Author Archive

• Ford’s Impressive 2011
  Eddy Elfenbein, January 4th, 2012 at 1:30 pm

  Shares of Ford ($F) are doing well today on the news that the company reported very good sales for 2011. Here are some highlights from today’s press release:

  U.S. sales of the Ford brand totaled 2,062,915 vehicles in 2011, sealing its first three-point market share gain over three consecutive years since 1970

  Ford brand small car sales were up 25 percent in 2011, with 244,291 vehicles sold, while utilities increased 31 percent with 579,626 sales. Ford sold 584,917 F-Series pickups in 2011, making it the best-selling truck for 35 consecutive years and the best-selling vehicle for 30 years

  Ford posts best December retail sales month since 2005; total company sales in December were up 10 percent

  The company said it expects the U.S. economy to expand by 2% to 3% this year. The stock got as high as $11.53 today which is a two-month high.

• Morning News: January 4, 2012
  Eddy Elfenbein, January 4th, 2012 at 6:49 am

  Euro-Area Inflation Slows, Giving ECB Room

  Italy’s UniCredit Offers Heavy Share Discount

  Turkish Lira Gains as Central Bank Sells Dollars for Fourth Day

  Macau Gambling Revenue Rose 42% Last Year

  Oil Trades Near 8-Month High on Iran Tension, Shrinking Supply

  Against Euro and Yen, Dollar Defied Reality

  Fed Shows Rate Forecasts, Boosts Transparency

  Bank Earnings Jump 57% in Analyst Forecasts

  Online Sales Buoy U.P.S. and FedEx

  France’s Total in $2.3 billion U.S. Shale Gas Deal

  Swiss National Bank Chief’s Wife Defends Dollar Trades

  WJB Faced 25% Interest on Some Debt Ahead of Brokerage Shutdown

  Chinese Retailer Casts Doubt on TV Investigation

  Edward Harrison: Krugman, Tabarrok, Cowen and the Bond Vigilante Fallacy

  Joshua Brown: UBS: Fed’s New Interest Policy Will Increase Confusion, Not Clarity

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• Fourth-Quarter Earnings Guidance
  Eddy Elfenbein, January 3rd, 2012 at 10:44 pm

  Barron’s has a round-up of Q4 earnings guidance (h/t: Tadas). I counted them up: 27 positive, nine inline and 96 negative.

  This is hardly scientific but it tells us that earnings estimates may be coming down in the weeks ahead. Q4 earnings reports will start next week.

• Ross Stores’ Amazing Record
  Eddy Elfenbein, January 3rd, 2012 at 4:08 pm

  I’m usually a bit wary of investing in retail although there are a few good names. One stock that deserves attention is Ross Stores ($ROST).

  I can’t fully stand behind these numbers, but I believe Ross has one of the most impressive dividend records around. The company has increased its dividend for 17 straight years, which is every year that it’s paid one. According to my numbers, the company has raised its dividend by at least 14% for 16 of the last 17 years. I can’t confirm that, but it appears to be correct.

  The stock just finished a blowout year and two weeks ago had a 2-for-1 split. In a few weeks, I expect to see another impressive dividend increase.

  

  I don’t believe that last dividend data point on the chart was adjusted for the stock split.

• Me on Lehman Brothers
  Eddy Elfenbein, January 3rd, 2012 at 3:11 pm

  Every once in a while I get one right. Six years ago, I listed some thoughts for 2006. Here’s what I said about Lehman Brothers:

  There’s something about Lehman Brothers (LEH) that I just don’t get. Every quarter they put up great numbers. I can’t put my finger on it, but I don’t see where all the growth comes from. How can they consistently do what others can’t? Maybe the company really is that good. Maybe not.

  True, I didn’t exactly call them out, but I was questioning them when many others were not.

• Starbucks Is Overpriced at $45
  Eddy Elfenbein, January 3rd, 2012 at 1:30 pm

  I like Starbucks ($SBUX) a lot but I’m afraid the stock has run well past a fair price. The shares closed the year at $46.01 which is 30 times trailing earnings and 25 times the estimate for future earnings. Starbucks is good, but not that good.

  The chart below shows SBUX over the last three years along with its P/E Ratio and trailing earnings. Right now, I’d say that a fair price is about $35. By that I mean $35 is fair, not a bargain.

  The company said today that it will be raising prices. Earlier, Starbucks had said that higher commodity prices will take 21 cents per share off its earnings for this fiscal year.

  

  (To be fair, I completely missed the great buying opportunity three years ago.)

• A Look at the Long View
  Eddy Elfenbein, January 3rd, 2012 at 11:01 am

  Since the start of the century (and millennium), the stock market has been a disaster. Taking a step back to look at the numbers, it’s truly remarkable.

  From the end of 1999 to the end of 2011, the S&P 500 dropped 13.58%. Dividends added 23.59%. But over those 12 years inflation was 34.69%. That adds up to a real total return of -20.70%.

  You would often hear money managers say that the real long-term return of the stock market was 8%, and that’s what it was from 1925 to 1999. But the last 12 years have been so bad that it’s taken that 8% number down to 6.58%.

  This means that historically, the stock market more than doubles your money in real terms every 12 years, but over the last 12 years, it’s down 20%.

  

• And…We’re Off!
  Eddy Elfenbein, January 3rd, 2012 at 10:28 am

  The 2012 trading year is underway and it looks to be a very good day. The S&P 500 has been as high as 1,284.41 today. We’re very close to our highest close since August 1st which was 1,285.09 from October 28th.

  The ISM Index report for December came out today at 53.9. It was 52.7 in November. This was the 29th-straight month that the ISM was over 50. Wall Street was expecting 53.2.

  Our Buy List is rocking it so far. AFLAC ($AFL) is above $45. JPMorgan Chase ($JPM) is up close to 5%. The whole list is up about 2% so far.

• Morning News: January 3, 2012
  Eddy Elfenbein, January 3rd, 2012 at 5:42 am

  World’s Biggest Economies Face $7.6 Trillion Debt

  In Euro Zone’s Crisis, Technocrat in Paris Works Behind the Scenes

  German Jobless Rate Sees Surprise Fall

  Nigeria Braces for Gas-Price Protests

  President Hu: West Is Using Cultural Means to Divide China

  Crude Advances in New York Amid Manufacturing Expansion, Tension Over Iran

  Same-store Sales Seen Up 4.3 Percent in December

  For 2012, Signs Point to Tepid Consumer Spending

  On Wall Street, a Renewed Optimism for Deals

  Total Buys $2.32 Billion Shale Stake, Helping Chesapeake Pare Its Debt

  Exxon’s Pursuit of Venezuelan Cash ’Not Over Yet’ After Ruling

  Macau Gambling Revenue Rose 42% in 2011

  VW’s Bentley 2011 Sales Jump 37% on China

  NYTimes Dealbook: Raising a Glass to 2011

  Jeff Carter: Stimulus and Debt are Manna From Heaven

  James Altucher: My Last Death Threat in 2011

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• Morning News: January 2, 2012
  Eddy Elfenbein, January 2nd, 2012 at 6:30 am

  Euro Leaders Aim to Buy Time to Save Currency

  Austerity Reigns Over Euro Zone as Crisis Deepens

  China Export Orders Show Threat From Europe

  India PMI Expands at Fastest Pace in 6 Months

  South Korea Manufacturing Falls

  Venezuela Is Ordered to Pay $900 Million to Exxon Mobil

  Nigeria to End Gasoline Subsidy Accounting for 25% of Government Spending

  India to Allow Individual Foreign Investors to Buy Local Shares Directly

  U.S. Consumer in the Slow Lane

  Samsung, Hyundai Workers Brace for Uncertainty

  In Flop of H.P. TouchPad, an Object Lesson for the Tech Sector

  The Danger of an Attack on Piracy Online

  Epicurean Dealmaker: Turn the Page

  Howard Lindzon: Starting 2012 – My Gameplan.

  Stone Street: 2012 “Predictions” from Stone Street Advisors Team & Friends

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