Wednesday, May 12, 2010
Target Corporation
Summary Description
Target Corporation (NYSE: TGT) is the second largest general merchandise and food discount chain retailer in the U.S. Target sells a number of products from household essentials, home furnishings, and kitchenware to fashion apparel, multimedia entertainment, groceries, and pet supplies. Target operates through roughly 1,740 brick-and-mortar Target and SuperTarget stores in 49 states, as well as online through Target.com. Target also supplies credit to its customers through its proprietary Target Visa and Target Card.
Key Competitors
Costco Wholesale Corporation
Kmart Corporation
Wal-Mart Stores, Inc.
Summary Financials
Fiscal Year-End: January
2010 Sales (mil.): $65,357.0
1-Year Sales Growth: 0.6%
2010 Net Income (mil.): $2,488.0
1-Year Net Income Growth: 12.4%
Company Industry Median Market Median
Price/Sales Ratio 0.65 0.52 3.48
Price/Earnings Ratio 17.18 17.33 25.58
© 2010 Morningstar, Inc. Financial Data provided by
Reason to Own
• With consumer spending down and unemployment up, discount retailers are positioned to be more attractive to consumers
Reasons to Sell
•
Recent News
Target Corporation (NYSE: TGT) is the second largest general merchandise and food discount chain retailer in the U.S. Target sells a number of products from household essentials, home furnishings, and kitchenware to fashion apparel, multimedia entertainment, groceries, and pet supplies. Target operates through roughly 1,740 brick-and-mortar Target and SuperTarget stores in 49 states, as well as online through Target.com. Target also supplies credit to its customers through its proprietary Target Visa and Target Card.
Key Competitors
Costco Wholesale Corporation
Kmart Corporation
Wal-Mart Stores, Inc.
Summary Financials
Fiscal Year-End: January
2010 Sales (mil.): $65,357.0
1-Year Sales Growth: 0.6%
2010 Net Income (mil.): $2,488.0
1-Year Net Income Growth: 12.4%
Company Industry Median Market Median
Price/Sales Ratio 0.65 0.52 3.48
Price/Earnings Ratio 17.18 17.33 25.58
© 2010 Morningstar, Inc. Financial Data provided by
Reason to Own
• With consumer spending down and unemployment up, discount retailers are positioned to be more attractive to consumers
Reasons to Sell
•
Recent News
Tuesday, April 13, 2010
Goldman Sachs Group Inc.
Summary Description
Goldman Sachs Group Inc. (NYSE: GS) is a global provider of investment banking, securities, and investment management services to corporations, financial institutions, governments, and high-net-worth individuals. Goldman Sachs operates through three business segments: Trading and Principle Investments, Asset Management and Securities Services, and Investment Banking.
Morgan Stanley
Citigroup, Incorporated
JPMorgan Chase & Company
Bank of America Corporation
Summary Financials
Goldman Sachs Group Inc. (NYSE: GS) is a global provider of investment banking, securities, and investment management services to corporations, financial institutions, governments, and high-net-worth individuals. Goldman Sachs operates through three business segments: Trading and Principle Investments, Asset Management and Securities Services, and Investment Banking.
- Trading and Principle Investments
The Trading Principle Investments is Goldman Sachs' largest segment, comprising 78% ($662B) of total assets. The market-making arm of Goldman Sachs is one of the largest sitting on the New York Stock Exchange. It engages in market making activities in all aspects of financial securities, derivatives, real estate, and private equity investing and subordinate lending. - Asset Management and Securities Services
Goldman Sachs' Asset Management and Securities Services segment offers asset management services comprising of investment advisory services, financial planning, and investment products; management of merchant banking funds; and securities services, such as prime brokerage, financial services, and securities lending. - Investment Banking
Goldman Sachs' Investment Banking segment, which accounts for an estimated 25% of revenues, is comprised of two components: Financial Advisory and Underwriting. Financial Advisory includes advisory services with respect to mergers and acquisitions, divestitures, corporate defense activities, restructuring, and spin-offs. Underwriting includes both equity underwriting and debt underwriting, public and private.
Morgan Stanley
Citigroup, Incorporated
JPMorgan Chase & Company
Bank of America Corporation
Summary Financials
GS 5-day Stock Price - Yahoo! Finance
Reason to Own
- Arguably most prestigious and profitable bank on Wall Street
Reasons to Sell
- Large amount of equity highly exposed to derivative risk
- China urging state-owned enterprises to default on existing commodity derivatives
Recent News
SEC accuses Goldman Sachs of defrauding investors - Yahoo! Finance, April 20th 2010
Saturday, April 10, 2010
CONSOL Energy Inc.
Company Description:
CONSOL Energy Inc. (NYSE: CNX) is a multi-fuel energy producer and energy services provider primarily serving the electric power generation industry in the United States. It primarily has two business units: Coal and Gas. During the year ended December 31, 2009, the Company produced quality bituminous coal from 16 mining complexes in the United States.
CONSOL Energy Inc. (NYSE: CNX) is a multi-fuel energy producer and energy services provider primarily serving the electric power generation industry in the United States. It primarily has two business units: Coal and Gas. During the year ended December 31, 2009, the Company produced quality bituminous coal from 16 mining complexes in the United States.
- The Coal unit, majorly involves activities such as mining, preparation and marketing of steam coal (for power generation) and metallurgical coal (for steel and coke production).
- The Gas unit principal activity is to produce methane gas for sale primarily to gas wholesalers.
- CONSOL Energy’s allied businesses include terminal services, river and dock services, industrial supply services and other business activities, including rentals of building and flight operations.
Friday, April 9, 2010
Apple Inc.
Description
Apple (NASDAQ:AAPL) designs, manufactures, and markets smart personal devices addressing the consumer electronics space. The company's products include the Macintosh (Mac) family of personal computers, the iconic iPod portable music player, the iPhone, and, commercially available April 3rd, 2010, the iPad. Under the leadership of Steve Jobs, Apple's co-founder who returned to head the company in 1996, Apple has demonstrated considerable acumen in implementing high-technology in product design and marketing, generating sustained enthusiasm and substantial growth.
Key News
Key Reasons to Buy
· iPhone’s Success
· iPad ?
· History of Continuous Innovation
Reasons to Sell
· Dependency on Steve Jobs and his deteriorating health
Recommendation : BUY
References : Wikinvest, Yahoo Finance
Western Digital (WDC)
Description
Western Digital (NYSE: WDC) is the second largest manufacturer of hard drives. The company produces drives for use in desktops, mobile devices, enterprise, and consumer electronics, and sells components to original equipment manufacturers (OEMs).
Western Digital controls 22% of the hard drive market, and its competitors are Seagate, Hitachi, Samsung, Toshiba, and Fujitsu.
Recent News
Reasons to Buy
· WDC’s offerings cover 90% of the market right now
· Strong growth in the mobile computing market
Reasons to Sell
· Flash Memory and Portable Media Drives threat to conventional hard disks
Recommendation : HOLD
References : Wikinvest, Yahoo Finance
Altria Group
Altria Group, Inc., (NYSE: MO) is involved in the manufacture and sale of cigarettes, wine, and other tobacco products in the United States and internationally. The subsidiaries of Altria are; PhillipMorrisUSA, US Smokeless Tobacco Company, John Middleton, Ste. Michelle Wine Estates and Phillip Morris Capital Corporation. It offers cigarettes under the Marlboro, Virginia Slims, and Parliament brands; smokeless tobacco products under the Copenhagen, Skoal, Red Seal, and Husky brands. The company was founded in 1919 and is headquartered in Richmond, Virginia.
Key Statistics
Revenue $ 16.82 Billion EBITDA $ 6.63 Billion Net Income $ 3.20 Million Operating Margin 19.06 % Revenue Growth (Quarterly/yoy) 7.00 %
Reasons to buy
- Alcohol and Tobacco are shown to be fairly recession proof products as they are viewed by users as necessities
- High Dividend and Earnings yield - Motley Fool
Reasons to sell
- Constant risk of litigation in the tobacco industry
- Rising prices of tobacco products as a result of continued taxation could reduce demand for products and deter new customers
Recommendation: Hold
Recent News
Amazon.com Inc.
Amazon.com, Inc. (NASDAQ: AMZN) is a online retailer in North America and internationally. The company has multiple retail web sites, including amazon.com, amazon.co.uk, amazon.de, amazon.fr, amazon.co.jp, amazon.ca, and amazon.cn. Its major categories include books; movies, music, and games; digital downloads; electronics and computers; home and garden; toys, kids, and baby; grocery; apparel, shoes, and jewelry; health and beauty; sports and outdoors; and tools, auto, and industrial. The company serves its consumer customers through its retail Websites and focuses on selection, price, and convenience. It also offers programs that enable seller customers to sell their products on its Websites and their own branded Websites. In addition, the company serves developer customers through Amazon Web Services, which provides access to technology infrastructure that developers can use to enable virtually any type of business. Amazon also manufactures and sells the kindle e-reader. Additionally, the company offers co-branded credit card programs, fulfillment, and other marketing and promotional services, such as online advertising. Amazon.com, Inc. was founded in 1994 and is headquartered in Seattle, Washington.
Key Statistics
| Revenues | $ 24.51 Billion |
| EBITDA | $ 1.39 Billion |
| Net Income | $ 902 Million |
| Operating Margin | 4.81 % |
| Revenue Growth (Quarterly/yoy) | 42.00 % |
Reasons to buy
- The Amazon web services business, especially the cloud computing space, has been growing rapidly and appears to have a strong future
- Amazon.com has shown strong revenue growth with growth of 42% year over year this past quarter
Reasons to Sell
- The new iPad could take market share from the Kindle e-reader
Recommendation: Buy
Recent Headlines
Tuesday, April 6, 2010
Costco Wholesale Corp.
Company Profile
Costco Wholesale-NA SNM-COST
999 Lake Drive
Issaquah WASHINGTON 98027
Exchange: NASNM
Sector: Customer Services
Industry: Broadline Retailers
Business Description
Costco Wholesale Corporation operates an international chain of membership wareshouses, mainly under the "Costco Wholesale" name, that carry quality, brand name merchandise at substaintially lower prices than are typically found at traditional wholesale or retail businesses. The warehouse that are designed to help small-to-medium sized businesses reduce costs in purchasing for resale and for everyday business use. Individuals may also purchase for their personal needs.
Costco's warehouses present one of the largest and most exclusive product category selections to be found under a single roof. Categories include groceries, candy, appliances, television and media, automotive supplies, tires, toys, hardware, sporting goods, jewerly, cameras, books, housewares, apparel, health and beuty aids, tobacco, furniture, office supplies and office equipment. Costco is known for carrying top quality national and regional brands, at prices consistently below traditional wholesale or retail outlets.
According to Jim Sinegal, the Company's Chief CEO, "Costco is able to offer lower prices and better values by eliminating virtually all the frills and costs historically associated with conventional wholesalers and retailers, including sales people, fancy buildings, delivery, billing and accounts receivable. We run a tight operation with extremely low overhead which enables us to pass on dramatic savings to our members."
For more business description, see http://www.costco.com/
Interactive Stock Quote & Chart
Five-year COST, S&P500 and NASDAQ:
-Click Chart directly to change time range.
One-year Price Chart:
-Click Chart directly to change time range.
SEC Filings
-Click HERE to view and download SEC filings.
Costco Wholesale-NA SNM-COST
999 Lake Drive
Issaquah WASHINGTON 98027
Exchange: NASNM
Sector: Customer Services
Industry: Broadline Retailers
Business Description
Costco Wholesale Corporation operates an international chain of membership wareshouses, mainly under the "Costco Wholesale" name, that carry quality, brand name merchandise at substaintially lower prices than are typically found at traditional wholesale or retail businesses. The warehouse that are designed to help small-to-medium sized businesses reduce costs in purchasing for resale and for everyday business use. Individuals may also purchase for their personal needs.
Costco's warehouses present one of the largest and most exclusive product category selections to be found under a single roof. Categories include groceries, candy, appliances, television and media, automotive supplies, tires, toys, hardware, sporting goods, jewerly, cameras, books, housewares, apparel, health and beuty aids, tobacco, furniture, office supplies and office equipment. Costco is known for carrying top quality national and regional brands, at prices consistently below traditional wholesale or retail outlets.
According to Jim Sinegal, the Company's Chief CEO, "Costco is able to offer lower prices and better values by eliminating virtually all the frills and costs historically associated with conventional wholesalers and retailers, including sales people, fancy buildings, delivery, billing and accounts receivable. We run a tight operation with extremely low overhead which enables us to pass on dramatic savings to our members."
For more business description, see http://www.costco.com/
Interactive Stock Quote & Chart
Five-year COST, S&P500 and NASDAQ:
-Click Chart directly to change time range.
One-year Price Chart:
-Click Chart directly to change time range.
SEC Filings
-Click HERE to view and download SEC filings.
Sunday, April 4, 2010
Johnson & Johnson
HOLD
Johnson & Johnson (NYSE:JNJ) is the world's second largest and most broadly based manufacturer of health care products, with 2008 annual sales of $63.8 billion. The company holds a significant share of the consumer and pharmaceutical markets, and is the world's largest developer and manufacturer of medical treatment and diagnostic devices.
The consumer health market is expanding as consumers are taking greater responsibility and interest in their own health. Johnson & Johnson owns highly successful brands such as Tylenol, Band-Aid, and Neutrogena. The acquisition of Pfizer's Consumer Healthcare division in 2006 and addition of brands such as Listerine, Lubriderm, Visine, and Neosporin further solidified Johnson & Johnson dominance in consumer health care.
The company's pharmaceutical segment faces many of the challenges that face all pharmaceutical companies, including issues surrounding patent expiration and FDA approval. In addition, there are constant threats of litigation and a growing pressure in the US and abroad to lower the price of medication.
BULLS
Well-diversified mix of health care, pharmaceuticals, and medical devices
The company's broad-spectrum, diverse business mix of consumer health care, pharmaceuticals, and medical devices decreases the risk of investment.
Aging Baby Boomer Population will Drive Profits
Demand for the diversified set of products in J&J portfolio will only increase as the baby Boomer population ages. Drugs, medical devices, medical supplies and over the counter medicines will all be used in higher volumes driving even higher profits.
BEARS
Drug development is costly and its success is inherently risky
Drug development is costly and its success is inherently risky.
FDA warnings are bad for business
The FDA sends warning letters to manufacturers of medical devices when there is concern for product safety or reliability, creating negative publicity. In 2004, the FDA sent a warning letter to Johnson & Johnson's Cordis, identifying safety concerns in its manufacturing plants. This created negative publicity which has slowed the growth of this franchise until follow-inspections resolved the issue in 2006.
Generics eat into profits
Like products of other major drugmakers, most of Johnson & Johnson's pharmaceutical products has been or will eventually be affected by generic medications. The U.S. patent for Risperdal, the company's most profitable drug, will expire in the end of 2007, and sales are likely to decline significantly after the loss of patent protection.
References
The Boeing Company
The Boeing Company is the world's largest aerospace and defense company. The company operates in over 90 countries and claims the title of America's largest exporter. Its has three divisions: commercial airplanes (46.4% of revenue), Integrated Defense Systems (IDS) (52.6%), and Boeing Capital Corporation (BCC) (1.15%).
The 787 has had the most successful launch of any new commercial airplane in Boeing history. Boeing just reported having 892 firm orders from 57 different customers. The Dreamliner's popularity is largely due to its cost efficiency: by replacing traditional materials with carbon-fiber-reinforced plastic (which is stronger than steel and lighter than aluminum), Boeing has created an aircraft that will consume 20% less fuel than predecessor 767. But despite the promise of the 787, challenges still exist. Production delays are common in commercial airplane manufacturing, especially when a large portion of component parts are outsourced.
Company website: http://boeing.com/
Key Statistics
| Revenues | $ 68.3 billion |
| EBITDA | $3.75 Billion |
| Net income | $ 1.31 Billion |
| Operating margin | 2.74% |
| Revenue Growth | 12.1% |
Reasons to buy (Bulls)
Short term:
- 25th March 2010: Boeing Production Rate Increases Accelerated to Meet Customer Demand. Future looks promising.
- 24th March 2010: Boeing Launches Commercial Security Products at International Security Conference
- 11th March 2010 : US Air Force Increases Order for Boeing-built Joint Direct Attack Munition Kits ($1.3 billion)
Long Term:
1. Recent bad news belies Boeings future growth
The recent loss of the U.S. Air Force tanker contract and announced delays in the first deliveries of the new 787 jet have pushed BA stock down to very attractive levels considering its future prospects. This has been revoked and BA stands in good stead once again to win the important military deal. Moreover, Boeing has a $327 billion order backlog. Orders have been added at record levels for the last 3 years. Profit margins and ROE are also improving. Analysts predict $5.94 per share earnings for 2008 and $6.93 for 2009 (Source: Reuters.com) compared to $5.25 for 2007. The $1.60 dividend is sure to be increased.
2. Huge Backlog
Boeing has a $327 billion order backlog. Orders have been added at record levels for the last 3 years. Count of 3700 planes.
3. BA's products are built to last
Boeing products are built to last and the government knows it. Boeing's B-52 bombers, built between 1952 and 1962,[1] are still flying and projected to last until 2040.[2] The history of Boeing's product quality will make it easy for the company to generate big earnings as other companies are forced to make significant (and expensive) innovations to encroach on Boeing's market share.
Reasons to Sell (Bears)
- Analysts expect new short haul flights where 787 might not sell
- 53% of sales come from Defence Systems . (85% is US Defence). So, reduced levels of global threat and changes in foreign policies could have a negative effect on the budget resulting in reduced profits.
Long term
1. Boeing to Recognize Charge Associated With Health Care Law
Boeing today announced that it expects to recognize an income tax charge of approximately $150 million as a result of the recently enacted Patient Protection and Affordable Care Act, as modified by the Health Care and Education Reconciliation Act.
2. UNION NEWS
787 plane will NOT fly by end of year, will be lucky if it flies by mid 2010. BA MUST deliver 450 planes just to break even at this point. STILL has major union problems,
3. Weakened Consumer Demand for Travel Hurts New Aircraft Sales
Because of the impending global recession, airlines worldwide are cutting new aircraft orders because of lower demand for travel. For example, in December 2008, China's Civil Aviation Administration announced that it was urging its airlines to cancel or postpone new aircraft orders for 2009. During the first two months of 2009, BA had a net total of minus ten new orders - thirty-two orders for 787 jets were canceled during the month of February alone
4. Obama administration likely to have negative impact on BA
Now that Barack Obama has taken the oath of office, it is very likely that his policies will have a negative impact on Boeing. First of all, Boeing produces the F-22 fighter jet with Lockheed Martin, Pratt & Whitney, and the US Air Force;[1] Obama is currently deciding whether or not to cut funding for the jet.[2] Because Obama has stated his intention to review the federal budget on a line-by-line basis,[3] it seems very likely that he will decide to cut the F-22 budget or shift to more competitively-priced alternatives. In light of his history of questioning the competitiveness of existing Boeing contracts,[4] this outcome seems especially likely. Other unforeseen defense-related budget cuts that will hurt Boeing seem likely, as well - Jim Albaugh, chief of Boeing Co.'s Integrated Defense Systems unit, believes the federal defense budget will dwindle because of economic pressures.[5]
References
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