My Own Analyst

FLIR Flops

I think that they will get a pass on the near-term challenges and like the stock 29-30 with a 36 target a year out (20 PE)

Treasure

CHS Downgrade

I usually don't care about upgrades and downgrades - just another guy's opinion.  Wells Fargo's downgrade of CHS to Hold, though, bothers me.  Not only did they reduce their target from 18-20 to 16-18, but they chopped their earnings estimate for 2014 (FY15) from 1.24 to 1.14.  This is a bold statement and intentional, as the lowest previous estimate was 1.15 - he wanted to be an "outlier".  The 20-analyst consensus was 1.25.

CHS Call

As I said, this wasn't a huge surprise.  The idea of CEO Dyer always bouncing back fast now is suspect after a second straight bad quarter.  Q1 was mainly weather, this time they had some errors, especially at WHBM, where  they had their first decline in comparable sales in over four years.  Boston Proper remains pretty disappointing but the recently opened stores  are doing well according to the company.  One positive is that August is off to a good start. Traffic remains challenging, but conversion to sales is "at an all-time high".  

 

Beneath 15, the support is 13.50 - this would be extremely cheap in my view.

Chico's Q2 Weak

I had too much confidence in CEO Dyer,who has always bounced back quickly from tough quartes at CHS.  Not this time, though, as the company reported a really bad Q2.  Sales were 4% below consensus, leading to an 18% EPS short-fall (.27 instead of .33).  The press release didn't have a lot of info. Inventory was up a lot, but they explained this and it turns out that in-store inventory fell on a per-store basis.  The call will shed more insight.  The huge miss on EPS suggests that they ended up being pretty promotional (sacrificing margin to get sales). 

Is this a big surprise really? The stock was at a 52-week low.  Next support appears to be 13.50.  More after the call...

SWI CFO Leaves

This is usually not good...  Split the job up and now two are doing it after promotions.  The CEO is a financial type (was Red Hat CFO).  Not too worried.  Actually wasn't a fan.  Still, stock won't react well most likely...

AEO: Trash or Treasure

This is mainly a technical and gut-feel observation - I haven't even read the press release (just news service headlines).  Buy AEO at 13.50-14.  This space is notoriously volatile, and the second shoe just fell.  The stock was hammered on a pre-announcement, and today it is getting whacked on crappy guidance.  

Lots of cash, this is a takeover target...

SWI

I listened to the entire 90 minute call, 45 minutes of prepared remarks and 45 minutes of Q&A.  I am somewhat surprised to see how much the stock has declined (below 37), but this is the second straight quarter of issues arising.  The full year EPS (after a beat this quarter) dropped from consensus of 1.55 to 1.51-1.54.  This clearly isn't worth 20%, but there's more to the story.  Licenses are the lifeblood, and the growth has slowed a lot.  The PE assumption I use here was high - like 30X.  If one decides it should be 25X, this knocks off about 17% alone.  I think that loss of confidence is the issue, but, and I could be wrong, it seems like this is very premature.  Maybe if I rode this all the way down from 60 my emotions would be different, but I really like this company's prospects.  So, hopefully this after-hours trashing is overdone.  I see 40 area as making more sense.

Still Negative On GNTX

It was a bad trade, but it's still a good short (after listening to the call).  If you didn't cover, hang on!

MW Goes Vertical

No, not the stock (it has gone vertical too), but the organization itself has become more vertically-integrated following the announced purchase of JA Holding for $98mm.  JA stands for Joseph Abboud, who is the famous designer who is actually now an employee of MW (I think his title is Creative Director).  They get a U.S. factory as part of the deal and say that this is accretive next year.  MW already makes its own clothes for its Moore's operation in Canada, but this is the first "brand".  Not sure I like this deal and may sell from CG/B given how close it is to my target.

Ingredion Follow-Up

I want to see what the analysts do with their 2014 estimates before finalizing my updated target, but I expect it to be near $88.  Gabelli downgraded the name to hold, but BMO reiterated a buy, calling it a "compelling entry" with a 75 target.  

I believe that this is a great example of a stock that was weak for a reason, not unlike CAH after the WAG contract loss.  I had pointed out Argentina as a risk, and the conditions there have been public and deteriorating (hyperinflation).  So, it's not exactly a surprise.  I think that the Brazil and U.S. commentary was disappointing and perhaps not expected.  In any event, after listening to the call, part of me is concerned that the company was just too optimistic or too locked into their guidance, which is troubling, but I also think that 2014 is shaping up for strong growth.  This stock is very cheap.  I would like to see it get back above 64 for technical reasons.  Until then, there is some risk of testing longer-term support 58-60.