Archive for January, 2019

  • Join Our Conference Call on Thursday
    , January 31st, 2019 at 11:50 am

    Join me this Thursday at 4 pm ET for a conference call to discuss earnings season.

    To join the call, register here: After you register, you’ll be able to hear the call either online or by phone.

    This is the busiest time for earnings, and I want to make sure you know what’s happening. Seven of our Buy List stocks are scheduled to report this week, plus another nine are due to report next week.

    I’ll go over each of them and tell you what to expect.

    I also wanted to remind you that you can easily buy the whole Buy List in one move by buying shares of the AdvisorShares Focused Equity ETF (CWS). The ETF has rebounded nicely from the market’s December low. In fact, we just had to print another 25,000 shares to keep up with demand. Thanks to everyone who has come on board!

    Remember that the ETF is tax-efficient. Also, if you wanted to buy one share each of all 25 Buy List stocks, it would cost more than $2,800. But one share of CWS, which holds all 25, currently goes for about $30. For more info on the ETF, check out our website:

    I’ll talk to you on Thursday.

    – Eddy

    Before investing you should carefully consider the Fund’s investment objectives, risks, charges and expenses. This and other information is in the prospectus, a copy of which may be obtained by visiting the Fund’s website at Please read the prospectus carefully before you invest. Foreside Fund Services, LLC, distributor.

    There is no guarantee that the Fund will achieve its investment objective. An investment in the Fund is subject to risk, including the possible loss of principal amount invested. The prices of equity securities rise and fall daily. These price movements may result from factors affecting individual issuers, industries or the stock market as a whole. Shares of the Fund may trade above or below their net asset value (“NAV”). The trading price of the Fund’s shares may deviate significantly from their NAV during periods of market volatility. There can be no assurance that an active trading market for the Fund’s shares will develop or be maintained. In addition, equity markets tend to move in cycles which may cause stock prices to fall over short or extended periods of time. Other Fund risks include market risk, liquidity risk, large cap, mid cap, and small cap risk. Please see prospectus for details regarding risk.

    Shares are bought and sold at market price not net asset value (NAV) and are not individually redeemed from the Fund. Market price returns are based on the midpoint of the bid/ask spread at 4:00 pm Eastern Time (when NAV is normally determined) and do not represent the return you would receive if you traded at other times.

  • Hershey Earns $1.26 per Share
    , January 31st, 2019 at 9:20 am

    From Reuters:

    Hershey Co forecast full-year profit largely above Wall Street expectations, as the maker of Kisses chocolate and Reese peanut buttercups benefits from a clutch of snacking brand acquisitions.

    Hershey has been building up a portfolio of snack brands through acquisitions as consumers opt for healthy food over sugary candies and processed food.

    The company bought cheese puff maker Pirate Brands for $420 million in September 2018, adding to its portfolio of snacks brands that includes SkinnyPop popcorn maker Amplify Snack Brands, beef jerky maker Krave and barkTHINS.

    The Pennsylvania-based company forecast full-year adjusted profit to be in the range of $5.63 per share to $5.74 per share, the mid-point of which at $5.69 is above analysts’ estimate of $5.65 per share, according to IBES data from Refinitiv.

    The candy maker also forecast full-year sales growth to be in the range of 1 percent to 3 percent in line with expectations.

    However, Hershey reported quarterly sales and profit that narrowly missed estimates in the fourth quarter ending Dec. 31.

    Net income attributable to the company surged to $336.8 million, or $1.60 per share, in the fourth quarter ended Dec. 31, from $181.1 million, or 85 cents per share, a year earlier.

    Excluding items, Hershey earned $1.26 per share, missing analysts’ estimate by one cent.

    Sales rose 2.5 percent to $1.99 billion, but narrowly missed the average analyst estimate of $2 billion, according to Refinitiv data.

  • Sherwin-Williams Earns $3.54 per Share
    , January 31st, 2019 at 9:15 am

    Consolidated net sales for the year increased 17.0% to a record $17.53 billion
    Net sales from stores in U.S. and Canada open more than twelve calendar months increased 5.1% in the year
    Full year diluted net income per share decreased 35.9% to $11.67 per share from GAAP 2017 $18.20 per share, revised to reflect a voluntary inventory accounting change
    Full year net operating cash increased $151.2 million to a record $2.04 billion
    The Company anticipates diluted earnings per share for 2019 in the range of $16.77 to $17.77 per share, including acquisition-related costs and other non-operating items of $3.63 per share

    Commenting on the financial results, John G. Morikis, Chairman, President and Chief Executive Officer, said “Sherwin-Williams delivered record results in 2018 despite a fourth quarter that was below our expectations. Consolidated sales for the year grew at a mid-single digit rate excluding the five months of Valspar incremental sales, and adjusted diluted earnings per share grew by approximately 23 percent. In all business segments, we continued to focus on innovative products and services to help our customers improve their productivity and profitability. We also implemented price increases during the year to combat persistent raw material inflation. In addition, our team made significant progress on our acquisition integration efforts, with the resulting benefits exceeding our target for the year. We also generated record cash from operations in 2018, enabling us to invest in growth initiatives, increase our dividend, purchase shares of stock and significantly reduce debt.

    “We enter 2019 well-positioned and focused on what we can control. While the current macroeconomic outlook is less than clear, we see significant opportunities for profitable growth throughout the business. In The Americas Group, we will continue to invest in our store model and best-in-class products while executing on share of wallet and new account activation initiatives. In the Consumer Brands Group, we are excited by the exclusive national partnership and shared commitment to growth we have with our largest retail partner, as well as by our strong relationships with other leading retailers. Finally, in the Performance Coatings Group, we are focused on leveraging the combined capabilities of our integrated organization across the various end markets and geographies we serve.

    “In the first quarter of 2019, we anticipate our net sales will increase two to six percent compared to the first quarter of 2018. The first quarter 2019 will include the expenses related to the defined benefit plan annuity purchase of approximately $.43 per share. For the full year 2019, we expect core net sales to increase four to seven percent compared to full year 2018. With annual sales at that level, we anticipate diluted net income per share for 2019 will be in the range of $16.77 to $17.77 per share compared to $11.67 per share earned in 2018. Full year 2019 earnings per share includes acquisition-related costs and other non-operating expenses of approximately $3.20 and $.43 per share, respectively. We expect our 2019 effective tax rate to be in the low twenty percent range.”

  • Raytheon Earns $2.93 per Share
    , January 31st, 2019 at 9:10 am

    – Strong bookings of $8.4 billion in the quarter and $32.2 billion for the year; book-to-bill ratio of 1.15 in the quarter and 1.19 for the year

    – Fourth quarter net sales of $7.4 billion, up 8.5 percent; full-year net sales of $27.1 billion, up 6.7 percent for the year

    – Fourth quarter EPS from continuing operations of $2.93, up 117 percent; full-year EPS from continuing operations of $10.15, up 46 percent for the year

    – Strong operating cash flow from continuing operations of $2.4 billion in the quarter and a record $3.4 billion for the year

    Raytheon Company (RTN) today announced net sales for the fourth quarter 2018 of $7.4 billion, up 8.5 percent compared to $6.8 billion in the fourth quarter 2017. Fourth quarter 2018 EPS from continuing operations was $2.93 compared to $1.35 in the fourth quarter 2017. The increase in the fourth quarter 2018 EPS from continuing operations was primarily driven by operational improvements and lower taxes primarily associated with tax reform.

    Net sales in 2018 were $27.1 billion, up 6.7 percent compared to $25.3 billion in 2017. Full-year 2018 EPS from continuing operations was $10.15 compared to $6.94 for the full-year 2017.

    “Raytheon had a very successful year in 2018. We accelerated our sales growth yet again and achieved a new company record for operating cash flow,” said Thomas A. Kennedy, Raytheon Chairman and CEO. “We ended the year with record bookings and backlog which positions us well for 2019 and beyond.”

    The company generated strong operating cash flow for both the fourth quarter and full-year. Operating cash flow from continuing operations for the fourth quarter 2018 was $2.4 billion. Operating cash flow from continuing operations for the full-year 2018 was a record $3.4 billion, after making the $1.25 billion pretax discretionary pension contribution in the third quarter 2018. Operating cash flow from continuing operations for the fourth quarter 2017 and full-year 2017 was $1.6 billion and $2.7 billion, respectively, after making the $1.0 billion pretax discretionary pension contribution in the fourth quarter 2017. Operating cash flow from continuing operations for the fourth quarter and full-year 2018 was better than the company’s prior guidance primarily due to improved working capital.

    For 2019, RTN expects EPS of $11.40 to $11.60, on sales of $28.6 to $29.1 billion.

  • Morning News: January 31, 2019
    , January 31st, 2019 at 7:12 am

    As Chances of No-Deal Brexit Rise, British Companies Scramble to Prepare

    Trump’s Venezuela Sanctions Put Russian Billions at Risk

    PetroChina to Drop PDVSA as Partner in Refinery Project

    U.S., China Take the Lead in Race for Artificial Intelligence: U.N.

    Friendly Fed Fires World Stocks to Best January on Record

    The Hot Topic in Markets Right Now: ‘Quantitative Tightening’

    Deutsche Bank Sees Merger by Mid-Year If All Else Fails

    Foxconn Reconsidering Plans for a Wisconsin Factory Heralded by Trump

    Tesla’s Incredible Shrinking Growth Machine

    Releasing Earnings, Microsoft Stays In Stride With Cloud Powering the Way

    CEO Made $357 Million From Small Businesses, $3.50 at a Time

    Inside the Takedown That Put Carlos Ghosn in Jail

    Howard Lindzon: Niche Niche Niche is The New Location Location Location

    Jeff Miller: Knowing When to Walk Away

    Michael Batnick: The Single Greatest Error, I Guess I’m Bearish Now, Adverse Variance

    Be sure to follow me on Twitter.

  • Today’s Fed Policy Statement
    , January 30th, 2019 at 2:55 pm

    Here’s the statement:

    Information received since the Federal Open Market Committee met in December indicates that the labor market has continued to strengthen and that economic activity has been rising at a solid rate. Job gains have been strong, on average, in recent months, and the unemployment rate has remained low. Household spending has continued to grow strongly, while growth of business fixed investment has moderated from its rapid pace earlier last year. On a 12-month basis, both overall inflation and inflation for items other than food and energy remain near 2 percent. Although market-based measures of inflation compensation have moved lower in recent months, survey-based measures of longer-term inflation expectations are little changed.

    Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability. In support of these goals, the Committee decided to maintain the target range for the federal funds rate at 2-1/4 to 2-1/2 percent. The Committee continues to view sustained expansion of economic activity, strong labor market conditions, and inflation near the Committee’s symmetric 2 percent objective as the most likely outcomes. In light of global economic and financial developments and muted inflation pressures, the Committee will be patient as it determines what future adjustments to the target range for the federal funds rate may be appropriate to support these outcomes.

    In determining the timing and size of future adjustments to the target range for the federal funds rate, the Committee will assess realized and expected economic conditions relative to its maximum employment objective and its symmetric 2 percent inflation objective. This assessment will take into account a wide range of information, including measures of labor market conditions, indicators of inflation pressures and inflation expectations, and readings on financial and international developments.

    Voting for the FOMC monetary policy action were: Jerome H. Powell, Chairman; John C. Williams, Vice Chairman; Michelle W. Bowman; Lael Brainard; James Bullard; Richard H. Clarida; Charles L. Evans; Esther L. George; Randal K. Quarles; and Eric S. Rosengren.

  • Stryker Soars on Earnings News
    , January 30th, 2019 at 1:02 pm

    Shares of Stryker (SYK) are doing very well today. At one point, SYK was up over 12% from yesterday’s close. Check Point (CHKP) is down a little bit after its earnings report.

    Two other items to note.

    The ADP payroll report came in at 213,000. That’s a good number but it’s not always a reliable indicator of the official government report which is due out on Friday.

    Ross Stores (ROST) is set to become a dividend aristocrat. That’s a stock with 25 straight years of dividend growth. The other four that are soon to make it are Albemarle (ALB), Essex Property Trust (ESS), Expeditors International of Washington (EXPD) and Realty Income (O).

  • Check Point Software Earns $1.68 per Share
    , January 30th, 2019 at 7:20 am

    Check Point Software (CHKP) reported Q4 earnings of $1.68 per share. That’s an increase of 6% and it beat Wall Street’s estimate by five cents per share. Revenue rose 4% to $526 million. During Q4, CHKP bought 2.8 million shares for $305 million.

    For the year, Check Point earned $5.71 per share. That’s an increase of 7% over 2017. Revenue fell 3% to $1.916 billion.

    “We finished the year with record results. Our revenues were toward the top of our projections and non-GAAP EPS exceeded. Our Security Subscriptions Business continued to increase, driven by cloud, mobile and zero-day advanced threat prevention technologies. We expanded our cloud security offering with the delivery of CloudGuard SaaS solution, and the acquisition of Dome9 and ForceNock,” said Gil Shwed, Founder and CEO of Check Point Software Technologies. “We started 2019 with many new innovations including two new threat prevention optimized security appliances and the new Maestro product line that provides Cloud-type HyperScale technology to reach unprecedented levels of security.” Shwed concluded.

    Over the course of the year, the company bought back 10.3 million shares for $1.104 billion.

  • Morning News: January 30, 2019
    , January 30th, 2019 at 7:09 am

    U.S., China Face Deep Trade, IP Differences in High-Level Talks

    Venezuela Has 20 Tons of Gold Ready to Ship. Address Unknown

    Trump Says the Economy Is Unstoppable. Most Economists Say Otherwise.

    Why Trump’s Tariffs Didn’t Help Create More Steel Jobs

    Apple Relief Boosts Futures Ahead of Fed Decision

    Apple Earnings: The Next IBM

    The Very High Costs of Climate Risk

    A Tesla Stock Bear Turns Gloomier

    Verizon’s Profit Stung by Oath Restructuring

    GameStop Stock Is Plunging After The Company Fails To Find A Buyer

    Where’s Nvidia Going?

    Ghosn Says Nissan Executives Used ‘Plot and Treason’ to Halt Renault Integration

    Nick Maggiulli: One Big Thing

    Ben Carlson: Planning For The Predictable & The Unpredictable

    Roger Nusbaum: Success Is Driven From Behaviors

    Be sure to follow me on Twitter.

  • Stryker Made $2.18 per Share
    , January 29th, 2019 at 4:28 pm

    Stryker (SYK) just reported Q4 earnings of $2.18 per share. That’s an increase of 11.2% and it’s three cents better than expectations. Stryker had given us a range of $2.13 to $2.18 per share, so they’re hitting the top end of that. For the quarter, net sales rose 9.4% to $3.8 billion. Organic sales were up 8.6% and operating margin rose to 27.5%.

    For the year, Stryker made $7.31 per share. That’s an increase of 12.6% of the $6.49 per they made last year.

    “We had an excellent finish to 2018 with the best organic sales growth in a decade, and strong adjusted earnings performance,” said Kevin A. Lobo, Chairman and Chief Executive Officer. “Our multi-year momentum reflects the strength of our diversified model, progress on globalization and outstanding people and culture. We are well positioned to deliver for our customers, employees and shareholders in 2019 and beyond.”

    For Q1, Stryker says it expects earnings to range between $1.80 and $1.85. Wall Street was at $1.84, which I thought might be too high. For the year, Stryker sees earnings between $8 and $8.20 per share. Wall Street was expecting $8.01.

    The shares are up 5% in the after-hours market.