Entries Tagged 'Analysis' ↓

Q4 2008 Earnings

Earnings Preview

Oplink Communications, Inc. (OPLK)  financial results fourth quarter ended June 30, 2008

Five analysts are predicting eps between $0.09 and $0.11, consensus of $0.10.

For those focused on eps this figure will compare poorly to last years $0.23.

Fast forward -> Results are now in and they’re great.

Good results, turnaround occurring, great upside potential in this well managed cash rich company.

The two main reasons I find oplk attractive are they make money and they mange that money well. Add in growth, OCP turnaround potential with proven management at helm Continue reading →

I decided to invest some of my profits from selling OHI into buying a trading position in Suntech Power Holdings Co. Ltd. (STP). Back in mid June I flagged that I would wait patiently for STP to come to the value point I wanted…and here it is.

STP has once again fallen to a value point I couldn’t ignore. After a quick refresh of my due diligence I have gone overweight in STP. [Neither OHI nor STP are held in the FI Portfolio] The following notes are my half edited notes with half my thoughts.

Why is STP so cheap? With a PEG of 0.55, healthy margins and Continue reading →

Omega Healthcare Investors Inc. (OHI), has been volatile since July 07.

Check out this chart to view the wild rollercoaster for this boring REIT. With those recent extremes I shouldn’t be surprised about the ride over the last four days. OHI closed last Wednesday at $17.84, it announced OK Q2 earnings Thursday morning and the conference call later that morning was likewise mixed by largely positive looking forward. Yet OHI closed down 3.5% at 17.22. Then on Friday OHI climbed 4.8% followed by a 4.5% climb today. These are big moves for a boring REIT, which chugs along increasing funds from operation (FFO) and dividends most quarters.

Look at this dividend chart or go back and check some of my posts on TMF for quarterly history and the one thing that jumps out is the predictability of these dividend increases. To make it even easier I’ve posted dividends, adjusted FFO and payout ratio below. Continue reading →

Would you rather a cat scratch your bum or a hamster hang off your face?

That was the insightful answer my five year daughter provided when I asked the women of the household their opinion on Bare Escentuals, Inc. (BARE). Once the laughter died down my partner gave this less amusing, but clearer response for those who can’t interpret the thought patterns of a five year. Continue reading →

Click to enlarge

Rich Smith over at the Fool concludes this article on Bare Escentuals, Inc. (BARE) with good advice

Let’s see whether the company’s free cash flow story looks similarly attractive — once management gets around to releasing its cash flow statement, that is. Seems to me, Bare just might bear closer examination.

Continue reading →

According to this pitch at Motley Fool CAPS Bare Essentials, Inc. (BARE) is a TMFSarahGen favourite. I’ve known Sarah for a while know and have always admired her openness to investing styles and willingness to combine both fundamental and technical analysis. Sarah also freely combines short term trading with long term investing. Those traits are pure Fusion Investing.

Sarah recently became a fully fledged Rule Breaker analyst. Her CAPS pitch on BARE highlights 

Strong repeat business from the most loyal customers in cosmetics combined with growing international sales, accelerating door openings (at Ulta, Sephora, Nordstroms) through end of year, mean that today’s price is a gift.

At first blush BARE appears to be in the bargain bins, so let’s take a closer look. Continue reading →

Now is one of the times you need to be a net buyer of stocks.

While I don’t have strong conviction that the bottom is in I do see a lot of extremely good value in the market at the moment. I have been focusing on US stocks recently and will continue to do so as I also believe now is a great time for international investors to be buying US assets. From my perspective the Australian dollar is at a 25 year high against the US dollar. While the upward trend is strong and almost everyone is expecting parity, I am happy to be buying US assets now.

I realise I am swimming against two strong currents, the falling US dollar and flailing US stock market, but to catch good waves you sometimes need to get into position early.

I will be continuing to buy over the coming year. With the high level of cash the FI portfolio has I can’t sit around waiting for a mythical bell to ring at the bottom. We may be headed lower. A lot lower is not impossible. However, I am confident enough that in the long run I will be rewarded for buying excellent value in the current market.

Today for something completely different I’m back buying in Australia. Following on from yesterday and buying what you know I am buying my bank, ANZ Banking Group Limited, ANZ. As per above I’m not calling a bottom on ANZ, but I will crawl out on a limb and say we’re closer to a bottom than the top.

Quick Fundamentals

The last decade has been a great time to be an Australian company. Earnings and margins have swelled. While earnings may have peaked and Australia may go into a recession if the US leads the world down, I am very confident that in the long run the four major Australian banks will continue to prosper and will have higher earnings. I’m a patient guy. That is a long way to say I don’t think the past ten years growth rates for ANZ are maintainable and I’m not investing based on the past growth.

If the consensus 2 year forecast process correct then ANZ is a steal at current prices. I’m not counting on any growth.

Dividend yield quoted at 7.6%

Next Dividend Ex Date 6 Nov 2008

Dividend History Since 1993 (extent of my history) ANZ have never failed to raise their dividend. The last dividends were; interim 62c and final 74c, both 100% fully franked. That represents a 7.9% yield or around 9.1% after tax for the Fund (tax rate 15%).

Credit Ratings of Aa1 and AA from Moody’s and Standard & Poor’s.

For a swathe of fundamental details check out the ANZ Analyst Toolkit This features ten year summary data, historical interactive charts which go back 13 years. For example the 13 year net non performing loan graph below. The site also has financial spreadsheets, presentations and more.

Quick Technical View

• Ugly. Falling Knife. Fall accelerating. Many buyers already exhausted at higher levels.
• Panic setting in.
• But is it time for a bounce? Looking at the shorter term six month chart I think it’s fair chance.

Quick Behavioural View

• The early value hounds who bought in first half of March and second half of April may now be feeling the pinch as the shares are down 15-30%.
• A lot of buyers have already bought. However, thanks to superannuation more money pours into the kitty every month and patient value buyers must be getting interested.
• When a bounce occurs from these depressed levels many buyers will quickly emerge. Although the next bounce may falter it should have enough momentum for a 20% bounce (based on recent history).
• The Fund bought ANZ at $17.16. If a bounce occurs soon I’d be looking for $21 as a first target. If ANZ continues lower then I will be averaging down.
• Funds managers’ TV advertisements currently pushing idea of buy and hold. I don’t even need to look at the fund flows to know they are out.

Summary

This is both an opportunistic buy and a long term buy. If I get a 20% return in a couple months and there is no large fundamental difference to the global economy I will re-evaluate with a eye to taking my profits. As we are close to a fundamental strong buy and long term technical support I see the chances of a bounce as at least 50:50. For the long term I am happy to start buying ANZ at these levels and believe a long term hold will outperform the ASX200.

Even under the worst circumstances of the dividend being cut in the short term, over the long term there is very small risk of losing capital on ANZ and a good probability of market beating returns with a healthy dividend.

This is one of the primary reasons I invest in GE, more on that another day.

Today it’s Q2 earnings time.

So it’s time to go to the source.

Press Release

Main Presentation

Supplemental Data

Always go directly to the source. Rather than read a Reuters or some other press release on a company’s earnings, go straight to the source. Go the company’s investor relations page on their website to get the information from the horses mouth. If it’s a company you invest in then sign-up for the investor alerts.

For those too busy to read the releases or listen to the conference call (I’ll wait for the transcript) here is the bottom line: Continue reading →

I have a full sized position of Suntech (STP) in a personal account. Despite that I was disappointed by the large, 9.7%, rise on Friday. I had been hoping to be able to pick up more STP down around the March lows of $30. I had an alert set at $35 and depending on market conditions would have bought around then. Only time will tell if I’ll get that opportunity now.

As this article highlights Cowen and Co. analyst Rob Stone reiterated his outperform and made the bold call that 2009 earnings could come in as high as $3.35, mainly driven by gross margin expansion. The current consensus is $2.58 with a range of $2.02 - 3.06.

So why is a company that has been growing at over 100% for the last five years and Continue reading →

There has been much speculation as to whether Pfizer will cut its dividend. As the speculation has gained momentum it has almost crossed over from speculation to sell newsprint to a fact. When I see this type of investor behaviour I sense an opportunity and try to look at the facts.

• PFE is an S&P dividend aristocrat, which means they have increased cash payments for 25 years. My records show PFE has increased their dividend every year since 1980.
• Management have maintained the dividend is safe, even in face of losing Lipitor exclusivity. In the Q1 conference call the CFO, Frank D’Amelio, outlined why PFE continue to view the dividend as safe.

As investor’s we need to ask is it likely that PFE will cut their dividend. Continue reading →