Archive for January, 2018

• RPM Earns 70 Cents Per Share
  Eddy Elfenbein, January 4th, 2018 at 11:16 am

  Good news this morning for RPM International (RPM). The company reported fiscal Q2 earnings of 70 cents per share which beat the Street by eleven cents. However, that includes a tax benefit of nine cents per share. Quarterly sales rose 10.5%. Organic sales rose by 4.3% and acquisition sales were up 4.7%. Forex added another 1.6% to sales growth

  RPM International today reported record sales, net income and diluted earnings per share for its fiscal 2018 second quarter ended November 30, 2017. Sales increased 10.5% and net income of $95.5 million, or $0.70 per diluted share, compared to a year-ago net loss of $70.9 million, or loss of $0.54 per diluted share. The fiscal 2017 second-quarter results included a $188.3 million pre-tax ($129.2 million or $0.97 per diluted share, after-tax) impairment charge. The fiscal 2017 second-quarter results also included a charge of $12.3 million, or $0.09 per share, which had no tax impact, related to the decision to exit an industrial segment business in the Middle East.

  Second-Quarter Results

  Net sales of $1.32 billion were up 10.5% over the $1.19 billion reported a year ago. Organic sales improved 4.2% and acquisition growth added 4.7%. Foreign currency translation increased sales by 1.6%. Net income of $95.5 million compares to last year’s adjusted net income of $70.5 million. Earnings per diluted share of $0.70 in the current quarter, which included a $0.09 per diluted share tax benefit relative to last year’s tax rate, compare to an adjusted $0.52 per diluted share last year. Earnings per diluted share increased 34.6% from last year’s adjusted earnings per diluted share of $0.52, and increased 17.3% excluding the $0.09 per diluted share tax benefit. Income before income taxes (IBT) of $109.2 million compares to a loss before income taxes of $106.9 million reported in the fiscal 2017 second quarter. RPM’s consolidated earnings before interest and taxes (EBIT) of $131.8 million compare to a consolidated loss before interest and taxes of $86.4 million reported in the fiscal 2017 second quarter. Excluding the year-ago charges, RPM’s consolidated EBIT for the fiscal 2018 second quarter improved 15.4% over $114.2 million in the fiscal 2017 second quarter. The EBIT improvement of 15.4% included the cost savings benefit in “Corporate/Other” expenses of $11.1 million from lower pension, healthcare, acquisition-related expenses and professional fees.

  “We were very pleased with RPM’s results during the fiscal second quarter. Our strategically balanced business model performed as intended with strength in our industrial and specialty businesses offsetting weakness in our consumer segment. Sales growth was strong across all three of our business segments, with a balance of organic and acquisition growth. We are also seeing the benefits of last year’s product line acquisitions and cost reduction efforts on improved leverage, which more than offset higher raw material costs that have negatively impacted gross profit margins,” stated Frank C. Sullivan, chairman and chief executive officer.

• The Dow By Days of the Week
  Eddy Elfenbein, January 4th, 2018 at 8:46 am

  I was number-crunching and I came across a remarkable stat. Here are the compounded gains for the Dow by days of the week from March 1, 1986 to the end of 2017.

  Mondays +94.60%
  Tuesdays +259.11%
  Wednesdays +107.54%
  Thursdays +5.46%
  Fridays -5.43

  That’s the compounded gain, meaning if you had solely invested on those days.

  Here are the number of trading days per day of the week:

  Mondays 1,517
  Tuesdays 1,645
  Wednesdays 1,647
  Thursdays 1,614
  Fridays 1,603

  It’s so skewed toward the start of the week. In fact, if we combine Monday, Tuesday and Wednesday, then we see that the Dow has gained 1,350.33% on 4,809 days. Meanwhile, Thursday and Friday have lost -0.27% on 3,217 days.

  That means the Dow’s entire gain, excluding dividends, has come during the first three days of the week. Thursday and Friday do nothing.

  If we add everything up, that’s 8,028 trading days for a return of 1,346.36%. That aligns with the Dow going from 1,709.06 on February 28, 1986 to 24,719.22 on December 29, 2017.

• Morning News: January 4, 2018
  Eddy Elfenbein, January 4th, 2018 at 7:05 am

  Researchers Discover Two Major Flaws in the World’s Computers

  How a Secretive Conclave Decides When U.S. Recessions Happen

  Commodities Are on Their Longest Winning Streak in History

  Bitcoin’s Cheap Energy Feast Is Ending

  U.S. Auto Sales Slump in First Since 2009, But Party Isn’t Over

  Competing With the Giants in Race to Build Self-Driving Cars

  Tesla Reports New Setack for Model 3, With Output Lagging

  AT&T Says It Will Launch 5G in a Dozen Cities This Year

  Smaller Rite Aid Plans To Grow PBM’s Medicare Prescription Business

  McDonald’s New ‘Archburger’ Will Use Fresh Beef Instead of Frozen

  Spotify Makes Confidential Filing for IPO

  Even a Billionaire Brother’s Love Has Limits

  Roger Nusbaum: Random Roger Round Up

  Howard Lindzon: One Man’s Bubble is Another’s Wealth Generating Event

  Josh Brown: Pro-Am & Bess Levin on the Market’s Mute Button

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• Dividends Rose 6.31% in Q4
  Eddy Elfenbein, January 3rd, 2018 at 12:07 pm

  Last quarter was another good one for dividends for the S&P 500. Dividends rose by 6.31% over Q4 2016. This is the 31st quarter in a row of dividend increases for the index.

  For the year, dividends were up 7.07% over 2016. Over the last seven years, dividends are up 115%. That’s actually a tiny bit slower than the S&P 500. In other words, the index has gotten cheaper on a yield basis.

  

  The blue is the S&P 500 and it follows the left scale. The black is the rolling 12-month dividends and it follows the right scale.

  For some reason the y-axis indicators didn’t show up, but both axes are scaled at a ratio of 50-to-1. That means that whenever the lines cross, the S&P 500’s dividend yield is exactly 2%. As you can see, it’s tracked near 2% fairly well for the last 15 years.

  Both axes are logarithmic. The left goes from 600 to 3,000 while the right goes from 12 to 60.

• The S&P 500 Breaks 2,700
  Eddy Elfenbein, January 3rd, 2018 at 11:17 am

  For the first time ever, the S&P 500 broke 2,700 this morning. The index was last below 27 in March 1954 (it was still below its 1929 high). That’s a 100-fold gain in 64 (and 89) years.

  We only have about 4% or so to go for the S&P 500 Total Return Index to be five times where it was at the March 2009 low.

  

  Yesterday’s market was interesting because high-beta stocks did well while low vol stocks lagged along. Today’s market is more balanced but small-caps are leading the pack.

  Before the market opened, we learned that the ISM Manufacturing Index was 59.7 for December. That’s a good number, and it was up from 58.2 in November. We also learned that construction spending rose 0.8% in November. In the past year, construction spending was up 2.4%.

• Morning News: January 3, 2018
  Eddy Elfenbein, January 3rd, 2018 at 7:05 am

  Germany’s Jobless Rate Drops to Record Low as Economy Booms

  MiFID Shake-Up Gets Real as Wary Traders See Volumes Dry Up

  New in the West Bank: A Credit Boom Waiting for a Real Economy

  Bitcoin Loses Some Dazzle as Second-Tier Crypto Coins Catch Up

  Peter Thiel Is a Bitcoin Believer

  Meet The Crypto Billionaires Getting Rich From Ripple’s XRP

  American and Southwest Airlines Promise ‘Tax Bill Bonus’ for Employees

  Time for Jack Ma to Step Up

  Amazon Will Buy Target This Year, Gene Munster Predicts

  Tesla’s Scant Disclosures on the Model 3 Leave Wall Street Guessing

  McDonald’s Tests New Fresh Beef Burger

  A Saucy App Knows China’s Taste in News. The Censors Are Worried.

  Jeff Carter: The Next Big Thing Is Hard

  Michael Batnick: The Math Doesn’t Work

  Cullen Roche: The 2018 Global Financial Asset Portfolio

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• The S&P 500 Sectors in 2017
  Eddy Elfenbein, January 2nd, 2018 at 8:30 am

  Here’s an interesting chart. This shows the relative strength of the major S&P 500 sectors during 2017.

  

  Sorry I had to cram the legend on there.

  To be clear, this isn’t how well the sectors did overall. Instead, it’s the sectors divided by the S&P 500. In other words, a rising line means the sector is beating the market while a falling line means it’s trailing. I used the total return figures.

  A few things stand out. First, this was a tough year for Energy stocks. They badly trailed the market during the first part of the year. (I didn’t include Real Estate, Utes or Telecoms. The chart is crowded enough as it is.)

  The Tech Sector was the big winner; however, there were two pullbacks, one in June and another in November.

  Most of the other sectors could fairly be said to be market performers. Healthcare was strong during much of the year, but it tailed off after Labor Day. Financials were weak through May but picked up steam later in the year.

  I think I was most surprised by the weakness in Consumer Staples from May to November.

• Morning News: January 2, 2018
  Eddy Elfenbein, January 2nd, 2018 at 7:04 am

  Bitcoin May Be Struggling — But Ethereum Just Posted a Fresh All-Time High

  Europe’s Record Factory Growth Puts the Squeeze on Resources

  OPEC Deal Doesn’t Stop Russia From Record Oil Output in 2017

  China Bulls Out in Force as Stocks, Yuan Start Year With Gains

  LeEco’s Jia Defies China Return Order, Sends Family Instead

  California Rolls Its Own Recreational Pot Sales Out For 2018

  The $15 Minimum Wage Movement Is Winning, And That’s Bad News For Cashiers

  BP Takes $1.5 Billion Charge Related to U.S. Tax Overhaul

  With Disney Deal Looming, Murdoch’s Empire Is Fractured

  UPS: If The Founders Were Alive Today

  Those Seatback Screens on Planes Are Starting to Disappear

  Toasts to the Deals (and Other Winners) of 2017

  Ben Carlson: Upside Risk Management

  Jeff Miller: What Should Worry Investors in 2018?

  Howard Lindzon: I Love 2018…and Trump Made American Stocks Below Average in 2017

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• Morning News: January 1, 2018
  Eddy Elfenbein, January 1st, 2018 at 7:56 am

  How China Will Shake Up the Oil Futures Market

  Goldman Sees Crypto, Credit Shadowing Robust 2018 U.S. Economy

  Wall Street Eyes 2018 Gains with a Side of Caution

  The Pessimist’s Guide to 2018

  Start of a New Year of Trading, and Jobs Report from December

  As U.S. Budget Fight Looms, Republicans Flip Their Fiscal Script

  Tax Law Offers a Carrot to Gig Workers. But It May Have Costs.

  A Retailers’ Guide to Curbing Online Gift Returns

  How Do You Turn an Ad Into a Meme? Two Words: Dilly Dilly

  Japan’s Nippon Life Eyeing M&A for Foreign Boutique Bond and Alternative Funds

  8 Changes to Social Security in 2018

  Louisiana Man Charged in ‘Nigerian Prince’ Scheme

  Josh Brown: Snowballing into 2018

  Michael Batnick: These Are the Goods

  Jeff Carter: ICO Accounting

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