It has been a little more than two months since my multi-part series on retailers highlighted the low valuations and negative sentiment on various companies, including department store chain Dillard’s (DDS). In recent weeks the stock has soared, in part due to speculation that a massive short squeeze could be imminent. It looks like we are seeing signs of one right now, as the stock has moved from $48 in May to nearly $77 today. Not only has the recent move narrowed the gap between market prices and intrinsic value, but it also greatly reduces the odds of a management-led buyout in the near-term. When the stock was in the 40’s, a $60...
VIX With An 8 Handle The VIX seems to keep reaching unprecedented levels. I guess it’s fair to say this is expected because the short VIX trade has been very popular as traders feel it’s a way to mint free money. Personally, I think it’s better to sell some of your stocks instead of buying the VIX for protection. When you sell stocks, you get to choose which stock you think is the least undervalued. Buying the VIX is a lazy way of buying protection. One issue obviously is paying capital gains taxes, but you can take that into account when deciding what to sell. Selling a small portion of a position to avoid taking too much risk shouldn...
It seems impossible to mention the words ‘blue chip’, without also mentioning Altria Group (MO). It has a strong business model, and pays one of the most rock-solid dividends in the entire stock market. Technically, Altria is not a Dividend Aristocrat. The Aristocrats are a group of 51 stocks in the S&P 500 Index, with 25+ years of consecutive dividend increases. You can see all 51 Dividend Aristocrats here. But this is only because Altria’s various spin-offs over the years have masked its dividend history. Instead, Altria is a Dividend Achiever, which have raised dividends for 10+ years in a row. You can see all 265 Dividend Achi...
Well, it would be virtually impossible to come up with a better clip than this one to sum up today’s action in the US: As detailed here earlier, JPMorgan’s own Marko Kolanovic, known affectionately as “Gandalf” appears to have triggered a rather abrupt turn in sentiment at 12:30 EST when his latest note began circulating among traders. “I come back to you now”… “Volatility near or at record lows by a handful of measures should give pause to equity managers,” Kolanovic warned, before cautioning on the pernicious feedback loop embedded in markets courtesy of the interplay between short vol. vehicles and systematic strats th...
Plano, TX-based Dr Pepper Snapple Group Inc. (DPS – Free Report) recently reported second-quarter 2017 results, with earnings missing the Zacks Consensus Estimate and revenues beating the same. Earnings & Revenues Second-quarter adjusted earnings per share of $1.25 missed the Zacks Consensus Estimate of $1.28 by 2.3%. Earnings were flat on a year-over-year basis. Dr Pepper Snapple’s net sales of $1.8 billion surpassed the Zacks Consensus Estimate of $1.77 billion by 1.7%. Net sales rose 6% year over year driven by solid volume growth. Volume Details Dr Pepper Snapple’s sales volume is measured in two ways: 1) sales volume an...
Intel (INTC) 2Q 17 earnings and First Solar (FSLR) 2Q 17 earnings were released after closing bell tonight. Intel reported non-GAAP earnings of 72 cents per share on $14.8 billion in revenue, while analysts had expected non-GAAP earnings of 68 cents per share on $14.4 billion in revenue. In last year’s second quarter, the chip maker reported 59 cents per share on $13.5 billion in sales. First Solar posted non-GAAP earnings of 64 cents per share on $623 million in net sales, compared to the consensus estimates of 1 cent per share in losses and $556.4 million in revenue. Management had guided for a breakeven quarter, so clearly Wall Stree...
July auto sales based on mid-month totals look grim despite record incentives. Industry analysts J.D Power and LMC estimate U.S. July auto sales down 5 percent. Declining sales will pad the already large inventory numbers piling up on dealers lots. DETROIT (Reuters) – U.S. auto sales in July likely fell a little more than 5 percent from the same month in 2016, a fifth consecutive month of declining sales and the largest monthly drop so far this year despite persistently large consumer discounts, industry consultants J.D. Power and LMC Automotive said on Thursday. LMC cut its full-year 2017 forecast for new vehicle sales for the fourth c...
World’s largest brewer Anheuser-Busch InBev SA/NV (BUD – Free Report), also known as AB InBev, missed the earnings estimate of analysts polled by Zacks for the sixth straight quarter, when it posted second-quarter 2017 results. The company’s bottom-line also declined year over year. Moreover, revenues also missed the estimate after beating the same in the trailing two quarters. Lower-than-expected earnings performance in the past few quarters has hurt the stock in the past one year. AB InBev’s stock has declined 8.2%, wider than the industry’s marginal decline of 0.4%. The lower-than-expected bottom-line result can larg...
Today I want to mention two disturbing trends – one of which may have some minor implications for inflation. The first is the six-month downtrend in the US Dollar (see chart, source Bloomberg). I’ve included the last several years’ worth of pricing for the broad trade-weighted dollar so as to help avoid any alarmist conclusions. While the trade-weighted dollar is down more than 7% since the beginning of 2017, it is unchanged on a trailing-two-year basis and still quite a bit above the level of three years ago. Moreover, as I’ve mentioned before – when the question concerned the effect of the dollar’s rise on inflation – the...