I woke up this morning and went cruising in search of the next BIDU, i.e. a stock with growth but an insanely high P/E that is too high for the earnings growth. Instead, I found a stock that has zero or negative growth and still an insanely high P/E.

Pull up a 2 year chart of NILE showing the rolling EPS. You will see yearly EPS of $0.70 - $1.00. You will also notice that when their trailing EPS was $1.00 the stock traded between $20 and $55 a share.

F4Q09 (Qtr Ended 8/31/09) Earnings Call

October 21, 2009 11:00 AM ET

The title of this article is of course borrowed from the brilliant book of the same name written in 1841 by Charles Mackay. The book deals with 3 “delusions”: "National Delusions", "Peculiar Follies", and "Philosophical Delusions". While dealing with The Crusades, alchemy, witch-hunts and other follies, the parts that interest us most today are the economic bubbles he discussed -- in 1841 -- and the national delusions he chronicled.

Mackay devoted a chapter each to the Dutch tulip mania of the early seventeenth century, the South Sea Company bubble of 1711–1720, and the Mississippi Company bubble of 1719–1720.

As earnings season begins in earnest we expect to see a wide variety of hits and misses. Alcoa (AA), one of the biggies, got the show rolling with a “beat” on their Q3 numbers.

However, CEO Klaus Kleinfeld made it clear that cost-cutting and other actions contributed heavily to cash positions and profits. In addition, the company cited improved aluminum demand by the auto makers.

The concept of real profit growth or earnings growth in this environment is an oxymoron . Many a recession has come and gone over the years, but this one is tainted by ghosts of loose notional values (think derivatives) and excess leverage.

Checking the pulse of dividend increases is an exercise whose goal is to uncover potential dividend growth plays that I might have otherwise missed out on. Another reason for that is to refute the idea that dividend investing is dead. It is also interesting to look for trends in the data, while browsing through the list of dividend increasers. While the REITs have been slaughtered along with other financials, Master Limited Partnerships and consumer staples have done pretty well. But just because I wrote about a certain stock, does not mean that I am going to add it to my portfolio. I need to research it and make sure that it could afford growing its generous distributions.

Stanley Works (SWK), which a diversified worldwide supplier of security solutions for commercial applications as well as tools and engineered solutions for professional, industrial, construction and do-it-yourself use, increased its quarterly dividend by 3.1% to 33 cents a share.

The main focus of dividend investing is finding and buying stocks that will continue to raise their dividends in the future. In making this determination there are many factors to consider such as dividend payout ratio, debt levels, the company’s dividend policy and track record.

Like so much that comes from the crooked smile of Wall Street, there is just enough truth in this statement to make it sound credible.

First, it is true that “over time,” buy and hold works out for 30-year periods (before taking inflation into account, anyway.) And it works for most 20-year periods. Of course, as John Maynard Keynes observed wryly, “In the long run we are all dead.” If you’re 65 and living on a fixed income, it is rather a small comfort to know that, while you may now be eating cat food until you die, in the long term your children will inherit a portfolio that someday gets back above ground zero.

Water: A Defensive growth sector

Lindsay Corporation (LNN) reported fiscal third-quarter earnings of $0.42 per share, beating our expectations of $0.34 per share and market expectations of $0.25 per share. The company has been successful in cutting personnel as well as other operating expenses through its cost-reduction initiatives implemented in the first three quarters of fiscal 2009.

The company posted revenue of $84.6 million for the quarter, compared to $143.6 million in the third quarter of fiscal 2008. Current global economic conditions are adversely impacting the company’s businesses. Irrigation equipment revenue declined 45%, and Infrastructure revenue was down 21% year-over-year.

F3Q09 Earnings Call

July 1, 2009 11:00 am ET

In Part I of this series, I discussed some of the global trends in freshwater availability and drinkability. It is nothing less than amazing to me that somehow 6 billion people sustain life on the roughly 1% of the earth’s water that is not salt water or brackish water (comprising about 97.5%) or encased in polar and glacial ice (about 1.5%).

An important industry has developed around this fact to treat, clean, and transport this water from its various sources to where people drink it, shower in it, irrigate their fields with it, and use it in literally thousands of manufacturing and agricultural applications. Because of the limited supply, much of this “waste” water is then purified, cleaned, and recycled for use again. But we can only refresh, re-use, and recycle so much.

F2Q09 Earnings Call

April 2, 2009 11:00 am ET

One of the major themes of 2009 to this point has been investor speculation on global infrastructure. With the recent $787 U.S. stimulus package signed into law by President Barack Obama, analysts are at a crossroads in looking where to invest to get the best exposure to bailout money. But where exactly is the money going to be? After digging into the stimulus, it seems to me that all signs are pointing to the road and water infrastructure as leading areas of the package.

If you want the “pure play” on this plan, one needs to look beyond the larger companies and focus on the smaller market cap, more niche, investments in infrastructure. Having a look into the “water” space can yield some big winners as the global water shortage scare starts to take effect in the face of huge capital injections into deserving companies. Small market cap companies in the stock market could have big advantages as money starts to pour into the system.

Just as Wall Street is the guardian of America’s financial capital, some 52,000 water systems in the U.S. are a key guardian of America’s “natural capital.” Because most are owned by cash-desperate municipalities, many are in even worse shape than the Detroit automakers, unable to repair hundreds of thousands of miles of old leaky pipes and derelict wastewater treatment plants.

F1Q09 Earnings Call

December 17, 2008 11:00 am ET

In a B.I.G. Tips report released Friday to Bespoke Premium subscribers, we detailed how the current earnings season has compared to past earnings seasons so far. 

Since Alcoa (AA) reported earlier this month, 159 US companies covered by analysts have released earnings. Below we list the best and worst performing stocks (>$10/share) in reaction to their earnings reports. We measure this by looking at the change on the first trading day following the company's report. For companies reporting in the morning, we use that day's change, and for companies reporting after the close, we use the following day's change. So far, Sunpower (SPWRA) has had the best response to earnings, rallying 24.55% on the day. Sunpower is followed by Continental Airlines (CAL), ICU Medical (ICUI), Peabody Energy (BTU), and Nucor (NUE). Other notables on the list of winners include GE, Briggs & Stratton (BGG), Monsanto (MON), and JB Hunt Transport (JBHT). On the downside, Badger Meter (BMI) has had the worst reaction to earnings, declining 28.9%. BMI is followed by Domino's Pizza (DPZ), Piper Jaffrey (PJC), and State Street (STT).

Nebraska prides itself for being one of the states with the lowest cost of living in the country, having some of the cleanest air and water, and being centrally located. An above average health care system is also in place in Nebraska. A hospital stay costs 30 percent less than the average national cost. Some other interesting facts about Nebraska are:

1. Nebraska has no property tax.
2. Income tax liability is calculated based on sales only.
3. Nebraska is the only state to offer a 100% public power system.
4. Agriculture and manufacturing are Nebraska’s primary source of revenue.
5. Nebraska’s top agricultural commodities are: cattle and calves, corn, and soybeans.
6. The Ogallala Aquifer, one of the major natural underground water available is under Nebraska’s soil.
7. Nebraska is the only state with a unicameral legislature.
8. Nebraska is geographically located in the center of the United States, half way between Boston and San Francisco.
9. The state of Nebraska offers several incentives for businesses relocating to the state. including, investment credits, sales tax refunds, and inventory tax exemptions.
10. Nebraska’s largest export is processed food.

The following companies are headquartered in Nebraska. They have a market cap of over $600 million:

F4Q08 Earnings Call

October 8, 2008 11:00 am ET