Archive for February, 2016

• Bank Stocks Flat for 20 Years
  Eddy Elfenbein, February 3rd, 2016 at 2:21 pm

  Bank stocks have been getting clobbered recently. Shares of Citigroup (C) are down by one-third in the last three months. Shares of the Financial ETF (XLF) are close to a two-year low.

  The S&P 500 Bank Index (^BIX) is about where it was 20 years ago. On October 17, 1996, the BIX closed at 192.32. Right now it’s at 193.52.

  

• Morning News: February 3, 2016
  Eddy Elfenbein, February 3rd, 2016 at 7:36 am

  China Sets 6.5% to 7% Growth Target, First Range Since 1990s

  Eurozone Economy ‘Losing Steam’ Amid Market Turmoil

  Putin Prepares to Court Foreign Investors Wary of Past Stumbles

  A Warning on Bankruptcy in Puerto Rico’s Debt Crisis

  China’s 1.4 Billion Mouths Behind ChemChina’s Syngenta Pursuit

  Intel Closes Some Diversity Gaps, but Challenges Remain

  A Yahoo Employee-Ranking System Favored by Marissa Mayer Is Challenged in Court

  Ford Europe to Cut Jobs in Drive For $200 Million of Savings

  Toyota Unit Enters $21.9 Million Settlement Over Alleged Auto Loan Racial Bias

  Pfizer Outlook for Little Growth Falls Short of Expectations

  Comcast Revenue Beats Street as NBCUniversal, Internet Units Grow

  Lowe’s Agrees to Buy Canada’s Rona for $2.3 Billion in Cash

  Why Michael Kors Holdings Ltd. Stock Skyrocketed Today

  Jeff Carter: Nothing Beats Growth, Nothing

  Joshua Brown: The Usual Explainers

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• Fiserv Earned $1.00 per Share for Q4
  Eddy Elfenbein, February 2nd, 2016 at 4:10 pm

  Fiserv (FISV) just reported Q4 earnings of $1.00 per share. That matches Wall Street’s estimate. Previously, the company had told us to expect Q4 earnings to range between 98 cents and $1.01 per share.

  For the year, Fiserv made $3.87 per share which is a 15% increase over the $3.37 in 2014. This is Fiserv’s 30th year in a row of double-digit EPS growth.

  “We delivered solid results in 2015 including internal revenue growth within our long-term outlook and our 30th consecutive year of double-digit adjusted earnings per share growth,“ said Jeffery Yabuki, President and Chief Executive Officer of Fiserv. “The organization generated record financial performance while delivering value for clients, associates and shareholders.”

  For our Buy List, this is our first earnings “non-beat” all season. Until now, all nine reports were beats.

  For 2016, Fiserv expects earnings to range between $4.32 and $4.44 per share. That’s an increase of 12% to 15% over the results from 2015. Wall Street had been expecting $4.33 per share.

• Ford’s Sales Slipped Last Month
  Eddy Elfenbein, February 2nd, 2016 at 2:25 pm

  From USA Today:

  Ford Motor’s U.S. sales fell 2.6% in January, compared to a year earlier, as auto industry sales leveled off in a month affected by a mighty storm in the Northeast.

  Edmunds.com analysts had projected a 2.4% decline in sales for Ford and a 0.5% decline for the industry.

  Following a record year for the industry, a brutal winter storm took a toll on sales in the Northeast in January, though analysts say the effect wasn’t particularly steep.

  Ford enjoyed a 4.5% increase in average transaction prices, compared to a year earlier, to $34,504, according to Kelley Blue Book.

  The company said its sales decrease was partially attributable to a strong January 2015.

  The shares are down to $11.48 today.

• Morning News: February 2, 2016
  Eddy Elfenbein, February 2nd, 2016 at 7:15 am

  Eurozone Unemployment Edges Down for 15th Month Running

  A New Global Oil Deal Could Draw Lessons From 1998

  Currency Traders Struggle to Parlay Bad Volatility Into Profit

  China’s Latest Measure Against Outflows Caps Insurance Purchases

  Alphabet Passes Apple as World’s Most Valuable Company With Google’s Help

  BP Cites Low Oil Prices in $3.3 Billion Loss, as Industry Toll Mounts

  Yahoo’s Marissa Mayer to Unveil Cost-Cutting Plan

  OSI Defies China Court Verdict as Frustrations Grow Over System

  Abbott to Acquire Alere, a Maker of Medical Diagnostics Tests

  G.E. to Phase Out CFL Bulbs

  Oh No Mario: Nintendo Profit Dives as Buyers Await Mobile Games

  Affordable Care Act Is Dark Spot For Aetna

  Einhorn Under Pressure as Greenlight Shrinks by $3.2 Billion

  Roger Nusbaum: January Finishes On An Up Note

  Cullen Roche: What Financial News Sources Should You Read?

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• AFLAC Earned $1.56 per Share for Q4
  Eddy Elfenbein, February 1st, 2016 at 4:27 pm

  AFLAC (AFL) just reported Q4 operating earnings of $1.56 per share. That beat estimates by nine cents per share. The weak yen knocked off five cents per share which is far less damage than it’s done in recent quarters.

  For the year, AFLAC earned $6.16 per share in operating earnings. That matched exactly what they made in 2014. However, the weak yen knocked off 46 cents per share from the 2015 number.

  In currency neutral terms, AFLAC grew its operating EPS by 7.5% last year. The original guidance was for 2% to 7%. In July, they raised it to 4% to 7%.

  AFLAC’s guidance for 2016 is the same as it was before:

  “As we look to 2016, our guidance remains unchanged since our December outlook call. Our objective is to produce stable operating earnings per diluted share of $6.17 to $6.41, assuming the average exchange rate in 2015 of 120.99 yen to the dollar. I would remind you that with volatile financial markets and interest rates at significantly depressed levels, it is difficult to safely invest cash flows at attractive yields. Additionally, 2016 benefit ratios in both the U.S. and Japan anticipate continued favorable experience. As always, we are working very hard to achieve our earnings-per-share objective while also ensuring we deliver on our promise to policyholders.”

• Tobacco Stocks Continue to Rally
  Eddy Elfenbein, February 1st, 2016 at 10:43 am

  I noticed that Philip Morris, Reynolds American and Altria are all at new highs today. Here’s a look at how tobacco stocks as a whole have performed over the last 16 years.

  

  That’s a 1,000% gain for the sector. Tobacco has done so well that the S&P 500 looks like a flat line in comparison. If anything, that chart understates tobacco’s gain because it doesn’t include dividends.

  Investors need to understand that tobacco is a classic defensive sector. That means it does well when the economy doesn’t. People cut back on big ticket items when the economy is soft, but they generally don’t cut buying cigarettes.

• Maybe No Rate Hike this Year
  Eddy Elfenbein, February 1st, 2016 at 10:23 am

  One of the more dramatic changes of the past few weeks has been the market’s abrupt change in its outlook for interest rates. Not that long ago, Wall Street thought the Fed would raise rates a few times this year, perhaps as many as four — that’s what the Fed has said.

  The futures market, however, sees a different story. Here are the odds the Fed will raise rates over the next few months.

  March 17.4%
  April 23.1%
  June 34.7%
  July 37.8%
  September 41.5%
  November 43.9%
  December 52.6%
  February 57.4%

  Meaning, it’s not a likely event until very late in the year. In fact, it’s quite possible that the Fed won’t touch rates all year.

• Stryker is Buying Sage Products
  Eddy Elfenbein, February 1st, 2016 at 10:10 am

  Big news today from Stryker (SYK). The company announced that it’s buying Sage Products for $2.775 billion. Sage is currently owned by Madison Dearborn Partners, a private equity firm.

  According to Stryker, “The transaction includes an anticipated future tax benefit which is expected to exceed $500 million and to positively impact cash flows over approximately 15 years.”

  Stryker said they hope the deal will close during Q2. They’re also raising their full-year guidance by five cents at both ends. The new range is $5.55 to $5.75 per share.

  “The company`s established leadership team and innovative products that help prevent hospital acquired conditions have driven consistent double-digit sales growth,” stated Kevin A. Lobo, Chairman and Chief Executive Officer. “This acquisition aligns with Stryker`s focus on offering products and services that support a mindset of prevention, specifically in the area of “Never Events” such as hospital acquired infections. Today, through our Medical division, Stryker offers products that are complementary to those produced by Sage. Sage has a 45-year history of focus on patients and caregivers that is evident in their culture and fits well with our Medical division. This business will also provide a consistent disposable revenue stream that will complement our capital equipment offerings. We look forward to welcoming the Sage team to Stryker.”

  Last week, Stryker reported Q4 earnings that topped consensus by one penny per share.

• Morning News: February 1, 2016
  Eddy Elfenbein, February 1st, 2016 at 6:56 am

  Euro Rises as ECB Officials Warn About Expecting Too Much Easing

  Domestic Demand Offsets Exports to Keep U.K. Factories Afloat

  Oil Rally Falters on Signs of Slowing China as OPEC Output Rises

  How Saudi Arabia Successfully Defended Its U.S. Oil Market Share

  “State-of-the-Art” Subterfuge: How Iran Kept Flying Under Sanctions

  What to Expect From Google’s Parent Alphabet Today

  Aetna Tops Street 4Q Forecasts

  CDC Expected to Declare End to Chipotle E. Coli Outbreak, Sources Say

  Caterpillar Revises Down Its 2016 Outlook

  Almond Prices Drop Significantly For California Growers

  As Zika Virus Spreads, Tata Gets Ready For The India Launch Of Its Hatchback Zica

  Nokia Drops as Samsung Patent Ruling Disappoints Investors

  China Company Accused of Fleecing Investors of $7.6 Billion

  Howard Lindzon: What Does Fear Look Like in 2016 Financial Markets?

  Jeff Miller: Is The Correction Over?

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