Archive for May, 2009

• Sysco’s Earnings Fall
  Eddy Elfenbein, May 4th, 2009 at 10:55 am

  While the rest of the market is higher today, Sysco (SYY) is down modestly on its earnings report. Earnings were in line at 38 cents a share, down from 40 cents a year ago. Revenue declined 4.5% to $8.7 billion.
  Overall, I like Sysco a lot. This is one of the most stable companies on the market. I recently pointed out that the stock has been an amazing performer after a Citigroup exec looked down on Sysco’s employees.

• Weekend Poll
  Eddy Elfenbein, May 1st, 2009 at 8:24 pm

• Fiserv’s Earnings Still Growing
  Eddy Elfenbein, May 1st, 2009 at 3:37 pm

  Pretty good.

  Fiserv Inc. said its earnings from continuing operations increased in the first quarter, reflecting improved operating margins from the growth in sales of more profitable services.
  The Brookfield-based provider of services and technology to the financial services industry reported income from continuing operations of $102 million, or 65 cents per share, compared with $99 million, or 60 cents per share, for the same period a year ago.
  Continuing operations excludes the results of the firm’s 51-percent investment in the insurance business, which Fiserv (NASDAQ: FISV) sold in July 2008.
  Revenue declined in the quarter to $1.04 billion from $1.31 billion. The decline in revenue was attributed in part to declines in the home equity processing business.
  “Our results showcase the strength of our business model as we continue to deliver highly valued products and services across the financial services market,” said Jeffery Yabuki, president and CEO of Fiserv. “In spite of the expected revenue weakness in the quarter, we managed the business to optimize margins and grew adjusted earnings per share 10 percent.”
  Fiserv continues to expect full-year 2009 adjusted earnings per share from continuing operations to be within a range of $3.61 to $3.75, which represents growth of 10 to 14 percent compared with $3.29 in 2008.

  Fiserv (FISV) is a good stock going for a good price. The shares got punished way too much during September and October.
  Here’s the earnings call from Seeking Alpha.

• Strangest Graph You’ll See All Day
  Eddy Elfenbein, May 1st, 2009 at 2:59 pm

  Bear with me on this one. The long-term evidence suggests that the stock market’s total return outperforms inflation by about 7% a year (or doubling in real terms every ten years). That’s of course an average—the stock market has been dead flat against inflation for 12 years now.
  Here’s a look at the stock market’s real total return, meaning with dividends and adjusted for inflation, divided by a line rising at 7% a year. In other words, a flat line is a real increase of 7% a year.
  Just to make things even weirder, I used a log scale. The idea is to get the purest measure of the stock market’s performance.
  
  Since earnings growth tends to be fairly consistent, this line is surprisingly similar to a graph of price/earnings ratios. Of course, there’s no guarantee that stocks will continue to outperform inflation by 7% a year.
  What I find interesting is that the peaks and valleys seem to line up well. Warning: It’s dangerous to see relationships where none may exist. Still, it’s kind of interesting. I think it’s also interesting to see that there are very long periods of out-performance and under-performance. Stock investing is hardly a game for all seasons.