I like when the initial claims numbers are much worse because all the doomers and gloomers come out of the woodshed to cry the world is ending. They fill my day with laughs.
Microsoft Offers Investors An Annualized Gross Return Of Up To 25% Over The Next 5 Years [View article]
In my mind, Microsoft trades at a correct multiple for a company approaching an inflection point. Microsoft has two options: 1) innovate and succeed, or 2) continue what its doing and stagnate, or slowly move backwards. It's the life cycle of businesses. Microsoft has the resources to innovate, but will they do it correctly? That's the big question in my mind, because it appears MSFT is simply going at it willy nilly in an attempt to make something work by pure chance.
I also find it hard to even value MSFT because the share buybacks inflate the earnings per share value. EPS is a good metric to use, but you must take into consideration the anti-dilutive effect of the buybacks and how that can make the company appear more profitable than it really is. Margins, on the other hand, as you can see in the chart above, are low; which should be expected for a company approaching an inflection point in its life cycle.
The Singapore Story: No Longer A Sure Thing For Investors? [View article]
When thinking of Singapore it may be a great idea to consider that we will likely see a considerable contraction in Q1. And the possibility that the MAS decides to lower the appreciation target of the SGD below it's current 2.5% target to combat the near continuous headline inflation and a weaker economy than what was expected late last year. This probably will not happen as long as the exchange rate stays away from the upper target, but it is something to keep in mind.
Futures give up a few ticks, SPY now flat after the big miss in the ADP jobs report. February's gain, however, was revised higher by 39K to 237K, making the whole thing kind of a wash. At 158K in March, the job gain is the slowest in the last 5 months, but well above most every print of 2012. (full report) [View news story]
QE is ending. Wait for the announcement of a slow decrease in buying in May/Juneish...
General Motors (GM) March U.S. sales: +6.4% to 245,950, short of the mark of analysts but the automaker's best March tally in five years. Sales gains were led by crossover (+31%) and truck (+2%) models while car sales dipped 3% during the month compared to a year ago. Total sales by brand: Cadillac +50%; Buick +37%; GMC +11.6%; Chevrolet +0.5%. The Cadillac ATS put in its best sales month ever with deliveries of 3,587 units. (PR) [View news story]
People must be working if they can buy cars. Expansion continues!
February Nonfarm Payrolls:+236K vs. consensus +160K, 119K previous (revised from +157K). Unemployment rate 7.7% vs. consensus 7.9%, 7.9% previous. [View news story]
Those are both overly ambitious numbers (1.2m house starts and 6% UE in about 20 months) but you have the right idea. The economy is improving as a whole. But don't forget there will always be market corrections during expansionary periods...
California gets its first upgrade from S&P since 2006, the agency hiking the rating on the state's general-obligation bonds to A from A-. "The economic expansion is gaining positive momentum," and the approval of higher sales and income tax rates "positions the state to capitalize on burgeoning economic activity." S&P should ask Phil Mickelson about that one. [View news story]
The better answer is still Phil's living location does not create jobs. He can live in Mexico and Callaway will still sell his drivers. How many drivers say "used by Phil Mickelson only when he is living in CA."
Despite beating profit expectations on the back of strong results in North America, Ford (F) could see some share price weakness after warning once again on sales in Europe, notes Douglas Kass. In early trading he's looking to be correct, Ford -1.7% premarket. [View news story]
Ford has been forecasting weak Euro sales for a year now, coupled with strong NA sales. It is a good stock to buy. Europe will eventually strengthen. The difficult part is when will Europe turnaround and will NA still be growing at that time.
Samsung (SSNLF.PK) Q4 net profit +76% to 7.04T won ($6.6B) vs consensus of 6.8T won. Revenue +18.5% to 56.1T won. Figures largely in line with guidance earlier this month. Revenues mostly driven by "solid sales" of flagship Galaxy S3 and Galaxy Note 2 smartphones. Profit at its mobile devices division more than doubles to 5.44T won, accounting for 62% of overall earnings. Expects the global smartphone market to shrink in Q1 from Q4. (PR) [View news story]
Apple's fast smartphone growth is done. Samsung's turn. Then somebody else. Maybe Microsoft will eventually make a phone people want?
The market moves based on future expectations. Not what happened last week or last month or last year. If people are expecting the economy to improve in a year or two, then you buy now before prices get pushed up too high.
Nokia Siemens Networks reportedly plans to issue €700M worth of high-yield bonds in the Spring to test investor interest in the company and assess the potential of a possible IPO. However, Nokia (NOK) and Siemens (S) have no plans to exit the telecom-equipment company, which has enjoyed a turnaround with three straight quarters of underlying profitability. [View news story]
The article answers the question of what they need the money for. NSN will "pay down existing bank debt and fund future investment." Seems like a good plan. Have to see how it unfolds. Perhaps a cleaner balance sheet and future growth prospects via expansion will open NSN up for a buyout.
SodaStream And Stifel: Why They Got It Wrong [View article]
I see both sides of SODA's story. All the expansion is great, BUT it is yet to be seen if that expansion will produce. Sort of like the example of paying $2 to earn $1 is not good business. Obviously it's not as simple as that but you get my point. I personally label SODA as more of speculative stock at this point. If the expansion produces tremendous margins then this stock will fly so high. But if it does not, then, well... You get the picture. I personally like to see companies like this making an effort to expand, but SODA's market is filled with stiff competition and only time will tell. I will be watching SODA's margins very closely... In any case, keep up the good work.
Gold Breakout In Process, Thanks To Germany [View article]
As an infinite GLD and SLV bear (at least until SLV dives to 20 and GLD 1200), I found myself doubting my own beliefs regarding GLD for a few nano seconds. Well done.
Initial Jobless Claims: -4K to 323K vs. 335K consensus, 327K prior (revised). Continuing claims -27K to 3.00M. [View news story]
Microsoft Offers Investors An Annualized Gross Return Of Up To 25% Over The Next 5 Years [View article]
I also find it hard to even value MSFT because the share buybacks inflate the earnings per share value. EPS is a good metric to use, but you must take into consideration the anti-dilutive effect of the buybacks and how that can make the company appear more profitable than it really is. Margins, on the other hand, as you can see in the chart above, are low; which should be expected for a company approaching an inflection point in its life cycle.
The Singapore Story: No Longer A Sure Thing For Investors? [View article]
Futures give up a few ticks, SPY now flat after the big miss in the ADP jobs report. February's gain, however, was revised higher by 39K to 237K, making the whole thing kind of a wash. At 158K in March, the job gain is the slowest in the last 5 months, but well above most every print of 2012. (full report) [View news story]
General Motors (GM) March U.S. sales: +6.4% to 245,950, short of the mark of analysts but the automaker's best March tally in five years. Sales gains were led by crossover (+31%) and truck (+2%) models while car sales dipped 3% during the month compared to a year ago. Total sales by brand: Cadillac +50%; Buick +37%; GMC +11.6%; Chevrolet +0.5%. The Cadillac ATS put in its best sales month ever with deliveries of 3,587 units. (PR) [View news story]
February Nonfarm Payrolls: +236K vs. consensus +160K, 119K previous (revised from +157K). Unemployment rate 7.7% vs. consensus 7.9%, 7.9% previous. [View news story]
California gets its first upgrade from S&P since 2006, the agency hiking the rating on the state's general-obligation bonds to A from A-. "The economic expansion is gaining positive momentum," and the approval of higher sales and income tax rates "positions the state to capitalize on burgeoning economic activity." S&P should ask Phil Mickelson about that one. [View news story]
Despite beating profit expectations on the back of strong results in North America, Ford (F) could see some share price weakness after warning once again on sales in Europe, notes Douglas Kass. In early trading he's looking to be correct, Ford -1.7% premarket. [View news story]
Samsung (SSNLF.PK) Q4 net profit +76% to 7.04T won ($6.6B) vs consensus of 6.8T won. Revenue +18.5% to 56.1T won. Figures largely in line with guidance earlier this month. Revenues mostly driven by "solid sales" of flagship Galaxy S3 and Galaxy Note 2 smartphones. Profit at its mobile devices division more than doubles to 5.44T won, accounting for 62% of overall earnings. Expects the global smartphone market to shrink in Q1 from Q4. (PR) [View news story]
Initial Jobless Claims: -5K to 330K vs. 360K consensus, 335K prior (revised). Continuing claims -71K to 3.15M. [View news story]
Nokia Siemens Networks reportedly plans to issue €700M worth of high-yield bonds in the Spring to test investor interest in the company and assess the potential of a possible IPO. However, Nokia (NOK) and Siemens (S) have no plans to exit the telecom-equipment company, which has enjoyed a turnaround with three straight quarters of underlying profitability. [View news story]
Capital One (COF): Q4 EPS of $1.41 misses by $0.16. Revenue of $5.6B (-3% Y/Y) misses by $0.28B. Shares -3.2% AH. (PR) [View news story]
Goldman Sachs Is A Phenomenal Investment Opportunity [View article]
SodaStream And Stifel: Why They Got It Wrong [View article]
Gold Breakout In Process, Thanks To Germany [View article]