Morning News: February 25, 2021
Posted by Eddy Elfenbein on February 25th, 2021 at 7:04 am

Carbon Offsets Gird for Lift-Off as Big Money Gets Close to Nature

Blank-Check Buyers Set Sights on Corporate Spinouts as Next Prey

It’s Gates Versus Musk as World’s Richest Spar Over Bitcoin

Hong Kong Slaps 30% Tax Hike on Share Trading

GameStop Rally Builds After Puzzling Ice-Cream Cone Tweet

Charlie Munger Says Novice Investors Are Getting Lured into a Bubble in ‘Dirty Way’ By Robinhood

Powell Says Better Child Care Policies Might Lift Women in Work Force

Verizon, AT&T and T-Mobile Dominate $81 Billion 5G Spectrum Auction

The Future of Car Navigation Has Arrived

Losing Bid for Postal Contract Proves Costly for Electric-Vehicle Maker

What Happens When a Publisher Becomes a Megapublisher?

Michael Batnick: When Value Turns Into Momentum?

Jeff Carter: Who Makes The Profit?

Howard Lindzon: Non Fungible Tokens (NFT’s) – Tell Me More Howie

Joshua Brown: Why Not Just Print and Give Away Money Infinitely? & Grantham: More Debt Doesn’t Grow the Economy.

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Ansys Earns $2.96 per Share
Posted by Eddy Elfenbein on February 24th, 2021 at 5:07 pm

ANSYS, Inc. (ANSS), today reported fourth quarter 2020 GAAP and non-GAAP revenue growth of 28% and 27% in reported currency, respectively, or 25% and 24% in constant currency, respectively, when compared to the fourth quarter of 2019.

For FY 2020, GAAP and non-GAAP revenue growth was 11% in reported currency, or 10% in constant currency, when compared to FY 2019. For the fourth quarter of 2020, the Company reported diluted earnings per share of $2.46 and $2.96 on a GAAP and non-GAAP basis, respectively, compared to $1.91 and $2.24 on a GAAP and non-GAAP basis, respectively, for the fourth quarter of 2019.

For FY 2020, the Company reported diluted earnings per share of $4.97 and $6.70 on a GAAP and non-GAAP basis, respectively, compared to $5.25 and $6.58 on a GAAP and non-GAAP basis, respectively, for FY 2019.

“Q4 was an outstanding quarter, concluding an excellent finish to fiscal year 2020. We delivered double-digit revenue growth, while maintaining industry-leading margins, despite the global disruptions caused by the COVID-19 pandemic,” said Ajei Gopal, Ansys president and CEO. “I am proud of our many accomplishments in 2020, in particular, maintaining our focus on customer success. That focus throughout the year resulted in our closing of the three largest license deals in our company history. We added to our market-leading portfolio with the acquisitions of two industry pioneers, Lumerical Inc. and Analytical Graphics, Inc. (AGI). And we recently released the latest version of our product portfolio, Ansys 2021 R1, making it faster and easier than ever for our customers to innovate.”

Gopal further stated, “The pandemic has reinforced Ansys’ core value proposition of cost savings and improved time to market. It has fast-tracked product roadmaps requiring more simulation, and it has accelerated corporate digital transformations as more engineers work from home for the long term. As we look ahead, these represent tailwinds to our total addressable market. I remain confident in our ability to drive strong and profitable growth.”

Maria Shields, Ansys CFO, stated, “We closed out 2020 with the strongest quarterly and annual financial results in the Company’s history, with our fourth quarter results exceeding the high end of guidance across all key metrics. Highlights include record quarterly and annual revenue, with the operating leverage of our business model driving strong margins and earnings. ACV, which grew 20% and 9% in constant currency for the quarter and the year, reached record levels of recurring sources at 83% for the quarter and 82% for the year. Additional notable highlights include both record operating cash flow of $547 million and deferred revenue and backlog of $967 million. These results reflect the resiliency of our business model and the incredible efforts and dedication of the Ansys employees during unprecedented times. Given the prolonged state of the global pandemic, while we remain cautiously optimistic as we look into the first half of 2021, we remain confident in our ability to continue to execute on our strategy and continue to create long-term value for all of our key stakeholders.”

S&P 500 Sector Correlations
Posted by Eddy Elfenbein on February 24th, 2021 at 9:46 am

Here’s something I have been working on. This is the correlation among the different S&P 500 sectors. It’s from the beginning of 2020 until today.

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

Hong Kong Announces Over $15 Billion Budget to Lift Economy Out of Recession

German Economy Robust at End of 2020 But Near-Term Outlook Weak

Australia’s Antitrust Chief Claims Victory After Facebook Standoff

Biden Rushes to Address Global Computer Chip Shortage via Latest Executive Order

After Texas Crisis, Biden’s Climate Plan Hangs on Fragile Power Grid

California Wins Court Victory for Its Net Neutrality Law

Powell Focuses on Economic Need at Key Moment in Markets and Politics

Cathie Wood Funds Hit by Biggest Investor Exodus on Record

Robinhood CEO Tells Portnoy Limits Prevented Liquidity Crunch

McDonald’s Joins the Fierce Fight for Chicken Sandwich Supremacy

Here’s How Much Wealth You Need to Join the Richest 1% Globally

Anime Is Booming. So Why Are Animators Living in Poverty?

Howard Lindzon: Non Fungible Tokens (NFT’s) …I Can’t Believe I Have To Learn This

Joshua Brown: Everybody Knows You Never Go Full Weimar

Michael Batnick: Buy the Dip & Animal Spirits: The Beanie Baby Bubble

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Thermo Fisher Raised Its Dividend by 18%
Posted by Eddy Elfenbein on February 23rd, 2021 at 6:06 pm

The dividend hikes keep coming.

Earlier we had a dividend increase from Silgan. Now we just learned that we got a dividend increase from Thermo Fisher (TMO). The company raised its payout by 18% to 26 cents per share.

The dividend is payable on April 16, 2021, to shareholders of record as of March 16, 2021.

Silgan Raises Dividend by 16.7%.
Posted by Eddy Elfenbein on February 23rd, 2021 at 4:47 pm

Silgan (SLGN) hiked its dividend by 16.7%. The quarterly payout will rise from 12 cents per share to 14 cents per share.

This is Silgan’s 17th consecutive annual dividend increase. The new dividend is payable on March 31 to the holders of record on March 17.

HEICO Reports Earnings of 51 Cents per Share
Posted by Eddy Elfenbein on February 23rd, 2021 at 4:25 pm

After the bell, HEICO (HEI) reported fiscal Q1 earnings of 51 cents per share. Wall Street had been expecting 48 cents per share. For Q1 of last year, HEICO made 89 cents per share.

HEICO’s operating margin was 19.2% which is good but is down from 21.9% from last year.

Laurans A. Mendelson, HEICO’s Chairman and CEO, commented on the Company’s first quarter results stating, “The COVID-19 global pandemic (the “Pandemic”) continues to impact our operating results. Most notably, demand for our commercial aerospace products and services were negatively impacted in the first quarter of fiscal 2021 mainly due to the continued suppressed demand in global commercial air travel. Consolidated net sales for our commercial aerospace businesses decreased by approximately 43% in the first quarter of fiscal 2021, as compared to the first quarter of fiscal 2020.

(…)

Despite the difficult operating environment created by the Pandemic, HEICO continues to generate excellent cash flow. Cash flow provided by operating activities was very strong, increasing 32% to $107.2 million in the first quarter of fiscal 2021, up from $81.1 million in the first quarter of fiscal 2020.

As we look ahead to the remainder of fiscal 2021, the Pandemic will likely continue to negatively impact the commercial aerospace industry and HEICO. Given this uncertainty, HEICO cannot provide fiscal 2021 net sales and earnings guidance at this time. However, we believe our ongoing fiscal conservative policies, healthy balance sheet, and increased liquidity will permit us to invest in new research and development and gain market share as the industry recovers.

Six Down Days in a Row
Posted by Eddy Elfenbein on February 23rd, 2021 at 12:01 pm

For the first time in a long time, the stock market is getting kicked around this morning. The losses aren’t so bad but we’re on track for the sixth decline in a row. At one point, Tesla was down $95 per share, which is a loss of more than 13%. The stock has rallied strongly off today’s low.

Bitcoin has also seen a very volatile day. It’s currently down a little over 9%, but that’s not unusual for Bitcoin. It was over $58,000 two days ago. Today’s low was $45,000.

The market is not pleased with Trex’s earnings report, even though the deck company beat expectations. I think this is an instance where traders are out for blood and they’re willing to attack anything. However, the #1 performing stock in the S&P 100 today is Disney (DIS).

Copper has been on fire, or what it does when it gets really hot. It broke above $9,000 per metric ton for the first time in nine years. This is an interesting market to watch because it’s often aligned well with the overall economy. That’s why it’s nicknamed Dr. Copper, for its predictive abilities.

Morning News: February 23, 2021
Posted by Eddy Elfenbein on February 23rd, 2021 at 7:05 am

Bitcoin Tumbles Below $50,000 as Caution Sweeps Over Crypto

Key Short-Term Bond Spread Hits Lowest Level in Nearly a Year

What the Bond Market Is Telling Us About the Biden Economy

Reading Between the Lines: A Conversation with Janet Yellen

U.S. Manufacturers Grapple with Steel Shortages, Soaring Prices

Facebook ‘Refriends’ Australia After Changes to Media Laws

HSBC is Pushing Even Harder into China and India

Tesla Shares in the Red for 2021 as Bitcoin Selloff Weighs

A New Class of ‘Performance’ Beers Is Taking a Page from Gatorade

Oprah-Backed Drink Maker Oatly Files Confidentially for U.S. IPO

Nick Maggiulli: Have Fun Staying Poor

Jeff Carter: It Might Be Time To Become A Bear

Ben Carlson: The Psychology Behind the Boom in Collectibles

Michael Batnick: What Is Top Shot?

Joshua Brown: Learning to Money with Tyrone Ross & Substack Vertigo

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Trex Earns 37 Cents per Share
Posted by Eddy Elfenbein on February 22nd, 2021 at 4:21 pm

After the bell, Trex (TREX) reported Q4 earnings of 37 cents per share. That beat the Street by a penny per share. Sales rose 39% to $228 million. The company made $1.55 per share for the year.

For Q1, Trex expects sales of $235 million to $245 million. The midpoint is a 20% increase. Wall Street had been expecting $237.51 million.

“We remain on track with our capital expenditure program to increase production capacity at our Trex Residential facilities in Virginia and Nevada. As recently announced, production in our new Virginia facility started in January 2021. When complete by June of this year, these investments will increase production capacity by approximately 70% and will further strengthen the Trex Company’s position as the industry’s leading composite decking manufacturer.

The stock is down a bit in the after-hours market.