The Long and the Short of it All
July 15, 2009
We are presenting a list of companies which we believe are currently mispriced, based on our estimate of fair value, by the market. We develop our fair value ranges by projected free cash flow out one year and estimating an appropriate FCF multiple based on our assessment of risk and the strength of the balance sheet.
Cisco Systems [CSCO: 26.08, +0.20 (+0.77%)] Recent Price $17.04 Value Range 21.86 – $38.41
Cisco Systems, Inc. designs, manufactures and sells Internet protocol (IP)-based networking and other products related to the communications and information technology (IT) industry, and provides services associated with these products and their use. Read more
Restaurant Stocks: A Lot of Hot Air
June 12, 2009
Out of the restaurant companies that I am covering, 3 of the names were on my radar screen late last year, with a formal recommendation of Chipotle’s “B” [[CMG-B]] shares at around $45 per share in my Top 5 Stocks for 2009 article. Read more
Stocks For An Economic Recovery – Staples
May 19, 2009
There is a long-term trend in the Western world towards a green culture. This includes hybrid cars, energy-efficient homes, and organic foods. Once a niche sub-culture, organic food is now pervasive throughout our society. The industry has been growing without fail for a decade, both in total organic sales and as a percentage of total food sales. Organic food, of course, is noticeably more expensive than non-organic food, due to the higher cost of production. This was not a problem during the ‘good’ years, but with rising unemployment and the decline in consumer spending; consumers began to cut back on this green luxury. Read more
Best Stocks of 2009 Review: The First Third
May 10, 2009
More than a third of the year has passed and the markets have rebounded nicely from their lows to turn a small profit on the year. It seems that the worst may be behind us when it comes to equity prices as many stocks have rallied more than 50% this year alone. Here at Bullish Bankers, we published a “Best Stocks of 2009″ newsletter at the beginning of the year, and our equities have performed very admirably when compared to our benchmark, the S&P 500. This article is designed to give a recap of how our equities have performed and give some additional explanation to our initial stock picking process. Through Friday, May 8th, our BB2009 Index has outperformed the S&P 500 by 11.51% on a geometric basis ex-dividend payments. Beside each of the sectors I have listed our three picks and the comparable ETF to show our relative performance on a sector by sector basis. Read more
Why Is Consumer Staples Underperforming?
March 10, 2009
Towards the end of last year anyone and everyone you talked to would tell you one thing about investing in the equity markets: Overweight the healthcare and consumer staples sectors. Two months into this year, in what should not come as a surprise, the pundits were wrong again with staples ranking 5th in year-to-date performance when compared to the other sectors in the S&P 500. Surprisingly, the information technology sector has performed the best year-to-date of the 10 sectors in the S&P 500. Let me offer my opinion on why the staples sector has underperformed, and what to expect going forward. Read more
Best Staples Stocks of 2009
February 22, 2009
Looking ahead to 2009, Consumer Staples should continue to be one of the best performing sectors in the market, given its strong fundamental macroeconomic backdrop relative to the other sectors in the S&P 500. We can sit and argue as to whether or not the market will go back up or further deteriorate in 2009, but given the unstable credit and the uncertain housing and labor markets, it is hard to say just what will happen and how much is already priced in. That being said three stocks in Consumer Staples should benefit in this environment. Read more
Good Eats: YUM Brands Posts Solid 4th Quarter
February 8, 2009
The world’s largest restaurant company in terms of system restaurants with nearly 36,000 restaurants in over 110 countries and territories, Louisville, Kentucky based Yum! Brands, Inc. [YUM: 37.68, +0.21 (+0.56%)] announced earnings for the fourth quarter and full-year 2008 after the bell on Tuesday. With some initial selling pressure in after-hours trading, shares traded mostly sideways on another down day for the Dow Industrials Wednesday. Investors sent shares downward after digesting the slide in profits from the fourth quarter in 2007 as net income was down 12 percent to $204 million, or $0.43 cents per share. Excluding special items, profits of $0.46 cents per share beat Reuters Estimates of $0.45 cents a share. Total revenue was up during the quarter to $3.38 billion from $3.26 billion in 2007, and for the full-year 2008 EPS was up over 14% to $1.91 per share.
Walgreen’s Cutting Back Store Openings as Profits Slow
December 25, 2008
As the current recession continues to dig deeper into company’s bottom lines, higher costs and lower profits equals contraction rather than growth. Walgreen Co. [WAG: 34.17, +0.24 (+0.71%)] reported earnings on Tuesday and a 5 cent miss sent shares reeling throughout another tough day for Wall Street. One of the countries largest drug store companies, behind industry leader CVS [CVS: 34.73, +0.10 (+0.29%)], reported earnings the the third quarter ending on November 30 of 41 cents per share Read more
Proctor & Gamble Cuts Outlook: What Does it Mean?
December 16, 2008
Proctor & Gamble [PG: 63.70, +0.38 (+0.60%)], the worlds largest consumer product maker, cut their 2Q09 sales outlook, stating that they would not be able to reach their organic sales growth target, which excludes sales from acquisitions, of 4-6% due to the strengthening dollar and weakness due to private label brands. However, P&G did not cut their profit forecast for the quarter and confirmed their full year sales and profit guidance for 2009. This is largely due to the recent pullback in commodity prices, which has allowed for a lower cost of goods sold for the firm. Even though much of the effect Read more
Coke or Pepsi?
November 24, 2008
One of the bigger debates that rages on within the Consumer Staples sector is whether Coca-Cola [KO: 53.65, +0.30 (+0.56%)] or PepsiCo [PEP: 66.15, +1.05 (+1.61%)] is a better investment. The two carbonated and non-carbonated soft drink manufacturing behemoths take up over 70% of the world wide beverage sales and have been solid equity holdings since well before I was born. Raising dividends and consistent earnings might as well be each company’s middle name, Read more
