Archive for January, 2007

  • Graco 4Q Profit Rises 10 Percent
    , January 30th, 2007 at 8:44 am

    From the AP:

    Graco Inc. (GGG), which makes pressure washers and pumps for industrial uses, on Monday said fourth-quarter profit increased 10 percent as growth in its industrial and lubrication equipment segments offset slightly lower sales of contractor products.
    Net income grew to $35.6 million, or 52 cents per share, from $32.3 million, or 46 cents per share, a year earlier.
    Sales expanded 10 percent to $203.4 million from $185.6 million.
    By segment, fourth-quarter contractor equipment sales fell 2 percent to $71 million. While the segment’s sales in Europe and Asia rose, sales in the Americas fell, reflecting a weak U.S. housing market. Sales of industrial equipment rose 14 percent at the same time to $110.6 million. Lubrication equipment sales jumped 40 percent to $21.8 million.
    Analysts polled by Thomson Financial forecast earnings of 52 cents per share and sales of $205.8 million.
    Graco said that a weaker U.S. dollar in 2006 compared with 2005 boosted sales and earnings.
    For the full year, net income increased to $149.8 million, or $2.17 per share, from $125.9 million, or $1.80 per share. Sales rose to $816.5 million from $731.7 million a year earlier.

  • The Money Honey Brand
    , January 29th, 2007 at 4:18 pm

    Bloomberg looks at the fallout of Todd Thomson’s dismissal at Citigroup (C). Journalism professors are criticizing the relationship Thomson had with Maria Bartiromo. Last year, she traveled with him to Asia on a company jet. He also approved $5 million for a show she was to co-host.
    The article includes this nugget:

    On Jan. 16, Bartiromo sought to trademark her “money honey” moniker for use on children’s television shows, games, T-shirts, dishes and bookbags, according to the U.S. Patent and Trademark Office’s Web site.

    The New York Post, naturally, has more.

  • Milton Friedman Day
    , January 29th, 2007 at 12:35 pm

    Today is Milton Friedman Day. The economist died two months ago at the age of 94. Tonight, PBS (note irony) will premiere “The Power of Choice: The Life and Ideas of Milton Friedman.” Check your local listings.

  • Nicholas Financial’s Earnings
    , January 29th, 2007 at 12:29 pm

    Our smallest stock on the Buy List, Nicholas Financial (NICK), reported earnings of 27 cents a share:

    Nicholas Financial, Inc. announced that net income increased 2% to $2,770,000 for the three months ended December 31, 2006 as compared to $2,718,000 for the three months ended December 31, 2005. Diluted earnings per share increased 4% to $0.27 for the three months ended December 31, 2006 as compared to $0.26 for the three months ended December 31, 2005. Revenue increased 6% to $11,730,000 for the three months ended December 31, 2006 as compared to $11,107,000 for the three months ended December 31, 2005. The Company has reported record same quarter increases in revenues and earnings for 66 out of the past 67 quarters.
    Net income increased 12% to $8,568,000 for the nine months ended December 31, 2006 as compared to $7,621,000 for the nine months ended December 31, 2005. Diluted earnings per share increased 14% to $0.83 for the nine months ended December 31, 2006 as compared to $0.73 for the nine months ended December 31, 2005. Revenue increased 14% to $34,666,000 for the nine months ended December 31, 2006 as compared to $30,506,000 for the nine months ended December 31, 2005.


  • Sysco Earns 38 Cents a Share
    , January 29th, 2007 at 9:58 am

    That’s in line with estimates:

    Food-services provider Sysco Corp. said Monday fiscal second-quarter net income grew 16 percent, helped by business reviews of customers.
    Quarterly earnings totaled $236.7 million, or 38 cents per share, from $204.2 million, or 33 cents per share during the same period last year.
    Revenue grew 8 percent to $8.57 billion, from $7.97 billion last year.
    Analysts polled by Thomson Financial expected net income of 38 cents per share on revenue of $8.6 billion.
    Sysco said it conducted 10,000 business reviews at its U.S. broadline operations during the quarter, and sales to customers who participated in the business-review process were “solid.”

  • P/E Ratios by Sector
    , January 26th, 2007 at 6:09 am

    Here’s a look at the P/E Ratios of the ten sectors of the S&P 500:
    The P/E ratio of the overall S&P 500 is about 16.2. This is slightly distorted due to the low P/E ratio of the energy sector (9.6% of the index).
    Since energy stocks have been generating very healthy profits, and the market doesn’t believe the good times will last, or least, not at this pace, that gives them a low P/E ratio. That’s pretty common for cyclical stocks. Ignoring energy, I see that five sectors have P/E ratios greater than 18.7.
    Here’s a look at each sector’s Relative P/E Ratio, which is their P/E compared with the overall S&P 500.
    Although Relative P/E’s are far from perfect, they’re a good measures of value. You can see that only the cyclical sectors like energy and industrials show any noticeable downtrend. Even though tech stocks haven’t done very well, by this metric, it doesn’t appear that tech has become any less expensive.

  • Today’s Investing Lesson: Diversify
    , January 25th, 2007 at 4:50 pm

    The S&P 500 had a big up day yesterday, and a big down day today. It’s almost back where it started, yet our Buy List managed to beat the index on both days.
    What’s particularly impressive is that we were able to stay ahead of the market today even though shares of Varian Medical Systems (VAR) got a super atomic wedgie. The stock dropped 8.6% today. The 11.4% jump in Respironics (RESP) helped ease the pain.
    Too many investors never give a thought about diversifying across industries. Or they think diversity means owning several tech stocks. You can own only a few stocks and track the market very closely. Also, you can own hundreds of stocks and have a very low correlation to the rest of the market.

  • Interest Rates Are Climbing Higher
    , January 25th, 2007 at 1:31 pm

    After plunging from May to December, interest rates are rising again. The yield on the 90-day Treasury bill just peaked above 5%. The yield on the 30-year bond is also climbing fast and will probably break through 5% any day now. In fact, the yield may soon “revert” from its inverted status.
    In May, the yield on the 30-year was 60 basis points over the 90-day. Then in December, it was 35 points under. Now they’re just about even.

  • Earnings from Danaher and Respironics
    , January 25th, 2007 at 10:42 am

    The bad news today is that Varian Medical Systems (VAR) is sharply lower thanks to yesterday’s earnings report. The stock is currently down about 8%. But the good news is we got positive earnings from Danaher (DHR) and Respironics (RESP).
    Danaher earned 95 cents a share, two cents more than estimates. For the year, the company earned $3.48 a share which was up from $2.76 in the year before. The company also reaffirmed its 2007 forecast of $3.68 per share to $3.78 per share.
    Respironics reported earnings of 40 cents a share, which was also two cents more than expectations. The company earned 33 cents a share in last year’s fourth quarter. Respironics said that it’s comfortable with 2007 estimates of $1.74 to $1.77, which doesn’t include 12 to 13 cents a share in stock compensation. The stock is up about 10% today (woo!), and it’s close to breaking the all-time high of $43.03 reached in October 2005.

  • S&P 500 Hits 1,440
    , January 24th, 2007 at 4:25 pm

    The S&P 500 broke through 1,440 for the first time in 75 months. The index was up 0.85% today to 1,440.13. Our Buy List also did well, rising 0.89%. The Dow closed at an all-time high of 12,621.77.
    Amphenol (APH) did particularly well as it added $1.44 a share. The stock is now up 8.4% on the year. Also, SEI Investments (SEIC) made a new 52-week high.
    After the bell, Varian Medical Systems (VAR) reported earnings of 37 cents a share for the fourth quarter, two cents more than estimates. Even though the company continues to do well, I’ve been surprised by the stock’s sluggish performance over the past year.
    In the press release, Timothy Guertin, Varian’s CEO said, “Net earnings should be in the range of $1.89 to $1.91 per diluted share for the year, and approach $0.46 for the second quarter.” Wall Street was expecting 48 cents a share, so the stock is down sharply after hours.
    Also, Fair Isaac (FIC) reported earnings of 52 cents a share.The company said that expects to make approximately 48 cents a share for the March quarter, and $2.15 for FY 2007.