• Stocks Surge as Bonds Fade
    Posted by on March 21st, 2012 at 2:17 pm

    Here’s another graphic which shows investors newly-found appetite for risk. The black line is the S&P 500 while the yellow line is the long-term bond ETF ($TLT).

  • Wright Express Hits 52-Week High
    Posted by on March 21st, 2012 at 11:25 am

    S&P said that it’s adding Wright Express ($WXS) to its S&P Mid-Cap 400 Index. The stock will be leaving the S&P Small-Cap 600 Index.

    The news helped propel shares of WXS up to as high as $65.64 today. We already have a 20% YTD gain here. Wright has beaten earnings pretty handily for the last several quarters. I’m looking forward to another strong earnings report in a month.

  • Discussion of Oracle’s Earnings
    Posted by on March 21st, 2012 at 9:27 am

  • Morning News: March 21, 2012
    Posted by on March 21st, 2012 at 5:45 am

    Italian Group Generali Targets $6.6 Billion Operating Profit

    China Quietly Relaxes Controls on Foreign Capital

    Sinopec Targets 31% of China’s 2015 Shale Gas Output, China Daily Says

    Australian Shares Drop As China Concern Reverberates

    U.S. Exempts Japan, 10 EU Nations From Iran Oil Sanctions

    Dubai Villa Sales Surge as Bank Lending Gains

    Bernanke Says Europe Must Aid Banks Even as Strains Ease

    Amazon Wrings Profit From Fulfillment as Spending Soars

    Oracle 3Q Profit Climbs 18% On Growth From New Licenses

    HP to Merge Printer, PC Arms in Revamp

    Generic Drugs Prove Resistant to Damage Suits

    Volkswagen Mans Up With Bug Leaving Women Behind in Sales

    Remember Datsun? It’s Coming Back From The Scrap Heap

    Viterra Deal Gives Glencore Influence in Global Wheat Trade

    Epicurean Dealmaker: Three’s a Crowd

    Roger Nusbaum: The Apple Party Continues

    Be sure to follow me on Twitter.

  • Oracle’s Q4 Guidance
    Posted by on March 21st, 2012 at 1:10 am

    This is from today’s earnings call:

    So here goes with the guidance. New software license revenue growth is expected to range from 1% up to 11% up in constant currency. Subtracting the 3 points, you get to negative 2% to 8% in U.S. dollars currently. Now the Hardware business has not turned out to be very seasonal, in fact. So I’m going to give my guidance really sequentially. And what we’re seeing for next quarter is hardware revenues a little more — basically, the low end of my range would be somewhere about where it is this past quarter, Q3, to potentially as much as $100 million to $110 million above where we closed this past quarter. That would be somewhere between I guess $870 million, let’s say, to as high as $980 million.

    So total revenue growth on a non-GAAP basis is expected to range from 1% to 5% in constant currency, subtracting the 3 points, it would be negative 2% to 2% in U.S. dollars. On a GAAP basis, we expect total revenue growth from 1% — sorry about that. Non-GAAP EPS is expected — oh, excuse me. On a GAAP basis, we expect total revenue growth basically in the same range as non-GAAP. Non-GAAP EPS is expected to be somewhere between $0.78 and $0.83 in constant currency. That would be up from $0.75 last year or $0.76 to $0.81 in reported dollars. GAAP EPS is expected to be $0.65 to $0.70 in constant currency. That would be up from $0.62 last year, and $0.62 to $0.67 in U.S. dollars. This guidance assumes a GAAP tax rate of 25% and a non-GAAP rate of 24.5%. That would be up from a little over 23%, I think, last year.

  • Professor Bernanke
    Posted by on March 20th, 2012 at 6:55 pm

    Here’s Ben Bernanke’s college lecture given today at George Washington titled: The Federal Reserve and the Financial Crisis.

  • Oracle Earns 62 Cents Per Share
    Posted by on March 20th, 2012 at 4:08 pm

    Nice earnings. The Street was expecting 56 cents per share.

    Oracle Corporation today announced fiscal 2012 Q3 GAAP total revenues were up 3% to $9.0 billion, and non-GAAP total revenues were up 3% to $9.1 billion. Both GAAP and non-GAAP new software license revenues were up 7% to $2.4 billion. Both GAAP and non-GAAP software license updates and product support revenues were up 8% to $4.1 billion. Both GAAP and non-GAAP hardware systems products revenues were down 16% to $869 million. GAAP operating income was up 11% to $3.3 billion, and GAAP operating margin was 37%. Non-GAAP operating income was up 8% to $4.2 billion, and non-GAAP operating margin was 46%. GAAP net income was up 18% to $2.5 billion, while non-GAAP net income was up 13% to $3.1 billion. GAAP earnings per share were $0.49, up 20% compared to last year while non-GAAP earnings per share were up 15% to $0.62. GAAP operating cash flow on a trailing twelve-month basis was $13.5 billion.

    “Oracle is on track to deliver the highest operating margins in our history this year,” said Oracle President and CFO, Safra Catz. “Oracle can achieve these record margins as an integrated hardware and software company because we are focusing on high margin systems where hardware and software are engineered to work together.”

    I was wrong about the quarterly dividend. It’s still at six cents per share. The stock is up 2.8% after hours.

  • The Rising Yield Curve
    Posted by on March 20th, 2012 at 1:29 pm

    Here’s a graph which illustrates the point I’ve been making about the market’s changing mood. Over the last few weeks, Treasury interest rates along the yield curve have been rising. This is a reflection of the market leaving conservative assets in search of riskier ones.

    The increase in rates has been most prominent at the long end of the yield curve. From five years out to 30 years, interest rates have increased by roughly 50 basis points. Rates have climbed especially since March 6th.

  • Donaldson’s Amazing (But Dull) Run
    Posted by on March 20th, 2012 at 11:19 am

    As long-time readers know, I love finding dull stocks that have done extremely well over the years. If you take a step back, it’s kind of amazing that Wall Street focuses so heavily on high-glamour businesses while there are lots of great companies that get almost no attention.

    Just think: How many stocks do you recognize from the Top 10 performers of the last 20 years?

    One such outstanding dull stock is Donaldson ($DCI) who’s in the exciting business of…filtration systems! Check out the graph below. The stock was on my Buy List up through 2009 when I stupidly kicked it off. Over the last 27 years, Donaldson is up 9,700% to the S&P 500’s 695%. That doesn’t include the dividend which has been increased every year since 1996.

    Over the last three years, Donaldson’s earnings-per-share have grown from $1.67 to $2.19 to $2.87. Note the nice steady upward trend. That’s what we like to see.

    Their fiscal year ends in July so we already have two quarters under our belt. Donaldson’s public EPS forecast for this year is $3.25 to $3.45. Using my trusty abacus, I think they should be able to earn $3.40 per share this year and $3.72 per share next year. Give or take. Donaldson’s CEO recently said that their earnings for this fiscal year would constitute the 21st record year in the last 23 years.

    As much as I like Donaldson, the shares seem very pricey here. Of course, that’s what I thought in late 2009 when I decided to take it off the Buy List.

    One final note: Donaldson’s stock will split 2-for-1 next week.

  • Happy Birthday Vera Lynn
    Posted by on March 20th, 2012 at 8:17 am

    95 years old