Electrolux Can Do Better From Here

At first glance, there's a lot not to like about Electrolux (OTCPK:ELUXY). While this international appliance maker is competitive with companies like Whirlpool (NYSE:WHR), BSH Hausgeräte and GE's (NYSE:GE) former appliance business in terms of market share, the company's margins have been underwhelming and the company has also seen lackluster (or worse) performance in businesses like small appliances and markets like Brazil in recent years. Worse still, a transaction with GE that was supposed to significantly increase its North American business, improve its product breadth and drive margin synergies was turfed on anti-trust concerns (with Haier (OTCPK:HRELY) benefiting).

And yet, I think there are solid reasons to consider these shares. I don't think Electrolux can get to Whirlpool's double-digit North American margins, but it doesn't have to; just a couple of points of margin improvement overall would make a difference. What's more, the company has a clean balance sheet and a lot of M&A options in both its core appliance and professional equipment businesses. If I'm right about Electrolux being able to generate a 6% to 8% EBITDA and FCF growth on the back of okay top-line demand, a slow recovery in Brazil and better operating margins, 10% to 15% undervaluation seems reasonable, with a decent dividend as a bonus.

Electrolux's ADRs aren't always as liquid as an investor might want, so readers may want to consider the shares listed in Sweden as a more liquid option.

Continue here:
Electrolux Can Do Better From Here

Investopedia: A Solid Beat-And-Raise As Lowe's Closes Some Of The Gap

While neither Home Depot (NYSE:HD) nor Lowe's (NYSE:LOW) were exactly what I thought of as “cheap” a quarter ago, I did think Lowe's looked like the better buy as I believed the Street would start factoring in improving operations and more HD-like performance. That call seems to have worked out, as Lowe's shares outperformed Home Depot by nearly 15% over the last quarter. As Lowe's still looks cheaper than Home Depot and has more upside to operational improvements/outperformance, I would probably stick with Lowe's over Home Depot, but almost anything house-related in retailing seems strong these days.

Continue here:
http://www.investopedia.com/stock-analysis/082113/solid-beatandraise-lowes-closes-some-gap-low-hd-whr-bby.aspx

Seeking Alpha: Middleby Not Giving Many 'Buy The Dip' Opportunities

When an investor is watching a great growth story from the wrong side of the glass, there's little to do but hope for the occasional stumble to create a buying opportunity. Fast-growing food service equipment company Middleby (MIDD) stubbornly refuses to cooperate, though, as management's consistent execution has created relatively few pullbacks in recent times. Given the company's dual focus on strong internal product development and strategic M&A, not to mention the large addressable markets left unexplored (both geographically and product-oriented), it's tempting to make a "forget the valuation" call with Middleby. At a minimum, this is a stock to monitor just in case one of those rare pullbacks comes.

Please continue here:
Middleby Not Giving Many 'Buy The Dip' Opportunities

Investopedia: Whirlpool Not Just Another Doomed U.S. Manufacturer

I've been curious about U.S. home appliance manufacturer Whirlpool (NYSE:WHR) for some time now; unfortunately standing on the sidelines while the stock soared immediately after the fourth quarter earnings. Although this company does have legitimately worrisome issues with margins, free cash flow conversion and foreign competition, skeptics may find that there's quite a bit more here than they assume.

Fourth Quarter Results Lukewarm  
Whirlpool had something of a good news/bad news release for the fourth quarter. Reported revenue fell 3% (or 2% in constant currency terms) and that wasn't great. Although North America eeked out a 1% sales gain, results were weaker than expected in Latin America and Europe (down 1 and 7%, respectively, in constant currency). Curiously, shipments were remarkably consistent across Whirlpool's major segments - down 3% in North America and 4% in both Europe and Latin America.

Read more here:
http://stocks.investopedia.com/stock-analysis/2012/Whirlpool-Not-Just-Another-Doomed-U.S.-Manufacturer-WHR-GE-SHLD-LOW0206.aspx

Investopedia: Still Waiting For Alcoa To Work

As aluminum is an economically sensitive metal, it is probably no great surprise that Alcoa (NYSE:AA) stock has underperformed amidst growing worries that the U.S. will trip over into recession. On the other hand, there are a lot of secular positives for both aluminum and Alcoa, that argue in favor of the thought that this stock should work at some point. The question, then, is whether patience can really pay large enough dividends to make Alcoa worth the time and trouble.

A Fixed Third Quarter   
Alcoa missed the earnings estimate for the quarter and that's certainly disappointing. It also isn't quite as bad as it may seem. Revenue rose about 21% from last year, but declined about 3% from the prior quarter. Performance was fairly consistent across the company's operating segments, but Alcoa did see a slowdown in demand from automakers and heavy truck manufacturers. On the profit side, ATOI (after-tax operating income) rose 41% from last year, but dropped 27% on a sequential basis.

Read more here:
http://stocks.investopedia.com/stock-analysis/2011/Still-Waiting-For-Alcoa-To-Work-F-AA-RIO-BHP-ACH-BA-GE-AKS-WHR1017.aspx

Investopedia: Lowe's Still Seeing Only Slow Progress

Investors don't need to wait until Lowe's (NYSE:LOW) or Home Depot (NYSE:HD) report earnings to know that the housing and big-ticket consumer spending environments are tough. The news is still full of stories about the high rate of foreclosures, the low rates of housing starts and the ongoing discrepancy between the recovery that large corporations are seeing and the recovery that individual consumers are experiencing.


A Tough, Disappointing Start to the Year
Lowe's started the fiscal year by missing on both its top and bottom line numbers. Revenue dropped 1.6% this quarter, coming in about 3% lower than analysts expected and below even the lowest published estimate. Poor top line performance was fueled by disappointing comps - down 3.3% from last year's level. While weather certainly played a role, weather is a convenient excuse for retailers; funny how weather never seems to keep shoppers from places like Lululemon Athletica (Nasdaq:LULU).


Read the full piece at:
http://stocks.investopedia.com/stock-analysis/2011/Lowes-Still-Seeing-Only-Slow-Progress-LOW-HD-TTC-WHR-SHW-MAS-FO0518.aspx

Nucor Adds A Note Of Caution To The Season

 Lest anyone get too assured by companies going through the normal beat-and-raise cycle of earnings this quarter, Nucor (NYSE:NUE) gave an outlook that could certainly sober up a few giddy investors. Given Nucor's well-earned reputation for honest and shareholder-friendly management (as well, perhaps, as some conservatism), it would seem unwise to just dismiss their concerns out of hand. 

The Quarter That Was
Nucor had provided guidance for the third quarter some time before, but results were somewhat disappointing. Nucor reported that sales grew 33% from last year to $4.1 billion (down 1% sequentially), and that was actually a bit above the highest published estimate. While production was basically flat with last year's level, shipments rose 9%. Pricing was also relatively solid, as average sales price per ton increased 20% from last year, while falling 3% on a sequential basis.

The news below the top line was not as good, though. The company saw scrap costs rise from last year (though fall from the second quarter), while power prices were higher as well. All in all, the company ended up reporting operating earnings of 7 cents a share - certainly within the company's guidance range, but below the more optimistic guesses of analysts. Although the company had guided for operating earnings of 5 to 10 cents per share, the range of analyst estimates was 10 to 15 cents.


Please click the following link to go to the full article: 
http://stocks.investopedia.com/stock-analysis/2010/Nucor-Adds-A-Note-Of-Caution-To-The-Season-NUE-STLD-MT-CAT-UTX-WHR1022.aspx

Nucor Not In The Clear

After a few years as an equity analyst, you get a little jaded about management guidance. Some managers are perpetual optimists who always promise and never deliver. Others are more like perpetual Eeyore's and never see anything good happening. 

And then there is the management of Nucor (NYSE:NUE). In all of the years I have paid attention to this company, I have never known management to be anything less than forthcoming and straight-shooting, if somewhat conservative. So when the CEO of Nucor expresses concern about the near-term (six to 12 months) outlook for the economy and steel markets, I tend to listen. 



For the complete piece:
http://stocks.investopedia.com/stock-analysis/2010/Nucor-Not-In-The-Clear-NUE-STLD-CAT-BUCY-WHR0726.aspx

Steel Dynamics Pitted, But Not Rusting

So, how is the economy doing, exactly? Alcoa (NYSE:AA) or CSX (NYSE:CSX) earnings may have you feeling optimistic, while earnings from major banks cast a pall over that scenario. In that context, maybe Steel Dynamics (Nasdaq:STLD) earnings are a perfect metaphor - they were good, but not great, and guidance was a little murky. 

The Quarter That Was
Steel Dynamics reported 5% sequential growth in revenue (to $1.63 billion) and earnings per share of $0.22. Both of these metrics were slightly below the average Wall Street analyst estimate; enough to be a mild disappointment, but nothing to panic about. 


For the full piece, please go to:
http://stocks.investopedia.com/stock-analysis/2010/Steel-Dynamics-Pitted-But-Not-Rusting-AA-CSX-STLD-X-NUE-AKS-WHR0722.aspx

Whirlpool Whirring

Solid results this morning from appliance-maker Whirlpool (NYSE: WHR).

Overall revenue was up almost 9% to $4.5 billion, slightly beating the average guess on Wall Street. Adjusted  earnings, though, came in at $3.09, well ahead of the guess of $2.17 a share, and the company bumped its full-year guidance by $1, or about 12%.

There was good and bad here.

Good:
- Sales to Asia up 43%; sales to Latin America up 24%; unit shipments to Brazil look to be up about 10% this year
- North American sales up 6% and the company pushed guidance to the high end of its prior range.
- Internal profitability and cash flow generation is improving significantly

Not-so-good:
- Sales to Europe were down 6%; consistent with Electrolux, but not good news
- Minimal overall revenue upside guidance (the company is doing well on profits, but overall demand is iffy in North America and weak in Europe).

I find it interesting that Whirlpool is widely under-covered; most of the major brokers do not cover them. That could mean that the company is still slightly below the radar of some institutions. I mean, after all, this is an American manufacturing company and American manufacturing is supposed to be doomed, right?

I like the company's overseas prospects; it is a given to me that Brazil, India, and China are going to continue to develop, and their growing middle classes are going to want the sorts of things that Whirlpool makes. Surely there will be competition (China's Haier is already a major competitor), but Whirlpool can be fourth or fifth in China in ten years and still be doing alright.

I need to do a more robust analysis on this stock. I like the long-term thesis, the valuation seems interesting at first blush, the company is serious about internal efficiency, and the company is doing okay in a pretty tough time for its two largest markets (North America and Europe). All that is at least worth a closer look.