Friday, May 01, 2015

Earnings Are Pouring In

Read All About It!

Wow, the last two days I have had so many companies report earnings.  Generally it has been good news.  My portfolios continue to do well.  I am up 8.5% on the year, which looks strong against the R3K being up a mere 2.2% and the MFI Index just 1.3%.

I am in Switzerland today. Yesterday you could see the snow-capped mountains in the distance.  Today, maybe a mile visibility.  I head back home tomorrow after being on the road for 11 nights - looking forward to being in own bed.

  • FLR - they reported earnings last night after the closing bell (Fluor Reports First Quarter Results). I felt they were not too hot and not too cold.  I like to look at operating income ($249m versus $271m a year ago). I look at backlog ($41.2b from $40.4b a year ago).  It is amazing for these firms to have so much revenue, yet not that much income ($4.58b of revenues deriving the $249m of op income).  It does make you realize that if they had to sharpen the pencil by 5%, they'd make nothing.  Guidance remained unchanged.
  • AVG - they reported Wednesday evening. And while I thought the earnings were strong (AVG Announces First Quarter 2015 Financial Results), I did not realize how strong. They popped 9% yesterday.  The timing for a couple of my real bullish earnings (AVG and RCII) could not be better as I am slated to sell these stocks on May 6th.  It is the opposite of how my February 1st tranche did in January, when it was one disaster after another.
  • GNW - I was nervous here.  Last quarter they took a huge charge. Then the prior two quarters were absolute disaster.  This quarter was normal, hooray! (Genworth Financial Announces First Quarter 2015 Results Net Income Of $154 Million, Or $0.31 Per Share).  That was really all the street wanted to see and the stock popped about 11%.  I think with a couple more "normal" quarters, this is a $12 stock easily.
  • IPCM - this was one where I was under-whelmed by earnings (IPC Healthcare Reports First Quarter 2015 Financial Results).  It is not that they were terrible, but they did (to me at least) make the stock look a bit expensive.  They are up 27% since I bought in November.  Unless something happens, I would call them fully-valued at this point. So not a "sell", but not a "buy" either.
  • NSU - they reported last night after the bell (Nevsun Reports $37 Million in Operating Cash Flow in Q1 2015).  This has been a real pocket rocket stock for me, up 14% since I bought a month ago.  I would call this a strong quarter.  Seems like operations are good, they are keeping cost per pound low (and profitable), they have done some studies showing they have more in mine than they thought. I am pleased.
  • PPC - guess what, there is still money in the chicken business (Pilgrim's Pride Reports Operating Income of $328 Million With a Margin of 16.0% for the First Quarter of 2015, a Significant 95% Improvement Compared to 2014).  Pilgrim's Pride continues to be a cheap stock, just about any way you skin the (errr) chicken.  I should probably add PPC to my idea list for May 6th.
  • RCII - Rent A Center had strong earnings as well (Rent-A-Center, Inc. Reports First Quarter 2015 Results).  When you read through them, they are pretty flat with a year ago, but clearly expectations were low.
  • VIAB - Spongebob and company have been struggling a bit (Viacom Reports Results for March Quarter).   Operating income was down year over year from 872m to 822m (note that exludes $780m restructuring charge). Revenues are down 3%.  Might be a decent buy on any 5% pullback, but I already own enough.

Whew.  Busy, busy, busy.  Generally it has been solid though and the cool news is that my May 6th tranche now looks like a solid winner and will break a two tranche losing streak.  Here are the most recently closed three tranches, plus the soon to close May tranche (ahead by four points):

8/15/2013 Start Current Dividend Pct Gain R3K Gain
CF $187.26 $247.43 $4.50 34.5% 19.4%
FLR $66.06 $73.03 $0.53 11.4% 19.4%
AGX $15.60 $36.71 $0.75 140.1% 19.4%
KLIC $11.29 $14.26 $0.00 26.3% 19.4%
RPXC $15.92 $15.09 $0.00 -5.2% 19.4%
Totals 41.4% 19.4%
11/15/13 Stocks Start Current Dividend Pct Gain R3K Gain
AVG $17.22 $19.21 $0.00 11.6% 14.5%
ATVI $17.71 $20.10 $0.20 14.6% 14.5%
GA $9.04 $11.90 $0.23 34.2% 14.5%
RPXC $17.04 $13.91 $0.00 -18.4% 14.5%
SYNA $48.01 $61.90 $0.00 28.9% 14.5%
Totals 14.2% 14.5%
2/1/14 Stocks Start Current Dividend Pct Gain R3K Gain
ATVI $17.13 $20.90 $0.20 23.1% 12.9%
KLAC $61.47 $61.47 $18.40 29.9% 12.9%
RPXC $16.22 $12.35 $0.00 -23.9% 12.9%
SNDK $69.55 $75.91 $0.83 10.3% 12.9%
WNR $39.11 $37.13 $3.04 2.7% 12.9%
Totals 8.5% 12.9%
5/6/2014 Start Current Dividend Pct Gain R3K Gain
AVG $19.57 $23.92 $0.00 22.2% 12.8%
CA $29.54 $31.77 $1.00 10.9% 12.8%
CSCO $22.79 $28.83 $0.57 29.0% 12.8%
NSR $25.82 $30.00 $0.00 16.2% 12.8%
RCII $28.78 $29.60 $0.94 6.1% 12.8%
Totals 16.9% 12.8%

Have a great day.

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