Author Archives: Stephen Percoco
September Housing Market Update
The average rate on the 30-year mortgage has risen above 6.00% in response to the latest hike in the Fed Funds target rate. Freddie Mac’s Primary Mortgage Market Survey pegged the average rate at 6.29% this week. The CME’s Fed … Continue reading
Baker Hughes (BKR): Initiating Coverage
Five years after its merger with GE Oil & Gas, Baker Hughes Company (BKR) is adjusting to changes in its market environment, including the fallout from the war in Ukraine, supply chain disruptions, inflation and challenges and opportunities in the … Continue reading
Campbell Soup (CPB) 22Q4 Update
Fiscal 22Q4 net sales of $2.0 billion increased 6.1% YOY. GAAP diluted EPS was $0.32, below 21Q4’s $0.95. Non-GAAP adjusted EPS of $0.56 exceeded 21Q4’s $0.52. These results were generally in line with my expectations.
Hewlett Packard Enterprise (HPE) 22Q3 Update
HPE’s 22Q3 GAAP diluted EPS was $0.31 vs. $0.29 in 21Q3 and better than my estimate of $0.26. Non-GAAP EPS was $0.48, compared with $0.47 last year and my estimate of $0.46. Net revenue of $6.95 billion exceeded 21Q3’s $6.90 … Continue reading
Nice Speech, Mr. Powell, But Please Pay Attention to Housing
The stock market fell 3.3% on Friday, following Fed Chairman Jay Powell’s speech on monetary policy at the Jackson Hole Fed meeting. Mr. Powell affirmed the Federal Reserve’s commitment to bring inflation down, which will probably take some time and … Continue reading
Toll Brothers (TOL) 22Q3 Update
Toll Brothers’ 22Q3 EPS was $2.35, up 25.7% from 21Q3’s $1.87 and above my estimate of $2.22. Revenues increased 10.6% to $2.49 billion, slightly below my projections. Deliveries of 2,414 units fell 7.1%, more than expected, but the average sales … Continue reading
22Q2 Housing Market Update
Despite an accelerating slide in housing sales and production following this year’s rise in mortgage rates, my homebuilder stock price index has performed in line with its benchmarks since April. At current prices, homebuilding stocks trade at less than four … Continue reading
Citius Pharmaceuticals (CTXR) 22Q3 Update
Citius Pharmaceuticals reported a third quarter loss of $8.9 million or $0.06 per share, compared with last year’s loss of $7.3 million or $0.05 per share. As an early stage drug development company, Citius currently generates no revenues. The loss … Continue reading
Diversified Healthcare Trust (DHC) 22Q2 Update
22Q2 GAAP loss was $0.46 per share and normalized FFO -$0.04 per share, below my forecast of -$0.42 and +$0.01, respectively. The Office Portfolio disappointed again, raising concerns about declining occupancy. Senior Housing Operating Portfolio (SHOP) results met expectations.
AlerisLife (ALR) 22Q2 Update
AlerisLife reported a 22Q2 net loss of $8.8 million or $0.28 per share, better than the 22Q1 loss of $9.7 million or $0.31 per share and the 21Q2 loss of $12.3 million or $0.39 per share. I had estimated a … Continue reading
Bluegreen Vacations Holding (BVH) 22Q2 Update
2022 second quarter net income attributable to shareholders was $17.8 million or $0.87 per diluted share, compared with 21Q2’s $19.5 million or $0.93 per share. The decline in EPS occurred despite a 21.8% increase in revenues to $235.6 million.
Mistras Group (MG) 22Q2 Update
Mistras Group reported 22Q2 EPS of $0.15, below 21Q2’s $0.20 and my estimate of $0.18. Revenues of $179.0 million were 0.8% above the year earlier period and also below my expectations. While revenues were essentially flat, gross margin was lower … Continue reading
Organon & Co (OGN) 22Q2 Update
22Q2 revenues of $1.585 billion were flat year-over-year, but up 5% at constant currency. GAAP EPS of $0.92, was below 21Q2’s $1.68 and also below my $1.11 estimate. Non-GAAP EPS of $1.25 was below last year’s $1.72 and also below … Continue reading
Public Service Enterprise Group (PEG) 22Q2 Update
Public Service Enterprise Group (PEG) reported 22Q2 operating revenues of $2.08 billion, up 10.8% from 21Q2. GAAP EPS was $0.26 vs. a loss of $0.35 a year ago. Most of last year’s loss was related to a net $457 million … Continue reading
Merck & Co (MRK) 22Q2 Update
22Q2 sales increased 28% to $14.6 billion, with LAGEVRIO sales of $1.2 billion, a 26% increase in KEYTRUDA sales to $5.3 billion and a 36% increase in GARDASIL/GARDASIL 9 sales to $1.7 billion. GAAP diluted EPS from continuing operations increased … Continue reading
American Water Works (AWK) 22Q2 Update
American Water Works Company (AWK) reported 22Q2 EPS of $1.20, up 5% from $1.14 in 21Q2. Operating revenues decreased 6.2% to $937 million, mostly due to the sale of the Homeowner Services (HOS) and New York American Water (NYAM) businesses, … Continue reading
Bristol-Myers Squibb (BMY) 22Q2 Update
22Q2 revenues were higher, GAAP earnings lower and non-GAAP earnings higher than anticipated. Management reduced its 2022 revenue guidance by $1 million to $46 billion due to foreign currency headwinds. It also lowered its GAAP EPS guidance, but left its … Continue reading
GE 22Q2 Update
General Electric Company (GE) announced 22Q2 revenues of $18.6 billion, up 2.4% year-over-year, a GAAP loss per share of $0.59, two cents worse than 21Q2’s $0.57 loss, and non-GAAP EPS of $0.78, above 21Q2’s $0.22. I had anticipated a GAAP … Continue reading
Hewlett Packard Enterprise Company (HPE) 22Q2 Update
Hewlett Packard Enterprise Company’s performance during the first half of fiscal 2022 was somewhat disappointing, due primarily to the residual disruptions from the pandemic and more recent developments, including the conflict between Russia and Ukraine. Although its order book increased … Continue reading
Bluegreen Vacations Holding Corp. (BVH) 22Q1 Update
2022 first quarter net income from continuing operations attributable to shareholders was $16.0 million or $0.76 per diluted share, compared with 21Q1’s $3.1 million or $0.16 per share. Revenues improved to $195.1 million from $146.4 million.
Citius Announces Its Intention to Spin-Off I/ONTAK
Earlier today, Citius Pharmaceuticals issued a press release announcing its intention to spin-off its late stage oncology candidate, I/ONTAK, to a new, standalone publicly-traded company. In making the announcement, the company said that it believed that the market has not … Continue reading
DHC 22Q1 Update
22Q1 In Line with Expectations. Maintaining Performance Rating and Price Target. 22Q1 GAAP earnings were $1.01 per share and normalized FFO –$0.09 per share, in line with my expectations of $1.04 and –$0.06. Excluding a $327.8 million gain on the … Continue reading
AlerisLife (ALR) 22Q1 Update
22Q1 Loss of $0.30 in Line with Expectations; Katie Potter Steps Down as CEO; ALR Hires Alvarez & Marsal to Conduct a Comprehensive Operational Review AlerisLife reported a 22Q1 net loss of $9.7 million or $0.31 per diluted share, slightly … Continue reading
GE 22Q1 Update
Since reporting disappoint 22Q1 results on April 26, GE’s stock has fallen sharply. Year-to-date, GE’s stock is down 22.6%, worse than the S&P 500 Industrial sector’s 11.7% decline.
Citius Pharma 22Q1 Update
Citius Pharmaceuticals (CXTR) is a specialty pharmaceutical company focused on the development of five potential products: (1) Mino-Lok, an antibiotic lock solution to treat and salvage infected central venous catheters (CVCs) in patients with catheter-related bloodstream infections (CRBSIs); (2) I/ONTAK, … Continue reading
Mistras Group, Inc. (MG) 21Q4 Update
21Q4 Results Below Expectations, Lowering 2022 Estimates, Reducing Rating and Price Target Mistras Group reported 21Q4 EPS of $0.00, slightly worse than 20Q4’s $0.01 and below my estimate of $0.06. Revenues of $171.2 million were 6.5% above the year earlier … Continue reading
Thoughts on the Outlook for Homebuilding Stocks
Homebuilding stocks have had a rough 2022. Year-to-date (through 4/12), my equal-weighted index of 11 publicly-traded U.S. homebuilders has fallen 34.8%. That compares with declines of 7.7% in the S&P 500 and 11.5% in the Russell 2000. Following a three-fold … Continue reading
Going to Neutral on Big Pharma
The stocks of large pharmaceutical companies, including Bristol-Myers Squibb (BMY) and Merck & Co. (MRK), which I follow, have outperformed the market significantly so far this year. The pharmaceuticals sector, as measured by the NYSE Arca Pharmaceuticals Index ($DRG) shows … Continue reading
AlerisLife (ALR) 21Q4 Update
Lowering Estimates and Safety Rating, Withdrawing Performance Rating and Price Target AlerisLife Inc. (ALR), formerly known as Five Star Senior Living, reported a fourth quarter net loss of $10.7 million or $0.34 per share, slightly worse than the third quarter’s … Continue reading
Toll Brothers (TOL) 22Q1 Update
Since my last report on December 9, 2021, Toll’s stock has fallen 26.3%, much more than the S&P Mid-Cap 400’s 2.6% decline. As I noted back then, shares of Toll and other homebuilders were ripe for a correction following their … Continue reading
Merck & Co. (MRK) Update
Establishing 2022 and 2023 Estimates, Maintaining Outperform Rating, Setting $85 Price Target Following the spin-off of Organon, Merck is focused on growing its pharmaceuticals business to offset the looming loss of exclusivity on its $5 billion Januvia/Janumet franchise and others … Continue reading
DHC 21Q4 Update
Lowering Estimates for 2022 and Adding 2023, Lowering Price Target to $5.00 DHC reported 21Q4 normalized FFO of –$0.09 per share, compared with 21Q3’s ‑$0.05 and 20Q4’s +$0.09. Although the Office portfolio posted another solid quarter and the Senior Housing … Continue reading
Bristol-Myers Squibb Update
Raising 2022 Estimate and Adding 2023, Maintaining Outperform Rating and Price Target of $73 Bristol-Myers Squibb Company (BMS) achieved many operational milestones in 2021, advancing its development pipeline through clinical trials, new drug applications and regulatory approvals. At its November … Continue reading
The Drivers of Large Cap Stock Performance in 2021
Estimated Returns by Sectors, Industry Groups and Industries Large cap stocks, as measured by the Lark Research Large Cap index (the “Index”) which currently mirrors the S&P 500, turned in another impressive performance in 2021. The Index posted a price … Continue reading
DHC Announces Sales of Joint Venture Interests in Certain Office Properties
Sales Raise Over $1 Billion, Giving the Trust the Means to Retire the 9.75% Senior Notes due 2025 When They Become Callable in June 2022. DHC announced on January 31 that it has entered into a joint venture with two … Continue reading
Notes and Analysis from Campbell Soup’s Fiscal 2022 Investor Day
Since 2019, Campbell Soup Company has jettisoned several businesses to focus on its core Meals and Beverage (M&B) and Snacks segments. It has also acquired new growth platforms in Pacific Foods and Snyder’s-Lance. Its $1 billion enterprise cost savings program … Continue reading
Mistras Group: Waiting for the Full Recovery
Mistras Group is a leading provider of non-destructive testing (NDT) and related asset protection services that monitor the condition of critical infrastructure and equipment to ensure safe and efficient operations and maximize uptime. The company’s business has suffered during the … Continue reading
Toll Brothers (TOL) 21Q4 Update
Toll Brothers reported stronger-than anticipated fiscal 21Q4 results that once again exceeded my and the consensus estimates. Its diluted earnings per share were $3.02, up 95% from $1.55 in 20Q4. My estimate was $2.51 and the consensus estimate was $2.50.
Organon 21Q3 Update
Organon reported 21Q3 GAAP EPS of $1.38 which exceeded my estimate of $1.31. Revenues were in line with my estimates and operating costs were lower, except for a $25 million increase associated with the acquisition of in-process research & development.
SJI 21Q3 Update
SJI reported a 21Q3 GAAP net loss of $25.8 million or $0.23 per share, wider than 20Q3’s net loss of $10.3 million or $0.10. On an economic earnings basis, which adjusts for fluctuations in the fair market value of derivatives … Continue reading
Notes and Analysis from HPE’s 2021 SAM
At its 2021 Securities Analyst Meeting (SAM), the management of Hewlett Packard Enterprise Company (HPE) said that the workplace changes advanced by the pandemic are proving the validity of its edge-to-cloud strategy. HPE has experienced stronger than anticipated growth in … Continue reading
DHC 21Q3 Results
Diversified Healthcare Trust (DHC) reported 21Q3 normalized FFO of –$0.04 per share, compared with 21Q2’s $0.05. The loss came despite a 40 bp improvement in SHOP occupancy. Operating costs remain high and senior living operators are discounting resident rates more … Continue reading
Five Star Senior Living 21Q3 Update
Again Lowering EPS Estimates; Reducing 6-12 Month PT and Maintaining Outperform Rating Five Star reported a third quarter net loss of $10.2 million or $0.32 per share, less than the second quarter’s loss of $12.3 million or $0.39 per share. … Continue reading
21Q3 Housing Market Update
The housing market has been quite strong since shortly after the onset of the pandemic, fueled by low interest rates, pent-up demand and a strong desire among urban apartment dwellers to escape the coronavirus. New home sales from May 2020 … Continue reading
Toll Brothers 21Q3 Update
Toll Brothers reported stronger-than anticipated fiscal 21Q3 results that once again exceeded my estimates. Its diluted earnings per share were $1.86, up 71% from $0.59 in 20Q2. My estimate was $1.48 and the consensus estimate was $1.53.
PSEG’s 2021 Investor Day
Public Service Enterprise Group held its 2021 Investor Day on Sept. 27, 2021. At the meeting, management offered the following guidance:
So. Jersey Industries: High Dividend Yield With Moderate Upside Price Potential
SJI’s utility businesses – South Jersey Gas Company (SJG) and Elizabethtown Gas Company (ETG) – are its core growth engines. Representing 70%-80% of consolidated profits, they have grown by pursuing regulatory-approved infrastructure investment programs and gaining customers from new construction … Continue reading
Organon (OGN) 21Q2 Update
21Q2 Performance in Line with Expectations; Raising Performance Rating and Lowering Price Target 21Q2 GAAP EPS of $1.68 was lower than 20Q2’s $2.14. Although sales increased 4.5% to $1.6 billion, costs were higher as a result of new tolling arrangements … Continue reading
DHC 21Q2 Update
Progress on Strategic Repositioning; Performance in Line with Expectations; Upgrading Performance Rating; Maintaining Price Target of ~$7.50. DHC reported 21Q2 normalized funds from operations (FFO) of $12.2 million or $0.05 per share, lower than 20Q2’s $0.25, due mostly to a … Continue reading
Five Star Senior Living 21Q2 Update
Five Star reported a second quarter net loss of $12.3 million, reversing last year’s $3.0 million net profit. On a per share basis, the loss was $0.39, compared to net income of $0.10 and below my estimate of a loss … Continue reading
American Water Works 21Q2 Update
2021 Second Quarter Results in Line with Expectations. Maintaining Neutral Rating. AWK reported 21Q2 EPS of $1.14, up 17.5% from 20Q2. Operating revenues increased 7.3% to $999 million. Operating income rose 5.4% to $330 million. Operating margin eased 60 bp … Continue reading
Bristol-Myers Squibb: Initiating Coverage
Initiating Coverage with an Outperform Rating. Prospects Beyond 2022 are Favorable. With the acquisitions of Celgene in 2019 and MyoKardia in 2020, BMS has substantially transformed its business and repositioned for growth. Drugs added to the portfolio from the two … Continue reading
PSEG: A Possible Rocky Transition to T&D
It has been a year since PSEG announced a strategic review to explore divesting its fossil fuel generating assets. Since then, management has said that it is pleased with the interest shown by potential buyers in its 6,750+ MW portfolio … Continue reading
Bluegreen Vacations Holding Corp. Stands to Gain as Domestic Travel Improves
On May 5, 2021, Bluegreen Vacations Holding Corporation (BVH), formerly known as BBX Capital Corporation, completed the acquisition of the 7% publicly-traded ownership stake of Bluegreen Vacations Corporation (BXG) that it did not already own through a statutory short-form merger … Continue reading
HPE 21Q2 Results
The Company Reported Stronger Than Expected 21Q2 Results, But Its Upwardly Revised Guidance Was Somewhat Disappointing. HPE reported fiscal 2021 second quarter GAAP earnings of $0.19 per share, well above its most recent guidance of $0.02-$0.08 per share and ahead … Continue reading
Update on Hewlett Packard Enterprise (HPE)
HPE has posted two consecutive quarters of stronger-than-expected results. Although the quarterly figures still lag behind the prior year, the recent strength suggests that its business is rebounding strongly off the bottom. As noted by management, HPE’s business portfolio, which … Continue reading
Five Star Alters Strategy, Its Stock Gets Slammed
In early April, Five Star announced a change in its strategy whereby it will transition out of the management of 108 smaller senior living communities (SLCs) with 7,500 living units (with an average of 69.4 units per community), close and … Continue reading
Assessing the Impact of the Organon Spin-Off on Merck
Merck is progressing toward the spin-off of its subsidiary, Organon & Co., which is expected to be completed by the end of the June. Organon will include Merck’s women’s health products, biosimilars and certain established brands, most of which have … Continue reading
Five Star and DHC Restructure Their Agreement
On April 9, Five Star and DHC announced a restructuring of their management agreement whereby DHC will transition the management of 108 smaller senior living communities (SLCs) with a total of 7,500 units to other operators by the end of … Continue reading
Merck Spin-Off of Organon Targeted for 21Q2
In recent weeks, Merck has been following through on its plan to spin-off its subsidiary, Organon & Co., to shareholders. On March 17, it filed its Form 10 registration statement related to the transaction. On March 24, it posted on … Continue reading
Vaccinations Raise Visibility of a Bottom in Occupancy for DHC
Diversified Healthcare Trust reported 2020 fourth quarter normalized funds from operations (FFO) (my definition) of $15.1 million or $0.06 per share, slightly better than 20Q3, but well below 19Q4. The results were modestly better than I anticipated with lower operating … Continue reading
Citius Pharma Raises $71 million in Equity Unit Offering
Citius Pharmaceuticals (CXTR) is a specialty pharmaceutical company focused on the development of four potential products: (1) Mino-Lok, an antibiotic lock solution to treat and salvage infected central venous catheters (“CVCs”) in patients with catheter-related bloodstream infections (“CRBSIs”); Halo-Lido, a … Continue reading
Five Star Senior Living (FVE) Update
Vaccination of 90% of Residents Raises Visibility on a Rebound in Occupancy Five Star reported slightly stronger 20Q4 results than anticipated, due primarily to gains on investments held by its captive insurer. Average occupancy across its owned and leased senior … Continue reading
2021 Market Outlook – Part 2: S&P 500 Sector Analysis
2020 was of course dominated by the impact of the pandemic on the economy and specifically on the revenues and profits of each of the S&P 500 constituents. There was a sharp stock market sell-off in March-April, followed by a … Continue reading
2021 Market Outlook – Part 1
Despite Ongoing Uncertainties about the Pandemic, the Economic Recovery and Global Events, the Stock Market is Poised to Move Higher in 2021. The financial markets turned in a stellar performance in 2020, the year of COVID-19, when real GDP probably … Continue reading
The Employment Situation and Outlook – December 2020
Yesterday, the Bureau of Labor Statistics estimated that nonfarm payroll employment declined by 140,000 in December. The estimate for November was increased by 135,000. The level of employment for December was therefore virtually unchanged from the November report.
An Uncertain Outlook for Housing
2020 was a surprisingly solid year for housing in light of the pandemic and the havoc that it wreaked in other parts of the economy. December data will not be reported until later this month. I project that single-family housing … Continue reading
Colony Credit Real Estate 20Q3 Update
Shares of Colony Credit Real Estate (CLNC) have surged over the past six weeks, nearly doubling from a low of $4.37 on Oct. 29 to a high of $8.11 on Nov. 25. Since then, CLNC’s share price has been trading … Continue reading
Diversified Healthcare Trust (DHC): Weaker Than Anticipated 20Q3 Results
Diversified Healthcare Trust reported 2020 third quarter normalized funds from operations (FFO) (according to my definition) of $11.0 million or $0.05 per share, well below results for 19Q3 and 20Q2 and also below my projection of $27.8 million or $0.12 … Continue reading
GE: 2020 Third Quarter Earnings Review
General Electric reported a 2020 third quarter GAAP loss of $1.16 billion or $0.13 per share on revenues on revenues of $19.4 billion, down 17%. In the 2019 third quarter, the company reported a comparable net loss of $1.3 billion … Continue reading
Wells Fargo: Still Under a Regulatory Cloud, Wading Through the Pandemic
Shares of Well Fargo have been under a regulatory cloud ever since the Federal Reserve placed a cap on its total assets in April 2018. To lift the cap, the company must demonstrate that it has implemented an effective remediation … Continue reading
GE 20Q3 Earnings Preview and Outlook
Shares of GE have underperformed both the broader market and GE’s industrial peer group since the onset of the COVID-19 pandemic. The weak performance reflects primarily the company’s exposure to the aviation business, which prior to the pandemic was GE’s … Continue reading
Housing Market Update
Despite continuing elevated unemployment and dampened consumer confidence, the housing market has been surprisingly strong in the months following the onset of the COVID-19 pandemic. According to the U.S. Commerce Dept., single-family housing starts for August were estimated at the … Continue reading
Debt Refinancing Eliminates Risk of Default; But Diversified Healthcare Trust Will Need to Raise Equity Eventually
Diversified Healthcare Trust (DHC) reported 2020 second quarter normalized funds from operations (FFO) (according to my definition) of $52.8 million or $0.22 per share, down 33% from $81.1 million or $0.33 per share in the prior year quarter. The decline … Continue reading
A Weak Second Quarter Should Mark the Bottom for Colony Capital, But Future Dilution is a Key Issue
Colony Capital reported a 2020 second quarter net loss of $2.04 billion or $4.33 per share, compared with a much smaller loss in the prior year quarter. This year’s loss was driven by $2.0 billion of impairment charges taken across … Continue reading
Five Star’s Strong Stock Performance Could Signal Quicker Turnaround
Five Star Senior Living continues to cope with the effects of the COVID-19 pandemic on its operations. During the 2020 second quarter, it experienced a 3.8% decline in occupancy from 82.5% to 78.7% across its owned and managed senior living … Continue reading
Colony Capital: The Big Pivot on Hold
In response to activist pressure precipitated by a deterioration in its financial performance and a steady decline in its stock price, Colony Capital announced in November 2019 a new strategy to focus on growing its Digital Realty and Investment Management … Continue reading
After the Quick Rebound, Investors Should Approach Homebuilding Stocks with Caution
Homebuilding stocks have been on a wild ride in 2020. They boomed from the start of the year, rising 19.1% (according to my index of 11 publicly-traded builders) to February 21, handily beating the 3.0% gain on the S&P 500 … Continue reading
After Completing Its Corporate Transition, Change Healthcare Copes With COVID-19
Change Healthcare Inc. (CHNG, Change Inc., Change or Inc.) is a new public company formed in 2016 as a joint venture between McKesson Corporation (MCK) and an investor group led by The Blackstone Group. Over the past four years, the … Continue reading
DHC Cuts Distribution As It Copes with COVID-19 Fallout
DHC’s share price closed on Thursday (4/9) at $3.51, down 58.4% year-to-date, worse than the peer group average of down 24.7%, but the stock is up from its bottom of $2.00. Most of the losses for DHC occurred during March. … Continue reading
Deep Dive on GE: Sum-of-the-Parts Valuation
As noted in a previous post, it is most appropriate to value GE as a single, stand-alone enterprise. Several unifying investment themes support this view:
Deep Dive on GE: GE Capital
In April 2015, partially in response to the regulatory restrictions that accompanied GE Capital’s designation as a systemically important financial institution by the Financial Stability Oversight Council, GE adopted the GE Capital Exit Plan, under which it planned to reduce … Continue reading
Deep Dive on GE: Consolidated Enterprise Valuation
In my view, the most appropriate way to look at GE’s stock valuation is to consider the company as a single enterprise. In this analysis, I compare its current valuation to peers. My calculations for GE’S enterprise value-to-EBITDA multiple at … Continue reading
Deep Dive on GE: Projected 2020 Consolidated Results
Based upon management’s guidance given at General Electric’s 2020 Outlook meeting on March 4th, I project 2020 Industrial Leverage EBITDA of $11.6 billion, up roughly 3% from 2019. Industrial Leverage EBITDA was given in the appendix to the company’s 2020 … Continue reading
Deep Dive on GE: The 2020 Outlook for its Businesses
Given the complexity of its business mix and financial structure, valuing GE is not an easy exercise even under benign economic conditions. The task is made even more difficult when there is considerable uncertainty about prospects for the global economy.
Though It Might Be Delayed, GE’s BioPharma Sale is Set to Close
GE’s stock has been battered during this sell-off, falling much more than the broader market as a whole. Since reaching an intra-day peak of $13.26 on February 12 (roughly one month ago), the stock has fallen 40.8% to its March … Continue reading
Recent Observations on Bed Bath & Beyond
The investor optimism that followed the October 2019 appointment of Mark J. Tritton as Bed Bath & Beyond’s CEO and continued after the company gave a preliminary upbeat assessment of its performance early in the Christmas selling season gave way … Continue reading
Brightcove’s “Disappointing” Quarter
On Thursday (2/21), Brightcove (BCOV) reported somewhat disappointing 2019 fourth quarter performance and guidance which caused its stock to plummet 12.8% on the open and end the day down 7.2% (from the previous close). Yet, buyers emerged quickly after the … Continue reading
A Strong Start for Housing
2019 was a solid year for U.S. housing. While still subject to modest revisions, government figures show that new residential sales increased 10.4% from an estimated 617,000 units in 2018 to 681,000 units in 2019. Single-family housing starts advanced 1.4% … Continue reading
A Brief Update on StoneMor
StoneMor Partners, L.P. has passed a few milestones since my previous update in late September. These accomplishments have advanced its turnaround, but more is needed including a significant rebound in its profitability before the effort can be declared a success.
NJR Adjusts to Meet Its Challenges and Opportunities
Under new CEO Steve Westhoven, the business portfolio of New Jersey Resources (NJR) has evolved as it typically does in response to changes in its operating environment. Its regulated utility operations, New Jersey Natural Gas (NJNG) and its Midstream segment, … Continue reading
Brightcove’s Prospects Look Brighter
A key change at Brightcove since my last post has been the turnover at the top. In August 2017, after three consecutive quarters of earnings misses, Dave Mendels, who had served as CEO for more than four years, agreed with … Continue reading
Homebuilder Stocks Fall as Optimism About Global Economic Growth Rises
Homebuilding stocks have been the best performing of the 150-odd sectors in the Dow Jones U.S. Total Market Index, up 44.4% over the past 12 months as of November 8. Last year, they declined sharply in the face of Federal … Continue reading
Notes and Analysis from HPE’s 2019 Securities Analyst Meeting
At its 2019 Securities Analyst meeting (SAM) held in New York City on October 23, the senior management of Hewlett Packard Enterprise (HPE) said that the company was poised to enter the third phase of its evolution: pivoting to sustainable, … Continue reading
SNH Still Seems Behind Goal on Asset Sales
SNH has set a goal of $900 million in announced or closed asset sales in 2019. With more than nine months of the year gone, it has completed only $119.1 million in asset sales and has an estimated $125 million … Continue reading
Eliminating the RMR Discount
The five publicly-traded REITs that are managed by the RMR Group, Inc. (RMR), a Newton, Mass.-based property manager, have often traded at significant discounts to their peers. The discount has been attributed to the nature of the relationship between RMR … Continue reading
NYT Magazine Article on the Boeing 737 Max
The cover story in this week’s Sunday New York Times Magazine is “What Really Caused the Deadly Crashes of the Boeing 737 Max?“. While acknowledging that malfunctions caused the crashes, it also documents in detail the errors made by the … Continue reading
StoneMor’s Rights Offering
This week, StoneMor Partners, L.P. (STON) announced that it has set a record date of September 26, 2019 for its upcoming rights offering. Soon thereafter, once the SEC declares the registration statement to be effective, the partnership will mail a … Continue reading
A Review of the Markopolos Report on General Electric
On August 15, 2019, Harry Markopolos, who gained fame as the person who exposed the fraud perpetrated by Bernie Madoff, released a 175-page report entitled “General Electric, A Bigger Fraud Than Enron.” GE’s stock fell 11.3% on the day; but … Continue reading
A Reset for Senior Housing Properties Trust
In response to the financial difficulties of its primary tenant, Five Star Senior Living (FVE), Senior Housing Properties Trust (SNH) has been forced to negotiate a change in the structure of their business relationship. Specifically, SNH has agreed to cancel … Continue reading