Monday, April 17, 2017

Can GE Hit its Target of $2 in EPS by 2018?

General Electric Company (NYSE:GE) set to abandon its target of $2 in operating EPS (earnings per share) by 2018? It surely wouldn't be a welcome event: Just ask investors in International Business Machines Corp. (NYSE:IBM) after the IT giant abandoned, in late 2014, its target of EPS of $20 by 2015. IBM's decision followed its coming to terms with fundamental declines in its legacy businesses; the stock is still below the level it traded at before the announcement was made. Is GE experiencing the same problems?

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Rockwell Automation's Lucky Quarter?

Rockwell Automation's (NYSE:ROK) recent first-quarter earnings report had more than its fair share of bullish signals to encourage investors in the stock. Indeed, Rockwell looks well-placed in an environment in which most forecasters are predicting a pickup in North American industrial production. So is it time to pile into the stock? Let's look at the cases for and against.

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Ingersoll-Rand is a Buy

Given the market's exuberance about the prospect of an industrial renaissance following President Donald Trump's election victory, it's becoming harder and harder to find industrial stocks at a good value. However, Ingersoll-Rand Plc (NYSE:IR) trades at a discount to its peers and offers investors a compelling mix of near- and long-term value creation prospects. In short, it's a smart buy for investors. Here's why.

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Monday, April 10, 2017

FedEx Corporation Earnings Analysis

The third-quarter results from FedEx Corporation (NYSE:FDX) look horrible on a superficial basis, but the devil is in the details, and a deeper analysis shows them to be solid. Moreover, management's outlook contained a number of positive points that should encourage investors. Let's take a look at the numbers from the earnings report and what they mean.

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Is Caterpillar Stock a Buy?

The stock market and Caterpillar Inc.  management appear to be taking a different tone with regard to the construction machinery giant's outlook for 2017. The stock is up nearly 60% since the start of 2016 and now trades at a forward P/E ratio of 30. Clearly, the market is expecting a strong recovery in the coming years, but management's recent commentary has been somewhat more cautionary. What's going on, and who is right?

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General Electric's Capital Arm

It's well known that General Electric Company  is shifting back to its industrial roots with CEO Jeff Immelt planning to generate 90% of the company's earnings from its digital industrial businesses by 2018. As such, GE Capital assets have been sold off to banks like Wells Fargo & Co and Capital One Financial Corp., while the highly successful Synchrony Financial spinoff also saw General Electric jettisoning financial businesses. With all of this going on, it's easy to forget that the company still has a capital arm, and it happens to be a key part of its future. Here's how and why.

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Wednesday, April 5, 2017

Oil Stock Crisis in the 1970s: The Key Lessons

The shocks to oil prices created by the Arab oil embargo in 1973 and the revolution in Iran in 1979 had far reaching consequences that still affect investor thinking today. Analyzing the aftermath of the ensuing energy crisis and stagflation (high inflation with stagnant growth) leads to one key conclusion oil stock pickers need to be aware of: the demand for oil is not price inelastic.

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Time to Buy Owens Corning Stock?

Buying a stock at an all-time high naturally invokes a kind of fear, but how about adopting Oscar Wilde's advice: believing that the cynics know the price of everything but the value of nothing? Despite its stock being at an all-time high, roofing and insulation materials company Owens Corning looks like a good value, and a great stock to play the housing recovery.

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What United Technologies Management Wants You to Know

Anyone following or invested in United Technologies Corporation (NYSE:UTX) knows that it faces near-term headwinds as the management team engages in positioning the company for long-term growth. So, it's important to monitor how well management is achieving their strategic aims, and how what they said might have a direct relevance to peers Ingersoll-Rand Plc (NYSE:IR) and Watsco Inc. (NYSE:WSO). With this in mind, let's take a look at five key takeaways from the recent investor and analyst meeting.

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Monday, March 27, 2017

Deere & Company Retail Sales

Deere & Company (NYSE:DE) has released commentary on its retail sales data for February. According to Deere, its February retail sales did better than the industry in all the two-wheel drive categories but worse in four-wheel drives and combines.
The chart below shows industry retail sales, so it's also relevant for investors in Deere's peers as well. The monthly numbers can bounce around a lot, so the chart shows the average of the last three months for selected data. As you can see, smaller tractors continue to do well, but the industry is still experiencing significant declines in its more profitable larger agricultural machinery sales.
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Is 3M Co a Good Buy For Income Investors?

3M Co.  has increased its dividend for 59 years in a row and is one of the most highly regarded stocks in the industrial sector. That said, any investment analysis of a stock's value must be forward-thinking, as well as mindful of the company's history. The key question is whether 3M can be relied upon to deliver for income investors in the future or not. Let's take a look at what it means to invest in 3M stock.

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3 Stocks You Wouldn't Want to Own

For three completely different reasons, Euronet Worldwide IncHerbalife Ltd. and Snap Inc  are stocks I won't be investing in anytime soon. While the reasons behind avoiding them are different, they all face some kind of existentialist threat which makes the worth avoiding -- no matter what the near term trends may suggest.

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Thursday, March 23, 2017

Trucking Stocks for 2017

The trucking sector has been on fire since the start of 2016, and anyone buying a basket of stocks in the industry would have generated handsome returns. At top of the bunch lies truck and engine manufacturer Navistar International Corp., whose ongoing turnaround and alliance with Volkswagen  helped the stock soar 176% in the period.
In light of Navistar's recent earnings, let's look at the company's turnaround progression and what its earnings and outlook say about the trucking market in 2017.
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AgroFresh Earnings Review

AgroFresh Solutions (NASDAQ:AGFS) needed to steady the ship after a difficult few quarters. After discussing increasing market competition for its core SmartFresh product and lowering its forecast for the U.S. apple harvest in 2016 on the third-quarter results presentation, management was under pressure to demonstrate it was back on track in the fourth quarter. The good news is that AgroFresh pretty much did that. In addition, management outlined some strategic actions taken to create growth. Let's analyze what happened in the quarter.

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Honeywell International Presents to Investors

Last year wasn't a great one for Honeywell International (NYSE:HON), at least from an operational perspective. Core organic growth declined 1%, as management lowered its revenue guidance due to a combination of three separate issues in its aerospace and PMT (performance materials and technologies) segments. Ultimately, full-year revenue came in at $39.3 billion, somewhat below the guidance for $39.6 billion to $40.9 billion given at the start of 2016.

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Fortive vs Danaher Stock

Danaher Corporation (NYSE:DHR) vs. Fortive Corp. (NYSE:FTV) makes for one of the most interesting comparisons in the industrial sector. Of course, there is nothing stopping you from owning both stocks -- in fact, before the spin-off of Fortive in July 2016, investors did own both businesses as a set -- and certainly their differing investment propositions would provide diversification.However, the split has created two significantly different companies, so let's take a look at the contrasting investment cases for the two stocks.

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Thursday, March 16, 2017

Jeff Immelt Writes to Investors

General Electric Company (NYSE:GE) CEO Jeff Immelt's annual letter to shareholders outlines what investors should expect from the company in the coming years. While Immelt usually addresses analysts and the professional investment community during presentations, the annual shareholder letter is a chance to directly speak to ordinary shareholders. If you own or are considering buying shares in the company, it's worth taking the time to see what he has planned. In that vein, let's take a look at five key takeaways from Immelt's letter.

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Why Huntington Ingalls Stock is Up in 2017

Stock in America's largest military shipbuilding company, Huntington Ingalls (NYSE:HII), rose 13.3% in February, significantly outperforming the S&P 500 gain of 3.7% in the same period. The move was likely promulgated by two factors:

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Wednesday, March 15, 2017

Deere & Company Equity Research

You have to hand it to Deere & Company's management. Not much has gone right from an end-market perspective in the last few years, with US farm cash receipts declining since 2014 as prices of key agricultural crops (ex. corn, wheat, and soybean) continue to fall. The end result is that farmers are declining to buy new equipment -- particularly the kind of high-margin large agricultural machinery that Deere thrives on -- and the company's sales have slumped.
However, Deere's stock is up nearly 40% on the year as management continues to defy the doubters. Let's analyze the key takeaways from the recent earnings report in order to see what's been going on and why the company looks set for better days.

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Tuesday, March 14, 2017

Honeywell International's Adamczyk Takes Over

What happened?

Honeywell International  gave its annual investor conference on Wednesday and updated investors on its 2017 outlook. In a nutshell, there was no change to the guidance given on its first quarter. That said, there is a case for believing that management is being a little conservative with its 2017 guidance, and at the conference management described the oil & gas and defense sectors -- previously problematic for Honeywell -- as improving. On a less positive note, the business-jet market still looks weak, with Honeywell predicting a recovery only toward the end of 2018

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