Earnings from Fiserv, Silgan and Thermo
Posted by Eddy Elfenbein on October 27th, 2021 at 10:41 am

We had three more Buy List earnings reports this morning.

Let’s start with Fiserv (FISV). For Q3, the company earned $1.47 per share. That beat the Street by two cents per share. Fiserv now expects 2021 revenue growth of 11% and EPS between $5.55 and $5.60. That’s an increase of five cents to the lower end.

Fiserv’s new range implies Q4 earnings of $1.54 to $1.59 per share. Wall Street had been expecting $1.58 per share.

Traders aren’t pleased with these results. The stock has been down as much as 10% this morning.

Silgan Holdings (SLGN) reported Q3 earnings of $1.02 per share which was two cents below estimates. Net sales for the third quarter rose 10.9% to $1.65 billion. The increase “was the result of higher net sales in all segments.”

Silgan lowered the upper end of its full-year guidance by five cents per share. The new range is $3.30 to $3.40 per share. That implies Q4 earnings of 69 to 79 cents per share. Wall Street had been expecting 74 cents per share.

Shares of Silgan are up slightly this morning.

Thermo Fisher Scientific (TMO) said it made $5.76 per share for Q3. That easily beat Wall Street’s estimate of $4.67 per share.

Q3 revenue increased by 9% to $9.33 billion. Of that, COVID-19 response revenue was $2.05 billion. Thermo’s adjusted operating margin was 29.8%, compared with 32.9% in the third quarter of 2020.

Thermo is increasing its full-year revenue guidance by $1.2 billion to $37.1 billion. That’s revenue growth of 15%. The company is also raising its EPS guidance by $1.30 to $23.37. That’s growth of 20% over last year.

AFLAC (AFL) will be reporting after today’s close.

Morning News: October 27, 2021
Posted by Eddy Elfenbein on October 27th, 2021 at 7:09 am

Pastries and Persuasion: How a Global Tax Deal Got Done

European Central Bank Expected to Hold Steady as Economy Slows and Inflation Soars

Investors Are Getting Very Greedy Again

Japan Stays Tough on Cannabis as Other Nations Loosen Up

Shiba Inu Surges to Record as Robinhood Petition Passes 300,000

The Surprise Reason Why Tesla & SpaceX Billionaire Elon Musk Supports Dogecoin Over Shiba Inu, Bitcoin And Ethereum

U.S. Demand for Oil Surges, Depleting Tanks in Oklahoma

Fed Faces Showdown as Supply, Demand and ‘Patience’ Collide

Workers Press for Power in Rare Advance for U.S. Labor Movement

Anonymity No More? Age Checks Come to the Web.

Who’s Building Facebook’s Metaverse? Meet CTO Andrew Bosworth

Hertz Teams With Uber, Carvana in Major Shift to Electric Cars

China Covid Spike Wipes $4 Billion Off Hot Pot Firm This Week

The Newest Power Player in Luxury’s First Family

McDonald’s Sales Soar on Higher Prices, Newer Menu Items

Coca-Cola Earnings Top Estimates as Consumers Drink More Beverages Away from Home

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Sherwin-Williams Earns $2.09 per Share
Posted by Eddy Elfenbein on October 26th, 2021 at 10:53 am

This morning, Sherwin-Williams (SHW) reported Q3 earnings of $2.09 per share. That missed Wall Street’s consensus by one penny per share.

Quarterly sales increased 0.5% to $5.15 billion. The company estimated that “raw material availability” hurt sales by a high-single-digit percentage.

“Demand remains strong across our pro architectural and industrial end markets; however, results in the quarter were significantly impacted by ongoing and industry-wide raw material supply chain challenges,” said Chairman, President and Chief Executive Officer, John G. Morikis. “Consolidated net sales increased less than 1%, as raw material availability negatively impacted total sales by a high single digit percentage, of which approximately 75% of the impact was in The Americas Group. The raw material availability challenges combined with higher raw material costs significantly pressured gross margins in the quarter. We continue to implement price increases to offset higher raw material costs across the business and are confident margins will recover as inflation headwinds eventually subside. Despite the near-term margin pressure, cash flow generation remained strong during the quarter, enabling us to invest in long-term strategic growth initiatives, open 19 new stores, announce two acquisitions and purchase 1.675 million shares.

“In The Americas Group, underlying demand in our professional architectural businesses remains robust. We expect delayed projects to be completed as raw material availability improves, and our team is aggressively pursuing additional business. In the Consumer Brands Group, our sales remained down double-digits, driven by difficult comparisons to the prior year, consumers returning to the workplace, raw material availability issues and the divestiture of the Wattyl business. Growth in the Pros Who Paint category in this segment was not enough to offset the lower North America DIY demand and raw material availability challenges. In the Performance Coatings Group, all businesses and regions delivered growth, most by double digit percentages.”

Here’s how the quarter breaks down. Diluted net income was $1.88 per share. There’s another 21 cents per share from an acquisition-related amortization expense. That adds up to $2.09 per share which is down from $2.76 per share for last year’s Q3.

The good news is that Sherwin is standing by its full-year guidance of $8.35 to $8.55 per share.

Morning News: October 26, 2021
Posted by Eddy Elfenbein on October 26th, 2021 at 7:07 am

Central Banks Are Getting Serious About Digital Money

Climate Tech Start-Ups Have Raised a Record $32 Billion Globally So Far in 2021

Rising Prices, Once Seen as Temporary, Threaten Biden’s Agenda

This Year’s Thanksgiving Feast Will Wallop the Wallet

Mr. Market Agrees Inflation Isn’t a Blip: Authers’ Indicators

No End in Sight for Labor Shortages as U.S. Companies Fight High Costs

A Fight Over Biden’s Pick for a Banking Watchdog Gets Nasty

White House to Name Rosenworcel as F.C.C.’s First Female Leader

Facebook’s Algorithms Increasingly in Sights of U.S. Lawmakers

Tesla Value Tops $1 Trillion After Hertz Orders 100,000 Cars

World’s Richest Person Elon Musk Is Now Worth More Than Exxon

Jeff Bezos’ Rocket Company Wants to Build a Space Station

UBS’s U.S. Wealth Management Push Lacks Oomph

Gaming Brand FaZe Clan to Go Public via SPAC Merger with $1 Billion Valuation

Gene Freidman, ‘Taxi King’ Who Upended His Industry, Dies at 50

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Bakkt Holdings Soars 109%
Posted by Eddy Elfenbein on October 25th, 2021 at 1:17 pm

Bakkt is soaring today. From MarketWatch:

Bakkt Holdings…said it was working with Mastercard Inc. to make it easier for merchants, banks and fintechs in the U.S. to use and offer a broad set of cryptocurrency solutions and services.

Bakkt said it was extending Mastercard’s ecosystem of cryptocurrency partners, enabling Crypto-as-a-Service, which provides quick access to cryptocurrency capabilities.

Through Mastercard’s network and Bakkt’s digital asset platform, Mastercard partners will be able to offer cryptocurrency solutions. These include the ability for consumers to buy, sell and hold digital assets through custodial wallets powered by the Bakkt platform and streamlined issuance of branded crypto debit and credit cards.

Mastercard also will integrate crypto into its loyalty solutions, enabling its partners to offer cryptocurrency as rewards and create fungibility between loyalty points and other digital assets.

New Buy List Highs
Posted by Eddy Elfenbein on October 25th, 2021 at 12:26 pm

We have a few new highs on our Buy List today. The list includes FactSet (FDS), Intercontinental Exchange (ICE), Sherwin-Williams (SHW) and Zoetis (ZTS). Also, Broadridge (BR), Hershey (HSY) and Moody’s (MCO) are within 1% of a new high.

Bakkt Soars 50% on Mastercard Deal
Posted by Eddy Elfenbein on October 25th, 2021 at 10:20 am

The stock market is up again this morning and it’s at another new all-time high. There aren’t any Buy List earnings reports today but there are many other stocks reporting. Kimberly-Clark (KMB) missed earnings and the shares are down about 3%.

Bakkt Holdings (BKKT), which is backed by Intercontinental Exchange (ICE) is up 50% this morning. The company announced a partnership with Mastercard.

The Energy Sector ETF (XLE) is up 1.6% today to a new 52 week high. Tesla also reached a new high of $970 per share. I think this is going to be the most important week for corporate earnings.

There aren’t any major economic reports today, but we will get the first report on third quarter GDP on Thursday.

Morning News: October 25, 2021
Posted by Eddy Elfenbein on October 25th, 2021 at 7:08 am

There’s No ‘Supply-Chain Shortage,’ Or Inflation. There’s Just Central Planning

M&A Heads to Record $5 Trillion Year Despite, Well, Everything

The Week in Business: A Consumer Internet Deal

SolarWinds Hackers Continue to Hit Technology Companies, Says Microsoft

Alibaba Has Lost $344 Billion in World’s Biggest Wipeout

The Chinese Companies Polluting the World More Than Entire Nations

Inside the Big Facebook Leak

Facebook, Alarmed by Teen Usage Drop, Left Investors in the Dark

Capitol Hill Drug Pricing Reform Opponents Among the Biggest Beneficiaries of Pharma Funds

Dollars in the Dirt: Big Ag Pays Farmers for Control of their Soil-Bound Carbon

Hertz Orders 100,000 Teslas in Car-Rental Market Shake-Up

Volvo Cars Gives Itself $18 Billion Price Tag as Cuts IPO Size

France Moves to Shield its Book Industry from Amazon

Why Amazon Is in Business with Judge Judy

Burger King Parent Earnings Beat but Labor Challenges Weigh on Sales

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“Don’t settle for measly yields”
Posted by Eddy Elfenbein on October 24th, 2021 at 4:20 pm

MarketWatch has an article on the importance of dividends. They go on to quote yours truly:

The new 10-year screen was inspired by Eddy Elfenbein, who discussed Public Storage PSA, +1.18% in his CWS Market Review on Oct. 19.

“I really like PSA’s dividend,” he wrote, explaining that the annual payout had quadrupled over the past 15 years. “Think of it this way: If you had bought PSA 15 years ago, you’d now be yielding close to 10% based on your original purchase price.”

Fifteen years is a very long time to hold a stock, so this time around we’re looking back 10 years, with a screen similar to the previous five-year list. Here’s the breakdown:

There were 204 stocks in the S&P 500 with dividend yields of at least 2.00% as of the close on Oct. 20, 2011.

Among the 204 stocks, 91 had at least tripled in price (with prices adjusted by FactSet for splits and spinoffs) for 10 years through Oct. 20, 2021. (We had limited our previous five-year dividend-compounders list to companies whose shares had at least doubled in price.)

Among the remaining 91 companies, 49 had achieved 10-year compound annual growth rates (CAGR) for dividends of at least 10%.

MarketWatch then lists 20 stocks from the remaining list for which the dividend yield would be highest based on a buy price from 10 years ago.

The Fed May Cut in June
Posted by Eddy Elfenbein on October 22nd, 2021 at 1:49 pm

The futures market has recently changed its mind about the Federal Reserve. Traders think the first rate hike could come as early as June, which is still eight months away.

Check out this chart:

The blue line is the odds of no rate cut by June. The orange line is the odds of one rate hike by June. Notice how in the last month the conventional wisdom has gone from no chance of a June hike to about 50-50. The green line is the odds of two rate hikes by June.