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Showing posts from July, 2016

Weekly Portfolio Summary

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A week without earnings allows me a chance to do a full review of my entire portfolio - something that's hard to accomplish with a full time job and short Minnesotan summers that you want to take advantage of.  So far, 3 of 7 of the stocks in my portfolio have reported.  Pepsico and Citigroup both did well whereas Honeywell didn't do poorly, but there were things there that are making people take pause.  We're a little over half-way through the heart of the earnings season as well, with almost 63% of companies in the S&P 500 reporting.  Of those, over 70% have beat their marks, which is fairly impressive.  The trend of downwards earnings seems to have come to and end as it looks like the S&P is showing future earnings trends to be rising going forward.  This helps prepare for a potential new bullish leg in the markets after having trended between a range of 1900 and 2100 since October of 2014.  The fear and greed index is in the extreme fear range, meaning there is…

Earnings Analysis: Honeywell (HON)

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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 announced second quarter earnings results on Friday, posting earnings of $1.66 on sales of $10B.  Earnings were a slight beat on analyst expectations of $1.64 while the sales were slightly under the expectations of $10.13B.  Additionally, the company also raised the lower end of guidance for 2016 to $6.60 and lowered their outlook on sales by about $300M.  Expected earnings now has a range of $6.60 to $6.70 while the sales range is now $40B to $40.3B.  The mixed results were reflected by the stock dropping over 2.5% on trading during the day, though the stock was down close to twice that at one point.  Analysts were expecting out performance as provided by th…

Earnings Analysis: Citigroup (C)

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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.

On Friday, Citigroup announced second quarter earnings results of $1.24 on $17.55B of revenues.  Earnings beat street expectations of $1.13 rather significantly, however, the top line missed expectations of $17.67B.  All results and expectations continue to be below what was reported a year ago.  While it should be recognized that a portion of the lower earnings is a result of the company continuing to sell off assets that is part of their Citi Holdings portfolio (a group of assets they don't feel fits the company's core competencies), this is also the story for the sector as a whole as gains from trading continues to be volatile and the key metric for revenues…

Earnings Analysis: Pepsico (PEP)

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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.

On Thursday, Pepsico announced their second quarter earnings results for 2016.  Earnings beat rather handily, coming in at $1.38 compared to expectations of $1.29.  Sales were also a fair beat at $15.4B compared to estimates of $15.36.  Those revenues are down 3.3% from a  year ago due to a 4% currency translation impact and 2.5% from discontinuation of operations in Venezuela, which occurred in the third quarter last year.  This results in an organic growth rate of 3.3%, which isn't bad, but it is below the 4% target management has set for the year.  Finally, management raised guidance for earnings by five cents to $4.71.

On the year, organic growth has been 3.4% a…