Fiserv Earned $1.00 per Share for Q4
Posted by Eddy Elfenbein on February 2nd, 2016 at 4:10 pm

Fiserv (FISV) just reported Q4 earnings of $1.00 per share. That matches Wall Street’s estimate. Previously, the company had told us to expect Q4 earnings to range between 98 cents and $1.01 per share.

For the year, Fiserv made $3.87 per share which is a 15% increase over the $3.37 in 2014. This is Fiserv’s 30th year in a row of double-digit EPS growth.

“We delivered solid results in 2015 including internal revenue growth within our long-term outlook and our 30th consecutive year of double-digit adjusted earnings per share growth,“ said Jeffery Yabuki, President and Chief Executive Officer of Fiserv. “The organization generated record financial performance while delivering value for clients, associates and shareholders.”

For our Buy List, this is our first earnings “non-beat” all season. Until now, all nine reports were beats.

For 2016, Fiserv expects earnings to range between $4.32 and $4.44 per share. That’s an increase of 12% to 15% over the results from 2015. Wall Street had been expecting $4.33 per share.

Ford’s Sales Slipped Last Month
Posted by Eddy Elfenbein on February 2nd, 2016 at 2:25 pm

From USA Today:

Ford Motor’s U.S. sales fell 2.6% in January, compared to a year earlier, as auto industry sales leveled off in a month affected by a mighty storm in the Northeast.

Edmunds.com analysts had projected a 2.4% decline in sales for Ford and a 0.5% decline for the industry.

Following a record year for the industry, a brutal winter storm took a toll on sales in the Northeast in January, though analysts say the effect wasn’t particularly steep.

Ford enjoyed a 4.5% increase in average transaction prices, compared to a year earlier, to $34,504, according to Kelley Blue Book.

The company said its sales decrease was partially attributable to a strong January 2015.

The shares are down to $11.48 today.

Morning News: February 2, 2016
Posted by Eddy Elfenbein on February 2nd, 2016 at 7:15 am

Eurozone Unemployment Edges Down for 15th Month Running

A New Global Oil Deal Could Draw Lessons From 1998

Currency Traders Struggle to Parlay Bad Volatility Into Profit

China’s Latest Measure Against Outflows Caps Insurance Purchases

Alphabet Passes Apple as World’s Most Valuable Company With Google’s Help

BP Cites Low Oil Prices in $3.3 Billion Loss, as Industry Toll Mounts

Yahoo’s Marissa Mayer to Unveil Cost-Cutting Plan

OSI Defies China Court Verdict as Frustrations Grow Over System

Abbott to Acquire Alere, a Maker of Medical Diagnostics Tests

G.E. to Phase Out CFL Bulbs

Oh No Mario: Nintendo Profit Dives as Buyers Await Mobile Games

Affordable Care Act Is Dark Spot For Aetna

Einhorn Under Pressure as Greenlight Shrinks by $3.2 Billion

Roger Nusbaum: January Finishes On An Up Note

Cullen Roche: What Financial News Sources Should You Read?

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AFLAC Earned $1.56 per Share for Q4
Posted by Eddy Elfenbein on February 1st, 2016 at 4:27 pm

AFLAC (AFL) just reported Q4 operating earnings of $1.56 per share. That beat estimates by nine cents per share. The weak yen knocked off five cents per share which is far less damage than it’s done in recent quarters.

For the year, AFLAC earned $6.16 per share in operating earnings. That matched exactly what they made in 2014. However, the weak yen knocked off 46 cents per share from the 2015 number.

In currency neutral terms, AFLAC grew its operating EPS by 7.5% last year. The original guidance was for 2% to 7%. In July, they raised it to 4% to 7%.

AFLAC’s guidance for 2016 is the same as it was before:

“As we look to 2016, our guidance remains unchanged since our December outlook call. Our objective is to produce stable operating earnings per diluted share of $6.17 to $6.41, assuming the average exchange rate in 2015 of 120.99 yen to the dollar. I would remind you that with volatile financial markets and interest rates at significantly depressed levels, it is difficult to safely invest cash flows at attractive yields. Additionally, 2016 benefit ratios in both the U.S. and Japan anticipate continued favorable experience. As always, we are working very hard to achieve our earnings-per-share objective while also ensuring we deliver on our promise to policyholders.”

Tobacco Stocks Continue to Rally
Posted by Eddy Elfenbein on February 1st, 2016 at 10:43 am

I noticed that Philip Morris, Reynolds American and Altria are all at new highs today. Here’s a look at how tobacco stocks as a whole have performed over the last 16 years.

That’s a 1,000% gain for the sector. Tobacco has done so well that the S&P 500 looks like a flat line in comparison. If anything, that chart understates tobacco’s gain because it doesn’t include dividends.

Investors need to understand that tobacco is a classic defensive sector. That means it does well when the economy doesn’t. People cut back on big ticket items when the economy is soft, but they generally don’t cut buying cigarettes.

Maybe No Rate Hike this Year
Posted by Eddy Elfenbein on February 1st, 2016 at 10:23 am

One of the more dramatic changes of the past few weeks has been the market’s abrupt change in its outlook for interest rates. Not that long ago, Wall Street thought the Fed would raise rates a few times this year, perhaps as many as four — that’s what the Fed has said.

The futures market, however, sees a different story. Here are the odds the Fed will raise rates over the next few months.

March 17.4%
April 23.1%
June 34.7%
July 37.8%
September 41.5%
November 43.9%
December 52.6%
February 57.4%

Meaning, it’s not a likely event until very late in the year. In fact, it’s quite possible that the Fed won’t touch rates all year.

Stryker is Buying Sage Products
Posted by Eddy Elfenbein on February 1st, 2016 at 10:10 am

Big news today from Stryker (SYK). The company announced that it’s buying Sage Products for $2.775 billion. Sage is currently owned by Madison Dearborn Partners, a private equity firm.

According to Stryker, “The transaction includes an anticipated future tax benefit which is expected to exceed $500 million and to positively impact cash flows over approximately 15 years.”

Stryker said they hope the deal will close during Q2. They’re also raising their full-year guidance by five cents at both ends. The new range is $5.55 to $5.75 per share.

“The company`s established leadership team and innovative products that help prevent hospital acquired conditions have driven consistent double-digit sales growth,” stated Kevin A. Lobo, Chairman and Chief Executive Officer. “This acquisition aligns with Stryker`s focus on offering products and services that support a mindset of prevention, specifically in the area of “Never Events” such as hospital acquired infections. Today, through our Medical division, Stryker offers products that are complementary to those produced by Sage. Sage has a 45-year history of focus on patients and caregivers that is evident in their culture and fits well with our Medical division. This business will also provide a consistent disposable revenue stream that will complement our capital equipment offerings. We look forward to welcoming the Sage team to Stryker.”

Last week, Stryker reported Q4 earnings that topped consensus by one penny per share.

Morning News: February 1, 2016
Posted by Eddy Elfenbein on February 1st, 2016 at 6:56 am

Euro Rises as ECB Officials Warn About Expecting Too Much Easing

Domestic Demand Offsets Exports to Keep U.K. Factories Afloat

Oil Rally Falters on Signs of Slowing China as OPEC Output Rises

How Saudi Arabia Successfully Defended Its U.S. Oil Market Share

“State-of-the-Art” Subterfuge: How Iran Kept Flying Under Sanctions

What to Expect From Google’s Parent Alphabet Today

Aetna Tops Street 4Q Forecasts

CDC Expected to Declare End to Chipotle E. Coli Outbreak, Sources Say

Caterpillar Revises Down Its 2016 Outlook

Almond Prices Drop Significantly For California Growers

As Zika Virus Spreads, Tata Gets Ready For The India Launch Of Its Hatchback Zica

Nokia Drops as Samsung Patent Ruling Disappoints Investors

China Company Accused of Fleecing Investors of $7.6 Billion

Howard Lindzon: What Does Fear Look Like in 2016 Financial Markets?

Jeff Miller: Is The Correction Over?

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The Final Chicago College All-Star Game
Posted by Eddy Elfenbein on January 30th, 2016 at 10:25 pm

Here’s a crazy video from the 1970s. For many decades, there was a preseason football game between a team of college all-stars and the previous year’s Super Bowl winner. At one point, the game was competitive and very popular, but over time, the pros began to dominate.

The final game came in 1976 when the Pittsburgh Steelers were easily beating the college all-stars. Later in the third quarter, Soldier Field was hit with massive rain. It quickly escalated into something biblical. This is where the video truly gets crazy. The players leave the field and fans storm on. It’s absolute mayhem. The drenched fans are running and sliding on the field. They even tear down goalposts.

The unfinished game was canceled and that was that—it was the final Chicago College All-Star Game.

Best Stock of the Last 30 Years
Posted by Eddy Elfenbein on January 29th, 2016 at 1:53 pm

I often talk about how boring and overlooked stocks can be great investments. At the WSJ, Jason Zweig gives us the name of the best-performing stock of the last 30 years. Not surprisingly, it’s a fairly dull stock.

The best-performing U.S. stock over the past 30 years isn’t a household name like Costco Wholesale Corp. or Johnson & Johnson. It’s Balchem Corp., up 107,099% since the end of 1985, according to FactSet Research Systems.

You’d never heard of Balchem? Me either; stocks don’t come much more obscure than this. Based in Wawayanda, N.Y. (population 7,266), about 70 miles northwest of New York City, Balchem makes flavorings, fumigating gases and nutritional additives for animal feed. Its total stock market value is about $1.7 billion.

Since the end of 1985, Balchem has gained an average of 26.2% annually, compared with 10.3% for the S&P 500 and 15.7% for Warren Buffett’s Berkshire Hathaway Inc.

So you would think there would be tons of interest in Balchem. Not at all. Zweig notes that Balchem didn’t attract a single major institutional holder until 1999. That was after it returned an average of 21.3% for the previous decade.