Sherwin-Williams Raises Guidance
Posted by Eddy Elfenbein on June 8th, 2021 at 5:11 pm

After the closing bell, Sherwin-Williams (SHW) raised its sales guidance for Q2 and the entire year. The paint people also raised their earnings guidance for this year.

Sherwin now sees Q2 sales rising by “a high-teens percentage” over last year’s Q2. For the entire year, Sherwin sees sales “up a high-single to low-double-digit percentage” compared with last year.

SHW sees 2021 earnings of $9.15 to $9.45 per share. The previous forecast range was $8.80 to $9.07 per share.

“We outperformed expectations in the first quarter, and sales in The Americas Group and Performance Coatings Group have been stronger than expected in the second quarter,” said Chairman, President and Chief Executive Officer, John G. Morikis. “Demand remains strong in our architectural end markets, led by residential repaint and new residential, with continued improvement in commercial and property management. Demand is also strong on the industrial side of our business and is recovering faster than expected. At the same time, the raw material inflation we experienced in the first quarter has continued in the second quarter. We have great confidence we will offset these higher costs, and we are implementing additional price increases across all our segments, including a 7% August 1st price increase in The Americas Group. We now expect our full year 2021 adjusted diluted net income per share to increase 13.6% at the midpoint of the range compared to the prior year.”

The stock is down some in the after-hours market due to the cost pressures mentioned above in bold.

Heico Raises Its Dividend
Posted by Eddy Elfenbein on June 8th, 2021 at 10:22 am

Heico (HEI) announced today that it’s raising its semi-annual dividend from eight to nine cents per share. That’s a tiny part of their earnings, but it’s nice to see anyway. Heico also has an interesting tradition of having frequent yet small stock splits. I count 17 splits since 1995.

Shares of Heico touched a new high today. The stock initially fell after its earnings report even though the numbers were quite good. That’s not uncommon. Traders like to act first and find out the details later.

From the press release:

Laurans A. Mendelson, HEICO’s Chairman and Chief Executive Officer, along with HEICO’s Co-Presidents, Eric A. Mendelson and Victor H. Mendelson, commented, “This dividend recognizes HEICO’s strong cash flow generation, coupled with our confidence in the future, including for a sustained commercial air travel recovery. Further, as is the case for all HEICO shareholders, the vast majority of HEICO’s Team Members will directly benefit from the dividend increase through their share ownership and we are deeply grateful for our Team Members’ outstanding efforts, especially during the COVID-19 Pandemic.”

Considering the impact of cash dividends, prior stock splits and stock dividends, one share of HEICO worth $8.38 in 1990 has become worth on a combined basis approximately $5,361, representing an increase of approximately 640 times the 1990 value and a compound annual growth rate of approximately 24% as of June 4, 2021.

Morning News: June 8, 2021
Posted by Eddy Elfenbein on June 8th, 2021 at 7:11 am

China’s Wolf Warriors Are Turning the World Against Beijing

Biden Administration Sets Up ‘Strike Force’ to Go After China on Trade

Biden Administration Moves to Unkink Supply Chain Bottlenecks

Small Business Optimism Slips on Hiring, Inflation Worries

The Debate Over Hacking Ransomware Hackers

One Crypto Exchange Is Going to Extreme Lengths on Cybersecurity

Bitcoin’s Terrible Run Isn’t Over Yet

El Salvador President’s Bitcoin Push Casts Shadow Over IMF Efforts

AMC, Other Meme Stocks Turn Options Market Upside Down

Apollo Global to Buy Gas Transportation Firm Total Operations

Burger King Trolls Chick-fil-A with LGBTQ+ Donations

Michael Batnick: Am I Diversified?

Ben Carlson: The Future of Bear Markets

Joshua Brown: Base Effects & Is Food Delivery the Worst Business Ever?

Howard Lindzon: Momentum Monday – Yoots Will Be Yoots And Lots Of Strength Behind The Silliness

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AFLAC’s Fraud Charges 3.5 Years On
Posted by Eddy Elfenbein on June 7th, 2021 at 1:12 pm

In early 2018, the Intercept ran a series of articles attacking AFLAC (AFL). I thought the charges were exaggerated.

This is what I wrote:

The allegations, if true, are disappointing. However, nothing I’ve seen so far has me concerned for AFLAC’s future.

First, let me say that I’m hardly an independent observer. I’ve owned AFLAC’s stock for many years, and I’ve admired the company.

Also, The Intercept has a political bent to their reporting. I’m reading this with my eyes open.

But most of what I’ve read so far is what I’d call the unseemly byproduct of running a large and profitable enterprise.

For example, the sales jobs described and very tough and demanding. That’s not a surprise. Perhaps AFLAC makes the jobs seem better than they are, but that’s a long way from an Enron-type scam. It’s not difficult for them to revamp their recruitment process.

Any big company will have lawsuits brought against them. If you read what the lawyers have to say, without any explanation from the company, the picture can look quite ugly. That’s what lawyers do.

In the movie Raising Arizona, the police asked Nathan Arizona, Sr., if he had any disgruntled employees. He answered, “Hell, they’re all disgruntled. I ain’t running no damn daisy farm.”

At the time, it was a big deal. The stock plunged more than 7% on the news. I’m revisiting this years later to show you how things like this often blow over. Since the article, AFLAC is up by more than 36%, including dividends. The stock just touched another new high today.

AMC Soars Another 24%
Posted by Eddy Elfenbein on June 7th, 2021 at 11:24 am

AMC (AMC) is up another 15% today as the meme stock craze continues. At one point, AMC was up over 24% today. GameStop (GME) is also doing well.

The overall market is down a bit but only by about 0.2%. The S&P 500 isn’t far from a new all-time high. The highest close was 4,232.60 from May 7.

There’s not much in the way of economic reports today although we’ll get the CPI reports later this week. There are a few items I wanted to pass along. The FDA approved a new Alzheimer’s drug from Biogen. This is newsworthy because it’s the first such drug in 20 years.

FactSet (FDS) has an interesting piece. They say that more than 30% of companies in the S&P 500 cited ESG on their earnings calls. I see that the Peru ETF (EPU) is down 6.3% after a very close presidential election.

Morning News: June 7, 2021
Posted by Eddy Elfenbein on June 7th, 2021 at 7:07 am

A Lifeline For The Unemployed Is About To End In Half Of U.S. Here’s What’s At Stake

Bitcoin’s Price Declines Amid Weibo’s Crackdown on Crypto

Economist Who Said Inflation Was Dead Now Thinks It’s Alive

Yellen Passes Deal-Making Test on Taxes, With Long Road Ahead

Why Wall Street Fears A Global Tax Deal

Market for U.S. Oil Acreage Booms Along with Crude Price Recovery

Offshore Wind Farms Show What Biden’s Climate Plan Is Up Against

Biggest Companies Plan to Reduce Emissons By Culling Suppliers

Some on Wall Street Try Options Trade to Bet Against AMC Without Getting Burned

Why Amazon Is Confronting the Richest Man in India

Google Settles Antitrust Case Over Advertising Practices

Joshua Brown: Miss Me With That Metaverse s***

Howard Lindzon: Technology Changes But Fear And Greed Never Do….And Sunday Reads

Michael Batnick: No More Bear Markets

Ben Carlson: The Stock Market vs. Earnings Growth & A Short History of Money Market Funds

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May 2021 NFP = +559,000
Posted by Eddy Elfenbein on June 4th, 2021 at 8:34 am

The May jobs report is out. Last month, the U.S. economy created 559,000 net new jobs and the employment rate dropped 5.8%. Wall Street had been expecting 671,000 new jobs.

Let’s dig into some details. Private payrolls added 492,000 and manufacturing added 23,000. Average hourly earnings increased by 0.5%. In the last year, average hourly earnings are up 2%.

The average work week was 34.9. The labor force participation rate was 61.6%. The under-employment rate fell to 10.2%. The payroll gain for March was revised to 785,000. The number for April was revised up to 278,000.

The unemployment rate fell to 5.8% from 6.1%, which was better than the estimate of 5.9%. An alternative measure of unemployment that includes discouraged workers and those holding parttime jobs for economic reasons edged lower to 10.2%.

May’s letdown came after April sharply undershot expectations, with the upwardly revised 278,000 still well short of the initial 1 million estimate that came with high hopes for an economy trying to shake loose its pandemic shackles.

Markets were not disappointed by the report. Stock market futures actually rose, with investors continuing to bet that the measured pace of job gains would keep the Federal Reserve from raising interest rates and tightening monetary policy.

Diminishing Covid-19 cases along with a continued brisk pace in vaccines has pushed elected leaders to relax restrictions put in place to halt the spread of the virus. The economy grew at a 6.4% pace in the first quarter and is on track to accelerate at a 10.3% pace in the second quarter, according to the latest reading from the Federal Reserve in Atlanta.

Morning News: June 4, 2021
Posted by Eddy Elfenbein on June 4th, 2021 at 7:00 am

Wage Growth Is Holding Up in Aftermath of the Economic Crash

How China Beat the U.S. to Become World’s Undisputed Solar Champion

Biden’s Electric Vehicle Plan Includes Battery Recycling Push

U.S. to Give Ransomware Hacks Similar Priority as Terrorism

AMC Rides Roller-Coaster in Wild Week for New King of Memes

SEB First to Defy Bank Industry’s ‘Elite, Closed’ Structure

Fixing the Insider Trading Prohibition Act

India and Israel Inflame Facebook’s Fights With Its Own Employees

Facebook Plans to End Hands-Off Approach to Politicians’ Posts

Twitter Will Now Allow You To Undo Tweets — If You Pay.

Bill Ackman SPAC Seeks Warner Music Deal at $42 Billion Valuation

Joshua Brown: Talking AMC with Stephanie Ruhle on MSNBC

Michael Batnick: Animal Spirits: Commodities Supercycle

Ben Carlson: Some Random Thoughts About Inflation, AMC & Small Caps

Howard Lindzon: Charlie Bilello, Founder and CEO of Compound Capital Advisors, Joins Me on Panic with Friends to Discuss Inflation and Irrational Exuberance

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Jobless Claims Fall to 385,000
Posted by Eddy Elfenbein on June 3rd, 2021 at 10:13 am

Tomorrow is the big jobs report. This morning, we got a few more pieces to the puzzle.

First up, the ADP private payroll report said that 978,000 jobs were added in May. That’s a huge increase. However, the ADP report doesn’t always match the official figures from the government.

In the other report, weekly unemployment claims fell to 385,000. That’s another pandemic low and it was below forecasts.

The ISM Services Index came in at 64.0. That’s the highest since 1997.

Also today, shares of AMC (AMC) have been halted. The company announced plans to sell 11 million shares. The stock plunged and the exchange halted trading. Yesterday, AMC traded 761 million shares. There are only 450 million shares outstanding.

Morning News: June 3, 2021
Posted by Eddy Elfenbein on June 3rd, 2021 at 7:03 am

Petrostates See Dire Consequences If World Rejects Oil Too Fast

A ‘Tsunami’ of Cash is Driving Rates Ever Lower. What Will the Fed Do?

Yellen Aims to Win Support for Global Tax Deal

Defiant Meme-Stock Short Sellers Stare Down $4.5 Billion Loss

NFTs Are Crashing and Who Could Have Seen This Coming Other Than Basically Anyone?

The Tech Aristocracy’s ‘Guaranteed Income,’ And A Jobs-Based Alternative

Private Equity Bet on Troubled Caribbean Refinery Blows Up on Retirement Funds

Russian Cybercriminal Group Was Behind Meat Plant Attack, F.B.I. Says

Russia Cuts Dollar Holdings From $119 Billion Wealth Fund Amid Sanctions

Why Etsy Dropped $1.6 Billion on Depop

This Ominous Warning From Moderna Could Shake Up the COVID Vaccine Market

Bill Gates and Warren Buffett Are Building a $1 Billion ‘Next-Generation’ Nuclear Reactor in Wyoming

United Airlines Wants to Bring Back Supersonic Air Travel

Cullen Roche: Three Things I Think I Think – The More Things Change the More They Stay the Same

Joshua Brown: Changing of the Guard

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