CR Bard Raises Dividend
Posted by Eddy Elfenbein on June 13th, 2012 at 10:26 pm

CR Bard ($BCR) announced that they raised their quarterly dividend from 19 cents to 20 cents per share.

Bard has now raised their dividend every year for the last 40 years. At Wednesday’s closing price, BCR yields 0.80%. They also announced a $500 million share repurchase program (well, “up to” $500 million).

Target Raises Dividend By 20%
Posted by Eddy Elfenbein on June 13th, 2012 at 5:37 pm

The other day I mentioned that I expected Target ($TGT) to soon raise its dividend for the 45th year in a row. The company made the announcement today. Target is raising its quarterly dividend by 20%, going from 30 cents to 36 cents per share.

At today’s closing price, the annual dividend of $1.44 per share works out to 2.48%. If you bought shares of Target 30 years ago, you’re now yielding almost 100% a year on your initial investment.

Right now, Target is a good stock but not a great value. I’m highlighting it to show you how well stocks can perform over the long haul.

Is This the New Trading Range?
Posted by Eddy Elfenbein on June 13th, 2012 at 12:06 pm

The S&P 500 may have entered a new trading range. The index seems locked in the upside by its 50-day moving average, and on its lowside by its 200-DMA.

We tested the low-end once but that didn’t last long. Something will have to give because the 50- and 200-DMAs are quickly coming together.

Is Zynga a Buy?
Posted by Eddy Elfenbein on June 13th, 2012 at 10:09 am

No. But it’s no longer overly expensive either.

Eric Savitz notes that some analysts are starting to pound the tables for Zynga (ZNGA). For example, Richard Greenfield at BTIG writes:

In recent weeks, Zynga has been trading as if it is going out of business, despite the fact that the company is free cash flow positive and has net cash of over $2/share. Investors simply do not believe Zynga online gaming is a sustainable business, especially Facebook-based gaming, which is now hated by investors. We estimate Zynga is currently trading at 6.7x current year EV/EBITDA and 4.4x our estimated 2013 EBITDA, with a 2013 free cash flow multiple of just over 9x and just over 5x excluding cash on hand (2012 FCF is burdened by acquiring Zynga’s office building, a one-time hit to cap/ex).

The World’s Simplest Stock Value Tool puts ZNGA at $7.09. The stock is currently at $5.17. That’s a 27% discount but given that it’s still so new, I’d want to see a larger discount.

Stocks Decline on Poor Retail Sales
Posted by Eddy Elfenbein on June 13th, 2012 at 9:46 am

This morning, the government reported that retail sales fell by 0.2% last month. This is the second 0.2% monthly decline in a row.

Let’s remember that retail sales means total dollars, not number of things bought. Since inflation remains low and gas prices are falling, that tends to distort how much actual consumer activity is out there. The government also reported that wholesale prices dropped by 1% in May. That’s the biggest fall in three years.

If we knock out auto sales from the retail sales report, then sales dropped by 0.4% last month. Of the Big Three, only Ford ($F), a member of our Buy List, beat sales expectations for May. Lower gas prices are probably aiding sales at lower-end stores like Walmart ($WMT) and Target ($TGT). Next week, we’ll find out how well business is going at Bed Bath & Beyond ($BBBY) when they report earnings.

The stock market is lower at the open. One stock that’s doing well is Johnson & Johnson ($JNJ). Jeffrey Holford, an analyst at Jefferies, raised the stock to buy from hold. He raised his target price from $68 to $72.

Morning News: June 13, 2012
Posted by Eddy Elfenbein on June 13th, 2012 at 7:05 am

Bailout in Spain Leaves Taxpayers Liable for the Cost

Rajoy Declares War On Central Bankers To Counter Crunch

Euro Strength Seen By Stiglitz Removing Greek Debt

Greek Bank Deposit Outflows Said To Rise Before Elections

Monti Calls on European Leaders to Emphasize Growth

German Sale Underscores Bund’s Safe-Haven Appeal

Iran’s Oil Exports Plummet As Sanctions Bite, Agency Says

China Government Adviser Predicts Second-Quarter Growth Below 7%

ING Bank to Pay $619 Million to Settle Inquiry Into Sanctions Violations

Dell Rises On Start Of 8-Cent-A-Share Quarterly Dividend

Facebook Combats Criticism Over Ads

Yahoo!, US Cable Station Team Up For Finance News

Zynga Shares Dive As Facebook Game Craze Wanes

Frito-Lay Takes New Tack on Snacks

Jeff Carter: Breakfast Links

Roger Nusbaum: European S&%# Storm

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Oil Versus Stocks
Posted by Eddy Elfenbein on June 12th, 2012 at 1:00 pm

It’s still too early to say if this is a trend, but for the first time in four years, stocks and oil are headed in different directions:

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Despite Europe, We’re Holding On
Posted by Eddy Elfenbein on June 12th, 2012 at 11:52 am

After the market’s late-day sell-off from yesterday, we’re holding on to some early gains. Today’s rally is being led by energy and materials stocks. I see that Boeing ($BA) is up by more than 3%. I think we’re going to see more investors shift to high-yielding stocks. Altria ($MO), for example, is at a 52-week high this morning.

On our Buy List, Bed Bath & Beyond ($BBBY) is back over $71 per share after a brief dip below $70. Oracle ($ORCL) is right at $27 even. I think we’ll see in a rally in ORCL after the earnings report comes out next week.

The bond market continues to give Spain its worst beat-down since the Spanish Armada. Yields on Spanish bonds jumped over 6.8% today. That’s the highest since the advent of the euro and it’s 537 bips over German bonds. This is a strong signal from the market that what the authorities just did wasn’t big enough. Now folks are worried about Italy. The spread between Italian and German bond yields is 482 points.

Two quick points: One of our former Buy List stocks, FactSet Data Research ($FDS) came out with decent earnings today. As much as I like this company, the shares are WAY too expensive. I wish it were cheaper but until it is, I’m staying far away.

One compelling stock is Seagate Technologies ($STX). David Einhorn disclosed that he’s got a big stake in this stock. Einhorn is always someone worth paying attention to. The numbers and dividend yield at Seagate look very good.

Morning News: June 12, 2012
Posted by Eddy Elfenbein on June 12th, 2012 at 5:42 am

Goirigolzarri’s Aid Demand Helped Push Spain to Bailout

Cyprus Explores a Limited Bailout

Spanish Aid To Offer CDS Fleeting Respite

Pulling Plug on Greece Sells in German Town Opposing Merkel Plan

China Oil Imports To Top May Record On Low Prices, Stockpiling

China Could Impound European Planes In Carbon Row

IMF: Yen Is Overvalued; Yen Falls on Remarks

In a Time to Shine, India Can’t Get Off the Ground

UAE Amends Stock Ownership Rules In Transparency Move

Crude Ends Lower, Hits New 2012 Low As Rally Fades

Average U.S. Family’s Wealth Plunged 40% In Recession, Fed Says

How the SEC Could Pursue A Case Against JPMorgan

Apple Takes On Google With Own Maps, Better Siri

Buffett Pounces in Private-Jet Slump With $9.6 Billion

Nobel Prize Amounts to Be Reduced

Financial Astrologer Charts Stock Market’s Course

Credit Writedowns: Will Globalization Go Bankrupt?

Howard Lindzon: Mood Over Math…How to Profit In a Connected World

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Some Retail Stocks Are Heating Up
Posted by Eddy Elfenbein on June 11th, 2012 at 2:50 pm

Even though the stock market hasn’t been doing well lately, a number of retail stocks have bucked the trend. Target ($TGT), for example, just hit a new 52-week high today, and it’s not far from an all-time high. I expect Tar-Zhay to announce its 45th-straight dividend increase any day now. Last month, the company said it’s aiming to have its dividend at $3 per share by 2017. That’s pretty optimistic, but I like to see folks who have big plans.

Walmart ($WMT) has also been doing well. On Friday, the Behemoth of Bentonville broke $68 per share for the first time since January 2000.

Ross Stores ($ROST) hit a new all-time high today. The stock has practically been in a nonstop bull market for 18 years. In January 1994, shares of ROST were going for 74 cents. Now they’re at $64. That’s an annualized gain of over 27% a year, and it doesn’t include the dividend.

On our Buy List, Bed Bath & Beyond ($BBBY) has pulled back from its all-time high of $74.67 (reached on May 29th). The company had an outstanding earnings report in early April. They beat Wall Street’s consensus by 15 cents per share. What’s interesting, though, is that the stock market took a while to react. After a small bump up after the earnings report, it was almost all gone three weeks later. Then the stock started to rally.

BBBY will report earnings again on June 20th. The company sees fiscal Q1 earnings ranging between 79 cents and 83 cents per share.