Seeking Alpha

Brian Dightman's  Instablog

Brian Dightman
Send Message
Brian Dightman founded Dightman Capital, an independent Registered Investment Advisor firm in 2007, just in time to deploy defensive strategies prior to the 2008 credit crisis. He has more than 10 years of industry experience and currently manages Global Growth Strategies which have been GIPSĀ®... More
My company:
Dightman Capital
My blog:
Global Market Monitor
View Brian Dightman's Instablogs on:
  • Top World Innovator List

    Thomson Reuters complies a list of top innovators from around the world using metrics like patent activity, success rate, globalization and influence.

    The U.S. took the top spot the first three years the list was published but not this year, the fourth. Japan took the top honor. 39 companies from Japan versus 35 from the U.S. were listed in the top 100.

    "The companies featured on this year's list have shown that the significant investment of time and resources in innovation are reaping rewards with shareholder value, growing revenues and increased market share," the Thomson Reuters report said.

    From the U.S. Apple (NASDAQ:AAPL), Lockheed Martin ((NYSE:LMT), Boeing (NYSE:BA), Google (NASDAQ:GOOGL), Microsoft (NASDAQ:MSFT), Intel (NASDAQ:INTL), and IBM (NYSE:IBM) were featured.

    Asian companies featured Samsung, Fujitsu, Hitachi and Canon.

    China had a company featured in the top 100 for the first time, Huawei.

    Innovation is a hallmark of the U.S. economy and an element we must work hard to expand.

    Disclosure: The author has no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Additional disclosure: Information for this post was provided by Investor's Business Daily, Internet & Technology, Monday, November 10, 2014 Issue.

    Tags: Innovation
    Nov 09 8:47 AM | Link | Comment!
  • S&P 500 Q3 Earnings Good So Far, Revenue Light
    • As of Friday, October 24th, 40% of S&P 500 companies have reported Q3 earnings.
    • 75% report earnings above mean estimate.
    • 60% report sales above mean estimate.
    • Earnings Growth is coming in above the estimate.

    With nearly ½ the S&P 500 (NYSEARCA:SPY) companies reporting, we have a good read on how Q3 earnings are shaping up.

    Back on September 30th analysts pegged Q3 earnings growth rate at a healthy 4.6%. As of last Friday the rate has actually come in at 5.6%, a nice 22% jump. Increases were primarily attributed to earnings surprises from Information Technology and Industrials. Telecom Services reported the highest earnings growth followed by Financials, Materials, & Healthcare. The only sectors to report year-over-year earnings declines are Consumer Discretionary and Energy.

    Sales growth has come in slightly below estimates at 3.7% vs. 3.8%; a development worth monitoring and somewhat supported by September's disappointing Advance Retail Sales report (which is subject to big revisions and may improve with the next update).

    Company conference calls have noted the negative impact of the stronger Dollar. Going forward most companies remain confident in U.S. growth prospects despite inconsistent GDP growth in 2014. Results and outlooks on Europe are mixed. The outlook on China is mostly positive despite their slowing economic growth.

    It looks like we are shaping up for decent Q3 earnings season but lagging sales could derail the current recovery attempt.

    Disclosure: The author has no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Additional disclosure: Data for this article came from Factset Earnings Insight, October 24th, 2014. No investment recommendations have been made in this article. Investing involves risk including the loss of capital. Conduct your own research before making any investment decision.

    Oct 29 12:56 PM | Link | Comment!
  • Balance Of 2014 Looks To Be Constructive For Stocks

    The Memorial Day Holiday is a great weekend for reflection. In between the special events and family gatherings it always seems as though there are a few extra quiet moments for thought about the future. The timing of this holiday is also only one month short of the mid-point in the year so it's also an interesting time to check on investment markets and the factors that drive them: Interest Rates, Economy, & Earnings.

    Interest Rates

    Interest rates remain very accommodative in the U.S. and are likely to remain so through the middle of 2015. Whether that is enough to keep the market rally alive remains to be seen. Even talk of rates rising a year out can give pause to the market and is one of the primary risks to this rally. We have seen The Fed successfully implement a QE extraction program so maybe they can manage the interest rate dynamic equally well.

    Economy

    The U.S. economy still lacks momentum and remains jittery but overall continues to improve. After weakness attributed primarily to winter weather, month-over-month growth has continued in the big four indicators:

    • Industrial Production
    • Real Income
    • Employment
    • Real Sales

    Growth has accelerated in February and March especially in terms of Industrial Production and Real Sales. If this pattern continues pressure to raise interest rates will mount. The Fed wants to see the economy grow a bit faster than the current rate, especially in labor metrics, but not to fast. Some observers point out pent up demand from the impact of cold weather this winter has driven the recent spikes up and once demand is met monthly growth will fall back to the 0.1-0.3% rate that has made up much of this recovery. As we move further into the summer we should have a better idea of the momentum behind recent economic acceleration.

    Earnings

    490 companies of the have reported 1st quarter earnings as of May 23rd. 74% reported earnings above the mean estimate and 53% reported sales above the mean estimate. For Q2 79 companies have issued negative EPS guidance and 26 companies issued positive EPS guidance. The current 12-month forward P/E ratio is 15.3, above both the 5-year average (13.2) and 10-year average (13.8).

    If we take a look at the actual and estimated earnings for the S&P 500 it becomes clear earnings growth is expected to pick up throughout 2014 when compared to 2013. At this point analysts are expecting earnings to increase by $1.18 or 4.24% in Q2 and continue growing at 4-5% in Q3 and Q4. Continued improvement in the U.S. economy will be an important component to realizing these numbers.

    Source: Factset Earnings Insight May 23, 2014

    Markets

    2014 has been an up and down ride for stocks. You may recall all of the major broad U.S stock indexes ended the month of January with declines which is often a precursor to result for the balance of the year. Since 1950 the Stock Trader's Almanac reports there have only been 7 "errors" where the full-year results did not follow the results that were generated in January. 2014 is a midterm election year which delivers its own set of statistics. The -8% decline experienced by the Dow at the end of January may mark the midterm low, which has often been an excellent buying opportunity. Given the more recent selloff in small/mid-cap aggressive growth stocks there may still be time to take advantage of any rally that helps the year finish with gains. Markets have been mostly marketing time this spring, moving sideways since early March.

    Both the Dow Jones Industrial and S&P 500 have gone on to hit new all-time highs recently. The Nasdaq and Russell 2000 (small cap) need to play catch up but action last week may indicate stocks are ready to resume another leg up. Price action was very constructive in the broad market and many market leading stocks started to rally after being under intense selling pressure the last few weeks. The only element missing was volume which could pick up if more participants get behind the rally attempt. We could see evidence of this as early as this week.

    Despite unrest in some parts of the world, recent election in Europe and the Ukraine are likely to be viewed as positive developments by the market.

    If economic growth finally accelerates the Fed is very likely to start moving rates up in mid-2015. From their current ultra-low level we may only see a moderate impact on stock prices initially. If economic growth continues to heat up and it is believed The Fed will move rates higher then we could see a more negative impact on the stock market. This would be the classic manner in which stock market appreciation is dimmed. The direction of interest rates likely holds the key for the direction of the stock market for the balance of 2014 and the start of 2015.

    At this point there is little risk of the economy "over heating" and interest rates spiking unless recent economic momentum continues through the summer and into the fall. Otherwise it looks like a combination of moderate economic growth could keep concerns about interest rates in check for the balance of 2014 which should be positive for the stock market.

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Additional disclosure: No investment recommendations have been made in this article. Investing involves risk including the loss of capital. Conduct your own research before making any investment decision.

    May 27 1:05 PM | Link | Comment!
Full index of posts »
Latest Followers

StockTalks

More »
Posts by Themes
Instablogs are Seeking Alpha's free blogging platform customized for finance, with instant set up and exposure to millions of readers interested in the financial markets. Publish your own instablog in minutes.