Q1 2009 Earnings Call Transcript

May 8, 2009 11:00 am ET

Price-to-Sales ratio ((PSR)) is a measure used by many of the Guru Strategies I run on Validea.com as a way to find undervalued stocks. The ratio, which is simply the market capitalization of the firm divided by the company’s sales, has become more popular over the years as investors look for additional ways to uncover value among publicly traded stocks.

The individual who popularized the PSR is Ken Fisher. Fisher, a longtime Forbes magazine columnist, is one of the most widely recognized names in the money management business. His firm, Fisher Investments, manages tens of billions of dollars. In his 1984 book Super Stocks, Fisher outlined an investment approach using the PSR – this is the approach I utilize in the computerized Price/Sales Investor strategy on Validea.com.

Bullish Calls:

Hasbro (HAS): "I like Hasbro, 52 week low… everyone is giving up on the toy business.. it is way, way too low… I think that this is a decent level to get some of the stock… get a little bit here, and then it goes under $20... buy a little more.

Q4 2008 Earnings Call Transcript

February 20, 2009 11:00 am ET

This is the Third Quarter 2008 edition of our ongoing hedge fund tracking series. Before reading this update, make sure you check out the preface to the series we're doing on Hedge Fund 13F's here.

The other funds we've already covered include:

Q3 2008 Earnings Call

October 30, 2008 11:00 am ET

• Fed cuts to 1%. In a unanimous decision, the Fed dropped its key fed funds target to 1% from 1.5%, while the discount rate fell to 1.25% from 1.75%. "The pace of economic activity appears to have slowed markedly, owing importantly to a decline in consumer expenditures," it said. The Fed hinted it may not be done with rate cuts: "... downside risks to growth remain. The Committee will monitor economic and financial developments carefully and will act as needed to promote sustainable economic growth and price stability." New in its statement were its reference to "slowing economic activity in many foreign economies" that "is damping the prospects for U.S. exports," and its more dovish stance on inflation, which it now "expects" to moderate.
• Fed moves free cash. Credit markets continued to thaw Thursday after the Fed lowered its target lending rate to 1% and agreed to pump $120B into Brazil, Mexico, Singapore and South Korea through swap agreements. Three-month Libor is expected to drop 20 BPs to 3.22%. Libor has declined for 13 days in a row. "The swap lines are not unlimited but at least they will take a lot of tension out of the credit markets," economist Mark Tan said. "The inclusion of Singapore is an extension to the region because it's the center for Asia's dollar markets." Taiwan, Hong Kong and China all lowered their key lending rates.
• ECB bank loans top $1T. The ECB says it has now loaned an unprecedented $1T (€774B) to banks, not including dollar loans. Still, while credit markets are looser than they were two weeks ago, they're by no means back to normal. "Short-term money markets are responding to the liquidity flood from the ECB and the prospect of lower interest rates, but we are not out of the woods on longer-term lending," ING's Padhraic Garvey said.
• FDIC to help troubled homeowners. The government is preparing to unveil a plan that will guarantee $500B in loans to troubled borrowers, sources say. The program would use $50B from the $700B TARP pot to lower loan interest rates for five years. FDIC will run the program, which could affect 3 million distressed loans. "It will take a massive and quick infusion of funds for refinancings and other foreclosure prevention to turn the tide," researcher David Abromowitz said.
• Poor DB earnings beat expectations. Deutsche Bank (DB) reports Q3 net income fell 73% to €435M from €1.62B the previous year. The results were better than the expected net loss of €251M thanks to new EU accounting rules and a tax benefit. Q3 results included €1.2B in writedowns related to the credit crisis, bringing the bank's total writedowns to €8.5B since the crisis began. Revenue fell 14% to €4.37B from €5.10B. CEO Josef Ackermann cautioned on dividend expectations for 2008, saying the dividend policy will be balance with 'our commitment to conserving capital strength in a highly uncertain environment.'
• High crude helps Shell. Royal Dutch Shell (RDS.A) reports Q3 profit climbed 22% as record high oil prices offset production cuts in Nigeria and the Gulf of Mexico. Net income rose to $8.45B from $6.92B the previous year. Profit was $8.04B with $800M of gains in fair-value adjustments, vs. expectations of $7.22B. With oil prices now down from July's highs and lost production in Nigeria and Russia, Shell plans to mine Canadian oil sands and develop a gas-to-liquids venture in Qatar. Shares -1.6% premarket.
• Investors eye premium on RTP deal. Rio Tinto (RTP) is facing pressure from some institutional investors to start talks with BHP Billiton (BHP) on its $87B hostile takeover bid. Investors have seen Rio's share price battered in recent weeks and are interested in BHP's premium of 3.4 of its shares for each Rio share vs. the current ratio of roughly 2.7 to 1. An inside source said a few small funds are in favor of the deal but Rio is not facing a wave of investor pressure to begin negotiations. Rio CEO Tom Albanese said recent movements in stock or commodity prices have not changed the company's views that BHP's offer undervalues the company's operations and growth projects. Premarket: RTP +6.9%.
• Tysabri suffers another setback. Shares of Irish drugmaker Elan (ELN) plunged as much as 49% in Dublin after a patient taking its multiple sclerosis treatment Tysabri contracted a life-threatening brain illness, the third case since July. Elan's ADRs are -18.4% in U.S. premarket trading. Elan markets the drug together with U.S. firm Biogen Idec (BIIB).
• More work, less oil. As more governments shut out Western oil companies, the pickings get slimmer. Chevron's (CVX) $3B investment in the Frade prospect off Brazil is expected to yield just 270M barrels over the next 18 years, despite CEO Ali Moshiri's best efforts to secure equipment and fast-track the project. He now concedes Frade is mediocre compared with some of the company's previous efforts.
• Bleak outlook for pension plans. Corporate pension plans may be in serious trouble. At the end of last year S&P 500 companies had a combined pension plan surplus of about $60B; through September of this year that figure likely turned into a combined deficit of $75B, which may by now be -$300B or more.
• Japan announces $50B stimulus package. Japan said it will pump ¥5T ($51B) into its economy, including funds for households and local governments. "We're facing a storm that comes once in every 100 years," Prime Minister Taro Aso said. "While Japan's financial system remains relatively sound there will surely be an impact on the real economy." The Bank of Japan is expected to cut interest rates tomorrow after a Nikkei newspaper report raised expectations of a rate cut, causing the yen to slump and stocks to rise. If BoJ holds its rate steady, the yen could appreciate again as the stock market resume its fall.
• Factory orders stronger than expected. Durable goods orders increased by 0.8% ($1.6B) in September to $208B, beating the consensus of -1.1%. Inventories increased by $1.2B to $340B. Shipments were up 0.2% following August's 4.2% drop. Excluding transportation, new durable goods orders fell 1.1%. It's still better than the -1.5% consensus, but clearly transport orders were a large part of the upside surprise.
• EIA's petroleum inventories. Crude +0.49M vs. consensus of +1.55M. Gasoline -1.5M vs. +1.5M. Distillate +2.3M vs. +1.05M. Crude futures are up 0.3% to $67.70.

Earnings: Thursday Before Open

• Apache (APA): Q3 EPS of $3.52 misses by $0.20. Revenue of $3.36B vs. $3.63B. Shares +1.1%. (PR)
• AstraZeneca (AZN): Q3 EPS of $1.32 beats by $0.18. Revenue of $7.8B vs. $7.6B. Shares +5.2%. (PR)
• Avon (AVP): Q3 EPS of $0.52 beats by $0.02. Revenue of $2.64B in-line. Avon believes it will continue to generate strong operating cash flow. Shares -0.6%. (PR)
• BJ Services (BJS): FQ4 EPS of $0.59 beats by $0.03. Revenue of $1.53B (+15%) vs. $1.47B. Sees FQ1 EPS of $0.48-0.51 vs. $0.56. "We expect drilling activity in North America to begin to decline during our first fiscal quarter and anticipate moderate reductions in certain international markets." (PR)
• Brink's (BCO): Q3 EPS of $1.00 beats by $0.11. Revenue of $949M (+16.1%) vs. $921M. Shares +4.5%. (PR)
• CBS (CBS): Q3 EPS of $0.43 beats by $0.03. Revenue of $3.38B (+2.9%) in-line. For the first time in 20 years, CBS TV was #1 in all key categories through the first five weeks of the season. (PR)
• Colgate-Palmolive (CL): Q3 EPS of $0.99 beats by $0.01. Revenue of $3.99B (+13%) in-line. (PR)
• Commercial Metals Company (CMC): FQ4 EPS of $0.55 misses by $0.39. Revenue of $3.1B vs. $3.19B. Shares -2.9%. (PR)
• CVS Caremark (CVS): Q3 EPS of $0.60 in-line. Revenue of $20.86B (+1.8%) vs. $21.06B. (PR)
• Deutsche Bank (DB): Q3 EPS of €0.39 vs. €1.57 consensus. Revenue of €4.37B in-line. Shares +14.5% in Frankfurt. (AP)
• Dominion Resources (D): Q3 EPS of $0.94 beats by $0.04. Revenue of $4.23B (+17.9%) vs. $3.55B. (PR)
• Eastman Kodak (EK): Q3 EPS of $0.33 beats by $0.05. Revenue of $2.4B (-5.1%) vs. $2.53B. (PR)
• Energizer (ENR): Q3 EPS of $1.67 beats by $0.49. Revenue of $1.12B (+28.3%) vs. $1.05B. "Lower advertising and promotion spending, which we previously disclosed, was augmented by strong hurricane battery volumes." Shares +8.7%. (PR)
• ExxonMobil (XOM): Q3 EPS of $2.59 beats by $0.20. Revenue of $137.7B vs. $131.4B. Shares +1.15%. (MW)
• International Paper (IP): Q3 EPS of $0.84 beats by $0.07. Revenue of $6.81B (+22.9%) vs. $7.01B. While Q3 results were solid, International Paper (IP) CEO John Faraci says, higher prices did not offset higher input costs which negatively impacted earnings. "Costs for wood and some key chemicals are still rising. Currently, in aggregate input and transportation costs remain high." Shares +8.9%. (PR)
• Jarden (JAH): Q3 EPS of $0.98 beats by $0.02. Revenue of $1.46B (+10.1%) in-line. (PR)
• Marathon Oil (MRO): Q3 EPS of $2.76 beats by $0.43. Revenue of $22.48B vs. $23.4B. Shares +5.7%. (PR)
• Motorola (MOT): Q3 EPS of $0.05 beats by $0.03. Revenue of $7.48B (-15.1%) vs. $7.82B. Sees Q4 EPS of $0.02-0.04 vs. $0.07. "While our strategic intent to separate the company remains intact, we are no longer targeting the third quarter of 2009, primarily due to the macro-economic environment, stresses in the financial markets and the changes underway in Mobile Devices," co-CEO Sanjay Jha says. (PR)
• Mylan (MYL): Q3 EPS of $0.23 beats by $0.12. Revenue of $1.66B vs. $1.15B. Shares +2.4%. (PR)
• Newell Rubbermaid (NWL): Q3 EPS of $0.36 beats by $0.02. Revenue of $1.76B in-line. Sees Q4 EPS of $0.29-0.34 vs. $0.38. Shares -1.8%. (PR)
• Penske Auto (PAG): Q3 EPS of $0.30 misses by $0.01. Revenue of $3B (-11.4%) vs. $3.12B. "We experienced a rapid decline in consumer interest for new vehicles in both the U.S. and the UK. We believe the challenges in our markets relate mainly to consumer confidence, not credit availability." (PR)
• Shaw Group (SGR): FQ4 EPS of $0.40 misses by $0.05. Revenue of $1.83B vs. $1.94B. (PR)
• Shell (RDS.A): Q3 EPS of $2.62 misses by $0.05. Revenue of $131.57B vs. $123.81B. Shares -1.3%. (PR)
• Taiwan Semi (TSM): Q3 EPS of $0.19 in-line. Revenue of $2.98B (-88.9%) in-line. Sees Q4 revenue of NT$69-71B vs. NT$84.64B. Shares +6.9% in Taiwan. (PR)
• Unilever (UL): Q3 earnings of $0.51 beats by $0.02. Revenue of $13.40B vs. $14.36B. Sees full-year sales growth "well in excess" of its target. Shares +3.4% in London. (PR)
• Waste Management (WMI): Q3 EPS of $0.63 beats by $0.01. Revenue of $3.52B (+3.6%) in-line. "The recycling commodity markets have become very volatile over the last two weeks... We do not expect a year-over-year benefit in the fourth quarter." (PR)
• Wyndham (WYN): Q3 EPS of $0.83 beats by $0.03. Revenue of $1.23B (+0.8%) in-line. 2009 is uncertain "given the disruptions in the global economy and capital markets, and uncertainty about how these will impact employment, consumer spending and other macroeconomic drivers." Shares +0.9%. (PR)

Earnings: Wednesday After Close

• Advance Auto Parts (AAP): Q3 EPS of $0.59 beats by $0.02. Revenue of $1.19B (+2.6%) in-line. Shares -1.2%. (PR)
• Allied Waste (AW): Q3 EPS of $0.28 beats by $0.02. Revenue of $1.61B (+3.2%) in-line. Shares +0.2%. (PR)
• Ameriprise Financial (AMP): Q3 EPS of $0.14 misses by $0.68. Revenue of $2.03B (-6.4%) vs. $1.95B. Shares flat. (PR)
• Amkor Technology (AMKR): Q3 EPS of $0.44 beats by $0.12. Revenue of $720M (+4.4%) vs. $725M. Shares -2.8%. (PR)
• Atmel (ATML): Q3 EPS of $0.09 beats by $0.08. Revenue of $400M (-5%) in-line. Shares +2%. (PR)
• CA Inc. (CA): FQ2 EPS of $0.41 beats by $0.04. Revenue of $1.11B (+3.7%) in-line. Approves $250M share repurchase. Shares +1.8%. (PR)
• Cliffs Natural Resources (CLF): Q3 EPS of $1.61 misses by $0.66. Revenue of $1.19B (+92%) vs. $1.23B. Shares -0.5%. (PR)
• CME Group (CME): Q3 EPS of $4.13 beats by $0.15. Revenue of $681M (+20.5%) vs. $644M. Shares -3.2%. (PR)
• Curtiss-Wright (CW): Q3 EPS of $0.60 in-line. Revenue of $436M (+9.9%) vs. $441M. (PR)
• Grey Wolf (GW): Q3 EPS of $0.12 misses by $0.05. Revenue of $234M (+2.4%) in-line. (PR)
• Hartford Financial (HIG): Q3 EPS of -$8.74 vs. -$1.54 consensus. Says volatile credit and equity markets and the largest catastrophe in the past three years significantly affected results. Shares -1.8%. (PR)
• JDS Uniphase (JDSU): FQ1 EPS of $0.11 beats by $0.02. Revenue of $380M in-line. Shares -1.7%. (PR)
• MetLife (MET): Q3 EPS of $0.88 misses by $0.01. Revenue of $13.38B (+14.6%) vs. $13.26B. Shares +1.3%. (PR)
• Murphy Oil (MUR): Q3 EPS of $3.04 beats by $0.39. Revenue of $8.19B (+71.3%) vs. $6.93B. Sees Q4 EPS of $1.00-1.40 vs. $1.99. Shares -1.1%. (PR)
• Oil States International (OIS): Q3 EPS of $1.66 beats by $0.41. Revenue of $815M (+54.5%) vs. $677M. Sees Q4 EPS of $1.45-1.55 vs. $1.32. Shares +11.5%. (PR)
• O'Reilly Automotive (ORLY): Q3 EPS of $0.40 in-line. Revenue of $1.11B (+67.9%) in-line. (PR)
• Owens-Illinois (OI): Q3 EPS of $0.90 beats by $0.05. Revenue of $2.01B (+4.2%) in-line. Shares +0.5%. (PR)
• Prudential Financial (PRU): Q3 EPS of $0.74 misses by $0.20. Revenue of $6.15B (-9.2%) vs. $6.72B. "Unfavorable financial market conditions are having a substantial negative effect on reported results of our domestic businesses and market values in our investment portfolio." Shares flat. (PR)
• RealNetworks (RNWK): Q3 EPS of -$0.03 in-line. Revenue of $152M in-line. Shares +2.2%. (PR)
• Smith Micro Software (SMSI): Q3 EPS of $0.19 beats by $0.04. Revenue of $26.6M (+30.6%) vs. $26.1M. Shares +8.7%. (PR)
• Standard Pacific (SPF): Q3 EPS of -$0.07 beats by $0.40. Revenue of $400M (-37.8%) vs. $421M. (PR)
• Symantec (SYMC): FQ2 EPS of $0.37 beats by $0.02. Revenue of $1.52B (+7%) in-line. Sees Q3 EPS of $0.30-0.33 vs. $0.36 and revenue of $1.45-1.5B vs. $1.61B. Shares -5.6%. (PR)
• Tesoro (TSO): Q3 EPS of $1.63 beats by $0.15. Revenue of $8.7B (+47.4%) vs. $7.81B. Shares +4.5%. (PR)
• TheStreet.com (TSCM): Q3 EPS of -$0.04 misses by $0.10. Revenue of $16.7M (+3.8%) vs. $19.2M. Names Jim Cramer Chairman, allowing CEO Thomas Clarke to focus "on navigating the company through this difficult economic environment." Shares -0.3%. (PR)
• ValueClick (VCLK): Q3 EPS of $0.15 in-line. Revenue of $153M (-2.5%) in-line. Sees Q4 EPS of $0.15-0.16 vs. $0.19, and revenue of $140-150M vs. $168M. Shares +2.9%. (PR)
• Visa (V): FQ4 EPS of $0.58 beats by $0.02. Revenue of $1.71B (+16.7%) in-line. Sees full-year revenue growth at the lower end of the 11-15% range. Shares -0.4%. (PR)
• Whiting Petroleum (WLL): Q3 EPS of $2.49 beats by $0.16. Revenue of $425M (+106.9%) vs. $358M. (PR)

Today's Markets

• Asia markets had a stellar day. Nikkei +9.96% to 9,030. Hang Seng +12.82% to 14,330. Shanghai +2.55% to 1,764. India closed.
• Europe is notably higher at midday. London +1.8%. Paris +1.5%. Frankfurt, yesterday's laggard, +4.7%.
• U.S. futures indicate a strong open. Dow +3.5%. to 9,160. S&P +3.1% to 956. Nasdaq +3.2%. Crude +1.5% to $68.49. Gold +2.3% to $771.50.

Thursday's Economic Calendar

• 8:30 GDP Q3 Advance
  8:30 Jobless Claims
  10:35 EIA Natural Gas Report
  4:30 PM Money Supply
• Notable earnings before Thursday's open: ABC, ABX, AIZ, ALU, AVP, AZN, BJS, BLL, CAM, CBB, CBS, CI, CL, CLI, CMC, CMS, CVS, D, EK, ENDP, EXPE, FAF, GLBL, IAR, ICE, IGT, IP, IRM, JAH, LEA, LKQX, MOT, MPS, MRO, MYL, NRG, NWL, OCR, PAG, PDE, PNX, PTEN, RDS.A, SCG, SFI, SGR, SPIL, TE, UIS, VC, WMI, WYN, XOM
• Notable earnings after Thursday's close: ACS, AKAM, AMCC, ARNA, BARE, BMC, BVN, CEM, CHK, CPT, CTV, DRC, ERTS, ESRX, FBN, GFIG, JAVA, KLAC, MCRS, MEE, MFE, MNST, O, OII, ONNN, PSYS, PWAV, QSFT, RSG, SBAC, SGMS, SPN, SQNM, SWN, THOR, UNM, VSEA, WRI, WYNN, XL

Seeking Alpha editor Rachael Granby contributed to this post.

Q2 2008 Earnings Call

August 1, 2008 11:00 am ET

Get Healthy: Becton Dickinson (BDX), CR Bard (BCR), Baxter (BAX)

Here is my initial list of replacement candidates for the third quarter 2008 portfolio reshaping:

AA ACMR ACS ACXM ADP AEM AEO AET AFFM AHL AIB AINV ALL AME AN APA ARP ATWO AVID AVZA AXS AYR BAGL BCPC BDK BGC BHI BJS BKS BLL BP BRO BRS BSET CAM CBI CBK CCK CCRT CDNS CFI CKH CMI COG COLM COMS CPB CRDN CROX CSCO CSL CTB DD DELL DFG DLM DRYS DUK DVN EGLE ENH EP ETP FAST FCX FDRY FITB FLEX FLXS FRPT FRZ FSR FTEK FTO GFF GHM GIL GMT GNK HAIN HAL HAR HAST HCC HCN HCP HELE HK HLYS HNT HNZ HOC HON HRS HRZ HTH INFS IPSU IR IRE ISCA ISYS IVN JCI JNX JOSB KCI KEY KMX KOF LMC LPX LRCX LSTR LZB MAN MAS MCRL MGIC MHK MHP MI MKSI MOT MPS MPWR MWA/A MXGL MYE NBR NBTY NFX NG NM NRG NSHA NTGR NVS NWLIA OC OCR ODP OIS OKE OMAB ONNN ORI OSK OXY PAYX PBI PBY PCZ PHX PKD PKI PPC PPG PRE PRU PTEN PVA PWR PXP PZZA RCII RDC RDK ROP RS RTN SAFM SCX SENEB SFY SGIC SGY SI SII SJM SKM SKX SLB SLGN SNDK SNG SNX SNY SPSS STZ SVR SVU SWN TECUA TEX THOR TLK TMS TPX TRMA TRN TRV TSC TSO TTC TXT UNF UNT URI USU VE VLGEA VLTR VZ WAG WDC WFT WGOV WNC WRB WTI WTIU WTM WY XEL Y ZNT ZZ

Oil States International, Inc. (OIS)

Q1 2008 Earnings Call

April 30, 2008 11:00 ET

Oil States International Inc. (OIS)

Q4 2007 Earnings Call

February 20, 2008 11:00 am ET

Investors have clearly learned over the past few months that this is a market of haves and have-nots. The dichotomy is pretty easy to describe: Financials and Consumer Discretionary stocks, both of which are heavily exposed to the deteriorating conditions of the overextended U.S. consumer/borrower, certainly are dragging down index returns. Additionally, Industrials with heavy domestic exposure are scaring off investors as well. Yet, the market goes up, as investors enjoy a flood of liquidity and reallocate to those names that seem immune from the sub-prime contagion. This behavior of investors crowding into an increasingly smaller number of “Teflon stocks” is dangerous, as it leads the stocks to become overextended and vulnerable to any sort of disappointment. Witness some of the earnings season massacres detailed below.

Oil States International Inc. (OIS)

Q3 2007 Earnings Call

November 2, 2007 11:00 am ET

One of my favorite sources of new ideas is a screen that I run on StockVal. In fact, I publish a monthly report, the Small-Cap Rocket Report, in which I give a brief synopsis of the names that meet the criteria. If you click on the link, you can download a copy and see all of the parameters that I employ. The goal is to identify Small-Cap stocks with high ROIC, good price momentum, stable or rising estimates, a good balance sheet, reasonable valuation and a relative lack of analyst coverage. It’s a lot to ask for! Usually 10-15 names make the list. Here is the output from October 5^th:

click to enlarge

Bullish calls:

Bullish calls: