Chuckles the Clown’s Funeral
Posted by Eddy Elfenbein on January 25th, 2017 at 2:57 pm

Sad news to hear that Mary Tyler Moore has passed away. Here’s my favorite scene from her show:

Dow 20,000 Falls
Posted by Eddy Elfenbein on January 25th, 2017 at 12:01 pm

The Dow first broke 200 on December 19, 1927, and then 2,000 fell on January 8, 1987.

Years ending in 7, I suppose?

Morning News: January 25, 2017
Posted by Eddy Elfenbein on January 25th, 2017 at 6:45 am

ECB’s Lautenschlaeger Seeks Talks Soon on Gradual QE Exit

In Its Third Month, India’s Cash Shortage Begins to Bite

Trump Injects High Risk Into Relations With China

Under Trump, It’s Make a Deal With the President — or Else

Trump Tells Auto CEOs That Environmental Regulations Are ‘Out Of Control’

Cisco to Buy AppDynamics for $3.7 Billion

How Wireless Competition Is Finally Catching Up to Verizon

Novartis Mulls Options Including Spinoff, IPO for Alcon Unit

Apple Downgraded on Over-Hyped ‘iPhone 8’

Retailers Chasing Fast Fashion Stumble Under Heavy Buyout Debts

Alcoa Beats Revenue Estimates, Sees Higher Aluminum Demand

Cohn To Receive Exit Package Of At Least $100 Million From Goldman Sachs

Judge Says Aetna Dropped Out Of Some Obamacare Markets To Help Win Its Merger Fight

Jeff Carter: 10,000 Bitcoins For a Pizza

Josh Brown: The Truth About Trade

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Stryker Earns $1.78 per Share
Posted by Eddy Elfenbein on January 24th, 2017 at 4:27 pm

Stryker (SYK) just reported Q4 earnings of $1.78 per share which beat the Street by two cents per share. Net sales grew 16.2% to $3.2 billion. That’s 16.8% growth in constant currency.

For the year, Stryker earned $5.80 per share. They had previously given us a range of $5.75 to $5.80. Later they said they expected earnings at the top of that range. It turns out, they were right. Net sales for 2016 grew 13.9% to $11.3 billion. In constant currency, that’s growth of 14.3%.

“I am pleased with our performance in both the fourth quarter and the full year 2016,” said Kevin A. Lobo, Chairman and Chief Executive Officer. “Fourth quarter organic sales growth of 6.7% versus a strong prior year is impressive and was balanced across Orthopaedics, MedSurg and Neurotechnology and Spine. In addition, we executed well on acquisitions and delivered leveraged adjusted earnings gains. We enter 2017 with good momentum across our businesses and look forward to building on this success.”

Now let’s look at guidance. For Q1, Stryker expects earnings to range between $1.40 and $1.45 per share. Wall Street had been expecting $1.43 per share. For all of 2017, Stryker sees earnings between $6.35 and $6.45 per share. Wall Street had been expecting $6.39 per share.

The company added that if forex rates hold, then they expect to see earnings dinged by $0.03 to $0.04 in Q1, and $0.10 to $0.12 for the year.

The shares are unchanged after-hours.

Atrion (ATRI)
Posted by Eddy Elfenbein on January 24th, 2017 at 12:39 pm

Here’s the latest in our never-ending series of great companies no one knows about. Please meet Atrion (ATRI).

The company has a grand total of 1.8 million shares outstanding. The current share price is $459 so that gives them a market value of $826 million. On average, ATRI trades about 5,000 shares each day. That’s very low.

From their website, Atrion describe themselves as:

Atrion Corporation is a leading supplier of medical devices and components to niche markets in the health care and medical industry. Atrion’s proprietary products, ranging from cardiovascular and ophthalmology products to fluid delivery devices, are sold to end-users, distributors and other manufacturers worldwide. As a developer and manufacturer of a diverse range of products, Atrion stays on the forefront of technology and manufacturing with products that meet the needs of its targeted markets.

Now for the money shot. Here’s the stock’s history.

The stock rose from just over $4 per share in 1989 to $459 today, and that’s down from a high of $522 a few weeks ago.

The stock has actually been a little more impressive than its price gain indicates because ATRI has often paid a dividend. By my estimate, ATRI has averaged 20% per year since 1990.

Not one analyst follows it.

Eight Alternating Days in a Row
Posted by Eddy Elfenbein on January 24th, 2017 at 9:11 am

Over the last eight days, the S&P 500 has closed up, down, up, down, up, down, up and down.

The up-down streak is actually more impressive than it sounds because the day before it started we had a rare unchanged day. Prior to that, we had a four-day alternating streak.

What this boils down to is that the first two trading days of the year were up. Since then, the market has failed to repeat the direction of the previous day.

Morning News: January 24, 2017
Posted by Eddy Elfenbein on January 24th, 2017 at 6:57 am

Eurozone Economy Slows Despite More Buoyant France

China’s Efforts to Stem Capital Outflows Are Starting to Pay Off

Fed Debate Over $4.5 Trillion Balance Sheet Looms in 2017

Trump’s Move to Dump TPP Bucks Growing Dependency on Asia

Trump to CEOs: Stay Here, And I’ll Wipe Out 75% of Regulations, Fast-Track Factories

The CFPB Is In The Crosshairs, Exactly Where It Belongs

Aetna’s $37 Billion Humana Takeover Blocked by Judge

Yahoo Faces SEC Probe Over Data Breaches

Top Execs of UAE’s Etihad to Quit But Airline Says Committed to Strategy

BT Plunges After Cutting Outlook, Tripling Italy Writedown

Goldman Fights Back in Suit Against Indonesian Businessman

Hoping to Strike Gold Again, Silver Lake Leads Investment in Koubei

U.S. Judge Approves Volkswagen Dealers $1.2 Billion Settlement

Roger Nusbaum: This Indeision’s Bugging Me

Cullen Roche: The Biggest Myths in Investing, Part 1 – The “Investing” Myth

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Winmark Corp. (WINA)
Posted by Eddy Elfenbein on January 23rd, 2017 at 1:56 pm

I’ve recently been looking at a fairly small company called Winmark Corp. (WINA). I’m not recommending it but it’s an interesting company to put on your radar screen.

The company franchises five different types of retail stores: Style Encore, Plato’s Closet, Once Upon a Child, Play It Again Sports and Music Go Round.

While the five stores are different, they share a common theme: they buy and sell slightly-used merchandise. Winmark also provides leasing for its business partners.

Because of the company’s unusual structure, they do about $70 million in sales despite having about 100 full-time employees.

From 2000 to 2016, Winmark was led by John Morgan, who turned the ship around. It’s difficult to describe this company. I suppose it’s like what eBay would be if they had stores.

Here’s a chart since 2009:

Volatility Now Versus the Summer
Posted by Eddy Elfenbein on January 23rd, 2017 at 11:32 am

It’s hard to describe how low the market’s volatility is. Here’s another way to see it. This is the daily changes of the S&P 500 over the last 24 days compared with a 24-day stretch from the middle of last year. I’ve used the same vertical axes.

Here’s last summer:

And this is now:

FLOTUS and AFLAC
Posted by Eddy Elfenbein on January 23rd, 2017 at 11:18 am

Here’s an ad from one of our Buy List stocks featuring the new First Lady of the United States: