Friday, September 27, 2013

Equities Research Pick Starbucks Up 200% vs 12% S&P 500

Equities Research Stock pick Starbucks(NASDAQ:SBUX $77.18)on September 25,2007 has gained 200% in 6 years vs a 12% gain for the S&P 500 index over the same period.



Thursday, September 26, 2013

Bob Olstein Favorite Metric: FREE CASH FLOW

This afternoon money manager appeared on CNBC-TV to discuss his three top picks:
  • Harmon International (NYSE: HAR)
  • General Electric (NYSE: GE)
  • Dupont (NYSE: DD)
Olstein:"Free Cash Flow is the Ultimate Arbiter of Valuation".




More on Free Cash Flow from Bob Olstein can be found:

My Barber: "Joe the Barber"

TheStreet Grows Free Cash Flow 25%

TheStreet, Inc (NASDAQ: TST) has grown free cash flow 25.7% for the trailing twelve months ending June 30,2013 vs the comparable ttm period ending June 30,2012.

TheStreet has recently seen the return of top investigative reporter Herb Greenberg to their staff.

There has been a bull/bear debate brewing about TST  recently in the news at SeekingAlpha.com:
EquitiesResearch.com remains bullish on TST
Visit the OnlinefinancialSector.com to learn more.

Below is Stockdiagnostics.com Chart on TST last trailing Twelve Months Growth Rates:

TheStreet.com, Inc. (TST) - Internet Software and Services Industry


Long Term Growth Rate Comparison
TheStreet.com, Inc. (TST) Internet Software and Services Industry    S&P 500
Period Ending 06/30/2013 04/30/2013    07/31/2013
SL TTM Gr % -4.5 1.1    -0.8
SL TTM 3 Yr CAGR % -4.9 6.8    4.5
SL TTM 5 Yr CAGR % -7.2 30.9    1.7
EB TTM Gr % 19.4 -20.4    -2.7
EB TTM 3 Yr CAGR % N/A 5.7    4.8
EB TTM 5 Yr CAGR % N/A 21.0    3.6
ER TTM Gr % 12.9 -41.5    -1.1
ER TTM 3 Yr CAGR % N/A 1.4    5.4
ER TTM 5 Yr CAGR % N/A 14.5    5.3
OC TTM Gr % 19.0 -16.2    0.4
OC TTM 3 Yr CAGR % N/A 11.0    5.9
OC TTM 5 Yr CAGR % N/A 17.1    4.1
FC TTM Gr % 25.7 -22.2    -0.7
FC TTM 3 Yr CAGR % N/A 8.9    0.1
FC TTM 5 Yr CAGR % N/A 15.7    3.4
FC Margin % -5.2 12.2    7.8
ROE % -12.4 0.5    16.5
FC ROE % -3.6 0.7    15.2

Legend:

SL
EB
ER
OC
FC
FC Margin
- Sales
- EBITDA (Earnings Before interest, taxes, depreciation, and amortization)
- Net Earnings
- Operational Cashflow
- Free Cashflow (Operational Cashflow minus Capital Expenditures)
- FC TTM/SL TTM
ROE
FC ROE
TTM
Gr
Yr
CAGR
- ER TTM/Book Value
- FC TTM/Book Value
- Trailing Twelve Months
- Growth versus Year Ago
- Year
- Compound Annual Growth Rate

           

Thursday, September 19, 2013

FOMC Projections Sends Market Higher?

from www.FederalReserve.gov website:

September 18, 2013

"Economic projections and the target federal funds rate projections made by Federal Reserve Board members and Federal Reserve Bank"







http://www.federalreserve.gov/monetarypolicy/files/fomcprojtabl20130918.pdf

Tuesday, September 10, 2013

Two Thumbs Up

My work is recognized on twitter!

Thursday, September 5, 2013

Titan Machinery EPS Falls 73%

Titan Machinery Lowered Guidance for FY2014 from  $1.70-$2.00 down to $1.20-$1.50
Q2 Operational Cash flow NEGATIVE $42 million


EPS declined 73% 6 months
FY2013 6 months : $0.60
FY2014 6 months : $0.16


EPS declined 28% Q2 vs Q2
FY2013 Q2 : $0.25
FY2014 Q2 : $0.18


CASH declined $22 million
January 31,2013 : $124 million (Accounts Payable $28 million)
July 31,2013 :       $102 million (Accounts Payable $39 million)

Total Current Liabilities
January 31,2013 : $804 million
July 31,2013 :       $969 million

Total Long Term Liabilities 
January 31,2013: $239 million
July 31,2013 :      $264 million

Net Income vs Operational Cash Flow
Trailing 10 quarters ending July 31,2013 Net Income:                 $89 million
Trailing 10 quarters ending July 31,2013 OP. Cash Flow:        -($345 million)




 




This Morning pre-market Titan Machinery (NASDAQ: TITN) reported 2nd Quarter numbers and shares traded at new 52 week low under $15.88. The high for the day was $17.88 and shares closed @ $17.65 on volume of 1.7 million.

With Shares being down from $30 in February, it appeared the short sellers where buying today to book profits. I don't see any reason for sophisticated institutional buyers to be attracted to these financials.
The next problem for TITAN will be the longs trying to exit on these weak fundamentals.

Click to 10-Q 

Click to Press Release 

Click toWells Fargo Commentary from theflyonthewall.com
"Wells says Titan commnets negative for Deere, Caterpillar
Agricultural machine makers Deere (DE) and Caterpillar (CAT) are falling after Titan Machinery (TITN) stated that it expects its revenue from farm machinery to drop in the second half of the year. WHAT'S NEW: Titan said that its agricultural business is expected to be challenging in the second half of the year, given its outlook for lower commodity prices and reduced crop production. Used farm equipment prices have come under pressure, Titan added. The company, which also manufactures construction equipment, lowered its full-year profit and revenue guidance. ANALYST REACTION: In a note to investors, Wells Fargo analyst Andrew Casey wrote that the news from Titan indicates that North American farm equipment demand is peaking. Titan's statements are negative for Deere and Caterpillar, as well as AGCO (AGCO), another farm equipment maker, Casey stated. He kept Underperform ratings on Deere and AGCO, and a Market Perform rating on Caterpillar. TODAY'S PRICE ACTION: In mid-afternoon trading, Deere fell 1.5% to $83, Caterpillar inched down 0.2% to $83.40, AGCO climbed 1.4% to $57.60 and Titan rose 0.4% to $17.20."published at flyonthewall.com

Somehow the Chairman made the following statement in press release:

  • " We remain confident in the long-term profitable growth potential for Titan Machinery due to our proven operating model and healthy balance sheet.”

CNH Global Manufacturer's (NYSE: CNH)  
Risk Rating Increases from Low to Low/Medium
Approximately $755 million securities affected
Moody's assigns definitive ratings to CNH Equipment Trust 2013-C securitization



I would guess some of these analyst will have to bring their price targets lower with the new guidance. 
 (In August 2013 William Blair lowered price target on $TITN to $15,)


Some notes from today’s 10-Q which was filed this afternoon. I always wondered how analyst can sit on those conference calls without 10Q. ;)

  • If interest rates go up 1% point over next 12-mo period it would decrease pre-tax earnings + CF approx $4.9 mil

  • OPERATING EXPENSES Q2 $70 million up from $54 mil in year ago comp Q2 . 24% increase

  • Long-term debt, less current maturities $82.6 million ...up from Q1 $58 million.....Total long-term liabilities increased $23million from Q1

  • Q2 operational. Cash flow NEGATIVE $42million. 

  • Accounts Payable up $6 million from Q1 to $39 million. (that sure helped net income, cash flow and cash position (cough cough) lol

  • Floor Plan Debt up $79 million from Q1 to $851 million

  • Plus they added 136,000 more shares outstanding from Q1 to Q2 (although they didn't use the new number of S/O to calculate EPS for quarter.)

  • Then the obvious of lowering guidance from $1.70-$2.00 down to $1.2-$1.50

EPS declined 73% 
FY2014 6 months : $0.16
FY2013 6 months : $0.60
(did I mention their accounts payable were $39 million (almost $2.00 a share)

Meanwhile stock traded like they Beat by a quarter and guided up



 Equities Research Archives on Titan Machinery 


Disclaimer.
All Newsletters, published by Equities Research, LLC , does not constitute a recommendation by Equities Research, LLC to buy, sell, hold any security, or to follow any particular trading or investment strategy. Also, the information provided should not be construed as an offer, or a solicitation of an offer, to buy or sell securities. An investor's best course of action must be based upon individual circumstances. EquitiesResearch.com shall not be liable for any damages or costs of any type arising out of or in any way connected with your use of The Newsletters, or any of our services. 

EquitiesResearch.com, its officers and employees may buy and sell any position in the securities or companies mentioned herein.

Content copyright 2010-2013. Equities Research LLC. All rights reserved


Wednesday, September 4, 2013

Don't Trust Titan Machinery's Guidance

TITAN MACHINERY Reports Q2 Financials Tomorrow Morning Pre-Market

In June 2012:
After giving a $2.55-$2.75 range guidance company reported $2.00 EPS for year ending January 31,2013.
Instead of earning $53.8million to $58  million for year the company only reported $42million.
But Management's Mission was accomplished by getting stock up to $30 so they could sell shares @ $30.
  • The underwriter Cherry Tree (owned by director Tony Christianson, the brother of CEO, was compensated for the $150 million indenture offering in April of 2012. In June 2012 TITAN gave the following guidance in a press release:   
  "Net income attributable to common stockholders is expected to be in the range of $53.8 million to $58.0 million, resulting in earnings per diluted share range of $2.55 to $2.75". In July 2012 director Tony Christianson and director Irwin James both sold shares of TITAN (TITN) in the market place above $30 per share. 



 


Earlier this Year on April 10,2013 the company reported 10K for year ending January 31,2013.
On April 10th the day of the conference call Management Said Guidance for 1st Quarter ending April 30, 2013 would be $0.18 per share :

Then 1 month later made the following press release:

  " Titan said it expects revenue of $440 million for the quarter, about $50 million less than it had anticipated. As a result, the company is anticipating a pre-tax loss between $700,000 and $1.2 million. That is $7 million less than Titan had previously expected. On a per share basis, the company expects a loss in the range of 1 to 3 cents per share.

Analysts polled by FactSet were anticipating Titan would report net income of 18 cents per share on revenue of $478.4 million for the quarter.

Titan lowered its full-year forecast Thursday as well, citing lower operating margins in its construction segment. The company now anticipates earning $1.70 to $2 per share, down from its prior forecast of $2 to $2.30 per share. It reiterated its revenue forecast of $2.35 billion to $2.55 billion. "              

TITN SGA for 6months last year was $111 million. Tomorrow they will report 6mos, they already reported $69 million SGA for Q1 up from $55 million Q1 year ago.



 In 2nd quarter that they report tomorrow there will be their first annual interest expense that they made on May 1st this year on an $150 million Indenture they received a year ago. Q2 last year they didn't have that interest expense. That number will take a chunk out of net income tomorrow.



Also Top 2 execs are both receiving 48% cash salary increases this year vs.last year. that's an additional $75,000 per quarter added expense.


On April 10,2013 in their 10K company disclosed:
  •  ******* April 2012 DEF Proxy Disclosure and compare it to the 2013 proxy disclosure,  you'll notice that TITN entered into an additional $50million worth of lease contracts (bringing total to over $100million) with the entity Dealer Sites LLC which is an entity that is owned in part to the top 2 Execs at TITN. What really raises an even bigger Red Flag is that TITN only increased locations owned by Dealer Sites by 2, 46 to 48 locations, but added over $50 million in leases agreements! there was no disclosure of the additional lease arrangements in the 10K filed on April 10,2013"


Don't fall into CASHLESS EARNINGS TRAP. Don't be fooled by #EPS Learn about #cashflow read #bobolsteinhttp://t.co/1NqzC9Es7u

EquitiesResearch

Wed theflyonthewall reported RWBaird $TITN Q2 results at risk.Used machinery prices under pressure.NEG implications on margins. target lowered
EquitiesResearch

$TITN Downgraded by Zacks to “Underperform” (TITN) in report on Friday, AnalystRatingsNetwork reports. $16.50 price target on the stock 


EquitiesResearch

$DE downgraded this morning to a sell at UBS, last week William Blair lowered price target on $TITN to $15, and Chanos bearish on $CAT



 Read EquitiesResearch.com Archives:

click to <Titan Machinery Warning (NASDAQ: TITN) 

click to <notes from TITN 10K and Proxy Disclosure including FootNotes

Disclaimer.
All Newsletters, published by Equities Research, LLC , does not constitute a recommendation by Equities Research, LLC to buy, sell, hold any security, or to follow any particular trading or investment strategy. Also, the information provided should not be construed as an offer, or a solicitation of an offer, to buy or sell securities. An investor's best course of action must be based upon individual circumstances. EquitiesResearch.com shall not be liable for any damages or costs of any type arising out of or in any way connected with your use of The Newsletters, or any of our services.

EquitiesResearch.com, its officers and employees may buy and sell any position in the securities or companies mentioned herein.




Content copyright 2010-2013. Equities Research LLC. All rights reserved

Sunday, September 1, 2013

Dow Jones Index Needs a Shuffle to take Average to 20,000

Dow Jones Index Needs a Shuffle to take Average to 20,000

A year ago United Health Group, Inc. (NYSE: UNH) was added to the Dow Jones Industrial Index (DJIA) to replace Kraft Food, Inc, after Kraft’s plans to spin off its American grocery business. Although UNH only accounted for approximately 3% of the index‘s weighted average, the stock’s 29.6% return was the 4th best stock performer of the 30 stocks in the index contributing to the average’s gain of 9.06% since being added through to yesterday’s close. Below is the performance of the Dow Jones Industrial Average and the 30 components since UNH was added on September 24, 2012. (Clicking on the Corporations’ names are links to Stockdiagnostics.com Charts of each stock through the date of the change on September 2012).


Ticker Company 9/21/12 8/30/13 % return
BAC Bank of America $9.09 $14.12 55.34%
BA Boeing Co. $68.43 $103.92 51.86%
HPQ Hewlett-Packard $17.21 $22.34 29.81%
UNH UnitedHealth Group Inc. $55.50 $71.74 29.26%
JNJ Johnson & Johnson $66.90 $86.41 29.16%
HD Home Depot Inc. $58.54 $74.49 27.25%
CSCO Cisco Systems Inc. $18.34 $23.31 27.10%
JPM JPMorgan Chase $39.76 $50.53 27.09%
UTX United Technologies Corp. $78.87 $100.10 26.92%
AXP American Express Co. $57.11 $71.91 25.91%
MMM 3M Co. $91.00 $113.58 24.81%
PFE Pfizer Inc. $23.70 $28.21 19.03%
TRV Travelers Cos. $67.39 $79.90 18.56%
DIS Walt Disney Co. $51.94 $60.83 17.12%
PG Procter & Gamble Co. $67.30 $77.89 15.74%
DD E.I. DuPont de Nemours $50.03 $56.62 13.17%
MSFT Microsoft Corp. $30.25 $33.40 10.41%
DJIA Dow Jones Indust Ave 13,579.47 14,810.31 9.06%
VZ Verizon Communications $43.72 $47.38 8.37%
MRK Merck & Co. Inc. $43.66 $47.29 8.31%
CVX Chevron $114.02 $120.43 5.62%
GE General Electric Co. $21.97 $23.14 5.33%
MCD McDonald's Corp. $91.42 $94.36 3.22%
KO Coca-Cola Co. $37.24 $38.18 2.52%
WMT Wal-Mart Stores Inc. $72.68 $72.98 0.41%
INTC Intel Corp. $22.22 $21.98 -1.08%
XOM Exxon Mobil $89.53 $87.16 -2.65%
T AT&T $36.26 $33.83 -6.70%
CAT Caterpillar Inc. $89.45 $82.54 -7.72%
IBM Internat'l Bus Machines  $202.26 $182.27 -9.88%
AA Alcoa Inc. $9.00 $7.70 -14.40%
KFT Kraft Foods $51.93


Since Being added to DJIA, Bank of America is Down 63% 

Although Bank of America (NYSE: BAC) was the top performing stock in the chart above with a 55% return, shares are still 63.54% lower since being added to the Dow Jones Industrial Index on February 19,2008.  Chevron was also added to the index on the same day as Bank of America and CVX shares are 73.38% higher. Since the stocks were added to the DJIA the index has gained 19.94%.

Prior to United Health Group being added to the Dow Jones Index, the last change to the index was made on the opening of June 8, 2009 with the addition of Cisco System (NASDAQ: CSCO) and Traveler Cos. (NYSE: TRV). Since the 2009 change Cisco has gained 23.66% and Travelers is up 105.03%, while the DJIA is 69.01% higher.

Today’s Dow Jones Industrial index has changed significantly since its inception to adapt to the changing landscape of America. Alcoa (NYSE: AA), Caterpillar (NYSE: CAT) and Hewlett-Packard (NYSE: HPQ) are no longer considered leaders in today’s market place and although HPQ stock has performed well of late, the stock performance is not indicative of the underlying business’s future growth. Its time for companies, Google (NASDAQ: GOOG), Apple (NASDAQ: AAPL) and Wells Fargo (WFC), that dominate the marketplace and the world economy to be added to the index to help get the index to 20,000 and beyond.