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(PAS) - PepsiAmericas - Announces Share Repurchase Increase and Dividend

Shawn — Thu, 04 Sep 2008 15:00:31 +0000

PepsiAmericas, Inc (PAS) is reaping the benefits of European acquisitions as they record an 18% year-over-year increase in second-quarter earnings. The stock has rebounded quite nicely after setting a 52-week low, is a Zacks Rank #1 rated stock, and just raised 2008 full-year guidance.

Company Description

PepsiAmericas, Inc produces, distributes, and markets soft drinks under several well know PepsiCo brands, including Pepsi, Mountain Dew, and 7UP. The company operates across the United States, Europe, and the Caribbean. PepsiAmericas is head quartered in Minneapolis, has over 20,000 full-time employees, and carries a market cap of $3 billion.

A Solid Second Quarter

On July 22nd PepsiAmericas announced its second-quarter results, including earnings per share of 72 cents. The announcement was 16% higher than the consensus estimate of 62 cents and a year-over-year increase of 11 cents.

The company saw strong revenue growth of 12% attributed to acquisition and increasing volume in European markets.

PepsiAmericas Raises Guidance

PepsiAmericas also raised the 2008 EPS estimate to between $1.92 and $1.96, up from between $1.77 to $1.83. The company’s new target reflects earnings growth of 16-18%.

Analysts have also raised the consensus estimate for 2009 EPS in the past 60 days, now $2.13 up from $2.00.

Announces Share Repurchase Increase and Dividend

The company announced 10 million shares of common stock have been authorized for repurchase. There is no timeline for the repurchase and the company has approximately 127 million shares outstanding.

PepsiAmericas also declared a third-quarter dividend of 13.5 cent per share, the same as the previous quarter. The date of record is September 15th and will be payable on October 1st.

The Chart

Shares of PAS are consolidating near $24 following the second-quarter announcement. Prior to the earnings surprise in July the company was trading at the 52-week low.

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(PAS) - PepsiAmericas - Announces Share Repurchase Increase and Dividend

Shawn — Thu, 28 Aug 2008 22:40:13 +0000

A Solid Second Quarter

The company saw strong revenue growth of 12% attributed to acquisition and increasing volume in European markets.

PepsiAmericas Raises Guidance

PepsiAmericas also raised the 2008 EPS estimate to between $1.92 and $1.96, up from between $1.77 to $1.83. The company’s new target reflects earnings growth of 16-18%.

Analysts have also raised the consensus estimate for 2009 EPS in the past 60 days, now $2.13 up from $2.00.

Announces Share Repurchase Increase and Dividend

The company announced 10 million shares of common stock have been authorized for repurchase. There is no timeline for the repurchase and the company has approximately 127 million shares outstanding.

PepsiAmericas also declared a third-quarter dividend of 13.5 cent per share, the same as the previous quarter. The date of record is September 15th and will be payable on October 1st.

The Chart

Shares of PAS are consolidating near $24 following the second-quarter announcement. Prior to the earnings surprise in July the company was trading at the 52-week low.

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(PAS) - PepsiAmericas - Announces Share Repurchase Increase and Dividend

(GMCR) - Green Mountain Coffee Roasters - At the Top of the Industry

Shawn — Fri, 15 Aug 2008 18:20:04 +0000

Green Mountain Coffee Roasters, Inc. (GMCR) is flourishing as consumers are opting for home-brewed coffee amid inflated prices at the pump and the supermarket. The company recently topped analysts estimates by 19% and has a projected growth rate of 20%.

Company Description

Green Mountain Coffee Roasters, Inc is a prominent fixture in the specialty coffee industry. The company sells a wide variety of coffee blends commercially and direct to customers in addition to teas, hot cocoa, and Keurig brewing products. Green Mountain is a socially responsible company headquartered in Waterbury, Vermont and has a market cap of approximately $900 million.

Net Income Up 67% in Third Quarter

Green Mountain announced its fiscal 2008 third-quarter results on July 31st. The company earned 25 cents per share in the quarter, up from just 15 cents in the same period last year. This was the third surprise in the last four quarters as analysts only estimated 21 cents per share for the company.

Net Sales were $118.1 million, a 43% year-over year increase. The increase in sales was driven by a sharp increase in Keurig brewers sold, up 61% year-over-year and a 49% increase in single serving packs sold.

One Cup at a Time

August 1st the company announced that it will be opening a new manufacturing facility in Knox County, Tennessee. The 334,000 square foot facility will primarily produce K-Cups packs, the companies single serving package for the Keurig brewing systems. The centralized location should reduce distribution costs and help the company meet the growing demand for single-serving products.

Award Winning Design

The Keurig B3000 brewer won a Silver Excellence in Design from DESIGN magazine on July 21st. The single serving brewer that has replaced coffee pots in large offices has a unique look, is easy to use, and brews a cup of coffee in less than one minute. The Office Coffee Services channel accounts for 30% of the company’s shipments by the pound.

At the Top of the Industry

Green Mountain has a projected growth rate of 20.0% over the next five years, easily above the industry average of 13.5%. The company also boasts a Net Profit Margin of 4.1%, about three times higher than the industry average. The Zacks #1 rated stock is also first in its industry.

Green Mountain is Cleaning Up

Green Mountain gave employees paid time off to clean up the Winooski River in Vermont. Volunteers spent the last week of July pulling debris, tires, and garbage from the river. This is the fourth year Green Mountain has participated through American Rivers, the non-profit that organized the event. The company has been recognized by several business publications, including Forbes, for its corporate citizenship.

The Chart

The stock is currently trading in the middle of a newly developed channel, bound by support at $32 and resistance at $40.

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(GMCR) - Green Mountain Coffee Roasters - At the Top of the Industry

(TRLG) - True Religion Apparel - Record-Breaking Quarter - Consumer Direct segment rose by 170.5%

Shawn — Wed, 13 Aug 2008 01:20:05 +0000

True Religion Apparel, Inc (TRLG) recently announced a record-breaking quarter and is expanding faster than anticipated. The company’s year-over-year earnings have incresed 86% and have a five-year projected growth rate of 20%.

Company Description

True Religion Apparel, Inc designs, manufactures and markets its own product line of premium apparel. The company is best known for its unique jeans for men, women and children. True Religion merchandise can be found in the company’s 34 retail locations, premium department stores and boutiques around the world, or its web site. The company is headquartered in Vernon, California and carries a market cap of approximately $750 million.

A Record-Breaking Quarter

True Religion announced second-quarter results on August 6th, which included net sales of $64.2 million, a 78.9% year-over-year increase and company record. All three segments of the company reported more than 50% year-over-year increase in sales, including the Consumer Direct segment, which rose by 170.5%.

The record-level sales translated to earnings per share of 39 cents, 18% higher than the consensus estimate and 86% higher than the second quarter of 2007. The company has met or beat earnings expectations in each of the last four quarters, with an average surprise of 8.9%

Raising Guidance

True Religion also raised full-year guidance for the second time this year. The company is projecting 2008 EPS to be between $1.61 and $1.65, up from between $1.52 and $1.56. The forecast reflects a 42% increase from the $1.16 reported for 2007.

Location, Location, Location

On August 4th True Religion opened its newest location in New York City’s Union Square. The newest location is the 16th new store opened this year and brings the total store count to 34. The company expects to have 39 stores by the end of 2008, up from the previous target of 35.

Favorable Industry Comparisons

True Religion has a Return on Equity of 37.0%, which easily trumps the industry average of 12.7%. The Net Profit Margin of 15.6% is more than twice the average. The Zacks #1 Rated stock has an estimated 20% growth rate for the next five years.

The Chart

Shares of True Religion had been trading sideways until recently breaking through a level of resistance at $28 per share and set a new 52-week high.

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(TRLG) - True Religion Apparel - Record-Breaking Quarter - Consumer Direct segment rose by 170.5%

(ANDE) - The Andersons Inc - expected to earn between $4.40 - $4.80, up from $3.65 - $4.00 per share

Shawn — Wed, 13 Aug 2008 01:20:03 +0000

The Andersons Inc. (ANDE) recently raised its full-year earnings guidance twice within a 30-day period, underscoring the strength of demand the company is experiencing in its plant nutrient segment. The Anderson’s second-quarter results were great and its share price has been steadily advancing in response to the bullish environment.

The Andersons Inc., in conjunction with its subsidiaries, operates as an agricultural producer and storage facilitator. The company was founded in 1947, has a market cap. of $836 million and is headquartered in Maumee, Ohio.

Guidance Spiraling Higher

Shares of ANDE have been on a big rally since late June after the company surprised the street and raised its earnings guidance.

The Anderson’s pleased shareholders on June 26 when it raised its full-year earnings guidance, saying it now expected to earn between $4.40 and $4.80 per share, up from the previous range between $3.65 and $4.00 per share.

Amazingly, The Anderson’s then proceeded to raise guidance once again in late July. Based upon strong demand in the company’s nutrients group, it raised its full-year earnings guidance to between $5.00 and $5.40 per share.

Second-Quarter Results

Adding to the sizzle of The Anderson’s stock price was the company’s second-quarter results, reported on Aug 6. Revenue was up 74% from last year to $1.1 billion. Profit totaled $45.6 million, an increase of 78% from last year’s $25.5 million. This produced earnings of $2.48 per share, blowing past analyst estimates of $2.19 per share.

Valuations

With the current-year estimate pegged at $5.20 per share, this stock still looks like a great buy even after the big run up, with a forward P/E multiple of just 8.8X, a steep discount to the overall market.

The Chart

As previously mentioned, shares of ANDE have been rallying for the last 6 weeks after the company provided a bullish outlook for investors and boosted its guidance twice within a month. As it stands, this stock is pressuring a key level of resistance just above $47.

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(ANDE) - The Andersons Inc - expected to earn between $4.40 - $4.80, up from $3.65 - $4.00 per share

(BG) - Bunge Limited - Beat Wall Street Second Quarter Estimates by 97.08%

Shawn — Wed, 13 Aug 2008 01:20:01 +0000

Bunge continues to beat Wall Street estimates as fertilizers and agribusiness boom. The company has surprised on estimates 4 consecutive quarters on average of 73.91%. Bunge’s forward P/E is 8.40.

Company Description

Bunge Limited (BG) is an agriculture food company with operations in over 30 countries.

The company, a Zacks #1 Rank (Strong Buy), manufactures fertilizers, originates oilseeds and grains, crushes oilseeds to make food for the livestock industry, produces bottled oils, mayonnaise, margarines and other food products, and mills wheat and corn for food processors, bakeries and other commercial customers.

Bunge has large operations in Brazil and Argentina as it operates 40 fertilizer facilities, including mines and blending plants, in the two countries.

BG to Acquire Corn Products International

On June 23, Bunge announced it was acquiring Corn Products International (CPO) in an all-stock transaction. Corn Products is the largest producer of dextrose in the world and manufactures starches, high fructose corn syrups and glucose. The company has 35 plants in 15 countries.

Corn Products stockholders will receive common shares of Bunge with a market value of $56.00 for each share. After the transaction closes, Corn Products shareholders will own 21% of Bunge. The transaction is expected to close in the fourth quarter of 2008.

Bunge believes Corn Products corn business will compliment its soybean-heavy segments.

“Combining with Corn Products provides a unique opportunity for Bunge to establish an integrated, global presence in the corn value chain, which is highly complementary to our existing operations,” stated Alberto Weisser, Bunge Limited’s Chairman and Chief Executive Officer.

Bunge Beat Wall Street Second Quarter Estimates by 97.08%

On July 24, Bunge reported that its second quarter profit had quadrupled and earnings per share were $4.73 per share compared to analysts’ estimates of $2.40 per share, a surprise of 97.08%.

Revenues rose 73% to $14.36 billion from $8.30 billion in 2007.

As expected given the demand for fertilizers, the company’s fertilizer segment remained strong worldwide, especially in Brazil, where Bunge is the largest fertilizer supplier. But it was the strength of its agribusiness segment which really led earnings in the second quarter. Profit rose 329% to $614 million in that segment from $143 million in the year ago period.

BG Raises Full Year Guidance

The company is bullish about the remainder of 2008. BG believes fertilizer fundamentals should remain strong and agribusiness margins should be solid, even if there’s a softening in demand for products.

Given the solid fundamentals, Bunge sharply raised full year guidance to the range of $11.60 to $11.90 from $9.35 to $9.65.

Analysts Raise Estimates for the Third Quarter and the Year

Brokerage analysts have been raising estimates in response to the second quarter results. In the last month, third quarter estimates rose to $2.67 from $2.51 per share. Full year estimates jumped to $11.42 from $9.58 per share, which is in the middle of the company’s guidance range.

Value Fundamentals

Bunge is trading at 8.4x its forward earnings. Its price-to-book (P/B) is 1.19. The company has a solid five year average return on equity (ROE) of 14.37%. Additionally, BG pays a dividend, with a current yield of 0.80%.

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(BG) - Bunge Limited - Beat Wall Street Second Quarter Estimates by 97.08%

(RL) Words from the (investment) wise for the week that was (Aug 4 – 10, 2008)

prieur — Mon, 11 Aug 2008 02:40:11 +0000

The Olympic Games kicked off at 8:08:08 pm on Friday night, the eighth day of the eighth month of 2008. Coincidence? Not at all. The number eight is considered lucky by the Chinese, because in Cantonese (the language of South China) the word for prosperity is “fa”, which sounds like “ba” (eight).

Let the gains begin. Fortune also smiled upon stock markets, with the S&P 500 Index scoring its first back-to-back weekly gain since April as the US dollar rallied strongly and oil and commodities plummeted. The S&P 500’s gain since the low of July 15 has been 6.7%, with the Financial SPDR up by 27.8%.

Hat tip: Phil’s Stock World

As expected, the Federal Open Market Committee held the Fed funds target rate steady at 2.0%. This is the second straight meeting with no change in the rate. The committee’s statement discussed high inflation; although the FOMC expected inflation to decline in the months ahead, the members said “the inflation outlook remains highly uncertain”. The statement acknowledged both downside risks to growth and upside risks to inflation, indicating no near-term change in monetary policy. Click here for a comparison of the content of last week’s communiqué with that of the previous one (June 25), courtesy of Bill King (The King Report).

Casting light on the market situation, David Fuller (The King Report) said: “The obvious beneficiaries of weaker oil and a firmer US dollar are global stock markets. As the US has been The Rocky Horror Show in terms of concerns, it is now one of the more obvious candidates for a relief (short covering?) rally.”

To which GaveKal added: “Policy responses to the credit crunch have helped. To successfully get out of a financial squeeze you need three things: 1) a cheap currency, 2) a positive yield curve, and 3) the recapitalization of bank balance sheets. With surprising speed, all three of these conditions are now being met in the US.”

Next, a tag cloud of the text of all the articles I have read during the past week. This is a way of visualizing word frequencies at a glance. “Prices”, understandably, remained a key concern of commentators.

I believe there is still no confirmation that stock markets have bottomed and maintain that the convalescence period will be an extended affair. From a short-term perspective, however, I would give the upside the benefit of the doubt unless the lows established on 1) July 28 and 2) July 15 are broken.

Interestingly, assets in US money market funds have increased by 1.8% to $3.56 trillion since the mid-July stock market lows. Mulling through my head are the words of the late Sir John Templeton: “Bull markets are born on pessimism, grow on skepticism, mature on optimism and die on euphoria.” It’s best to keep an open mind about matters.

Before highlighting some thought-provoking news items and quotes from market commentators, let’s briefly review the financial markets’ movements on the basis of economic statistics and a performance round-up.

Economy
“Global business sentiment remains weak and fragile,” according to the Survey of Business Confidence of the World conducted by Moody’s Economy.com. The survey results suggest that the global economy is skirting recession, but just barely.

Economic reports released in the US during the past week were mixed and included the following:

• Personal income inched up 0.1% in June after soaring 1.8% in May. Excluding the tax rebate effect, personal income rose by 0.3% in June, up from 0.4% in May. Spending growth slipped to 0.6% from 0.8% the prior month. Real spending fell by 0.2% as prices soared. The core PCE deflator rose by 0.3%, the fastest since September, while the top-line deflator jumped 0.8%.

• The ISM non-manufacturing index came in slightly better than expected in July. However, a decline in new orders and new export orders signaled weaker activity in the non-manufacturing economy in the months ahead.

• Initial claims for unemployment insurance benefits increased 7,000 to 455,000 for the week ended August 2. Although expectations had been for claims to remain high, this figure exceeded them.

• Friday’s productivity and costs numbers came in worse than expected on the productivity side but better than expected on the cost side.

On Thursday, the European Central Bank (ECB) left interest rates on hold at 4.25% and stated that risks to economic growth were starting to materialize. Victoria Marklew (Northern Trust) commented: “Eurozone GDP almost certainly contracted in Q2 – Eurostat will release its flash estimate on August 14, the same day that Germany and France release their own first estimates. If the numbers surprise on the downside, the markets will start anticipating a rate cut by the ECB on September 4.”

“Europe has moved further along the road towards a recession than the US. The economic data of the past two weeks make that conclusion hard to avoid,” reported John Authers in the Financial Times.

In line with market expectations, the Bank of England also decided to keep its key repo rate steady at 5.0% at its August monetary policy meeting last week. August marks the fifth consecutive month with no change in the repo rate. UK house prices fell by almost 11% in the year to July – one of the biggest year-on-year falls recorded in the UK – prompting BCA Research to say: “The BoE will cut aggressively before year end.”

Further afield, according to the Financial Times, the Japanese government conceded on Wednesday that the country’s longest postwar period of economic expansion might be over as it reported a drop in its key measure of underlying economic conditions for June.

WEEK’S ECONOMIC REPORTS

Date	Time (ET)	Statistic	For	Actual	Briefing Forecast	Market Expects	Prior
Aug 4	8:30 AM	Personal Income	Jun	0.1%	0.0%	-0.2%	1.8%
Aug 4	8:30 AM	Personal Spending	Jun	0.6%	0.4%	0.4%	0.8%
Aug 4	10:00 AM	Factory Orders	Jun	1.7%	0.5%	0.7%	0.9%
Aug 5	10:00 AM	ISM Services	Jul	49.5	51.0	48.7	48.2
Aug 5	2:15 PM	FOMC Policy Statement	-	-	-	-	-
Aug 6	10:35 AM	Crude Inventories	08/02	1614K	NA	NA	-81K
Aug 6	3:00 PM	Consumer Credit	Jun	-	$7.0B	$6.0B	$7.8B
Aug 7	8:30 AM	Initial Claims	08/02	455K	420K	420K	448K
Aug 7	10:00 AM	Pending Home Sales	Jun	5.3%	-	-1.0%	-4.9%
Aug 7	3:00 PM	Consumer Credit	Jun	$14.3B	$7.0B	$6.4B	$7.8B
Aug 8	8:30 AM	Productivity-Prel	Q2	2.2%	2.5%	2.5%	2.6%
Aug 8	10:00 AM	Wholesale Inventories	Jun	1.1%	0.6%	0.6%	0.9%

Source: Yahoo Finance, August 8, 2008.

Next week’s economic highlights in the US, courtesy of Northern Trust, include the following:

1. International Trade (August 12): The trade deficit is predicted to have widened to $61.5 billion in June from $59.7 billion in May, with the oil import bill showing a noticeable increase. Consensus: $59.5 billion.

2. Retail Sales (August 13): Auto sales fell sharply to 12.55 million units in July. Non-auto retail sales were soft. The decline in gasoline prices in July should trim back the headline reading. Consensus: 0.0% versus 0.1% in June; non-auto retail sales: 0.5% versus 0.8% in June.

3. Consumer Price Index (August 14): A 0.4% increase in the CPI is predicted for July after a 1.1% jump in June. The core CPI is expected to have moved up 0.2% versus a 0.3% increase in June. Consensus: +0.3%; core CPI +0.2%.

4. Industrial production (August 15): The 0.1% drop in the manufacturing man-hours index in July points to a drop in industrial production. The operating rate is projected to have declined to 79.8% in July, the lowest since September 2005, excluding the 79.6% rate in May 2008. Factory production had declined for three straight quarters, with the 3.7% annualized drop in the second quarter the largest since the fourth quarter of 2001. Consensus: -0.1%; Capacity Utilization 79.8% versus 79.9% in June.

5. Other reports: NFIB Survey (August 12), Inventories (August 13), Consumer Sentiment Index (August 15).

Click here for a summary of Merrill Lynch’s US economic and interest rate forecasts.

A summary of the release dates of economic reports in the UK, Eurozone, Japan and China is provided here. It is important to keep an eye on growth trends in these economies for clues on, among others, which way the US dollar is going to move and how strongly.

Markets
The performance chart obtained from the Wall Street Journal Online shows how different global markets performed during the past week.

Source: Wall Street Journal Online, August 10, 2008.

Equities
Developed stock markets, in general, soared during the past week, with gains in excess of 2.5% being the order of the day. As was the case during the previous week, the Japanese Nikkei 225 Average was the worst performer among mature markets, rising by a relatively modest 0.6%.

The emerging markets category, as a group, underperformed developed markets, with Russia (-11.3%), China (-7.0% – a 19-month low) Turkey ( 4.7%) and Hong Kong (-4.32%) leading the declines. On the other side of the scale, the Indian BSE 30 Sensex Index (+3.5%) scored a fifth successive weekly gain. The Philippines (+4.2%) and Taiwan (+3.0%) also delivered solid returns.

Interestingly, the MSCI World Index has been outperforming the MSCI Emerging Markets Index since the stock market peaks of the middle of May, gaining 4.0% in relative performance on the back of perceived increased risks in developing markets.

The US stock markets moved strongly higher, especially on Wednesday and Friday when the Dow Jones Industrial Index recorded gains in excess of 300 points. The major index movements were: Dow Jones +3.6% (YTD -11.5%), S&P 500 Index +2.9% (YTD -11.7%), Nasdaq Composite Index +4.5% (YTD 9.0%) and Russell 2000 Index +2.5% (YTD -4.1%).

It is noteworthy that the Dow Jones, Nasdaq Composite and Russell 2000 have all crept back to above their 50-day moving averages, with the S&P 500 closing the week a mere 1 point below. The Russell 2000 also managed to penetrate the key 200-day line – often used as an indicator of the primary trend.

Click here or on the thumbnail below for a market map, courtesy of Finviz.com, providing a quick overview of the performance of the various segments of the S&P 500 Index over the week.

The apparel & accessory group outperformed last week, gaining 16%. Polo Ralph Lauren (RL) and Jones Apparel (JNY) reported earnings that handsomely beat the consensus estimates. Coach (COH), the largest member of the group, rose by 20% on the back of Coach’s CEO increasing his holdings in the company’s stock.

The casino & gaming group (+14%) was also among the top performers. Its single member, International Game Technology (IGT), reported that it had repurchased 3% of the company’s outstanding shares since the end of June.

Stocks related to the energy sector (-4.6%) and materials sector (-3.0%) were at the bottom end of the week’s performance table.

The thrifts & mortgage finance group was the worst-performing group for the week, down by 12%. The two largest members of the group, Fannie Mae (FNM) and Freddie Mac (FRE), both reported losses in excess of the analyst consensus estimates as they continue to be negatively affected by the housing decline and mortgage-related credit problems.

In other corporate news, Citigroup (C) and UBS (UBS) agreed to settle allegations of misrepresentation in the marketing of auction-rate securities. Separately, Moody’s indicated that it had placed American Express’ (AXP) A1 rating on review for a downgrade.

Fixed-interest instruments
UK, Eurozone and Japanese government bond yields declined during the past week as the economic outlook for those parts of the world worsened.

The UK ten-year Gilt yield declined by 17 basis points to 4.68%, the German ten-year Bund yield by 7 basis points to 4.26% and the Japanese ten-year bond yield by 4 basis points to 1.47%. The ten-year US Treasury Note, however, was almost unchanged at 1 basis point higher, closing at 3.95%.

US mortgage rates rose, with the 15-year fixed rate and the 5-year ARM both 7 basis points higher at 6.08% and 6.06% respectively.

Credit market stress was almost unchanged in the US, but worsened in Europe as reflected by the spread of the Markit iTraxx Europe Crossover Index widening from 531 to 563.

Source: Markit/Creditex

Currencies
The US dollar surged following an acknowledgment of weakening growth in the Eurozone by ECB President Trichet, prompting traders to think the ECB would not be hiking rates further to fight inflation.

The US Dollar Index now trades above its 50-day and 200-day moving averages, signaling a breakout from its five-month trading range.

The greenback rose against the euro (+3.2% – a five-month high), the British pound (+2.9% – a 20-month peak), the Swiss franc (+3.0%), the Japanese yen (+2.2%) and the Canadian dollar (+3.7%).

The Australian dollar (-3.9%) and New Zealand dollar (-3.1%) also lost badly against their US namesake as a result of slowing economic growth pointing to interest rate cuts.

Commodities
The dollar’s rally and growing concerns of slowing demand knocked down dollar-denominated commodity prices as seen in the Reuters/Jeffries CRB Index plunging by 7.4%.

Crude oil, understandably, received the most attention in the commodity sell-off given its strong link to the economy. The price of West Texas Intermediate crude dropped by 7.9% for the week to $115.20 a barrel, i.e. a decline of 20.9% since its high on July 11.

Precious metals remained out of favor, with silver down 12.5%, platinum 5.9% and gold bullion 5.6%. The yellow metal dropped to a three-month low, falling below its 200-day moving average. Among base metals, copper declined by 6.9%.

As far as agricultural commodities were concerned, an expected reassurance from the US Department of Agriculture on the outlook for this year’s harvest caused corn to nosedive 11.8%, soyabeans 12.0% and wheat 2.8%.

The chart below shows the past week’s damage for the various commodities.

Source: StockCharts.com

Now for a few news items and some words and charts from the investment wise that will hopefully assist with our preparation to achieve investment success. It is a prerequisite for success at the Beijing Olympics that athletes be extraordinarily well prepared. Likewise with managing our investments.

Source: Slate

Financial Times: Beijing Olympics in perspective
John Authers discusses the market implications of the Beijing Olympics.

Source: John Authers, Financial Times, August 8, 2008.

Financial Times: A year in a tin hat – one-year anniversary of the credit crunch
FT Alphaville’s Paul Murphy narrates a short guide to the 12 months of the credit crunch.

Source: Financial Times, August 5, 2008.

CNBC: Faber says US economy in recession; “long” on dollar
“Investor Marc Faber, publisher of the Gloom, Boom & Doom Report, talks with Bloomberg about the euro’s performance against the US dollar, the commodities market and the global economy. The euro fell the most in almost eight years against the dollar as traders pared bets the European Central Bank will raise interest rates as the economy slows.”

Source: CNBC, August 8, 2008.

CNBC: Hugh Hendry (Eclectica Asset Management) – the state of the market and opportunities

Source: CNBC, August 1, 2008.

(more…)

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(RL) Words from the (investment) wise for the week that was (Aug 4 – 10, 2008)

(TWI) - Titan Intl - Analysts project an impressive growth rate for next year of 92.7%

Shawn — Thu, 07 Aug 2008 19:40:08 +0000

Titan International, Inc. (TWI) just announced record sales for the second quarter of 2008 and increased its quarterly earnings by 167%, year-over-year. Analysts project an impressive growth rate for next year of 92.7% and is driven by its growing product line.

Company Description

Titan International manufactures wheels and tires for construction, agricultural, and consumer purposes. While the company’s origin dates to over 100 years ago, they shifted focus to the tire market in 1993. Titan supplies some of the most well known companies like Deere & Co, and Caterpillar, Inc. The company has a world-wide presence through its subsidiaries and is headquartered in Quincy, IL.

A Record-Setting Quarter

Titan announced second-quarter earnings per share of 48 cents, which is up 167% year-over-year. The second-quarter results also included record setting sales of $269.1 million, up from $210.3 million in the same period last year.

The company also announced a gross profit of $41.9 million, up from $27.3 million in the second quarter of 2007. Titan’s CEO credits an increasingly efficient manufacturing process and better alignment between sale prices and production costs.

“Big Daddy” is in Production

Titan Tire Corp, a subsidiary of Titan International, shipped the first 63-inch tire and wheel assembly on July 29th. The massive tire assembly, appropriately nick-named “Big Daddy”, measures almost 14 feet high and weighs over 6 tons.

While Titan is hoping to ship 900 of the new tires by the end of the year, full scale production does not start until January of next year.

A Positive Outlook

Titan has a projected growth rate of 92.7% for 2009 and is currently a Zacks #1 rated stock. The consensus earnings estimates for the year-end of 2008 and 2009 have risen 14% and 4%, respectively, within the last week. Zacks.com has rated Titan as the number one company in its industry and it carries an average broker recommendation of 1.5.

The Chart

The stock jumped higher to set its 52-week and all-time high of $47.49 just after the second-quarter announcement.

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(TWI) - Titan Intl - Analysts project an impressive growth rate for next year of 92.7%

(FLO) - Flowers Foods - boosted its dividend by 20% in late May

Shawn — Mon, 04 Aug 2008 18:00:06 +0000

Flowers Foods (FLO), which announced a definitive agreement to acquire ButterKrust Bakery in Lakeland, Florida, boosted its dividend by 20% in late May. Its dividend yield of 2.1% is a standout in its industry. A few days before hiking its dividend, the company posted first-quarter earnings of 39 cents per share. The result was ahead of last year’s 31 cents and topped the consensus estimate by 11.43%.

Company Description

Flowers Foods produces and markets packaged bakery foods for retail and foodservice customers. Among the company’s top brands are Nature’s Own, Cobblestone Mill, Sunbeam, Blue Bird, and Mrs. Freshley’s. Flowers Foods produces, markets, and distributes fresh bakery products that are delivered to customers daily through a direct-store-delivery system serving the Southeast, Southwest, and Mid-Atlantic. The company also produces and distributes fresh snack cakes and frozen breads and rolls nationally through warehouse distribution.

Higher Income

The company boosted its dividend by 20% in late May. Its dividend yield of 2.1% is a standout in its industry.

Strong First Quarter

A few days before hiking its dividend, the company posted first-quarter earnings of 39 cents per share. The result was ahead of last year’s 31 cents and topped the consensus estimate by 11.43%. Sales jumped 10.9% to $676.7 million from the year-prior $609.9 million.

George E. Deese, Flowers Foods’ Chairman, CEO, and President said, “Investments over the long term in bakery technology, distribution systems, and information technology have helped make Flowers Foods one of the most efficient operators in our industry. We continue to face the most dramatic cost increases the baking industry has ever experienced, but our team remains focused on executing our strategies, further improving our efficiencies, taking costs out of our business wherever possible, and maintaining the quality and value of our products. These efforts, along with pricing actions, helped offset our higher input costs in the quarter and allowed us to achieve another good quarter.”

The company lifted its earnings per share guidance to a range of $1.15 to $1.23 for the full year. Wall Street has current 2008 estimates pegged at $1.20 per share, which was revised up from $1.13 over the past 90 days.

The second-quarter report is scheduled for release on Aug 14, 2008.

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(FLO) - Flowers Foods - boosted its dividend by 20% in late May

(FSYS) - Fuel Systems Solutions - cashing in on America’s growing desire for less expensive fuel alternatives - 300% jump in earnings

Shawn — Wed, 30 Jul 2008 21:00:05 +0000

Fuel Systems Solutions, Inc. (FSYS) is cashing in on America’s growing desire for less expensive fuel alternatives. The company’s first-quarter results were impressive, including a 300% jump in earnings. Analyst estimates are up as Fuel System’s forecasts continued strong demand.

Fuel Systems Solutions, Inc. designs and manufactures supplies for alternative fuel components for both transportation and industrial uses. The company’s products and systems allow regular cars to operate using either propane or natural gas. Fuel Systems was founded in 1958, carries a market cap. of $588.64 million and is headquartered in Santa Ana, California.

An Industry Trend

As higher gasoline prices continue to pressure consumers, alternative energy company’s have been experiencing a sharp up tick in demand for their products and services. Fuel System’s falls into this category, as seen by the company’s impressive first-quarter results, reported on May 12.

First-Quarter Results

Revenue came in at $94.6 million, an impressive improvement from last year’s $54.8 million. Net income was up big, climbing to $6.2 million from just $1 million last year. This produced earnings of 40 cents per share, easily trumping analyst expectations of 16 cents per share.

The company noted that it experienced a 50% jump in its unit volume from the same period last year.

Guidance Raised

After the great quarter Fuel Systems boosted its full-year guidance, saying it now expects to generate revenue of $320 million. Analysts are projecting current-year earnings of $1.02 per share, up from 87 cents 60 days ago.

Valuations

With shares currently trading at $38, this is by no means an inexpensive stock, carrying a forward P/E multiple of 38X, as the market is pricing in very high expectations for significant earnings growth.

The Chart

Shares of FSYS have already had an amazing year, advancing from less than $11 to current levels over $39, an amazing return of more than 300%. More recently, this stock traded lower after hitting a new 52-week and all-time high in late June. But the sell-off was short lived as investors capitalized on the lower prices, driving share back to the 52-week high.

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(FSYS) - Fuel Systems Solutions - cashing in on America’s growing desire for less expensive fuel alternatives - 300% jump in earnings

(HAS) - Hasbro - earnings of 25 cents per share, far ahead of analyst expectations of 15 cents

Shawn — Wed, 23 Jul 2008 15:40:07 +0000

Hasbro, Inc. (HAS) reported strong second-quarter results on July 21 that once again outpaced analyst expectations. The company’s share price advanced back to its 52-week high on the news. Estimates have continued to rise over the last 90 days.

Hasbro, Inc. designs, manufactures and sells games and toys. The company was founded in 1923, carries a market cap of $5.37 billion and is headquartered in Pawtucket, Rhode Island.

Another Solid Quarter

Hasbro reported second-quarter results on July 21 that were ahead of analyst expectations. Sales were up 13% to $784.3 million. Hasbro’s profits sky rocketed to $37.5 million, a big jump from last year’s profit of $4.8 million. This produced earnings of 25 cents per share, far ahead of analyst expectations of 15 cents.

A History of Beating Estimates

Hasbro has surprised and beaten analyst estimates four out of the last four quarters, having done so by an average of 7 cents, or 31%.

U.S. and Canada sales grew 11% while international sales rose 15%. The company’s boys business sales rose 13%, driven by robust sales from the movie franchises “Star Wars”, “Transformers” and “Iron Man”.

Revenue in the company’s girl segment was up 24%, driven by strong sales in its Littlest Pet Shop Products.

Estimates Continue To Rise

Analysts have been upgrading their earnings estimates as Hasbro has continued to deliver solid results. The current-year estimate now stands at $2.14 per share, up from $2.01 per share 90 days ago.

The Chart

This is another stock that has delivered solid returns to its shareholders in 2008, starting the year trading at less than $25 a share and recently establishing a new 52-week high just below $40. Since then, this stock has retreated some but still looks well positioned to continue advancing.

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(HAS) - Hasbro - earnings of 25 cents per share, far ahead of analyst expectations of 15 cents

(CEDC) - Central European Distribution Corp - Estimates continue to revise their earnings estimates upward

Shawn — Wed, 16 Jul 2008 23:11:13 +0000

Central European Distribution Corporation (CEDC) shares just broke through a key level of resistance and set a new 52-week and all-time high. The company’s stock price has had a great year, advancing from less than $47 a share to this recent high-water mark above $77, an impressive return of more than 60%. Estimates continue to revise their earnings estimates upward.

Central European Distribution Corporation imports and distributes alcoholic beverages in Poland, Russia and Easter Europe. The company was founded in 1990, carries a market cap. of $3.16 billion and is based Bala Cynwyd, Pennsylvania.

Another Solid Quarter

CEDC reported very solid first-quarter results on Apr 30. Sales were up 37% from the same period last year to $313.6 million. On a U.S. GAAP basis, net income surged ahead, jumping to $18.5 million from a loss of $5.2 million in the same period last year. This produced earnings of 45 cents per share, ahead of analyst estimates of 28 cents per share.

This marks the third time in four quarters that CEDC has surprised and beaten analyst estimates, an impressive accomplishment in a volatile economic environment.

Growth Through Acquisition

On May 26, CEDC announced that it had officially completed its acquisition of the Russian alcohol distributor Whitehall Group. The acquisition is expected to produce an additional $200 million in annual top line revenue for CEDC, representing a 15%-20% increase in revenue from 2007.

William Carey, President and CEO commented, “The Whitehall Group is one of the premier spirit companies in Russia. The Company’s portfolio is well-positioned to take advantage of the strong economic trends in Russia.”

Estimates Are Up

The analyst community continues to be bullish on CEDC. In just the last 7 days the current-year estimate has advanced to $2.70 from $2.59.

The Chart

Shares of CEDC have been on a very smooth up trend for the last four months, advancing from the Mar 4 low just above $48 to current prices above $77. Only a few days ago, shares of CEDC surged past the a resistance level at $72 and set a new 52-week and all-time high.

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(CEDC) - Central European Distribution Corp - Estimates continue to revise their earnings estimates upward

(BG) - Bunge Limited - current estimates at $9.58 per share, versus last month’s $7.47

Shawn — Wed, 16 Jul 2008 23:11:06 +0000

Bunge Limited (BG) sees solid growth ahead as evidenced by the company’s recent increase of its full-year 2008 guidance from a range of $7.10 to $7.40 per share to $9.35 to $9.65 per share. Wall Street is in agreement, pegging current estimates at $9.58 per share, versus last month’s $7.47. In addition to the promise of growth, Bunge will reward investors with income in the form of a 0.7% dividend yield, which is more than what is being paid by the other companies within BG’s industry group.

Company Description

Bunge Limited is a global agribusiness and food company with integrated operations. The company manufactures fertilizer and animal feed for farmers; originates oilseeds and grains from the world’s primary growing regions and transports them to customers worldwide; crushes oilseeds to make meal for the livestock industry and oil for the food processing, food service and biofuel industries; produces bottled oils, mayonnaise, margarines and other food products for consumers; and mills wheat and corn for food processors, bakeries, brewers and other commercial customers.

Bullish Forecasts

In late June, the company increased of its full-year 2008 guidance from a range of $7.10 to $7.40 per share to $9.35 to $9.65 per share.

Wall Street is in agreement, pegging current estimates at $9.58 per share, versus last month’s $7.47.

Increased Income

In addition to the promise of growth, Bunge will reward investors with income in the form of a 0.7% dividend yield, which is more than what is being paid by the other companies within BG’s industry group.

In late May, the company hiked its regular quarterly cash dividend from 17 cents per share to 19 cents. Bunge noted that the new dividend is payable on September 3, 2008 to shareholders of record on August 15, 2008.

Solid Growth Attributes

Bunge offers a return on equity (ROE) of 18%, which is ahead of the industry average of 15%.

In late April, the company reported first-quarter results, stating that it capitalized on strong global market conditions and generated outstanding operating results.

First-quarter earnings per share of $2.10 surged past the year-prior 5 cents and slammed the consensus estimate with a 94% positive surprise.

Results for the second quarter will be announced on July 24, 2008.

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(BG) - Bunge Limited - current estimates at $9.58 per share, versus last month’s $7.47

(FLO) - Flowers Foods - earnings of 39 cents per share, outpacing analyst expectations of 35 cents

Shawn — Wed, 16 Jul 2008 23:11:02 +0000

Flowers Foods, Inc. (FLO) has distinguished itself from other companies in 2008 by producing very steady investor returns. Much of the recent strength comes on the heels of the company’s excellent first-quarter results, reported on May 22.

Flower Foods, Inc. produces baked goods in the United States. The company distributes its products to bakeries and grocery stores. Flowers Foods was founded in 1919, carries a market cap. of $2.63 billion and is headquartered in Thomasville, Georgia.

Most investors would quickly dismiss a baked goods company from an aggressive growth portfolio, but Flowers definitely fits the mold, as seen by the company’s impressive first-quarter results, reported on May 22.

First-Quarter Results

Sales increased to $676.7 million, up 10.9% from the same period last year. Net income also jumped ahead, coming in at $35.8 million, a 25.6% increase from last year. This produced earnings of 39 cents per share, outpacing analyst expectations of 35 cents.

This is a company that has a track record of surprising and beating analyst estimates, having done so over the last four quarters by an average of 2 cents, or 8.6%.

Share Repurchasing

The company noted that it continued to move forward with its share repurchase plan, purchasing 256,248 shares of its common stock for $5.8 million at an average price of $22.75. Since the inception of the share repurchase plan, the company has acquired 19.4 million shares of its common stock for $286.2 million, an average of $14.76 per share. Flowers also noted that it paid dividends totaling $11.5 million during the quarter.

After the solid quarter, the analyst community boosted its guidance, following the lead of Flowers. The current-year estimate is currently pegged at $1.20 per share, up 7 cents from last month.

The Chart

As previously mentioned, shares of FLO have been solid performers in 2008, posting very steady gains in a highly volatile environment. After setting a new 52-week high in late May this stock has traded mostly sideways for the last few weeks, with shares recently advancing to the top of the channel to once again challenge the high.

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(FLO) - Flowers Foods - earnings of 39 cents per share, outpacing analyst expectations of 35 cents

(AVP) - Avon Products - attractive ROE of 108%, which is much higher than the industry average of 13%

Shawn — Wed, 16 Jul 2008 23:10:56 +0000

Avon Products, Inc. (AVP) boasts an attractive ROE of 108%, which is much higher than the industry average of 13%. The strong ROE is one sign of growth, while on the income side the company offers a dividend yield of 2.3%. The yield is also higher than the industry average as virtually no companies within AVP’s industry group pay a dividend. Avon paid out its most recent quarterly dividend of 20 cents per share in early June.

Company Description

Avon Products is global beauty company, with $10 billion in annual revenue. It is the world’s largest direct seller, marketing to women in more than 100 countries through over 5.4 million independent Avon representatives. The company’s product line includes beauty products, fashion jewelry and apparel, and features such well-recognized brand names as Avon Color, Anew, Skin-So-Soft, Advance Techniques, Avon Naturals and Mark.

Income

In early Many, Avon declared a regular quarterly dividend of 20 cents per share, which was paid out on June 2, 2008. The company offers a dividend yield of 2.3%, which is higher than the industry average as virtually no companies within AVP’s industry group pay a dividend.

Growth

The company announced first-quarter results in late April, noting that beauty sales climbed 17%, while active representatives increased by 14%. First-quarter earnings per share jumped 26%.

Avon’s earnings per share are expected to grow by 14% over the next 3 – 5 years, versus the industry average of 12%. The company boasts an attractive ROE of 108%, which is much higher than the industry average of 13%.

Wall Street is forecasting full-year 2008 earnings per share of $2.19, an upward revision from the two months-ago level of $2.15.

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(AVP) - Avon Products - attractive ROE of 108%, which is much higher than the industry average of 13%

(MA) - Mastercard Inc - ROE of 30%, squashing the industry average of 9%

Shawn — Fri, 20 Jun 2008 21:10:33 +0000

Mastercard Incorporated (MA), a Zacks #1 (Strong Buy) company, continues to reward investors with both growth and income. The company posted an outstanding first quarter in late April and boasts a ROE of 30%, squashing the industry average of 9%. Analysts see more growth ahead as evidenced by a hike in 2008 earnings forecasts of 15% over the past three months. The company’s dividend yield of 0.2% is a competitive one within its industry as MA operates in a space that offers very little in terms of dividend income.

Company Description

As a franchisor, processor and advisor, MasterCard develops and markets payment solutions, processes more than 18 billion transactions each year, and provides analysis as well as consulting services to financial institution customers and merchants. Through its family of brands, including MasterCard(R), Maestro(R) and Cirrus(R), MasterCard serves consumers and businesses in more than 210 countries and territories.

Recent Events

The company recently said that it would temporarily repeal fees that were charged for cross-border transactions in Europe. This was done in order to abide by European Commission’s December 19, 2007 decision and avoid possible fines since, according to the European Union, the cross-border transactions fees were in violation of EU rules on fair competition.

President of Mastercard Europe Javier Perez commented, “We said in December that although we strongly disagree with the European Commission’s decision, we would comply with it. At the same time, we have solid legal arguments supporting our appeal of the decision to the European Court of First Instance, and we will continue to vigorously pursue that appeal. MasterCard’s policy is to comply with all applicable decisions and regulations, but to challenge them through appropriate channels when we believe that is necessary.”

In late May, Reuters reported that (MA) announced its expectation of double-digit net revenue growth for 2008. Over the longer term, the company is shooting for average annual net income growth of 20% to 30% and average annual net revenue growth of 12 % to 15%.

Higher Estimates

Analysts are also growth for the credit and debt card processor. Five out of 18 covering analysts upped full-year 2008 earnings forecasts to $8.68 per share from last month’s $8.54. Three months ago, projections stood at $7.54. The most accurate current estimate is most bullish at $8.87 per share.

Strong Growth

The Zacks #1 (Strong Buy) company’s first-quarter report noted that profit more than doubled thanks to more customers abroad using the company’s credit and debit cards. Net revenue totaled $1.2 billion, a 29.2% increase over the year-prior result. Cardholders in U.S. also increased their use of the company’s cards but at a more moderate pace.

Industry Comparisons

Mastercard’s earnings per share are expected to grow by 21% over the next 3 - 5 years, topping the industry average of 15%. The company’s ROE of 30%, squashes the industry average of 9%. Mastercard’s net profit margin of 30% crushes the industry’s average of 4%.

Income

The company is yielding 0.2% as it operates in a space that is not known as a dividend paying industry.

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(MA) - Mastercard Inc - ROE of 30%, squashing the industry average of 9%