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  • Monsanto - All-Time Highs Are In Sight After A Good News Show
    Jun. 25, 2014 MON 2 Comments

    Summary

    • Monsanto reported third quarter results which were roughly in line with expectations.
    • The company is upbeat about the final quarter of the year, and has set aggressive targets which call for earnings per share to double by 2019.
    • Management announces a huge $10 billion share repurchase program, as a tax-motivated deal with Syngenta appears to have broken down.
    • The future roadmap provides visibility and supports a premium current valuation. Despite this, a lot of good news has already been priced in already.
  • Endo International - Why Either A Short Or Long Position Is Too Risky For Me
    Jun. 25, 2014 ENDP Comment!

    Summary

    • Endo International acquires DAVA in a deal with a potential value of $600 million.
    • The deal seems fine and corresponds to the recently adjusted strategy.
    • CEO De Silva appears to copy Valeant's acquisition-based strategy combined with a lean business model.
    • His past ties to Valeant could make Endo a target itself, I shun the shares given the aggressive accounting and valuation.
  • General Mills - Poor End To 2014 As 2015 Will Be Difficult
    Jun. 25, 2014 GIS 10 Comments

    Summary

    • General Mills reports an unexpected fall in fourth quarter sales.
    • Sees more weakness in 2015 as cost inflation picks up.
    • Management is taking measures to boost sales and cut costs.
    • General Mills is still a prime long term dividend investment, yet appeal is limited in the short to medium term.
  • Abbott Laboratories: Recent Emerging Market Acquisitions Boost Growth Profile
    Jun. 24, 2014 ABT 3 Comments

    Summary

    • Abbott Laboratories announces the second deal in as many months.
    • This should boost growth and improve its growth profile as it expands even more into emerging markets.
    • Despite the improved growth appeal, diversification and strong financial position, I am cautious given the quality of adjusted earnings.
  • Wisconsin Energy - Implications Of The Latest Big Energy Deal
    Jun. 24, 2014 WEC 13 Comments

    Summary

    • Wisconsin Energy acquires Integrys Energy Group in a $9.1 billion deal.
    • Investors react very cautious, as the deal is driven by the need for capital, scale and diversification. The primary objective are not synergies, although they can be reasonably expected.
    • Solid projected earnings growth and anticipated dividend hikes should comfort investors.
  • Walgreen - Bad News Show Warrants A Bigger Short-Term Correction
    Jun. 24, 2014 WBA 9 Comments

    Summary

    • Walgreen has some bad news for investors: the company saw soft operating performance, while the Alliance Boots deal discussions are problematic.
    • Investors stand to receive an update about the potential deal for the 55% remainder stake later this summer.
    • Investors are furthermore hoping on a tax inversion move, following the potential completion of the deal.
    • Shares offer appeal if a decent correction might occur in the coming weeks.
  • William Lyon Homes: Nice Deal, But Has It Failed To Learn Its Past Leverage Lesson?
    Jun. 24, 2014 WLH Comment!

    Summary

    • William Lyon Homes makes a nice strategic deal at first look.
    • The deal will add significantly to the company's operations at what appear to be reasonable financial terms.
    • I am very troubled with the built-up in leverage, given the company's bankruptcy as recently as 2011.
  • Oracle - Long Awaited MICROS Deal Finally Materializes
    Jun. 24, 2014 ORCL 6 Comments

    Summary

    • Oracle reported a relatively soft set of results on Friday.
    • It now announces a $4.6 billion acquisition of MICROS Systems, bolstering cloud and enterprise offerings.
    • The deal makes perfect sense, ensuring modest topline revenue growth in the coming year as the business remains in transition.
    • I remain a buyer in the $36-$38 region.
  • Micron Technology - Investors Take Some Cash Off The Table Following A Strong Quarter And Outlook
    Jun. 24, 2014 MU 11 Comments

    Summary

    • Micron Technology reports solid third quarter results, offers a strong outlook.
    • Investors are taking some cash off the table following very strong momentum.
    • I am a buyer on significant dips, keeping a close eye on the supply constraints of the industry.
  • Molson Coors - Time To Take A Profit, And Have A Beer
    Jun. 23, 2014 TAP 4 Comments

    Summary

    • Very strong momentum has pushed shares up 50% over the past four months.
    • Rumors about a consolidation of the beer industry, and analysts upgrades are the main drivers behind this momentum.
    • These are excellent levels to take profits, unless a Molson will be a target in a potential deal.
  • 4 Large U.S. Corporations Set To Publish Earnings The Week Of The 23th Of June
    Jun. 23, 2014 GIS, MON, NKE Comment!

    Summary

    • Investors will get the latest trends in drug store sales, apparel, agriculture and food production this week.
    • Notably earnings from Walgreen, Nike and General Mills could stir things up a bit.
    • Please consider the risks when investing in shares over earnings; only hold a position if you are a long-term investor.
  • Analysts Late In The Upgrade Game As AutoNation Lacks Operational Growth
    Jun. 23, 2014 AN 4 Comments

    Summary

    • Shares in AutoNation rise to fresh all-time highs on the back of an analyst upgrade.
    • Shares offer little appeal in my eyes as analysts are late in the game.
    • Repurchases drive returns, as revenues are still lower than 10 years ago.
  • Family Dollar - Icahn Making Headlines Again, Sounding More Determined Then Ever
    Jun. 23, 2014 FDO 8 Comments

    Summary

    • Icahn attacks Family Dollar again just one and a half week after this first attack.
    • This time Icahn urges a quick sale of the business, or else threatens to find shareholders to gain a majority.
    • After two painful public losses, Icahn sounds very determined. It will be a hot summer for Family Dollar.
  • Smith & Wesson - Wait Before You Pull The Trigger
    Jun. 22, 2014 SWHC 13 Comments

    Summary

    • Shares of Smith & Wesson fell nearly 10% following a disappointing 2015 outlook.
    • Shares have seen huge momentum past year on the back of strong operations and shareholder payouts.
    • No real appeal yet; wait for a further correction before pulling the trigger.
  • Darden Restaurants - The Worst Is Yet To Come
    Jun. 22, 2014 DRI 28 Comments

    Summary

    • Darden Reports very soft results on the back of weak traffic.
    • Even at its growth franchises, earnings are falling on a relative and absolute basis.
    • I continue to shun shares, as the operating performance is deteriorating, especially if the dilutive Red Lobster sale becomes a fact.
  • CarMax - Great Results And Even Better Track Record Come At A Too Steep Price
    Jun. 22, 2014 KMX 7 Comments

    Summary

    • CarMax reported very strong first quarter results, triggering a huge rally in its stock.
    • The largest US company re-selling used cars has an excellent long term profitable growth track record.
    • Appeal is limited at premium multiples for a company still influenced by market cycles.
  • Rite Aid - No Surprises, Although Short-Term Headwinds Will Persist In The Second Quarter
    Jun. 20, 2014 RAD 38 Comments

    Summary

    • Rite Aid released its official first quarter results after warning the market earlier this month.
    • Shares sold off a bit, as weakness is seen in the current quarter as well, while the company reiterated the full year outlook.
    • There is long-term upside, but be careful of the leverage and short-term struggles.
  • Kroger - Great Performance, Limited Appeal After A Very Strong Performance Already
    Jun. 20, 2014 KR 1 Comment

    Summary

    • Kroger continues to report very strong identical sales numbers in a competitive market.
    • The Harris Teeter acquisition has worked out well.
    • After the huge run-up over the past year, the immediate appeal is limited.
  • Oracle: Sell-Off Is An Overreaction Given The Comforting Outlook
    Jun. 20, 2014 ORCL 6 Comments

    Summary

    • Investors punish Oracle for "disappointing" cloud numbers.
    • Despite solid growth, Oracle has a long way to go as the cloud operations are still very modest in size.
    • Investors should find comfort in the guidance, the rock solid balance sheet and fair valuation.
  • Century Communities - Disappointing Debut Of Fast-Growing And Profitable Home-Builder Creates Opportunities
    Jun. 20, 2014 CCS Comment!

    Summary

    • Century Communities witnessed a disappointing public offering.
    • The homebuilder is showing solid growth, is profitable and operates with a strong balance sheet.
    • Shares are actually appealing at current levels in my opinion.
  • Markit - Successful Debut As Shares Offer Compelling Value Around Their Offer Price
    Jun. 20, 2014 MRKT 2 Comments

    Summary

    • Markit sees a successful public debut.
    • Shares rise on their opening day as the company increased its offering size.
    • I am a buyer at levels around the offer price in this quality growth stock.
  • AbbVie - Attempt To Acquire Shire Is Driven By Opportunistic Tax Synergies
    Jun. 20, 2014 ABBV 6 Comments

    Summary

    • AbbVie is attempting to acquire Irish-based Shire.
    • The deal is once again motivated by tax differentials, and AbbVie's intentions to reduce reliance on Humira.
    • The market is applauding these deals way too much, I suggest that tax savings should be discounted at higher rates as governments will come under pressure to respond.
  • SolarCity - Attaching A Valuation Is A Daunting Task, An Investment Is A Bet On Musk
    Jun. 19, 2014 SCTY 11 Comments

    Summary

    • Shares jump more than 30% on the back of a deal and announced intentions to build a new plant.
    • Estimating the value of SolarCity is very complicated: unsuitability of GAAP accounting, changing dynamics and rapid growth make it a daunting task.
    • Long-term investors can allocate a small portion of their portfolio, knowing that they are betting on Elon Musk and have true long-term vision.
  • TE Connectivity: Measurement Specialties Deal Smart By My Measures
    Jun. 19, 2014 TEL Comment!

    Summary

    • TE Connectivity makes a smart deal, aiming to acquire Measurement Specialties.
    • The deal adds growth prospects, margin expansion and long-term accretion.
    • Overall valuation of TE is fair given the modest track record, and shares offer appeal on dips.
  • Amazon - Fire Phone Consistent With The Goal To Reinforce Its Ecosystem
    Jun. 19, 2014 AMZN 23 Comments

    Summary

    • Amazon.com announces the Fire phone.
    • Some cool new features, but pricing at par with the iPhone is slightly disappointing.
    • All of this is consistent with the long term vision of Bezos, boosting the value of the ecoystem and general merchandise operations.
  • ConAgra Foods - Acquisition Troubles, Core Weakness And High Leverage Result In Continued Worries
    Jun. 19, 2014 CAG 39 Comments

    Summary

    • ConAgra issues a serious profit warning, just a week ahead of its scheduled earnings release.
    • Hangover from Ralcorp deal and consumer foods softness is too blame.
    • Valuation is not appealing, driven by the huge debt position.
  • Adobe Systems: Shares Remain Pricey Despite Strong Cloud Subscriber Numbers
    Jun. 18, 2014 ADBE Comment!

    Summary

    • Investors send shares to fresh all-time highs on the back of strong subscriber numbers for creative cloud.
    • Second quarter results are strong, accompanied by a soft third quarter financial outlook.
    • Strong earnings growth is anticipated in 2015 and 2016. Still shares are rather pricey.
  • FedEx: Continued Growth, E-Commerce And Cost Savings Pay Off
    Jun. 18, 2014 FDX Comment!

    Summary

    • FedEx reports strong earnings driven by economic growth, e-commerce and cost savings.
    • The company is upbeat about the prospects for 2015.
    • Yet after 50% momentum over the past year, the good news has been priced in.
  • Expedia - I Have My Doubts About Susquehanna's Bullish Call
    Jun. 18, 2014 EXPE 2 Comments

    Summary

    • Susquehanna turns positive on Expedia as it believes consensus estimates are too pessimistic.
    • The company has demonstrated inferior revenue growth and margins.
    • If it can improve these metrics versus competition, the relative valuation gap and opportunity is large.
    • Yet I am not very convinced Expedia has the ability to do this, losing relative market share in a scalable business.
  • WEX: Evolution1 Deal Bolsters Non-Fleet Offerings As Long-Term Growth Continues
    Jun. 18, 2014 WEX Comment!

    Summary

    • WEX announces the $532 million acquisition of Evolution1.
    • This is as the company diversifies away from its core fleet business.
    • WEX's track record is very strong, shares offer appeal on dips.
  • Hill-Rom Holdings - Good Acquisition Of Trumpf Medical, Yet Overall Appeal Is Limited
    Jun. 18, 2014 HRC Comment!

    Summary

    • Hill-Rom acquires the medical business of TRUMPF in a $250 million deal.
    • The deal appears nice, executed at fair multiples, adding to diversification and earnings per share.
    • Yet the overall valuation, increase in leverage and poor long-term track record makes me cautious.
  • Cisco Systems - Another Small Deal Shows Cisco's Commitment To Turn The Ship
    Jun. 18, 2014 CSCO 1 Comment

    Summary

    • Cisco Systems acquires Tail-f Systems, a provider of traditional and virtualized network solutions.
    • The company is facing gaps in its product and service offerings, something which it tries to solve by making nimble acquisitions.
    • Fair valuation, strong balance sheet and high shareholder payouts lower the risks.