Slowest Trading Day of the Year
Posted by Eddy Elfenbein on November 27th, 2015 at 12:45 pm

A reminder again that there’s no CWS Market Review today. The stock market is open today but it’s traditionally the slowest trading day of the year. The exchange closes down at 1 pm. The indexes are mildly positive.

Hormel Foods (HRL) is continuing its amazing run. The shares have been as high as $75.20 today. It’s always interesting how the really important part of a stock’s move happens within a few days. Snap-on (SNA) also touched a new 52-week high.

Ball Corp. (BLL) made news this week when it said it plans to sell 11 plants in order to meet EU approval for its Rexam merger.

Morning News: November 27, 2015
Posted by Eddy Elfenbein on November 27th, 2015 at 7:11 am

WTO Talks Stuck Again as Ministers Prepare to Meet, Azevedo Says

Euro-Area Confidence at Four-Year High as ECB Mulls Stimulus

Piketty Says Russia Robbed of Bigger Reserves by Capital Flight

It’s Open Season on China’s Securities Firms as Probes Intensify

Economic Takeaways From Japan’s Inflation, Unemployment Reports

Macau Gambling Industry Faces Challenges on Multiple Fronts

Biggest Oil Buyers Pick Themselves as Winners From OPEC Meeting

Orders for Business Equipment in U.S. Rise More Than Forecast

Everything You Need to Know about Cyber Monday Sales

Online Sales Surge Ahead of Brick-and-Mortar Retailers’ Big Day

Toyota Leads Global Car Sales in October, Outsells VW for Fourth Month

ESPN, Down 7 Million Subscribers in 2 Years, Biggest Loser Among Disney Cable Channels

Brazil Hedge Fund Star Looks Elsewhere for Next Big Bet

South Korea Fines Volkswagen and Orders Recall Over Emissions Scandal

Two-decade Pfizer Mission Pays Off for Guggenheim’s Deal King

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Morning News: November 26, 2015
Posted by Eddy Elfenbein on November 26th, 2015 at 7:09 am

Euro On the Defensive as ECB Easing Bets Grow

Draghi, a Rabbit, the Euro and the Magic Trick Traders Envision

Japan Announces $10.6 Billion in Climate Financing for 2020

Philippines GDP Jumps 6% in Third Quarter

Consumer Spending Rises Less Than Forecast as Americans Save

Black Friday Falters as Consumer Behaviors Change

Barclays Fined for Anti-Money-Laundering Control Failings

Pfizer Didn’t Need an Inversion to Avoid Paying U.S. Taxes

Disney’s ESPN Subscribers Fall Over 3%

Yahoo’s CEO Is Running Out of Time to Turn Things Around

Alibaba in Talks to Buy Hong Kong’s SCMP Newspaper

Tesco Reaches Agreement on $12 Million New York Lawsuit

BTG CEO’s Arrest Triggers Big Question: How Much Cash Will Flee?

Roger Nusbaum: Not Every Holding Should Go Up

Cullen Roche: Covariation Bias and the Bear Market “Genius”

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Hormel Foods to Split 2-for-1
Posted by Eddy Elfenbein on November 25th, 2015 at 9:37 am

Hormel Foods (HRL) to split 2-for-1:

Hormel Foods Corporation (HRL) today announced its Board of Directors has authorized a two-for-one split of the company’s common stock. This would be the 10th stock split in the company’s history.

“For the second time in the last five years, we are excited to announce a proposed two-for-one stock split,” said Jeffrey M. Ettinger, chairman of the board and chief executive officer at Hormel Foods. “This decision acknowledges our track record of providing our shareholders solid long-term returns and demonstrates our confidence that we will continue to grow our sales and earnings in the future. In addition, we anticipate this will also put our stock price in a more attractive trading range for a number of individual investors.”

Once it’s approved, the shares will split early next year.

Morning News: November 25, 2015
Posted by Eddy Elfenbein on November 25th, 2015 at 7:11 am

ECB Warns Asia Risks Rising as Fed Liftoff Tests Stability

Russia Halts Natural Gas Supplies to Ukraine as Payments End

Why Japan’s Negative Yields Are Drawing Record Global Investment

If China Killed Commodity Super Cycle, Fed Is About to Bury It

Thomas Cook Says Earnings Will Withstand Travel Security Concerns

U.S. GDP Growth Raised for Third Quarter

Consumer Confidence in U.S. Economy Down Sharply in November

Investors Should Stay Plugged in for These Power Assets

New UAW Contracts Land Best Terms in Over a Decade

Final Earnings at the Old Hewlett-Packard Fall Short of Expectations

Dream of New Kind of Credit Union Is Extinguished By Bureaucracy

VW Will Stick to 6.7 Billion Euro Provisions Despite Simple Technical Fix

BTG Pactual CEO Esteves Arrested In Brazil’s Graft Probe, Police Say

Jeff Carter: Asset Volatility

Joshua Brown: There Is No Value In Your Portfolio Without These Two Holdings

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Q3 Real GDP Revised to 2.1%
Posted by Eddy Elfenbein on November 24th, 2015 at 10:58 am

Last month, the government said that the economy grew by 1.5% in real terms during the third quarter. Today they bumped that up to 2.1%. Nominal GDP grew by 3.4%.

The WSJ reports:

The third-quarter boost was largely due to a sharp upward revision for private inventories, which still weighed on GDP growth, but not nearly as much as initially estimated.

Rising stockpiles help boost gross domestic product, but they could be a potential drag in the fourth quarter when those inventories are drawn down.

“The key takeaway is that the inventory adjustment that has always been inevitable for the second half of the year is likely to drag out to two, or more, quarters rather than being concentrated primarily in the third quarter,” said Stephen Stanley, chief economist at Amherst Pierpont Securities, in a note to clients. “The movement in inventories basically just shuffles growth between Q3 and Q4.”

Here’s real GDP over the last 10 years.

Hormel Foods Earns 74 Cents per Share
Posted by Eddy Elfenbein on November 24th, 2015 at 9:07 am

Good news for Hormel Foods (HRL). The spam company just reported fiscal Q4 earnings of 74 cents per share. That topped expectations by five cents per share. This is a solid report from Hormel.

“I am proud of the excellent fourth quarter delivered by our team, achieving record earnings for the tenth straight quarter. We reported record bottom line results for the full year, with fiscal 2015 adjusted net earnings up 19 percent over last year and all five segments registering earnings growth,” said Jeffrey M. Ettinger, chairman of the board and chief executive officer.

For the year, Hormel earned $2.64 per share which topped their announced range of $2.57 to $2.63 per share. That’s a 19% increase over last year.

For 2016, Hormel projects a range of $2.85 to $2.95 per share. That’s above Wall Street’s consensus of $2.83 per share.

Best of all, the spam company also raised their quarterly dividend by 16% to 29 cents per share. That comes to $1.16 per share for the year. This is Hormel’s 50th-straight annual dividend increase. Based on yesterday’s close, HRL yields 1.7%.

The stock gapped as high as $71.71 per share which is a new 52-week high. Check out the 25-year chart on Hormel.

Morning News: November 24, 2015
Posted by Eddy Elfenbein on November 24th, 2015 at 7:13 am

German Business Confidence Rises in Sign of Robust Economy

Nestlé Reports on Abuses in Thailand’s Seafood Industry

In Taking Economic War to Islamic State, U.S. Developing New Tools

Oil Advances as Mideast Tensions Rise After Russian Plane Downed

Low Oil, Gas Investment to Have Long-Term Impact on Supply, IEA Chief Says

Bank of America: The ‘Great Divorce’ Between the World’s Two Largest Economies Will Drive Currency and Rates Markets in 2016

Yellen Defends Seven Years of Low Interest Rates in Letter to Nader

Pfizer Weighs Splitting Up New Drug Behemoth

Apple Seems to Launch Apple Pay in China by February

Microsemi to Buy PMC-Sierra In Deal Valued at About $2.5 Billion

Skyworks Scraps Deal for PMC After Microsemi’s Increased Bid

Elliott Confirms Alcoa Stake, Supports Plans to Split Company

Allianz Exiting Coal Stocks on Climate Change, CIO Tells ZDF

Cullen Roche: The Budget Deficit is (Mostly) Endogenous

Roger Nusbaum: Strongest Week of the Year?

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Morning News: November 23, 2015
Posted by Eddy Elfenbein on November 23rd, 2015 at 7:08 am

Masters of the Finance Universe Are Worried About China

Cut Oil Supply or Drop Riyal Peg? Saudis Face ‘Critical’ Choice

Commodities Clobbered as Dollar Bulldozes Higher

Creditors Signal Potential Support for Overhauling Puerto Rico Debt

The Fed’s Inflation Expectations Game

Pfizer, Allergan Agree on Historic Merger Deal

Wal-Mart Pulls Cyber Monday Forward to Sunday, Record Industry Sales Expected

Chrysler Expands Free Tuition Program to Include Employees’ Families

Alibaba’s Jack Ma Said to Be in Discussions to Buy SCMP Stake

Pearson’s Big Paydays Defy the Odds Against Print Media

Petco Nears $4.7 Billion Sale to CVC and Canadian Pension Plan

Avago Secures Unconditional EU Approval For $37 Billion Broadcom Buy

Procter & Gamble: Time for a Split – Barron’s

What’s in a Corporate Turnaround Plan Name?

Jeff Miller: What Are The Best Year-End Investments?

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Investors Revolt at Towers Watson
Posted by Eddy Elfenbein on November 20th, 2015 at 1:27 pm

One of my frustrations with modern finance is the way shareholders have been pushed to the side. The job of the board of directors is to serve their interests but you wouldn’t know that by looking at a lot of deals. That’s why I was glad to see the recent shareholder revolt at Towers Watson (TW).

In June, Willis Group holdings said it would merge with TW. The combined entity would be worth $18 billion. But it was a terrible deal for TW shareholders. When you added up the cash and shares, TW shareholders would actually be getting a 9% discount for their shares. The whole point of a merger is to pay a premium.

Shareholders struck back and this week, they voted down the deal. Good for them. TW has been an impressive company over the past few years. Now Willis and TW have sweetened the deal, but not by much. I hope this new offer gets shot down as well.