My Own Analyst

RMD

I had trimmed RMD from CG/B due to it being ahead of itself and a little expensive.  I am a buyer of a dip.  The company reported weak sales and EPS that missed but by a lot less than one might have expected giving the sales shortfall.  Sales were hurt by Japan and by masks in the U.S.  Japan is a short-term situation, while the U.S. is more questionable.  I think that the company is probably right - the U.S. is just a short-term issue related to both the timing of new products as well as reimbursement issues related to competitive bidding.

I recently raised my target by lifting the PE from 20 to 21.  This is an art, but I actually think that the PE could rise more over time.  Based on slightly lower earnings outlook I expect, my target drops to 66 from 68.  I like this stock near 50 and love it 46-48.

GS Upgrades RMD to Buy

Nice chart, strong company, reasonable valuation (in CG/B) - just raised target to 64 a year out (20PE plus cash)

Tuesday Update

Texans 31, Chargers 28 (sorry, Bob!)...

CAG cut their outlook slightly - stock has been acting poorly and hopefully this marks the end.  I really like this for a conservative play.

CHS again has an activist investor on board -very positive on that.

PSMT August same-store sales were up a nice 10% - stock too expensive for me

The Dow Jones booted AA, BAC and HPQ and added GS, NKE and V

I would be a buyer of BAC on any weakness on that one...  Maybe a better idea is just to be a buyer of BAC - looks great on the chart...

 

INTC - Nice Q

The quarter was in line, but, importantly, guidance was good.  The full year expectation had been 1% sales growth, but the sales guidance is slightly higher and the company thinks it can do 60% GM still.  I think an even friendlier piece of news is that they reduced their CapEx guidance by $1 billion.  This is bad for AMAT and maybe KLAC by the way.  INTC up nicely!

 

 

CSCO Jacks Dividend

CSCO boosted the quarterly dividend to .17 from .14:  +21%

Sticking with this one...

 

P.S.  Here are my 4 stock picks for my quarterly contest (I got smoked last quarter!):

• ANV
• MAKO
• PLPC
• FLO (short)

 

INTC Update

I figured out the technicals first (earlier this week, when I shared my bullish view), but here is what's going on fundamentally.  INTC is likely going to be making chips for AAPL for mobile.  They are adopting a smart strategy of partnering with CSCO and ALTR now (new) in order to get better returns on their capital (foundry).  I think that this is a "game-changer" and could impact the way people think about INTC as being a desktop dinosaur...

CFR: Patience Rewarded

CFR, a core holding in CG/B, announced a transaction to change their capital structure today, issuing a preferred stock in order to repurchase common stock (a la Einhorn's suggestion for AAPL!).  The stock cleared 60 and appears poised for its all-time high in the 62.50 area (absent a spike in 2008).  My one-year target based on 18PE is 72, but this will allow me to raise it somewhat due to earnings accretion.  Every now and then I like to review my long-term performance with a particular name.  We added CFR in October and are up 10.37%.  Here is the entire rest of the history - never a loss:

While this deal doesn't likely change the EPS by more than 1% or so (on a 4% repurchase), it's a very strong signal from a conservative institution.

CATO Comps Weak

CATO had a rough end to January, hurt, it thinks, by delayed tax refunds and higher payroll tax withholding.   The bottom line is that Q4 EPS, projected by analysts at .35, will be .27-.29.  This continues a trend of weak results.  I don't think that it materially changes the story for this value stock.

MAT Misses by .03 but Hikes Dividend by .05

We'll see how this one goes, but it was a small miss that will likely be overlooked soon if not immediately.  

CFR Update

CFR is a great bank.  The good news is that deposit growth is just smoking.  The bad news is that it remains hard to lend/invest.  While the company signed off on analyst consensus for 2013 (which is flat), the tone was much better.  Interestingly, they flipped a block of Treasuries for a $4.4mm gain - this may account for the "beat" and isn't really sustainable.  I was surprised to hear that they did this (take a quick profit).  They also pointed to a horrible lending environment in Q4 (fiscal cliff, elections) but a better one in Q1.

The stock isn't cheap at about 15PE, but it's not real expensive and they are doing well despite lots of challenges.  I don't think that there is a lot of risk, and I think that the next move is up, but it might make some sense to lighten up at 60 area - not sure.