Archive for December, 2012

  • Update on Nicholas Financial
    , December 20th, 2012 at 12:24 am

    I want everyone to be clear on what just happened with Nicholas Financial ($NICK).

    Tuesday was the last day one could buy the shares to qualify for the big dividend.

    As such, the stock lost $2 per share in value on Wednesday. Shareholders, of course, aren’t losing anything since that $2 will be paid out to them. On Wednesday’s trading, NICK lost $2.29 per share, so that was $2 due to the dividend and 29 cents as a part of regular trading.

    When the dividend was announced, NICK was at $13.35 so the stock has only lost 90 cents per share. In effect, the stock gains $1.10 per share before we adjust for the $2 dividend.

    What I’m trying to say is that we’ve made a nice profit on this whole special dividend plan.

  • Bed Bath & Beyond Earns $1.03 Per Share
    , December 19th, 2012 at 4:26 pm

    Bed Bath & Beyond ($BBBY) just reported fiscal Q3 earnings of $1.03 per share which was one penny better than estimates. Sales rose 15.3% to $2.702 billion. The key metric for retailers is comparable-store sales. For Q3, that rose by 1.7%. The company estimates that Hurricane Sandy knocked 0.9% off comparable-store sales growth.

    Bed Bath & Beyond also announced a $2.5 billion share repurchase program. Personally, I’d much rather have a dividend.

    This was a decent quarter for Bed Bath & Beyond, and it’s a nice rebound from Q2. BBBY’s guidance, however, was a bit weak. For Q4, they see earnings ranging between $1.60 and $1.67 per share. The Street was expecting $1.75. The stock is down in the after-hours market but I don’t expect tomorrow’s open to be too severe.

    Here are the sales and earnings figures for the past few quarters:

    Quarter Sales Gross Profit Operating Profit Net Profit EPS
    May-99 $356,633 $146,214 $28,015 $17,883 $0.06
    Aug-99 $451,715 $185,570 $53,580 $33,247 $0.12
    Nov-00 $480,145 $196,784 $50,607 $31,707 $0.11
    Feb-00 $569,012 $238,233 $77,138 $48,392 $0.17
    May-00 $459,163 $187,293 $36,339 $23,364 $0.08
    Aug-00 $589,381 $241,284 $70,009 $43,578 $0.15
    Nov-01 $602,004 $246,080 $64,592 $40,665 $0.14
    Feb-01 $746,107 $311,802 $101,898 $64,315 $0.22
    May-01 $575,833 $234,959 $45,602 $30,007 $0.10
    Aug-01 $713,636 $291,342 $84,672 $53,954 $0.18
    Nov-02 $759,438 $311,030 $83,749 $52,964 $0.18
    Feb-02 $879,055 $370,235 $132,077 $82,674 $0.28
    May-02 $776,798 $318,362 $72,701 $46,299 $0.15
    Aug-02 $903,044 $370,335 $119,687 $75,459 $0.25
    Nov-03 $936,030 $386,224 $119,228 $75,112 $0.25
    Feb-03 $1,049,292 $443,626 $168,441 $105,309 $0.35
    May-03 $893,868 $367,180 $90,450 $57,508 $0.19
    Aug-03 $1,111,445 $459,145 $155,867 $97,208 $0.32
    Nov-04 $1,174,740 $486,987 $161,459 $100,506 $0.33
    Feb-04 $1,297,928 $563,352 $231,567 $144,248 $0.47
    May-04 $1,100,917 $456,774 $128,707 $82,049 $0.27
    Aug-04 $1,273,960 $530,829 $189,108 $120,008 $0.39
    Nov-05 $1,305,155 $548,152 $190,978 $121,927 $0.40
    Feb-05 $1,467,646 $650,546 $283,621 $180,980 $0.59
    May-05 $1,244,421 $520,781 $150,884 $98,903 $0.33
    Aug-05 $1,431,182 $601,784 $217,877 $141,402 $0.47
    Nov-06 $1,448,680 $615,363 $205,493 $134,620 $0.45
    Feb-06 $1,685,279 $747,820 $304,917 $197,922 $0.67
    May-06 $1,395,963 $590,098 $148,750 $100,431 $0.35
    Aug-06 $1,607,239 $678,249 $219,622 $145,535 $0.51
    Nov-07 $1,619,240 $704,073 $211,134 $142,436 $0.50
    Feb-07 $1,994,987 $862,982 $309,895 $205,842 $0.72
    May-07 $1,553,293 $646,109 $154,391 $104,647 $0.38
    Aug-07 $1,767,716 $732,158 $211,037 $147,008 $0.55
    Nov-08 $1,794,747 $747,866 $203,152 $138,232 $0.52
    Feb-08 $1,933,186 $799,098 $259,442 $172,921 $0.66
    May-08 $1,648,491 $656,000 $118,819 $76,777 $0.30
    Aug-08 $1,853,892 $739,321 $187,421 $119,268 $0.46
    Nov-08 $1,782,683 $692,857 $136,374 $87,700 $0.34
    Feb-09 $1,923,274 $785,058 $231,282 $141,378 $0.55
    May-09 $1,694,340 $666,818 $142,304 $87,172 $0.34
    Aug-09 $1,914,909 $773,393 $222,031 $135,531 $0.52
    Nov-09 $1,975,465 $812,412 $245,611 $151,288 $0.58
    Feb-10 $2,244,079 $955,496 $370,741 $226,042 $0.86
    May-10 $1,923,051 $775,036 $225,394 $137,553 $0.52
    Aug-10 $2,136,730 $874,918 $296,902 $181,755 $0.70
    Nov-10 $2,193,755 $896,508 $305,110 $188,574 $0.74
    Feb-11 $2,504,967 $1,076,467 $461,052 $283,451 $1.12
    May-11 $2,109,951 $857,572 $288,948 $180,578 $0.72
    Aug-11 $2,314,064 $950,999 $371,636 $229,372 $0.93
    Nov-11 $2,343,561 $958,693 $357,020 $228,544 $0.95
    Feb-12 $2,732,314 $1,163,669 $550,765 $351,043 $1.48
    May-12 $2,218,292 $887,199 $313,398 $206,836 $0.89
    Aug-12 $2,593,015 $1,032,669 $365,137 $224,330 $0.98
    Nov-12 $2,701,801 $1,074,010 $361,649 $232,750 $1.03

  • News Corp. at 13-Year High
    , December 19th, 2012 at 1:16 pm

    Being in opposition can apparently be quite profitable. News Corp. ($NWSA), the parent of Fox, hit a 13-year high today. The shares are up more than 250% since President Obama was inaugurated. The stock lost more than 59% during President Bush’s time in office.

  • Mark Hurd on Oracle’s Earnings
    , December 19th, 2012 at 11:03 am

  • Oracle’s Q3 Guidance
    , December 19th, 2012 at 10:41 am

    From Oracle’s conference call:

    We now have nearly $34 billion in cash and marketable securities. And now as we’ve said before, we remain committed to returning value to our shareholders through our technical innovation, acquisitions, stock repurchases and prudent use of debt. At dividend, in this quarter we repurchased 96.1 million shares for a total of 3 billion in the quarter. Over the last 12 months, we’ve repurchased nearly 350 million shares for a total value of $10.2 billion. And earlier this month, the Board declared an accelerated dividend of $0.18 per share for the second, third and fourth quarters, which will be paid out in December.

    Now to the guidance. New software license and cloud subscription revenue growth is expected to range from 4% to 14% in constant currency and 3% to 13% in reported dollars. Hardware product revenue growth is expected to range from a negative 10% to flat in constant and reported dollars. And as a result, total revenue growth on a GAAP to non-GAAP basis is expected to range from 2% to 6% in constant dollars, 1% to 5% in U.S. dollars.

    Non-GAAP EPS is expected to be somewhere between $0.64 and $0.68 in both U.S. dollars and constant dollars, up from $0.62 last year. GAAP EPS is expected to be between $0.51 and $0.55 in U.S. and constant dollars. This guidance assumes a GAAP tax rate of 24% and a non-GAAP tax rate of 24.5%. And of course, it may end up being a bit different.

    Wall Street had been expecting 62 cents per share.

  • Oracle Hits 52-Week High
    , December 19th, 2012 at 10:21 am

    The stock market continues to climb. The S&P 500 has been as high as 1,447.75 this morning which is its highest point in two months. We’re not that far from making a new five-year high.

    The big news today is that GM ($GM) will be buying back 200 million shares from the Treasury. That’s given a nice boost to GM’s stock price which in turn is helping out Ford ($F). Ford’s stock has been as high as $11.85 today which is an eight-month high.

    The best news is that Oracle ($ORCL) is up nicely this morning on yesterday’s earnings report. I see that Oracle is at a new 52-week high. The stock has been as high as $34.15 this morning. Was this stock really below $26 per share in June?

    Nicholas Financial ($NICK) is down about $2 per share today because of course, shareholders aren’t really at a loss since the dividend date has just passed.

    After the close, we’ll get earnings from Bed Bath & Beyond ($BBBY).

  • Morning News: December 19, 2012
    , December 19th, 2012 at 6:39 am

    UBS Admits Fraud In $1.5 Billion Libor Rigging Deal

    Bank of England Says Sterling Hurting Economy

    German Business Confidence Rises for a Second Month

    Greek Bond Yields At 21-Month Low

    Stocks Climb to 17-Month High as Yen Falls Versus Euro

    How Retirees Can Cope With Fed’s “New Normal”

    Oracle Sales, Profit Top Estimates on Cloud Computing Demand

    Nielsen to Branch Out With Arbitron

    Knight Takes Higher Price in Getco Sacrificing Virtu Cash

    Jefferies Group’s Profit Rises 48%

    In Unusual Move, Cerberus to Sell Gun Company

    Zuckerberg Donates $500 Million to Silicon Valley Foundation

    Boo-Yah? SEC Settles With Jim Cramer’s TheStreet.com Former Execs

    Phil Pearlman: All Eyes on the Financials

    Roger Nusbaum: Not How To Create Your Own Hedge Fund

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  • Oracle Earns 64 Cents Per Share
    , December 18th, 2012 at 5:52 pm

    I said in last week’s CWS Market Review that I expected Oracle ($ORCL) to beat earnings, and that’s exactly what happened. After the closing bell, Oracle reported fiscal Q2 earnings of 64 cents per share which was three cents more than Wall Street’s consensus. Sales came in at $9.11 billion which beat Wall Street’s forecast of $9.02 billion.

    New software license and subscription sales — a closely watched metric because it’s a predictor of future revenue — gained 17 percent to $2.39 billion. Analysts on average had anticipated $2.24 billion, according to Olson.

    Hardware revenue — including servers and storage gained in the 2010 acquisition of Sun Microsystems Inc. — declined 23 percent to $734 million, while Olson said analysts were expecting $810 million.

    Oracle is competing with SAP AG (SAP), Microsoft Corp. and a growing number of startups for share of the cloud software market as customers replace aging software and servers with updated, Web-based products.

    Since the middle of last decade, Oracle has spent more than $50 billion on more than 80 deals, fueling an expansion in sales and earnings.

    Ellison has said Oracle will use cash to boost dividends gradually over time, rather than to make big acquisitions. The company will accelerate dividend payments for its next three quarters, making one payment on Dec. 21 and joining a list of businesses moving up payouts ahead of potential U.S. tax increases next year.

    The stock is up to $33.45 after hours. Look for a new 52-week high tomorrow.

  • Stocks Love Inflation
    , December 18th, 2012 at 10:35 am

    Here’s an update to the chart showing the S&P 500 (red line) moving in tandem with 10-year inflation expectations (blue line). The blue line is the 10-year Treasury yield minus the 10-year TIPs yield.

  • Morning News: December 18, 2012
    , December 18th, 2012 at 7:29 am

    Abe Shift on BOJ Shows Volcker Moment May Loom in Japan

    India’s US Government Debt Holding Dips To $58.9 Billion, China’s Rises

    Spain Bad Loans Ratio Surges to 11.23% as Defaults Climb

    Sweden Cuts Interest Rates To 1%

    Obama Makes A Substantial Counteroffer On Fiscal Deadline

    Gold Gains as U.S. Budget-Deal Optimism Spurs Commodities

    Massachusetts Fines Morgan Stanley Over Facebook I.P.O.

    Clearwire Investors Unlikely To Get Higher Sprint Bid

    American Railcar Offers To Buy Greenbrier For About $543 Million

    The Bribery Aisle: How Wal-Mart Used Payoffs to Get Its Way in Mexico

    Elliott Management Offers To Buy Compuware

    Boeing to Lift Dividend, Resume Buybacks

    McDonald’s Pushes Stores To Stay Open On Christmas

    Jeff Carter: Compromise on The Fiscal Cliff

    Pragmatic Capitalism: Our 2012 Awards to the Markets

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