Investment "Logic"

Notes: Stock Ratings: 1 = buy at current stock prices, 2 = buy on a 5-10% dip in stock price, 3 = sell on a 5-10% increase in stock price, 4 = sell at current stock prices to raise cash.  Ratings are based upon 12-18 month outlook on stock direction and not necessarily related to moves I make due to financial positioning. Today was the day Pepsico announced their first quarter financial results.  Earnings beat analyst estimates by coming in at $0.83 (core constant) and earnings were essentially in line with expectations at $12.22B.  It's safe to say that those results along with the 1.5% increase in core gross margin were better than I was anticipating.  However, my predictions of foreign exchange rates being a problem also came through, as it was a driving factor in reduced revenues and the company's forward guidance, which I'll get to shortly.   First, I'd like to discuss the upside surprises to the quarter.  Clearly the earnings result was a s...

Notes: Stock Ratings: 1 = buy at current stock prices, 2 = buy on a 5-10% dip in stock price, 3 = sell on a 5-10% increase in stock price, 4 = sell at current stock prices to raise cash.  Ratings are based upon 12-18 month outlook on stock direction and not necessarily related to moves I make due to financial positioning. I have been too busy with earnings reports and life to deliver my usual weekly summary.  It is in that summary that I usually preview stocks with upcoming earnings reports.  Since I didn't do the summary, I wanted to take enough time to preview what's to be expected in Pepsico's earnings release, which will happen on Thursday.  Pepsico is an international company with just under half of their earnings coming from the rest of the world.  As we noted last quarter, foreign exchange clearly is a risk to the company's forward performance as Europe, Russia, and Venezuela all play roles in the numbers that will be produced.  From what I'...

Notes: Stock Ratings: 1 = buy at current stock prices, 2 = buy on a 5-10% dip in stock price, 3 = sell on a 5-10% increase in stock price, 4 = sell at current stock prices to raise cash.  Ratings are based upon 12-18 month outlook on stock direction and not necessarily related to moves I make due to financial positioning. Honeywell presented their first quarter results on Friday.  While they were able to beat earnings expectations by two cents, coming in at $1.41, they missed revenue expectations, reporting only $9.2B.  Earnings were up in large part due to a 2.2% increase in segment margin. The company raised the lower end of their guidance by five cents, indicating they feel things are continuing to look good, despite the lighter sales.   With a mixed quarter like this, I see some good and some not so good items worth noting.  I'll start with some of the concerns and risks the stock faces.  To start with, they missed on revenues.  January ...

Notes: Stock Ratings: 1 = buy at current stock prices, 2 = buy on a 5-10% dip in stock price, 3 = sell on a 5-10% increase in stock price, 4 = sell at current stock prices to raise cash.  Ratings are based upon 12-18 month outlook on stock direction and not necessarily related to moves I make due to financial positioning. While I haven't shared a detailed overview of the stock yet, my eyes have been on Cedar Fair for some time now.  As of today, I bought about half of my desired position in the stock at a price of $55.80.  This puts a stock that has strong cash flow, has growth through good and bad financial times in the US, primarily domestic sources of income and over a 5.3% dividend yield, I found the stock hard to pass up.  That's not to say the stock is fool proof.  The stock has pulled back into the low 55 range recently and I'm not convinced the stock is done going down yet.  The yield does provide support, but I am concerned regarding ...

Notes: Stock Ratings: 1 = buy at current stock prices, 2 = buy on a 5-10% dip in stock price, 3 = sell on a 5-10% increase in stock price, 4 = sell at current stock prices to raise cash.  Ratings are based upon 12-18 month outlook on stock direction and not necessarily related to moves I make due to financial positioning. Today Citigroup announced first quarter 2015 results.  Earnings beat analyst expectations, coming in at $1.51 and revenues were basically in line with expectations, with results of $19.8B (revenue estimates apparently were raised from the number I researched back in my weekly summary of $19.3B).  Tangible book value was listed at $57.66.  Additionally, despite currency conversion and regulatory considerations, return on assets were 1.05%, which was higher than the .9% target.  CEO Michael Corbat added to all of this with the key statement of "we are on track to hit our financial targets for the year."   Concerns to note were tha...

After yet another quiet week overall, things are about to get more busy, as earnings season started this week and now I will start dealing with announcements from companies in my portfolio.  Announcing next week will be Citigroup on Thursday and Honeywell on Friday. The analyst community has an earnings estimate of $1.39 on $19.3B in revenues.  Revenues are expected to be down from the same quarter a year ago on higher earnings.  This indicates to me that earnings growth comes from cost cutting and not any significant growth overall.  Revenues are expecting a 1.5% drop from the same quarter a year ago.  The stock has been climbing steadily since the company's fourth quarter earnings release and subsequent positive CCAR results.  I'm a little surprised that earnings are expected to be as high as they are, given the weak interest rate market, but this is clearly a stock that can go either way depending upon how it and its peers reports over the next 1...

The short trading week presented little in regards to news to change any of the stories I have in place.  As a result, you'll notice not much below has changed.  While the overall news flow hasn't changed my overall perceptions, it's not to say that a few of my stocks weren't volatile.  On Semi was hit with a downgrade that crushed the stock, sending it down over 5% on Wednesday and then received a buy reiteration and $16 price target on Thursday.  Isis Pharma is getting more and more turbulent, as are biotechs overall right now.  On Friday, we received a somewhat surprisingly low jobs number report.  I say somewhat because there had been a number of other reports that came out recently indicating that things might have weakened, at least temporarily, when considering the rougher than normal weather and strength in the US Dollar.  Since the market was closed, we haven't seen how investors will react to these numbers yet. Which takes me into next...