/* Article Data (Server Side) article (o): [object Object] Content (s): Article Not Found. relatedData (o:Array(16)): 0 (o): [object Object] Headline (s): US oil and natural gas rig count drops by 10 to 875 Teaser (s): HOUSTON - Oilfield services company Baker Hughes Inc. says the number of rigs exploring for oil and natural gas in the U.S. declined by 10 this week to 875. Source (s): Washington Post DocumentDate (s): 28 minutes ago DocumentDate_raw (n): 1432929150000 Link (s): http://www.washingtonpost.com/business/us-oil-and-natural-gas-rig-count-drops-by-10-to-875/2015/05/29/728b0ba4-063d-11e5-93f4-f24d4af7f97d_story.html DocumentKey (s): HTTPwww.washingtonpost.com/business/us-oil-and-natural-gas-rig-count-drops-by-10-to-875/2015/05/29/728b0ba4-063d-11e5-93f4-f24d4af7f97d_story.html DMSourceID (s): Google ContentType (s): Article 1 (o): [object Object] Headline (s): Comcast, Time Warner Cable and Other Providers Smacked Down in Customer ... Teaser (s): A new report on customer satisfaction with pay television and Internet providers brought scores that Time magazine says are horrible - “even for cable TV. Source (s): Television Week DocumentDate (s): 28 minutes ago DocumentDate_raw (n): 1432929150000 Link (s): http://www.tvweek.com/tvbizwire/2015/05/comcast-time-warner-cable-and-other-providers-smacked-down-in-customer-satisfaction-study/ DocumentKey (s): HTTPwww.tvweek.com/tvbizwire/2015/05/comcast-time-warner-cable-and-other-providers-smacked-down-in-customer-satisfaction-study/ DMSourceID (s): Google ContentType (s): Article 2 (o): [object Object] Headline (s): Humana Is Said to Consider Sale of Company Teaser (s): The health insurer Humana is considering a potential sale of itself after several competitors approached it, people briefed on the matter said on Friday. Source (s): New York Times DocumentDate (s): 36 minutes ago DocumentDate_raw (n): 1432928699000 Link (s): http://www.nytimes.com/2015/05/30/business/dealbook/humana-is-said-to-consider-sale-of-company.html DocumentKey (s): HTTPwww.nytimes.com/2015/05/30/business/dealbook/humana-is-said-to-consider-sale-of-company.html DMSourceID (s): Google ContentType (s): Article 3 (o): [object Object] Headline (s): AmEx President Dies Suddenly After Falling Ill on Flight Teaser (s): American Express said president Ed Gilligan died suddenly Friday after falling ill while flying on a corporate plane to New York. The credit card company said the 55-year-old executive was coming back from a business trip. Source (s): ABC News DocumentDate (s): 1 hour ago DocumentDate_raw (n): 1432927153000 Link (s): http://abcnews.go.com/Business/wireStory/american-express-president-dies-suddenly-flight-31400483 DocumentKey (s): HTTPabcnews.go.com/Business/wireStory/american-express-president-dies-suddenly-flight-31400483 DMSourceID (s): Google ContentType (s): Article 4 (o): [object Object] Headline (s): Skanska consortium preferred bidder for $3.6-billion LaGuardia project Teaser (s): A $3.6-billion (U.S.) overhaul of the decrepit Central Terminal at New York's LaGuardia Airport has taken a major step forward with the selection of a team to design, build, operate and maintain the project for 35 years. Source (s): The Globe and Mail DocumentDate (s): 1 hour ago DocumentDate_raw (n): 1432927125000 Link (s): http://www.theglobeandmail.com/report-on-business/international-business/us-business/skanska-consortium-preferred-bidder-for-36-billion-laguardia-project/article24701217/ DocumentKey (s): HTTPwww.theglobeandmail.com/report-on-business/international-business/us-business/skanska-consortium-preferred-bidder-for-36-billion-laguardia-project/article24701217/ DMSourceID (s): Google ContentType (s): Article 5 (o): [object Object] Headline (s): DuPont Statement on the EPA's Proposed 2014 , 2015 and 2016 Renewable ... Teaser (s): DuPont is disappointed with the EPA's proposed rule on the 2014, 2015 and 2016 Renewable Volume Obligations under the RFS. Our primary concern continues to be that the EPA is proposing a flawed methodology to fundamentally change how the annual ... Source (s): CNNMoney DocumentDate (s): 1 hour ago DocumentDate_raw (n): 1432925775000 Link (s): http://money.cnn.com/news/newsfeeds/articles/globenewswire/10136591.htm DocumentKey (s): HTTPmoney.cnn.com/news/newsfeeds/articles/globenewswire/10136591.htm DMSourceID (s): Google ContentType (s): Article 6 (o): [object Object] WSODIssue (s): |53894|2837268|105361|143857|149661|201895 DMSourceID (s): KAPITALL Source (s): Kapitall Headline (s): Shrink, shrank, shrunk: a picture of the US economy Link (s): http://folionation.squarespace.com/news/2015/5/29/shrink-shrank-shrunk-a-picture-of-the-us-economy.html Thumbnail (s): DocumentDate_raw (n): 1432922100000 DocumentDate (s): May 29, 2015 DocumentDate_smart (s): 1:55 PM DocumentKey (s): 1107-290734296785735358792-45TFA50IUMBTJHF2GQH4T120DL ContentType (s): Article TrackingPixel (s): Teaser (s):

Surprise! The US economy contracted in the first quarter, which makes the recovery look less like a sure thing.

The Commerce Department kicked off the weekend with a bit of bad news: it turns out that instead of growing by 0.2 percent, the US economy actually shrank by 0.7 percent in the first three months of the year. 

A bad winter, the strengthening dollar, spending-averse consumers and a shutdown at West Coast ports contributed to the contraction. On the plus side, The Wall Street Journal reports that the downward revision fell short of the 1 percent contraction consensus estimate.

Companies spent less money on business investment in the first quarter, resulting in a 2.8 percent decline. Consumer spending grew a measly 1.8 percent, way below the 4.4 percent growth achieved during the fourth quarter of 2014. Exports fell by 7.6 percent, and exports of goods plunged 14 percent—a six-year record. The trade deficit, which was severely impacted by the strong dollar and West Coast ports shutdown, also grew.

The US economy is expected to rebound in the second quarter. Bank of the West Chief Economist Scott Anderson told The New York Times that he expects growth to reach just over 2 percent this quarter, echoing most economists' projections of 2 to 3 percent growth.

But some of the issues that contributed to the first-quarter contraction are still around and could continue to hurt companies. Reuters writes that Johnson & Johnson (JNJ), Microsoft (MSFT) and Procter & Gamble (PG) have all said the strong dollar will negatively impact sales and profits. 

Below is a list of other US stocks that could really see a drop in profit and revenue thanks to a stronger dollar. These stocks were already having some difficulty selling their goods, and a stronger dollar makes the products more expensive for overseas customers.

Each of the stocks has the following traits: slower growth in revenue than inventory over the last year, an increase in inventory as a portion of current assets and falling diluted normalized earnings per share (EPS) for the past three consecutive years.  

Click on the interactive chart to view data over time. 

1. Atmel Corporation (ATML, Earnings, Analysts, Financials): Designs, develops, manufactures, and markets a range of semiconductor integrated circuit (IC) products. Market cap at $3.62B, most recent closing price at $8.76.

Revenue grew by -5.65% during the most recent quarter ($318.29M vs. $337.36M y/y). Inventory grew by 10.84% during the same time period ($274.19M vs. $247.38M y/y). Inventory, as a percentage of current assets, increased from 31.2% to 36.4% during the most recent quarter (comparing 3 months ending 2015-03-31 to 3 months ending 2014-03-31).

Diluted normalized EPS decreased from 1.05 to 0.66 during the first time interval (12 months ending 2011-12-31 vs. 12 months ending 2010-12-31).

For the second time interval, diluted normalized EPS decreased from 0.66 to 0.13 (12 months ending 2012-12-31 vs. 12 months ending 2011-12-31).

And for the last time interval, the EPS decreased from 0.13 to 0.06 (12 months ending 2013-12-31 vs. 12 months ending 2012-12-31). 

 

2. AtriCure Inc. (ATRC, Earnings, Analysts, Financials): Develops, manufactures, and sells cardiac surgical ablation systems designed to create precise lesions, or scars, in cardiac tissue. Market cap at $643.43M, most recent closing price at $22.59.

Revenue grew by 20.28% during the most recent quarter ($29.89M vs. $24.85M y/y). Inventory grew by 36.37% during the same time period ($15.11M vs. $11.08M y/y). Inventory, as a percentage of current assets, increased from 10.33% to 16.17% during the most recent quarter (comparing 3 months ending 2015-03-31 to 3 months ending 2014-03-31).

Diluted normalized EPS decreased from -0.25 to -0.35 during the first time interval (12 months ending 2011-12-31 vs. 12 months ending 2010-12-31).

For the second time interval, diluted normalized EPS decreased from -0.35 to -0.47 (12 months ending 2012-12-31 vs. 12 months ending 2011-12-31).

And for the last time interval, the EPS decreased from -0.47 to -0.56 (12 months ending 2013-12-31 vs. 12 months ending 2012-12-31).

 

3. Fairchild Semiconductor International Inc. (FCS, Earnings, Analysts, Financials): Designs, develops, manufactures, and sells power analog, power discrete, and non-power semiconductor solutions worldwide. Market cap at $2.33B, most recent closing price at $20.10.

Revenue grew by 3.37% during the most recent quarter ($355.70M vs. $344.10M y/y). Inventory grew by 19.87% during the same time period ($266.00M vs. $221.90M y/y). Inventory, as a percentage of current assets, increased from 29.84% to 35.23% during the most recent quarter (comparing 13 weeks ending 2015-03-29 to 13 weeks ending 2014-03-30).

Diluted normalized EPS decreased from 1.32 to 1.14 during the first time interval (52 weeks ending 2011-12-25 vs. 52 weeks ending 2010-12-26).

For the second time interval, diluted normalized EPS decreased from 1.14 to 0.27 (53 weeks ending 2012-12-30 vs. 52 weeks ending 2011-12-25).

And for the last time interval, the EPS decreased from 0.27 to 0.05 (52 weeks ending 2013-12-29 vs. 53 weeks ending 2012-12-30).

 

4. Haemonetics Corporation (HAE, Earnings, Analysts, Financials): Provides blood management solutions to plasma and blood collectors, blood banks, hospitals and hospital service providers, and health organizations in the United States and internationally. Market cap at $2.13B, most recent closing price at $41.73.

Revenue grew by -6.06% during the most recent quarter ($226.48M vs. $241.09M y/y). Inventory grew by 6.79% during the same time period ($211.08M vs. $197.66M y/y). Inventory, as a percentage of current assets, increased from 31.73% to 37.16% during the most recent quarter (comparing 13 weeks ending 2015-03-28 to 13 weeks ending 2014-03-29).

Diluted normalized EPS decreased from 1.65 to 1.51 during the first time interval (52 weeks ending 2012-03-31 vs. 52 weeks ending 2011-04-02).

For the second time interval, diluted normalized EPS decreased from 1.51 to 0.81 (52 weeks ending 2013-03-30 vs. 52 weeks ending 2012-03-31).

And for the last time interval, the EPS decreased from 0.81 to 0.7 (52 weeks ending 2014-03-29 vs. 52 weeks ending 2013-03-30).

 

5. Harsco Corporation (HSC, Earnings, Analysts, Financials): Provides engineered solutions to industrial customers worldwide. Market cap at $1.28B, most recent closing price at $16.10.

Revenue grew by -11.88% during the most recent quarter ($451.58M vs. $512.48M y/y). Inventory grew by 16.68% during the same time period ($194.60M vs. $166.78M y/y). Inventory, as a percentage of current assets, increased from 21.47% to 27.72% during the most recent quarter (comparing 3 months ending 2015-03-31 to 3 months ending 2014-03-31).

Diluted normalized EPS decreased from 2.01 to 1.94 during the first time interval (12 months ending 2011-12-31 vs. 12 months ending 2010-12-31).

For the second time interval, diluted normalized EPS decreased from 1.94 to 0.44 (12 months ending 2012-12-31 vs. 12 months ending 2011-12-31).

And for the last time interval, the EPS decreased from 0.44 to -0.34 (12 months ending 2013-12-31 vs. 12 months ending 2012-12-31).

 

6. MKS Instruments Inc. (MKSI, Earnings, Analysts, Financials): Provides instruments, subsystems, and process control solutions that measure, control, power, monitor, and analyze parameters of manufacturing processes worldwide. Market cap at $2.01B, most recent closing price at $37.76.

Revenue grew by 3.63% during the most recent quarter ($213.84M vs. $206.35M y/y). Inventory grew by 11.46% during the same time period ($164.41M vs. $147.51M y/y). Inventory, as a percentage of current assets, increased from 16.47% to 24.34% during the most recent quarter (comparing 3 months ending 2015-03-31 to 3 months ending 2014-03-31).

Diluted normalized EPS decreased from 2.6 to 2.42 during the first time interval (12 months ending 2011-12-31 vs. 12 months ending 2010-12-31).

For the second time interval, diluted normalized EPS decreased from 2.42 to 0.99 (12 months ending 2012-12-31 vs. 12 months ending 2011-12-31).

And for the last time interval, the EPS decreased from 0.99 to 0.67 (12 months ending 2013-12-31 vs. 12 months ending 2012-12-31). 

 

(List compiled by Mary-Lynn Cesar. Accounting data sourced from Google Finance. EPS data sourced from Yahoo! Finance. Monthly return data sourced from Zacks Investment Research. All other data sourced from FINVIZ.)

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Kapitall Wire offers free cutting edge investing ideas, intended for educational information purposes only. It should not be construed as an offer to buy or sell securities, or any other product or service provided by Kapitall Inc., and its affiliate companies.

Open a free account today get access to virtual cash portfolios, cutting-edge tools, stock market insights, and a live brokerage platform through our affiliated company, Kapitall Generation, LLC. 

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7 (o): [object Object] Headline (s): US STOCKS-Wall St lower after first-quarter GDP contraction Teaser (s): ... * Q1 GDP data shows economy contracted. * Consumer sentiment fell in May. * Intel biggest boost to Dow, S&P. * United Rental falls after BofA downgrade. Source (s): Reuters DocumentDate (s): 4 hours ago DocumentDate_raw (n): 1432914971000 Link (s): http://www.reuters.com/article/2015/05/29/markets-stocks-usa-idUSL3N0YK4XU20150529 DocumentKey (s): HTTPwww.reuters.com/article/2015/05/29/markets-stocks-usa-idUSL3N0YK4XU20150529 DMSourceID (s): Google ContentType (s): Article 8 (o): [object Object] Headline (s): U.S. Takes Cuba off Terror List, Paving Way for Normal Ties Teaser (s): The State Department removed Cuba from its list of state sponsors of terrorism, a largely symbolic step clearing the way for normalizing diplomatic relations 54 years after the U.S. Source (s): Bloomberg DocumentDate (s): 5 hours ago DocumentDate_raw (n): 1432912027000 Link (s): http://www.bloomberg.com/news/articles/2015-05-29/u-s-takes-cuba-off-terror-list-paving-the-way-for-normal-ties DocumentKey (s): HTTPwww.bloomberg.com/news/articles/2015-05-29/u-s-takes-cuba-off-terror-list-paving-the-way-for-normal-ties DMSourceID (s): Google ContentType (s): Article 9 (o): [object Object] WSODIssue (s): |81093|282728 DMSourceID (s): KAPITALL Source (s): Kapitall Headline (s): LED leader Cree is spinning off part of the company Link (s): http://folionation.squarespace.com/news/2015/5/29/led-leader-cree-is-spinning-off-part-of-the-company.html Thumbnail (s): DocumentDate_raw (n): 1432910460000 DocumentDate (s): May 29, 2015 DocumentDate_smart (s): 10:41 AM DocumentKey (s): 1107-290734296785735358489-7MHDF5PAN5M08KPCJ3C44RH8TL ContentType (s): Article TrackingPixel (s): Teaser (s):

LED lighting is growing in popularity, so why does market leader Cree have to spin off part of its business?

LED lighting suppliers are facing dark times. As Bloomberg notes, competition is growing while profit margins are falling. Cree, Inc. (CREE), which is down 36 percent over one year, is a leader in LED chip, components and silicon carbide (SiC) materials. The LED supplier is still richly valued at 24 times forward earnings, and management is determined to boost shareholder value. To do this, the firm announced on May 18 that it is spinning off a portion of its business.  Will the move work?

Cree will spin off its Power and RF unit by offering subsidiary Class A common stock. In theory, the semiconductor stock’s overall value should go up, so long as the market assigns a respectable price multiple to the new, publicly traded company. The market must also believe Cree will still hold value as a parent company to the spinoff. At $30.47, the fair value for Cree should be sustainable: simplifying the business structure and having two units each focused on a specific market is a positive development.

However, the spinoff does not change anything fundamentally about Cree. The firm is still struggling in the consumer space, and RF/Power is a very small contributor to Cree’s bottom line. The stock is still expensive, and there may be better semiconductor product plays to consider.

Take Vishay Intertechnology (VSH), for example. With a market capitalization of $1.92 billion, Vishay is relatively close in size to Cree, which has a $3.37 billion market cap. Vishay also boasts a much lower forward P/E of 11.81.

While Cree is spinning off parts of its business, Vishay is expanding its operations. In December, Vishay completed its acquisition of Capella, an optical sensor maker for $201.3 million. Capella makes UV and IR sensors which is used in a variety of things, like PCs, Phones, and automotive systems. Considering that some of the biggest names in lighting—Royal Philips NV (PHG) and General Electric (GE)—have left or are leaving lighting altogether, Vishay's strategy might be a wise one.

Written by Chris Lau


Click on the interactive chart to view data over time. 

1. Cree Inc. (CREE, Earnings, Analysts, Financials): Develops and manufactures light emitting diode (LED) products, silicon carbide (SiC) and gallium nitride (GaN) material products, and power and radio frequency (RF) products. Market cap at $3.42B, most recent closing price at $30.92.

 

 

2. Vishay Intertechnology Inc. (VSH, Earnings, Analysts, Financials): Manufactures and supplies semiconductors and passive electronic components in the United States, Europe, and Asia. Market cap at $1.92B, most recent closing price at $13.04.

 

 

(Monthly return data soured from Zacks Investment Research. All other data sourced from FINVIZ.)

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© Kapitall, Inc. All rights reserved. Kapitall Wire is a division of Kapitall, Inc. Kapitall Generation, LLC is a wholly owned subsidiary of Kapitall, Inc.

Kapitall Wire offers free cutting edge investing ideas, intended for educational information purposes only. It should not be construed as an offer to buy or sell securities, or any other product or service provided by Kapitall Inc., and its affiliate companies.

Open a free account today get access to virtual cash portfolios, cutting-edge tools, stock market insights, and a live brokerage platform through our affiliated company, Kapitall Generation, LLC. 

Securities products and services are offered by Kapitall Generation, LLC - a FINRA/SIPC member.

10 (o): [object Object] Headline (s): US Consumers Remain Wary of Economy's Health, Survey Says Teaser (s): Consumers remain cautious about the current economy this month, according to data released Friday. But the report also said consumers are optimistic about their future financial situations. Source (s): Wall Street Journal DocumentDate (s): 5 hours ago DocumentDate_raw (n): 1432910335000 Link (s): http://www.wsj.com/articles/u-s-consumers-remain-wary-of-economys-health-survey-says-1432910292 DocumentKey (s): HTTPwww.wsj.com/articles/u-s-consumers-remain-wary-of-economys-health-survey-says-1432910292 DMSourceID (s): Google ContentType (s): Article 11 (o): [object Object] Headline (s): Another first-quarter shocker: US GDP falls 0.7% Teaser (s): WASHINGTON (MarketWatch) - The economy contracted in the first quarter for the second straight year, a disappointing start that could foil the chance of the U.S. Source (s): MarketWatch DocumentDate (s): 7 hours ago DocumentDate_raw (n): 1432903564000 Link (s): http://www.marketwatch.com/story/us-gdp-turns-negative-in-first-quarter-again-2015-05-29 DocumentKey (s): HTTPwww.marketwatch.com/story/us-gdp-turns-negative-in-first-quarter-again-2015-05-29 DMSourceID (s): Google ContentType (s): Article 12 (o): [object Object] WSODIssue (s): |38401|260106|223505 DMSourceID (s): KAPITALL Source (s): Kapitall Headline (s): Open Text is embracing the cloud at whatever cost Link (s): http://folionation.squarespace.com/news/2015/5/28/open-text-is-embracing-the-cloud-at-whatever-cost.html Thumbnail (s): DocumentDate_raw (n): 1432838580000 DocumentDate (s): May 28, 2015 DocumentDate_smart (s): May 28, 2015 DocumentKey (s): 1107-290734296785735357542-0ESFREKQAS8C8IA5546C3HNGN8 ContentType (s): Article TrackingPixel (s): Teaser (s):

Open Text disappointed Wall Street its quarterly guidance. Hey, no one said moving to the cloud was easy.

One weak quarter is all it takes for a company’s stock to tank. Open Text (OTEX), a software company based in Canada, reported weak fiscal third-quarter results at the end of April and, on May 20, forecast a weak outlook for the current quarter and announced pending job cuts. After drifting downward throughout 2015, the stock fell sharply from $49 and closed at $42.45 on May 21.

One of the reasons for Open Text’s big miss is the strong US dollar. This alone will cost the company $0.11 per share. Open Text is expecting revenue between $440 million to $455 million and adjusted earnings of $0.64 to $0.72 per share in its fiscal fourth quarter. The consensus estimate before the announcement was earnings of $0.89 per share on revenue of $487.8 million.

Open Text still has some appeal. Like Adobe Systems (ADBE) and Nuance Communications (NUAN), the company is shifting from license sales to cloud software sales. Furthermore, Open Text has never missed expectations, and other firms shifting towards the cloud suffered equally when it issued the weak guidance last week.

Still, there are risks. Nuance, which makes voice recognition solutions, is slowly realigning its business solutions on the cloud. Only Adobe is highly successful at the moment. The Photoshop maker convinced its users to buy yearly licenses with its Creative Cloud offering. Adobe's superior products and lack of competition have resulted in strong sales, which rose 11 percent year over year to $1.11 billion in the first fiscal quarter.

Open Text does not face that much competition in its market of enterprise content, business process and customer experience management. Revenue from the company’s first cloud services was $143.8 million in the fiscal third quarter, up 12 percent year over year. Customer service support revenue grew to $184.3 million, up 2 percent year-over-year and 10 percent on a constant-currency basis. Gross margins from support were a healthy 87 percent.

Ultimately, despite currency headwinds and slower growth this quarter, Open Text’s revenue from cloud services is improving. After the stock’s nearly 26 percent drop in 2015, it may prove a possible rebound play for investors.

Written by Chris Lau

 

Click on the interactive chart to view data over time. 

1. Adobe Systems Incorporated (ADBE, Earnings, Analysts, Financials): Operates as a diversified software company in the Americas, Europe, the Middle East, Africa, and Asia. Market cap at $40.10B, most recent closing price at $80.16.

 

 

2. Nuance Communications Inc. (NUAN, Earnings, Analysts, Financials): Provides voice and language solutions for businesses and consumers worldwide. Market cap at $5.34B, most recent closing price at $17.0.

 

 

3. Open Text Corporation (OTEX, Earnings, Analysts, Financials): Develops, markets, sells, licenses, and supports enterprise content management (ECM) solutions primarily in North America and Europe. Market cap at $5.23B, most recent closing price at $42.43.

 

 

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© Kapitall, Inc. All rights reserved. Kapitall Wire is a division of Kapitall, Inc. Kapitall Generation, LLC is a wholly owned subsidiary of Kapitall, Inc.

Kapitall Wire offers free cutting edge investing ideas, intended for educational information purposes only. It should not be construed as an offer to buy or sell securities, or any other product or service provided by Kapitall Inc., and its affiliate companies.

Open a free account today get access to virtual cash portfolios, cutting-edge tools, stock market insights, and a live brokerage platform through our affiliated company, Kapitall Generation, LLC. 

Securities products and services are offered by Kapitall Generation, LLC - a FINRA/SIPC member.

13 (o): [object Object] WSODIssue (s): |19744231|178782|197606|10808544 DMSourceID (s): KAPITALL Source (s): Kapitall Headline (s): The beautiful game is a dirty one Link (s): http://folionation.squarespace.com/news/2015/5/27/the-beautiful-game-is-a-dirty-one.html Thumbnail (s): DocumentDate_raw (n): 1432751640000 DocumentDate (s): May 27, 2015 DocumentDate_smart (s): May 27, 2015 DocumentKey (s): 1107-290734296785735356204-16DB094ULDKVPL7ARAR37CJJ8U ContentType (s): Article TrackingPixel (s): Teaser (s):

Watch out, Sepp! FIFA has been dealt a red card by the US Justice Department in a corruption investigation.

Early Wednesday morning, Swiss police arrested seven senior FIFA officials at a Zurich hotel in connection with a US Justice Department investigation into corruption at soccer's top governing body. By late morning, the Justice Department said it had indicted 14 individuals—nine current and former FIFA officials and five corporate executives—for bribery, racketeering and money laundering, among other charges.

According to the 161-page, 47-count indictment, the 14 defendants, along with 25 co-conspirators, participated in numerous schemes over the last 24 years to make themselves rich. And they allegedly did, to the tune of "well over $150 million."

Most of the charges in Wednesday's indictment concern tournaments and related activities involving North and South America, namely CONCACAF (Confederation of North, Central America and Caribbean Association Football) and CONMEBOL (South American Football Confederation). However, the indictment also mentions bribes and kickbacks between a major U.S. athletic company and the Brazilian national soccer federation, South Africa's selection as the host of the 2010 World Cup and the 2011 FIFA presidential election, which current president, Josep "Sepp" Blatter won. 

Speaking of presidential elections, Wednesday's high-profile arrests come just two days before FIFA's next one, and Blatter is widely expected to win it. Blatter, who is seeking his fourth term as the head of FIFA, has been at the center of controversy for years despite not being charged with anything today. His right-hand man, FIFA Vice President and CONCACAF President Jeffrey Webb, wasn't so lucky. 

The Wall Street Journal has a collection of some of Blatter's scandals for the unfamiliar. Highlights include a lawsuit from FIFA executive committee members over alleged financial mismanagement, facepalm-worthy statements about female soccer players and homosexual fans and, most recently, the awarding of the 2018 and 2022 World Cup to Russia and Qatar, respectively. According to the Journal, Swiss authorities are launching a separate criminal investigation into FIFA's latest World Cup host choices.

Until Wednesday morning, FIFA's decision to hold the World Cup in Russia and Qatar had been its biggest and costliest issue. Castrol, Continental, Emirates, Johnson & Johnson (JNJ) and Sony (SNEstopped sponsoring the organization at the end of 2014 when their contracts expired. No formal reasons were given for the parting of ways, but The Telegraph reports that Sony had expressed concerned over FIFA's alleged wrongdoing in the 2018 and 2022 World Cup host selection process.

So where does that leave FIFA's current sponsors? Will they leave or stay, hoping this all blows over?

Click on the interactive chart to view data over time. 

1. Anheuser-Busch InBev SA/NV (BUD, Earnings, Analysts, Financials): Engages in brewing and selling beer in North America, Latin America, Europe, and the Asia Pacific. Market cap at $195.89B, most recent closing price at $120.06.

The stock is up 1.99% as of 2:20PM.

Subsidiary Budweiser said that it is closely monitoring the developing FIFA situation.

 

2. The Coca-Cola Company (KO, Earnings, Analysts, Financials): Distributes, and markets nonalcoholic beverages worldwide. Market cap at $179.34B, most recent closing price at $40.99.

The stock is up 0.30% as of 2:20PM.

No statement has been issued.

 

3. McDonald's Corp. (MCD, Earnings, Analysts, Financials): Operates as a foodservice retailer worldwide. Market cap at $94.50B, most recent closing price at $98.46.

The stock is up 0.01% as of 2:20PM.

McDonald's said it's in contact with FIFA over the "extremely concerning" corruption allegations, stating that it "takes matters of ethics and corruption very seriously."

 

4. Visa Inc. (V, Earnings, Analysts, Financials): Operates retail electronic payments network worldwide. Market cap at $169.67B, most recent closing price at $68.54.

The stock is up 1.17% as of 2:20PM.

Visa has already expressed "grave concern" to FIFA earlier this month over migrant workers' rights in Qatar in the leadup to the 2022 World Cup.

 

(List compiled by Mary-Lynn Cesar. Monthly return data sourced from Zacks Investment Research. All other data sourced from FINVIZ.)

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14 (o): [object Object] WSODIssue (s): |243688|58327|79521|139905|8169008|264447 DMSourceID (s): KAPITALL Source (s): Kapitall Headline (s): Best Buy is doing better than anyone expected Link (s): http://folionation.squarespace.com/news/2015/5/27/best-buy-is-doing-better-than-anyone-expected.html Thumbnail (s): DocumentDate_raw (n): 1432738560000 DocumentDate (s): May 27, 2015 DocumentDate_smart (s): May 27, 2015 DocumentKey (s): 1107-290734296785735355864-2MQHGJSA2JN6HRAR0EBE3VQ6N8 ContentType (s): Article TrackingPixel (s): Teaser (s):

Many thought Best Buy would close its doors in 2014. The company is still here, and, by the looks of it, doing well. 

Best Buy (BBY) is full of surprises. The electronics retailer reported a stellar first quarter, much to everyone’s surprise.  Is Best Buy’s worst finally behind it?

During the first quarter of 2015, Best Buy earned $0.37 per share on revenue of $8.56 billion. Revenue is lower than last year’s, but domestic gross profits improved by 120 basis points, or 1.20 percent, to 22.7 percent.

Unfortunately, the company forecast that domestic revenue growth would not be any higher than the low single-digits. Internal sales could also fall by as much as 35 percent due to fewer open stores. On the plus side, Best Buy is improving its performance because management is watching its costs, initiating focused marketing campaigns and investing in technology to support its business.

Best Buy is the largest electronics retailer by market cap. GameStop (GME) is a distant second, with a market cap at $4.2 billion:

At a price of around $34, Best Buy is well off its March peak of $41.26. The stock is fairly valued at 11.97 times forward earnings, but has room to move up if its profitability keeps improving. There’s also back-to-school season to consider in August, which has coincided with a rally in Best Buy shares.

For investors considering the stock, it may be best to add Best Buy shares on any pullback.

Written by Chris Lau

 

Click on the interactive chart to view data over time. 

1. Aaron's Inc. (AAN, Earnings, Analysts, Financials): Operates as a specialty retailer of consumer electronics, computers, residential furniture, household appliances, and accessories in the United States and Canada. Market cap at $2.58B, most recent closing price at $35.40.

 

 

2. Best Buy Co. Inc. (BBY, Earnings, Analysts, Financials): Operates as a retailer of consumer electronics, home office products, entertainment products, appliances, and related services primarily in the United States, Europe, Canada, and China. Market cap at $12.22B, most recent closing price at $33.90.

 

 

3. Conns Inc. (CONN, Earnings, Analysts, Financials): Operates as a specialty retailer of home appliances, consumer electronics, home office equipment, lawn and garden products, mattresses, and furniture in the United States. Market cap at $1.41B, most recent closing price at $39.54.

 

 

4. GameStop Corp. (GME, Earnings, Analysts, Financials): Operates as a retailer of video game products and personal computer (PC) entertainment software. Market cap at $4.31B, most recent closing price at $40.18.

 

 

5. hhgregg Inc. (HGG, Earnings, Analysts, Financials): Operates as a specialty retailer of consumer electronics, home appliances, and related services. Market cap at $107.61M, most recent closing price at $3.93.

 

 

6. Systemax Inc. (SYX, Earnings, Analysts, Financials): Operates as a direct marketer of brand name and private label products. Market cap at $312.95M, most recent closing price at $8.44.

 

 

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Open a free account today get access to virtual cash portfolios, cutting-edge tools, stock market insights, and a live brokerage platform through our affiliated company, Kapitall Generation, LLC. 

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15 (o): [object Object] WSODIssue (s): |197606|81931009|82867067|292976 DMSourceID (s): KAPITALL Source (s): Kapitall Headline (s): Shake Shack is sizzling Link (s): http://folionation.squarespace.com/news/2015/5/26/shake-shack-is-sizzling.html Thumbnail (s): DocumentDate_raw (n): 1432658220000 DocumentDate (s): May 26, 2015 DocumentDate_smart (s): May 26, 2015 DocumentKey (s): 1107-290734296785735354728-6VC6KAS57324T01MM2Q83LMLS1 ContentType (s): Article TrackingPixel (s): Teaser (s):

Popular burger chain Shake Shack is one of the hottest stocks on the market right now, but is it a bubble?

Shake Shack (SHAK) bottomed at $38.63 on February 17, and the stock keeps moving up. After taking a breather at $70, the stock rallied again and reached $92.86 on May 22. Does this burger company really deserve its $3.2 billion market cap? At this rate, each of Shake Shack's 68 locations is worth $50 million. This makes Chipotle (CMG), at $10 million a location, look inexpensive.

Shake Shack’s stock is expensive. The valuation is even more obvious when compared to McDonald’s (MCD) or Chipotle, which are valued at 20 times and 35 times forward multiples, respectively:

Shake Shack’s forward P/E is over 70. Then again, McDonald's first-quarter earnings fell by 9 percent, when adjusted for currency fluctuations, to $0.84 per share. The food chain giant is tweaking its stores in China by testing customization. It is also simplifying the menu by cutting down the number of offerings at the drive-thru.

On the other hand, Shake Shack is arguably inexpensive when compared to market darlings Amazon (AMZN), Tesla (TSLA) or even Facebook (FB). Still, the comparison is weak when comparing by valuation alone. Shake Shack is still a restaurant that sells burger and hot dogs, though the company may soon branch out into chicken sandwiches. There is no moat. Meanwhile, Facebook has a moat in social media, Amazon keeps getting bigger and Tesla’s electric cars command a high price and healthy demand.

The problem with owning Shake Shack is that a relatively inexpensive stock will still fall if other over valued ones falls, too. Tailwinds invariably become headwinds when the earnings growth rate does not justify the stock price. 

Though Q1 2015 was great for Shake Shack. The company earned just $0.04 per share, but this beat consensus by $0.07 per share. Revenue, at only $37.8 million, grew an impressive 56.3 percent. Same-store sales increased by 59.2 percent. These high-growth figures support a high multiple, but the company must continue this rate of growth indefinitely. If growth slows, the positive momentum behind the stock will slow. This would mean a lower stock price in the future.

Written by Chris Lau

 

Click on the interactive chart to view data over time. 

1. McDonald's Corp. (MCD, Earnings, Analysts, Financials): Operates as a foodservice retailer worldwide. Market cap at $94.88B, most recent closing price at $98.99.

 

 

 

2. Restaurant Brands International Inc. (QSR, Earnings, Analysts, Financials): Owns and operates quick service restaurants under the Burger King and Tim Hortons brand names. Market cap at $8.06B, most recent closing price at $39.84.

 

 

3. Shake Shack Inc. (SHAK, Earnings, Analysts, Financials): Owns, operates, and licenses Shake Shack restaurants (Shacks) in the United States, the District of Columbia, North America, Europe, and Asia. Market cap at $3.37B, most recent closing price at $92.86.

 

 

4. Yum! Brands, Inc. (YUM, Earnings, Analysts, Financials): Operates quick service restaurants. It operates in five segments: YUM China, YUM India, the KFC Division, the Pizza Hut Division, and the Taco Bell Division. Market cap at $39.28B, most recent closing price at $91.54.

 

 

(Monthly return data sourced from Zacks Investment Research. All other data sourced from FINVIZ.)

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© Kapitall, Inc. All rights reserved. Kapitall Wire is a division of Kapitall, Inc. Kapitall Generation, LLC is a wholly owned subsidiary of Kapitall, Inc.

Kapitall Wire offers free cutting edge investing ideas, intended for educational information purposes only. It should not be construed as an offer to buy or sell securities, or any other product or service provided by Kapitall Inc., and its affiliate companies.

Open a free account today get access to virtual cash portfolios, cutting-edge tools, stock market insights, and a live brokerage platform through our affiliated company, Kapitall Generation, LLC. 

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