Middleby Beats Earnings
Posted by Eddy Elfenbein on May 12th, 2016 at 12:35 pm

I often tell investors that there are many great companies that aren’t well-known on Wall Street. It seems like investors and the financial media are obsessed with a small number of high-profile stocks, while the rest are barely noticed.

A good example is Middleby (MIDD). I’ve written about them before. This is a company has an oustanding track record, yet few investors seem to have heard of them.

So what does Middleby do? I’ll turn it over to them:

The Middleby Corporation is a global leader in the foodservice equipment industry. The company develops, manufactures, markets and services a broad line of equipment used in the commercial foodservice, food processing, and residential kitchen equipment industries.

Exciting, right?

Yesterday, Middleby delivered another solid earnings report. For Q1, they earned 96 cents per share which was 12 cents more than expectations. I should add that that’s not a very broad consensus since only seven analysts follow the stock. The shares are currently up 2.7% today on the good news.

The stock has done so well that the S&P 500 looks like a flat line in comparison.

Morning News: May 12, 2016
Posted by Eddy Elfenbein on May 12th, 2016 at 7:05 am

Hope, Fear and Brexit

Global Oil Glut to Shrink Despite Iranian Output Surge, IEA Says

Canada Fire Deals Staggering Blow to Oil Sands Industry and Economy

Wall Street’s Dealmaking Goes From Boom to Bust in a Few Months

U.S. Posts $106 Billion Budget Surplus in April

Fintech Needs to Expand the Club

Pentagon Turns to Silicon Valley for Edge in Artificial Intelligence

The First Public Hyperloop Test: Dazzling And Done In Two Seconds

Google Joins the Ranks of the Condescending

Nissan Becomes Largest Shareholder in Scandal-Plagued Mitsubishi

Sharp Names Foxconn Executive as CEO to Spearhead Revival

Macy’s Reignites Retail Worries

Theranos Executive Sunny Balwani to Depart Amid Regulatory Probes

Roger Nusbaum: The Sweet Simplicity of Core & Explore

Jeff Miller: Is the Market Cheap? Three Things You Need to Know About Valuation, But Don’t

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The Long Range
Posted by Eddy Elfenbein on May 11th, 2016 at 5:39 pm

Since August 19, 2014, the S&P 500 has closed within 75 points of 2,050 over 79.3% of the time. That’s nearly 21 months.

Wabtec Raises Dividend by 25%
Posted by Eddy Elfenbein on May 11th, 2016 at 5:31 pm

After the bell, Wabtec (WAB) announced they’re raising their quarterly dividend by 25%.

That’s not as impressive as it sounds. The dividend will rise from eight to 10 cents per share. Last year, WAB raised their div from six to eight cents, a 33% increase.

Raymond T. Betler, Wabtec’s president and chief executive officer, said: “Based on our current financial performance and future outlook, the company has ample financial strength to invest in growth opportunities and to return a greater portion of our cash flow to shareholders. We intend to continue to review our policies periodically based on Wabtec’s ongoing performance and growth prospects.”

Going by today’s close, WAB yields 0.5%.

Have the Tesla Wheels Stopped Turning?
Posted by Eddy Elfenbein on May 11th, 2016 at 9:05 am

In 22 months, Tesla (TSLA) became a ten-bagger. I explain that that’s not normal.

Morning News: May 11, 2016
Posted by Eddy Elfenbein on May 11th, 2016 at 7:11 am

EU Blocks U.K. Hutchison-Telefónica Deal

China’s Anonymous Economic Oracle Signals Shift From Debt

US Takes China To WTO Again Over Chicken Trade: Rightly So

Tax Shift Marks Trump’s Latest Test of Conservative Orthodoxy

‘Contract for Deed’ Lending Gets Federal Scrutiny

Staples-Office Depot Merger Collapses After Block by Judge

Office Depot Falls 34%, Staples Down 15% in Pre-Market Trading

Toyota Struggles to Find That Extra Gear

Don’t Buy Disney…Yet

ABN Amro Victim of Bad Timing as Market Rout Dents Profit

Facebook Debuts Retargeted Ads On Instagram, Tests New Travel Ads

Dean Foods to Buy Friendly’s Ice Cream, Swings to Profit

Macau Plans Oversight, Entry Capital Hike for Gaming Promoters

Josh Brown: Why God Sent Financial Advisors Into the World

Jeff Carter: Some Mountains Are Too Hard To Climb

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Amazon Cracks $700 per Share
Posted by Eddy Elfenbein on May 10th, 2016 at 1:24 pm

Shares of Amazon.com (AMZN) broke $700 today. The stock went public 19 years ago next week at $1.50 per share (adjusted for splits). Bear in mind, that includes one price drop of 95%, plus a much smaller one of just 65%.

Defense Stocks Are Rallying
Posted by Eddy Elfenbein on May 10th, 2016 at 9:57 am

One area of the market that’s clearly in an uptrend is defense/aerospace stocks. Northrop Grumman (NOC) has beaten expectations by more than 20% for the last three quarters in a row. Check out the rise in three major defense stocks:

Morning News: May 10, 2016
Posted by Eddy Elfenbein on May 10th, 2016 at 7:08 am

Ukraine Makes Iffy Progress After Trade Pact With Europe

Dead-of-Night Reversal Puts Brazil Impeachment Back on Track

As Lending Club Stumbles, Its Entire Industry Faces Skepticism

Hedge Funds Faced Choppy Waters in 2015, but Chiefs Cashed In

Emirates Profit Rises 50% on Fuel Windfall, Long-Haul Routes

IBM Watson Brings AI Wonders to Cybersecurity

Gap Inc. Can Go Lower

Lumber Liquidators Posts Worse-Than-Expected Loss as Sales Dip

SBE Entertainment to Acquire Morgans Hotel Group

Nokia Network Sales Weighed Down by Alcatel Integration

Credit Suisse Takes the Pain

ING Profit Falls on Regulatory Costs, Loss at Markets Unit

J.C. Penney Tops Quarterly Profit Goal and Expands Appliance Availability

Roger Nusbaum: Are FOMC Members Losing Hope?

Cullen Roche: The Appropriate Portfolio vs. the Optimal Portfolio

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Low Vol Doesn’t Mean Value
Posted by Eddy Elfenbein on May 9th, 2016 at 9:20 pm

Jason Zweig writes in the WSJ on the allure of Low Vol funds:

At year end, the stocks in the iShares portfolio — among them Newmont Mining, AT&T, McDonald’s Corp. and Johnson & Johnson — traded at an average price of 22.2 times their earnings over the previous 12 months. That was almost identical to the P/E ratio of 21.8 for the U.S. stock market as a whole.

By the end of April, after all that new money had flowed in, the holdings of the iShares fund were at an average P/E of 24.3; the stock market overall was at 22.4. In four months, the fund’s portfolio shot from being only a hair more costly to nearly 10% more expensive than the market average.

It’s true that the academic research has shown that Low Vol portfolios have historically outperformed the market. But some investors have confused Low Vol with Value. There’s a lot of overlap but they’re not the same.

For example, there are many stalwart growth stocks that exhibit low daily volatility, yet their blue chip status accords them lofty valuations.