Friday, May 22, 2015

United Parcel Service Inc Equity Research and Analysis

United Parcel Service (NYSE:UPS) delivered earnings that beat analyst expectations on Tuesday, and the market reacted positively by taking the stock above $100. Diluted EPS came in at $1.12 for the quarter -- ahead of analyst estimates of $1.09 -- but that's only part of the story. On closer inspection, there are a few positive takeaways from the results and commentary. Most also reflect positively on FedEx Corp. (NYSE:FDX) -- but one doesn't. Let's take a closer look.



It's worth noting that, despite beating analyst estimates, the company left its full-year guidance unchanged. Management still expects $5.05 to $5.30 in earnings. In a sense, the positive news in the report isn't really about the numbers per se; it's more a matter of how the numbers confirm the directional trends in UPS' business.


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Sunday, May 17, 2015

5 Takeaways From Danaher's Earnings

Foreign exchange matters to most companies, but it matters to more to a company like Danaher Corporation (NYSE:DHR). In truth, its underlying earnings and revenue generation were good, but the market is in no mood to forgive companies that reduce estimates, even if the downgrade was due to currency effects. Let's take a look at the five key conclusions from last week's results, and try to gauge the underlying direction of Danaher's progress in 2015.


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Friday, May 15, 2015

Dassault Systemes Equity Research and Analysis

In a departure from the recurring theme of this quarter's earnings season, engineering and design software company Dassault Systemes (NASDAQ Other:DASTY) saw a benefit from currency effects in its recent first-quarter results. Of course, it's a French company and reports in euros, so don't be fooled by the startling headline revenue increase of 32%. Nevertheless, the company's constant currency revenue growth of 19% is still very strong. In addition, the company is tracking significantly ahead of company expectations for the full year. Let's look at the underlying themes in the earnings report and what to expect going forward.


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Thursday, May 14, 2015

Robert Half International (RHI) Equity Research Analysis

The market didn't take kindly to staffing specialist Robert Half International's (NYSE:RHI) first-quarter results released on Thursday. In a familiar refrain this earnings season, the company saw its revenue generation hit by the strength of the U.S. dollar. However, that wasn't enough to derail earnings from coming in at the top end of guidance. Moreover, the second-quarter guidance looks OK relative to analyst estimates. So what was the market concerned about when it sold the stock off? Let's take a deeper look at the results to find the answer.


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Polycom Inc Equity Research

Video-conferencing company Polycom Inc's (NASDAQ:PLCM) first-quarter earnings were almost the stuff of a trivia question on a game show. Just how does a company report a 28% increase in non-GAAP EPS while its sales only rose 1%? The answer is obviously margin expansion.

Just how did Polycom do it? Moreover, what are the underlying themes in its trading performance? Let's take a closer look.


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Sunday, May 10, 2015

AZZ Incorporated Equity Research

Following two disappointing earnings reports, AZZ Incorporated (NYSE:AZZ) delivered a solid set of fourth-quarter results and reaffirmed its full-year forecast for 2016. Going back to the previous quarter's results, management had lowered expectations for 2015 earnings amid outlining some negative headwinds in the oil and gas market, alongside push-outs of some large nuclear-related projects. How did these headwinds affect the fourth quarter, and what about the company's guidance?


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Wednesday, May 6, 2015

Check Point Software Technologies Ltd Equity Research and Analysis

Network security company Check Point Software Technologies Ltd. (NASDAQ:CHKP) delivered a strong set of first-quarter earnings on Monday, and the market rewarded investors by taking the stock higher by 5% on the day. Moreover, management announced a threat intelligence partnership with FireEye Inc. (NASDAQ:FEYE). There's a lot to like about the earnings report, so let's take a more detailed look.


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Monday, May 4, 2015

United Parcel Service Return on Assets Analysis

In a previous article, I discussed the three big trends that have changed the nature of end-market demand for FedEx and United Parcel Service, Inc. (NYSE:UPS) since the last recession: burgeoning e-commerce demand, creeping protectionism that's slowing the growth of world trade, and customer preferences for cheaper, less time-sensitive deliveries. All have had an impact, and both companies have had to make significant operational changes in response. Today, I'll look at whether these changes have made UPS less productive.


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Sunday, May 3, 2015

FedEx Corporation's Acquisition of TNT Express

FedEx Corporation stock investors will have been pleased by the market's reaction to the announcement of an agreement to buy European courier TNT Express. The deal appears to be a perfect fit, and FedEx's management believes it's unlikely to face the kind of regulatory hurdles that hindered United Parcel Service, Inc's attempt to buy TNT Express two years earlier. With that said, there are still questions to be asked about the deal in general. Specifically, what are the details behind the deal? And what about the execution risk?


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Saturday, May 2, 2015

3 Biggest Business Trends in United Parcel Service Inc and FedEx Corporation

Investors in FedEx Corporation and United Parcel Service Inc  have probably noticed some significant changes in their company's end markets in the last few years. Burgeoning e-commerce demand, changes in global trade patterns, and transforming parcel delivery preferences have adjusted the environment in which transportation companies operate. How have they changed the operations of FedEx and UPS, and what does it mean for investors?


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Friday, May 1, 2015

Wells Fargo & Co Earnings Analysis

Wells Fargo & Co. (NYSE:WFC) on Tuesday gave a mundane set of earnings results that led to a slight stock sell-off in early trading. The bank has been in the news for its recent agreement to buy performing loans from the real estate arm of GE Capital. In a sense, the GE deal highlights the need to purchase loans in a difficult lending environment. As a consequence of that environment, Wells Fargo's stock slightly underperformed the S&P 500 over the last five years.



With that said, let's look at the development of the bank's underlying metrics.


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Thursday, April 30, 2015

Cognex Corporation Earnings Preview

It's been a strong year for machine vision company Cognex Corporation (NASDAQ:CGNX), with the stock up around 24% in 2015. Investors eagerly await the forthcoming first-quarter results, due at the start of May, for confirmation of the company's positive sales trajectory. Let's review the key metrics to look for and explain what they mean in the context of the company's long-term development, a key part of which will be the replication of the kind of large deal it has with Apple Inc.


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MSC Industrial Direct Earnings Anaylsis and Research

Industrial supply company MSC Industrial Direct (NYSE:MSM) delivered disappointing second-quarter results on Wednesday, and you only have to look at the price chart below to see the company remains in a difficult trading environment. In my article on the previous quarter's report, I noted that management spoke of "a more optimistic outlook from customers," but that prediction was not borne out in the latest results. Let's take a more detailed look at what went wrong.





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Wednesday, April 29, 2015

6 Takeover Target Stocks For 2015

In a previous article I looked at the recent history of mergers and acquisitions in the industrials sector and concluded that future deals were likely to involve companies making horizontal and/or vertical acquisitions within their core business areas. With that said, everybody loves a bit of takeover speculation, so let's look at some potential acquisition targets in the industrials sector in 2015.


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Monday, April 27, 2015

General Electric Company Industrial Services: Why They Matter

When investors think about buying stock in General Electric Company (NYSE: GE) they usually think about the company's high-profile industrial products, and then its finance arm, GE Capital. However, revenue generated from industrial services represents the biggest growth opportunity for the company. Essentially, industrial services revenue is generated when the company services the base of installed products sold to customers.



The company is better known for its industrial products, but it is servicing them that really counts in terms of the bottom line. Let's look in more detail at how important services revenue is, and at its future growth prospects


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Sunday, April 26, 2015

Mergers and Acquisitions Activity in the Industrials Sector

There are fewer finer feelings in investing than waking up one morning to find one of your stocks is subject to a takeover bid. Not only does that usually come with a juicy premium, but it vindicates your view that the stock was a good value. With that said, what does the merger and acquisition landscape look like in 2015? Let's study this question in the context of a historic appraisal of the biggest deals in the industrial sector.


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Friday, April 24, 2015

Caterpillar (CAT) or Deere & Company (DE) for 2015?

Ask any investor or hedge-fund manager what his favorite stock pairs are and Caterpillar (NYSE:CAT) and Deere & Company (NYSE:DE) are likely to feature near the top of the list. The two are oft discussed in the same breath as their investment propositions are believed to have had much in common during the last decade. However, on closer inspection the two stocks actually have notably different drivers. Let's take a look at them and, in doing so, assess what will guide their stock performance in 2015.

CAT Chart

CAT data by YCharts

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Wednesday, April 22, 2015

FedEx's Management Updates Investors, and What it Means for UPS

Logistics and delivery stalwarts United Parcel Service, Inc. (NYSE:UPS) and FedEx Corporation (NYSE:FDX) have a lot of things in common, but earnings dates aren't one of them. UPS delivered fourth-quarter results on Feb. 3, while FedEx released its third-quarter earnings a month and a half later. Given that both companies are facing similar challenges and opportunities in 2015, it's useful -- for both sets of investors -- to assess the latest industry commentary from FedEx's management. What does it mean for FedEx and UPS in 2015?


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Tuesday, April 21, 2015

Is FedEx Corporation (FDX) a Good Value?

n years past, FedEx Corporation (NYSE:FDX) hasn't done well converting revenue and operating income into free cash flow, or FCF, especially compared to competitor United Parcel Service (NYSE:UPS). FedEx is the most expensive stock in the transportation sector, but its FCF generation is likely to improve in the years to come, making it a stock worth buying despite its current price tag.



Let's take a closer look


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Thursday, April 16, 2015

General Electric Company (GE) Return on Equity Analysis

General Electric Company's (NYSE:GE) 3.5% dividend yield is attracting a lot of income seekers, but will the company be able to grow the dividend in the future? In a recent article, I highlighted the importance of the company's need to grow earnings and improve productivity to do so. The question now is whether General Electric really can improve productivity. Or is it stuck in an era of productivity decline because of its size and scale?


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