FactSet Reports Earnings of $2.74 per Share
Posted by Eddy Elfenbein on June 29th, 2021 at 9:08 am

This morning, FactSet (FDS) reported fiscal Q3 earnings of $2.74 per share. That missed estimates by two cents per share and it’s down from $2.86 per share one year ago.

“I’m pleased with the acceleration in our top line and proud of our record of returning value to our shareholders every year since we became a public company 25 years ago,” said Phil Snow, CEO, FactSet. “Demand for our open content and analytics platform continues to fuel our growth as clients pursue their own digital transformations. We believe that the next generation of digital solutions we are building for the financial community will enable us to grow faster.”

I was I could share Mr. Snow pleasure. This was a decent quarter for FactSet but I was expecting more.

Revenues increased by 6.8% to $399.6 million. At the end of the quarter, FactSet’s Annual Subscription Value, or ASV, stood at $1.6 billion. That’s up $100 million in the past year. That’s an important indicator of future revenue. What concerns me is that FactSet’s operating margin slipped to 29.5%. That’s down 3% over the past year.

One bright spot is that the company increased its organic ASV plus professional services outlook to be in the range of $85 million to $95 million.

Some more details. At the end of the quarter. FactSet’s client count stood at 6,172. The company’s user count is up to 155,004. Annual ASV retention was greater than 95%. When expressed as a percentage of clients, annual retention improved to 91%, year over year.

During the quarter, FactSet bought 178,100 shares of its stock for $57.6 million. That’s an average price of $323.25. In the current program, there’s $292.4 million left to buy back stock.

FactSet didn’t change its full-year earnings forecast of $10.75 to $11.15 per share. I thought there was a good chance they’d increase the range.

So far this year, FactSet has made $8.32 per share. That implies FactSet expects Q4 earnings to range between $2.43 and $2.83 per share. Wall Street currently expects $2.80 per share.

Here’s an updated look at FactSet’s guidance:

Morning News: June 29, 2021
Posted by Eddy Elfenbein on June 29th, 2021 at 7:06 am

EU Watchdog Takes Deep Dive Into Banks’ Use of Tech

China’s Central Bank Strikes Positive Tone as Economy Stabilizes

Don’t Let the Hawkish Talk Fool You. Fed, ECB, BOJ Will Stay Relatively Loose

Wall Street Funnels Cash to Investors on Stress-Test Success

Commodity Traders Harvest Billions While Prices Rise for Everyone Else

Markets Work, But Untangling Global Supply Chains Takes Time

High Lumber Prices Add Urgency to a Decades-Old Trade Fight

Lower Rents? Check. Speakeasy? Check. How Office Landlords Are Enticing Tenants.

As Regulatory Scrutiny Intensifies, Crypto Exchange Binance Jumps on the NFT Bandwagon

Clean Energy ETFs Take a Hit, but Money Keeps Flowing In

United Goes All-In on Premium Flyers With 270 Jets, Upgrade

Facebook Stock Hits an All-Time High After Judge Dismisses FTC Complaint

Oil Drops as COVID-19 Surges Threaten Fuel Demand Outlook

Gas Stations Are Running Out of Gas Ahead of the Holiday Weekend

Juul Will Pay $40M to Settle Suit Over Marketing to Minors

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Is Buffett Looking at Hershey?
Posted by Eddy Elfenbein on June 28th, 2021 at 12:04 pm

The stock market is mostly flat today. On Friday, the S&P 500 closed at its 33rd all-time high this year. Charlie Bilello points out that since the start of 2013, the S&P 500 has made 327 all-time highs.

This looks to be one of the best first halves on record. In fact, a strong first half has often been followed by a strong second half. Ryan Detrick notes that when the market gains more than 12.5% during the first six months of the year, the median return of the following six months has been close to 10%. That’s nearly double the return of the other years.

Hershey (HSY) got to a new high today. The New York Post reported that the Hershey jet was spotted in Omaha.

A jet owned by candy maker Hershey made an unusual trip to Omaha, Nebraska, the home of Warren Buffett, according to an analyst with a history of spotting deals through plane records.

Don Bilson, head of event-driven research at Gordon Haskett, said in a note Thursday that a plane tracked as being owned by Hershey made a June 12 trip to Omaha.

Is there a Buffett deal in the works? One sticking point is that the Hershey Trust owns a majority of shares. Warren Buffett is about the only person who could win their votes.

There’s not much economic news today, but this is jobs week. Later in the week, we’ll get the jobs report plus several key turn-of-the-month economic reports.

Morning News: June 28, 2021
Posted by Eddy Elfenbein on June 28th, 2021 at 7:06 am

Binance, the World’s Largest Cryptocurrency Exchange, Gets Banned by UK Regulator

Bitcoin Leads Crypto Rally in Defiance of Regulatory Crackdown

Crypto’s Top V.C. Is Playing the Long Game

How Two Start-Ups Reaped Billions in Fees on Small Business Relief Loans

Blue Collars Have Outpaced White Collars in Pay—At First Glance

Where Jobless Benefits Were Cut, Jobs Are Still Hard to Fill

Fed’s Rosengren Says U.S. Can’t Afford Housing Market ‘Boom and Bust’

Illegal Gambling Mocks The Economics Profession’s Fed Obsession

China’s Envision to Build Renault $2.4 Billion Battery Plant

Google’s Cookie Delay Is Bittersweet for Trade Desk

United Airlines Closes in on $30 Billion Post-Pandemic Jet Order

NBA Star Risks Billions for Failing to Diversify Executive Ranks

Swiss Bank UBS to Allow Most Staff to Adopt Hybrid Working

Burberry Shares Tumble After CEO Resigns to Join Rival

The Cryonics Industry Would Like to Give You the Past Year, and Many More, Back

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Morning News: June 25, 2021
Posted by Eddy Elfenbein on June 25th, 2021 at 7:03 am

China’s PBOC Leads the Fed in Weaning Economy Off Stimulus

China Crushed Jack Ma, and His FinTech Rivals Are Next

China’s Ban Forces Some Bitcoin Miners to Flee Overseas, Others Sell Out

Bitcoin to Become Legal Tender in El Salvador on Sept 7

‘For The Bitcurious’—Tesla Billionaire Elon Musk Suddenly Sends The Dogecoin Price Sharply Higher After Trashing Bitcoin

Supreme Court Kills The Fannie And Freddie Preferred Trade

Job Hole or Inflation? Fed Policymakers Split Over Risk View

Wall Street Sees Big Wish Granted in Biden’s Infrastructure Deal

Why Washington Can’t Quit Listening to Larry Summers

Ousting Toshiba Chairman, Foreign Investors Score Breakthrough in Japan

Panasonic Sells Tesla Stake for $3.6 Billion

Amazon and Google Face UK Competition Probe Over Fake Reviews

Teamsters Pass Resolution to Unionize Amazon Drivers, Warehouse Workers

Nike Earnings Beat Expectations. Why Its Stock Is Jumping.

Phantom Goldman Banker Is Bait in Swiss Trader Kidnapping ‘Trap’

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Another All-Time High for Stocks
Posted by Eddy Elfenbein on June 24th, 2021 at 10:45 am

The stock market is again up to a new all-time high. The S&P 500 has been as high as 4,271.16 this morning. The Dow is still about 800 points from its all-time high from May 10.

This morning’s weekly unemployment claims report fell to 411,000. That’s still above the pandemic low of 374,000 from two weeks ago.

Also this morning, the Q1 GDP was revised to 6.4%. That’s the same number as the first and second reports. I don’t ever recall that happening. In fact, there’s a tiny change in these numbers but not enough to alter the decimal.

Morning News: June 24, 2021
Posted by Eddy Elfenbein on June 24th, 2021 at 7:03 am

China ‘Banks’ Time for Its Elderly While U.S. Seniors Drown in Debt

U.S. Bans Imports of Solar Panel Material from Chinese Company

The Little Hedge Fund Taking Down Big Oil

JPMorgan Sees New Headwind for Bitcoin

No End to Whiplash in Meme Stocks, Crypto and More

The Inside Story of the Sideways Ship That Broke Global Trade

Antitrust Overhaul Passes Its First Tests. Now, the Hard Parts.

Yellen Steers the Economy With Brooklyn on Her Mind

Fed’s Mixed Messages on Inflation Unsettle Investors

The Canny Business Model Behind Our Obsession With White Paint

Buffett Weighs In on Tax-Free Philanthropy

Visa to Buy Swedish Fintech Tink for $2.2 Billion

BuzzFeed Nears Deal to Go Public Via SPAC, Eyeing Digital-Media Rollup

Credit Suisse’s New Chairman Sends Chill Through Investment Bank

Bezos’ 2021 Space Odyssey A Risk Too Far for Insurers

Silicon Valley Gave Asia’s Richest Man Billions, But Things Aren’t All Going to Plan

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New-Homes Sales Miss Estimates. By a Lot.
Posted by Eddy Elfenbein on June 23rd, 2021 at 11:45 am

By my count, 13 Fed officials are giving speeches or testimonies this week. That’s a lot of jargon headed our way. The good news is that inflation fears continue to abate. The 10-year Treasury yield is below 1.5%.

This morning’s new-home sales report came in at 769,000. That’s the annualized number. That’s a big miss. Wall Street had been expecting 865,000. Of course, home prices have been shooting up so that should put some pressure on buying.

Not only that but the previous three months were revised downward. By a lot.

Shipping bottlenecks and higher input prices have held back homebuilding, contributing to skyrocketing prices for the limited supply of homes available. A silver lining of the report was data showing new-housing inventory continued to increase, though about a third of those homes have yet to be built.

(…)

There were 330,000 new homes for sale in May, the most since July 2019. At the current sales pace, it would take 5.1 months to exhaust the supply of new homes, compared with 4.6 months in the prior month.

The median sales price rose to a record $374,400. Mortgage applications have fallen sharply since January, suggesting that demand for homes is slowing.

Morning News: June 23, 2021
Posted by Eddy Elfenbein on June 23rd, 2021 at 7:06 am

How China Rivals Elon Musk in Rattling Crypto Markets

Reckoning With Brexit, Five Years Later

A Higher Minimum Wage Can Lead Employers to Lower Compensation

Analysis Says Biden’s Tax Plan Will Effectively Cut Lower- and Middle-Class Wages

Everyone Is Quitting Their Job. Great!

Nine Months After Lockdowns, U.S. Births Plummeted by 8%

The SPAC Man Method: Inside the Billionaire Rush for Riches

Manufacturers Have an Answer to Higher Costs: Pass Them On

Tech Giants, Fearful of Proposals to Curb Them, Blitz Washington With Lobbying

Amazon and Other Tech Giants Race to Buy Up Renewable Energy

Electric Vehicles Seen Reaching Sales Supremacy by 2033, Faster Than Expected

Amazon’s Planned Purchase of MGM Faces FTC Scrutiny

Meat Grown in Israeli Bioreactors Is Coming to American Diners

‘It’s Like Coming Home to Family’: Disneyland Paris Reopens

Agreement in Principle Reached Over Suez Canal Ship, Says Stann Marine

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$20 Gold Coin Sells for $19 Million
Posted by Eddy Elfenbein on June 22nd, 2021 at 9:41 pm

Gary Alexander is one of my favorite financial writers. We used to work together years ago.

Here’s Gary’s take on some U.S. currency history:

The Grand Experiment began on July 22, 1776, when the Continental Congress issued $2 million in new bills, known as Continentals, which bore the inscription, “The United Colonies.” Unbacked by gold or any other hard asset, the bills led to almost immediate inflation. By 1778, it took $6 in paper to buy what $1 bought in 1776. By November 1779, it took $40 to buy what $1 bought in 1776. As General George Washington said at the time, “A wagonload of currency will hardly purchase a wagonload of provisions.”

The Continental failed and left the young nation with a hefty war debt. Chastened by the experience of that Continental currency, the U.S. Constitution prescribed: “No State shall…make any Thing but gold and silver Coin a Tender in Payment of Debts,” and America drafted a series of gold and silver coins in the 1790s, resisting the urge to issue new paper notes until the Civil War, with Lincoln’s “Greenbacks.”

The U.S. didn’t abandon gold in one step. In June 1933, America officially went off the gold standard for domestic convertibility, but nations still traded in gold. The newly minted 1933 $20 gold Double Eagles were almost all confiscated, melted, and destroyed but one remains. On June 7, it sold for a record $18.9 million. Once owned by Egypt’s King Farouk, it was later seized in a Secret Service sting. With a face value of $20, this one-of-a-kind collectible drew nearly $19 million at auction. Beat that price, Bitcoin!

Here’s the whole thing.