Archive for January, 2017

• Morning News: January 26, 2017
  Eddy Elfenbein, January 26th, 2017 at 7:08 am

  Spain Unemployment Falls to Seven-Year Low Amid Budget Talks

  Dow Bursts Through 20,000, Extending a Rally That Looked Unlikely A Year Ago

  U.K. Brexit Boom Still Sees Economy Plagued by Old Problems

  RBS Gains After $3.8 Billion Charge Tied to U.S. Mortgage Probe

  Johnson & Johnson to Acquire Actelion for $30 Billion

  Fiat Chrysler Pledges to Nearly Halve Net Debt in 2017, Shares Rise

  Apple Sues Qualcomm in Beijing Seeking 1 Billion Yuan

  The New Cisco Is All About Software, Software, Software

  Musk’s Surprising Rapport With Trump Yields 40% Rally for Tesla

  Facebook’s Virtual Reality Business Gets a New Leader

  TransCanada Has Not Yet Broached Keystone XL With Shippers

  Dow Chemical’s Revenue Rises 14% On Dow Corning Deal

  The $99 Billion Idea

  Jeff Miller: The Quest for Investing Excellence and the Lesson of Dow 20K

  Howard Lindzon: Dow 20,000 and Damn the Hedges

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• Nice Move in Continental Building Products
  Eddy Elfenbein, January 25th, 2017 at 4:58 pm

  Our littlest stock, Continental Building Products (CBPX), has had a nice rally in the last few days.

  

• Chuckles the Clown’s Funeral
  Eddy Elfenbein, January 25th, 2017 at 2:57 pm

  Sad news to hear that Mary Tyler Moore has passed away. Here’s my favorite scene from her show:

• Dow 20,000 Falls
  Eddy Elfenbein, January 25th, 2017 at 12:01 pm

  

  The Dow first broke 200 on December 19, 1927, and then 2,000 fell on January 8, 1987.

  Years ending in 7, I suppose?

• Morning News: January 25, 2017
  Eddy Elfenbein, January 25th, 2017 at 6:45 am

  ECB’s Lautenschlaeger Seeks Talks Soon on Gradual QE Exit

  In Its Third Month, India’s Cash Shortage Begins to Bite

  Trump Injects High Risk Into Relations With China

  Under Trump, It’s Make a Deal With the President — or Else

  Trump Tells Auto CEOs That Environmental Regulations Are ‘Out Of Control’

  Cisco to Buy AppDynamics for $3.7 Billion

  How Wireless Competition Is Finally Catching Up to Verizon

  Novartis Mulls Options Including Spinoff, IPO for Alcon Unit

  Apple Downgraded on Over-Hyped ‘iPhone 8’

  Retailers Chasing Fast Fashion Stumble Under Heavy Buyout Debts

  Alcoa Beats Revenue Estimates, Sees Higher Aluminum Demand

  Cohn To Receive Exit Package Of At Least $100 Million From Goldman Sachs

  Judge Says Aetna Dropped Out Of Some Obamacare Markets To Help Win Its Merger Fight

  Jeff Carter: 10,000 Bitcoins For a Pizza

  Josh Brown: The Truth About Trade

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• Stryker Earns $1.78 per Share
  Eddy Elfenbein, January 24th, 2017 at 4:27 pm

  Stryker (SYK) just reported Q4 earnings of $1.78 per share which beat the Street by two cents per share. Net sales grew 16.2% to $3.2 billion. That’s 16.8% growth in constant currency.

  For the year, Stryker earned $5.80 per share. They had previously given us a range of $5.75 to $5.80. Later they said they expected earnings at the top of that range. It turns out, they were right. Net sales for 2016 grew 13.9% to $11.3 billion. In constant currency, that’s growth of 14.3%.

  “I am pleased with our performance in both the fourth quarter and the full year 2016,” said Kevin A. Lobo, Chairman and Chief Executive Officer. “Fourth quarter organic sales growth of 6.7% versus a strong prior year is impressive and was balanced across Orthopaedics, MedSurg and Neurotechnology and Spine. In addition, we executed well on acquisitions and delivered leveraged adjusted earnings gains. We enter 2017 with good momentum across our businesses and look forward to building on this success.”

  Now let’s look at guidance. For Q1, Stryker expects earnings to range between $1.40 and $1.45 per share. Wall Street had been expecting $1.43 per share. For all of 2017, Stryker sees earnings between $6.35 and $6.45 per share. Wall Street had been expecting $6.39 per share.

  The company added that if forex rates hold, then they expect to see earnings dinged by $0.03 to $0.04 in Q1, and $0.10 to $0.12 for the year.

  The shares are unchanged after-hours.

• Atrion (ATRI)
  Eddy Elfenbein, January 24th, 2017 at 12:39 pm

  Here’s the latest in our never-ending series of great companies no one knows about. Please meet Atrion (ATRI).

  The company has a grand total of 1.8 million shares outstanding. The current share price is $459 so that gives them a market value of $826 million. On average, ATRI trades about 5,000 shares each day. That’s very low.

  From their website, Atrion describe themselves as:

  Atrion Corporation is a leading supplier of medical devices and components to niche markets in the health care and medical industry. Atrion’s proprietary products, ranging from cardiovascular and ophthalmology products to fluid delivery devices, are sold to end-users, distributors and other manufacturers worldwide. As a developer and manufacturer of a diverse range of products, Atrion stays on the forefront of technology and manufacturing with products that meet the needs of its targeted markets.

  Now for the money shot. Here’s the stock’s history.

  

  The stock rose from just over $4 per share in 1989 to $459 today, and that’s down from a high of $522 a few weeks ago.

  The stock has actually been a little more impressive than its price gain indicates because ATRI has often paid a dividend. By my estimate, ATRI has averaged 20% per year since 1990.

  Not one analyst follows it.

• Eight Alternating Days in a Row
  Eddy Elfenbein, January 24th, 2017 at 9:11 am

  Over the last eight days, the S&P 500 has closed up, down, up, down, up, down, up and down.

  

  The up-down streak is actually more impressive than it sounds because the day before it started we had a rare unchanged day. Prior to that, we had a four-day alternating streak.

  What this boils down to is that the first two trading days of the year were up. Since then, the market has failed to repeat the direction of the previous day.

• Morning News: January 24, 2017
  Eddy Elfenbein, January 24th, 2017 at 6:57 am

  Eurozone Economy Slows Despite More Buoyant France

  China’s Efforts to Stem Capital Outflows Are Starting to Pay Off

  Fed Debate Over $4.5 Trillion Balance Sheet Looms in 2017

  Trump’s Move to Dump TPP Bucks Growing Dependency on Asia

  Trump to CEOs: Stay Here, And I’ll Wipe Out 75% of Regulations, Fast-Track Factories

  The CFPB Is In The Crosshairs, Exactly Where It Belongs

  Aetna’s $37 Billion Humana Takeover Blocked by Judge

  Yahoo Faces SEC Probe Over Data Breaches

  Top Execs of UAE’s Etihad to Quit But Airline Says Committed to Strategy

  BT Plunges After Cutting Outlook, Tripling Italy Writedown

  Goldman Fights Back in Suit Against Indonesian Businessman

  Hoping to Strike Gold Again, Silver Lake Leads Investment in Koubei

  U.S. Judge Approves Volkswagen Dealers $1.2 Billion Settlement

  Roger Nusbaum: This Indeision’s Bugging Me

  Cullen Roche: The Biggest Myths in Investing, Part 1 – The “Investing” Myth

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• Winmark Corp. (WINA)
  Eddy Elfenbein, January 23rd, 2017 at 1:56 pm

  I’ve recently been looking at a fairly small company called Winmark Corp. (WINA). I’m not recommending it but it’s an interesting company to put on your radar screen.

  The company franchises five different types of retail stores: Style Encore, Plato’s Closet, Once Upon a Child, Play It Again Sports and Music Go Round.

  While the five stores are different, they share a common theme: they buy and sell slightly-used merchandise. Winmark also provides leasing for its business partners.

  Because of the company’s unusual structure, they do about $70 million in sales despite having about 100 full-time employees.

  From 2000 to 2016, Winmark was led by John Morgan, who turned the ship around. It’s difficult to describe this company. I suppose it’s like what eBay would be if they had stores.

  Here’s a chart since 2009: