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  • 3M: Extremely Well-Led Business Is Appealing If A Correction Takes It To General Market Multiples
    Fri, Jul. 25 MMM 7 Comments

    Summary

    • 3M reports uneventful second quarter results.
    • Continued organic growth, margin expansion and increased R&D should boost growth and earnings for years to come.
    • Combined with appealing dividends and share repurchases, shares offer appeal on a 10-15% dip which brings the valuation at par with wider equity markets.
  • Visa - Dollar Strength And International Tensions Will Have An Impact In The Final Quarter
    Fri, Jul. 25 V 18 Comments

    Summary

    • Visa posts solid third-quarter earnings, in line with expectations.
    • The company turns more cautious for the final quarter, driven by international uncertainty and dollar strength.
    • Premium valuation leaves little appeal despite solid growth; I worry about long-term technological changes undercutting its business model somehow.
  • Amazon.com: Bezos Seriously Testing Investors' Patience And Trust After Guiding For A Big Loss
    Fri, Jul. 25 AMZN 22 Comments

    Summary

    • Amazon.com posts second-quarter results, which are more or less in line with expectations.
    • The shocker is the guidance for a large loss in the third quarter, which could result in a full-year loss.
    • Bezos is seriously testing investors' patience, who are becoming frustrated with no improvements on the bottom line and the lack of transparency.
  • Qualcomm: China Problem A Buying Opportunity?
    Fri, Jul. 25 QCOM 16 Comments

    Summary

    • Qualcomm posts solid results but reveals a nasty surprise.
    • It has serious regulatory issues in China and customers appear to be under-reporting device sales to the company.
    • Yet the big sell-off might just provide a bit of an opportunity, as Qualcomm is likely to tackle the issues.
  • Starbucks - Investors Take Profits After A Cautious 2015 Outlook
    Fri, Jul. 25 SBUX 13 Comments

    Summary

    • Starbucks posted results which are in line, driven by store openings, comparable sales growth and continued margin expansion.
    • Notably the operating margin expansion is limited for next year, resulting in Starbucks issuing a cautious earnings outlook for next year.
    • I am cautious given the premium valuation in the short to medium term, although I remain optimistic for the very long run.
  • Caterpillar - Investors Ignore Low Quality And Financially Engineered Earnings
    Fri, Jul. 25 CAT 18 Comments

    Summary

    • Caterpillar continues to report modest revenue declines.
    • Earnings are up on cost cutting, continued and accelerated share repurchases.
    • The increase in leverage resulting form repurchases, premium valuation and lack of growth is a worry.
  • Gilead Sciences - Sovaldi Momentum Continues, Appeal Remains
    Thu, Jul. 24 GILD 16 Comments

    Summary

    • Gilead reported blow-out second quarter results driven by Sovaldi of course.
    • The full year outlook looks conservative, implying second half sales to drop.
    • Despite risks related to pricing and competing drugs, the overall valuation remains compelling enough.
  • Ford - Solid Quarter, Still On Track For A Great 2015
    Thu, Jul. 24 GM, F 18 Comments

    Summary

    • Ford reported relatively solid earnings aided by Europe in particular, offset by weakness in Southern America.
    • The company continues invest for the transition into 2015 which is hurting today's earnings.
    • The bright outlook and near 3% yield continues to drive appeal for me.
  • AT&T - Dividend Remains Appealing As Competition, Leverage And Changing Industry Circumstances Pose Modest Risks
    Thu, Jul. 24 T 13 Comments

    Summary

    • AT&T posts weaker-than-anticipated sales and earnings.
    • The 5%+ dividend yield remains its largest appeal.
    • Cautious on the prospects for capital gains amidst competition, leverage and a changing landscape.
  • PepsiCo - Strong Results And High Payouts Push Shares To Fresh Highs
    Wed, Jul. 23 PEP 3 Comments

    Summary

    • PepsiCo posts very strong underlying results for the second quarter, despite uninspiring topline numbers.
    • The company raises its underlying earnings target for the year, pushing shares to fresh highs.
    • Fairly high multiple and debt make me cautious, as dividends remain appealing in this low rate environment.
  • Boeing - Solid Quarter, Appeal Remains On Dips
    Wed, Jul. 23 BA 15 Comments

    Summary

    • Boeing reports solid second quarter earnings.
    • As it hikes the full year outlook after being conservative earlier this year.
    • Strong balance sheet, backlog and dividend are appealing. I remain a buyer on dips.
  • McDonald's - Headwinds Continue As Pressure Is Building To Make A Dramatic Strategic Move
    Wed, Jul. 23 CMG, SBUX, YUM 26 Comments

    Summary

    • McDonald's global comparable store sales growth have halted, resulting in disappointing earnings.
    • This is as comparable sales are expected to fall in July, lowering expectations for the third quarter.
    • The increase in leverage is worrying amist lack of growth. Increased focus on obesity and healthy food remain a structural headwind.
    • As such I remain very cautious, as dividend investors seek shelter in the 3.4% dividend yield.
  • Microsoft - Nadella Continues To Appeal To Investors, Be Cautious After The Strong Momentum
    Wed, Jul. 23 MSFT 13 Comments

    Summary

    • Microsoft shares trade at fresh post-dot com highs.
    • Nokia took out $0.08 per share in earnings, although Microsoft expects the unit to break-even by 2016.
    • Investors continue to applaud Nadella's moves, cutting losses at Nokia and focusing on the cloud and enterprise markets.
    • Still, the valuation is fair at 14 times ex-cash, given the challenges ahead in its core business to catch up with changing business models.
  • Six Flags - Too High Dividend And Too Much Leverage... Has Management Learned Its Lessons?
    Tue, Jul. 22 SIX 3 Comments

    Summary

    • Six Flags revenues fall short on poor weather, while some investors suspect that aggressive price hikes have pushed away traffic.
    • I am worried about the excessive usage of leverage being employed, as management should know better given its bankruptcy experience.
    • Targeted expansion and high dividends are unsustainable, a potential investment does not pass my scrutiny test.
  • Hasbro - Poor Sales Track Record Is An Operational Risk 'Masked' By Shareholder Payouts
    Tue, Jul. 22 HAS 8 Comments

    Summary

    • Hasbro sales rose on Marvel and Transformers sales, still fell short to consensus estimates.
    • Investors worry about engagement among kids who favor technology over traditional toys.
    • Franchise remains strong, dividend and repurchases look appealing.
    • Yet the valuation is a bit high for me, as I see operational risks.
  • Verizon Communications - Growth Appeal For Dividend Investors At A Reasonable Price
    Tue, Jul. 22 TMUS, VOD, VZ 10 Comments

    Summary

    • Verizon is posting continued growth, trading at 13-14 times earnings.
    • Its 4% dividend yield combined with anticipated growth is very appealing in this low interest rate environment.
    • Be aware of the relatively high leverage following the consolidation of Wireless, as the net debt position exceeds the staggering amount of a $100 billion.
  • Coca-Cola - Operational Headwinds Continue, Investors Are Pushing Up Shares In Search For Yield
    Tue, Jul. 22 KO 15 Comments

    Summary

    • Coca Cola reported an unexpected decline in topline sales.
    • Currency headwinds and divestitures hurt revenues more than projected.
    • I remain cautious amidst a premium valuation, lack of growth, worries about the soft drink markets and the dilutive effect of the sizable share-based compensation program.
  • 4 Large U.S. Technology And Communication Companies Set To Publish Earnings This Week
    Tue, Jul. 22 AAPL, MSFT, T Comment!

    Summary

    • This week will be very busy on the earnings front, 13 U.S. corporations with a valuation over a $100 billion are expected to report.
    • Technology names in particular are expected to share their latest insights.
    • Please consider the risks when investing in shares over earnings, only maintain positions if you are a long-term investor.
  • Morgan Stanley - Gorman's Strategy Creates Stability And Value, And Is Already Paying Off
    Mon, Jul. 21 MS Comment!

    Summary

    • Morgan Stanley posted strong second quarter results, even adjusting for DVA and tax benefits.
    • CEO Gorman's strategy to focus on wealth and investment management creates visibility and high earnings.
    • The freed up capital from exiting capital-intensive businesses is already being returned to investors, creating further appeal.
  • Honeywell - Little Appeal As I Cannot Identify The Next Value Driver
    Mon, Jul. 21 HON 6 Comments

    Summary

    • Honeywell's shares hit fresh high in the wake of solid second quarter results.
    • Multi-year plans, organic growth, margin expansion and valuation multiple increase all benefited shares in recent years.
    • I wonder what could drive shares higher, not finding the current risk-reward too appealing given the cyclical nature of the business.
  • Halliburton - Appeal Remains, Yet Buy Selectively After Year To Date Returns Of 40%
    Mon, Jul. 21 HAL 1 Comment

    Summary

    • Halliburton is benefiting from the recovery in the oilfield service market.
    • The strong US exposure boost the growth profile and reduces geo-political risks.
    • I like the stock, the valuation and opportunities for margin expansion. Yet after 40% returns so far this year, I am only buying on significant pullbacks.
  • Schlumberger - No Surprises In The Earnings Report As Geo-Political Risks Is Most Important Now
    Mon, Jul. 21 SLB 2 Comments

    Summary

    • Schlumberger posts solid second quarter results.
    • Investors hardly react to the numbers, they are focused on oil and gas price developments amidst international tensions.
    • The company recently issued a strong 2017 long term target, providing a roadmap for investors.
  • IBM - Shifting Focus From Repurchases To Operational Improvements Is To Be Applauded
    Sun, Jul. 20 IBM 14 Comments

    Summary

    • IBM posts second quarter results in line with expectations.
    • Sales fall for the 9th quarter in a row, despite ¨huge¨ investments into the cloud & big data.
    • Shareholders have seen huge buybacks which have fueled EPS, investors have discounted these earnings amidst the build up in leverage and sliding sales.
    • There is value in the shares as long as the focus on the new growth areas can offset revenue declines at the legacy businesses.
  • General Electric - Steady Results, Investors Are Happy With Financial IPO Timeline
    Fri, Jul. 18 GE 26 Comments

    Summary

    • GE posts results which are in line with expectations. Industrial moves along fine as GE Capital continues its slow wind down.
    • Immelt's transformation strategy is applauded but has moved slowly in recent years.
    • Alstom deal is a big addition to industrial activities, while the Synchrony Financial IPO should shed a lot of financial assets.
    • Shares already trade at a premium valuation to the market despite the modest growth and past mistakes.
  • AMD: Sell-Off Is Warranted As AMD Disappoints So Early In The Recovery Cycle
    Fri, Jul. 18 AMD 76 Comments

    Summary

    • AMD had a soft quarter, as it failed to benefit from the recovery in PCs unlike Intel.
    • This was accompanied by a very soft third quarter outlook as growth is stalling.
    • This is as management is underdelivering again, which means this sell-off creates no obvious buying opportunity.
  • SanDisk - Sell-Off Is Warranted After Very Strong Momentum And Worries About Sales And Margins
    Fri, Jul. 18 SNDK 7 Comments

    Summary

    • SanDisk reports second quarter earnings which are in line with expectations.
    • Analysts are worried about a weak third quarter sales outlook as SanDisk aims to avoid oversupply which could pressure margins.
    • Despite the soft sales outlook, margins are also seen under continued pressure.
    • As such the 15% sell-off can be justified, especially as shares are still up by a third this year.
  • Google - Solid Results, Continued Focus On Innovation Still Leaves Long-Term Appeal
    Fri, Jul. 18 GOOG, GOOGL 5 Comments

    Summary

    • Google reported second quarter earnings which were in line with expectations.
    • The company continues to grow rapidly and continues to innovate even into ¨crazy¨ ideas.
    • The strong culture and modest valuation at 25 times earnings still implies that better days might be ahead.
  • Goldman Sachs - Strong Results By This Well-Managed Banking Franchise
    Thu, Jul. 17 GS 4 Comments

    Summary

    • Goldman Sachs reported very strong second-quarter results.
    • Organic strength, driven by investment banking and less weakness in trading boosted results.
    • Smart investments added to earnings, as Goldman's management has a strong long-term strong track record.
    • Structural pressure on trading is now priced into the shares, I am cautiously optimistic.
  • Las Vegas Sands - Macao Slowdown Is Evident In Second Quarter Results
    Thu, Jul. 17 LVS 13 Comments

    Summary

    • Las Vegas Sands reports disappointing revenues and earnings.
    • Slowdown in Macao is impacting results, causing uncertainty for the near term outlook.
    • Premium valuation, leveraged balance sheet and reliance on Macao makes me hesitant to invest at current levels.
  • eBay - More Work Ahead For John Donahoe As Investors Are Relieved For Now
    Thu, Jul. 17 AMZN, FB, GOOG 29 Comments

    Summary

    • eBay reports second quarter earnings which are in line with expectations.
    • Investors are relieved amidst a security breach, a high profile departure, a fight with Icahn and competitive threats.
    • CEO John Donahoe has a lot of work ahead, I like the company but not yet at this price.
  • Bank Of America - Earnings Shortfall Driven By New 'One-Time' Litigation Charges
    Wed, Jul. 16 BAC 27 Comments

    Summary

    • Bank of America reports disappointing earnings.
    • Litigation costs of $4 billion bring the year-to-date bill towards $10 billion, as the major settlement with the Justice Department still has to be announced.
    • With operational improvements being made, I remain neutral.
  • JPMorgan - Another Bank Earnings Beat, Driven By Better-Than-Anticipated Markets Performance
    Wed, Jul. 16 JPM Comment!

    Summary

    • JPMorgan reports declining second-quarter sales, yet it beat on lowered consensus estimates.
    • Earnings beat is driven by a better-than-expected performance in trading, and resilient commercial banking, community banking and asset management.
    • Despite appealing price-earnings valuation and dividends, I am not a buyer given asymmetric risk-return potential in the banking sector at this point in time.