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Brian Gilmartin, CFA

 
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  • S&P 500 Earnings Update: Technology And Industrial Sectors Looking Better, Avoid Energy
    Nov. 2, 2014 SPY, SH, SSO Comment!
  • Exxon Mobil And Chevron Earnings Previews: Be Patient, Estimates Still Falling
    Oct. 29, 2014 CVX, XOM 9 Comments

    Summary

    • XOM looks fairly-valued in the low $90's;
    • CVX looks to be trading at a 10% discount to intrinsic value at $118;
    • We (I) will give the two giants time, at least until early '15 to see how cash-flow and capex shake out.
  • US Steel Reports Tonight: Fabulous Structural Cost Turnaround - 20% Free-Cash Yield
    Oct. 28, 2014 X Comment!

    Summary

    • Carnegie Way driving cost savings.
    • New CEO has transformed broken steel giant.
    • Cash-Flow valuations truly remarkable.
  • Facebook Earnings Preview: P/E Is 1X Average Forward Growth Rate But Sentiment Very Bullish
    Oct. 27, 2014 FB Comment!

    Summary

    • Mobile Ad revenue was the catalyst to drive stock in '13 from mid $20's to mid $50's.
    • Wondering about next catalyst - monetization of user base?
    • Sentiment now very bullish, complete opposite of mid 2013 with stock in the mid $20's.
    • Absolute valuation of FB is quite rich, relative valuation to growth not so much.
  • Twitter Earnings Preview: Still A Fan Into Q3 '14 Earnings Results
    Oct. 27, 2014 TWTR 5 Comments

    Summary

    • We like Twitter as a trade to mid-$60's, after that depends on the fundamentals.
    • Cash-flow is just starting to accelerate.
    • I thought bringing on Anthony Noto as CFO was a very smart move.
  • Microsoft Earnings Preview: Transitioning From Deep Value, Capital Allocation Story To Growth Stock ?
    Oct. 22, 2014 MSFT 10 Comments

    Summary

    • MSFT (the stock) was a stalwart during this recent 8% correction.
    • The price action is telling me Satya Nadella still getting the benefit of the doubt.
    • MSFT's Cloud traction more critical than ever.
  • Boeing Earnings Preview: For Longer-Term Investors, Think Stock Still 25% Undervalued
    Oct. 21, 2014 BA 1 Comment

    Summary

    • Slowing Non-US economies possibly taking a toll;
    • Secular aircraft demand cycle still intact.
    • After doubling in 2013, BA range-bound this year.
    • As 2014 EPS estimates have risen, 2015's are stable, so slower growth expected.
  • Drilling Down Into The Energy Sector
    Oct. 20, 2014 SLB, HAL, BHI 3 Comments
  • IBM Earnings Preview: Longer Term, Big Blue Needs Revenue Growth
    Oct. 20, 2014 IBM 6 Comments

    Summary

    • Consensus 2015 EPS growth still looking for 11% or low-double-digits.
    • Revenue growth remains an issue.
    • Like stock into year-end '14, Longer term, IBM needs revenue growth.
  • Energy Sector: A Look Ahead Before Weekend Revisions
    Oct. 17, 2014 6 Comments
  • Intel Earnings Preview: Consensus EPS And Revenue Estimates Headed Higher
    Oct. 8, 2014 INTC 39 Comments

    Summary

    • INTC's EPS and revenue estimates have started to turn higher.
    • The PC Group showed 6% revenue and 41% operating income growth in Q2 2014.
    • Has gross margin peaked ? 64.5% in q2 '14 - best since late 2011.
    • INTC, like a lot of large-cap tech companies, hung up on financial crack of stock options.
    • Dividend growth is limited with free cash spent on dilution prevention.
  • Apple Earnings Preview: Fiscal 2015 Looks Solid, But What About After That?
    Oct. 6, 2014 AAPL 76 Comments

    Summary

    • Fiscal 2015 will see better growth, but the longer-term issue of secular growth remains.
    • The new products are intriguing, but the IBM arrangement could be far more important.
    • The stock, despite the good product news in Sept. 2014, couldn't break out above the Sept. 2012 high.
    • The valuation remains very reasonable - we'd buy more AAPL in mid $80s.
    • As every Apple product segment is commoditized, how can margins be maintained?
  • More On S&P 500 Earnings And A Look At Revenue Estimates By Sector
    Oct. 6, 2014 SPY, DIA, QQQ Comment!
  • The Pessimism Around Q3 And Q4 2014 Earnings Seems Unwarranted
    Oct. 5, 2014 SPY, SH, SSO 2 Comments
  • Alcoa Earnings Preview: 2015 Estimates Look Robust
    Oct. 3, 2014 AA 6 Comments

    Summary

    • Fundamentals still improving - LME aluminum price up mid-single-digits in Q13 '14 alone.
    • Alcoa continues its shift to value-added segments and away from commodity businesses;
    • Convertible preferred issued by AA in September '14.
    • Would like to see company free-cash-flow positive with all the positive developments.
    • EPS and revenue estimates still being revised upward.
  • Comparing EPS Vs. Operating Cash-Flow Per Share (OCFPS) - A Lesson On Earnings Quality
    Sep. 29, 2014 AMZN, TIF, TWTR 24 Comments

    Summary

    • The concept of Earnings per Share (EPS) is not well understood by retail investors.
    • Operating Cash Flow per Share (OCFPS) is less well understood than the concept of EPS.
    • The litmus test for earnings quality is cash-flow coverage of net income.
    • GAAP vs Non-GAAP while important, isn't nearly as telling as cash-flow vs net income.
  • Walgreen Earnings Preview: Fiscal '15 Could Be Bumpy - Waiting On Better Valuation
    Sep. 29, 2014 WBA Comment!

    Summary

    • The inversion premium is out of the stock.
    • WAG is now a cost cutting story;
    • WAG lowered guidance when they announced abandonment of tax inversion.
  • S&P 500 Earnings Update: Finally, A Jump In The Forward Estimate Growth Rate
    Sep. 28, 2014 SPY, SH, SSO Comment!
  • Twitter - EPS And Revenue Estimates Still Headed Higher - Like For A Trade
    Sep. 26, 2014 TWTR 13 Comments

    Summary

    • TWTR is free-cash-flow positive, but just starting to ramp.
    • Revenue and EPS estimates have been headed north.
    • Like the stock to at least $65.
    • Valuation looks absurd, but model just starting to leverage.
  • Ford Investor Day, Monday Sept. 29: Stock Potentially Trading At 30% - 35% Discount To Intrinsic Value
    Sep. 25, 2014 F 23 Comments

    Summary

    • Ford holding an Investor Day, Monday Sept. 29, '14.
    • Stock has been in trading range all year, after December '13 guidance;
    • Europe is recovering;
    • Think intrinsic value is $23 - $25 per share.
    • Risk to stock is the $14 per share price level;
  • Nike Earnings Preview: The Global Brand Juggernaut
    Sep. 23, 2014 NKE Comment!

    Summary

    • One of the premier global consumer brands today.
    • The stock always looks expensive, which global brands always do.
    • Nike returning all free-cash-flow to shareholders.
  • Micron Earnings Preview: Think Intrinsic Value High $30s, Low $40s
    Sep. 22, 2014 MU 30 Comments

    Summary

    • MU's valuation is still reasonable.
    • Love the free-cash-flow generation post-Elpida; 9% current free-cash-flow yield.
    • Sustainability of free-cash-flow is key metric.
    • Forward EPS and revenue estimates still appear conservative.
  • Lennar Earnings Preview: The Quandary Is Decent Growth, Attractive Valuation, But Slowing Orders
    Sep. 16, 2014 LEN 2 Comments

    Summary

    • LEN average estimated EPS and revenue growth for next 3 years is 20% and 19% respectively.
    • LEN is more a mid-range homebuilder vs TOL at the high end.
    • Order growth has been slowing for homebuilders.
  • FedEx Earnings Preview: Returning Capital To Shareholders, But At What Price ?
    Sep. 14, 2014 FDX Comment!

    Summary

    • The share repo should be almost done.
    • Given paltry free-cash-flow, FDX adding debt.
    • Think stock is fairly valued here, although crude oil drop very helpful.
  • Oracle Earnings Preview: Fairly Valued, Is Oracle Now Secular Mid-Single-Digit Grower?
    Sep. 12, 2014 ORCL 3 Comments

    Summary

    • Dividend payout and dollars should increase as % of free-cash-flow.
    • More share repurchases being used to absorb insider sales.
    • I wonder if ORCL now a cash-cow with mid-single-digit secular growth ?
  • Merck Vs. Pfizer: Merck Better Performer, Pfizer Better Risk-Reward
    Sep. 9, 2014 MRK, PFE 20 Comments

    Summary

    • Valuation metrics are very similar.
    • Slight edge to Merck on expected earnings growth.
    • Slight edge to Pfizer on dividend yield and cash flow valuation.
  • S&P 500 Weekly Earnings Update: Q3 '14 Earnings Revisions Return To Normal
    Sep. 9, 2014 Comment!
  • Chart Of 10-Year Treasury Yield Tells You Everything
    Sep. 5, 2014 TBT, TLT, TMV 3 Comments
  • A Quick Look At The S&P 500 By Sector Market Cap
    Sep. 2, 2014 SPY, XLF, XLE 2 Comments
  • Toll Brothers Earnings Preview: Attractive Multiple, But Range Bound For 2 Years Now
    Sep. 1, 2014 TOL Comment!

    Summary

    • Relative to earnings and revenue growth, the stock looks cheap;
    • Stock has been locked in trading range for 2- 3 years.
    • QE3 was targeted at mortgage market - Taper could be having impact.
    • New single-family home data has been gradually slowing.
  • S&P 500 Weekly Earnings Update: Still Looking For $120 For Full-Year 2014 EPS
    Aug. 31, 2014 SPY, SH, SSO 26 Comments
  • Ford Vs. GM: Still Love Ford, But GM At 34%-35% Discount To Intrinsic Value
    Aug. 28, 2014 GM 46 Comments

    Summary

    • Estimated intrinsic value for GM is mid-$50s.
    • Estimated intrinsic value for F is low $20s.
    • Both are trading at discounts to intrinsic value, with GM at a bigger discount.