Tuesday, July 31, 2012

Seeking Alpha: Pfizer's Trade-Off Between Value And Momentum

In terms of earnings growth today, Pfizer (PFE) is just a middling Big Pharma pick. On a longer-term basis, though, it looks as if the Street is still undervaluing the company's ability to continue to earn strong economic profits and return capital to shareholders. While the near-term news flow has not been great and the company will be hard-pressed to post major earnings growth without a large transaction, there is still value here for the patient shareholder.

Click here for more:
Pfizer's Trade-Off Between Value And Momentum

Seeking Alpha: Hologic Seems A Little Underrated

Big deals carry big risks, and Hologic (HOLX) does not have a great record with big deals. Couple that with a difficult hospital spending environment and I can understand why Hologic shares trade at a discount to fair value. That said, investors who want to buy into women's health and diagnostics could certainly do worse than to consider this name.

Please continue here:
Hologic Seems A Little Underrated

Investopedia: Time For Cameron To Start Flexing

Cameron International (NYSE:CAM) has been a strong player in energy equipment for a while now, but new products for new markets may take the company to another level. While Cameron's relative popularity with the sell-side and institutions ups the risk a bit (it's hardly an undiscovered play), the company may be approaching a period of both expanding profits and expanding multiples.

Please continue here:

Seeking Alpha: DONE-Dreon?

With yet another disappointment in the bag, maybe the Dendreon (DNDN) bulls can take a break with the "success is just around the corner" stories. Every controversial story has its supporters, but supporting Dendreon has come at a high cost as the price has continued to break down on successive disappointments with the cancer vaccine Provenge.

I hope that with second quarter results in hand and a significant restructuring on the way, the argument will at last shift from whether Provenge is a great drug (it's not) to whether it's a salvageable business (it might be).

Please read more here:

Monday, July 30, 2012

Investopedia: CB&I's Acquisition Of Shaw Is Shocking And Awesome

CB&I (NYSE:CBI) announced on July 30 that it will acquire Shaw Group (NYSE:SHAW) for $3 billion, or $46 per Shaw share. The deal will be made up of $41 per share in cash and $5 in stock (0.13 shares of CB&I), and values Shaw at a 72% premium to July 27's close. The deal price also carries a seven times multiple to the 2012 EBITDA multiple for Shaw - a slight premium to the broader sector.

To execute the deal, CB&I will need to raise about $1.9 billion in debt financing, but the company expects the deal to be accretive almost immediately.

Continue here:

Seeking Alpha: Is Chevron Following The Exxon Game Plan?

Investors have ample choice in the oil and gas sector these days, with plenty of high-quality names like Apache (APA) and Petrobras (PBR) trading at discounts for one reason or another. Add Chevron (CVX) to that list, for while it's not the cheapest energy stock out (nor the cheapest major), the company's valuation seems to give it only marginal credit for following a game plan that looks more than passingly similar to the one successfully put into place at Exxon Mobil (XOM).

Please read the article here:
Is Chevron Following The Exxon Game Plan?

Seeking Alpha: Exxon Mobil And The Jam Today/Jam Tomorrow Dilemma

Exxon Mobil (XOM) knows a good thing when they see it - a pristine balance sheet, nearly 20 billion barrels of reserves, and the largest refining system in the world produces almost bond-like cash flow that makes Exxon Mobil a favored place to park cash and capture decent dividends. If management really has anything to worry about, it may be as to whether it's worth risking the wrath of Wall Street to build an even better long-term asset base.

Read more here:
Exxon Mobil And The Jam Today/Jam Tomorrow Dilemma

Seeking Alpha: Lincoln Electric Is Mortal After All

Lincoln Electric (LECO) has been an exceptionally well-run industrial company for decades, building itself into one of the world's largest suppliers of welding equipment and consumables. But no company is perfect, and Lincoln Electric posted a surprisingly large miss at a time when rival Illinois Tool Works (ITW) doesn't seem to be sharing in the weakness.

Please click here to continue:
Lincoln Electric Is Mortal After All

Seeking Alpha: Alcatel-Lucent - The Rope Is Getting Tighter

When I last wrote on Alcatel-Lucent (ALU) a quarter ago, longs certainly didn't appreciate my skepticism on this company's near-term prospects. Nevertheless, the stock has dropped almost another 40% since then, and now questions are popping up regarding whether the company can cut enough costs to remain a viable contender.

Please click here for more:
Alcatel-Lucent - The Rope Is Getting Tighter

Seeking Alpha: Roche Building On Its Strengths

It's not all that unusual for analysts and investors to accentuate the negative when it comes to Big Pharma, and Roche (RHHBY.PK) is no exception. Although this company has a pretty clean patent cliff over the next few years, leading positions in lucrative markets and solid upcoming pipeline products, more attention has gone to some pipeline setbacks and a big R&D restructuring. Although Roche may no longer be the most compelling European pharmaceutical, it's still a quality name worth considering on dips and pullbacks.

Please read more here:
Roche Building On Its Strengths

Seeking Alpha: Can Microsemi Deliver On Its Leverage Promises?

Small-cap value is a dicey proposition in technology, as investors are often more inclined to ignore valuation in the pursuit of disruptive technology and break-out growth stories. Unfortunately, while Microsemi's (MSCC) growth isn't bad by the depressed standards of today's semiconductor market, this is not a stock that's going to challenge names like Broadcom (BRCM) or Mellanox (MLNX) for growth leadership. What Microsemi does offer, though, is a business leveraged to operating improvements and built around markets where the company is often hard to dislodge.

Read more here:
Can Microsemi Deliver On Its Leverage Promises?

Friday, July 27, 2012

Investopedia: BorgWarner - Patience May Not Be Futile

With European vehicle production softening and any company with substantial European business facing significant currency headwinds, the question going into BorgWarner's (NYSE:BWA) second quarter seemed to be just how bad things would be. While BorgWarner did disappoint (the second miss in a row) and lower guidance, this remains an interesting growth story within a very mature industry, and one that investors may want to follow a little more closely.

Please read more here:

Investopedia: Why Is Walmart Evil, But Amazon Isn't?

If you really want to generate some hate mail, say something nice about Walmart (NYSE:WMT) in a public forum. According to the critics and self-appointed guardians of America's conscience, Walmart is an evil company that kills American business (by sourcing from overseas), kills American retail (by undercutting other retailers on price) and kills the American worker (by offering low wages and benefits). What's interesting to me, though, is how Amazon (Nasdaq:AMZN) gets none of this hate. While Amazon and Walmart are in many respects using the same model (offering customers the lowest prices available), you garner no shame, opposition or lectures in boasting about being an avid Amazon customer. So why is it that Amazon is "good," but Walmart is "evil?"

Please click here for more:


Seeking Alpha: AstraZeneca Taking Its Lumps

If investors wonder why I'm so hard on Big Pharma stocks like Lilly (LLY) and Bristol-Myers (BMY), I would offer up AstraZeneca (AZN) as an example. Due to a mix of poor planning and poor luck in the clinic, AstraZeneca is getting walloped by generic competition to key drugs. The company has most definitely opened up its wallet to restock its pipeline, but the cavalry isn't going to arrive for a while yet.

Please continue here:
AstraZeneca Taking Its Lumps

Commodity HQ: The Five Minute Guide To Oil ETFs

The world still largely runs on crude oil, and that ever-present demand coupled with erratic shifts in supply, makes it a volatile, liquid, and popular instrument for investors, traders, and speculators alike. Savvy individuals have always had the option to try to play oil prices through the equities of multinational energy companies and/or smaller independent exploration and production (E&P) companies, as well as actual oil futures themselves [see also 25 Ways To Invest In Crude Oil].

These instruments have notable drawbacks, though, including imperfect correlation to actual oil prices (for the energy company stocks) and high margin requirements (for oil futures). Enter oil ETFs. These products give traders many of the advantages of direct investment in oil, but in a vehicle that is much more convenient for the average individual investor [for more commodity news subscribe to our free newsletter].

Please follow this link for more:

Investopedia: The Week Ahead In Healthcare

Earnings season is now winding down and very little has changed in the healthcare sector. Hospitals in the U.S. are still being cautious with their capital spending, while European health systems are pushing back hard on prices for both devices and drugs. Companies with differentiated products are doing well (Abbott Labs' (NYSE:ABT) Humira, Edwards Lifesciences' (NYSE:EW) transcatheter heart valve), Intuitive Surgical's (Nasdaq:ISRG) DaVinci surgical robot and tools), but general trends seem more like "muddle through" right now.

Please click here for more:

Seeking Alpha: Skepticism Could Be A Merck Investor's Friend

For those who scoff at the idea that stock markets are efficient, skepticism can be an investor's best friend. Recognizing good news (or potential) when you see it and buying in before it's commonly accepted can be a ticket to above-average performance, and that has been true for Merck (MRK) and its shareholders recently. While I've been positive on this giant Big Pharma for some time now, it seems like others on the Street have woken up to the value and potential here over the past couple of months.

Read more here:
Skepticism Could Be A Merck Investor's Friend

Thursday, July 26, 2012

Seeking Alpha: Sanofi Still Surprising And Surpassing

It typically takes a while for the Street to really buy into a better-than-expected story, and it looks like catch-up is still the name of the game around French drug giant Sanofi (SNY). While growth is not great in absolute terms, there's more value here than many analysts seem able to see. Investors can take advantage of a company that should offer above-average growth and yield over the next three to five years.

Please click here for more:
Sanofi Still Surprising And Surpassing

Seeking Alpha: Siemens Is Going To Struggle With Credibility

German conglomerate Siemens (SI) highlights the difference between "value" and "cheap for a reason". While management has twice come out to say that full-year targets would prove to be "ambitious" and hard to reach, they nevertheless stuck by them. Now investors have to digest some pretty troubling data on profits and orders that suggests Siemens has more self-improvement ahead of it.

Please continue here:
Siemens Is Going To Struggle With Credibility

Seeking Alpha: ABB's Outlook Really Stands Out

I guess assessing the state of the global economy today is a bit like taking a Rorschach test - where companies like Emerson (EMR) and Illinois Tool Works (ITW) see ogres and dragons, ABB (ABB) management seems to see butterflies and bunnies. Although that's obviously an exaggeration, ABB's call for a more resilient Europe, a strong U.S., and a more resilient China is definitely out of the mainstream and could represent an "all clear" for investors waiting to buy this undervalued and underperforming industrial conglomerate.

Read more here:
ABB's Outlook Really Stands Out

Seeking Alpha: Covidien - A Leading Growth Story At A Reasonable Price

An inevitable consequence of writing about many companies is that you can't own everything you like and you're going to see a few great ideas slip away over the years. While I wouldn't say that Covidien (COV) has slipped away yet, the stock is up nicely from the late 2011 lows on very strong operating performance. While businesses like endomechanical devices, oximetry, and energy may not be the most scintillating in the med-tech world, I continue to believe that Covidien is not only a good company, but one whose growth prospects are meaningfully underrated by investors.

Please follow this link for more:
Covidien - A Leading Growth Story At A Reasonable Price

Seeking Alpha: How Can Boston Scientific Still Be This Bad?

It is not easy to turn around a struggling medical technology business. It took a while for Covidien (COV) to really get back into the swing of things, and Johnson & Johnson (JNJ) still has a way to go, but those companies pale in comparison to the challenges at Boston Scientific (BSX). While this quarter was not a disaster, and the company does have some valid opportunities in its pipeline, it just feels like the newsflow from this company has been unrelentingly disappointing for quite a while now.

Read more here:
How Can Boston Scientific Still Be This Bad?

Seeking Alpha: 3M Can Lead The Way From Here

3M (MMM) is one of my longest-held positions and one of the most confounding. I love the company's strong brands and excellent tradition of innovative R&D, but I have often found the company's M&A priorities to be both exasperating and confusing. And while the company has a remarkable record of steady performance, it seems to always be a relatively unloved name for Wall Street analysts. Nevertheless, with the company's sizable exposure to early-cycle markets and China in particular, I believe this company should be a leader if global growth resumes and a steady survivor if the malaise continues.

Please click here to read the full article:
3M Can Lead The Way From Here

Investopedia: Western Digital Looks LIke A Trader's Dream

Looking at the two major hard drive companies, I'm reminded of an oft-played Vince Lombardi quote - "What the is going on out there?" It was just a few weeks ago that Seagate (Nasdaq:STX) warned the Street that its performance was going to come up short, and here we have Western Digital (Nasdaq:WDC) blowing away numbers for its fiscal fourth quarter and issuing some pretty bold guidance. One way or another, it looks like these stocks are likely to continue to offer up red meat for those inclined to trade.

Please follow this link for more:

Investopedia: Change Is Coming At PepsiCo, One Way Or Another

It is interesting how Wall Street will seem to reward companies that are, in many respects, underperformers. One such example is the relative valuation between Coca-Cola (NYSE:KO) and PepsiCo (NYSE:PEP). Relative to the possible future cash flow streams, the companies seem roughly equally valued, even though Coca-Cola is in most relevant respects the superior operator. What that tells me is that the Street already assumes that PepsiCo's restructuring efforts will either succeed or that the company will take more dramatic steps, including a potential break-up.

Please read more here:

Investopedia: Fortinet A Little Too Hot For Love

It's hard to imagine a tech world where security isn't an ongoing concern; even sci-fi gives ample time and attention to hackers, slicers and the like. Accordingly, I think companies like Check Point (Nasdaq:CHKP) and Fortinet (Nasdaq:FTNT) are definitely in a market with attractive long-term fundamentals. The real question for investors is value - as far as high-growth tech stocks go, Fortinet doesn't seem too expensive, but it's hard to call this stock cheap.

Click here to read here:

Wednesday, July 25, 2012

Seeking Alpha: GlaxoSmithKline's R&D Is Delivering, But The Street's Not Buying

One of the less endearing, if not outright annoying, traits of those who make up Wall Street is their tendency to harp on whatever a company doesn't have at the moment. In the case of Big Pharma, good current quarterly results are often waved off with skepticism about generic competition and/or the pipeline. For GlaxoSmithKline (GSK) it looks like the reverse is true. Forget the solid pipeline and good recent Phase 3 results, it's this quarter's bad performance that somehow proves Glaxo isn't a good company.

Please read more here:
GlaxoSmithKline's R&D Is Delivering, But The Street's Not Buying

Seeking Alpha: The Next 12-18 Months Will Shape Lilly's Future

My skepticism on Lilly (LLY) hasn't paid off so well of late, with the stock up about 12% over the last quarter and nearly 7% for the year to date. That said, I still think this company has a lot left to prove in terms of its pipeline quality and future expense structure. The stock is on a solid run, but this still wouldn't be among my choices for new money in Big Pharma.

Please read more here:
The Next 12-18 Months Will Shape Lilly's Future

Seeking Alpha: Bristol-Myers No Bargain

While some Big Pharma companies can fairly be accused of being too passive in dealing with upcoming patent expirations and relying too much on cost-cutting to boost numbers, that's not really the case for Bristol-Myers Squibb (BMY). Not only has Bristol-Myers continued to invest in the clinic, but the company has also been an active acquirer in the biotech space. Although Bristol-Myers has respectable growth prospects relative to its peer group, this earnings stream seems fairly valued today.

Read the full article here:
Bristol-Myers No Bargain

Seeking Alpha: Relief Will Only Carry Caterpillar So Far

Earnings from heavy machinery specialist Caterpillar (CAT) certainly gave investors a little relief, but they shouldn't underestimate the risks to growth over the next 12-18 months. While this company certainly does have solid long-term prospects, the possibility of long-term gain isn't always enough to assuage the short-term pain that can go with wholesale institutional abandonment of a sector.

Continue here:
Relief Will Only Carry Caterpillar So Far

Investopedia: Will This Be The Pause That Refreshes Apple?

It will be interesting to see how investors and analysts ultimately process Apple's (Nasdaq:AAPL) fiscal third quarter miss. This is not the first time that the company has missed expectations or rattled investors, and it seems like the investment community is so focused on the next iPhone launch that this hiccup in performance doesn't amount to much. Apple still presents a very interesting conundrum in valuation - today's price seems to discount an erosion in sales growth and/or margins that nobody is willing to publicly discuss or put into print.

Continue reading here:

Investopedia: Weatherford Has To Be Better

When it comes to the No. 4 energy services company Weatherford (NYSE:WFT), I have walked the line between supporter and apologist as I thought I saw a lot of potential value in running this business better. Unfortunately, while it is still true that Weatherford has an interesting under-valued business, it's also true that the company's management has to clean up a lot of messes. Consequently, there's value here, but its value that comes with a big asterisk.

Read more here:

Investopedia: Broadcom In The Right Place At The Right Time

Broadcom (Nasdaq:BRCM) continues to deliver the goods. In a market rattled by bad tech earnings numbers, particularly in chips and communications, this leading communications chip company once again posted solid results and encouraging guidance. While the exceptional popularity of Broadcom concerns me, the numbers are what they are and Broadcom still looks like a good stock to own.

Please click the link for more:

Investopedia: Metal Fatigue At Steel Dynamics

Although I don't own it, I nevertheless feel like I've spent a lot of 2012 supporting or coming to the defense of steel companies like ArcelorMittal (NYSE:MT), Nucor (NYSE:NUE) and Steel Dynamics (Nasdaq:STLD). Maybe there's some logic there, as buying into beaten-down commodity stocks can be a good way to earn short-to-intermediate capital gains, or maybe I'm just stubborn. Whatever the case, it's getting harder and harder to stay optimistic on Steel Dynamics even though (yep, you guessed it) the shares don't look especially pricey today.

Continue here:

Seeking Alpha: Illinois Tool Works Hunkering Down

Industrial conglomerate Illinois Tool Works (ITW) was a growth laggard in the first quarter, and slowing demand in markets like Europe, China, and the U.S. didn't help matters for this quarter. Margins held up well, though, and management's decision to simplify the business during this lull ought to have the company in good position to post good margins whenever the recovery may come. Illinois Tool Works just isn't cheap enough to be my favorite industrial name (a common complaint with me and this stock), but those who believe in the margin expansion story may find more to like here, even if the company is facing a stiffer headwind going into the second half.

Please follow this link for more:
Illinois Tool Works Hunkering Down

Tuesday, July 24, 2012

Investopedia: Is Halliburton Finding The Bottom?

Buying a stock in the energy service sector is a little like buying a ticket to a roller-coaster ride, but one that is already in progress and one where they don't tell you where the car is on the track. When a stock like Halliburton (NYSE:HAL) is near its 52-week lows, it's relatively easy to assume that things will get better, but there may be a further dive yet to come. Likewise, when the stock is riding high you just know that there will be another drop ... but that the stock may have yet to rise before that fall begins.

Please continue here:

Investopedia: For Texas Instruments The Song Remains The Same

For all the talk of how supply chain and customer inventories are scraping the bottom, there's just no momentum in the broad semiconductor sector. Once again Texas Instruments (Nasdaq:TXN) found itself with a tougher-than-expected quarter and once again guidance is heading lower. While it remains a fine company with significant untapped potential, investors have to realize that the potential may stay on ice for a while longer.

Please click here for more:

Investopedia: Bull Vs. Bear - Olympic Advertising Is A Waste Of Shareholders' Money

Question: Are the Olympics worth the money spent on marketing by corporate sponsors?

Bear's Response
Commercial sponsorship is a huge part of the "Olympic experience." Not only do corporate sponsors go a long way toward defraying the cost of an Olympics, but "in kind" payment of services and products can make the games run more smoothly. The question, though, is whether these companies get an adequate return on their money. I believe they do not.

Continue here:

Seeking Alpha: Fear And Noise Creating Opportunity In Freeport-McMoRan

It may sound sarcastic or cynical, but if the news flow around copper miner Freeport-McMoRan (FCX) is terrible, it's probably time to think about a good entry price. Certainly, there are worries pushing down on valuation today -- worries tied to production costs, worries tied to global growth and implied demand, and worries tied to ongoing saber-rattling from the Indonesian government. The reality, though, is that this is what it looks and sounds like when companies like this bottom out. When the news turns positive, that may just be a signal to look for the exit.

Please click here for more:
Fear And Noise Creating Opportunity In Freeport-McMoRan

Seeking Alpha: Peabody Energy Still In Limbo; How Low Can It Go?

The investment thesis on Peabody Energy (BTU) continues to be that it's the best house on a pretty scary street - a street that increasingly looking like Elm Street for long-suffering investors. If there's good news in the company's second quarter results, it's that the Street seems to still be washing out expectations despite some signs of improvement in the U.S. coal business. While this remains an interesting asset-driven company for the long term, the coal sector has shown in spades that the answer to the question of how much worse things can get is "a lot worse".

Please continue here:
Peabody Energy Still In Limbo; How Low Can It Go?

Seeking Alpha: A Disappointing, But Not Altogether Surprising, Failure For JNJ And Pfizer

Some diseases are notoriously hard targets for new pharmaceutical development, and Alzheimer's may well be one of the worst. There are very few drugs on the market for the disease (Forest Labs' (FRX) Namenda and Pfizer's (PFE) Aricept are the two most prominent), but Johnson & Johnson (JNJ), Pfizer, and Elan (ELN) hoped to defy the odds and bring a new Alzheimer's drug to market - bapineuzumab.

Unfortunately, Pfizer's news announcement Monday after the close largely brings that hope to an end.

Read more here:
A Disappointing, But Not Altogether Surprising, Failure For JNJ And Pfizer

Monday, July 23, 2012

Investopedia: The Week Ahead In Healthcare

With earnings season now in swing, it looks as though the state of the healthcare market is "more of the same." Company executives have managed Wall Street expectations such that companies are technically posting above-expectation earnings, but a lot of this outperformance seems to be coming from lower tax rates, "other income" and lower operating spending. Overall revenue growth is still not impressive, and with the market-beating returns seen across the sector so far this year, there could be some risk to these stocks if revenue growth doesn't accelerate towards the end of the year.

For the full piece, please click here:

Investopedia: Genesee's Bold Bid To Be The Leading Short-Line Operator

It's always interesting to see how nimble and well-managed companies can prosper by zigging when larger rivals zag. Class 1 railroad operators like Union Pacific (NYSE:UNP) and Norfolk Southern (NYSE:NSC) have spent the last three decades selling off their short-line operations in response to the Staggers Act, while short-line specialist Genesee & Wyoming (NYSE:GWR) has been busy buying short-line rails and building itself into one of the premier operators.

On Monday, Genesee announced a major expansion of that strategy - agreeing to acquire fellow short-line operator RailAmerica (NYSE:RA) for $27.50 per share or about $1.4 billion overall. This is a very sizable deal for Genesee & Wyoming and one of those bold moves that will either vault the company to a new level of operating performance or saddle the company for years with debt and non-synergistic assets.

Please continue here:

Seeking Alpha: Is McDonald's Setting Up A 2008/2009 Rerun?

Companies like Nike (NKE), Coca-Cola (KO), and McDonald's (MCD) don't give you too many chances to get in at reasonable valuations, and oftentimes those opportunities come with substantial market worries. While McDonald's present valuation doesn't exactly make it a screaming buy, there are at least a couple of similarities between conditions today and conditions three to four years ago - the period when McDonald's really separated itself from the QSR pack and delivered quite a run.

Please read the full article here:
Is McDonald's Setting Up A 2008/2009 Rerun?

Seeking Alpha: Reasons For Relief At Eaton, But Tougher Times Still Ahead

Eaton (ETN) isn't necessarily the best industrial company that investors can buy, but it's a quality name that investors ought to reconsider during the lulls in the cycle. With good long-term fundamentals in most (if not all) of its target markets and reasonable leverage to emerging market growth, Eaton should be a reliable "market growth-plus" story for the foreseeable future.

Please click this link for more:
Reasons For Relief At Eaton, But Tougher Times Still Ahead

Seeking Alpha: Microsoft's Battles - Value Versus Operating Leverage, Enterprise Versus Consumer

Microsoft (MSFT) remains a confounding stock for an investor with a value inclination. While the stock looks undervalued even on the assumption of 5% free cash flow declines for a decade, the company clearly as a long way to go to catch up to rivals like Apple (AAPL) and Google (GOOG) in markets like mobile, consumer, and online. Likewise, while Microsoft is stronger in enterprise than the Street seems to think, the company needs to show stronger operating leverage.

Continue reading here:
Microsoft's Battles - Value Versus Operating Leverage, Enterprise Versus Consumer

Investopedia: CNOOC Paying Up For An Undervalued Canadian Oil Asset

Canada and China have had an interesting relationship over recent years. While Canada has certainly appreciated China's boundless appetite for its ores, agricultural products and energy exports, it has not been quite so appreciative of the efforts of Chinese companies to acquire operating assets in the country. So while CNOOC's (NYSE:CEO) announced intention to acquire Nexen (NYSE:NXY) makes sense on many levels, it may not be a total certainty that the deal goes through.

Read more here:

Investopedia: Better Operating Performance Should Let Baker Hughes' Value Emerge

Companies would do well to follow one of the fundamental precepts of medical ethics - "primum non nocere" (first do no harm). While there is little that any one company can do about the overall demand environment in a given quarter or year, there's a lot that can be done to at least minimize the damage. In the case of Baker Hughes (NYSE:BHI), it looks like a lot of the operating issues and missteps that bedeviled recent quarters have improved, and while the near-term outlook for energy services is not great, there's value here nonetheless.

Please read more here:

Investopedia: Check Point Is In Its Competitors' Crosshairs, But Maybe Too Cheap

Not too many tech stocks get a second act, and Check Point Software's (Nasdaq:CHKP) heyday was back in the mid-to-late 90's, alongside companies like Cisco (Nasdaq:CSCO) and Symantec (Nasdaq:SYMC) that have likewise been unable to recapture former glories. The question for shareholders, though, is whether oncoming next-gen competition will damage this business as much as feared and whether they have the patience for the Street to come back around to the value of this business.

Continue reading here:

Sunday, July 22, 2012

FYI On Comments

I'm going to be turning off the comments feature.
There has been only minimal interest/usage from readers and I'm frankly tired of battling the spammers.

Friday, July 20, 2012

Seeking Alpha: Can Intuitive Surgical Drive Wider Adoption Fast Enough To Maintain Multiples?

Coming out of second quarter earnings, it's as clear as ever that surgical robot company Intuitive Surgical (ISRG) does not have the luxury of being casual about driving wider adoption of its daVinci robotic surgical system. While the U.S. prostatectomy market is not going to disappear, the multiples on this stock leave almost no room for disappointment and declines in this long-time core market are starting to weigh on procedure volumes.

Continue here to the full article:
Can Intuitive Surgical Drive Wider Adoption Fast Enough To Maintain Multiples?

Seeking Alpha: Another Disappointing Quarter Still Doesn't Make Cepheid Cheap

So far, this has been a tough quarter for some of the growth darlings of the medical technology sector. It's still somewhat early in the reporting cycle, but Intuitive Surgical (ISRG) and MAKO Surgical (MAKO) have both disappointed, and Cepheid (CPHD) joins that unfortunate list for the second time in as many quarters. While the sort of operational disturbances that Cepheid is seeing are not at all uncommon with small, young companies, the cripplingly high expectations built into the stock give it little room to breathe.

Read more here:
Another Disappointing Quarter Still Doesn't Make Cepheid Cheap

Seeking Alpha: Can Nokia Pull Out Of Its Death Spiral?

Simply put, Nokia (NOK) is a mess. Where once this was the world's best cell phone maker and the owner of a high-quality balance sheet, now the company is struggling to stay relevant and stem the loss of market share to Apple (AAPL) and Samsung (SSNLF.PK). Although the company's feature phone business in North America looks as though its in shambles, the company does have enough liquidity and time to make what may be a last stand around its Microsoft (MSFT) Windows-powered Lumia.

Please follow this link for the full article:
Can Nokia Pull Out Of Its Death Spiral?

Investopedia: Mighty Mellanox Mashes Expectations

Tech is perennially frustrating for value-driven investors, but Mellanox (Nasdaq:MLNX) is taking that to a new level. While the shares have long looked appealing on the basis of the growth potential, valuation has looked aggressive unless an investor was willing to make pretty outrageous growth estimates. As it turns out, maybe "outrageous" was actually conservative, as this Infiniband adapter specialist boosted revenue guidance for the next quarter by a whopping 50%.

Please click here for more:

Investopedia: Mind The Moving Parts At Yum!

Taken as a whole, Yum! Brands (NYSE:YUM) is still an exceptional global restaurant concept. You could argue that the company has "out-McDonald's (NYSE:MCD)" McDonald's, with its exceptional success and excellent growth platforms in Southeast Asia, Latin America and the Middle East. All of that said, Yum! Brands has long carried a premium valuation due to that Chinese growth kicker and while the company is likely to continue to be quite successful, valuation may be an issue with the shares.

Read more here:

Investopedia: Street To Chipotle - Queremos More Growth, Now!

Figuring out the difference between a pot-hole and a sinkhole is a pretty critical skill when it comes to investing in high-growth stocks, and it seems especially relevant to Chipotle Mexican Grill (NYSE:CMG). Whether slower comps later this year are just a lull or a new trend, and whether the company can maintain exceptionally high restaurant margins are two huge questions that play directly into the valuation. Given the high valuation, I can understand if investors feel that caution is the better part of valor and want to step to the side for the time being.

Please follow this link for more:

Investopedia: Danaher Battening Down The Hatches

There is no real doubt anymore that the bloom is off the industrial rose; investors are no longer asking if there's going to be a significant slowdown in industrial earnings growth, but rather when the growth will resume. To that end, Danaher (NYSE:DHR) did not really provide a lot of cheer with its second quarter earnings release. Danaher is still not really cheap enough to own today, but it's at least at a point where investors may want to watch it more closely in case this market malaise stretches into the fall.

Please click here for more:

Investopedia: BB&T Still Not Getting Its Due

Shareholders in super-regional bank BB&T (NYSE:BBT) just have to accept that this bank is a bit of a black sheep in the analyst community. Although, like U.S. Bancorp (NYSE:USB), BB&T largely moved through the housing crash and credit crisis bruised but not bloodied, analysts have seemingly been waiting for the other shoe to drop. The good news, though, is that there is both value and high-quality operations here and that will eventually show itself in the market.

Please read more here:

Thursday, July 19, 2012

Seeking Alpha: Stryker Looking A Little Stiff And Creaky

With relatively positive news about the orthopedics market from Biomet and Johnson & Johnson (JNJ), investors were primed to hear more of the same from Stryker (SYK). Unfortunately, Stryker disappointed with numbers that showed real share loss outside the U.S. and ongoing difficulties in the hospital capital equipment market. While Stryker remains a quality GARP name to consider in healthcare, management's credibility is increasingly on the line.

Continue here:
Stryker Looking A Little Stiff And Creaky

Seeking Alpha: Honeywell Close, But Not In The Sweet Spot

Industrial companies and stocks are clearly out of favor right now, and that's not an entirely unreasonable position - Europe continues to struggle, China and Brazil look weaker, and even the robust U.S. industrial rebound seems to be tiring. All of that bad news seem to largely be in these stocks, though, and that could make it a good time to consider shopping for diversified names like Honeywell (HON).

Click here to continue:
Honeywell Close, But Not In The Sweet Spot

Seeking Alpha: While Not Expensive, Both Halves Of Abbott Need Work

Drug, device, and nutrition conglomerate Abbott Labs (ABT) continues to oscillate just above and below the point where it looks like an interesting buy in the healthcare space. Valuation may not be too demanding, investors nevertheless have reason to pause before jumping into this name. On both sides of the soon-to-be-split business, there is real work that needs doing.

Read more here:
While Not Expensive, Both Halves Of Abbott Need Work

Investopedia: IBM - The New Model For Tech?

When I last wrote about IBM (NYSE:IBM) in mid-April 2012, I thought that for all of the quality that IBM offered, the stock was still too expensive and vulnerable to a broader tech slowdown. The stock (and tech in general) dutifully cooperated, falling about 10% over that period. While IBM is not yet cheap enough to make it a hands-down buy, it is very much worth noting that not only is IBM now the model that many tech companies seem to aspire to, but it is also executing that model better than anybody else.

Read more here: 

Investopedia: F5 Networks Managing The Slowdown Pretty Well

Once again, it looks like we have a summer of discontent for tech stock investors, as economic issues in Europe, the slowdown in China and the not-so-unusual summer malaise weigh on financial results and stock valuations. While networking equipment company F5 (Nasdaq:FFIV) has shown that it's not immune to these issues, the company's performance is holding up relatively well. Though not by any means a safe play or a value stock, investors ought to consider buying shares during this lull.

Please click here for more:

Investopedia: Enthusiasm For Bank Of America Seems A Little Strange

Say what you will about the quality of sell-side research these days, but scanning reports can at least give you a sense of how one side of the Street feels about a company. To that end, I'm a little surprised at the generally positive response to Bank of America's (NYSE:BAC) second quarter earnings. While it is true that credit and capital are slowly getting better, I see a lot of "core" issues that make me question the pace and extent of the bank's ultimate recovery.

Please continue here:

Investopedia: F5 Networks Managing The Slowdown Pretty Well

Once again, it looks like we have a summer of discontent for tech stock investors, as economic issues in Europe, the slowdown in China and the not-so-unusual summer malaise weigh on financial results and stock valuations. While networking equipment company F5 (Nasdaq:FFIV) has shown that it's not immune to these issues, the company's performance is holding up relatively well. Though not by any means a safe play or a value stock, investors ought to consider buying shares during this lull.

Please click here for more:

Investopedia: Expectations, Not Performance, The Biggest Issue At J.B. Hunt

There's really not much a company can do when its stock takes on a popularity above and beyond rationality, as very few CEOs are going to come out and talk down their company's prospects. Nevertheless, fandom can create its own problems, and the popularity of J.B. Hunt (Nasdaq:JBHT) as an organic growth play in transportation and a great way to leverage the growth of intermodal traffic has resulted in high expectations and an arguably unsustainable valuation. Accordingly, I think there's a meaningful gap between how well the company actually performed in the second quarter and how the market has responded.

Continue here:

Wednesday, July 18, 2012

Seeking Alpha: Can Stanley Black & Decker Shake Off This Sluggishness?

Given that Stanley Black & Decker (NYSE: SWK) isn't quite as exposed to a U.S. housing recovery as commonly believed, it isn't the uncertain pace there that is keeping growth down. Rather, Stanley Black & Decker is seeing broad-based sluggishness across almost all of its businesses. While further diversification into industrial fasteners makes some long-term sense and the stock's valuation is not demanding, investors will have to have some patience to see this one work out.

Please click here for more:
Can Stanley Black & Decker Shake Off This Sluggishness?

Seeking Alpha: St. Jude Medical's Weaker Guidance Presents Another Opportunity

At the risk of being accused of trying to spin straw into gold, I can't bring myself to get all that worked up about St. Jude Medical's (STJ) modest shortfall in Q2 and lower guidance for 2012. Yes, in the momentum-driven "what have you done for me lately" world of Wall Street, that's a bad thing. But my bullish thesis on St. Jude wasn't really about what the company would do in 2012, and the company's long-term opportunities still look attractive.

Please click here for the full article:
St. Jude Medical's Weaker Guidance Presents Another Opportunity

Seeking Alpha: With Qsymia Approval, The Race Is Now On

As expected, Vivus (VVUS) got FDA approval for its anti-obesity drug Qsymia (formerly known as Qnexa) on Tuesday. With both Arena Pharmaceuticals (ARNA) and Vivus beating the odds and getting the FDA go-ahead, the race is now on to disprove the skeptics (and validate the bulls) and rack up significant prescriptions and drug sales. While I do believe Vivus has the edge in this race, investors should not underestimate the challenges of launching new drugs to skeptical docs.

Please read more here:
With Qsymia Approval, The Race Is Now On

Investopedia: U.S. Bancorp Still Standing Out From The Crowd

As U.S. Bancorp (NYSE:USB) has long had a winning formula for both its banking and non-bank operations, it's no great surprise that the company continues to report very solid financials. Although its stock does not seem to offer the same upside as other names, USB looks like one of the more dependable names in the large bank universe.

Read more here:

Investopedia: Can Intel Manufacture An Edge?

Companies have been lining up to tell investors how tough the PC market is these days, so there was a little bit of relief when Intel's (Nasdaq:INTC) second quarter numbers were basically on target. The issue for investors, though, is that near-term pressures in the PC market and a relatively unimpressive valuation could well weigh on shares even as the company has an improving long-term outlook.

Click here for more:

Investopedia: CSX In Solid Shape Despite Weak Coal

Given how often data is reported about the railroad industry, there aren't too many secrets or surprises in the industry. In the case of CSX (NYSE:CSX), for instance, pretty much everybody knew going in that coal numbers were going to look pretty bad, but that other categories like automobiles and intermodal would help the overall numbers. Even with the operational challenges created by lower coal traffic, CSX is doing a good job of improving its operating performance.

Please read more here:

Investopedia: Packaging Corp Continues To Play A Solid Hand

Containerboard and corrugated packaging is admittedly not the most exciting of market sectors, and it is most definitely a commodity market. But not all commodities are quite the same, and Packaging Corp (NYSE:PKG) has built a solid defensible niche by running low-cost mills and focusing on specialty products and regional customers that companies like International Paper (NYSE:IP) and Rock-Tenn (NYSE:RKT) do not. While Packaging Corp (aka "PCA") is rightly well-respected within the industry for its patient, conservative approach, it's worth wondering if there's enough growth here to really appeal to investors.

Please click here for more:

Investopedia: Will Margins Take Some Fizz From Coca-Cola?

Although many packaged food companies have struggled to maintain their volumes while passing through higher input prices, Coca-Cola (NYSE:KO) isn't like most companies. Although ongoing margin compression merits some attention, it's hard to imagine that long-term holders are going to get too worked up about it. Coca-Cola remains what it has long been - a top-quality company with a price to match.

Please click here for more:

Investopedia: Rumors Roil VMware

Virtualization leader VMware (NYSE:VMW) has been an exceptional stock for the past three years and the business has grown nicely on the back of server virtualization, system virtualization and management tools. Sometimes, though, I wonder if investors overlook a key part of the VMware story - namely, that EMC (NYSE:EMC) owns 80% or so of the business and can largely do as it pleases with it.

That is coming home to roost with a vengeance on Tuesday, as rumors have spread widely that EMC is replacing VMware's CEO. While these reports have not been confirmed as of this writing, such a change would be a considerable shake-up for investors and would certainly introduce new risk into the business.

Read more here:

Tuesday, July 17, 2012

Seeking Alpha: Plenty Of Analysts Scared To Go Into Forest Labs

"If you go out in the woods today,
You'd better not go alone.
It's lovely out in the woods today,
But safer to stay at home.
" Teddy Bear's Picnic, J.Kennedy

It's hard to find a healthcare stock where there is such a wide divergence of opinion and range of possible outcomes as with Forest Labs (FRX). Despite an exemplary record of free cash flow production and sales execution, many analysts still cannot find the will to believe that the company can reload after the loss of Lexapro and resume a growth trajectory. While there are in fact good reasons to wonder about the future growth of the company, this is a story where the courageous could come out with sizable capital gains.

Please follow this link for the full article:
Plenty Of Analysts Scared To Go Into Forest Labs

Seeking Alpha: Mind The Margins And Devices, But Johnson & Johnson Looks Alright

With the Synthes merger in hand, a new CEO in charge, and a rejuvenated pharmaceutical business, Johnson & Johnson (JNJ) is perhaps in the best shape it has been in in quite some time. By no means is this a flawless story, particularly as the device business seems to need some real work, but it looks as if the company has more going for it than against it at this point.

Please read more here:
Mind The Margins And Devices, But Johnson & Johnson Looks Alright

Seeking Alpha: TPG's Bid For Par Reflects More Difficult Generic Environment

While the seemingly endless M&A process among generic drug companies means that the acquisition of Par Pharmaceuticals (PRX) isn't a complete surprise, it's an interesting deal all the same. Not only does this deal point to the cost of not having a truly global business, but it also seems to speak to the extent to which this sector could see pipeline-driven valuation worries in the coming years.

Please click here for more:
TPG's Bid For Par Reflects More Difficult Generic Environment

Seeking Alpha: ICU Medical's Growth Needs Some Intensive Care

ICU Medical (ICUI) is a company likely to toil in near-obscurity for the foreseeable future. The company does most of what it does exceptionally well, but it strikes many as a dull business. While that doesn't seem to be a problem at companies like Bard (BCR) or Becton Dickinson (BDX), ICU Medical is relatively illiquid, under-followed, and still fairly volatile when it comes to earnings performance. All of that said, this is still a company that belongs on the watchlists of value-oriented med-tech investors.

Click here for more:
ICU Medical's Growth Needs Some Intensive Care

Investopedia: Yahoo Makes A Bold Move Bringing In New Leadership

It was no secret that Yahoo! (Nasdaq:YHOO) was looking for a new CEO, but much of the news in recent weeks has centered around who didn't want the job. Consequently, sentiment was building that the one-time Internet pioneer was going to keep interim CEO Levinsohn and remove the "interim" from his title. However, Yahoo! wouldn't be Yahoo! without throwing a curveball, and the company threw what looks like a doozy - hiring Marissa Mayer from Google (Nasdaq:GOOG).

Please click here for more:

Investopedia: Bank Of The Ozarks Hitting The Accelerator In A Low-Growth Environment

I am big fan of Bank of the Ozarks (Nasdaq:OZRK), so it bothers me that I can't find much value in these shares. Moreover, while I believe this company's aggressive growth strategy could underpin its evolution into a significant regional bank, I do worry that the bank is doing too much too soon. While it certainly makes sense to grow aggressively while many larger competitors have a hand tied behind their back, aggressive growth stories in banking have a disturbing habit of going sour at some point.

Challenges Seem to Be Intensifying
While there are certainly regional differences in business conditions in the U.S., the fact remains that Bank of the Ozarks operates in the same low-rate/narrow spread environment as First Horizon (NYSE:FHN), Cullen/Frost (NYSE:CFR), and Regions Financial (NYSE:RF). To wit, it's a lot harder to make a buck in regular old banking.

Continue reading here:

Investopedia: Commerce Bancshares Looks Like A Slow-And-Steady Pick

This arguably isn't the sort of market that really favors a stock like Commerce Bancshares (Nasdaq:CBSH). While the Midwest wasn't hit as hard in the housing crunch, it isn't a sexy market like the Southeast or Texas. What's more, with the generally conservative habits of Commerce Bancshares leadership, this stock is more likely to accrete value slowly (but dependably) rather than make flashy moves.

Please follow this link for more:

Investopedia: Wells Fargo Doing Well, But How Long Will "Better" Take?

Wells Fargo (NYSE:WFC) deserves credit for the extent to which it has cleaned up its messes from the housing crash. Not only does Wells Fargo enjoy a pretty attractive risk exposure, but the company has multiple avenues for future growth. The question for investors is how quickly those avenues can lead to actual increased returns.

Continue reading here:

Investopedia: Bull Vs. Bear - Netflix Can Rise Back To $100

Question: Can Netflix Hit $100 Again?
Bull's Response
It's been a wild ride for Netflix (Nasdaq:NFLX). Once a darling of the "growth at any cost" crowd, Netflix stock enjoyed a rocket ride from late 2008 to mid-2011 that took it over $300 a share. Then came the "Apocaflix" strategic shift/marketing nightmare that not only confused and alienated customers, but dramatically dented investor and analyst confidence in the story. So now the question before is whether Netflix can hit $100 again. For those of you also considering this question, here's what I believe to be the main arguments for a bull case for Netflix reaching that level again.

Please click here for more:

Monday, July 16, 2012

Investopedia: Citigroup Stays On Track

Citigroup's (NYSE:C) problems were never the sort that were going to allow a quick fix, and some of the risk in the stock has centered around the company being too aggressive in trying to compensate for past mistakes. While a slowdown in many overseas markets is a definite risk factor to the near-term growth outlook, Citi seems to be sticking to a multi-year recovery strategy and it looks like the bank will be in decent shape in two or three years' time.

Please click here for more:

Seeking Alpha: AngioDynamics Still A "Hurry Up And Wait" Story

Small-cap med-tech stock AngioDynamics (ANGO) continues to offer the sort of patience-testing value opportunity that drives many investors away in frustration. That said, a rebound in the company's laser-based varicose vein treatment and synergies from the Navilyst deal do give patient investors a little encouragement for the short-term.

Please click here for more:
AngioDynamics Still A "Hurry Up And Wait" Story

Seeking Alpha: Will Alnylam Raise Money Soon?

There's an old adage in biotech that says you raise money when you can, regardless of whether you really need it at the moment. With very strong early-stage data in hand on lead compound ALN-TTR02, Alnylam Pharmaceuticals (ALNY) may well be considering whether it is time to raise money again.

Please read more here:
Will Alnylam Raise Money Soon?

Seeking Alpha: Glaxo And Human Genome Have Apparently Seen Reason

If word from usually reliable Bloomberg is to be believed, the managements of GlaxoSmithKline (GSK) and Human Genome Sciences (HGSI) have seen reason and reached an agreement on a friendly transaction. While this deal is an unconfirmed rumor at the time of this writing, Glaxo has supposedly upped its offer by a little less than 10%, to $14 per share or $2.8 billion in cash.

Please read more here:
Glaxo And Human Genome Have Apparently Seen Reason

Investopedia: Where Does A Bruised JPMorgan Go From Here?

Reputation is a delicate thing, and in less than one quarter JP Morgan (NYSE:JPM) has lost much of the luster it built during the credit crisis. While management has apparently acted quickly to mitigate the damage of a large bad trade, the slow pace of recovery in its core banking business makes it harder to take up the slack. Although investors can certainly find value in JP Morgan at current prices, risks remain from scandals like the LIBOR rigging and a potential worsening of credit conditions if the economy slows significantly

Please read the full article:

Investopedia: The Week Ahead In Healthcare

With earnings season kicking into high gear, the week of July 16 to July 20 promises a little more action for investors. Although healthcare earnings reports don't tend to spur the same sort of volatile trading action as tech earnings, investors will be keenly interested in what major companies like Johnson & Johnson (NYSE:JNJ), Stryker (NYSE:SYK) and St. Jude (NYSE:STJ) have to say about volume and pricing trends in healthcare.

Please read more here:

Sunday, July 15, 2012

Second Quarter Performance

I thought I had posted this the weekend after the end of the second quarter, but either I messed up or there was some issue with Blogspot. In any case, I'm re-posting it here.

The slowdown in industrials did me no favors, nor did the issues in Brazil or at JPMorgan (NYSE: JPM). That said, it could have been a lot worse. I have a fair bit of dry powder now, and I'm looking to get more active after second quarter earnings. 

Q2'12 Performance
Portfolio A - (5.0%)
Portfolio B - (0.1%)
Combined Portfolios - (3.2%)

S&P 500 - (3.3%)
Nasdaq -  (5.1%)
Russell 3000 - (3.7%)

YTD Performance
Portfolio A - +11.0%
Portfolio B - +15.1%
Combined Portfolios - +12.5%

S&P 500 - +8.3%
Nasdaq - +12.7%
Russell 3000 - +8.2%

Disclosure: I own shares of JPMorgan

Friday, July 13, 2012

Investopedia: Rebound In Eurozone Industrial Production Doesn't Seem To Matter

One of the signs of a bear market is when there is little or no reaction to what would ordinarily be good news. Although Eurozone industrial production rose a better-than-expected 0.6% in May, European stock markets continue to sell-off on Thursday in the ongoing global equity sell-off. While good news is good news, this may be an example where investors would do well to listen to the companies and ignore the government officials and analysts.

Please follow this link for more:

Investopedia: SuperValu May Be Too Far Gone To Save

Food retailing has never been an easy business, particularly since large discounters like Walmart (NYSE:WMT) and Target (NYSE:TGT) got into the game in a big way. While there has been room for companies with differentiated models (often built around premium products or intense merchandising skill), SuperValu (NYSE:SVU) has been struggling to differentiate itself and compete effectively in the mainline supermarket space. With this major earnings disappointment in hand, it's worth asking if even deep-value turnaround investors ought to bother with this name.

Continue reading here:

Thursday, July 12, 2012

Investopedia: Adtran And Its Peers Are Back To "Show Me" Status

I'll often get emails from readers that ask me "if you think this stock is cheap, why don't you own it?" Adtran (Nasdaq:ADTN) is a great example of why I often wait to pull the trigger - while I do like the company's management and I think there's potential for the business to grow, no single boat can fight the tide and I'd rather wait to see signs of stabilization (or recovery) in the carrier spending market before stepping up with my own money.

Please follow this link to continue:

Investopedia: Hi-Tech Pharmacal An Under-Followed Name Worth Following

Due to the seemingly insatiable appetites of companies like Teva (NYSE:TEVA), Mylan (Nasdaq:MYL) and Watson (NYSE:WPI), there aren't nearly as many independent publicly-traded generic drug companies as there used to be. While scarcity value alone is not a good argument for considering Hi-Tech Pharmacal (Nasdaq:HITK), this company's focus on higher-barrier products and over-the-counter (OTC) cold and cough business, coupled with little sell-side support, could make it a potential hidden gem at some point.

Continue here:

Seeking Alpha: Fastenal - Plenty To Love Outside The Valuation

Sentiment has very definitely turned on the American industrial economy, and investors have been fleeing the stocks of industrial distributors and supplies like Fastenal (FAST), MSC Industrial (MSM), and Grainger (GWW). Fastenal once again delivered a good quarter of growth in an absolute sense, but the high valuation and competitive threats make this a less perfect stock.

A Sigh Of Relief After Q2
With the reported monthly sales figures at Fastenal and Grainger showing declining growth (but still double-digit growth in the case of Fastenal), analysts have been paring back their estimates here for a couple of months. Consequently, the company's basically in-line performance and the steady tone of management on the call seems to be giving investors some relief.

Please click here to continue:
Fastenal - Plenty To Love Outside The Valuation

Wednesday, July 11, 2012

Financial Edge: Jobs That Can't Be Outsourced

There's little question that outsourcing has had a significant impact on the U.S. economy. Outsourcing customer service and support jobs to countries like India has become so common that it's become an advertising campaign topic for companies that want to stand out for their better (and presumably not outsourced) services. However, with companies seeing savings of 50% or more for outsourced positions, it's clearly tempting for those companies under never-ending pressure to either match low-price competitors or shore up their own operating margins.

Read more here:

Investopedia: A Small Miss Means Little for The Long Term At Wolverine

Starting around September of this year, the next couple of years at Wolverine (NYSE:WWW) could be very interesting. The billion dollar-plus acquisition of Collective Brands' (NYSE:PSS) Performance and Lifestyle Group holds the promise of transforming the company from a high-return/low-growth cash-farmer into a company that produces both robust returns and solid growth. Against that backdrop, a two-cent miss in quarterly earnings just doesn't seem like a big deal and this looks like a stock that could still be an attractive buy today.

Please click here for more:

Investopedia: Regulation Likely To Always Weigh On Shaw

It's hard to maintain a lot of enthusiasm for engineering and construction (E&C) companies like Shaw Group (NYSE:SHAW). By their very nature, large projects take a long time to design, permit and execute, and there is enough competition in the industry to prevent anyone from making especially attractive economic returns for a long time. That said, I do not believe Shaw's valuation reflects the steps that the company has taken to reduce the risk of its operations, nor the long-term realities of electricity demand.

Continue here:

Investopedia: hhgregg's Struggles Suggest Best Buy Could Be In Big Trouble

For all of the debate and discussion about what ails Best Buy (NYSE:BBY) and whether this large electronics and appliance retailer has a future, it's worth observing that times are just as bad (if not worse) at hhgregg (NYSE:HGG). While investors shouldn't draw straight lines between the two companies (hhgregg is much more focused on appliances and TVs), the fact remains that consumers are holding back on big-ticket spending and this does not bode well for the retailers.

Read more here:

Investopedia: Is Moore's Law Fueling Intel's Investment in ASML?

Maybe the corporate world's never-ending capacity to surprise is what has kept me so interested in the equity markets for over 20 years. In the latest example, Intel (Nasdaq:INTC), a company famous for playing suppliers off each other and encouraging/supporting small up-and-comers, is taking a significant stake in lithography equipment maker ASML (Nasdaq:ASML) and agreeing to help fund the company's R&D efforts. While this is an unusual deal in many respects, it seems to acknowledge (if not cement) ASML's market leadership, as well as the challenges of continuing to push the leading edge of chip development.

Please click here to continue:

Investopedia: Familiar Problems Stalk Alcoa

Another quarter has rolled by, but precious little has changed for giant aluminum company Alcoa (NYSE:AA). The company's growth and cost initiatives continue to deliver real (and positive) results in the downstream business, but there's little they can do to navigate around the difficult operating environment for its upstream businesses. And once again, the shares look pretty cheap on most metrics, but investors could be looking at dead money here. Investopedia Broker Guides: Enhance your trading with the tools from today's top online brokers.

Please click here for more:

Tuesday, July 10, 2012

Seeking Alpha: Cummins - If The Good Are Struggling, Where Does That Leave The Rest?

A strong second half is looking less and less likely for the industrial sector. Class 8 truck orders have been declining, Europe is not getting better, and emerging markets continue to weaken. Now we have Cummins (CMI) warning that management no longer expects 2012 revenue to grow from 2011 levels.

While I have expressed some reservations in the past about Cummins' valuation and the risk of engine market share loss to internal programs, I have never questioned the quality of the business, or its status as a leader. So then, if Cummins is now of the opinion that there will be no revenue growth this year, where does that leave truck manufacturers and other heavy equipment producers?

Please click here for more:
Cummins - If The Good Are Struggling, Where Does That Leave The Rest?

Seeking Alpha: Komatsu Confirms The Smoke, But Declines To Fire

For over a year, investors have been buzzing over the idea that Japanese heavy machinery giant Komatsu (KMTUY.PK) would be interested in acquiring mining equipment manufacturer Joy Global (JOY) and basically matching Caterpillar's (CAT) move to into mining equipment. While the combination would make a certain amount of sense, Komatsu would seem to have laid the rumors to rest in an interview with Bloomberg.

Follow this link for the full piece:
Komatsu Confirms The Smoke, But Declines To Fire

Seeking Alpha: Keeping The Faith On BioMimetic Therapeutics

It hasn't been easy to stay bullish on BioMimetic Therapeutics (BMTI), as the stock has stagnated while the company worked to resubmit its PMA for its Augment bone graft product. What's more, news about under-reported side-effects and over-promised for Medtronic's (MDT) Infuse BMP-2 protein has not led doctors nor analysts to have especially warm and fuzzy feelings about the orthobiologics space. All of that said, there remains a real medical need for this product, and the efficacy data on Augment is such that I believe there is a legitimate bull case to be made on BioMimetic.

Please continue reading here:
Keeping The Faith On BioMimetic Therapeutics

Seeking Alpha: MAKO's Blood Is In The Water

When I wrote on MAKO Surgical (MAKO) in the wake of disappointing first quarter results, I mentioned an old wives tale that says med-tech companies miss in threes. Based on management's warning that second quarter results would come up short of lowered expectation, it looks we may have one more yet to go.

Read more here:
MAKO's Blood Is In The Water

Investopedia: Helen Of Troy Needs To Find Margin Leverage

Helen Of Troy (Nasdaq:HELE) is a classic second-chance stock. Between management's aggressive M&A philosophy and the ups and downs of the value-priced home and personal care market, these shares are surprisingly volatile for a company that markets shampoo, deodorant, garlic presses and the like.

I do like the relative scarcity value of this company, not to mention the leverage potential of acquiring neglected brands and pushing them through a surprisingly strong retail distribution network. Accordingly, while these shares are not a screaming bargain today, they are starting to look interesting for more risk-tolerant investors.

Read the full article here:

Investopedia: Duke Energy Has Made Utilities Interesting Again, For All The Wrong Reasons

Internal corporate politics are often confusing, if not incomprehensible, to outsiders, but sometimes a corporation goes above and beyond the call of duty in creating a "what the ... ?" moment for analysts and investors to ponder. Enter Duke Energy (NYSE:DUK) and what appears to be a scandal-in-the-making regarding its sudden CEO change in the wake of the closing of its acquisition of Progress Energy.

Continue here: