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Earnings Report November 1st, 2014. Autonation reports 20% increase in EPS with strong growth across new vehicles, used vehicles and parts. Chairman and CEO Mike Jackson says he expects continued growth in 2015 with industry wide new car sales rising to 17 million units (Zacks). He also added that falling used car values reflected a normalization of supply that would be beneficial for the market (Reuters)

 

Earnings Report November 1st, 2014. CBRE Group, the real estate services firm, reported 33% growth in EPS with strong global revenue growth (article). The company has seen annual EPS growth of 43% over the past five years and is priced on 20 times 2014 earnings (Yahoo Finance). 

 

Earnings Report October 31st, 2014. Bombardier reports 20% jump in revenues and 35% increase in adjusted earnings (article).  The company is trading on 7.5 times forecast earnings but risks remain for CSeries jet. 

 

Strong Growth. October 31st, 2014. Meritor Inc is a global supplier of components to commercial vehicle and trailer manufacturers. The company has recently signed a 7 year agreement to supply axles to Volvo in Europe and South America and should benefit from macroeconomic tailwinds in most of the markets its operates. Priced on a forward PE of 15 would not be expensive if 59% annual growth forecasts are correct. (best article) (Yahoo Finance)

 

 Insider Purchase. October 31st, 2014. Bassett Furniture Industries Chairman Paul Fulton bought almost $35,000 of stock on Tuesday increasing his total holding to almost $940,000 (Article). The acquisition comes after double digit sales and earnings growth reported earlier this month. "Our team was excited with our third quarter financial results as we grew our top line by 10.4% and quadrupled our operating income to $3.4 million," said Robert H. Spilman Jr. "We are executing our strategy at a higher level as witnessed by a 13% comparable store sales increase in our Company-owned stores and a strong incoming wholesale order rate during the period. Our balance sheet is strong as cash and investments grew to $42.6 million, partially due to the generation of $4.8 million of operating cash flow in the period." (Press Release

 

Strong Growth. October 30th, 2014. Supercom is a leading electronic identification manufacturer of inbedded chips and biometric testing for passports and the security industry. The company bought its main competitor, SmartID, in a transformational acquisition last year that will help it win more tenders at better pricing while providing synergies and significantly reducing management overheads (SA article). Investors have not been disappointed with second quarter revenues increasing 277% year on year to $7.1 million and operating income growing from $0.5 million to $2.6 million (Q2 results). Third quarter results are due on November 3rd, but the company has already announced cash balances increased by $3.9 million (Company Release) suggesting the strong run rate is continuing.

 

Insider Purchase. October 30th, 2014. CEO and Chairman of Opko Health Inc has made multiple purchases in October at prices between $8.34 to $8.42 and now holds around 17 million shares directly and indirectly. In August the company reported a second quarter loss per share of $0.06 beating consensus forecast losses of $0.09 (article).  Consensus target price from four brokers is currently $11.50.

 

Insider Purchase. October 30th, 2014.  Schlumberger Limited Director purchased $300,000 of stock on Monday at a price of $92.59 after the company reported third-quarter EPS of $1.49 up from $1.29 last year and beat consensus earnings of $1.46 (Zacks). Deutsche Bank analysts reiterated their target price of $119.00 for the stock.

 

Potential Value. October 29th, 2014.  Chicago Bridge and Iron (CBI) is a construction company for the energy sector that has seen net income increase to $590 million from $174 million in 2009. Third quarter revenues grew 13% while earnings jumped 37% beating forecasts by 7% (NASDAQ article). However the company stock price is currently $53.74 representing a PE of 9.95.


The reason is that the market is worried that CBI will not be paid $1.5 billion of receivables that have been caused by cost over runs on two nuclear projects overseen by recently acquired Shaws Group. Reports are that these are "cost plus contracts" and clients are liable (SA article). Warren Buffett seems to agree with 9.9% holding while Deutsche Bank recently reissued target price of $80.

Earnings Report October 29th, 2014.  HCA Holdings, the nations largest hospital operator, beat forecasts as it reported a 47% increase in third quarter earnings to $1.16 a share. The company said revenues grew 9% due to rising admissions and confirmed guidance for $4.40 to $4.60 earnings per share. The company also reported it was buying a small urgent care provider.   The stock price fell 0.17% to $71.28.

 

Earnings Report October 28th, 2014. Precision Drilling (PDS), Canada's biggest oil and gas contractor, reported a 79 per cent jump in third quarter profits boosted by a 20 per cent increase in drilling activity. The company beat the 8 per cent industry wide growth which has been boosted by the shale fuel drilling boom in North America (Reuters). CEO Kevin Neveu said 26 rig deliveries scheduled for the fourth quarter through to mid 2015 will further support the high performance. (Benzinga) PDS is trading on about 7.5 times next year forecast earnings with annual growth of almost 29 per cent expected. (Yahoo Finance)

 

Strong Growth. October 24th, 2014. US Steel manufacturer Nucor is trading on around 23 times forward earnings with annual forecast EPS growth of almost 40%.  The company beat estimates with a 66% jump in earnings as sales rose 15%. Operating profit improved significantly as sales price per tonne increased 15% and volume rose 10%. Industry expected to grow 2% this year and next as strong US growth offsets weaker Chinese economy. (Reuters)

 

Potential Value. October 24th, 2014.  IBM's vision of the future is one where computers are able to think more like humans, except with greater capacity and complexity, in order to analyse the huge amount of data that is now available from social networks on line and elsewhere. So much so it has exited personal computing and is spending around $6 billion each year on research and development. Whether this will transpire and which players will be the ultimate winners has yet to be seen (SA article). But with IBM's standard business currently priced on a PE of 10.22 with EPS forecast to grow at around 6% annually it looks like a free bet (Yahoo Finance). 

 

Earnings Report October 24th, 2014. Ethan Allen, reported first quarter results yesterday with a 33% increase in adjusted EPS as wholesale division sales jump 10%, overall sales rise 5% and gross margin increase 60 basis points. The company is planning the launch of a new website, that has been in development for two years, on October 15th. Advertising is due to be ramped up this quarter and next half. The company remains cautiously optimistic. (article

 

Earnings Report October 24th, 2014. Global biotechnology firm Biogen Idec, Inc. ( BIIB ) reported Wednesday a 76% increase in third quarter profits. Revenues grew 37% as the company reported significant progress in introducing and launching treatments for MS and Hemophilia worldwide. The company raised guidance to a range of $13.45 to $13.55 per share from the prior forecast range of $12.90 to $13.10 per share. (read full article) PE was 34.38 with annual growth of 20% forecast.

 

Potential Value. October 24th, 2014. HealthEquity is priced on ten times earnings with 35% annual growth forecast. It is ironic that Health Savings Accounts and their providers should be thriving under the Affordable Care Act given legislators tried for some time to exclude the accounts from the new regime. However that is exactly what is happening as the accounts offer policy holders and employers a cheaper and tax efficient way to cover their insurance needs. (SA article)
Earnings and revenues have both grown at a double digit rate and consensus forecasts point to 35% annual growth over the next five years. Consensus EPS provided by five analysts for the current year is $0.18 (increasing to $0.29 next year) placing the company on a forward multiple of just over ten with its current stock price of $18.20. Such a low multiple is unusual for a company benefiting from strong industry growth that looks set to continue to benefit profits and margins. (Yahoo Finance)

 

Earnings Report October 24th, 2014. IROBOT , the robot technologycompany, smashed forecasts when it reported third quarter results with net income almost doubling to $14.6 million as sales increased from $124.5 million to $143.5 million. @@Quote@@. At the same time the company hiked full year guidance from the $1.10 - $1.20 range to $1.20 - $1.25 range. 

 

Earnings Report October 21st, 2014. Chipotle Mexican Grill reported earnings of $130.8 million or $4.15 per share compared to $2.66 last year and consensus forecasts of $3.86.  Sales rose 19.8% and operating marging jumped 2% to 28.8%.  (ABC) 

 

Potential Value. October 21st, 2014. Horsehead holding co is the largest zinc manufacturer in the US and is set to see cash flows ramp up when its new state of the art Mooresboro facility comes on line, probably next year. However, the company has also recently extended an option for Shell to purchase a 300 acre site in Beaver County, Shell has begun demolishing an existing premises on the site at its own expense and Shell has completed the acquisition of 5.5 acres of adjacent land for $1.87 million. Were Shell to pay the same price for the Horsehead site the land would be valued at over $100 million. The total value of land on Horsehead's balance sheet in June was only $46.4 million. (SA article)

 

Earnings Report October 21st, 2014. Texas Instruments reported a 31% increase in third-quarter net income. EPS was 76 cents compared to consensus forecasts of 71 cents and revenue rose 8%. The outlook for fourth quarter EPS of between 64 cents to 74 cents was at the high end of forecasts as demand for chips used in cars, industrial equipment and mobile phone systems fuel sales growth. CFO Kevin March said We feel pretty good about the portfolio and the way the company is executing and our customers seem to be happy because they keep on giving us plenty of orders and keeping us busy," (Bloomberg) (Reuters)

 

Earnings Report October 21st, 2014. Gannett Company reported a 48.6% increase in earnings as revenues from broadcasting and political advertising increased 105% to $416 million. Revenue at the company's publishing division fell 3.6% to $858.1 million. (NYTimes) The stock price jumped 5% to $29.08 to trade at a PE of 15.55. 

 

Earnings Report October 21st, 2014.  Halliburton beat forecasts yesterday with a 70% jump in earnings and 16% increase in revenues. Joining other oil industry service providers, the company said it believed the current low oil price was unsustainable and that industry fundamentals would rebalance it in a relatively short time. (Reuters)

 

Insider Purchase. October 21st, 2014. Natural Resource Partners (NRP) has seen significant insider buying as the stock has fallen from its 52 week high of $21.57 to recent lows of $10.50. The CEO acquired just over $3 million of stock on October 10th at $12.02 and was joined by his director grandson who acquired $1.0 million. These acquisitions were followed by four other meaningful purchases by company officers .

The purchases are supported by recent comments made in the second quarter earnings report when the company disclosed that revenues increased to$90.6 million from $86.8 million and reported strong performances from oil and gas, soda ash and the Illinois coal businesses. 

The company expects to see continued strong performance in the second half and reaffirmed full year guidance of earnings per unit of between $1.40 and $1.50.

Priced on $12.51 this represents a PE of 9.54. 

 

 Strong Growth. October 20th, 2014. Frutarom Industries is a fast growing flavourings and fine ingredients manufacturer priced on a forward PE multiple of just below 17 in an industry with significant barriers to entry. Annual earnings growth of 15.5% and revenue growth of 13.15% over the past 5 years look set to continue and have been driven by above average organic growth and earnings accretive acquisitions. A significant contributor to value creation is the company's ability to buy companies on an EBITDA multiple of around 6 and incorporate them in Frutarom's which commands a multiple of 12. (SA article

 

Earnings Report October 20th, 2014.  Flexsteel Industries, Inc., the Iowa based commercial and residential furnishing manufacturer, last week reported record first quarter results with adjusted net income increasing 14% to $5 million. Net sales increased 4% and gross margin increased from 22.7% to 23.5%.

The company added that, due to existing strong order backlog and positive order trends, it expects top line growth will continue for fiscal year 2015. Residential growth is expected from existing customers and products, and will be led by increased demand for upholstered, case goods and ready-to-assemble products.

 

Earnings Report October 17th, 2014. Johnson and Johnson last week announced a 5.1% jump in sales as worldwide pharmaceutical sales jumped 18.1% to $8.3 billion. The strong sales results were driven by new products and the strength of our core products. New products include hepatitis C treatment, Olysio, and Invokana for the treatment of type 2 diabetes. 

 

Earnings Report October 17th, 2014.  Knoll, the high quality office design company reported third quarter results with net sales up 23.7% to $268.3 million and earnings up 82.6% to $15.7 million. Diluted earnings per share was $0.33 for the quarter compared to $0.18 per share in the prior year. 

 

Potential Value. October 15th, 2014.  CSS Industries is a stable company trading on a PE multiple of 7.3 when cash is excluded. Founded in 1923, the company designs, manufactures and sells greetings cards and novelty gift items. It is headquartered in Pennsylvania with five showrooms in the US and one in Hong Kong.