Tuesday, May 17, 2016

Honeywell International Stock Analysis

In common with its peer and sometime acquisition target, United Technologies (NYSE:UTX), Honeywell International (NYSE:HON) has had a good 2016 so far. But can the good times continue? Let's take a look at the updated investment thesis for buying the stock in the light of Honeywell's recently released first-quarter results.

UTX Chart
UTX data by YCharts.
The case for buying Honeywell International stock With a trailing P/E ratio of nearly 19, Honeywell isn't an obviously cheap stock, but upon closer inspection, it has plenty of upside potential. In fact, if it merely hits its long-term targets, the case for buying the stock is a strong one. The best argument in its favor rests on its underlying free cash flow generation.

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Cognex Corporation Earnings Analysis

Machine vision company Cognex Corporation's (NASDAQ:CGNX) first-quarter results easily beat management's guidance, and the forecast for the second quarter indicates a strong start to 2016. Despite management taking a cautionary tone on full-year prospects in Monday's earnings report, the market took the stock up as much as 20% in Tuesday's trading, and it was up 17% around 2:20 p.m. EDT. Let's take a look at the results from the quarter.

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Saturday, May 14, 2016

UPS Earnings Predict FedEx's Future

With rival United Parcel Service (NYSE: UPS) having given results recently, it's time to look ahead to what FedEx Corporation (NYSE: FDX) might report in its upcoming fourth quarter. UPS' commentary on market conditions has direct relevance to FedEx, so let's take a look at five key impacts on FedEx drawn from UPS' earnings report.
Ups Means
UPS and FedEx earnings are traditionally tied to the economy. Image source: United Parcel Service.

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Emerson Electric Earnings Analysis

Another quarter and another set of tough end-market conditions for Emerson Electric (NYSE: EMR). It almost feels like the company has spent the last two years firefighting deteriorating end markets. To be fair, though, its management hasn't stood still. Restructuring plans are afoot, even while the recent second-quarter results confirmed ongoing tough conditions. Let's take a look at the key themes and numbers from the earnings.

Emr
OIL AND GAS SPENDING REMAINS DIFFICULT FOR EMERSON ELECTRIC. IMAGE SOURCE: EMERSON ELECTRIC.

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Friday, May 13, 2016

Cognex Corporation Stock Analysis

Dataman
COGNEX HAS HIGH HOPES FOR ITS MOBILE TERMINAL. IMAGE SOURCE: COGNEX CORPORATION. 
Machine vision company Cognex Corporation's (NASDAQ:CGNX) first-quarter results easily beat management's guidance, and the forecast for the second quarter indicates a strong start to 2016. Despite management taking a cautionary tone on full-year prospects in Monday's earnings report, the market took the stock up as much as 20% in Tuesday's trading, and it was up 17% around 2:20 p.m. EDT. Let's take a look at the results from the quarter.

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United Parcel Service, FedEx Corporation, Fuel Surcharge

How should we think about oil prices and profitability at logistics companies like United Parcel Service (NYSE:UPS) and FedEx Corporation (NYSE:FDX)? The answer will help determine your investing position in response to oil price movements. For example, if you think oil prices are likely to bottom (recall that a move from, say, $30 to $50 is actually a 66% hike in prices) in 2016, then is it safe to assume UPS and FedEx are automatically a buy now?
Let's take a closer look at the underlying considerations.
WTI Crude Oil Spot Price Chart

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IDEXX Laboratories Earnings Analysis

IDEXX Laboratories (NASDAQ:IDXX) and its management cheered the market by doing something few companies have done in the current earnings season: raise full-year guidance, generate double-digit organic revenue growth, and talk of more favorable end markets. In a moderately growing economy, the stock stands out for its growth prospects. Let's look at the highlights from the veterinary health specialist's recent first quarter to see what's going on.

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Friday, May 6, 2016

Wesco International Earnings Analysis

The first quarter was never going to be a pretty one for Wesco International (NYSE:WCC). Compared to other industrial suppliers like MSC Industrial Direct, Wesco has a lot of exposure to the kind of heavy industrial activities (metals, mining, energy) that have suffered the most in the recent slowdown. However, given the startling recovery in industrial supply company stock prices in 2016, the market is clearly preparing for a turnaround in conditions. Let's take a look at the facts behind Wesco's first quarter to shed more light on the matter.

WCC Chart
WCC data by YCharts.

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BorgWarner Management Sounds Cautious

Having disappointed the market by failing to meet guidance in 2015, the onus is on BorgWarner's management to restore confidence in their forecasting -- which goes a long way toward explaining the cautionary tone taken by CEO James Verrier during Thursday's earnings call. The first-quarter earnings themselves were good, and despite some operational disappointments, management of the auto parts supplier kept full-year earnings guidance intact. On the other hand, when any company's leadership says current risks outweigh opportunities, investors will want to take notice. Let's take a closer look at the quarter and what was said.

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United Parcel Service Earnings Analysis

United Parcel Service, Inc managed to navigate the waters of difficult economic conditions in the first-quarter in producing a pretty solid set of results. As with key rival FedEx Corporation , UPS is seeing strong e-commerce (particularly Business to Consumer, or B2C) growth supplant weakness in the industrial economy. This is unsurprising, as the theme of consumer-facing businesses outgrowing industrial-facing ones is a recurring one this earnings season. Let's see how the company managed to extract 9% operating income growth in a quarter when other companies have floundered.

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Wednesday, May 4, 2016

Jones Lang LaSalle Earnings Analysis

Jll
From the JLL Investor Relation site

Given the considerable anxiety expressed by widening credit spreads at the start of the year, the first-quarter results from commercial property services company Jones Lang LaSalle (NYSE:JLL) were pretty solid. In addition, the market no longer fears commercial property Armageddon via the credit markets -- the company's stock has rallied more than 7% in the last month. That said, what can investors glean from the first-quarter results?

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Robert Half International Earnings Analysis

Staffing company Robert Half International's  results are always interesting because they offer a lot of color on prospects for the global economy. Simply put, there aren't many better gauges of economic growth than employment trends. The company's first-quarter earnings and guidance indicate a moderately growing economy beset with caution on behalf of employers and characterized by unevenness in demand. It's OK, but it could be better.

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Cognex Corporation Earnings Preview

What to expect from Cognex Corporation's upcoming first-quarter results on May 2? In a simple world, we would be able to pencil in a series of assumptions based on global manufacturing trends and quickly conclude that Cognex is heading for the kind of OK-ish quarter reported by others in the industrial sector so far. 

But we don't live in a simple investing world. In reality, Cognex has a number of positive and negative stock-specific factors governing its earnings in 2016. Let's take a look at three of them.

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Roper Technologies Earnings Analysis

Sometimes the headline numbers don't tell you everything about a company's earnings, and that was definitely the case with diversified industrial Roper Technologies' (NYSE:ROP) first quarter. A revenue increase of just 4.4% accompanied by flat operating income isn't usually anything to write home about, but the figures mask a lot of moving parts under the surface, and the underlying picture is a bit brighter.

Let's take a closer look.

Roper
Exposure to upstream oil and gas proved a drag on first-quarter results. Image source: Roper Technologies. 

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Monday, May 2, 2016

AZZ Incorporated Earnings Review

AZZ Incorporated stock has had a strong year, with notable outperformance compared to the S&P 500 index. It's in large part due to the successful resolution of operating inefficiencies plus completing previously delayed shipments in its energy segment and the positive effects of acquisitions in the galvanizing segment. All of these themes came up in the company's recent fourth-quarter earnings. Let's take a closer look at the numbers and what management outlined for its fiscal year 2017.

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Why Dassault Systemes Earnings Will Get More Volatile

Having previously outlined that growth would be back-end-loaded in 2016, France-based 3D software company Dassault Systemes was under pressure to deliver in its first-quarter results. Any kind of revenue or earnings miss and the market would have fretted over the company's prospects in the second half. Fast-forward to the results, and management delivered what they said they would; however, they may not have delivered exactly what the market wanted.
Let's take a look at the details.

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Illionois Tool Works Helps Itself

In the last three months, the market has significantly bid up industrial stocks like Illinois Tool Works  and 3M Company , possibly in the belief that a recovery in industrial conditions would occur in the second half of 2016. Indeed, if a cyclical pickup occurs, then both companies are well placed to benefit. If they can generate margin expansion during bad times, then they are surely well situated for any upturn. That said, let's take a look at the tale of Illinois Tool Works' first-quarter results.

ITW Chart
ITW data by YCharts.

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Check Point Software Technologies Ltd Gives Earnings

Did Check Point Software Technologies Ltd. have a good quarter? The initial downward stock market reaction after the company reported this morning would indicate no, but given the moving parts in its numbers and how its near-term earnings are being affected by long-term strategic decisions, the answer might not be so simple to discern. Let's take a closer look at what went on with Check Point's first-quarter results and its guidance.

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Honeywell International Earnings Review

Earnings season has kicked off, and industrial bellwether Honeywell International (NYSE:HON) is set to join the party on Friday. Following its aborted bid for United Technologies (NYSE:UTX), investors will be eagerly following Honeywell's results to see if its ongoing plans are on track. Let's take a look at three key things to look out for in the results.
Honeywell reports out of three segments, the relative importance of which can be seen by looking at last year's segment profits. (ACS stands for Automation and Control Solutions, and PMT for Performance, Materials, and Technologies.)
Hon
DATA SOURCE: HONEYWELL INTERNATIONAL PRESENTATIONS.

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Tuesday, April 26, 2016

Wells Fargo Earnings Review

In a week when coal miner Peabody Energy filed for bankruptcy and rival bank JPMorgan Chase & Co. increased its provision for credit losses by 46% largely because of pressure on its energy, metals and mining clients, investors' focus was naturally on Wells Fargo's energy portfolio. Let's take a look at how credit loss provisions hit income at Wells Fargo, and the other key takeaways from the first-quarter report.

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