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  • Archer Daniels Midland: Underperforming On A Comparative Basis
    Nov. 13, 2014 ADM 3 Comments

    Summary

    • The company is acquiring WILD Flavors which will enable Archer to provide food and beverage clients a complete range of systems to facilitate them in offering improved products.
    • WILD Flavors is the world’s leading provider of natural flavor systems to the food and beverage industry.
    • On a per share basis, the EBITDA per share is anticipated to go up by $0.58.
    • However, on a comparative basis, it is better to invest in other players in the industry who are performing a lot better rather than this stock.
  • Uncertainty Prevails For Coach
    Nov. 12, 2014 COH 6 Comments

    Summary

    • Coach’s revenue pummeled by 9.73% during the first quarter of the fiscal year 2015 and reported absolute revenue of $1,038.8 million as North American sales were down by 18.60%.
    • Similarly, the same pattern flowed downwards and the company’s operating margin has plunged by 10.60% to reach 17.30%.
    • To combat this problem Coach is shutting down its inefficient stores in North America. It also intends to inaugurate new stores or refurbish major stores in 12 main markets.
    • The company is centering its efforts on four main initiatives in order to revive and maintain future growth.
    • I do not share the opinion that the company’s key growth initiatives are likely to bring about a drastic shift in its financial returns anywhere in the immediate term.
  • PepsiCo: Promising Shareholders Higher Returns
    Nov. 11, 2014 PEP 5 Comments

    Summary

    • PepsiCo has been able to expand internationally and has been one of the largest fast-moving consumer goods company.
    • The company experienced an increase in its top line, and tightening up of its expenses relative to sales illustrates a positive side of the company.
    • The company has a diversified stream of products and is not depending only on one product line like its competitor, Coca-Cola.
    • PepsiCo’s stock is undervalued relative to the industry and offers a superior dividend yield as well.
    • Studying the progressing extensions of PepsiCo, investing in the company would result in higher promised returns to the shareholders in the years ahead.
  • Kellogg: Grappling Through Hard Times
    Nov. 10, 2014 K 2 Comments

    Summary

    • Despite being the market leader, the company is facing headwinds in its cereal business which contributes nearly 23% of the total revenue.
    • Top line pummeled by 2.10% in the third quarter of the fiscal year 2014. To revive demand for its products, the company continues to actively invest in category-building programs.
    • The net profit margin shrinked by 271 basis points to reach 6.16% in the most recent quarter.
    • Project K is being implemented which aims to achieve annual cost savings in the range of $425 million to $475 million by the fiscal year 2018.
    • The stock represents an upside capital return potential of nearly 48%. Moreover, the company is also paying out an active dividend yield return of 1.18%.
  • Phillips 66: Should You Buy It?
    Nov. 7, 2014 PSX 39 Comments

    Summary

    • The recent decline in crude oil prices has benefited refiners like Phillips 66.
    • Phillips 66 is heavily investing in growth projects in order to capitalize on the growth in US oil production.
    • Phillips 66’s Midstream and Chemicals businesses will drive the future growth of the company.
  • Priceline: Fighting Against Adverse Currency Movements
    Nov. 6, 2014 PCLN 3 Comments

    Summary

    • Gross bookings shot up by 28.4% in the third quarter of fiscal year 2014 which culminated into a staggering top line gain of nearly 25%.
    • Top line growth trickled down to the bottom line and the company’s net profit margin witnessed an improvement of 75 basis points to reach 37.45%.
    • On a per share basis, EPS for the fourth quarter is anticipated to be reported in the range of $22.48 to $23.89.
    • Priceline is trying on its part to make things favorable by taking a number of active steps to achieve future growth.
    • The stock represents an upside potential of approximately 50%. On the flip side, it is not a regular income providing stock.
  • Broadcom Well-Positioned For Growth
    Oct. 29, 2014 BRCM Comment!

    Summary

    • Broadcom's share price surged 5.5% on Wednesday, after the chipmaker reported better-than-expected Q3 2014 results.
    • The company recorded top-line growth of 5.3%, and clocked in absolute revenue of $5.26 billion for Q3 2014.
    • Broadcom's wind-down of its cellular base-band business will allow the company to focus on its core and key growth areas.
    • The launch of the WICED sense development kit will contribute to the future growth of the company's Broadband and Connectivity business.
  • American Express: Direct Beneficiary Of Growth In The Credit Card Industry
    Oct. 28, 2014 AXP Comment!

    Summary

    • American Express reported a growth of 5% in its top line in the most recent quarter and clocked in absolute revenue net of interest expense of $8,329 million.
    • The company has increased its net profit margin to 17.73% in the third quarter of the fiscal year 2014, an improvement of 127 basis points.
    • On a per share basis, the EPS is projected to go up by $0.49 due to the growth in the credit card industry in 2014.
    • With the addition of American Express to provide Apple Pay service, this is expected to provide an additional source of top line growth for the company in upcoming quarters.
    • The company’s improved financial and credit performance coupled with the forthcoming industry growth where American Express has a significant market share, the stock provides a good opportunity for investment.
  • Energy Transfer Partners Is Well Positioned For Growth
    Oct. 12, 2014 ETP 3 Comments

    Summary

    • The decision of Susser’s shareholders to opt for the Energy Transfer Partners shares indicates their belief in the company and the positive effects of the merger.
    • The Expansion Open Season plan will increase the transport capacity of the Dakota Access Pipeline from 320,000 barrels per day to 450,000 barrels per day.
    • Energy Transfer Partners is operating at a healthy distribution coverage ratio of 1.10x, which makes the company an intriguing choice for investors.
  • Nike: Growth Story Continues
    Oct. 9, 2014 NKE Comment!

    Summary

    • Nike’s share soared to an all-time high of $89.99 followed by the terrific first quarter results.
    • The sports gear giant reported an increase of 15% in revenues and a 27% increase in earnings per share beating analysts’ estimates.
    • In the wake of its strong earnings report, analysts raised their target price forecast of the company.
    • In Western Europe, Adidas’s home turf, Nike’s sales growth outpaced Adidas’s sales growth.
    • The Olympics are set to take place in Brazil in 2016 and Nike is looking for another year of excellent performance.
  • Campbell Soup Company: Well Positioned To Continue The Growth Trajectory
    Oct. 7, 2014 CPB 4 Comments

    Summary

    • Campbell registered top line growth of 3% during the fiscal year 2014 and reported absolute revenue of $8.3 billion on the back of healthy acquisitions and new product launches.
    • Operating margin shot up to 14.42% during 2014 compared to 13.41% in the corresponding period last year due to higher operational efficiency.
    • The company has set aside $400 million funds to spend on capital projects in 2015.
    • In the wake of the company’s recent acquisitions and divestitures to streamline its business and its long term growth strategy, Campbell is well positioned to continue the growth trajectory.
    • The stock upholds a capital return potential of 43%. Also, it is offering a superior dividend yield of 2.96%.
  • Regeneron Pharmaceuticals Has A Bright Future Ahead
    Oct. 6, 2014 REGN 6 Comments

    Summary

    • Regeneron's shares went up by more than 30% year-to-date, despite the tumbling performance of the entire biotechnology sector.
    • According to analysts at UBS, Regeneron's blockbuster drug EYLEA's sales are expected to hit $3.7 billion by 2020.
    • Regeneron received Breakthrough Therapy designation for EYLEA for the treatment of patients suffering from diabetic retinopathy.
    • Once approved, Regeneron and Sanofi's drug, Alirocumab, could hit more than $4 billion in annual sales.
  • Continental Resources' Recent Share Price Dip Creates A Buying Opportunity
    Oct. 2, 2014 CLR 12 Comments

    Summary

    • Continental Resources’ share price has fallen due to the company’s announcement of an increase in drilling costs.
    • Continental’s unrisked resource potential in the Bakken region is approximately 4.1 billion BOE (barrels of oil equivalent) in addition to the company’s proved developed reserves of 240 million BOE.
    • The company has announced a new oil discovery, the Springer Shale, in the heart of the SCOOP region.
    • The CEO of Continental Resources bought 72,000 of the company’s shares for a total of more than $4.85 million.
  • Celgene Has A Very Bright Future Ahead
    Sep. 29, 2014 CELG 3 Comments

    Summary

    • The U.S. Food and Drug Administration authority approved the expanded use of Celgene's drug Otzela as an oral treatment for patients with moderate-to-severe plaque psoriasis.
    • According to analysts' estimates compiled by Bloomberg, Otzela expects to generate $1.03 billion in sales by 2017.
    • Celgene is consistently expanding its existing blockbusters labels to fuel the future growth of the company.
    • Based on future growth expectations, Celgene seems to be undervalued.
  • Bed Bath & Beyond: Heading Towards A Brighter Future
    Sep. 28, 2014 BBBY 1 Comment

    Summary

    • BBBY recorded a positive growth of 4.3% in its top line on the back of higher comparable store sales and new store openings.
    • The company was able to report an EPS of $1.17 for the quarter, surpassing analyst estimates by 3 cents.
    • The company has replaced equity with cheaper debt during the quarter, resulting in a net benefit of $0.03 per share as it moves towards the optimal capital structure.
    • BBBY is planning on further expanding its retail network by inaugurating 22 new stores domestically and one in Mexican City during the remaining year.
    • The stock upholds an upside potential of 26.47% based on PE valuation.
  • Union Pacific Is Well Positioned For Growth
    Sep. 26, 2014 UNP 9 Comments

    Summary

    • The recent boom in oil and gas production in North America has boosted the performance of the US railroad industry.
    • Union Pacific’s stock went up by 28% year-to-date led by the record performance reported in the second quarter.
    • The new energy sector reforms in Mexico are anticipated to expand Union Pacific’s industrial and chemical shipments.
  • Hormel Foods Corporation: Successfully Fighting The Obstacles Coming Its Way
    Sep. 25, 2014 HRL Comment!

    Summary

    • The company recorded top line growth of 5.8% and clocked in absolute revenue of $2.28 billion for the third quarter of the fiscal year 2014.
    • Total segment margin improved to 9.80% from 8.48% during the third quarter due to higher margin derived from robust export of pork, growth in retail and foodservice products etc.
    • The acquisition of CytoSport is anticipated to increase the company’s earnings by 5 cents on a per share basis from the fiscal year 2015 onwards.
    • The company plans to increase the investment to $3 billion by 2016 to fund the development and launch of unique product lines and offerings.
    • The stock is trading at a discount based on its PE valuation. Moreover, its leverage status is superior to the industry leading to higher ROE generation for the shareholders.
  • Sysco Corporation: The Impact Of The Mega Deal Quantified
    Sep. 25, 2014 SYY 4 Comments

    Summary

    • Sysco is looking forward to acquire US Foods against a consideration of $3.5 billion. The combination will enhance the company’s market share domestically.
    • Afterwards, Sysco will be representing 25% of the total market and rake in total revenue of $231 billion.
    • On a per share basis, the net incremental revenue and cost synergies are projected to uplift Sysco’s EPS by $1.06 annually in the upcoming years following the acquisition.
    • Being a regular income provider, the company is offering a superior dividend yield of 3.09% to its investors.
    • Apart from the acquisition of US Foods, the company is offering a higher ROE of 17.81% whereas the peers are on average generating 12.31% for the shareholders.
  • V.F. Corporation: Timberland To Bring In Healthy Returns
    Sep. 24, 2014 VFC 1 Comment

    Summary

    • Timberland is working on its plan to increase total revenue from currently $1.7 billion to $3.1 billion by 2019, translating into a CAGR of 12.77%.
    • It is focusing on US, EMEA and Asia to derive future growth by coming up with innovative products, further enhancing its product range offered, distribution network expansion, etc.
    • Moreover, the company plans to enhance its global retail network by opening 130 additional stores on top of the 230 stores already in operation.
    • On a per share basis, the Timberland brand is projected to uplift VFC’s earnings by $0.35 by the end of fiscal year 2019.
    • Based on the company’s healthy expansion plans and growth in its brand, Timberland, I believe VFC is a good investment choice. VFC also generates a higher ROE of 23.18%.
  • Best Buy Is Still A Good Buy
    Sep. 22, 2014 BBY 2 Comments

    Summary

    • The company’s restructuring program “Renew Blue” has achieved $900 million in annualized savings compared to the target of $1 billion; it also achieved $40 million in cost savings.
    • The online segment sales of Best Buy increased 22% in the recently-ended quarter driven by the company’s “buy online – ship from store” and marketing endeavors.
    • The bankruptcy of RadioShack will be a positive boost for Best Buy as it can capitalize on $341 million of Radio Shack’s lost sales.
    • The company’s shares went up 3.5% last week on strong volume following the launch of the iPhone 6 and news that Apple had witnessed a record number of preorder sales.
  • Lululemon Athletica Is Back In Shape
    Sep. 19, 2014 LULU 3 Comments

    Summary

    • Lululemon’s share price surged as much as 18% last week as the company reported better than expected second quarter fiscal year 2014 results.
    • The company’s revenue climbed 13% topping the company’s projection and leading to earnings beating the Street’s estimates.
    • I believe that the company’s margin pressure will begin to ease because of the cleaner inventory heading into the second half of fiscal year 2014.
    • Lululemon is planning to open a standalone men’s store to drive growth from this segment and is also planning to have 20 stores in Europe and Asia by 2017.
  • CVS Health Corporation: Adapting To The Shifting Market Dynamics
    Sep. 18, 2014 CVS Comment!

    Summary

    • The company’s top line witnessed a double digit growth of 10.7% during the second quarter of 2014 and reported absolute revenue of $3.4 billion.
    • Revenue growth was achieved as revenue per mail choice claim rose by 29.7%, pharmacy claims processed increased to 230.9 million, revenue per pharmacy network claim processed increased by 8%.
    • The company’s generic sourcing venture with Cardinal Health prepares it to seek full advantage of the increasing generic drug usage trend.
    • The company’s net profit margin had remained flat at 3.6% which means that the top line increase had trickled down to the bottom line causing a similar increase in net.
    • The drug store company has delivered a higher return on assets and equity of 7.05% and 12.71%, respectively, compared to peers.
  • Gilead Sciences: The Recent Dip In Share Price Creates A Buying Opportunity
    Sep. 18, 2014 GILD 5 Comments

    Summary

    • Gilead Sciences's stock has been on a rocket ship trajectory ever since the launch of its blockbuster drug, Sovaldi.
    • Gilead Sciences is planning to launch a generic version of the Sovaldi drug for more than 90 developing countries.
    • Sovaldi's sales are expected to further increase in the US, despite being expensive.
    • The company recently announced the positive results of its AMBITION study conducted in collaboration with GlaxoSmithKline.
    • Based on its fundamentals and earnings growth rate, Gilead appears to be relatively undervalued.
  • Clorox: A Value Stock
    Sep. 17, 2014 CLX 12 Comments

    Summary

    • Clorox formulated its strategic growth plan which aims to grab value opportunities in the long run in order to derive future bottom line growth and deliver solid stockholder returns.
    • It plans to achieve sales growth target by developing its “3D” demand-creation model, product innovation, reviving its product categories and increasing market share by escalating investment in demand-building programs.
    • Margin expansion is likely to be achieved by cutting down inflation exposure, curtailing growth of selling and administrative expenses by eliminating low-value activities and restoring margin in international businesses.
    • On a per share basis, the EBIT is anticipated to increase to $7.11 in 2015 as compared to $6.67 in 2014.
    • The stock is undervalued based on its P/E and offers a regular income return of 3.33%.
  • China Is The Current Focus Of Johnson Controls
    Sep. 17, 2014 JCI Comment!

    Summary

    • Johnson has recently added ECOSS, a stainless steel evaporative condenser, to its portfolio of industrial refrigeration solutions.
    • As part of its restructuring plan to align its business, the company has divested from its auto-interior business to team up with a Chinese company, Yanfeng Automotive Trim Systems.
    • On a per share basis, this joint venture will uplift the bottom line by 0.15 in 2015, increasing to 0.22 by 2020.
    • Johnson Controls has bright future prospects in China as the company’s high class building technologies and solutions assist the objective of the Chinese government.
    • To sum up, the increased penetration in the high growth market like China is likely to add decent numbers to the company’s top and bottom line.
  • Eli Lilly Will Soon Emerge As A Star
    Sep. 16, 2014 LLY 3 Comments

    Summary

    • The patent expiration of two of Eli Lilly's blockbuster drugs have strangled the company's recent-quarter performance.
    • The company's diabetes pipeline has many blockbuster drugs that are materializing in the massively growing diabetes market.
    • Eli Lilly's acquisition of Novartis's animal healthcare segment will result in $200 million financial synergies per year, and will also give Eli Lilly control over its projects.
    • Eli Lilly's recently approved cancer drug Cyramza has the potential to generate around $1 billion in annual sales.
  • Schlumberger: Recent Dip In Share Price Creates Buying Opportunity
    Sep. 16, 2014 SLB 4 Comments

    Summary

    • American oil production is on a roll and the best way for the investor to cash in on this black gold rush is to invest in oilfield service companies.
    • Schlumberger’s topline witnessed a growth of 8% along with a whopping return on equity of 17% after a rebound in drilling activity.
    • The recent increase in rig count will result in increased demand for oil and gas equipment and will translate into significant growth for Schlumberger.
    • Recent sanctions on Russia regarding its dispute with the Ukraine shouldn't be a concern for Schlumberger.
  • Reynolds American: Adapting To The Switch Towards A Healthy Lifestyle
    Sep. 14, 2014 RAI 5 Comments

    Summary

    • The acquisition of Lorillard will add Newport cigarettes to the company’s branded cigarette portfolio, the market leader in the US menthol category.
    • The combination will also provide Reynolds a dominant position in the high growth market of e-cigarettes.
    • The company has recently introduced its nicotine gum, marketed under the brand name of Zonnic, throughout US which is expected to add an EPS of $0.15.
    • The stock is currently undervalued based on its P/E and offers a striking dividend yield of 4.67%.
  • Teva Pharmaceutical Is Poised To Grow
    Sep. 13, 2014 TEVA 2 Comments

    Summary

    • Teva is trying to recover the Copaxone sales loss due to patent expiration by introducing an improved version of Copaxone 40mg.
    • Teva revealed positive data from the phase 3 study of its drug reslizumab for the treatment of moderate to severe asthma.
    • Teva won its case against AstraZeneca in the UK High Court paving the way for the company to launch its DuoResp Spiromax inhaler in the UK.
    • Recently Teva received 180-day marketing exclusivity in order to launch the generic version of Baracludes.
  • Progressive Corp.: All Set To Beat Competitors With Innovative Launches
    Sep. 12, 2014 PGR Comment!

    Summary

    • Progressive has teamed up with Zubie to encourage safe and sound driving by rewarding the customers in the form of lower premium charged.
    • The customers have two options: buy the policy directly or take a test drive.
    • Currently, over 1 million subscribers have enrolled into the Snapshot program. The expected growth in new applications is likely to increase the net premium written of Personal Lines segment.
    • The company is trying to achieve further growth by offering a “bundle” package i.e. auto product with property insurance through its Progressive Home Advantage program.
    • Based on the company’s recent program launches coupled with the trimming of expenses as exhibited by its declining combined ratio, the company has bright future prospects.
  • Nike's Growth Momentum Continues
    Sep. 12, 2014 NKE 1 Comment

    Summary

    • Nike cashed in on the back to school shopping spree in athletic attire.
    • Nike spent 11% of its revenue on demand Creation, which includes payment to athletes and advertisements to improve brand popularity and extend the shelf life of its products.
    • In order to provide cutting-edge products to its customers Nike is focused on increasing its innovation.
    • Nike’s huge cash pile will enable it to continue investing in marketing and product innovation which will be the drivers of its future growth.
  • Baker Hughes: The Expected Outperformer
    Sep. 11, 2014 BHI 3 Comments

    Summary

    • Operating environment turns positive as oil extraction in North Dakota Bakken Shale surpassed the record level of one million barrels of oil/day due to availability of cheap crude oil.
    • This puts the oilfield services’ companies like Baker Hughes in high demand as their products are used in the extraction process.
    • Baker’s acquisition of the pipeline and specialty service business of Weatherford broadens its offering in pre-commissioning, deepwater and in-line inspection services across the globe.
    • If Baker secures the Petrobras Drilling Contract, it will be able to add higher numbers to its bottom line compared to Schlumberger and Halliburton.
    • The company is offering a higher cash flow yield of 9.35% in an industry where the prevailing yield stands to be 8.20%.