter results earlier this week confirmed the challenges, but the stock price has yet to fully reflect that these challenges could persist for an extended time.
Bricks-and-mortar book retailing has always been a tough business and is only getting more challenging as consumers shift to online purchases and the reading of digital books on electronic reading devices. Unfortunately for Barnes & Noble (NYSE:BKS), its core retailing business appears to be declining more rapidly than expected. It remains to be seen how much cash flow generation has deteriorated, but the implications are significant as the company will have to spend heavily to compete with a new set of rivals for digital books.
Consulting and business outsourcing giant Accenture (NYSE: ACN) reported third-quarter results this week that indicated businesses are shifting gears from survival mode to investing for the future. The trends are encouraging for the global economy, as well as prospective investors in the stock.
Spice, herb, and extract provider McCormick (NYSE: MKC) reported second-quarter earnings results June 24 that came in ahead of analyst projections. The firm is unlikely to grow rapidly, but an extremely steady sales base and overseas expansion prospects bode well for investors going forward.
Posted: Jun 25, 2010 11:00 AM by Ryan C. Fuhrmann Darden Restaurants (NYSE:DRI) closed out its fiscal year with a mixed fourth quarter. However, the full year was much more stable and served as an illustration that the company has been one of the safest bets in the industry over the longer haul.
Leading cruise line operator Carnival Corp. (NYSE:CCL) (NYSE:CUK) reported second quarter results on Tuesday that demonstrated booking trends are improving after a couple of down years. However, profits continue to be buffeted by volatile fuel costs and its ships continue to be expensive to run and build. As a result, another firm operating on its decks may be a smarter industry play.
Consumer good firm J.M. Smucker (NYSE:SJM) boasts that it can “help families create memorable mealtime moments,” and has done so for more than 100 years now. The addition of a leading coffee brand two years ago has helped it deliver on this mission, but may have made sales growth more of an uphill battle going forward.
FactSet (NYSE:FDS) specializes in providing financial systems and services to firms and individuals operating in the investment industry. The firm has developed a loyal following among its clients and continues to sign new clients. Profitability is also stellar, but the current stock valuation is lofty.
Consumer electronics titan Best Buy (NYSE:BBY) reported first quarter earnings on Tuesday that came in well below analyst expectations. Management brushed off the shortfall as a short-term blip and stuck to its full year guidance. It also expects profits to improve at a steady pace over the longer haul, but a number of factors are currently working against these ambitions. (Learn to pick out your investments on your next trip to the mall in our related article Analyzing Retail Stocks.)
Posted: Jun 15, 2010 10:47 AM by Ryan C. Fuhrmann
Shares in BP plc (NYSE:BP) were hammered again last week on continued criticism over the oil spill debacle in the Gulf and speculation that cleanup costs will escalate into the tens of billions of dollars. The stock reached a new low and has lost nearly half of its market capitalization, which now stands at $99 billion. At this point, the valuation has been unduly punished and represents a very interesting risk/reward tradeoff for brave investors.
Ski-resort operator Vail Resorts (NYSE:MTN) owns a handful of one-of-a-kind mountain assets and real estate. Strong third quarter results were indicative of the earnings potential from its operations, but the stock valuation and high costs to run its operations could end up snowballing investors.
Posted: Jun 10, 2010 08:35 AM by Ryan C. Fuhrmann
Cascade Corp (Nasdaq:CASC), which supplies loading products for industrial lift trucks, reported fiscal first-quarter financial results on Monday that came in well ahead of analyst projections. Despite the upside surprise, the shares don’t hold much upside potential, though the results do lend insight into the current state of global economic activity.
Posted: Jun 08, 2010 08:24 AM by Ryan C. Fuhrmann
China Finance Online (Nasdaq:JRJC) bills itself as the only financial website portal firm available for U.S. investors to invest in on domestic exchanges. It also happens to be a leading portal in China in its own right, and is one of the few ways for a burgeoning class of individual investors to track stock indexes in China and learn about individual companies.
After years of asset sales and divestitures, packaged food firm Sara Lee (NYSE:SLE) is a shadow of its former corporate self. Most of the appealing businesses have either been sold or spun out to shareholders, but what remains still holds promise for those hoping to make a buck, and should be realized through a number of appealing scenarios.
Data storage firm EMC (NYSE:EMC) is in an enviable situation due to its leading position in the industry, an improving economy and a secular demand trend supporting its hardware sales, service revenues and virtualization data capabilities. A major stock run left the shares fully valued, but they are worth keeping an eye on to see if they fall back to more reasonable levels.
Posted: May 31, 2010 09:00 AM by Ryan C. Fuhrmann
Big-box warehouse retail chain Costco (Nasdaq:COST) posted third-quarter results on Thursday that indicated shoppers are starting to spend on more discretionary items again. Given the firm’s higher-end focus, its domestic prospects are really looking up and put it in a more favorable position than archrivals. The share price valuation currently discounts most of this upside, but Costco is as steady a retailer as investors will find out there.
Posted: May 28, 2010 10:26 AM by Ryan C. Fuhrmann
Cracker Barrel Old Country Stores (Nasdaq:CBRL) operates nearly 600 locations that offer a sit-down, “home-style food” restaurant with a retail concept “reminiscent of America’s country heritage.” The combination has turned many otherwise fickle food patrons into a loyal customer base. Vicinity to convenient highway stops hasn’t hurt either. Sales stability coupled with old-fashioned cost cutting makes the stock worth a good, hard look.
Posted: May 27, 2010 08:51 AM by Ryan C. Fuhrmann
Growth prospects for the major players in the packaged and processed food industry continue to look uninspiring given their limited sales expansion prospects. Campbell Soup Co. (NYSE:CPB) confirmed this top-line predicament when it reported third-quarter results on Monday morning, which reflected stable growth, yet would not be able to give investors double-digit returns. Currency effects provided a boost to reported sales growth, and earnings increase was robust. Whether or not such increases can be maintained is a matter of speculation.
Diversified technology giant Hewlett-Packard (NYSE: HPQ) reported second quarter results May 18 that came in ahead of expectations. The upside was driven by robust trends in its personal computer, storage and server, and printer businesses. Longer term, these cyclical divisions could prove a drag on company fortunes. As a result, other firms in the industry are stronger investment candidates.
Retailing giant and industry bellwether Wal-Mart (NYSE: WMT) reported first quarter results May 18 that saw profits come in ahead of analyst projections. U.S. store sales trends came in a bit light, but the firm has its sights firmly set on international growth and is expanding at an impressive pace. Given the reasonable valuation, investors should consider hopping on board.
Human resources (HR) consultant and business outsourcing provider Hewitt Associates (NYSE:HEW) reported a tepid second quarter as sales growth was modest and profits declined. The firm has a better long-term track record of growing earnings and cash flow. Investors should consider using near-term weakness as an opportunity to pick up the shares on the cheap.
Home improvement giant Lowe’s (NYSE:LOW) reported first quarter earnings on Monday morning ahead of analyst projections. However, investors were disappointed by the firm’s outlook for the coming quarter and sent the shares on a downward path. This trajectory shouldn’t last too long as the industry has yet to recover to pre-crisis levels in terms of residential spending on improving and maintaining their residences.
Posted: May 14, 2010 11:43 AM by Ryan C. Fuhrmann
After an extremely difficult stretch brought on by the credit crisis, upscale department store retailer Nordstrom (NYSE:JWN) is finally seeing clients return to its flagship store with open wallets. Its share price ran up in anticipation of its sales and profit recovery, but a pullback from a new round of macroeconomic worries has placed the valuation back in more reasonable territory.
Posted: May 14, 2010 09:40 AM by Ryan C. Fuhrmann
In 2006, fast-food dining chain Wendy’s (NYSE:WEN) spun Tim Hortons (NYSE:THI) out to shareholders. Tim Hortons boasts itself as the largest restaurant chain in Canada, though this is still an understatement given it has achieved iconic status in the country, due in part to the fact it was named after a hockey legend. Having already wrapped up its home market, its sights remain firmly south of the border, where it is currently only a bit player and has ample expansion opportunities.
In early 2007, payroll processor Automatic Data Processing (NYSE: ADP) spun out Broadridge Financial Solutions (NYSE: BR). A weak stock market over the past couple of years has left shares of Broadridge little changed from levels when they first became public. At current levels, the market is not giving Broadridge the credit it deserves for its stable business model and subsequent downside protection. Better yet, recent events could indicate upside potential for shareholders.
Though nearly a decade apart, Japan and the United States both experienced severe stock market and real estate bubbles. Each bubble has its own similarities, but certain structural differences also exist in each country. These two cases help explain the unique circumstances that have marked the creation of and subsequent bursting of the most severe bubbles throughout history.
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2010-09-03 16:00
