Archive for May, 2013

• Ross Stores Earns $1.07 per Share for Q1
  Eddy Elfenbein, May 23rd, 2013 at 5:55 pm

  After the closing bell, Ross Stores ($ROST) reported first-quarter earnings of $1.07 per share. That’s up 15% from a year ago. Q1 Sales rose 8% to $2.54 billion. Comparable store sales were up by 3%.

  The CEO said, “We are pleased with the slightly better-than-expected sales and earnings we delivered in the first quarter, especially considering this growth was achieved on top of strong prior year gains. These results continued to be driven by our ongoing ability to offer terrific bargains to today’s value-oriented consumers.”

  For Q2, Ross sees earnings of 89 to 93 cents per share. That’s up from 81 cents for last year’s Q2. Wall Street had been expecting 91 cents per share. For the whole year, Ross projects earnings between $3.70 and $3.81 per share. Wall Street was a little higher, at $3.88 per share.

• The Great Market Crash of Mid- to Late-May 2013
  Eddy Elfenbein, May 23rd, 2013 at 10:02 am

  Traders seem a bit nervous today. The big turnaround from yesterday is continuing into this morning.

  

  Yesterday’s high for the S&P 500 came at about 10:30 am when the index peaked at 1,687.18. Today it’s been as low as 1,635.53. From top to bottom, that’s a loss of just over 3% in less than 24 hours.

• Morning News: May 23, 2013
  Eddy Elfenbein, May 23rd, 2013 at 7:15 am

  Japanese Stocks Fall Sharply

  China Factory Activity Shrinks For First Time In Seven Months: Flash PMI

  IMF’s Lagarde Heard by Court in Sarkozy-Ally Arbitration Probe

  Bernanke Seeks Sustained Job Gains Before Paring Bond Buy

  House Set To OK Pegging Student Loan Rates To Financial Markets Despite A Veto Threat

  Cash Piles Up as U.S. CEOs Play Safe With Slow-Growth Economy

  Torches and Pitchforks for IRS But Cheers for Apple

  Lenovo Quarterly Profit Rises 90% on Market Share Gains

  Target Earnings: Outlook Cut Follows Weak Sales

  U.S. Retailers See Big Risk in Safety Plan for Factories in Bangladesh

  EU Regulators Accept Lufthansa, United Antitrust Offer

  SoftBank Would Appoint “Security Director” To Sprint Board

  UK Regulator Fines Jpmorgan 3 Million Pounds

  Joshua Brown: Chills n’ Wrath

  Credit Writedowns: Excess German Savings, Not Thrift, Caused the European Crisis

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• Flowers Foods to Split and Raise Dividend
  Eddy Elfenbein, May 22nd, 2013 at 8:58 pm

  I often point out to investors that there are a lot of dull and little-known companies that have been great investments. One of the best has been Flowers Food ($FLO). Here’s a company description from Hoovers:

  Flowers Foods is a rising star in baked goods. The company is one of the largest wholesale bakeries in the US. Flowers Foods bakes, markets, and distributes fresh breads, buns, rolls, corn and flour tortillas, and sweet bakery goodies to retail food and foodservice customers in the western, southern, and northeastern US. The company’s brand names include Cobblestone Mill, Nature’s Own, and Tastykake. Flowers Foods makes snack cakes, pastries, donuts, and frozen bread products for retail, vending, and co-pack customers nationwide. It also rolls out hamburger buns for national fast-food chains. Flowers Foods has agreed to buy several bread brands, including Wonder, and about 20 bakeries from Hostess Brands.

  Exciting, huh? Yeah, I know it sounds pretty boring but FLO makes stuff people need, and after all, that’s all that business is.

  The stock is currently at $34 per share; 18 years ago, you could have picked them up for $1 apiece. Since 1995, FLO has split 3-for-2 seven times (and that doesn’t include another in 1987), plus they just announced another 3-for-2 split today. Flowers is also raising its dividend by 5.5% to 11.25 cents per share per quarter.

  Despite a stellar track record and a market cap near $5 billion, Flowers is followed by just nine Wall Street analysts. Netflix ($NFLX) is followed by 24 even though FLO makes about seven times the profit.

• Ford Expands Production
  Eddy Elfenbein, May 22nd, 2013 at 9:39 am

  So many things are going right for Ford ($F) these days. A few years ago, the company was worrying about staying alive. Today, it’s worried about keeping up with demand.

  The WSJ reports:

  Ford Motor Co. plans to increase its North American manufacturing capacity by 200,000 vehicles in 2013 through a series of production-line expansions and a shortening of its normal summer shutdown by a week at several plants.

  The Dearborn, Mich., auto maker won’t say what its total capacity is, but the company built 2.8 million vehicles in the region last year and was working near full capacity.

  Ford will reduce its normal summer shutdown to one week from two at most of its North American plants. That alone will add 40,000 units of capacity, the company said. Also, it plans to speed up production at other plants to meet demand.

  Ford recently said it would add a third shift to its Kansas City, Mo., F-150 pickup truck plant, adding 900 workers. It also is adding a shift of workers to an assembly plant near Detroit that will make the Fusion sedan as well as the Mustang.

  After spending years closing plants and battling with its U.S. unions to get cost-savings, Ford is adding back production and is running at nearly full capacity, said Jim Tetreault, Ford’s North American manufacturing chief.

  “We have three-quarters of our plants running on three crews,” Mr. Tetreault said. Three shifts at a plant is considered beyond “full capacity,” which typically is two shifts running 40 hours a week. Going around the clock makes plants more efficient and profitable.

  I think Ford is a $20 stock.

• Morning News: May 22, 2013
  Eddy Elfenbein, May 22nd, 2013 at 7:21 am

  Bank of Japan to Bond Markets: We Hear You

  Russia Shelves Bond Auction Citing Lack of Competitive Bids

  In Europe, a Fed President Urges Quantitative Easing

  Dudley Says He Can’t Be Sure If Next QE Move Is ‘Up or Down’

  Even Before Apple Tax Breaks, Ireland’s Policy Had Its Critics

  Apple’s Web of Tax Shelters Saved It Billions, Panel Finds

  Google Joins Apple Avoiding Taxes with Stateless Income

  Sony Board Considers Plan for Entertainment IPO

  Vote Strengthens Dimon’s Grip

  Ford Adding 200,000 to Capacity as Fusion, F-Series Gain

  Lowe’s Earnings Fall Short of Estimates

  Toll Brothers Profit Rises 46%

  Staples Quarterly Profit Misses Analysts’ Estimates

  Cullen Roche: The Portfolio Manager Strategy Cycle

  Howard Lindzon: Tumblrnomics – The Winners of the Tumblr and Yahoo Deal are …..Web Entrepreneurs, Creatives and Angel Investing…The Loser is The Middle Class

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• 19 Straight Tuesdays for the Dow
  Eddy Elfenbein, May 21st, 2013 at 4:02 pm

  For the 19th time in a row, the Dow has rallied on a Tuesday.

  

• JPMorgan Chase Raises Dividend
  Eddy Elfenbein, May 21st, 2013 at 3:31 pm

  Fresh after winning its vote, Jamie Dimon and JPMorgan Chase ($JPM) raised its quarterly dividend by 26.7% to 38 cents per share. The old dividend was 30 cents per share. Based on the new dividend and this afternoon’s price, JPM yields 2.86%.

• That Goldman Sachs Report
  Eddy Elfenbein, May 21st, 2013 at 2:42 pm

  Here’s a link to that Goldman Sachs report that’s been getting so much attention. In it, Goldman says the S&P 500 could reach 2,100 by 2015. They forecast earnings of $124 for 2015 so that translates to an earnings ratio of 17.

  Here’s more from ValueWalk and Josh Brown.

• The Russell 2000 Breaks 1,000
  Eddy Elfenbein, May 21st, 2013 at 2:12 pm

  Yesterday, the Russell 2000 index broke 1,000 for the first time ever. The index has a chance to close over that mark today.

  While large-cap stocks have had a hard time over the last several years, small-caps have done quite well. Consider this: if the S&P 500 had kept pace with the Russell 2000 over the last 14 years, it would be over 3,200 today.