• Turner Puts Other ‘Edgy’ Marketing Plans on Hold
    Posted by on February 1st, 2007 at 8:28 pm

    Scott Ott is on the case:

    A day after a Turner Broadcasting guerrilla marketing campaign for an adult cartoon put Boston on full terror alert, the company said it would reconsider other “edgy” marketing plans it was about to launch.
    Turner had placed dozens of battery-operated light boards displaying an obscene gesture throughout each of the 10 major U.S. cities. A series of Boston bomb scares sparked by the devices forced authorities to shut down roads, bridges and a section of the Charles River yesterday.
    An unnamed spokesman for Turner said the company would now review plans for the following guerrilla marketing campaigns designed to “generate buzz” about the cartoon.

    Read more…

  • 2006 Personal Savings Fall to 74-Yr. Low
    Posted by on February 1st, 2007 at 4:06 pm

    From the AP:

    People once again spent everything they made and then some last year, pushing the personal savings rate to the lowest level since the Great Depression more than seven decades ago.
    The Commerce Department reported Thursday that the savings rate for all of 2006 was a negative 1 percent, meaning that not only did people spend all the money they earned but they also dipped into savings or increased borrowing to finance purchases. The 2006 figure was lower than a negative 0.4 percent in 2005 and was the poorest showing since a negative 1.5 percent savings rate in 1933 during the Depression.

    On the bright side, 1933 was a great time to buy.

  • Chicken Vs. Pork
    Posted by on February 1st, 2007 at 12:21 pm

    Over the last 30 years, Tyson Foods (TSN) is up 24,000% while Smithfield Foods (SFD) is up by 33,000%.
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    The two stocks have done so well that the S&P 500 (the gold line) looks flat, even though it’s up more than 1,300%.

  • Exxon Mobil’s Earnings
    Posted by on February 1st, 2007 at 11:21 am

    For 2006, Exxon Mobil (XOM) earned $39.5 billion. That’s an astounding number.
    To put that in perspective, the GDP of the United States for last year was $13.25 trillion. About 27% of XOM’s profits, or $10.8 billion, came from the U.S. So that means that one company makes up nearly 0.1% of the national economy.

  • American Standard to Split Itself Into Three
    Posted by on February 1st, 2007 at 10:31 am

    One of the companies I like to follow is American Standard (ASD). Most people assume that this is a toilet stock. By that, I don’t mean the shares are in the toilet, but that the company literally makes toilets. Actually, both assumptions are incorrect. The company’s main business is Trane air conditioning, and the stock has done very well.
    The company has a rather interesting history. American Standard first went public in 1929, which was a good time to be selling shares. In 1968, the company bought WEBCO, which was the Westinghouse Air Brake Company. George Westinghouse’s air brake revolutionized rail travel. When Westinghouse died in 1914, the New York Times wrote that his invention saved more lives than all wars combined.
    By 1988, American Standard was threatened with a hostile takeover, so the management decided to take the company private through an LBO. In 1995, American Standard returned to the markets when it IPO’d at $20 a share. The stock reached an all-time high yesterday of $49.47, and that includes a 3-for-1 split. So ASD’s shares are up about 650% in 12 years.
    Now for the good news. Today the company announced fourth-quarter earnings of 51 cents a share, and it guided higher for 2007. Now for the really good news—the company will split itself up into three parts. Please take note. Whenever a successful company splits itself up, you can often find outstanding buys. Check out Moody’s stock since it was spun off from Dun & Bradstreet. Or Corporate Executive Board since it was spun off from the Advisory Board Company.
    American Standard will sell off its struggling kitchen and bath unit (the toilets), which accounts for about 21% of sales. The WEBCO unit (about 18% of sales), which is now vehicle control, will be spun off to shareholder. ASD shareholders will get one share of WEBCO for every three shares of ASD they own. Lastly, the core air-conditioning business (61% of sales) will change its name to Trane.
    The stock is up to $53 this morning.

  • SEI Investments’ Earnings
    Posted by on February 1st, 2007 at 9:28 am

    SEI Investments (SEIC) was our top-performing stock from last year. The company just reported another quarter of solid results. For the last three months of 2006, SEIC earned 62 cents a share. This was three cents more than estimates. For last year’s fourth quarter, the company earned 50 cents a share. For the year, SEIC earned $2.33 a share compared with $1.83 in 2005.

  • Rollins is Out at Dell
    Posted by on January 31st, 2007 at 5:39 pm

    From Bloomberg:

    Dell Inc. Chairman and founder Michael Dell replaced Kevin Rollins as chief executive officer and said fourth-quarter results will miss analysts’ estimates. The shares rose 4.3 percent.

    My thoughts exactly.

  • The Buy List So Far
    Posted by on January 31st, 2007 at 5:26 pm

    One month down, eleven to go. The Buy List had a great first half of January, followed by a blah second half. For the month, the S&P 500 was up 1.41% while our Buy List was up 1.66%.
    The big winners were Respironics (12.85%), Bed Bath & Beyond (10.73%) and Amphenol (9.09%). Our losers for January were Sysco (-6.01%), Nicholas Financial (-4.24%) and WR Berkley (-4.11%).

  • Fiserv Earns 64 Cents a Share
    Posted by on January 31st, 2007 at 5:00 pm

    Fiserv (FISV) just reported fourth-quarter earnings, after charges, of 64 cents a share. This was in line with expectations. Sales were up 19%.
    For 2006, Fiserv earned $2.53 a share, up from $2.19 in 2005. The company is also forecasting 2007 earnings growth of 13% to 16%, which works out to earnings of $2.86 to $2.94 per share. That means that Fiserv is going for about 18 times forward earnings.
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  • Today’s Fed Statement
    Posted by on January 31st, 2007 at 2:32 pm

    For the fifth meeting in a row, the Federal Reserve does nothing:

    The Federal Open Market Committee decided today to keep its target for the federal funds rate at 5-1/4 percent.
    Recent indicators have suggested somewhat firmer economic growth, and some tentative signs of stabilization have appeared in the housing market. Overall, the economy seems likely to expand at a moderate pace over coming quarters.
    Readings on core inflation have improved modestly in recent months, and inflation pressures seem likely to moderate over time. However, the high level of resource utilization has the potential to sustain inflation pressures.
    The Committee judges that some inflation risks remain. The extent and timing of any additional firming that may be needed to address these risks will depend on the evolution of the outlook for both inflation and economic growth, as implied by incoming information.
    Voting for the FOMC monetary policy action were: Ben S. Bernanke, Chairman; Timothy F. Geithner, Vice Chairman; Susan S. Bies; Thomas M. Hoenig; Donald L. Kohn; Randall S. Kroszner; Cathy E. Minehan; Frederic S. Mishkin; Michael H. Moskow; William Poole; and Kevin M. Warsh.

    This is a very positive statement.
    The “somewhat firmer economic growth” line replaces “has slowed over the course of the year” from December. That’s a big change. Also, the “substantial cooling” of the housing market is gone and has been replaced with “some tentative signs of stabilization.” In the world of Fedspeak, that’s a jump for joy.
    Core inflation has now “improved modestly,” where last month it was “elevated.” With Jeffrey Lacker off the committee, the vote was unanimous.